From Democracy Now!
Majeed al-Alawi: “Secretary of Defense thank you very much for the excellent speech. I was wondering whether you think the Israeli nuclear weapon is a threat to regional security or not?”
Robert Gates: “No, I do not.”
The statement by Gates was greeted by laughter from a room filled with government officials from Middle Eastern countries.
Just the right response to this nonsense.
Tuesday, December 11, 2007
Sunday, December 9, 2007
Indo-US nuclear deal and Iran
Here's one of my letters published in Eat the State!, a local newspaper.
Tuesday, December 4, 2007
Allan Nairn on Guatemala
The courageous Allan Nairn calling for Elliot Abrams to be tried for crimes against humanity.
Sunday, December 2, 2007
Invasion Newspeak
See this: INVASION - A COMPARISON OF SOVIET AND WESTERN MEDIA PERFORMANCE, a comparison of Soviet and American invasion newspeak.
Nikolai Lanine examines Soviet propaganda during Afghanistan war. Change a few names and lo' and behold! You get the American propaganda during Iraq war!
One of the snippets which would resonate with events today:
n 1988, Pravda reported that Afghan president Najibula had criticised this ”interference in the internal affairs of Afghanistan”. (Pravda, February 9, 1988) The newspaper failed to mention that the Soviet Union was itself guilty of illegal external “interference“. Instead, journalists blamed the West for ”pouring oil onto the fire of the Afghan conflict”. (Pravda, February 22, 1987) Ignoring the fact that much of the fighting in Afghanistan was in +response+ to the Soviet occupation, the media were also heavily critical of Iran and Pakistan.
Iran was criticised for “supporting the armed Islamic opposition” and for “sending its political emissaries and agents into the territory of Afghanistan”. (Spolnikov, 1990, pp.104-105) Russian journalist Andrei Greshnov, who worked as a TASS correspondent in Afghanistan for eight years in the 1980s, describes in his book “Afghanistan: Hostages of Time” (2006) how for several years, starting in the early 1980s, he was tasked with collecting information on Iranian Shia infiltration across the Afghan border near Herat. Iranian influence was very tangible in Western Afghanistan and widely confirmed by the testimony of Soviet soldiers interviewed (by Lanine) over the last 20 years.
Nikolai Lanine examines Soviet propaganda during Afghanistan war. Change a few names and lo' and behold! You get the American propaganda during Iraq war!
One of the snippets which would resonate with events today:
n 1988, Pravda reported that Afghan president Najibula had criticised this ”interference in the internal affairs of Afghanistan”. (Pravda, February 9, 1988) The newspaper failed to mention that the Soviet Union was itself guilty of illegal external “interference“. Instead, journalists blamed the West for ”pouring oil onto the fire of the Afghan conflict”. (Pravda, February 22, 1987) Ignoring the fact that much of the fighting in Afghanistan was in +response+ to the Soviet occupation, the media were also heavily critical of Iran and Pakistan.
Iran was criticised for “supporting the armed Islamic opposition” and for “sending its political emissaries and agents into the territory of Afghanistan”. (Spolnikov, 1990, pp.104-105) Russian journalist Andrei Greshnov, who worked as a TASS correspondent in Afghanistan for eight years in the 1980s, describes in his book “Afghanistan: Hostages of Time” (2006) how for several years, starting in the early 1980s, he was tasked with collecting information on Iranian Shia infiltration across the Afghan border near Herat. Iranian influence was very tangible in Western Afghanistan and widely confirmed by the testimony of Soviet soldiers interviewed (by Lanine) over the last 20 years.
George Galloway's wit
George Galloway is a colourful and courageous anti-war MP in Britain who incidentally also hosts a radio show. He's full of the gift of the gab. Here's on of his phrases commenting on a former communist:
John was all for the men behind the wire.
Now he wants to make the wire ever higher.
John was all for the men behind the wire.
Now he wants to make the wire ever higher.
Tuesday, November 27, 2007
Thursday, November 22, 2007
Milton Friedman and Chile
One of the things for which Milton Friedman is both reviled and hailed is his connection with the "Miracle of Chile".
There are at least two questions:
a) What happenned in Chile and was it a "miracle"?
b) Why did Friedman consider it a "miracle"?
Let's try to lay out what happenned in Chile. The relevant time period is 1973-late 80s, the reign of Augusto Pinochet.
In 1970, a democratic socialist politician, Salvador Allende came to power in the Presidential election. He tried to carry out moderate reforms, including minor land reform. Unfortunately, as is the norm in Latin America, this means the President wasn't going to last very long. The CIA immediately started efforts to destabilize the political and economic structure. Nixon famously declared "make the economy scream". On September 11, 1973, what is known as the "first 9/11" in Latin America, Augusto Pinochet overthrew Allende in a coup.
The Pinochet regime is well known for its brutal suppression of labour unions, dissidents and all kinds of torture, massacres and other familiar stuff in Latin America. But it was also notable for its economic policies.
Milton Friedman was in Chile in the initial period and from what I can see, his only direct involvement was giving a speech laying out the case for neoliberal reforms.
However his ideas of economic policy were followed quite widely by a group of economists known as the "Chicago Boys", alumni of the University of Chicago, where Friedman taught. The strategies included large scale "privatization" of industries, cutting taxes, privatizing Social Security and many other familiar features of the neoliberal package.
Amartya Sen, in his book, Hunger and Public Action, examines the economic performance of Chile. From a survey of the literature in the field, he finds:
"This so-called "monetarist experiment"... has been the the object of much controversy, but few have claimed it to be a sucess. The failure of the monetarist experiment to lead to a sustained and broad-based increase in economic prosperity is apparent...The most conspicuous feature of the post-1973 period is that of considerable instability...and no firm and consistent upward trend (to say the least) in the conventional indicators of economic prosperity."
From his data, the per capita GDP fell 20% from 1973-85, real wages declined by approximately the same amount and unemployment rate increased from 4% to 14%.
On the social side, the picture is a little more complex. There has been an undeniable reduction in infant mortality rate (IMR) from 1973-85 from 82 per thousand to 19 per thousand. The life expectancy at birth also increased from 64.8 to 68.3. But life expectancy at age 1 (by definition, less sensitive to IMR) stagnated at 68.6 years. He finds that:
"Favourable IMR trends have not been reflective of a corresponding general improvement in living conditions".
Also, he notes that "there's little disagreement as to what caused the observed improvements in the area of child health and nutrition". Chile had a very long tradition of public action in nutritional and health programs for children, which played the major role in observed trends in IMR.
Friedman did consider the Chilean economy to have performed well.
"Oh, very well. Extremely well. The Chilean economy did very well, but more important, in the end the central government, the military junta, was replaced by a democratic society. So the really important thing about the Chilean business is that free markets did work their way in bringing about a free society."
A few comments about that. People can judge for themselves whether it did perform well. As to the second aspect, Friedman displays an extraordinary lack of historical knowledge. Even it Latin America, it was pretty evident, the role of military and business interests in sustaining dictatorial governments. These famous lines come from one of the most decorated American generals in history, Smedley Butler, in his book War is a Racket. He talks about his activities in Latin America in the first half of the 20th century:
"I spent 33 years and four months in active military service and during that period I spent most of my time as a high class muscle man for Big Business, for Wall Street and the bankers. In short, I was a racketeer, a gangster for capitalism. I helped make Mexico and especially Tampico safe for American oil interests in 1914. I helped make Haiti and Cuba a decent place for the National City Bank boys to collect revenues in. I helped in the raping of half a dozen Central American republics for the benefit of Wall Street. I helped purify Nicaragua for the International Banking House of Brown Brothers in 1902-1912. I brought light to the Dominican Republic for the American sugar interests in 1916. I helped make Honduras right for the American fruit companies in 1903. In China in 1927 I helped see to it that Standard Oil went on its way unmolested. Looking back on it, I might have given Al Capone a few hints. The best he could do was to operate his racket in three districts. I operated on three continents."
Friedman has held that in fact, this picture is misleading because the state in intertwined with the Big Business (which is true) and thus he held that privatizing and minimizing the state would help things along. Did that happen in Chile? From what I can make out (I need to do more research on this), most of the newly privatized business went to Pinochet's cronies and was just taking things out from the public realm, where it had, however small, a measure of control by the public, into the hands of cronies of the barbaric dictator.
There are at least two questions:
a) What happenned in Chile and was it a "miracle"?
b) Why did Friedman consider it a "miracle"?
Reality
Let's try to lay out what happenned in Chile. The relevant time period is 1973-late 80s, the reign of Augusto Pinochet.
Politics
In 1970, a democratic socialist politician, Salvador Allende came to power in the Presidential election. He tried to carry out moderate reforms, including minor land reform. Unfortunately, as is the norm in Latin America, this means the President wasn't going to last very long. The CIA immediately started efforts to destabilize the political and economic structure. Nixon famously declared "make the economy scream". On September 11, 1973, what is known as the "first 9/11" in Latin America, Augusto Pinochet overthrew Allende in a coup.
The Pinochet regime is well known for its brutal suppression of labour unions, dissidents and all kinds of torture, massacres and other familiar stuff in Latin America. But it was also notable for its economic policies.
Economics
Milton Friedman was in Chile in the initial period and from what I can see, his only direct involvement was giving a speech laying out the case for neoliberal reforms.
However his ideas of economic policy were followed quite widely by a group of economists known as the "Chicago Boys", alumni of the University of Chicago, where Friedman taught. The strategies included large scale "privatization" of industries, cutting taxes, privatizing Social Security and many other familiar features of the neoliberal package.
Performance
Amartya Sen, in his book, Hunger and Public Action, examines the economic performance of Chile. From a survey of the literature in the field, he finds:
"This so-called "monetarist experiment"... has been the the object of much controversy, but few have claimed it to be a sucess. The failure of the monetarist experiment to lead to a sustained and broad-based increase in economic prosperity is apparent...The most conspicuous feature of the post-1973 period is that of considerable instability...and no firm and consistent upward trend (to say the least) in the conventional indicators of economic prosperity."
From his data, the per capita GDP fell 20% from 1973-85, real wages declined by approximately the same amount and unemployment rate increased from 4% to 14%.
On the social side, the picture is a little more complex. There has been an undeniable reduction in infant mortality rate (IMR) from 1973-85 from 82 per thousand to 19 per thousand. The life expectancy at birth also increased from 64.8 to 68.3. But life expectancy at age 1 (by definition, less sensitive to IMR) stagnated at 68.6 years. He finds that:
"Favourable IMR trends have not been reflective of a corresponding general improvement in living conditions".
Also, he notes that "there's little disagreement as to what caused the observed improvements in the area of child health and nutrition". Chile had a very long tradition of public action in nutritional and health programs for children, which played the major role in observed trends in IMR.
Friedman's view
Friedman did consider the Chilean economy to have performed well.
"Oh, very well. Extremely well. The Chilean economy did very well, but more important, in the end the central government, the military junta, was replaced by a democratic society. So the really important thing about the Chilean business is that free markets did work their way in bringing about a free society."
A few comments about that. People can judge for themselves whether it did perform well. As to the second aspect, Friedman displays an extraordinary lack of historical knowledge. Even it Latin America, it was pretty evident, the role of military and business interests in sustaining dictatorial governments. These famous lines come from one of the most decorated American generals in history, Smedley Butler, in his book War is a Racket. He talks about his activities in Latin America in the first half of the 20th century:
"I spent 33 years and four months in active military service and during that period I spent most of my time as a high class muscle man for Big Business, for Wall Street and the bankers. In short, I was a racketeer, a gangster for capitalism. I helped make Mexico and especially Tampico safe for American oil interests in 1914. I helped make Haiti and Cuba a decent place for the National City Bank boys to collect revenues in. I helped in the raping of half a dozen Central American republics for the benefit of Wall Street. I helped purify Nicaragua for the International Banking House of Brown Brothers in 1902-1912. I brought light to the Dominican Republic for the American sugar interests in 1916. I helped make Honduras right for the American fruit companies in 1903. In China in 1927 I helped see to it that Standard Oil went on its way unmolested. Looking back on it, I might have given Al Capone a few hints. The best he could do was to operate his racket in three districts. I operated on three continents."
Friedman has held that in fact, this picture is misleading because the state in intertwined with the Big Business (which is true) and thus he held that privatizing and minimizing the state would help things along. Did that happen in Chile? From what I can make out (I need to do more research on this), most of the newly privatized business went to Pinochet's cronies and was just taking things out from the public realm, where it had, however small, a measure of control by the public, into the hands of cronies of the barbaric dictator.
Friday, October 26, 2007
Edward Herman on genocide
An excellent article by Edward Herman (of Manufacturing Consent fame) on genocide. Includes great material on Rwanda.
"The dictator Paul Kagame, one of the great mass murderers of our time, was made into an honored savior deserving and receiving strong Western support."
Thursday, October 25, 2007
IAEA report
There was a piece in Reuters India about IAEA's report that India and China would be needing a lot of energy, including nuclear energy in the decades ahead. Though, there is a slight matter of the dates. The report actually came out last year and mentions very little about India and China per se. The actual incident seems to have been comments made by a senior IAEA official.
Wednesday, October 17, 2007
Milton Friedman: Free to choose
I watched the PBS documentary Free to choose (1990 version) featuring Milton Friedman. Each episode features a roughly half-hour narration and analysis by Friedman followed by a 15-20 min discussion between Friedman and a couple other people.
