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Is Capitalism Dead or Merely Dying?
« on: October 23, 2017, 06:08:41 PM »

Is Capitalism Dead or Merely Dying?
 October 22, 2017  Posted by Raúl Ilargi Meijer at 2:02 pm Finance Tagged with: AI, Ardern, Artemis, capitalism, Google, mathematics, redistribution, snake, tail, UBI, Varoufakis

Alfred Wertheimer Elvis 1956

New Zealand’s new prime minister Jacinda Ardern calls capitalism a blatant failure. Former Greek finance minister Yanis Varoufakis says capitalism is ‘merely’ coming to an end because it is making itself obsolete. Mathematics professor Bruce Boghosian claims that without redistribution of wealth, our market economy would not be stable, because wealth always tends to concentrate. The people at Artemis Capital Management write that the stock market has begun self-cannibalizing like a snake eating its tail, and the only reason we’re not in a recession already is ‘financial alchemy’.

At the very least we can say that the system is under pressure. But what system is that? It would be nice to have a clearcut definition of capitalism, but alas, there are many, about as many as there are different forms of it. That doesn’t make this any easier. Americans call many European economies ‘socialist’, which seems to mean they are not capitalist. But Scandinavian countries don’t function like the Soviet Union either.

And if you see how much money is involved in transfer payments to citizens in the US, the supposed bastion of free market capitalism, it’s tempting to conclude the system has already failed. But even with transfer payments, inequality is at record levels. That would seem to confirm Boghosian’s statement that “even if a society does redistribute wealth, if it’s too small an amount, “a partial oligarchy will result..” So what then?


Varoufakis and others want a “universal basic dividend”, or “universal basic income”. Would that be the end of capitalism as we know it? Or is it just a -perhaps more extreme- form of ‘state capitalism’? Varoufakis deems it inevitable because technology will eradicate so many jobs from societies that people won’t be able to make money from work. Personally, I’ve long thought that the pending large-scale demise of pensions systems will lead to some form of UBI.

37-year-young Jacinda Ardern is very clear in her assessment of New Zealand’s form of capitalism. If you’ve got the worst homelessness in the developed world, you have a broken system. If the system fails the people, it’s no good. Other people might argue that capitalism never promised to take care of everyone. Or rather, not through state interference. Labour’s Ardern has her view:


New Zealand’s New Prime Minister Brands Capitalism A ‘Blatant Failure’

    [Jacinda] Ardern, has pledged her government will increase the minimum wage, write child poverty reduction targets into law, and build thousands of affordable homes. In her first full interview since becoming prime minister-elect, she told current affairs programme The Nation that capitalism had “failed our people”. “If you have hundreds of thousands of children living in homes without enough to survive, that’s a blatant failure,” she said. [..] “When you have a market economy, it all comes down to whether or not you acknowledge where the market has failed and where intervention is required. Has it failed our people in recent times? Yes. How can you claim you’ve been successful when you have growth roughly 3%, but you’ve got the worst homelessness in the developed world?”

So to which extent should a state interfere in markets, and in society at large? There are obviously wide ideological divides when it comes to answering that one. Does that mean there is no answer possible at all? Perhaps not. Perhaps the answer lies in the fact that the system is predestined to fail, as Boghosian’s mathematical models suggest: “Our work refutes the idea that free markets, by virtually leaving people up to their own devices, will be fair..”

That doesn’t necessarily demand a lot of interference, we could ‘simply’ write the rules of the game in such a way that the ‘natural tendency’ towards wealth concentration is blocked. An example is the history of the top US income tax rate. Arguably, the nation was doing a lot better under Eisenhower and Kennedy, with a top rate of 91%, than it is today. If you put a few rules like that in play, perhaps including Varoufakis’ idea of a ‘common welfare fund’, maybe the state doesn’t have to interfere much otherwise.


One of the main underlying claims of capitalism, and of macroeconomics in general, is that markets -and societies- will sort themselves out if left alone. Bruce Boghosian says this is not true, and that he has the math to prove it. The entire notion of markets tending towards a ‘supply-demand equilibrium’ is nonsense, he says (echoing Minsky, Steve Keen et al). Trickle-down economics is a figment of the imagination, while trickle up-economics flourishes.

This refutes much of what our economic systems are based on, which would appear to indicate that we need an urgent revision of these systems. Unless we would agree that Darwin-on-Steroids is a good idea. We don’t and won’t, because it would mean Stephen Foster’s “frail forms fainting at the door” all over the place. A market ideology that causes widespread misery has no future.


The Mathematics of Inequality

    Seven years ago, the combined wealth of 388 billionaires equaled that of the poorest half of humanity , according to Oxfam International. This past January the equation was even more unbalanced: it took only eight billionaires, marking an unmistakable march toward increased concentration of wealth. Today that number has been reduced to five billionaires.

    Trying to understand such growing inequality is usually the purview of economists, but Bruce Boghosian, a professor of mathematics, thinks he has found another explanation—and a warning. Using a mathematical model devised to mimic a simplified version of the free market, he and colleagues are finding that, without redistribution, wealth becomes increasingly more concentrated, and inequality grows until almost all assets are held by an extremely small percent of people.

    “Our work refutes the idea that free markets, by virtually leaving people up to their own devices, will be fair,” he said. “Our model, which is able to explain the form of the actual wealth distribution with remarkable accuracy, also shows that free markets cannot be stable without redistribution mechanisms. The reality is precisely the opposite of what so-called ‘market fundamentalists’ would have us believe.”

    While economists use math for their models, they seek to show that an economy governed by supply and demand will result in a steady state or equilibrium, while Boghosian’s efforts “don’t try to engineer a supply-demand equilibrium, and we don’t find one,” he said. [..] The model tracks the data with remarkable accuracy, he said. He and his team will soon publish a paper on how it relates to U.S. wealth data from 1989 to 2013.

    “We have also begun to apply it to wealth data from the ECB, and so far it seems to work very well for certain European countries as well,” he said [..] It turns out that when agents do well in early transactions, the odds are so increasingly stacked in their favor that—without redistribution from taxes or other wealth-transfer mechanisms—they will get more money, and keep accruing wealth inevitably.

    “Without redistribution of wealth, our market economy would not be stable,” said Boghosian. “One person would run away with all the wealth, and it would keep going until it came to complete oligarchy.” And even if a society does redistribute wealth, if it’s too small an amount, “a partial oligarchy will result,” Boghosian said.

If markets and societies cannot survive under current rules, theories and ideologies, what do we do? The Artemis guys strongly suggest we stop the practice of excessive stock buybacks- even if they’re the only thing propping up the whole market system. Because they’re leading us straight into a recession. Because they’re making that recession a lot worse.


Volatility and the Alchemy of Risk

    The Ouroboros, a Greek word meaning ‘tail devourer’, is the ancient symbol of a snake consuming its own body in perfect symmetry. The imagery of the Ouroboros evokes the infinite nature of creation from destruction. The sign appears across cultures and is an important icon in the esoteric tradition of Alchemy. Egyptian mystics first derived the symbol from a real phenomenon in nature. In extreme heat a snake, unable to self-regulate its body temperature,will experience an out-of-control spike in its metabolism. In a state of mania, the snake is unable to differentiate its own tail from its prey,and will attack itself, self-cannibalizing until it perishes. In nature and markets, when randomness self-organizes into too perfect symmetry, order becomes the source of chaos.

    The Ouroboros is a metaphor for the financial alchemy driving the modern Bear Market in Fear. Volatility across asset classes is at multi-generational lows. A dangerous feedback loop now exists between ultra-low interest rates, debt expansion, asset volatility, and financial engineering that allocates risk based on that volatility. In this self-reflexive loop volatility can reinforce itself both lower and higher. In a market where stocks and bonds are both overvalued, financial alchemy is the only way to feed our global hunger for yield, until it kills the very system it is nourishing.


    [..] At the head of the Great Snake of Risk is unprecedented monetary policy. Since 2009 Global Central Banks have pumped in $15 trillion in stimulus creating an imbalance in the investment demand for and supply of quality assets. Long term government bond yields are now the lowest levels in the history of human civilization dating back to 1285. As of this summer there was $9.5 trillion worth of negative yielding debt globally. Last month Austria issued a 100-year bond with a coupon of only 2.1%(6) that will lose close to half its value if interest rates rise 1% or more. The global demand for yield is now unmatched in human history. None of this makes sense outside a framework of financial repression.

    Amid this mania for investment, the stock market has begun self-cannibalizing… literally. Since 2009, US companies have spent a record $3.8 trillion on share buy-backs financed by historic levels of debt issuance. Share buybacks are a form of financial alchemy that uses balance sheet leverage to reduce liquidity generating the illusion of growth. A shocking +40% of the earning-per-share growth and +30% of the stock market gains since 2009 are from share buy-backs. Absent this financial engineering we would already be in an earnings recession.

    Any strategy that systematically buys declines in markets is mathematically shorting volatility. To this effect, the trillions of dollars spent on share buybacks are equivalent to a giant short volatility position that enhances mean reversion. Every decline in markets is aggressively bought by the market itself, further lowing volatility. Stock price valuations are now at levels which in the past have preceded depressions including 1928, 1999, and 2007. The role of active investors is to find value, but when all asset classes are overvalued, the only way to survive is by using financial engineering to short volatility in some form.

Yanis Varoufakis doesn’t so much argue that capitalism has already failed, he says it is bound to fail in the near future. Because new technology, including artificial intelligence, will destroy too many jobs for society to continue to function intact. That is already happening, in that we both produce and consume Google’s ‘products’, but we get none of the profits. An example:


Google’s Plan To Revolutionise Cities Is A Takeover In All But Name

    Alphabet’s weapons are impressive. Cheap, modular buildings to be assembled quickly; sensors monitoring air quality and building conditions; adaptive traffic lights prioritising pedestrians and cyclists; parking systems directing cars to available slots. Not to mention delivery robots, advanced energy grids, automated waste sorting, and, of course, ubiquitous self-driving cars. Alphabet essentially wants to be the default platform for other municipal services. Cities, it says, have always been platforms; now they are simply going digital.

    “The world’s great cities are all hubs of growth and innovation because they leveraged platforms put in place by visionary leaders,” states the proposal. “Rome had aqueducts, London the Underground, Manhattan the street grid.” Toronto, led by its own visionary leaders, will have Alphabet. Amid all this platformaphoria, one could easily forget that the street grid is not typically the property of a private entity, capable of excluding some and indulging others. Would we want Trump Inc to own it? Probably not. So why hurry to give its digital equivalent to Alphabet?

Google aims at taking over our entire communities, and claims this will be to our benefit. We let the new technology companies expand far and wide, to a large extent because our ‘leaders’ don’t understand what is happening any better than we do. But that is not a good thing, for many different reasons. It’ll be very hard to whistle them back later, both because of the wealth they’re building, and because of the intensifying links they have to government, including -or especially- the intelligence community.


Capitalism Is Ending Because It Has Made Itself Obsolete

    Former Greek finance minister Yanis Varoufakis has claimed capitalism is coming to an end because it is making itself obsolete. The former economics professor told an audience at University College London that the rise of giant technology corporations and artificial intelligence will cause the current economic system to undermine itself.

    Mr Varoufakis [..] said companies such as Google and Facebook, for the first time ever, are having their capital bought and produced by consumers. “Firstly the technologies were funded by some government grant; secondly every time you search for something on Google, you contribute to Google’s capital,” he said. “And who gets the returns from capital? Google, not you. “So now there is no doubt capital is being socially produced, and the returns are being privatised. This with artificial intelligence is going to be the end of capitalism.”

    Warning Karl Marx “will have his revenge ”, the 56-year-old said for the first time since capitalism started, new technology “is going to destroy a lot more jobs than it creates”. He added: “Capitalism is going to undermine capitalism , because they are producing all these technologies that will make corporations and the private means of production obsolete. “And then what happens? I have no idea.”

    Describing the present economic situation as “unsustainable” and fearing the rise of “toxic nationalism”, Mr Varoufakis said governments needed to prepare for post-capitalism by introducing redistributive wealth policies. He suggested one effective policy would be for 10% of all future issue of shares to be put into a “common welfare fund” owned by the people. Out of this a “universal basic dividend” could be paid to every citizen.

Has capitalism failed already, as Jacinda Ardern claims, or will that happen only in the future, as Varoufakis says? It may be a moot question once the system and the markets start collapsing. That they will, and must, is not a question but a certainty, even a mathematical one. Whatever your ideology, that is not a good thing. And the current ideology has caused this, that much is clear.

If the remaining wealth is not divided better than it is today, those who have gathered most of it will also find themselves in non-functioning societies and communities. Unless perhaps you’re George W. and have property in Paraguay.

But even then. We’re eating our tails.
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Whose Private-Sector Debt Will Implode Next: US, Canada, China, Eurozone, Japan?


Whose Private-Sector Debt Will Implode Next: US, Canada, China, Eurozone, Japan?

Canadians, fasten your seat-belt. Here are the charts.

The Financial Crisis in the US was a consequence of too much debt and too much risk, among numerous other factors, and the whole house of cards came down. Now, after eight years of experimental monetary policies and huge amounts of deficit spending by governments around the globe, public debt has ballooned. Gross national debt in the US just hit $20.5 trillion, or 105% of GDP. But that can’t hold a candle to Japan’s national debt, now at 250% of GDP.

And private-sector debt, which includes household and business debts — how has it fared in the era of easy money?

In the US, total debt to the private non-financial sector has ballooned to $28.5 trillion. That’s up 14% from the $25 trillion at the crazy peak of the Financial Crisis and up 63% from 2004.

In relationship to the economy, private sector debt soared from 147% of GDP in 2004 to 170% of GDP in the first quarter of 2008. Then it all fell apart. Some of this debt blew up and was written off. For a little while consumers and businesses deleveraged just a tiny little bit, before starting to add to their debts once again.

But the economy began growing again too, and private-sector debt as a percent of GDP fell to a low of 148% in Q1 2015. It has since picked up steam, growing once again faster than the economy, and now is at 151.7% of GDP, back where it was in 2005. This chart shows US private sector debt to the non-financial sector, in trillion dollars (blue line, left scale) and as a percent of GDP (red line, right scale):

In the Eurozone, the pattern looks similar before the Financial Crisis, with total debt growing sharply both in euros and as a percent of GDP. But after the Financial Crisis, private-sector debt continued to grow in euro terms. As a percent of GDP, it largely leveled off, and as the economy picked up steam over the past two years, this debt declined to 163% of GDP:

These charts are based on data from the Bank for International Settlements and the St. Louis Fed.

In Japan, private-sector debt declined over much of the period but over the last three years picked up a little. Debt as percent of GDP has zigzagged lower, though it recently bounced to 160% — higher than in the US but lower than in the Eurozone.

Japan occupies a unique place in the developed world. The private sector experienced a phenomenal credit bubble in the 1980s, with debt peaking at 219.5% of GDP in Q3 of 1993. This private-sector credit bubble then imploded in a more or less orderly fashion over the next decades:

But as Japan’s private-sector debt bubble deflated, the government went on a gigantic no-holds-barred deficit-spending spree. As a consequence, the national debt skyrocketed from 55% of GDP in 1981 to 250% of GDP in 2017, by far the highest in the world. The Bank of Japan has been monetizing much of this debt under the guise of QE to keep it under control:

China is now where Japan was before its credit bubble blew up in the early 1990s. China’s private-sector debt – the part that has been officially acknowledged – surged from 20% of GDP in 2008 to 211% of GDP in 2017. This is the danger Zone where Japan got in trouble. It also assumes that China’s GDP numbers are not inflated. If GDP numbers are inflated, as many observers suspect, China’s private-sector debt as percent of GDP would be much higher:

But wait, Canada rules! Private sector debt in Canada has more than doubled, from C$2.2 trillion in 2006 to C$4.5 trillion, and private sector debt as percent of GDP has soared to 217%, within a hair of where Japan was in Q3 1993, before the credit bubble imploded. Also note how eerily similar the charts for China’s debt and Canada’s debt are:

So Canada and China stand out in this group of debtor economies. The chart below shows private-sector debt as a percent of GDP with China (red) and Canada (black) up in their own universe, competing with each other to see whose debt will implode first. By comparison, the US, the Eurozone, and Japan look practically tame. Note how in 2008 Canada was right in their neighborhood:

Within this group of economies, when it comes to the next private-sector-debt bubble implosion, there are really two places to look: Canada and China. In Canada households are on the hook, being among the most indebted in the world. In China, the debt binge has spread across businesses and households alike.

In the US, the yield spread of Treasury securities has collapsed to lowest level since 2007, and even the Fed is fretting about it. Read…  The US Treasury Market Smells a Rat

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American Brainwash: Guess what, Ma, capitalism is not Americanness!
« Reply #2 on: November 25, 2017, 12:57:08 AM »

American Brainwash: Guess what, Ma, capitalism is not Americanness!
November 21, 2017

Patrice Greanville
Iterations: March 18, 2017, August 1982)

(Photo: Mary Crandall, Flickr)

Virtually unchallenged to this day, corporate media are accustomed to using a number of misleading “cultural equations” to hide the existence of undemocratic institutions at the core of the American system. Thus, capitalism, a “hierarchic tyranny” as Chomsky calls it, is usually identified by its euphemisms: “Free Enterprise,” “market system,” “private enterprise.” “the American Way,” etc. Academia also cheerfully participates in this deliberate cosmetisation of what otherwise many people would begin to recognize as something unhealthy and malodorous in their midst. But of all these quaint labels and false equations the most outrageous and cynically deceptive is that which makes “Americanness”—the very national identity of the United States— identical with capitalism, both concepts one and inseparable.

Consistent with this practice, overt and pervasive partisanship in support of capitalism is not regarded by the American media as an ideological bias negating their vaunted professional “objectivity” but rather something akin to the serene acceptance of natural law.

Yet, despite its currency, the idea that capitalism is synonymous with “Americanness” is as spurious as the equally widespread delusion that capitalism equals human nature, another fraud, we should hasten to point, bandied about by pretty much the same crowd of conservatives and free marketers.

It is surely anticlimactic to state it, but these myths have been deliberately injected into the American political consciousness by the system’s mind managers.  Alex Carey, Herbert Schiller, Noam Chomsky, Ed Herman, Bob McChesney, and Michael Parenti, among other leading political scientists, have amply documented that such notions do not materialize out of thin air, that they are deliberately manufactured, and that a huge apparatus of propaganda is used to keep them in circulation.

Cui bono?

Great political benefits can be reaped from this kind of sleazy political legerdemain. For by successfully equating loyalty to capitalism with loyalty to the motherland (a ruse that reminds us uncomfortably of another system that continually elevated loyalty to the motherland and its underlying supremacist system as sacred), the ruling orders can more easily whip up support and legitimacy for policies which chiefly safeguard their interests.

    Did the French revolution deny the French some of their precious “Frenchiness”?

Besides invading the notion of “American nationhood,” like a giant, Alien-like parasite, US capitalism has also embedded itself behind “freedom”. One of its most popular deceiving masques, “the Free Enterprise System” exudes unconditional love for freedom. But is this so? The record again hardly supports such claims. For if “free enterprise” is so respectful of individual liberty and human rights, why does it thrive under Nazism?
The ploy has been particularly effective in the area of foreign policy, where the global interests of American business and the native plutocracy have long been sold to the public as those of the nation. As anyone can easily infer, this has often served to silence and isolate critics, who have been thus conveniently smeared with the brush of disloyalty, suspicion, nuttiness or even treason. An informational ghetto has been created in America, partly to maintain the illusion that free speech still matters. In extreme cases, home dissidents have been carted away under charges of “sedition,” ingrates “intent on subverting the hallowed political system of the United States,” and similarly dubious statutes and charges.

Given the success of these grand manipulations, there is little doubt that the American ruling class has carried the art of mass deception to truly unprecedented heights. No other western nation would have the audacity of requiring loyalty to capitalism–however camouflaged–as a prerequisite for good citizenship. Only in a nation where political illiteracy is high, and kept artificially that way  by the powers that be, can such a fraud be propagated without too much challenge or any challenge at all. Indeed, why should a historically transient system such as capitalism, one frequently suspect and deservedly despised by large numbers of people, be equated with the more enduring essence of the nation, itself an extraordinarily elusive and historically ephemeral concept?

The fact that in the 21st century a cancerous capitalism is essentially eating away the very substance of the nation, a concept it finds narrow, inconvenient and outmoded to its compulsion for transnational depredation, does not reduce the need to dismantle this noxious myth, as it is still American capitalism, and its monstrous military muscle, that remains the linchpin in the imperialist global effort. It is capitalism’s dynamic that feeds Washington’s mad push for global supremacy at any cost, and it is capitalism again which stands to gain by imposing fascism on a semiconscious world.

Since no one ever bothers to point the obvious, that capitalism and Americanness—whatever that is—are not the same thing,  and that such notion is a raging fraud, we should stress for the record that the concept does not have the remotest iota of validity. And that even sixth-grade logic can prove it. In fact, here’s a simple set of questions for capitalist propagandists:

Will Americans be less “American” it they choose for themselves another social system?
For that matter, were the Russians certifiably less“Russian” after their October Revolution?
Did the French revolution deny the French some of their precious “Frenchiness”?
Are the millions of Italian communists less quintessentially Italian because they cherish Marx instead of Adam Smith?
Are pro-Castro Cubans demonstrably “less” Cuban than those living in exile?