Overall, it's a clear and lucid exposition of Friedman's philosophy. From consulting various sources, here's a summary.
Friedman holds that individual freedom is both the best means and the ends of human activity. To this end, he proposes that any coercion is wrong on the part of the govt. unless it's given a justification. Most forms of intervention, he argues, just make things worse. He writes, in Capitalism and Freedom:
Fundamentally, there are only two ways of co-ordinating the economic activities of millions. One is central direction involving the use of coercion--the technique of the army and of the modern totalitarian state. The other is voluntary co-operation of individuals--the technique of the market place.
Friedman, however, believes that there is a role for govt. - a limited role - in which it's main objectives are to maintain law and order, and rules to ensure private contracts - namely defense and security.
General comments on philosophy:
a) Since it's a very general philosophy, we must be careful of what it implies. The documentary gives a number of illustrations of the proposition. We can evaluate them and see what's going on.
b) His conception of "socialism". Not surprisingly, since we tend to have nuanced opinions about out own position and to caricaturize the opponent, his view of socialism is pretty one-dimensional. It roughly corresponds to govt. ownership of means of production.
An illustrative example happens in the fourth episode "The failure of socialism". At some point during the discussion, Henry Levin, who's supposed to be the "left" end of the spectrum, says something like "employee-owned business is also a possibility". Friedman says he has no objection to the thing per se, but that it is artificially propped up by govt. subsidies in the US.
To appreciate the joke in the idea fully, we must realize that the core of socialism, as always understood by almost every theorist, is workers' control over the means of production. Now, there are differences as to whether there should be an intermediate state facilitating the goal (communism), or should it be realized directly (anarcho-syndicalism).
In placing the "left" and the "right", we should realize, as Orwell did in his Homage to Catalonia, that Communism was a right-wing deviant of socialism (for example in the Spanish Civil War), not its core.
One of the works I'd recommend to understand this is Chomsky's Notes on Anarchism.
c) Friedman say he's opposed to concentrated power. But he has hardly any discussion of concentrated power in private hands, namely corporations. He holds that, in a competitive market, things will tend to disperse this power. I'm not convinced by his very limited argument here.
d) His role of govt. in defense and security. We can ask the question: what view of the police, security guards and the army does the ordinary worker have? Keep in mind that the US has an extremely violent labour history with security guards killing droves of union activists. The workers' views on the army (Friedman was opposed to the draft by the way), is pretty negative as well. They regarded the army as "sending poor folk to die for a war for rich folk". To get a sort of "radical leftist" - meaning workers' - view of the army, I recomment Howard Zinn's books.
Some more comments on the discussion.
a) Invariably there are discussions between Friedman, sort of a "conservative" like bankers, wall street guys or some such in the discussion together with a sort of "Keynesian" - which is in my book, sort of "centrist". They may range from "capitalism is good, but we need more safety nets" Michael Kinsley to the "capitalism does not work, both in theory and practice" Steve Cohen. Watching the objections raised by Galbraith in the first episode, I was pretty amused.
The observation I make is pretty common in the media. FAIR notes that invariably the discussion is framed in the media between committed right-wingers and sort of moderate centrists taking on the role of "left".
b) Again, the discussion presupposed a framework where socialism is "govt. intervention" or "protectionism" and capitalism is "free markets". Cohen makes a good point about this: like Eskimos having thirty words for "snow", protectionism is not a single strategy. In his view, Japan had a very intelligent govt. intervention in the economy. I'll talk more about the discussion with Cohen later.
c) There weren't any voices, both in the narration and the subsequent discussion from, say union activists. (one exception is the small quote from a teacher's union representative in the education segment, which I regard as the strongest, though still not satisfactory - more on that later.
This only scratches the surface, more on this later.
Overall, it's a clear and lucid exposition of Friedman's philosophy. From consulting various sources, here's a summary.
Friedman holds that individual freedom is both the best means and the ends of human activity. To this end, he proposes that any coercion is wrong on the part of the govt. unless it's given a justification. Most forms of intervention, he argues, just make things worse. He writes, in Capitalism and Freedom:
Fundamentally, there are only two ways of co-ordinating the economic activities of millions. One is central direction involving the use of coercion--the technique of the army and of the modern totalitarian state. The other is voluntary co-operation of individuals--the technique of the market place.
Friedman, however, believes that there is a role for govt. - a limited role - in which it's main objectives are to maintain law and order, and rules to ensure private contracts - namely defense and security.
General comments on philosophy:
a) Since it's a very general philosophy, we must be careful of what it implies. The documentary gives a number of illustrations of the proposition. We can evaluate them and see what's going on.
b) His conception of "socialism". Not surprisingly, since we tend to have nuanced opinions about out own position and to caricaturize the opponent, his view of socialism is pretty one-dimensional. It roughly corresponds to govt. ownership of means of production.
An illustrative example happens in the fourth episode "The failure of socialism". At some point during the discussion, Henry Levin, who's supposed to be the "left" end of the spectrum, says something like "employee-owned business is also a possibility". Friedman says he has no objection to the thing per se, but that it is artificially propped up by govt. subsidies in the US.
To appreciate the joke in the idea fully, we must realize that the core of socialism, as always understood by almost every theorist, is workers' control over the means of production. Now, there are differences as to whether there should be an intermediate state facilitating the goal (communism), or should it be realized directly (anarcho-syndicalism).
In placing the "left" and the "right", we should realize, as Orwell did in his Homage to Catalonia, that Communism was a right-wing deviant of socialism (for example in the Spanish Civil War), not its core.
One of the works I'd recommend to understand this is Chomsky's Notes on Anarchism.
c) Friedman say he's opposed to concentrated power. But he has hardly any discussion of concentrated power in private hands, namely corporations. He holds that, in a competitive market, things will tend to disperse this power. I'm not convinced by his very limited argument here.
d) His role of govt. in defense and security. We can ask the question: what view of the police, security guards and the army does the ordinary worker have? Keep in mind that the US has an extremely violent labour history with security guards killing droves of union activists. The workers' views on the army (Friedman was opposed to the draft by the way), is pretty negative as well. They regarded the army as "sending poor folk to die for a war for rich folk". To get a sort of "radical leftist" - meaning workers' - view of the army, I recomment Howard Zinn's books.
Some more comments on the discussion.
a) Invariably there are discussions between Friedman, sort of a "conservative" like bankers, wall street guys or some such in the discussion together with a sort of "Keynesian" - which is in my book, sort of "centrist". They may range from "capitalism is good, but we need more safety nets" Michael Kinsley to the "capitalism does not work, both in theory and practice" Steve Cohen. Watching the objections raised by Galbraith in the first episode, I was pretty amused.
The observation I make is pretty common in the media. FAIR notes that invariably the discussion is framed in the media between committed right-wingers and sort of moderate centrists taking on the role of "left".
b) Again, the discussion presupposed a framework where socialism is "govt. intervention" or "protectionism" and capitalism is "free markets". Cohen makes a good point about this: like Eskimos having thirty words for "snow", protectionism is not a single strategy. In his view, Japan had a very intelligent govt. intervention in the economy. I'll talk more about the discussion with Cohen later.
c) There weren't any voices, both in the narration and the subsequent discussion from, say union activists. (one exception is the small quote from a teacher's union representative in the education segment, which I regard as the strongest, though still not satisfactory - more on that later.
This only scratches the surface, more on this later.
Sunday, October 14, 2007
The threat of nuclearization in the Middle East
Here's a story in The Hindu on terrorism and nuclear proliferation in the Middle East.
Saturday, October 13, 2007
Friday, October 12, 2007
Training cameramen is terrorism
Well, he is almost six years now in Guantanamo Bay. Sami Al-Haj is an Al Jazeera cameraman.
...
And what I just discovered this week -- I got it unclassified on Monday -- the latest allegations against him. Every time they come up with something, we prove it’s nonsense. And yet, on September the 11th -- this is the second time they’ve chosen September the 11th to do this -- they alleged -- and I’ve got it right here; I’m going to read it to make sure I’m accurate you -- that the training that Sami received to become a supposed terrorist was, quote, "the detainee was trained by Al Jazeera in the use of cameras." And that’s the sort depths, unfortunately, to which we’ve sunk in making allegations against people.
Democracy Now
...
And what I just discovered this week -- I got it unclassified on Monday -- the latest allegations against him. Every time they come up with something, we prove it’s nonsense. And yet, on September the 11th -- this is the second time they’ve chosen September the 11th to do this -- they alleged -- and I’ve got it right here; I’m going to read it to make sure I’m accurate you -- that the training that Sami received to become a supposed terrorist was, quote, "the detainee was trained by Al Jazeera in the use of cameras." And that’s the sort depths, unfortunately, to which we’ve sunk in making allegations against people.
Democracy Now
Thursday, October 11, 2007
Milton Friedman
I've been studying, among other things, Milton Friedman in the past few days. Of course, I'm no economist, so I can only read relatively nontechnical things.
Here's the resources I've looked at:
Friedman's interview with Charlie Rose in 2005(?).
Friedman's Nobel Prize lecture.
Friedman's interview with PBS, in particular his remarks on Chile.
Friedman's draft on Indian planning.
I've just got Friedman's Capitalism and Freedom and will go through it soon.
I'll make a detailed post (or a few) on Friedman later. A few remarks though.
Friedman, in his own words, is a '"libertarian" with a small "l" and a "Republican" with a capital "R"'. I happen to hold a "left-libertarian" or "anarchist" view myself with mistrust of govt. and states. So, immediately there is a certain point of agreement and many of his observations concur with my own.
However, when it comes to, say markets and corporations, I feel that for the argument to be consistent, I should be mistrustful of corporations as well. Anarchism is basically opposition to power. On the other hand, Friedman notes that corporations are "bad" only when they're tied in with the state (which I feel they are).
That's regarding philosophy. I'll elaborate more in this and also primarily concentrate on the implementation of the philosophy.
Here's the resources I've looked at:
Friedman's interview with Charlie Rose in 2005(?).
Friedman's Nobel Prize lecture.
Friedman's interview with PBS, in particular his remarks on Chile.
Friedman's draft on Indian planning.
I've just got Friedman's Capitalism and Freedom and will go through it soon.
I'll make a detailed post (or a few) on Friedman later. A few remarks though.
Friedman, in his own words, is a '"libertarian" with a small "l" and a "Republican" with a capital "R"'. I happen to hold a "left-libertarian" or "anarchist" view myself with mistrust of govt. and states. So, immediately there is a certain point of agreement and many of his observations concur with my own.
However, when it comes to, say markets and corporations, I feel that for the argument to be consistent, I should be mistrustful of corporations as well. Anarchism is basically opposition to power. On the other hand, Friedman notes that corporations are "bad" only when they're tied in with the state (which I feel they are).
That's regarding philosophy. I'll elaborate more in this and also primarily concentrate on the implementation of the philosophy.
Friday, October 5, 2007
Pew Research survey
The Pew research centre has come out with a new survey of attitudes around the world.
Saturday, September 29, 2007
Myanmar, India, China
There's been a flicker of coverage on the Myanmar military junta's crackdown on the demonstrators. It's been mostly the shaking of heads and making clicking noises at the situation.
Why should Indians care?
By far the biggest culprit in this (apart from the junta of course) is China. Followed by India. Both China and India have invested heavily in keeping the junta armed and dangerous. As pointed out by Amnesty International, China is a leading arms supplier to govts. with human rights violations, including Myanmar and Sudan. India has also invested heavily in arms to the junta. Amnesty International has also accused India of selling Advanced Light Helicopters (ALH) to the junta, which would constitute violations of the EU sanctions on Myanmar, though India denies it. When you give arms to a repressive govt., it's not "non-interference" by any means.
It's widely recognized round the world that arms sales correspond to increasing repression and human rights violations. These arms are used to murder, torture, destroy and pillage. It's not pretty.
Indians have to decide whether to treat the Burmese people as dispensable in India's quest for gas resources in the region.
Why should Indians care?
By far the biggest culprit in this (apart from the junta of course) is China. Followed by India. Both China and India have invested heavily in keeping the junta armed and dangerous. As pointed out by Amnesty International, China is a leading arms supplier to govts. with human rights violations, including Myanmar and Sudan. India has also invested heavily in arms to the junta. Amnesty International has also accused India of selling Advanced Light Helicopters (ALH) to the junta, which would constitute violations of the EU sanctions on Myanmar, though India denies it. When you give arms to a repressive govt., it's not "non-interference" by any means.
It's widely recognized round the world that arms sales correspond to increasing repression and human rights violations. These arms are used to murder, torture, destroy and pillage. It's not pretty.
Indians have to decide whether to treat the Burmese people as dispensable in India's quest for gas resources in the region.
Friday, September 28, 2007
A good joke
"A famous comment by a Mexican foreign minister when Kennedy tried to convince him to join in the terrorist war against Cuba and the economic embargo strangulation, in fact on the grounds that Cuba was a threat to the security of the hemisphere ... and the Mexican ambassador said he had to decline, the prime minister had to decline because if he tried to tell people in Mexico that Cuba was a security threat, 40 million Mexicans would die laughing, which is approximately the right answer."
Noam Chomsky, interview with Democracy Now!, on Reagan's legacy.
Noam Chomsky, interview with Democracy Now!, on Reagan's legacy.
Thursday, September 27, 2007
Israel-Palestine conflict
This is a very controversial issue and I was thinking for a long time on how, if at all, I should comment on it.
Perhaps one of the best ways of going about this is to get to the realm of facts. There's so much disinformation and ideological probelms in this conflict that it's helpful to know what actually happenned.
I'd recommend this as a primer and essentially my view on the topic. This is a discussion between Shlomo Ben-Ami, former Foreign Minister of Israel and chief negotiator at the Camp David accords of 2000, and Norman Finkelstein, a leading and courageous expert on this topic.
A few excerpts:
On events 1920-1947
Ben-Ami: "The reality on the ground was that of an Arab community in a state of terror facing a ruthless Israeli army whose path to victory was paved not only by its exploits against the regular Arab armies, but also by the intimidation and at times atrocities and massacres it perpetrated against the civilian Arab community. A panic-stricken Arab community was uprooted under the impact of massacres that would be carved into the Arabs' monument of grief and hatred.”
On the resolution
Ben-Ami: We need to draw a line between an Israeli state, a sovereign Palestinian state, and solve the best way we can the problem, by giving the necessary compensation to the refugees, by bringing back the refugees to the Palestinian state, no way to the state of Israel, not because it is immoral, but because it is not feasible, it is not possible.
On Oslo (1991)
Ben-Ami: the P.L.O. will be Israel's subcontractor and collaborator in the Occupied Territories,...” "...in order to suppress the genuinely democratic tendencies of the Palestinians."
On Hamas and PLO
Ben-Ami: ...in my view there is almost sort of poetic justice with this victory of Hamas. After all, what is the reason for this nostalgia for Arafat and for the P.L.O.?...
...1990s was the first time that Hamas spoke about a temporary settlement with Israel. In 2003, they declared unilaterally a truce...
...Now, everybody says they need first to recognize the state of Israel and end terrorism. Believe me, I would like them to do so today, but they are not going to do that. They are eventually going to do that in the future, but only as part of a quid pro quo, just as the P.L.O. did it.
On 1967 borders
Finkelstein: Borders. The principle is clear. I don't want to get into it now, because I was very glad to see that Dr. Ben-Ami quoted it three times in his book. It is inadmissible to acquire territory by war. Under international law, Israel had to withdraw from all of the West Bank and all of Gaza. As the World Court put it in July 2004, those are, quote, "occupied Palestinian territories."
On Camp David (2000)
Finkelstein: ...On every single issue, all the concessions came from the Palestinians. The problem is, everyone, including Dr. Ben-Ami in his book — he begins with what Israel wants and how much of its wants it's willing to give up. But that's not the relevant framework. The only relevant framework is under international law what you are entitled to, and when you use that framework it's a very, very different picture.
Ben-Ami: ...Camp David was not the missed opportunity for the Palestinians, and if I were a Palestinian I would have rejected Camp David, as well...
On Clinton Parameters (late 2000) and Taba (2001)
Finkelstein: It[Taba] ended officially when Barak withdrew his negotiators. It wasn't the Palestinians who walked out of Taba. It ended with the Israelis walking out of Taba, a matter of historical record, not even controversial.
Ben-Ami: ...Now, with regard to Taba, you see, we were a government committing suicide, practically... Our legitimacy as a government to negotiate such central issues as Jerusalem, as Temple Mount, the temple, etc., was being questioned...“Shlomo Ben-Ami is ready to sell out the country for the sake of a Nobel Prize.”
On "not-so-new new anti-Semitism.”
Finkelstein: There is no evidence of a new anti-Semitism. If you go through all the literature, as I have, the evidence is actually in Europe...the evidence is, if you look at like the Pew Charitable Trust surveys, anti-Semitism has actually declined since the last time they did the surveys. They did it in 1991 and 2002. They said the evidence is that it's declined.
Ben-Ami: I don't believe also that the number of incidents, as such, is the reflection of whether or not anti-Semitism is growing...[I] can see more xenophobia against North Africans, against foreigners throughout Europe. And in a way, in a way...The problem today is, in my view, much more that of [discrimination against] the Arab, the Muslim immigrants from North Africa, from the Middle East and other parts
On human rights
Finkelstein: ...the fact of the matter is, being faithful to historical record, the record of Labour ["left-wing"] has been much worse on human rights violations than the record of Likud ["right-wing"]... it doesn't speak too much in Israel's favor that it's the only country in the world that legalized torture. It was also the only country in the world that legalized hostage taking...Israel was the only country in the world that's legalized house demolitions as a form of punishment.
On the future
Ben-Ami: ...let us not fool ourselves. Many of the problems that the West is facing today with the Arab world will persist. The Palestinian issue has been used frequently by many Arab rulers as a pretext for not doing things that need to be done in their own societies...
...I define myself as an ardent Zionist that thinks that the best for the Jews in Israel is that we abandon the territories and we dismantle settlements and we try to reach a reasonable settlement with our Palestinian partners. It's not because I am concerned with the Palestinians. I want to be very clear about it. My interpretation, my approach is not moralistic...
Perhaps one of the best ways of going about this is to get to the realm of facts. There's so much disinformation and ideological probelms in this conflict that it's helpful to know what actually happenned.
I'd recommend this as a primer and essentially my view on the topic. This is a discussion between Shlomo Ben-Ami, former Foreign Minister of Israel and chief negotiator at the Camp David accords of 2000, and Norman Finkelstein, a leading and courageous expert on this topic.
A few excerpts:
On events 1920-1947
Ben-Ami: "The reality on the ground was that of an Arab community in a state of terror facing a ruthless Israeli army whose path to victory was paved not only by its exploits against the regular Arab armies, but also by the intimidation and at times atrocities and massacres it perpetrated against the civilian Arab community. A panic-stricken Arab community was uprooted under the impact of massacres that would be carved into the Arabs' monument of grief and hatred.”
On the resolution
Ben-Ami: We need to draw a line between an Israeli state, a sovereign Palestinian state, and solve the best way we can the problem, by giving the necessary compensation to the refugees, by bringing back the refugees to the Palestinian state, no way to the state of Israel, not because it is immoral, but because it is not feasible, it is not possible.
On Oslo (1991)
Ben-Ami: the P.L.O. will be Israel's subcontractor and collaborator in the Occupied Territories,...” "...in order to suppress the genuinely democratic tendencies of the Palestinians."
On Hamas and PLO
Ben-Ami: ...in my view there is almost sort of poetic justice with this victory of Hamas. After all, what is the reason for this nostalgia for Arafat and for the P.L.O.?...
...1990s was the first time that Hamas spoke about a temporary settlement with Israel. In 2003, they declared unilaterally a truce...
...Now, everybody says they need first to recognize the state of Israel and end terrorism. Believe me, I would like them to do so today, but they are not going to do that. They are eventually going to do that in the future, but only as part of a quid pro quo, just as the P.L.O. did it.
On 1967 borders
Finkelstein: Borders. The principle is clear. I don't want to get into it now, because I was very glad to see that Dr. Ben-Ami quoted it three times in his book. It is inadmissible to acquire territory by war. Under international law, Israel had to withdraw from all of the West Bank and all of Gaza. As the World Court put it in July 2004, those are, quote, "occupied Palestinian territories."
On Camp David (2000)
Finkelstein: ...On every single issue, all the concessions came from the Palestinians. The problem is, everyone, including Dr. Ben-Ami in his book — he begins with what Israel wants and how much of its wants it's willing to give up. But that's not the relevant framework. The only relevant framework is under international law what you are entitled to, and when you use that framework it's a very, very different picture.
Ben-Ami: ...Camp David was not the missed opportunity for the Palestinians, and if I were a Palestinian I would have rejected Camp David, as well...
On Clinton Parameters (late 2000) and Taba (2001)
Finkelstein: It[Taba] ended officially when Barak withdrew his negotiators. It wasn't the Palestinians who walked out of Taba. It ended with the Israelis walking out of Taba, a matter of historical record, not even controversial.
Ben-Ami: ...Now, with regard to Taba, you see, we were a government committing suicide, practically... Our legitimacy as a government to negotiate such central issues as Jerusalem, as Temple Mount, the temple, etc., was being questioned...“Shlomo Ben-Ami is ready to sell out the country for the sake of a Nobel Prize.”
On "not-so-new new anti-Semitism.”
Finkelstein: There is no evidence of a new anti-Semitism. If you go through all the literature, as I have, the evidence is actually in Europe...the evidence is, if you look at like the Pew Charitable Trust surveys, anti-Semitism has actually declined since the last time they did the surveys. They did it in 1991 and 2002. They said the evidence is that it's declined.
Ben-Ami: I don't believe also that the number of incidents, as such, is the reflection of whether or not anti-Semitism is growing...[I] can see more xenophobia against North Africans, against foreigners throughout Europe. And in a way, in a way...The problem today is, in my view, much more that of [discrimination against] the Arab, the Muslim immigrants from North Africa, from the Middle East and other parts
On human rights
Finkelstein: ...the fact of the matter is, being faithful to historical record, the record of Labour ["left-wing"] has been much worse on human rights violations than the record of Likud ["right-wing"]... it doesn't speak too much in Israel's favor that it's the only country in the world that legalized torture. It was also the only country in the world that legalized hostage taking...Israel was the only country in the world that's legalized house demolitions as a form of punishment.
On the future
Ben-Ami: ...let us not fool ourselves. Many of the problems that the West is facing today with the Arab world will persist. The Palestinian issue has been used frequently by many Arab rulers as a pretext for not doing things that need to be done in their own societies...
...I define myself as an ardent Zionist that thinks that the best for the Jews in Israel is that we abandon the territories and we dismantle settlements and we try to reach a reasonable settlement with our Palestinian partners. It's not because I am concerned with the Palestinians. I want to be very clear about it. My interpretation, my approach is not moralistic...
Anarchism & Socialism
The following is a description taken from George Orwell's book, Homage to Catalonia. It's a firsthand account of one of the few really successful libertarian socialist revolutions in history - The Spanish Civil War.
It was the first time that I had ever been in a town where the working class was in the saddle. Practically every building of any size had been seized by the workers and was draped with red flags or with the red and black flag of the Anarchists; every wall was scrawled with the hammer and sickle and with the initials of the revolutionary parties; almost every church had been gutted and its images burnt. Churches here and there were being systematically demolished by gangs of workmen. Every shop and cafe had an inscription saying that it had been collectivized; even the bootblacks had been collectivized and their boxes painted red and black. Waiters and shop-walkers looked you in the face and treated you as an equal. Servile and even ceremonial forms of speech had temporarily disappeared. Nobody said 'Senior' or 'Don' or even 'Usted'; everyone called everyone else 'Comrade' and 'Thou', and said 'Salud!' instead of 'Buenos dias'. Tipping was forbidden by law; almost my first experience was receiving a lecture from a hotel manager for trying to tip a lift-boy. There were no private motor-cars, they had all been commandeered, and all the trams and taxis and much of the other transport were painted red and black. The revolutionary posters were everywhere, flaming from the walls in clean reds and blues that made the few remaining advertisements look like daubs of mud. Down the Ramblas, the wide central artery of the town where crowds of people streamed constantly to and fro, the loudspeakers were bellowing revolutionary songs all day and far into the night. And it was the aspect of the crowds that was the queerest thing of all. In outward appearance it was a town in which the wealthy classes had practically ceased to exist. Except for a small number of women and foreigners there were no 'well-dressed' people at all. Practically everyone wore rough working-class clothes, or blue overalls, or some variant of the militia uniform. All this was queer and moving.
He goes on to say:
There was much in it that I did not understand, in some ways I did not even like it, but I recognized it immediately as a state of affairs worth fighting for
It was the first time that I had ever been in a town where the working class was in the saddle. Practically every building of any size had been seized by the workers and was draped with red flags or with the red and black flag of the Anarchists; every wall was scrawled with the hammer and sickle and with the initials of the revolutionary parties; almost every church had been gutted and its images burnt. Churches here and there were being systematically demolished by gangs of workmen. Every shop and cafe had an inscription saying that it had been collectivized; even the bootblacks had been collectivized and their boxes painted red and black. Waiters and shop-walkers looked you in the face and treated you as an equal. Servile and even ceremonial forms of speech had temporarily disappeared. Nobody said 'Senior' or 'Don' or even 'Usted'; everyone called everyone else 'Comrade' and 'Thou', and said 'Salud!' instead of 'Buenos dias'. Tipping was forbidden by law; almost my first experience was receiving a lecture from a hotel manager for trying to tip a lift-boy. There were no private motor-cars, they had all been commandeered, and all the trams and taxis and much of the other transport were painted red and black. The revolutionary posters were everywhere, flaming from the walls in clean reds and blues that made the few remaining advertisements look like daubs of mud. Down the Ramblas, the wide central artery of the town where crowds of people streamed constantly to and fro, the loudspeakers were bellowing revolutionary songs all day and far into the night. And it was the aspect of the crowds that was the queerest thing of all. In outward appearance it was a town in which the wealthy classes had practically ceased to exist. Except for a small number of women and foreigners there were no 'well-dressed' people at all. Practically everyone wore rough working-class clothes, or blue overalls, or some variant of the militia uniform. All this was queer and moving.
He goes on to say:
There was much in it that I did not understand, in some ways I did not even like it, but I recognized it immediately as a state of affairs worth fighting for
Monday, September 24, 2007
Saturday, September 22, 2007
Sunday, September 16, 2007
Govt. officials said
A few weeks back, I was listening to a speech by Robert Fisk where he was talking about a report on the Middle East in the L.A. Times. The theme of the report was "govt. officials said". I was reading HT business pages today with a column which very well illustrates the point.