The answers should be clear to anyone with a modicum of common sense.
A pioneer in the field of political media analysis, Patrice Greanville is TGP’s editor in chief. The above is an edited excerpt from the author’s First Catalog of Media Biases / Whitewashing the Face of Capitalism (Cyrano’s Journal, Premiere Issue, Fall 1982).

MAIN IMAGE: The American Way, by Margaret Bourke.
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Money Is Power and Billionaires Can Subvert Democracy
« Reply #3 on: December 03, 2017, 01:37:00 AM »

Money Is Power and Billionaires Can Subvert Democracy
2017 November 27
tags: Bill Gates, Common Core Curriculum, Gates Foundation
by Ian Welsh

Money is the ability to tell other people how to spend their time: what to make, what to do. It is that simple.

The Washington Post has a story about how the Gates Foundation pushed the Common Core curriculum. The details are there, but the bottom line is that once they decided to do it, it happened fast:

    The result was astounding: Within just two years of the 2008 Seattle meeting, 45 states and the District of Columbia had fully adopted the Common Core State Standards.

This wasn’t done “democratically,” it was done with money, which bought officials.

The biggest problem with vast wealth isn’t that it directly makes other people poor, it is that it makes rich people disproportionately powerful. They have so much money that they can buy the state.

When they do so, they usually do so in their self-interest. Sometimes, as with the Gates’s in this case, they do so out of a desire to good.

But their idea of good may not be the same other people’s idea of good. They have vastly more weight than ordinary people, and in an unequal society, they can buy people.

It is that simple.

One way vast inequality corrupts is that it makes some people powerful enough to overthrow democracy; in general (as with Citizen’s United), and in particular cases.

Most rich people are not good people. It is well established now, in the academic literature, that rich people have an empathy deficit, that they give less as a percentage of their wealth and income, and that (to put it unscientifically) they tend to become assholes. They don’t need to care what other people think, or about others’ welfare.

And even when they do try to do good, well, they don’t need to go through normal democratic processes; they just buy the results.

Nor are they effective. There is a weird myth that “the private sector” is why solar power is cheap now. That’s effectively a lie. Solar power is cheap now because countries subsidized the markets for years (Germany in particular), and because China pushed it as a policy as well.

The Internet exists because of the public sector. Also, for decades, the US government bought the vast majority of all low-to-high-end computers. If they had not, you would not have cheap, modern electronics. Anyone who says otherwise is either a liar or doesn’t know the actual history.

Money is power. When the government relies on rich individuals and corporations to do what should be done by government, it takes longer and produces less welfare than it should, and it leads to the capture of the government by the rich.

A 90 percent top marginal tax rate and punitive capital and estate taxes aren’t necessary because “government needs the money,” they are necessary so that the rich don’t become so rich they buy the State.

And that includes the ones who try to do some good, like Gates.

(More on rich states vs. rich individuals soon.)
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Finance and Business: Enemies of Sustainable Development?
« Reply #4 on: December 21, 2017, 03:08:53 AM »

Finance and Business: Enemies of Sustainable Development?
«The military-industrial complex is in itself a major deterrent to sustainable development.»
By Prof. Jacques Prescott
Global Research, December 20, 2017
Theme: Environment, Global Economy, Militarization and WMD

The economy is seen by sustainable development theorists as a tool, a means to achieve sustainability. [1] Although all UN Member States have adopted in 2015 twenty global sustainable development goals by 2030 “to ensure peace and prosperity for people and the planet”, [2] funding for the actions needed to achieve these goals is slow to materialize. [3] Yet financial resources have never been so abundant in the global economic system.

The priorities of the neo-liberal economy centered on the enrichment of a privileged few are in fact contrary to the collective well-being. The main economic actors turn a blind eye to the tragic socio-environmental effects of their practices and act as enemies of sustainable development. Banks and financial systems, trade regulators, private companies and political authorities, however, have an essential role to play and a responsibility to assume if we want to succeed on the way to sustainability. As underlined by the ATTAC (Association for Taxation of Financial Transactions and Citizen Action), one of the main challenges is therefore to use the political, economic and financial levers, whether they are already available or they must be invented to speed up a transition to more responsible investments. [4]

Indebtedness and bankruptcy

In Europe and America, central bank policies are dictated by the lobbies of private banks. [5] [6]  Current economic frameworks promote easy access to credit, leading to over-consumption and scandalous debt levels. According to the Institute of International Finance, [7]  the public and private indebtedness of the 44 richest countries reached 235% of GDP in 2017 while it was 190% in 2007. Governments and people become hostages of banks and their fraudulent monetary system. By flooding the market with banknotes [8] (a process known as quantitative easing) whose value is based on the debt of the States and offering very low or even negative borrowing rates, the European Central Bank, following the example of the US Federal Reserve[9] and the Central Bank of Japan, [10] could lead the European economy in a “nuclear” doldrums. [11]  The collapse of the banking sector in 2008, mainly caused by the low interest rates, easy money, subprime mortgage policy and inadequate banking regulation of the US Federal Reserve, [12] [13] led to the bankruptcy of thousands of households. In recent years, the bankruptcy rate of private banks around the world has reached an all-time high at the expense of many small savers. [14] [15]

Even though the world of finance has been advocating for responsible investment [16] and the green economy [17] [18] for some time, its contribution to sustainable development is rather disastrous. This led the UN and the World Bank to publish in November 2017 a roadmap that proposes “an integrated approach that can be used by all actors in the financial sector – public and private – to accelerate the transformation towards a sustainable financial system. » [19]  The UN’s Responsible Investment Program has also highlighted the unwillingness of financial advisors to promote responsible investment and the lack of consideration of environmental and social issues in investment decisions. [20] In 2017, the green bond market represents only 0.1% of the volume of the international bond market valued at nearly $ 100 trillion. [21] Will the financial community by itself take effective measures against deregulation, [22] tax evasion, [23] [24]  large-scale market manipulation, [25]  vulture funds, [26]  corruption [27] and money laundering? [28] Will it subject itself to integrating environmental and social impacts into investment decisions? Unless forced to do so, it is permissible to doubt it.

Overconsumption and overexploitation

Motivated by short-term gain and easy money, the business sector is flooding consumers with riotous advertising promoting questionable lifestyles and cheap products and encouraging over-consumption and waste. The use of corruption to access markets and resources, tax evasion, cartelization, [29]  the relocation of industrial jobs [30] and the social exploitation of workers [31] are but a few of the unsustainable and unacceptable practices in this sector. Despite its commitment to the UN’s sustainable development goals [32] and the adoption of social [33] and environmental [34] management standards, the business community has yet to develop and implement a truly responsible growth model.

Inequitable trade

Similarly, international trade and commerce is controlled by multinationals eager for free trade agreements that expand their hegemony at the expense of small local producers. [35] It is well known that small island sugar-producing states would simply need a fair price to make their production economically viable. [36] When will the World Trade Organization truly integrate equity in its decision-making? When will it act effectively against illegal cartels and commercial dumping?

Security at all costs

The military-industrial complex, the war and security industry, is in itself a major deterrent to sustainable development. This industry sector has a strong record of engaging in threat inflation. In his book, Indefensible – Seven Myths That Sustain the Global Arms Trade, [37]  Paul Holden describes how the defense industry, the military, political leaders and an accommodative press can agree to unduly amplify security threats, justify military interventions, pursue specific foreign policies and massively divert financial resources to the industries and individuals that will be paid to defuse the threat.

The global increase in military budgets observed in recent years has come at the expense of much needed social and environmental investments (up 43.6% since 2000 in the United States alone to reach US $ 611 billion in 2016; [38]  according to a study by the Brown University of Rhode Island published in 2017, US $ 5,600 billion has been spent on US wars in Iraq, Syria, Afghanistan and Pakistan, veterans and homeland security since 2001 [39] ). Many believe that the military activity of the United States and other NATO members held under false humanitarian motives would be aimed primarily at protecting their economic hegemony, eliminating competition and enslaving the peoples by destabilizing and destroying emerging countries. [40] [41] [42] [43]

The IMF and the World Bank, obstacles to sustainable development? [44]

In 1971, shortly after the US decision to end the International Monetary System by dissociating the dollar from the gold standard (so the US dollar was no longer convertible into gold),[45] the IMF and the World Bank are invested a new mission: to impose on developing countries the liberalization of their economy by setting as conditionality to the granting of any loan the adoption of a series of neo-liberal structural adjustment measures. Reduction of state expenditure, privatization of national enterprises, devaluation of the local currency (let the currency float), reorientation of the national economy towards exports, truth of prices (eliminate subsidies), lower wages, adoption of a legal framework favoring respect for private property rights …

Although apparently laudable, these measures prove to be ineffective since they necessarily entail a loss of financial autonomy for the countries concerned, a reduction of public services and an impoverishment of the population in general for the benefit of an elite; the opposite of sustainable development.

For an ethics of development

Chronic indebtedness, questionable or downright illicit financial practices, inequitable trade and the massive misappropriation of public funds for the defense industry largely explain why it is so difficult to finance actions that promote sustainable development. As economist Rodrigue Tremblay points out in his book The Code for Global Ethics, humanity needs a serious moral stroke to continue its march towards continuous progress and increased freedom. [46] The world of finance, business and politics suffers from a lack of morality. Its commitment to sustainable development must be based on a universal ethics aimed at truly improving people’s quality of life and social well-being. An ethics that our political leaders have the responsibility to translate into concrete prescriptions.


Article in french :

La finance et les affaires, ennemies du développement durable?, December 11 2017,



[1] «Economic instruments, by changing prices and market signals, discourage certain modes of production and consumption and encourage others, thus reducing environmental degradation.»





[6] Canada’s Money Problem – Who Changed the Bank of Canada’s Policies in 1974 and Why?






[12] Tremblay, R. 2008. Questions et réponses concernant l’actuelle crise financière., 24 janvier 2008.

[13] Tremblay, R., 2013. The Fed’s Monetary Policy of Zero Interest Rates. Global Research, March 05, 2013.



[16] More on UN responsible investment program here :



[19] UN Environment & the World Bank Group, 2017. Roadmap for a Sustainable Financial System.

[20] file:///C:/Users/Utilisateur/Downloads/PRI_Investment-consutant-services-review.pdf


[22] «La croyance dans l’autorégulation pour remplacer la réglementation a clairement failli». Jeffers, E. & J.-P. Pollin, 2012. Déréglementation bancaire des années 1980 et crise financière. Revue d’économie financière 2012/1 (N° 105) : 103-114.