Titled, "Agri will remain unaffected by water supply to industries", the column can be summarized in one phrase: "govt. officials said".
Here's what we find by going through the column:
"Orissa government on Saturday claimed..."
"...claim was based on the report of a four-member technical committee"
"Chief Minister Naveen Patnaik told..."
"He asked officials to ensure..."
"Official sources said..."
"The committee, the government claimed..."
I did have occasion to read something about Vedanta Aluminium Limited in Orissa, here. I've no idea whether it's true or not, but at least it doesn't fall into the category of "govt. officials said".
Apparently, the people are too insignificant for the HT to talk to.
Titled, "Agri will remain unaffected by water supply to industries", the column can be summarized in one phrase: "govt. officials said".
Here's what we find by going through the column:
"Orissa government on Saturday claimed..."
"...claim was based on the report of a four-member technical committee"
"Chief Minister Naveen Patnaik told..."
"He asked officials to ensure..."
"Official sources said..."
"The committee, the government claimed..."
I did have occasion to read something about Vedanta Aluminium Limited in Orissa, here. I've no idea whether it's true or not, but at least it doesn't fall into the category of "govt. officials said".
Apparently, the people are too insignificant for the HT to talk to.
Saturday, September 15, 2007
Economics and human nature: selfishness and solidarity
My point here is that human nature is a complex thing. There is a selfish streak, but there are also other considerations, like truth, justice, solidarity. Human values/morals are not axiom systems.
It follows that many of the concepts in economics are ideological rather than "scientific". That's not necessarily a bad thing. Our understanding always progresses by simplifying and making assumptions. But it's always prudent to consider alternative systems, with different assumptions, especially as they relate to human nature.
To illustrate, let's take the case of Pareto efficiency. That's a specific type of economic efficiency. Basically it says that if everyone is no worse off, but someone is better off, then it's a Pareto improvement. And if no further improvements can be made, it's Pareto optimal.
Markets are intimately connected with Pareto optimal solutions.
Now, that's a highly ideological notion. There's nothing holy about it. And in fact, these caveats can be found throughout the development of neoclassical economics.
To take a simple but far from obvious case. Consider a owner and a slave. The slave labours and the owner looks over him, maybe directing him to do this and that. They make a profit. And then the owner takes 90% and gives the slave 10%. That's a Pareto optimal solution. Is it acceptable?
To make this interesting, let's consider analogous scenarios.
a) Replace the slave with a beast of burden. Now what?
b) Replace the slave with a wage slave, namely a worker. Now what?
It's clear that the other cases (as well as the original one) are far from clear. It very largely depends upon our view. Should animals be treated like human beings? If not, how different?
It's clear that "culture" or "justice" or things like "solidarity" play a very important role. These things, though hard to quantify, are deeply rooted in human behaviour.
The task of social movements, past and present, is to change this view. Intellectual discussions are important, but won't solve the root problem. The way of changing the view is through education and awareness, at least.
For instance, let's look at slavery. Slave owners were giving many plausible arguments. Do you take better care of your car when you own it, or rent it? Therefore, we should own the slaves. Not rent them, like labour bonded to capital.
This argument was abolished only when the people decided that people ought not to be owned. That's a value judgement. It's extremely hard. It was not done by arguing about the merits of private property.
It follows that many of the concepts in economics are ideological rather than "scientific". That's not necessarily a bad thing. Our understanding always progresses by simplifying and making assumptions. But it's always prudent to consider alternative systems, with different assumptions, especially as they relate to human nature.
To illustrate, let's take the case of Pareto efficiency. That's a specific type of economic efficiency. Basically it says that if everyone is no worse off, but someone is better off, then it's a Pareto improvement. And if no further improvements can be made, it's Pareto optimal.
Markets are intimately connected with Pareto optimal solutions.
Now, that's a highly ideological notion. There's nothing holy about it. And in fact, these caveats can be found throughout the development of neoclassical economics.
To take a simple but far from obvious case. Consider a owner and a slave. The slave labours and the owner looks over him, maybe directing him to do this and that. They make a profit. And then the owner takes 90% and gives the slave 10%. That's a Pareto optimal solution. Is it acceptable?
To make this interesting, let's consider analogous scenarios.
a) Replace the slave with a beast of burden. Now what?
b) Replace the slave with a wage slave, namely a worker. Now what?
It's clear that the other cases (as well as the original one) are far from clear. It very largely depends upon our view. Should animals be treated like human beings? If not, how different?
It's clear that "culture" or "justice" or things like "solidarity" play a very important role. These things, though hard to quantify, are deeply rooted in human behaviour.
The task of social movements, past and present, is to change this view. Intellectual discussions are important, but won't solve the root problem. The way of changing the view is through education and awareness, at least.
For instance, let's look at slavery. Slave owners were giving many plausible arguments. Do you take better care of your car when you own it, or rent it? Therefore, we should own the slaves. Not rent them, like labour bonded to capital.
This argument was abolished only when the people decided that people ought not to be owned. That's a value judgement. It's extremely hard. It was not done by arguing about the merits of private property.
Friday, September 14, 2007
It's not just the calories, stupid
Swaminathan S. Anklesaria Aiyar's article in the Economic Times makes a good point, but not, I argue, in the manner which he intended.
The article critiques the work by Utsa Patnaik (see this work for the upgraded version of her work), as methodologically wrong. I note here a number of weak points in his argument.
a) The article only takes into account the issue ratio of people below the "poverty line". However, Utsa Patnaik's article makes the case for the poverty figures by giving many interrelated and important statistics, including debt figures, decreasing rural credit, decreasing rural development spending, falling output and many others. Those are not addressed, a typical case of dismissing other people's critique as unidimensional.
b) The example which he gave (of Burger King etc.) is totally misleading. Those don't correspond to anywhere near the average dietary figures for Americans, or even the recommended ones. Also, again, he uni-dimensionalizes obesity. Obesity is not just caused by over-eating. I suggest Aiyar try out that diet sometime.
c) The main point of Patnaik's work is not that 1800 calories or 2400 calories is the "correct" poverty line, but that the line has been "clandestinely" decreased over the years. With that, the poverty figures don't make any sense. That hasn't been addressed.
d) There are hypotheses for explaining the fall in calorie requirements. How accurate are they? No discussion.
e) The article actually uses circular reasoning. There's rising income and falling poverty, so calories have fallen, therefore there's falling poverty.
f) Relying one just work which seems contrary to someone else's doesn't make for good argument. A variety of different issues/measures/theories have to be considered.
This, to me is not acceptable. We should have more debate on these issues. Some may not apportion blame to neoliberal reforms, but honest scholars should confront the issues nonetheless.
The article critiques the work by Utsa Patnaik (see this work for the upgraded version of her work), as methodologically wrong. I note here a number of weak points in his argument.
a) The article only takes into account the issue ratio of people below the "poverty line". However, Utsa Patnaik's article makes the case for the poverty figures by giving many interrelated and important statistics, including debt figures, decreasing rural credit, decreasing rural development spending, falling output and many others. Those are not addressed, a typical case of dismissing other people's critique as unidimensional.
b) The example which he gave (of Burger King etc.) is totally misleading. Those don't correspond to anywhere near the average dietary figures for Americans, or even the recommended ones. Also, again, he uni-dimensionalizes obesity. Obesity is not just caused by over-eating. I suggest Aiyar try out that diet sometime.
c) The main point of Patnaik's work is not that 1800 calories or 2400 calories is the "correct" poverty line, but that the line has been "clandestinely" decreased over the years. With that, the poverty figures don't make any sense. That hasn't been addressed.
d) There are hypotheses for explaining the fall in calorie requirements. How accurate are they? No discussion.
e) The article actually uses circular reasoning. There's rising income and falling poverty, so calories have fallen, therefore there's falling poverty.
f) Relying one just work which seems contrary to someone else's doesn't make for good argument. A variety of different issues/measures/theories have to be considered.
This, to me is not acceptable. We should have more debate on these issues. Some may not apportion blame to neoliberal reforms, but honest scholars should confront the issues nonetheless.
Utsa Patnaik and poverty
Here's how I look at Utsa Patnaik's work.
Every pathbreaking piece of scholarship is controversial. That, however is not a sufficient condition for a work to be good.
To me, the issues in the work is the following:
a) What's the state of poverty in India?
b) What's the effect of neoliberal policies on poverty?
These are questions which are multi-faceted and deserve lots of scrutiny. Not just by economists (who are no gods, and have been shown to be wrong before), but also by the general public.
I think the main failure of Indian media is not just the dismissal of the report, but the failure to generate a serious debate about the policies which affect more than 60% of Indians. Indeed, this point is made by Amartya Sen, in his book, Hunger and Public Action. Indian media/democracy has had a very good record in preventing famines (which is relatively simple), but an abysmal record in preventing endemic hunger, to the point where India is below sub-Saharan Africa in many aspects, like general malnourishment. This has nothing to do with "left" or "right".
While I would be the first to disclaim any knowledge of statistics and economics (I do have a good technical education though), I think Utsa Patnaik's work raises many issues which have not been addressed.
The only issue which has been addressed, rather dismissively, by a wholly inadequate article by Swaminathan S. Anklesaria Aiyar, seems to be the headcount ratio, or the number of people below a defined "poverty line".
There're also larger issues. Even noted by this article by Angus Deaton and Jean Dreze, surely one of the most respected economists in India, not only has poverty reduction more or less remained the same in the 90s as in the 80s, inequalities rose sharply. Agricultural growth has reduced to half. Also, infant mortality fall is not too good. Female-male ratio actually fell. These are also aspects of poverty. The picture is not so simple. The only way to clarify these issues is to have a vigorous public and academic debate.
Let me make some comments on the academic debate. Utsa Patnaik's work has largely been ignored by the "Great Indian Poverty Debate", largely carried out in 2001-2 in the pages of Economic and Political Weekly. However, I haven't yet seen a well developed critique addressing her main point of measuring poverty using calorie levels. Indeed, Angus Deaton, in his non-technical introduction to poverty study says (I'm quoting at some length):
...it is clear that the food rhetoric is mostly just that. In particular, even when a national poverty line is set using the calorie method, it is usually updated over time in a way that is inconsistent with the maintenance of the nutritional norm. In countries as widely different as the US and India, the official poverty lines have never been updated so as to preserve the original link with food...
which mirrors Patnaik's criticism. Also:
...if one were really to believe in a fixed calorie standard, the poverty line would have to be revised upward. Such revision is something for which there is typically little political support, in India or in the US...
and -
...But because of the political issues involved in redistribution, lines survive even beyond the time when they can be justified, either by considerations of food, or as some average of what people think a poverty line ought to be. Poverty lines are as much political as scientific constructions.
The gist seems to be that calorie measurements give too high a figure to sustain them politically and nobody knows how to "fix" them.
It seems to me, a calorie level, (let's say if it was low enough), could be useful, provided it was consistent. While Patnaik's figures of 75% poverty are pretty astonishing (using 2400 Cal), they do calculate poverty on the basis of consistent 2200 Cal values, and they do show somewhat similar trends.
Every pathbreaking piece of scholarship is controversial. That, however is not a sufficient condition for a work to be good.
To me, the issues in the work is the following:
a) What's the state of poverty in India?
b) What's the effect of neoliberal policies on poverty?
These are questions which are multi-faceted and deserve lots of scrutiny. Not just by economists (who are no gods, and have been shown to be wrong before), but also by the general public.
I think the main failure of Indian media is not just the dismissal of the report, but the failure to generate a serious debate about the policies which affect more than 60% of Indians. Indeed, this point is made by Amartya Sen, in his book, Hunger and Public Action. Indian media/democracy has had a very good record in preventing famines (which is relatively simple), but an abysmal record in preventing endemic hunger, to the point where India is below sub-Saharan Africa in many aspects, like general malnourishment. This has nothing to do with "left" or "right".
While I would be the first to disclaim any knowledge of statistics and economics (I do have a good technical education though), I think Utsa Patnaik's work raises many issues which have not been addressed.
The only issue which has been addressed, rather dismissively, by a wholly inadequate article by Swaminathan S. Anklesaria Aiyar, seems to be the headcount ratio, or the number of people below a defined "poverty line".
There're also larger issues. Even noted by this article by Angus Deaton and Jean Dreze, surely one of the most respected economists in India, not only has poverty reduction more or less remained the same in the 90s as in the 80s, inequalities rose sharply. Agricultural growth has reduced to half. Also, infant mortality fall is not too good. Female-male ratio actually fell. These are also aspects of poverty. The picture is not so simple. The only way to clarify these issues is to have a vigorous public and academic debate.
Let me make some comments on the academic debate. Utsa Patnaik's work has largely been ignored by the "Great Indian Poverty Debate", largely carried out in 2001-2 in the pages of Economic and Political Weekly. However, I haven't yet seen a well developed critique addressing her main point of measuring poverty using calorie levels. Indeed, Angus Deaton, in his non-technical introduction to poverty study says (I'm quoting at some length):
...it is clear that the food rhetoric is mostly just that. In particular, even when a national poverty line is set using the calorie method, it is usually updated over time in a way that is inconsistent with the maintenance of the nutritional norm. In countries as widely different as the US and India, the official poverty lines have never been updated so as to preserve the original link with food...
which mirrors Patnaik's criticism. Also:
...if one were really to believe in a fixed calorie standard, the poverty line would have to be revised upward. Such revision is something for which there is typically little political support, in India or in the US...
and -
...But because of the political issues involved in redistribution, lines survive even beyond the time when they can be justified, either by considerations of food, or as some average of what people think a poverty line ought to be. Poverty lines are as much political as scientific constructions.
The gist seems to be that calorie measurements give too high a figure to sustain them politically and nobody knows how to "fix" them.
It seems to me, a calorie level, (let's say if it was low enough), could be useful, provided it was consistent. While Patnaik's figures of 75% poverty are pretty astonishing (using 2400 Cal), they do calculate poverty on the basis of consistent 2200 Cal values, and they do show somewhat similar trends.
Tuesday, September 11, 2007
Latest ILO report
The latest ILO report on labour is out.
Interestingly, but not too surprisingly, there was a piece in the HT "Economy" section, which only mentioned the productivity part, but didn't mention the hours worked/day or the "Substantial decent work deficits" section. Guess that's too irrelevant to our economy.
Interestingly, but not too surprisingly, there was a piece in the HT "Economy" section, which only mentioned the productivity part, but didn't mention the hours worked/day or the "Substantial decent work deficits" section. Guess that's too irrelevant to our economy.
Sunday, September 9, 2007
Thursday, August 30, 2007
India's N-deal
There's been a lot of attention to India's N-deal in the papers lately. Almost unanimously, the press has been in favour of the deal while berating the BJP and the Left for their "ideological opposition" while ignoring "national interests".
I have, in general, a very low opinion of opinion pieces. That's perhaps natural.
In this particular case, almost all the opinion pieces are almost uniformly ignorant and/or uncaring about the actual issues of the deal and the stated positions of the various parties.
I feel issues are important, institutions are important, rather than personalities. This is not a fight between a "spineless" PM putting his foot down against a recalcitrant left. What are the issues? I feel people will be interested in issues, but only if they're dealt with seriously.
In politics, it's very hard to talk to each other without having a shared narrative or basis of agreement. There are no easy ways to win debates. Here's my attempt to provide more perspective.
Let me raise a few questions, which I feel are relevant. People can find out about them or hear my opinions. These questions almost never come up in the media discussion on this, which is filled with hysteria.
Incidentally, I feel that much of this hysteria about "bringing down the govt." is totally unwarranted.
Let's go on to the issues:
0) What are the Indian people's positions on nuclear energy (civilian and military), US (generally and its adventures in the Middle East) and China?
It's amazing that I can't find good polls for this. One would've thought it would be an immediate and extensively studied question. I know that Indians generally do have a favourable opinion of the US, more than many others. But this is too vague a measure to be quite meaningful on specific issues.
1) What's the role of this deal in the larger Indo-US framework?
This is a question which can be looked at from many angles. A lot depends upon how we view the US role in world affairs.
Unquestionably, the US is very powerful. It's also unquestionably an imperial power bent on naked aggression as evidenced by Iraq and Afghanistan. These things aren't going to change much (contrary to Barkha Dutt's hopes) even if Bush is succeeded by someone from the Democrats. Both Barack Obama and Hillary Clinton (as far as anyone can understand what they're saying - which is a task) support keeping some level of troops in Iraq and are trying to outdo each other in hawkish statements. These are things to keep in mind. We have to decide ourselves, which we feel is more important.
2) What're the consequences of the deal for nuclear proliferation?
India is a non NPT signatory. This means that, in the view of the international community, India cannot be trusted about whether it will use the fissile material to develop bombs. Certainly, Pakistan will assume the worst (as should any sane person). This is likely lead to an arms race in the region. We have to keep in mind that Pakistan is a known nuclear proliferator and a non-signatory to the NPT.
Similar statements hold for China.
3) What's the quid pro quo for the deal? In other words, no deals are one-off affairs. What's India letting itself in as part of the ongoing process with US?
One of the other deals which seems part of the quid pro quo seems to be the 10 year "defence" deal with the US and the arms deals with Israel.
We need to ask ourselves the question: do we need more arms? When so much of our population is living is horrendous poverty? India has one of the lowest expenditures on health and education in the world, no wonder, its human development index is comparable to sub-Saharan Africa. What should be our priorities?
4) What about energy issues? Also related is India's relations with Iran. How much of the future energy would nuclear power generate? Is it clean, inexpensive and plentiful? What about questions of self-sufficiency? And sovereignty? What will happen to the Iran-Pakistan-India pipeline?
5) With regard to the Left's position on this matter: What exactly is their position? The question was asked rhetorically by Vir Sanghvi's article in HT, "What is the communist manifesto?" It seems strange that in the article he doesn't even try to find out their official position. Indeed, the deal itself gets scarce mention, amidst an orgy of left-bashing.
These are just the immediate questions which come to mind. To have not addressed these seriously shows a clear incompetence/bias/whatever in the media.
Here's an article which I found giving some more perspective (totally pro-Left, but gives some facts):
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There is something deeply reassuring about the corporate media's tirades against the Left in the context of the Left's opposition to India's nuclear deal with the US - the Left must be doing something right. And going by the shrillness of the attack, it's hitting where it hurts.
Look at only one newspaper, the Hindustan Times, over the last four days. On 16 August, CNN-IBN's Rajdeep Sardesai wrote on the Left's opposition to the nuclear deal. (http://www.hindustantimes.com/StoryPage/StoryPage.aspx?id=847b5aea-11f2-43fe-b221-67323df41c3d&ParentID=671f1d5e-8fad-4cc1-9e4e-65f5efb9c29e&&Headline=Karat and stick) The large bulk of his column is used to bash the Left, especially Prakash Karat, the CPM's General Secretary. Sardesai comes to the deal itself in the penultimate paragraph, only to tell us that "This is not about the details of the 123 agreement any longer, not even about a robust discussion on the country's energy needs, this is simply now about the unseen 'dangers' of forging a closer strategic relationship with the 'Evil Empire' in Washington." Since Left ideologues have "spent a lifetime seeing the world through the prism of the Cold War, the collapse of the Soviet Union has not meant the end of ideology." He accuses the Left of an "unwillingness to grow up, to recognise that while one has the legitimate right to oppose, the nature of the opposition cannot be such that it begins to resemble a spoilt brat who is being denied the entire cake of power."
Not a word on why the nuclear deal is in fact good for India.
Not to be outdone, Sardesai's former colleague, Barkha Dutt of NDTV 24x7, launched into the Left with gusto in her own column the following day. (http://www.hindustantimes.com/StoryPage/StoryPage.aspx?id=671f1d5e-8fad-4cc1-9e4e-65f5efb9c29e&&Headline=Left in a time warp) All the usual anti-Left clichés are there: the Left leaders are "dour faced," they sound like "Stalinists," who have the "government on its knees, blackmailed into submission." She counsels the Left to "put an ear to the ground." Translated into simple English, this means, listen to us. "The problem with the Left, . . . the reason for Modern India's disdain for them, is that while their heart is in the right place, their mind is woefully out of sync with our aspirations." These aspirations "take us westwards." Even though "we may oppose the war in Iraq and Afghanistan," "(our) future as global players is linked to the American dream," because "(we) know how to distinguish between Bush and the country he governs."
This is lovely. I oppose the war in Iraq and Afghanistan but don't ask what led to the war. I distinguish between Bush and the country he governs, which is why I trust the administration he heads to give us a treaty that is beneficial to us. And, since our future is linked to the American dream, I am confident that the Americans will never renege on that treaty, citing domestic law.
No wonder, then, that the details of the 123 agreement are "gobbledygook" to her.
The following day, it was Vir Sanghvi's turn. (http://www.hindustantimes.com/StoryPage/StoryPage.aspx?id=17e23240-f37f-460e-877b-61bca13067a5&&Headline=What are the Communists up to%3f) It has become mandatory to nod at the Left's clean image and to acknowledge that the Left leaders are "men - and women - of integrity and principle," and Sanghvi too does the needful: "In a political environment where only money and power seem to matter, the Left stands out as a grouping that believes in ideology and principle. Put the Politburo next to the Congress Working Committee or the BJP National Executive and even a child will be able to tell the difference in intelligence, stature and integrity."
There's some serious Left-bashing here. Sanghvi slyly suggests that "the CPI played no role in the freedom struggle;" but of course he is not saying it, he is merely reporting a "right-wing smear." But accounts of "global communist tyranny" are taken as fact: "Joseph Stalin killed 20 million people - over thrice the number killed by Adolf Hitler's Nazis. Figures for those who perished in China while the CPM was translating Chairman Mao's Little Red Book into Bengali are harder to come by, but a number of 50 million seems conservative (many accounts say it was 70 million)." Where these numbers have come from is obviously of no consequence.
Sanghvi's lament is that "when the UPA government was elected, the Left had a historic opportunity . . . to recast itself as a liberal force for good which held out against the power of multinationals, fought for the preservation of the environment, and defended the rights of the individual" - in other words, forget class issues, be blind to systems of exploitation, become namby-pamby do-gooders - but "sadly, the Left has blown this historic opportunity."
That is the problem. Prakash Karat and Sitaram Yechury walk like us, talk like us, why the hell can't they think like us? They'd be really nice guys, you know, if only they weren't commies.
And then there are the insinuations: it is alleged that "the UPA took the Left into confidence before signing the agreement," and therefore the Left's opposition is "no more than a politically expedient afterthought."
What stands out in all these tirades against the Left is, of course, the unwillingness to discuss the issue at hand. To my mind, The Hindu is the only paper that has seriously and consistently gone into the specifics of the deal, and tracked it over time. See, for instance, Siddharth Varadarajan's piece of August 20. (http://www.hindu.com/2007/08/20/stories/2007082058271500.htm ) While the paper has endorsed the 123 agreement itself editorially, it has suggested that the agreement be put on hold while the government schedules "an earnest round of all-party discussions, which must take in objections, apprehensions, reservations, and questions relating to the nuclear deal that have come from all serious quarters."
All the others, Hindustan Times, Times of India, Indian Express, Pioneer, the whole lot of them, have turned the nuclear deal into what Barkha Dutt so eloquently described as "gobbledygook."
Since the deal itself is "gobbledygook," the Left's opposition is variously characterized as an ego clash between Prakash Karat and Manmohan Singh (which is the surest way of trivializing an issue), as blind anti-Americanism (but not anti-imperialism), or as betrayal of confidence (though we are never told when exactly the Left's consent for the deal was actually acquired).
Then there is the other bogey: India's energy security. Sagarika Ghosh of CNN-IBN put the question to CPM's Mohd. Salim on live television on the night of August 20 saying "no deal, no bijli (electricity)." Salim asked her a simple question: how much electricity are we going to get from this deal, and when? Ghosh was silent. Salim repeated the question. Silence. When Salim began answering his own question, Ghosh cut him off, with a question about the Left's "anti-Americanism." (For the record, nuclear energy satisfies 3% of India's energy needs currently, which is expected to go up to 7% by 2020.) And, while on energy, why isn't anyone asking what will happen to the gas pipeline from Iran?
As for the Left's actual opposition to the deal, and the reasoning behind that opposition, it never existed. Accordingly, you hear a tone of injured exasperation - "what IS the communist manifesto?", as Sanghvi's piece was titled.
Well, all they need to do is to recall recent history: the Left has opposed the deal consistently ever since 2005, when the Indian Prime Minister and the American President issued their famous joint statement in July, which itself came on the back of the 10-year Defence Framework Agreement. The Left has reiterated again and again that the nuclear deal has to be seen in the context of the larger strategic aims of the U.S., in which it sees India becoming an imperial largest outpost in South Asia. The Left's vigorous opposition forced the Prime Minister to give assurances to the Indian Parliament exactly an year ago, on August 17, 2006. (For a sober statement of the Left's objections, see Prakash Karat's article, "Why the CPI(M) and the Left oppose the nuclear deal," available at http://www.hindu.com/2007/08/20/stories/2007082058071400.htm )
One would have expected the media and commentators to put a simple question to the Left: you had expressed satisfaction at the Prime Minister's statement in Parliament in August 2006, so how do you think the present 123 agreement reneges on those assurances?
But this is a vain hope. Because the moment you ask this question, you admit that the Left's opposition has not materialized all of a sudden, out of thin air. Even more importantly, you focus on issues.
That is quite simply the last thing the corporate media wants. Any criticism - or even mention - of the American imperial project is a strict no-no.
Obeisance to the master is the order of the day. The rest is gobbledygook.
-----------------------------------------------------------------------------
Here's also a blog entry discussing the deal.
I have, in general, a very low opinion of opinion pieces. That's perhaps natural.
In this particular case, almost all the opinion pieces are almost uniformly ignorant and/or uncaring about the actual issues of the deal and the stated positions of the various parties.
I feel issues are important, institutions are important, rather than personalities. This is not a fight between a "spineless" PM putting his foot down against a recalcitrant left. What are the issues? I feel people will be interested in issues, but only if they're dealt with seriously.
In politics, it's very hard to talk to each other without having a shared narrative or basis of agreement. There are no easy ways to win debates. Here's my attempt to provide more perspective.
Let me raise a few questions, which I feel are relevant. People can find out about them or hear my opinions. These questions almost never come up in the media discussion on this, which is filled with hysteria.