[23] More than half of international financial transactions pass through tax havens, and are exempt from national taxes. See : Sainteville, M. 2011. Les paradis fiscaux dans la mondialisation boursière. Espace politique 15/2011-3.

That was $ 5.3 trillion a day in April 2013 according to the Bank for International Settlements cf.


[25] Zero Hedge, 2016. Every Single Bloody Market Is Manipulated.

[26] Vivien, R. & A. Penasse, 2017. Les fonds vautours : Dépeceurs des, 20 mars 2017.



[29] Escande, P. 2017. Concurrence : la cartellisation du monde est en marche.

[30] Hurteau, P. 2009. Mondialisation et délocalisations d’emplois. Rapport de recherche IRIS/CISO.

[31] Beatson, J. & J. Hanley, 2015. L’exploitation des travailleurs étrangers chez nous. Examen de l’exploitation de la main-d’œuvre et du travail forcé au Canada.




[35] file:///C:/Users/Utilisateur/Downloads/grain-5801-nouveaux-accords-de-libre-echange-la-normalisation-de-la-brutalite-des-chaines-d-approvisionnement-mondiales.pdf

[36] Nations unies, 2005. Rapport de la réunion internationale chargée d’examiner la mise en œuvre du programme d’action pour le développement durable des petits états insulaires. Port-Louis (Maurice), 10-14 janvier 2005. Page 90.

[37] Holden, P., 2017. Indefensible – Seven Myths That Sustain the Global Arms Trade. Zed Books, U.K.

[38] Beaudoin, D. 2016. Quels pays ont le plus augmenté leur budget militaire? La réponse en carte. Radio-Canada, 20 mai 2016.

[39] Crawford, N.C., 2017. United States Budgetary Costs of Post-9/11 Wars through FY2018: A Summary of the $5.6 Trillion in Costs for the US Wars in Iraq, Syria, Afghanistan and Pakistan, and   Post-9/11 Veterans Care and Homeland Security. Watson Institute, Brown University.

[40] See for example : Ganser, D. 2007. Les armées secrètes de l’OTAN. Éditions Demi-Lune.


[42] Chomsky, N. 2002. De la guerre comme politique étrangère des États-Unis. Éditions Agone.

[43] Chossudovsky, M. 2002. Guerre et mondialisation: La vérité derrière le 11 septembre. Éditions Éco-société.

Jacques Prescott is a consultant in biodiversity and sustainable development and associate professor, Chair in eco-advising, Université du Québec à Chicoutimi
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How Inequality Kills
« Reply #5 on: December 23, 2017, 12:02:24 AM »

How Inequality Kills
December 22, 2017 processing mats



The Global March of Neoliberalism: The World Inequality Report 2018

How many studies and savants does it take to admit that unrestrained capitalism is designed to create enormous inequality?

Contrary to the assumptions of left-liberal commentators, neoliberalism is not merely a bad policy adopted by “greedy” elites. It is in fact a fundamental systemic rejection of the post-laissez-faire settlement put in place in just about all of the developed capitalist countries after the Second World War. Out with the legacy of the New Deal and the Great Society and forward with what is essentially a resurrection of 1920s capitalism. Because capitalism is a globally integrated system, if neoliberalism exists on a significant scale anywhere, it must exist everywhere. It is thus a “New World Order,” a phrase deployed by G. H. W. Bush and Adolf Hitler.

Neoliberalism is an eminently rational arrangement for the capitalists and their political cronies who instituted it. The system is called capitalism, not laborism, because it was forged for centuries and is presided over by those whose overarching objective is to maintain a settlement that serves the interests of owners of capital. Adam Smith’s tome is called The Wealth of Nations, not The Income of Nations or The Wages of Nations. The bottom-line priority of those who own society’s most valuable asset, its means of production, is that society be organized around the continuous increase of wealth, especially the wealth and income of its wealthiest. The welfare state foils that project. The evidence is unambiguous: after the Depression and during the great expansion of the Golden Age, we witnessed the unprecedented: the share of national income flowing to the one percent continued to fall by an increasing percentage each decade during the ‘30s, ‘40s, ‘50s, ‘60s and early ‘70s. (1) These were the only years in American history when an essential feature of State policy was to increase social services benefitting the working class and redistribute income from the wealthiest to those who do society’s work. And these were also the only years in the history of the republic that featured ongoing and increasing downward redistribution. This was the result of New Deal and Great Society social legislation, and the power of labor unions. Hence, from the perspective of the enlightened capitalist, the legacy of these policies must be reversed.

The World Inequality Report  2018
The undoing of social democracy must be effected on a global scale. Because one of the principal effects of neoliberalism is the remarkable growth of inequality, Thomas Piketty and associates have produced the World Inequality Report  2018, assessing the growth of worldwide inequality. (2) They conclude that “income inequality has increased in nearly all countries,” and that “rising inequality… can lead to various sorts of political, economic, and social catastrophes.” Inequality is lowest in Europe, where social-democratic economic policy is strongest, and has increased rapidly in North America, where the top 10 percent cop 47 percent of national income. The divergence in inequality levels is particularly extreme between Western Europe, which, as noted, retains significant vestiges of welfare state policy, and the United States, whose social democratic policies are the stingiest among the developed capitalist countries. The share of national income of the top 1 percent in both regions in 1980 was about the same, close to 10 percent. By 2016 it had risen slightly, to 12 percent in Western Europe, while in the United States it soared to 20 percent, while the share of the bottom 50 percent decreased from more than 20 percent in 1980 to 13 percent in 2016. Between 1980 and 2016 the global 1 percent captured twice as much of the growth in income as the bottom 50 percent. What’s more, Credit Suisse reports that as of 2015 the richest global 1 percent had accumulated more wealth than the rest of the world put together. (3) In the same year, a mere 62 individuals had accumulated as much wealth as is held by the bottom 50 percent of humanity. (4)

The World Inequality Report reminds us that  “economic inequality is largely driven by the unequal ownership of capital..,” as we should expect in capitalist countries.  Capital can be either privately or publicly owned. With neoliberalism’s idolatry of the private and ongoing decimation of the public, we are not surprised to learn that “since 1980, very large transfers of public to private wealth occurred in nearly all countries… While national wealth has substantially increased, public wealth is now negative or close to zero in rich countries. Arguably this limits the ability of governments to tackle inequality; certainly it has important implications for wealth inequality among individuals.” The situation is graver still if we acknowledge, as the authors of this study apparently do not, that governments in the capitalist countries have no intention to “tackle inequality.” Quite the contrary. What we are witnessing is the bipartisan effort to “starve the beast.” As the study puts it, “Over the past decades, countries have become richer but governments have become poor.” The net public wealth (public assets minus public debts) of the most aggressively neoliberal advanced countries, the United States and the UK, “has even become negative in recent years.” “The balance between private and public wealth is a crucial determinant of the level of inequality.” In their summation, the authors conclude that ‘In a future in which “business as usual” continues, global inequality will further increase’.
Capital can be either privately or publicly owned. With neoliberalism’s idolatry of the private and ongoing decimation of the public, we are not surprised to learn that “since 1980, very large transfers of public to private wealth occurred in nearly all countries… While national wealth has substantially increased, public wealth is now negative or close to zero in rich countries.

The whole picture draws out the implications of Thomas Piketty’s demonstration that it belongs to the nature of capitalism that more and more private wealth tends to concentrate in fewer and fewer hands. (5) The plutocrats pass their booty on to their progeny, so that an increasing portion of total wealth is inherited. Indeed, as of today between 50 and 70 percent of U.S. household wealth is inherited. (6) If this continues, it is a matter of arithmetic that the U.S. is headed for rule by dynasty.

How Neoliberal Austerity Kills
There is decisive evidence that neoliberalism’s widening inequality tends to generate uncommon rates of physical and mental health disorders. (7) A Princeton study found that middle-aged non-Hispanic white Americans suffered a great increase in mortality between 1998 and 2013. (8) This was the first such case in American history. The increase is entirely concentrated among persons with a high school degree or less, a reliable criterion of poverty. Among whites with any college experience, mortality rates have declined during this period. And disease is not the issue. The predominant causes of death are suicide, chronic alcohol abuse and drug overdoses. Paul Krugman has noted that these statistics mirror “the collapse in Russian life expectancy after the fall of communism.” (9) The Princeton study labels these mortalities “deaths of despair.” It is noteworthy that among the population in question, wages have fallen by over 30 percent since 1969. (10) In a detailed study of the health effects of austerity, based on data from the Great Depression, Asian countries during the 1990s Asian Financial Crisis, and European countries suffering austerity policies after the 2008 crisis, researchers found that the more austerity was practiced in a country, the more people became ill and the more people died. (11)

Homicide and murder are also strongly related to inequality. The World Bank reports that inequality predicts about half of the variance in murder rates between the U.S. and other countries and the FBI notes that of U.S. murders for which the precipitating reason is known over half stem from the agent’s sense that he had been “dissed.” (12) Persons shoot someone who has cut them off in traffic or beat them to a parking spot.

In connection with the high number of homicides associated with dissing, i.e. challenging a person’s sense of self-respect or personal worth, the psychologist and neuroscientist Martin Daly documents the intimate connection between inequality and loss of personal and social status. He shows that inequality predicts homicide rates “better than any other variable.” (13) In America, status is determined by how much a person has, and having is a matter of the standard of material living one enjoys, competitively conceived in terms of how one compares with others. And the admired standard is one’s level of material comfort, determined for the non-wealthy by a good job and the ability to support a family or the ability to enjoy a comfortable and independent standard of living as a single person. These makers of social status and self-respect are unavailable to those at the lower ends of the income hierarchy and the unemployed. Self-respect is one of men’s (and most homicides are male-on-male) most prized goods, and self-respect, as much as income and wealth, is unequally distributed. In a society where there are structurally determined winners and losers, if one is a loser one’s social reputation is all one has, all one can brandish, in order to maintain a sense of self-respect and personal worth. A diss is a blow to both social reputation and self-respect, and if one has nothing else, the threat looms disproportionately large.

While gang murders are not the majority of murders by the poor, they display in stripped-down form the way in which dissing translates to a social put-down and social denigration makes for personal humiliation and devaluation. The disser becomes a deadly rival. The research I cite in this essay shows that this syndrome is by no means limited to gang culture.

Most recently, David Ansell, a physician and social epidemiologist, has demonstrated in an exhaustive study that the acceleration of inequality between high and low socioeconomic groups over the past three decades has resulted in higher mortality rates for the poorest strata of the working class. He concludes that “nequality triggers so many causes of premature death that we need to treat inequality as a disease and eradicate it, just as we seek to halt any epidemic.” (14) Capitalism, in its post-welfare-state form, kills.