Incidentally, I feel that much of this hysteria about "bringing down the govt." is totally unwarranted.
Let's go on to the issues:
0) What are the Indian people's positions on nuclear energy (civilian and military), US (generally and its adventures in the Middle East) and China?
It's amazing that I can't find good polls for this. One would've thought it would be an immediate and extensively studied question. I know that Indians generally do have a favourable opinion of the US, more than many others. But this is too vague a measure to be quite meaningful on specific issues.
1) What's the role of this deal in the larger Indo-US framework?
This is a question which can be looked at from many angles. A lot depends upon how we view the US role in world affairs.
Unquestionably, the US is very powerful. It's also unquestionably an imperial power bent on naked aggression as evidenced by Iraq and Afghanistan. These things aren't going to change much (contrary to Barkha Dutt's hopes) even if Bush is succeeded by someone from the Democrats. Both Barack Obama and Hillary Clinton (as far as anyone can understand what they're saying - which is a task) support keeping some level of troops in Iraq and are trying to outdo each other in hawkish statements. These are things to keep in mind. We have to decide ourselves, which we feel is more important.
2) What're the consequences of the deal for nuclear proliferation?
India is a non NPT signatory. This means that, in the view of the international community, India cannot be trusted about whether it will use the fissile material to develop bombs. Certainly, Pakistan will assume the worst (as should any sane person). This is likely lead to an arms race in the region. We have to keep in mind that Pakistan is a known nuclear proliferator and a non-signatory to the NPT.
Similar statements hold for China.
3) What's the quid pro quo for the deal? In other words, no deals are one-off affairs. What's India letting itself in as part of the ongoing process with US?
One of the other deals which seems part of the quid pro quo seems to be the 10 year "defence" deal with the US and the arms deals with Israel.
We need to ask ourselves the question: do we need more arms? When so much of our population is living is horrendous poverty? India has one of the lowest expenditures on health and education in the world, no wonder, its human development index is comparable to sub-Saharan Africa. What should be our priorities?
4) What about energy issues? Also related is India's relations with Iran. How much of the future energy would nuclear power generate? Is it clean, inexpensive and plentiful? What about questions of self-sufficiency? And sovereignty? What will happen to the Iran-Pakistan-India pipeline?
5) With regard to the Left's position on this matter: What exactly is their position? The question was asked rhetorically by Vir Sanghvi's article in HT, "What is the communist manifesto?" It seems strange that in the article he doesn't even try to find out their official position. Indeed, the deal itself gets scarce mention, amidst an orgy of left-bashing.
These are just the immediate questions which come to mind. To have not addressed these seriously shows a clear incompetence/bias/whatever in the media.
Here's an article which I found giving some more perspective (totally pro-Left, but gives some facts):
-----------------------------------------------------------------------------------------------------
There is something deeply reassuring about the corporate media's tirades against the Left in the context of the Left's opposition to India's nuclear deal with the US - the Left must be doing something right. And going by the shrillness of the attack, it's hitting where it hurts.
Look at only one newspaper, the Hindustan Times, over the last four days. On 16 August, CNN-IBN's Rajdeep Sardesai wrote on the Left's opposition to the nuclear deal. (http://www.hindustantimes.com
Not a word on why the nuclear deal is in fact good for India.
Not to be outdone, Sardesai's former colleague, Barkha Dutt of NDTV 24x7, launched into the Left with gusto in her own column the following day. (http://www.hindustantimes.com
This is lovely. I oppose the war in Iraq and Afghanistan but don't ask what led to the war. I distinguish between Bush and the country he governs, which is why I trust the administration he heads to give us a treaty that is beneficial to us. And, since our future is linked to the American dream, I am confident that the Americans will never renege on that treaty, citing domestic law.
No wonder, then, that the details of the 123 agreement are "gobbledygook" to her.
The following day, it was Vir Sanghvi's turn. (http://www.hindustantimes.com
There's some serious Left-bashing here. Sanghvi slyly suggests that "the CPI played no role in the freedom struggle;" but of course he is not saying it, he is merely reporting a "right-wing smear." But accounts of "global communist tyranny" are taken as fact: "Joseph Stalin killed 20 million people - over thrice the number killed by Adolf Hitler's Nazis. Figures for those who perished in China while the CPM was translating Chairman Mao's Little Red Book into Bengali are harder to come by, but a number of 50 million seems conservative (many accounts say it was 70 million)." Where these numbers have come from is obviously of no consequence.
Sanghvi's lament is that "when the UPA government was elected, the Left had a historic opportunity . . . to recast itself as a liberal force for good which held out against the power of multinationals, fought for the preservation of the environment, and defended the rights of the individual" - in other words, forget class issues, be blind to systems of exploitation, become namby-pamby do-gooders - but "sadly, the Left has blown this historic opportunity."
That is the problem. Prakash Karat and Sitaram Yechury walk like us, talk like us, why the hell can't they think like us? They'd be really nice guys, you know, if only they weren't commies.
And then there are the insinuations: it is alleged that "the UPA took the Left into confidence before signing the agreement," and therefore the Left's opposition is "no more than a politically expedient afterthought."
What stands out in all these tirades against the Left is, of course, the unwillingness to discuss the issue at hand. To my mind, The Hindu is the only paper that has seriously and consistently gone into the specifics of the deal, and tracked it over time. See, for instance, Siddharth Varadarajan's piece of August 20. (http://www.hindu.com/2007/08
All the others, Hindustan Times, Times of India, Indian Express, Pioneer, the whole lot of them, have turned the nuclear deal into what Barkha Dutt so eloquently described as "gobbledygook."
Since the deal itself is "gobbledygook," the Left's opposition is variously characterized as an ego clash between Prakash Karat and Manmohan Singh (which is the surest way of trivializing an issue), as blind anti-Americanism (but not anti-imperialism), or as betrayal of confidence (though we are never told when exactly the Left's consent for the deal was actually acquired).
Then there is the other bogey: India's energy security. Sagarika Ghosh of CNN-IBN put the question to CPM's Mohd. Salim on live television on the night of August 20 saying "no deal, no bijli (electricity)." Salim asked her a simple question: how much electricity are we going to get from this deal, and when? Ghosh was silent. Salim repeated the question. Silence. When Salim began answering his own question, Ghosh cut him off, with a question about the Left's "anti-Americanism." (For the record, nuclear energy satisfies 3% of India's energy needs currently, which is expected to go up to 7% by 2020.) And, while on energy, why isn't anyone asking what will happen to the gas pipeline from Iran?
As for the Left's actual opposition to the deal, and the reasoning behind that opposition, it never existed. Accordingly, you hear a tone of injured exasperation - "what IS the communist manifesto?", as Sanghvi's piece was titled.
Well, all they need to do is to recall recent history: the Left has opposed the deal consistently ever since 2005, when the Indian Prime Minister and the American President issued their famous joint statement in July, which itself came on the back of the 10-year Defence Framework Agreement. The Left has reiterated again and again that the nuclear deal has to be seen in the context of the larger strategic aims of the U.S., in which it sees India becoming an imperial largest outpost in South Asia. The Left's vigorous opposition forced the Prime Minister to give assurances to the Indian Parliament exactly an year ago, on August 17, 2006. (For a sober statement of the Left's objections, see Prakash Karat's article, "Why the CPI(M) and the Left oppose the nuclear deal," available at http://www.hindu.com/2007/08
One would have expected the media and commentators to put a simple question to the Left: you had expressed satisfaction at the Prime Minister's statement in Parliament in August 2006, so how do you think the present 123 agreement reneges on those assurances?
But this is a vain hope. Because the moment you ask this question, you admit that the Left's opposition has not materialized all of a sudden, out of thin air. Even more importantly, you focus on issues.
That is quite simply the last thing the corporate media wants. Any criticism - or even mention - of the American imperial project is a strict no-no.
Obeisance to the master is the order of the day. The rest is gobbledygook.
-----------------------------------------------------------------------------
Here's also a blog entry discussing the deal.
Friday, August 24, 2007
Poverty in India
I'm investigating this right now. Utsa Patnaik is a veteran economist at JNU. She's done a lot of work on rural poverty and nutrition levels. She has written many op-eds in The Hindu, which seems to be the only newspaper that'll touch her.
http://www.hindu.com/2005/08/05/stories/2005080501971000.htm
According to Patnaik, the rural poverty levels claimed by the Planning Commission is bogus. Poverty is increasing, not decreasing, after the neoliberal reforms of the 1990s. The poverty line has been lowered continously by around 100 calories per diem for every five year period since 1975. So the poverty level claims are gettting increasingly irrelevant and wrong. Also, when the Public Distribution System changed from universal to targeted in 1997 - targeting only the below poverty line people, this had profound implications for the many poor, but not counted people.
Also, check out this interview:
http://www.hinduonnet.com/fline/fl2113/stories/20040702006302200.htm
I can't find any sort of discussion on this in the newspapers. Shouldn't we be concentrating a whole lot more on this? It's about three-fourths of India's population.
http://www.hindu.com/2005/08/05/stories/2005080501971000.htm
According to Patnaik, the rural poverty levels claimed by the Planning Commission is bogus. Poverty is increasing, not decreasing, after the neoliberal reforms of the 1990s. The poverty line has been lowered continously by around 100 calories per diem for every five year period since 1975. So the poverty level claims are gettting increasingly irrelevant and wrong. Also, when the Public Distribution System changed from universal to targeted in 1997 - targeting only the below poverty line people, this had profound implications for the many poor, but not counted people.
Also, check out this interview:
http://www.hinduonnet.com/fline/fl2113/stories/20040702006302200.htm
I can't find any sort of discussion on this in the newspapers. Shouldn't we be concentrating a whole lot more on this? It's about three-fourths of India's population.
Monday, August 20, 2007
India's unorganized sector and agriculture
What have been the effects of neoliberal reforms in India? It's a broad question and there's no simple answer. However, if we are concerned about fairness and justice, we should be looking at the impact on the agricultural sector, which employs 600 million people and not just at the glossy BPO and IT sectors which are miniscule by comparison.
I'm still studying the impact, but the following report sheds some light on this:
http://nceus.gov.in/Executive_Summary_08082007.pdf
"In the last several years, the growth rate of agricultural wages has declined and there are evident signs of agrarian distress in many areas which specially affect marginal and small farmers. There is now a clear need to address this sector (i.e. agricultural labourers, marginal and small farmers) in a focused way. "
I'm still studying the impact, but the following report sheds some light on this:
http://nceus.gov.in/Executive_Summary_08082007.pdf
"In the last several years, the growth rate of agricultural wages has declined and there are evident signs of agrarian distress in many areas which specially affect marginal and small farmers. There is now a clear need to address this sector (i.e. agricultural labourers, marginal and small farmers) in a focused way. "
Thursday, August 16, 2007
Globalization
The following is a reproduction of a discussion I had with my friend. The essay is my reaction to India Unbound, a book by Gurcharan Das.
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This essay is very long. I hope I don't bore you with it. Probably, if we have a discussion, in future, I'll concentrate on one or few aspects. Also, probably, I could have split it into a number of essays.
Let me have a shot at a reaction to India Unbound. Again, let me first give some general remarks, then go into details.
Zeroth, let me say that I liked it and would be reading it in more detail, again. It is one of a series of books I am planning to read to make sense of the Indian political and economic scene. If you have more ideas of books like that, I'll be happy to try them.
I'm interested in globalization, the few books which I've read are: Making Globalization Work by Joseph Stiglitz , In Defense of Globalization by Jagdish Bhagwati and Development as Freedom by Amartya Sen. I've also read a lot of Noam Chomsky's work on markets and globalization.
India Unbound talks about two things. a) Nehruvian socialism b) The neoliberal reforms of 1991.
First, let me make a few observations. The whole book is written in an entertaining, anecdotal form. While anecdotal evidence is useful, it's dangerous, at least in principle, because you can sort of validate any theory on the basis of anecdotes. There are a lot of endnotes, and I plan on going through them in detail.
Next, the book concentrates on the manufacturing / knowledge-based sector generally. There's very little, almost no mention of the agricultural sector. This is significant. It's a reflection of Das's background which is mostly in the manufacturing sector and management. While the manufacturing sector is important, it's very important to have a perspective of what's happenning in the agricultural sector which employs 600 million people with another 200 million indirectly affected by it. In view of this, I find the book having a very narrow perspective. In coming to a decision between "socialism" and "capitalism" (I'll explain the quotes in a second), it's quite important to have view of all the implications.
The dominant theme throughout the book is one of "freedom". I agree with that, in principle. For instance, in his book Development as Freedom, Amartya Sen argues that (I'm oversimplifying a bit here), freedom can be thought of as both the end and the means to development. To take a concrete case, consider one of the areas in which Sen has written about extensively, famines. He points out that there has been no substantial famine in any country which has a multiparty democracy and a relatively free press, like post-independence India. But, for example, during Mao's Great Leap Forward in the 1960s, communist China experienced massive famine, killing 10-15 million people. There is, in my view a very good case to be made for increasing the freedom of people in the world.
Let me make a few comments about "socialism" and "capitalism".
Socialism is a broad theory. The main element of socialism is control by the people, both in the political and the economic sphere. The relevant principle for economics is "workers control of the workplace". The principle is simple (we may argue whether it's right or wrong), "the people who are involved in production ought to own it".
Now, there are different approaches to socialism. They can be broadly classified as "statist" or "non-statist", depending upon how important the role of the state is.
"Nehruvian socialism" was a statist approach to socialism. We can ask ourselves if it fulfilled the aim of having worker control of the workplace. In my view, it largely failed in this task. The industry was controlled by bureaucrats, not the workers. That's an important distinction.
Capitalism is also very broad. The idea is that people should be free to choose and the decisions on production are to be made through a market mechanism based on supply and demand.
There are many issues regarding capitalism, but we can say that the two of the dominant issues are that of corporations and importance and fairness of the market. I'll give you my view.
What exactly is a corporation? Well, corporations are basically dictatorships, with a more or less hierarchical structure with orders going from top to down. There is, broadly, a worker class and a management class and these are hierarchical structures. The exclusive goal of the corporations is to have large, growing, sustainable profits for its shareholders. That's fine, but we have to be clear about what it is. Corporations are not accountable to anyone else except its shareholders. For example, if Coca-Cola sets up a plant somewhere, it's not accountable to the local people, but only to its board of directors. That's the basic setup. How fair it is, we can argue.
A related issue is the market mechanism. There are many critiques of markets. I find, in India Uncut and many of the other blogs a feeling that "markets know best" and freedom means cutting down on govt. power while encouraging private enterprise. I'd urge you to read the books of Joseph Stiglitz, Nobel Prize winner and former chief economist of the World Bank, on what he calls "market fundamentalism". His main contribution is "information theory of economics", where he shows that, under conditions of imperfect information, (that is, always), markets don't lead to efficiency. Markets will produce too little of some things, like basic research, and too much of others, like pollution.
For example, just look at the main innovations of the American economy, to name a few, internet, communication, airlines, drugs, biotech. Let's take the internet. As you know, the internet was basically a product of the publicly funded Pentagon system. It was basically set up in the 1960s and there was important research, mainly in universities till about mid 1990s when it was handed over to the private sector. Since then, its character has changed (whether for the good or not, we can argue). Earlier, the buzzword was "information superhighway", now it's "e-commerce".
Let me make a general statement. Markets, by themselves, don't produce enough of basic research. For example, just look at India. Where were the main centres of excellence in the past? - IIT, IISc, ISI. They are relatively autonomous institutions, but are funded by the govt. There are many other centres of learning, like NIIT, Aptech. What's your view of them? I'd like to hear them.
Some more examples. We hear a lot about R&D in American drug companies. First, a huge amount of investment is through the publicly-funded university system. Next, we can look at what it has produced. Keep in mind that R&D in drug companies is huge. We can look at the different products which have come out in the past 10 years. I don't have an accessible source for this, this is coming from memory from Making Globalization Work . The large majority of products are the so-called "lifestyle products", like Viagra or skin lotions or stuff like that. There are very few products for important diseases like cholera or malaria or other things. Again, I'm not saying that the system is useless, but we have to be clear about what it is and whether this is what we want it to be. The overwhelming majority of patents are for slightly different molecules which some other company has not patented.
Summarizing, in my view, the role of the govt. is not just to keep law and order etc, but an active interference is required for markets to function well. Like building infrastructure, like roads and universities. Like education and health. It also has its seamier side, like US govt. interfering in Iraq to protect its oil. In fact, the American system is basically a "state capitalist" system. Again, we can argue as to whether these kinds of interferences are ethical or effective or whatever, but its clear (to me) that they are required and expected.
For example, you might have done macro-eco? Remember Keynesian economics? Keynes' contribution was in periods of slow growth or recession, the govt. can stimulate the economy my massive intervention. Stiglitz places Keynes' contribution as the most important in the history of capitalism.
Let's get back to India Unbound.
India's Human Development Index places it at 126th in the world, comparable to sub-Saharan Africa. In view of this, we can safely claim that a) was a failure.
Let's look at b). "Neoliberalism". Let's take the 1991 reforms in India. In India Unbound, Das gives an anecdotal view of the role of Chidambaram, Narasimha Rao and Manmohan Singh. I still know very little of the background, but, in my view, the reforms were mainly a product of the "structural adjustment" programs of the World Bank and IMF. Manmohan Singh etc. were only responding to the pressures of the institutions due to the financial crisis. Thus, the reforms only lasted for 2-3 years and haven't been pursued very strongly after that. (We can see that in the current govt., when Manmohan Singh is the PM).
Anyway, it's a fine point. We can agree, I think, that the role of these financial institutions was at least as important as Manmohan Singh etc.
This raises a few questions: (The questions are arranged in decreasing order of my knowledge about them. I still need to know a lot about all of them).
a) What's the history of neoliberal reforms around the world? What was the role of the World Bank etc. in this? Do the western countries follow these rules?
b) The "Asian Tigers", in South East Asia. What was their strategy in their period of growth in the 1980s? Was it comparable to neoliberalism?
c) What about China? What's going on there?
Let me address these questions.
a) First, let's look at the theory of neoliberalism. The "structural adjustment" programs, also called the "Washington Consensus" - namely the consensus between, World Bank, IMF and US Treasury dept. (that's what it is - the US dominates these institutions). What do these entail?
In a "free" market, there are basically two kinds of freedom, freedom of movement of labour and freedom of movement of capital. Neoliberalism refers mainly to free movement of capital, not labour. In fact, as the US is passing more and more draconian immigration laws, freedom of labour is severely restricted. Let's look at the Washington Consensus policies.
The main measures are fiscal conservatism, namely, less govt. expenditure in many areas. Also, it involves privatization of many public-sector industries. It involves the strategy of export promotion instead of "import substitution". It involves cutting down or eliminating tariffs. Let's look at what liberalization theory says.
According to theory, the economy will be a dynamic one, with jobs continously being created and destroyed. The economy will move from low wage/low-productivity jobs to high wage/high productivity jobs. There will be both import and export of the same commodity, for example, rice. India both imports and exports rice depending upon where the market is.
The country as a whole will benefit (in theory), but there will be some losers. The losers being the unskilled and low-wage workers. This is what the theory says. How ethical it is, we can argue.
For example, Stiglitz points out, that in most developing countries, unemployment rates are very high. The "dynamic" economy, when it destroys jobs, the workers don't move on to high-productivity/high-wage jobs, but simply add to the unemployed force.
In theory, even a moderate liberalization of labour would have many times the impact than the liberalization of capital. But, since the big capital countries tilt the playing field to their own liking, it's capital liberalization which is being implemented.
That's the theory, what's the practice?
My main source on this is Making Globalization Work. In the book, Stiglitz says this: With globalization, development is possible, but not inevitable. Most economists agree that the Washington Consensus policies have failed.
Why did he say that? Let's look at the history. I'll concentrate on four areas: Latin America and Central America, East Asia, Russia after the fall of the Berlin Wall and India.
i) Latin America and Central America are the areas where the Washington Consensus policies were tried extensively. I'll mix up politics and economics in this, because, in my view, they're both important in this and I feel that they're two aspects of the same thing.
Let's first concentrate on South America. Let's take Argentina, one of the cases which Stiglitz discusses in his book.
Argentina was one of the poster children of the IMF. The IMF gives grades to countries as to many factors like credit worthiness, macroeconomic health etc. Argentina was an A+ student. It carried out "structural adjustment" programs extensively. The result of these policies was that it went deep into debt. It kept on falling into a deeper and deeper debt crisis and then finally its new president just said - NO. It just refused to pay its debt. That was the biggest default in IMF history.
With the default and the rolling back of many of the structural adjustment programs and massive state intervention in the economy, Argentina did something no-one expected it to do. It grew. It grew 7-10 percent, a very healthy growth rate, comparable to India and China.
Let's look at Central America - Guatemala, Nicaragua, Haiti, Honduras, Mexico. I'll be talking generally here, but I'll go into details on any country if you want.
Just imagine, what kind of image do you have of these countries? I'd think, an absolute symbol of destruction. The first four countries have been so systematically destroyed that there's little hope of recovery. Mexico is a somewhat different case.
For instance, around 60% of Haitian children are suffering from malnutrition and probable brain damage. It's the poorest country in the hemisphere. Similarly, Nicaragua, the second poorest country in the hemisphere.
The result of these policies is that there have been left-of-centre governments throughout Latin America. People have become disenchanted with IMF policies. Latin America once constituted 80% of IMF's clients. Now it's less than 1%.
b) Let's look at Russia. Russia was the object of "shock-therapy", which is a sudden transition to a market economy from communism. Let's look at what happenned.
The few years after the fall of the Berlin Wall were a catastrophe for ordinary Russians. Incomes fell 40%. Poverty rose 10 times. Inflation and unemployment soared. There were a huge number of oligarchs created, with massive capital flight from the country. You might have read about Roman Abramovich, the Russian oil tycoon who purchased the Chelsea football club and a number of county estates in the UK. The IMF lent more money, it all flew out.
Nobody wants to go back to the repressive communist regime, but the Russians are asking, what kind of economy is this?
ii) Next, let's look at East Asia. In East Asia, there are very strict controls on speculative capital and capital flow. In Singapore, there's the death penalty for capital flight. That takes care of that.
What was the strategy of the East Asian "tigers"?
I'm still learning about Japan, Korea, Taiwan etc. But it's clear that the states intervened massively in the economy. First, as Sen notes in his book, the conditions before the economic "miracle" were already there. These countries had very high literacy rates (primary education was extremely important) and social welfare programs. In these countries, Sen notes, development came first, then growth. These countries had a well-developed population which was ready to be put into manufacturing high-tech goods. In contrast, we can see what India's literacy and health standards are. Also, there are many studies of Japan, where the Japanese MITI (Ministry of Trade and Industry) worked very closely with the industries and ignored many market rules (for example Japan always runs a trade surplus, which means that there is a corresponding trade deficit somewhere in the world). I'm still studying this, but it's clear that Japan and the other tigers ignored market rules and had massive state intervention.
You might have read about the East Asian financial crisis. It was again due to IMF policies. As Stiglitz notes in his book, these countries already have a very high savings percentage. (Like Korea saves around 30% of its GDP, China 40%). They already had the resources and the citizens could spend money to stimulate the economy. But instead, they borrowed money from the IMF (and crucially other private investors) and freed up capital flow. For a while there was boom, then sentiment changed and massive capital flight took place.
iii) India: Let's look at what India is. A large majority of India is involved in agricultural sector. This is where Das's book is very weak, as I mentioned. Note that liberalization theory says that the unskilled, low-wage workers would be hardest hit. In theory, these people can be compensated, because the country as a whole benefits. But in practice, this seldom occurs.
I'm still studying the effect of liberalization on Indian agriculture. It's by no means pretty. Let me illustrate one of the main issues which you may have heard about.
The EU and US have massive subsidies for domestic farmers. In the US, a big share of the subsidies goes to the large agricultural corporations, which is a form of "corporate welfare". Despite these huge subsidies, farmers are leaving agriculture. One European farmer quits every minute. There's that old joke that it's better to be a cow in Europe than a farmer in India, because a cow gets a $2 subsidy per day. 70% of India lives under $2 a day.
These subsidies are a big reason why the agricultural market is unfair. You might have read that India and Brazil had made this one of the main issues in the WTO negotiations.
The effects of neoliberal policies are still being studied, but the World Bank estimates that there would be massive rural-to-urban migration.
http://www.zmag.org/sustainers/content/2007-07/08sharma.cfm
I don't know how balanced or accurate this is, but you can look at that.
In about 10-15 years more than 400 milliion people in India would be migrating to urban centres. You can imagine the slums in Delhi and Bombay. Now imagine them being much worse. Around 40-60% of people in states like Tamil Nadu, Andhra etc. would be migrating to urban centres because they can't live on subsistence agriculture any more. You might have read about the farmer suicides in Andhra. More than 25,000 farmers have committed suicide in India, since 1997.
These are things which are also part of globalization. We should be looking at them too when we talk about India's growth and "superpower" status. Globalization has many possibilities, but we must be aware of its implications.
--------------------------------------------------------------------
This essay is very long. I hope I don't bore you with it. Probably, if we have a discussion, in future, I'll concentrate on one or few aspects. Also, probably, I could have split it into a number of essays.
Let me have a shot at a reaction to India Unbound. Again, let me first give some general remarks, then go into details.
Zeroth, let me say that I liked it and would be reading it in more detail, again. It is one of a series of books I am planning to read to make sense of the Indian political and economic scene. If you have more ideas of books like that, I'll be happy to try them.
I'm interested in globalization, the few books which I've read are: Making Globalization Work by Joseph Stiglitz , In Defense of Globalization by Jagdish Bhagwati and Development as Freedom by Amartya Sen. I've also read a lot of Noam Chomsky's work on markets and globalization.
India Unbound talks about two things. a) Nehruvian socialism b) The neoliberal reforms of 1991.
First, let me make a few observations. The whole book is written in an entertaining, anecdotal form. While anecdotal evidence is useful, it's dangerous, at least in principle, because you can sort of validate any theory on the basis of anecdotes. There are a lot of endnotes, and I plan on going through them in detail.
Next, the book concentrates on the manufacturing / knowledge-based sector generally. There's very little, almost no mention of the agricultural sector. This is significant. It's a reflection of Das's background which is mostly in the manufacturing sector and management. While the manufacturing sector is important, it's very important to have a perspective of what's happenning in the agricultural sector which employs 600 million people with another 200 million indirectly affected by it. In view of this, I find the book having a very narrow perspective. In coming to a decision between "socialism" and "capitalism" (I'll explain the quotes in a second), it's quite important to have view of all the implications.