(1) Piketty, Thomas and Saez, Emmanuel (2006) “The Evolution of Top Incomes: A Historical and International Perspective,” American Economic Association: Papers and Proceedings, 96, No.2 May

(2) Alvaredo, Facundo; Chancel, Lucas; Piketty, Thomas; Saez, Emmaneul and Zucman, Gabriel (2017) World Inequality Report  2018

(3   (3) Credit Suisse (2015) ‘Global Wealth Databook 2015’. Total net wealth at constant exchange rate (USD billion).

(4) Hardoon, Deborah (2017) “An Economy For the 99 Percent,” Oxfam Briefing Paper        99-percent-160117-en.pdf

(5) Picketty, Thomas (2014) Capital in the Twenty First Century Harvard University Press

(6) Roth, Steve (2017) “Insanely Concentrated Wealth Is Strangling Our Prosperity” Evonomics

(7) Wilkinson, Richard and Pickett, Kate (2010) The Spirit Level. New York: Bloomsbury Press; Ehrenreich, John (2016) Third Wave Capitalism. Ithaca: Cornell University Press, 40, 44-5, 47-8, 50, 155-162

(8) Case, Anne and Deaton, Angus (2015) “Rising morbidity and mortality in midlife among white non-Hispanic Americans in the 21st century,” Proceedings of the National Academy of Sciences of the United States. September 17

(9) Krugman, Paul (2015) “Heartland of Darkness,” The New York Times.  November 4

(10) Cooper, Ryan (2015) “Why Poor White Americans Are Dying of Despair,” The Hill.  November 6

(11) Stuckler, David abd Basu, Sanjay (2013) The Body Economic  Why Austerity   Kills. New York: Basic Books

(12) Szalavitz, Maia (2017) “Why Inequality Predicts Homicide Rates Better Than Any Other Variable” Evonomics

(13) Daly, Martin (2016) Killing the Competition  Economic Inequality and Homicide. New York: Routledge

(14) Ansell, David (2017) The Death Gap: How Inequality Kills. Chicago: The University of Chicago Press, p. vii

Alan Nasser is professor emeritus of Political Economy and Philosophy at The Evergreen State College. His website is:  His book, Overripe Economy  American Capitalism and the Crisis of Democracy, will be published by Pluto Press in June, 2018. If you would like to be notified when the book is released, please send a request to
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Where is Marley’s ghost… When we really need him?
« Reply #6 on: December 24, 2017, 12:21:36 AM »

Where is Marley’s ghost… When we really need him?

The overwhelming preponderance of dead-end box store jobs and part-time positions offering little or no benefits is what we have become in this so-called modern era.
Philip Farruggio / NationofChange / - December 15, 2017

NationofChange is a nonprofit organization, and this website is funded by readers like you. Please support our work. Donate or give monthly.

It is yuletide season once again What better book to read or film to watch than Dickens’  A Christmas Carol? This writer watches that movie every December and always takes more out of it each year. It took me perhaps a multitude of viewings to finally realize the true gist of the tale. For years I thought the story was about the personal redemption of Ebenezer Scrooge. No! Now I realize that the crux of the story (and film) was centered around Jacob Marley’s ghost and Karma. Scrooge was the recipient of and future receiver of the karma that Marley’s ghost forecast. Sadly, and most often the case of those among us who are able to peer into the future through whatever supernatural means, Ebenezer Scrooge was thus driven by fear. It was such a fear of the future laid out for him… by his own actions, that opened his eyes to truth. The ghost of Jacob Marley, destined to trudge the earthly ethers dragging his chains of Karma, is the key to the whole story. His ghost finally understood the ‘errors of his earthly ways’ and chose to save his partner Ebenezer from the same fate.

But… there is another aspect of the Dickens story. The interlude revealing the life of the Cratchit family addresses how much Dickens felt for the working poor… not just the poor, but those who labored for lousy pay working long hours. Similar to our 21st Century America, yes? The overwhelming preponderance of dead-end box store jobs and part-time positions offering little or no benefits is what we have become in this so-called modern era. The diminishing effect of fewer and less powerful labor unions has made us into a two-tier republic of haves and have-nots. Boy, would Dickens have a field day now! Getting back to the Scrooge story, how many of us can identify with the health crisis faced by Tiny Tim? Of course, today such a problem would warrant the needed surgery, but then the 21st Century Cratchits would be in debt forever. Sad, but true, because today’s insurance system could not let a working stiff like Cratchit, no matter how little he made, completely off the hook financially… but that’s for another column.

Marley’s ghost could sure come in handy this Christmas. He would need an army of fellow ghosts dragging their chains (with Richard Nixon and  Ronald Reagan leading the way) to visit all our fellow Americans who act like old Ebenezer. There would be lots of folks to visit: the whole Bush Sr. and Jr. gangs, the Pentagon War Machine, the super-rich who control them all while financially squeezing the rest of us dry. Lest we not forget the Clintons,  Mr. ‘Hope and Change’ Obama, the megalomaniac demagogue Mr. Trump, along with the prostitute mainstream media. They all most likely will blame those visits on ‘an undigested piece of meat’ and hide under the covers. Ah, how great this thing called Karma is!

Philip Farruggio

Philip A Farruggio is son and grandson of Brooklyn, NYC longshoremen. A graduate of Brooklyn College ( class of ’74 with a BA in Speech & Theater), he is a free lance columnist posted on World News Trust, Nation of Change Blog, Op Ed News,, The Intrepid Report, Information Clearing House, Dandelion Salad, Activist Post, Dissident Voice, Counterpunch and many other sites worldwide. Philip works as an environmental products sales rep and has been a street corner protest activist leader and Green Party member since 2000. In 2010 he became a local spokesperson for the 25% Solution Movement to Save Our Cities by cutting military spending 25%. Philip can be reached at

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Collapse of Construction Giant with 43,000 Employees Globally Sparks Fear and Mayhem
by Don Quijones • Jan 15, 2018 • 32 Comments   
“The company that runs Britain”: profits were privatized, costs will be socialized.
By Don Quijones, Spain, UK, & Mexico, editor at WOLF STREET.

The decline and fall of 200-year old UK infrastructure group Carillion was as spectacular as it will be costly. It was forced into compulsory liquidation this morning, following the breakdown of crisis talks with its banks and the government. The company, with global sales of £5.2 billion in 2016, has 43,000 employees, including 20,000 in Britain and 10,000 in Canada. It’s saddled with debts and an underfunded pension plan.

Its shares had plunged by 95% over the past 12 months, from £2.40 ($3.53) in January 2017 to as low as £0.12 ($0.17).

“We have been unable to secure the funding to support our business plan, and it is therefore with the deepest regret that we have arrived at this decision,” the company said in a statement. And the government is now forced to guarantee public services, ranging from school meals and hospital maintenance to roadwork.

Carillion’s problems began after a spate of contract delays and a decline in new business left it at the mercy of its lenders and battling a burgeoning debt pile. The rot became irreversible once the hedge fund community, scenting fresh blood, began shorting the stock en masse in November 2016.
Time For a Coffee Run! Starbucks Just Made an Exciting Change to Its Espresso
Time For a Coffee Run! Starbucks Just Made an Exciting Change to Its Espresso
by Starbucks

In July 2017 a partial review by auditors KPMG identified £845 million of contract write-downs, sparking a massive rout in the shares. The finance director who helped unearth those problems, Zafar Khan, was duly fired by management in September, but the damage had already been done: Carillion shares were down 70% and the stock was the most shorted in Europe. As a leading City analyst told City A.M, the extent of the problems was “gobsmacking.”

Last week, senior government ministers held a crisis meeting to discuss further steps. The choice was stark: either bail out the firm or it let it fail, with ugly ramifications for its project partners, employees, creditors, including three lenders, HSBC, RBS and Santander UK, and UK public services as a whole.

The government chose the latter.

This is a company that builds and maintains schools, roads, hospitals, prisons, police stations and army barracks — or at least used to. It was also meant to play a major part in Britain’s High Speed Rail 2 project (or HS2), Europe’s biggest infrastructure project. In total, the firm participated in over 450 public-service projects. The fate of some of those projects and of the jobs associated with them is up in the air.

The UK government has pledged to take over Carillion’s public service projects, meaning a further drain on public spending. Nonetheless, jobs will be cut, schools and hospitals will go unbuilt and big questions will be asked about the wisdom and sustainability of the UK government’s almost 30-year old private finance initiative (PFI) model for building essential services. As Aditya Chakrabortty writes in The UK Guardian, “the dirty secret of PFI and all government attempts to pass public services into the private realm is that the shareholders make profits while the taxpayers remain on the hook for any losses.”

PFI deals were invented in 1992 by the Conservative government and then enthusiastically rolled out by the subsequent Labour government. The schemes usually involved large scale public buildings such as new schools and hospitals which were previously funded by the UK Treasury. Under PFI they were put out to tender with bids invited from developers who put up the investment to build new schools, hospitals or other schemes and then leased them back.

The schemes allowed ministers to harness big sums of private capital to invest in public projects, such as new schools and hospitals, without paying any money up front — and thus keeping the level of current public debt relatively low. Repayments are made over a long time scale, usually between 25 and 30 years but occasionally as long as 60 years, but often at an exorbitant rate of interest.

For the developers involved, the returns are generous and relatively safe, backed as they are by the UK taxpayer. But if the developer doesn’t want to hold on to the asset, there’s always the option of “flipping,” or selling on to some other investor, invariably one based in a tax haven, so not even UK corporation tax is paid on the profits. Carillion was one of four companies (the other three being Balfour Beatty, Interserve and Kier) that pocketed over £300 million flipping PFI schools and hospitals to the highest bidder. And that was before the company’s existential problems began.

In other words, many of Carillion’s PFI assets are already in the hands of foreign-domiciled investors, meaning that while the government will have to take over many of the services Carillion can no longer provide, it may still have to pay leasing costs to the foreign-owned firms that Carillion sold out to. Otherwise, those firms may sue the government for lost profits.

This is all happening as the true cost of PFI is becoming apparent. In April 2017, a bombshell report by the National Audit Office warned that the price tag for paying PFI firms would reach £8.6 billion in 2018 alone. In total, taxpayers owe a mind-watering £121.4 billion on public projects that are worth just £52.9 billion. And the compound interest continues to grow.

An investigation by The Daily Telegraph revealed that young people starting work in 2017 would end up paying taxes for the Government’s Private Finance Initiative until they are nearly 70. In return, they get to use increasingly costly and shoddy services.

As for the companies involved, they will continue to pick up billions in easy, virtually guaranteed profits — unless, of course, they go bankrupt, in which case the shareholders get wiped out, management walks away with well-filled pockets, and taxpayers get to foot an even bigger bill for public services the private sector can no longer provide. By Don Quijones.
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The Business of Bullshit
« Reply #8 on: January 18, 2018, 02:48:48 AM »

January 17, 2018
The Business of Bullshit

by Thomas Klikauer

Bullshit business is about the meaningless language conjured up in schools, in banks, in consultancy firms, in politics, in the media and, of course, in thousands of business schools releasing MBA-certificated managers who are then spreading the meaningless managerial buzz-word language of bullshit business around the world. Bullshit business can indeed take over organizations crowding out their core purpose – profit-maximization. When pro-business academics, management writers, CEOs, and upper-level managers invent bullshit language, they fabricate something that sustains Managerialism. While ideologically supporting Managerialism and capitalism, bullshit business also just gets in the way of the proper functioning of a business, a corporation, and ultimately capitalism. If business bullshit and its banal language were removed, corporations might even improve their real bottom line. Yet despite being rather counterproductive, Managerialism clings on to bullshit business.

The historic origins of bullshit business and its pathological language lie in Kroning and AT&T’s management “guru” hired to change the AT&T corporation. A management guru is someone named so by people who can’t spell “charlatan”. Others call them “witch doctors”. In the case of AT&T’s bullshit business, it was Russian mystic George Gurdjieff introducing an entire new set of bullshit language. Managerialism’s language has indeed led to a lot more management meetings as everything takes twice as long.

It is true that Kroning may have been killed off while Kronese has lived on. Nonetheless there are powerful forces behind bullshit business. Like Managerialism, the bullshitter has a lack of connection or concern for the truth – as if truth had ever been relevant for corporations and corporate management. True, bullshitters are not concerned that their grand pronouncements might be illogical, unintelligible or downright baffling. All they care about is whether people will listen and whether they can persuade them that corporations are good, management is legitimate and capitalism is the best system on earth. And this even though life expectancy in the USA – a truly capitalist country – has declined for the second consecutive year.

Meanwhile bullshit business jargon is also used as a linguistic barbed wire fence, which stops unfortunate amateurs (that is us) from trespassing on territory already claimed by experts (managers and business school professors). “That’s bullshit” indeed puts up a barbed wire fence. It not just blocks conversations, it also blocks critical thoughts about bullshit business protecting business, corporations, and capitalism as such. Consequently, many of the managerial practices are not adopted because they work, but because they are fashionable and they ideologically legitimize corporations. Ever since its invention, the bullshit merchant or management consultant can find a lucrative trade in any large organization. Managerialism thrives on this while management consultants rake in large fees as workers are “downsized” – to use another managerial buzzword.

At the same time, business schools remain one of the key drivers behind the process of bullshit business. The predecessor of bullshit business is David Graeber’s well known concept of “bullshit jobs”. These are jobs in which people experience their work as utterly meaningless, contributing nothing to the world and they think they should not exist? Not just in business schools but also in private industry, Managerialism has serious impacts when deans of business schools, university presidents – not yet called “CEOs” – and real CEOs flourish on bullshit business.

Aligned to bullshit business and Managerialism, all the managerial image enhancement has one economic impact: the CEOs’ pay went up. Large CEO pay cheques and golden parachutes have a very serious economic impact – inequality rises on a global scale. Even the otherwise extremely business friendly Fortune Magazine admitted recently that the pay gap between the average worker and CEOs stands at 271 in 2017, announcing “Top CEOs Make More in Two Days Than An Average Employee Does in One Year”.

An almost classical example of bullshit business is Nokia’s “Hello There” story of 2014. It remains one of the perfect examples of what Managerialism euphemistically calls organizational life – a true bullshit business term often taken on in the blissful unawareness that most of human life takes place outside of organizations while organizations, or better workplaces are all but deprived of life. The Orwellian bullshit business term “organizational life” is designed to camouflage the fact that for-profit corporations and companies hardly provide a livable space. Beyond that, “organization” sound so much nicer than corporation. The term corporation carries negative connotations to unwanted realities such as, for example, profits, the ruthless destruction of life on earth, etc. Perhaps’s cynicism is the best one can hope for on “organizational life”. Organizational life might boil down to what has been described in the BBC’s “the office”, The Living Dead – Switched off Zoned Out, The Shocking Truth about Office Life, Organizational Pathology: Life and Death of Organizations, and the by now classical study on the Moral Mazes – The World of Corporate Managers.

A much less recognized example of bullshit business occurred in Helsinki where a costly merger of three educational institutions (a business school, a technical school, and a design school) was driven by the analogy of the “Nordic MIT”. Finland’s top educational managers might have been Victims of Groupthinking. They might have also been victims of Managerialism believing their own ideology. Nordic MIT and similar hallucinations occur because of the prevalence of marketing and PR (public relations and propaganda) inside formerly research and teaching oriented institutions that once deserved the name “university”. As macro-level neoliberalism and micro-level Managerialism took hold, universities became PR institutions ruled by public relations managers creating what has been called a PR-university’. All too often, these are driven by top-managers with kitschy MBA certificates on their walls.

While MBAs learn bullshit business jargon in business schools, those on the receiving end of the Managerialism double-speak merchant are coerced into what ultimately results in ‘silence is the best policy’. Workers under the regime of Managerialism are forced to adhere to an old feudal policy: when the great lord passes by, the wise peasant bows deeply and farts silently. In the corporate workplace, it becomes: when the great CEO or one of his top managers pass by, the wise worker bows deeply and farts silently. In almost all business schools, in many management textbooks and crypto-academic articles on business, those at the receiving end of all this – the workers – are not just forgotten but all too often deliberately eliminated from public view.

As workers are disregarded or perhaps discarded, other themes are ideologically reframed. Just as standard management textbooks prefer the Orwellian Newspeak term “organization”, profits (Oldspeak) have been replaced with “shareholder value” (Newspeak). Whenever anti-democratic authoritarian management regimes need to vanish into rhetoric’s thin air, Managerialism’s henchmen prefer the word “bureaucracy”. Exchanging management with bureaucracy whenever convenient might make Cicero’s disciples happy while protecting managerial domination. However, management double-talk rarely enlightens one about the true state of workplace affairs often governed by a top-heavy bureaucratic apparatus. Despite the widespread stories about the decline of bureaucracy, we have actually experienced an explosion of bureaucracy.

Originating from the French Jean Claude Marie Vincent de Gournay (1712-1759), bureau or office actually means a system of government in which most of the important decisions are taken by state officials rather than by elected representatives. It does not mean an overblown managerial apparatus that runs today’s corporations operating in the profit mode. It means public administration for a greater good, namely the state. What bureaucracy also does not mean is a self-serving management elite narrowly focused on ROI – return of investment and the real bottom line. Transferring bureaucracy into the world of business and management makes the ugly “C”-words (corporations and companies) disappear. With it also disappears the company’s historical origin found in the con-pane, the bread sharing mercenaries – hired killers. With the bullshit business language of organizations and bureaucracy, the harshness of the profit maxim vanishes as Managerialism borrows heavily from democratic institutions and state bureaucracies. Much of this aids the appearance that lower level administrators are the problem – not those who govern them, i.e. top-management and CEOs. Very often, the very opposite is the case.

When stabilizing Managerialism as it is often done by business schools, the task is to infuse new MBAs with the latest managerial buzz- and “weasel worlds”. Set apart from corporate reality, it is not at all surprising to find that many management ideas are cooked up far from the day-to-day realities of a workplace. Generally, management ideas are designed without having much to do with day-to-day workplace realities. Far from workplaces, bullshit business buzz-words have a rather different task. Often, they are specifically not invented to be reflective of management and work. Instead, they fulfill what ideology sets out to achieve:

    1) Camouflaging contradictions (e.g. workers and management have different interests on wages, working time and general working conditions);

    2) cementing domination (e.g. the domination of management over workers); and finally,

    3) the prevention of emancipation (e.g. by obscuring the true affairs of work through, for example, putting up a smokescreen called bullshit business).

Far above the harshness of the neoliberal workplace, bosses continue to demand loyalty from their subordinates while those at the top get the lion’s share of rewards. Down the line, a global bureaucracy has created a huge number of bullshit jobs, such as PR agents, corporate lawyers, and a supportive cohort of pro-business writers in the corporate press and business schools. The central mission of many bullshit managers is to create a vast and apparently unbroken complex of rules and regulations which increasingly infiltrate all of our lives. The bullshit job list also includes CEOs, top managers and business school professors. Perhaps American writer and Pulitzer Prize winner Upton Sinclair hit the nail on the head when noting, it is difficult to get a man to understand something when his salary depends upon his not understanding it!

Creating bullshit business and its adjacent language remains the job of upper managers and a vast ring of ideologues surrounding corporations, ranging from lobbying camouflaged as think-tanks to employer associations, to the so-called business press, PR agencies, business school academics, and neoliberal economists. They provide the “right”(!) atmosphere for business, corporations, capitalism, and managerial regimes. In workplaces, office workers are managerially controlled, supervised, monitored, watched, assessed and measured by KPIs, the infamous key performance indicators. It is not workers but managers who are responsible for complex sets of rules and regulations. In the corporate world of business, however, these are no longer called rules and regulations – they are now called corporate policies, mission statements, and the like.

Such a top-down engineering of corporate bullshit policies, KPIs, mission statements, etc. has rather negative consequences for workers. Not only do you have to spend your time answering emails, sitting in meetings, and update your LinkedIn page as well as your next performance review, now you also need to spend time trying to optimize the way you process the bullshit that rains down on you from the top. This puts a double burden onto workers in the form of bullshit time, e.g. wasted time satisfying the upper echelons of Managerialism, and real working time, e.g. doing your job. Beyond that, many workers complain about the stratospheric increase of sitting in often rather useless meetings. The sheer endless amount of Dilbert cartoons and internet-transmitted jokes about management meetings tells one as much.

Concurrently, Managerialism’s bullshit business not just wastes an employee’s time sitting in management meetings but much of middle-management’s work is also artificially made busy through attending meetings, reviewing other people’s work, maintaining good relationships with co-workers and upper management through informal conversations, feed the administration machine through various form filling, and putting together proposals and propositions for new projects and funding. Worse, some workers are annually forced into re-applying for their own positions. In those cases, HRM’s internal labor market is driven to extremes by upper-managers hooked on the systemic and structural casualization of the workforce often camouflaged as being part of strategic management or restructuring or some other fashionable bullshit business. Beyond that, much of this legitimizes upper management as they organize the entire recruitment and selection process from job analysis to position descriptions, advertising the position, creating short-lists, holding job interviews, etc.