The dominant theme throughout the book is one of "freedom". I agree with that, in principle. For instance, in his book Development as Freedom, Amartya Sen argues that (I'm oversimplifying a bit here), freedom can be thought of as both the end and the means to development. To take a concrete case, consider one of the areas in which Sen has written about extensively, famines. He points out that there has been no substantial famine in any country which has a multiparty democracy and a relatively free press, like post-independence India. But, for example, during Mao's Great Leap Forward in the 1960s, communist China experienced massive famine, killing 10-15 million people. There is, in my view a very good case to be made for increasing the freedom of people in the world.
Let me make a few comments about "socialism" and "capitalism".
Socialism is a broad theory. The main element of socialism is control by the people, both in the political and the economic sphere. The relevant principle for economics is "workers control of the workplace". The principle is simple (we may argue whether it's right or wrong), "the people who are involved in production ought to own it".
Now, there are different approaches to socialism. They can be broadly classified as "statist" or "non-statist", depending upon how important the role of the state is.
"Nehruvian socialism" was a statist approach to socialism. We can ask ourselves if it fulfilled the aim of having worker control of the workplace. In my view, it largely failed in this task. The industry was controlled by bureaucrats, not the workers. That's an important distinction.
Capitalism is also very broad. The idea is that people should be free to choose and the decisions on production are to be made through a market mechanism based on supply and demand.
There are many issues regarding capitalism, but we can say that the two of the dominant issues are that of corporations and importance and fairness of the market. I'll give you my view.
What exactly is a corporation? Well, corporations are basically dictatorships, with a more or less hierarchical structure with orders going from top to down. There is, broadly, a worker class and a management class and these are hierarchical structures. The exclusive goal of the corporations is to have large, growing, sustainable profits for its shareholders. That's fine, but we have to be clear about what it is. Corporations are not accountable to anyone else except its shareholders. For example, if Coca-Cola sets up a plant somewhere, it's not accountable to the local people, but only to its board of directors. That's the basic setup. How fair it is, we can argue.
A related issue is the market mechanism. There are many critiques of markets. I find, in India Uncut and many of the other blogs a feeling that "markets know best" and freedom means cutting down on govt. power while encouraging private enterprise. I'd urge you to read the books of Joseph Stiglitz, Nobel Prize winner and former chief economist of the World Bank, on what he calls "market fundamentalism". His main contribution is "information theory of economics", where he shows that, under conditions of imperfect information, (that is, always), markets don't lead to efficiency. Markets will produce too little of some things, like basic research, and too much of others, like pollution.
For example, just look at the main innovations of the American economy, to name a few, internet, communication, airlines, drugs, biotech. Let's take the internet. As you know, the internet was basically a product of the publicly funded Pentagon system. It was basically set up in the 1960s and there was important research, mainly in universities till about mid 1990s when it was handed over to the private sector. Since then, its character has changed (whether for the good or not, we can argue). Earlier, the buzzword was "information superhighway", now it's "e-commerce".
Let me make a general statement. Markets, by themselves, don't produce enough of basic research. For example, just look at India. Where were the main centres of excellence in the past? - IIT, IISc, ISI. They are relatively autonomous institutions, but are funded by the govt. There are many other centres of learning, like NIIT, Aptech. What's your view of them? I'd like to hear them.
Some more examples. We hear a lot about R&D in American drug companies. First, a huge amount of investment is through the publicly-funded university system. Next, we can look at what it has produced. Keep in mind that R&D in drug companies is huge. We can look at the different products which have come out in the past 10 years. I don't have an accessible source for this, this is coming from memory from Making Globalization Work . The large majority of products are the so-called "lifestyle products", like Viagra or skin lotions or stuff like that. There are very few products for important diseases like cholera or malaria or other things. Again, I'm not saying that the system is useless, but we have to be clear about what it is and whether this is what we want it to be. The overwhelming majority of patents are for slightly different molecules which some other company has not patented.
Summarizing, in my view, the role of the govt. is not just to keep law and order etc, but an active interference is required for markets to function well. Like building infrastructure, like roads and universities. Like education and health. It also has its seamier side, like US govt. interfering in Iraq to protect its oil. In fact, the American system is basically a "state capitalist" system. Again, we can argue as to whether these kinds of interferences are ethical or effective or whatever, but its clear (to me) that they are required and expected.
For example, you might have done macro-eco? Remember Keynesian economics? Keynes' contribution was in periods of slow growth or recession, the govt. can stimulate the economy my massive intervention. Stiglitz places Keynes' contribution as the most important in the history of capitalism.
Let's get back to India Unbound.
India's Human Development Index places it at 126th in the world, comparable to sub-Saharan Africa. In view of this, we can safely claim that a) was a failure.
Let's look at b). "Neoliberalism". Let's take the 1991 reforms in India. In India Unbound, Das gives an anecdotal view of the role of Chidambaram, Narasimha Rao and Manmohan Singh. I still know very little of the background, but, in my view, the reforms were mainly a product of the "structural adjustment" programs of the World Bank and IMF. Manmohan Singh etc. were only responding to the pressures of the institutions due to the financial crisis. Thus, the reforms only lasted for 2-3 years and haven't been pursued very strongly after that. (We can see that in the current govt., when Manmohan Singh is the PM).
Anyway, it's a fine point. We can agree, I think, that the role of these financial institutions was at least as important as Manmohan Singh etc.
This raises a few questions: (The questions are arranged in decreasing order of my knowledge about them. I still need to know a lot about all of them).
a) What's the history of neoliberal reforms around the world? What was the role of the World Bank etc. in this? Do the western countries follow these rules?
b) The "Asian Tigers", in South East Asia. What was their strategy in their period of growth in the 1980s? Was it comparable to neoliberalism?
c) What about China? What's going on there?
Let me address these questions.
a) First, let's look at the theory of neoliberalism. The "structural adjustment" programs, also called the "Washington Consensus" - namely the consensus between, World Bank, IMF and US Treasury dept. (that's what it is - the US dominates these institutions). What do these entail?
In a "free" market, there are basically two kinds of freedom, freedom of movement of labour and freedom of movement of capital. Neoliberalism refers mainly to free movement of capital, not labour. In fact, as the US is passing more and more draconian immigration laws, freedom of labour is severely restricted. Let's look at the Washington Consensus policies.
The main measures are fiscal conservatism, namely, less govt. expenditure in many areas. Also, it involves privatization of many public-sector industries. It involves the strategy of export promotion instead of "import substitution". It involves cutting down or eliminating tariffs. Let's look at what liberalization theory says.
According to theory, the economy will be a dynamic one, with jobs continously being created and destroyed. The economy will move from low wage/low-productivity jobs to high wage/high productivity jobs. There will be both import and export of the same commodity, for example, rice. India both imports and exports rice depending upon where the market is.
The country as a whole will benefit (in theory), but there will be some losers. The losers being the unskilled and low-wage workers. This is what the theory says. How ethical it is, we can argue.
For example, Stiglitz points out, that in most developing countries, unemployment rates are very high. The "dynamic" economy, when it destroys jobs, the workers don't move on to high-productivity/high-wage jobs, but simply add to the unemployed force.
In theory, even a moderate liberalization of labour would have many times the impact than the liberalization of capital. But, since the big capital countries tilt the playing field to their own liking, it's capital liberalization which is being implemented.
That's the theory, what's the practice?
My main source on this is Making Globalization Work. In the book, Stiglitz says this: With globalization, development is possible, but not inevitable. Most economists agree that the Washington Consensus policies have failed.
Why did he say that? Let's look at the history. I'll concentrate on four areas: Latin America and Central America, East Asia, Russia after the fall of the Berlin Wall and India.
i) Latin America and Central America are the areas where the Washington Consensus policies were tried extensively. I'll mix up politics and economics in this, because, in my view, they're both important in this and I feel that they're two aspects of the same thing.
Let's first concentrate on South America. Let's take Argentina, one of the cases which Stiglitz discusses in his book.
Argentina was one of the poster children of the IMF. The IMF gives grades to countries as to many factors like credit worthiness, macroeconomic health etc. Argentina was an A+ student. It carried out "structural adjustment" programs extensively. The result of these policies was that it went deep into debt. It kept on falling into a deeper and deeper debt crisis and then finally its new president just said - NO. It just refused to pay its debt. That was the biggest default in IMF history.
With the default and the rolling back of many of the structural adjustment programs and massive state intervention in the economy, Argentina did something no-one expected it to do. It grew. It grew 7-10 percent, a very healthy growth rate, comparable to India and China.
Let's look at Central America - Guatemala, Nicaragua, Haiti, Honduras, Mexico. I'll be talking generally here, but I'll go into details on any country if you want.
Just imagine, what kind of image do you have of these countries? I'd think, an absolute symbol of destruction. The first four countries have been so systematically destroyed that there's little hope of recovery. Mexico is a somewhat different case.
For instance, around 60% of Haitian children are suffering from malnutrition and probable brain damage. It's the poorest country in the hemisphere. Similarly, Nicaragua, the second poorest country in the hemisphere.
The result of these policies is that there have been left-of-centre governments throughout Latin America. People have become disenchanted with IMF policies. Latin America once constituted 80% of IMF's clients. Now it's less than 1%.
b) Let's look at Russia. Russia was the object of "shock-therapy", which is a sudden transition to a market economy from communism. Let's look at what happenned.
The few years after the fall of the Berlin Wall were a catastrophe for ordinary Russians. Incomes fell 40%. Poverty rose 10 times. Inflation and unemployment soared. There were a huge number of oligarchs created, with massive capital flight from the country. You might have read about Roman Abramovich, the Russian oil tycoon who purchased the Chelsea football club and a number of county estates in the UK. The IMF lent more money, it all flew out.
Nobody wants to go back to the repressive communist regime, but the Russians are asking, what kind of economy is this?
ii) Next, let's look at East Asia. In East Asia, there are very strict controls on speculative capital and capital flow. In Singapore, there's the death penalty for capital flight. That takes care of that.
What was the strategy of the East Asian "tigers"?
I'm still learning about Japan, Korea, Taiwan etc. But it's clear that the states intervened massively in the economy. First, as Sen notes in his book, the conditions before the economic "miracle" were already there. These countries had very high literacy rates (primary education was extremely important) and social welfare programs. In these countries, Sen notes, development came first, then growth. These countries had a well-developed population which was ready to be put into manufacturing high-tech goods. In contrast, we can see what India's literacy and health standards are. Also, there are many studies of Japan, where the Japanese MITI (Ministry of Trade and Industry) worked very closely with the industries and ignored many market rules (for example Japan always runs a trade surplus, which means that there is a corresponding trade deficit somewhere in the world). I'm still studying this, but it's clear that Japan and the other tigers ignored market rules and had massive state intervention.
You might have read about the East Asian financial crisis. It was again due to IMF policies. As Stiglitz notes in his book, these countries already have a very high savings percentage. (Like Korea saves around 30% of its GDP, China 40%). They already had the resources and the citizens could spend money to stimulate the economy. But instead, they borrowed money from the IMF (and crucially other private investors) and freed up capital flow. For a while there was boom, then sentiment changed and massive capital flight took place.
iii) India: Let's look at what India is. A large majority of India is involved in agricultural sector. This is where Das's book is very weak, as I mentioned. Note that liberalization theory says that the unskilled, low-wage workers would be hardest hit. In theory, these people can be compensated, because the country as a whole benefits. But in practice, this seldom occurs.
I'm still studying the effect of liberalization on Indian agriculture. It's by no means pretty. Let me illustrate one of the main issues which you may have heard about.
The EU and US have massive subsidies for domestic farmers. In the US, a big share of the subsidies goes to the large agricultural corporations, which is a form of "corporate welfare". Despite these huge subsidies, farmers are leaving agriculture. One European farmer quits every minute. There's that old joke that it's better to be a cow in Europe than a farmer in India, because a cow gets a $2 subsidy per day. 70% of India lives under $2 a day.
These subsidies are a big reason why the agricultural market is unfair. You might have read that India and Brazil had made this one of the main issues in the WTO negotiations.
The effects of neoliberal policies are still being studied, but the World Bank estimates that there would be massive rural-to-urban migration.
http://www.zmag.org/sustainers/content/2007-07/08sharma.cfm
I don't know how balanced or accurate this is, but you can look at that.
In about 10-15 years more than 400 milliion people in India would be migrating to urban centres. You can imagine the slums in Delhi and Bombay. Now imagine them being much worse. Around 40-60% of people in states like Tamil Nadu, Andhra etc. would be migrating to urban centres because they can't live on subsistence agriculture any more. You might have read about the farmer suicides in Andhra. More than 25,000 farmers have committed suicide in India, since 1997.
These are things which are also part of globalization. We should be looking at them too when we talk about India's growth and "superpower" status. Globalization has many possibilities, but we must be aware of its implications.
Sunday, June 24, 2007
First thoughts
I'm not sure how I want to organize this blog. I think, mostly it will consist of my analysis and thoughts on politics and economics. Given that right now, I'm in the US and have been influenced by many American figures, it will contain a bit of American politics. I'm trying hard to get a handle on Indian politics and economics. The purpose is twofold, one, since there's obviously a lot of issues there which I think are important. Also, it will help me broaden my view.
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