More often than not, many of these activities are done to feed the upper-management apparatus by sustaining its existence as many of these activities, like form filling, even when online, aren’t really necessary for the administration of a company. They are necessary for the acceptability of upper-management, the chain of command, the hierarchies and the controlling rules it has established. In short, it feeds the behemoth of Managerialism. Many at the top of the managerial pyramid who remain true believers of management fundamentalism see those at the bottom of Fayol’s infamous “chain of command” in the following way: you’re just a sheet of paper. While this sheet of paper might appear to be bullshit business, in managerial reality, it reduces workers to a figure on Kaplan and Norton’s “balanced scorecard”.

Whether employees are denigrated to human resources and assigned an individual profit indicting number on an (often not really) “balanced” scorecard or Xcel-file for the purpose of performance management, they are forced into line – a line invented and handed out by management. Under neoliberalism’s deregulation of formerly protective work rules and the deliberately created demise of trade unions, this occurs increasingly in a “my way or the highway” approach. In any case, you can be cynical about management bullshit all you want in private, but in public you need to pretend you are signing up. Workplaces under the rule of Managerialism are never really the “public”. Quite often, these are authoritarian workplaces without democracy.

These workplaces are reflective of a mixture of George Orwell’s “Animal Farm” and “Nineteen Eighty-Four”. Managerialism mixes Orwellian style “some animals are more equal than others” with Big Brother style workplace surveillance. Workers deliver scripted behavior and “Impression Management”. On a much more sophisticated and perhaps even slightly philosophical note, what occurs inside managerial regimes might be reflective of Baudrillard’s “Simulacra”. Many workers no longer really partake in management bullshit. Instead, they merely simulate. Working in today’s companies becomes mere simulation. And this remains so irrespective of “Working With the Corporate Psychopath” or not.

Of course, it is not only ordinary office workers who are drowning in shit, Managerialism or bullshit business has entered universities as well. This is so ever since Managerialism came to universities as the German army came to Poland. As a consequence, for example, plans for a new building for an international center for democracy and conflict resolution were cancelled in favor of a new building for the business school. The much believed “we live in a democracy” ideology conveniently camouflages the democracy to business move. An awareness that huge chunks of our lives are excluded from democracy: our educational systems, our schools, and of course our workplaces, is eliminated from our imagination. Terms like workplace or industrial democracy have all but disappeared. Google.Books gives the impression that industrial democracy died a slow death sometime during the 1970s. It has effectively been eliminated from the public domain and even more so from academia. Industrial democracy is no longer taught at universities.

Bullshit business also helps to assure that in the managerialized university, teaching and research have been replaced by the classical insignia of Managerialism with league tables, beauty contests, rankings and “impact factor fetishism” as the crown king of scholarly achievement. What counts in universities as in business schools are the routinely undergone brand-building and brand-refreshing exercises each time there is a change of deans or a new cohort of management consultants is hired. This is an activity spiced up with the eternally performed treadmill of business restructuring. In any top-heavy university apparatus blown up by Managerialism, the number of administrators has increased rapidly while the number of academics has stayed relatively flat. When the managerialist university is “Selling Students Short”, it does so with more managers and less academics. Meanwhile, the real work no longer means doing research and teaching and other things a university is supposed to do. Rather, the real work has become dealing with bullshit to make universities appear more business-like.

Virtually the same happened, for example, in Britain’s National Health Service: there was an 87 per cent increase in the number of managers, whereas the number of clinical staff rose by about a third. This may be bullshit business but all this has something to do with neoliberalism, Managerialism, Maggie Thatcher, Ronald Reagan and the Austrian aristocrat Herr von Hayek’s neoliberalism. Under the managerial university, people like Albert Einstein and Alan Turing are all but useless as they do not “publish a lot” nor do they rake in external, i.e. corporate funding. Certainly, in the case of Alan Turing, they might not even help in creating the right image of a university. Today, what matters is the external presentation – the eternal beauty pageant ever since a few second-tier journalists of a middle-level outfit called “USA Today” invented university rankings during lunch -or so the story goes.

Eccentrics like Alan Turing may well be the people who once told the truth but in today’s university their reputation is on the line and so are their jobs. Today, university management will “performance management you out of here” if you do not measure up. The case of London’s Imperial College and Stefan Grimm has shown so pointedly. In other words, reality reaches well beyond the fact that business bullshit took precedent over anything vaguely resembling the truth – it can kill people. Bullshit business in the form of Managerialism has very serious consequences reaching far beyond mere lips-service.

It is certainly on the mark to note that relying on bullshit means organizations do not get to the root of the issue. The very same can be said about business schools. They too do not get to the root of the issue. Their ideological task is to camouflage the negatives of business, corporations, and capitalism. For them bullshit business is very much a mixed blessing. Blessed is the managerial bullshitter. In a reminiscence of avoiding what American philosopher John Rawls once called the “veil of ignorance”, one should never be ignorant to what lies behind bullshit business. Some of this is shown in Schrijvers’ most exquisite ‘The Way of the Rat’. Interestingly, one shouldn’t forget key bullshit business terms such as PR’s corporate social responsibility (CSR) and business ethics. Bullshit business has been with us for some time now and the indications that it will leave soon are slim. Bullshit business supports capitalism and Managerialism. Someone once said that it is easier to imagine the end of the world than to imagine the end of capitalism. In the case of bullshit business, this seems pretty much on the mark.

Andre Spicer’s book Bullshit Business was published in 2018 by Routledge.
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The Carillion Collapse: Corporate Sickness in May’s Britain
« Reply #9 on: January 18, 2018, 02:52:43 AM »

The Carillion Collapse: Corporate Sickness in May’s Britain
By Dr. Binoy Kampmark
Global Research, January 16, 2018
Region: Europe
Theme: Police State & Civil Rights

Britain is ill, and even as the opportunists and populists scramble before the hardened negotiators of the European Union over imminent exit, revising optimistic forecasts and notions of sovereign greatness has begun.  Within Theresa May’s decaying state comes yet another economic disaster, and one that has prompted a revival of government assistance before the vicissitudes of the market. This, from a Tory government extolling the divine nature of free market enterprise.

Carillion, the UK’s second biggest construction company, is in a mammoth pickle, one to the tune of £1.5 billion.  It has gone into liquidation after the weekend failure to reach agreement with lenders and the government, a fact that literally threatens up to 20,000 jobs within the country, not to mention pension funds to the value of £600m.

Things get even more interesting when one sees where these jobs are, located across a range of industries from defence, health, transport (the HS2 high-speed rail line comes to mind) and education (notable here is the provision of dinners and cleaning for hundreds of schools).  In short, the company was something of a poster boy in the outsourcing agenda of government, golden boy of the competitive, tendering process.

The situation for the company has been so notably stricken as to prompt an emergency Cobra meeting by May’s Cabinet lasting for up to two hours.  Cabinet Office minister David Lidington suggested with usual understatement in the face of imminent catastrophe that matters had gone “pretty well” given that “people were turning up to work” and no “reports of serious interruption to service delivery” had been received.

Lidington’s language is that of a session at your MP’s surgery: dull, medicated, non-committal. Most of all, there is no sense of alarm.  The meeting, he continues, provided an “opportunity for ministers to test what sort of concerns are being expressed and decide how we should best address them”.

To date, the government has committed its first notable transgression against its self proclaimed free market ideology: covering the dues for small businesses and employees connected with Carillion’s public contracts.  The disastrous conduct of the golden boy must be somehow addressed.

Lidington’s point is to dress the assistance to those connected with the provision of public services in a different costume: avoid, for instance, any reference to a bailout, which reeks of the socialist hand and state-directed philosophy. “The action we have taken is designed to keep vital public services running rather than to provide a bailout on the failure of a commercial company.”

The consequences of such a patchy approach are already evident.  Given the web of contracts and commitments other companies have with Carillion, jobs are already being lost, the devastation starting to bite.  As a worker for the Midland Metropolitan Hospital Building told the BBC, “Everyone on the site told: ‘That’s it, go home.’  My company said, ‘You’ve been laid of.’”

Did anybody see this coming?  The situation last summer was already providing smoke signals of danger that all was not prudent on the financial side of Carillion.  The books were simply not tallying.  The company had issued profit warnings, largely triggered by overrunning costs regarding the Midland Metropolitan Hospitalin Sandwell, the Royal Liverpool Hospital, and the Aberdeen bypass.

Notwithstanding these concerns, ideology prevailed: the company still received £2bn worth of contracts.  It was too big not to, being the fundamental face of outsourcing.  An export guarantee issued on July 6 even went so far as to put £130m of taxpayer funds at risk.

Frank Field MP, chair of the Work and Pensions select committee, was unflattering:

    “Carillion took on mega borrowings while its pension deficit ballooned. We called over a year ago [The Pensions Regulator] to have mandatory clearance powers for corporate activities like these that put pension schemes at risk, and powers to impose truly deterrent fines that would focus boardroom minds.”

Labour leader Jeremy Corbyn has been, predictably, the first to take the hammer to government policies on privatisation, most notably what he terms the “out-source first dogma”.  “In the wake of the collapse of the contractor Carillion, it is time to put an end to the rip-off privatisation policies that have done serious damage to our public services and fleeced billions of pounds.”

Showing that this was not merely a concern on the left of politics, the traditional gristle of progressive concern for market forces, Bernard Jenkin, Conservative chairman of the House of Commons Public Administration Committee, made a rather damning admission.  Carillion’s collapse “really shakes public confidence in the ability of the private sector to deliver public services and infrastructure.”

This is the Thatcherite sin of Britain, government prostrate before the private provision of services, the state indifferent to accountability.  In May’s declining Britain, even receiving a half-credible, resourced public service from any sector, is a doomed challenge.


Dr. Binoy Kampmark was a Commonwealth Scholar at Selwyn College, Cambridge.  He lectures at RMIT University, Melbourne.  Email:
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Global Capitalism and Livelihoods Denied: Whipping India’s Farmers into Submission
By Colin Todhunter
Global Research, January 23, 2018
Region: Asia
Theme: Biotechnology and GMO, Poverty & Social Inequality

In India, there is a push to drive people from the countryside into cities. The mainstream narrative implies that urbanisation is natural in the evolution of societies and constitutes progress. The World Bank wants India to relocate 400 million people to urban centres. Former Chief Finance Minister P. Chidambaram once stated that 85% of the population would eventually live in cities, which would mean displacing many more than 400 million people given that the country’s population is heading towards 1.3 billion and that over 60% reside in rural India.

It is easy for some to conflate urbanisation and progress and to believe this is how to ‘develop’. But societies do not ‘evolve’ in a unilinear way. Policy makers merely look to prosperous countries and see the bulk of their populations living in cities with a small percentage working in (heavily subsidised and an unsustainable system of) agriculture. This is what ‘we’ must do, Indian politicians then say, spurred on by World Bank directives.

The route to capitalism and urbanisation was not ‘natural’ in Europe and involved the unforeseen outcomes of conflicts and struggles between peasants, landowners, the emerging class of industrialists and the state. The outcomes of these struggles resulted in different routes to modernity and levels of urbanisation.

In the book ‘The Invention of Capitalism’, economic historian Michael Perelmen lays bare the iron fist behind the invisible hand which  whipped the English peasantry in a workforce willing to accept factory wage labour. In this article by Yasha Lavene, it is noted that English peasants didn’t want to give up their rural communal lifestyle, leave their land and go work for below-subsistence wages in dangerous factories being set up by a new, rich class of industrial capitalists.

A series of laws and measures were designed to push peasants out of the old and into the new by destroying their traditional means of self-support. Perelman outlines the many different policies through which peasants were forced off the land, not least the destruction of the access to common land by fencing off the commons.

Early capitalists and their cheerleaders complained how peasants were too independent and comfortable to be properly exploited. Indeed, many prominent figures advocated for their impoverishment, so they would leave their land and work for low pay in factories.

In effect, peasants were booted off their land by depriving a largely self-reliant population of its productive means. Although self-reliance persisted among the working class (self-education, recycling products, a culture of thrift, etc), this too was eventually eradicated via advertising and an education system that ensured conformity and dependence on the goods manufactured by capitalism.

‘Development’: facilitating capital

    “We build cyber cities and techno parks and IITs at the cost of the welfare of the downtrodden and the environment. We don’t think how our farmers on whose toil we feed manage to sustain themselves; we fail to see how the millions of the poor survive. We look at the state-of-the-art airports, IITs, highways and bridges, the inevitable necessities for the corporate world to spread its tentacles everywhere and thrive, depriving the ordinary people of even the basic necessities of life and believe it is development.” – Sukumaran CV

Today’s affluent sections of urbanised Indians are often far removed from the daily struggles of the farmers for whom they depend on for their food. While inequalities spiral, many city dwellers echo similar sentiments of the cheerleaders of early capitalism described by Perleman when they say loan waivers for farmers are a drain on the economy and any subsidies given to them or the poor in general just encourages unproductivity or fecklessness.

Neoliberal dogmatists are quite content to sign a death warrant for Indian farmers.

Despite nice-sounding, seemingly benign terms like ‘foreign direct investment’, ‘ease of doing business’, making India ‘business friendly’ or ‘enabling the business of agriculture’- behind the World Bank/corporate-inspired rhetoric, policies and directives is the hard-nosed approach of neoliberal capitalism that is no less brutal for Indian farmers than early industrial capitalism was in England for its peasantry.

Like the English peasantry, India’s farmers are also being booted off the land.

Let us take a look at what has happened to India’s farmers. Trade policy and agriculture specialist Devinder Sharma has written much on their plight (access his writing here). GDP growth has been fuelled on the back of cheap food and the subsequent impoverishment of farmers. The gap between their income and the rest of the population, including public sector workers, has widened enormously. Rural India consumes less calories than it did 40 years ago. And corporations receive massive handouts and interest-free loans because it supposedly spurs job creation (which it has not), while any proposed financial injections (or loan waivers) for agriculture (which would pale into insignificance compared to corporate subsidies/written off loans) are depicted as a drain on the economy.

In short, although farmers continue to produce bumper harvests, the impact of underinvestment, lack of a secure income and effective minimum support prices; the undermining of the public distribution system; exposure to cheap imports courtesy of rigged international trade; the hardship caused by deregulation and profiteering companies which supply seeds and proprietary inputs; the loss of state agricultural support services; and the impacts of the corporate-backed/written Indo-US Knowledge Initiative on Agriculture, have made farming financially non-viable for many.

It is a deliberate strategy: part of the plan to displace the existing system of production with one dominated from seed to food processing to retail to plate by Western corporations. Independent cultivators are being bankrupted, land will be amalgamated to facilitate large-scale industrial cultivation and those that remain will be absorbed into corporate supply chains and squeezed as they work on contracts, the terms of which will be dictated by large agribusiness and chain retailers. 

Between 300,000 and 400,000 farmers have taken their lives since 1997 and millions more are experiencing economic distress. Over 6,000 are leaving the sector each day. And yet the corporate-controlled type of agriculture being imposed and/or envisaged only leads to degraded soil, less diverse and nutrient-deficient diets, polluted water and water shortages and poor health.

In addition to displacing people to facilitate the needs of resource extraction industries, unconstitutional land grabs for special economic zones, nuclear plants and other corporate money-making projects have forced many others from the land.

Various reports have concluded that we need to support more resilient, diverse, sustainable agroecological methods of farming and develop locally-based food economies. Indeed, small farms are more productive than giant industrial (export-oriented) farms and produce most of the world’s food on much less land.

Instead, in India, the trend continues to move in the opposite direction towards industrial-scale agriculture for the benefit of Monsanto, Cargill, Bayer and other transnational players. Is this the future India needs, with a fraction of farmers left on the land, trapped on an environmentally unsustainable chemical-GMO treadmill?

While whipping farmers, tribals and the unorganised sector into submission by depriving them of their livelihoods by one way or another, India’s political elite blindly adhere to the mantra that urbanisation equals progress and look to the West, whose path to ‘development’ was based on colonialism, eradicating self-reliance and beating the peasantry into submission. There was nothing ‘natural’ or ‘progressive’ about any of it. It involved the planned eradication of peasants and rural life by capitalist interests and the sucking of wealth from places like India.

In India, the bidding of capital is these days done through its compliant politicians, the World Bank, the WTO and lop-sided, egregious back-room deals written by corporations.
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⚠️ Fallout from Carillion Collapse Hits KPMG
« Reply #11 on: January 28, 2018, 02:51:10 AM »

Fallout from Carillion Collapse Hits KPMG

by Don Quijones • Jan 27, 2018 • 32 Comments   

Next Arthur Andersen? No, the “Final Four” audit firms are “too big to replace.”
By Don Quijones, Spain, UK, & Mexico, editor at WOLF STREET.

As the rubble from the financial collapse of British infrastructure giant Carillion gradually settles, two powerful parliamentary panels are piling pressure on the world’s biggest audit firms to disclose the full extent of their involvement with the company. The big four auditors — Deloitte, Ernst & Young (EY), KPMG, and PricewaterhouseCoopers (PwC) — have received letters from the Business and Work and Pensions select committees ‎demanding that they reveal all the work they carried out for Carillion since 2008.

The move comes amid growing concern around the world about the ‎power of the so-called Big Four — down from the Big Five after Arthur Andersen imploded in the wake of the Enron scandal — and the potential conflicts of interest that can arise between their myriad roles.

A case in point: when Spanish authorities tried to roll seven failed or failing Spanish saving banks into Bankia in 2011, Deloitte was hired not just as Bankia’s auditor but also the consultant responsible for formulating its accounts, in complete contravention of the basic concept of auditor independence. Deloitte (together with Spain’s market regulators) then confirmed in Bankia’s IPO prospectus that the newly born franken-bank was profitable and in sound financial health. It was a blatant lie. Bankia collapsed within less than a year of its IPO. Shareholders ended up losing billions and were later reimbursed by Spanish taxpayers.

In the case of Carillion, all four of the Big Four provided services of some kind or another to the now defunct company, but it was Dutch-seated KPMG that signed off on its accounts. This it did without fail, even in early 2017 when it was clear that Carillion had wafer-thin profit margins and was dangerously overloaded with debt, including £2.6 billion worth of pension liabilities. Between 2012 and 2016 Carillion ran up debts and sold assets just to continue paying out dividends to shareholders.
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Yet in Carillion’s last ever annual report, KPMG approved Carillion’s viability statement, certifying it as strong enough to survive for “at least three more years.” Within less than three months, Carillion’s management was forced to admit it had significantly overestimated revenues, cash and assets, prompting a stunning stock market meltdown from which it would never recover.

A scathing letter to the Financial Times this week called for Carillion’s directors and KPMG to be investigated for the company’s collapse. Martin White, of the UK Shareholders Association, and Natasha Landell-Mills, of Sarasin & Partners, wrote:

    “Although fingers are being pointed in all directions, most are missing the real culprit: faulty accounts appear to have allowed Carillion to overstate profits and capital, thereby permitting them to load up on debt while paying out cash dividends and bonuses.”

All of it on KPMG’s watch.

Carillion’s collapse bears a striking resemblance to the dramatic demise of Spanish green energy giant, Abengoa, in 2016. For three years, the auditor, Deloitte again, failed to spot (or at least report) any of the glaring irregularities on Abengoa’s financial statements. By contrast, Pepe Baltá, a 17-year old student in Barcelona who chose Abengoa as the subject of his high school economics project, noticed serious flaws in the company’s accounting — a full year before Deloitte’s auditors finally blew the whistle. “The big surprise was that negative profits were being converted into positives,” Baltá told the Spanish daily El Mundo.

Yet each time a new corporate scandal or collapse exposes the failings, abuses or conflicts of interest of one of the big four accounting firms, a dainty slap on the wrist is the inevitable punishment. When Deloitte was found to have “seriously” infringed Spain’s auditing laws by ignoring at least a dozen glaring errors and irregularities in Bankia’s accounts prior to its IPO, the auditor was fined a paltry €12 million by Spanish authorities.

The problem is that the Big Four are simply too big. Having extended their tentacles into just about every facet of business administration, from accountancy to auditing, to legal and tax consultancy, while wiping out or gobbling up all their smaller rivals, the big four firms have grown horrendously large and conflicted, says British financial journalist Ian Fraser.

In the US, the Big Four audit 497 of the 500 S&P 500 companies. In the UK, the Big Four audit 99 of the FTSE 100 companies. In the vast majority of EU Member States, the combined market share of the Big Four audit firms for listed companies exceeds 90%. In Spain, all IBEX 35 companies are audited by the Big Four. Their global annual revenues have reached $134 billion in 2017.

This perfect oligopoly poses a major problem, not just for companies looking for alternatives but also for governments. “These giant firms are… virtually unassailable and are now called the ‘Final Four’,” says Fraser. “There’s a fear in government that you can’t allow one of these companies to fail because if there’s only three left, there will be even less competition in the sector… and even more of an oligopoly. As such, government is almost being held to ransom around the world by these big four firms.”

In other words, the Big Four, the self-anointed guardians of fiduciary responsibility and probity at the world’s biggest companies and banks, are not just woefully compromised and conflicted; they have grown too big to replace. And doling out petty fines for bad behavior each time they’re caught out is not going to change that. By Don Quijones.

At “the company that runs Britain,” profits were privatized, costs will be socialized. Read…  Collapse of Construction Giant with 43,000 Employees Globally Sparks Fear and Mayhem
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