David Harvey on the Geography of the Financial Crisis

David Harvey: the geography of financial crisis
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Michael Hudson - Why Government is More Afraid of Debt than Depression

Mark Blyth on the dangerous nonsense of neo Liberalism - Austerity

Take back our Banks - Taming of the Vampire Squid

Launched to mark the start of bank bonus season, a new animation is setting out to increase public pressure on government to take on the banks and not sweep reform under the carpet. It ask politicians whether they have a plan to tame the bank, and if not, why not?

The minute-long animation is inspired by Rolling Stone journalist Matt Taibbi's description of investment bank Goldman Sachs as a giant vampire squid "sucking on the face of humanity".

The animation is backed by a wide range of influential pressure groups including: nef, Compass, PLATFORM, ResPublica, 38 Degrees, WDM, Positive Money, Tax Research and the Post Bank campaign.

Find out more at www.giantvampiresquid.org and send the film to your MP.

From Field to Fork: Obama’s agri recipe for India

By Rahul Goswami (Source - Macroscan)

November 20, 2010

The government of the USA has planned for India to become an important consumer of its agricultural exports and crop science. India has also been planned as a host country for an agricultural research agenda directed by American crop-seed biotech corporations. This is to be achieved through a variety of programmes in India, some of which began their preparation two years ago. This agenda, labelled as US-India cooperation by India’s current UPA-2 government and by the USA’s current Barack Obama administration, has the support of the American farm sector, but not that of India’s farmers and cultivators. The clear and blunt objective is to increase US agricultural exports and to widen as quickly as possible the trade surplus of the US agricultural sector.

This agenda has become clear following the three business and industry meetings held during the visit of US President Barack Obama-’US-India Business and Entrepreneurship Summit’ in Mumbai on 6 November, ‘India-US: An Agenda for Co-Creation’ with the Confederation of Indian Industry (CII) in New Delhi on 8 November, and ‘US-India Conclave: Partnership for Innovation, Imperative for Growth and Employment in both Economies’ with the Federation of Indian Chambers of Commerce and Industry (FICCI) in New Delhi on 9 November.

The US agri-business view has been projected in India by the US-India Business Council, a business advocacy group representing American companies investing in India together with Indian companies, with a shared aim to deepen trade and strengthen commercial ties. In a document titled ‘Partners in Prosperity -Business Leading the Way’ (November 2010), the business council stated: “India requires an ‘Ever-Green Revolution’-a new program which would engage the country’s rural sector, providing water utilization and crop management ‘best practices’ to promote greater food security-this time based on technology to increase efficiency and productivity. The effort to vitalize India’s agriculture sector should be driven by business, and the first step is improving India’s farm-to-market global supply chain.”

This business-driven trade in agricultural goods and services was given formal shape two months ago during the inaugural meeting of what is called the India-US Agriculture Dialogue, on 13 and14 September 2010 in New Delhi. India’s Foreign Secretary Nirupama Rao and USA’s Under Secretary (Energy, Economic and Agricultural Affairs) in the US State Department, Robert Hormats, co-chaired the ‘Dialogue’. Under this agreement, India and the USA have set up three working groups for: ’strategic cooperation in agriculture and food security’, ‘food processing, agriculture extension, farm-to-market linkages’, and ‘weather and crop forecasting’. The ‘Agriculture Dialogue’ is designed to be the implementing process for the India-US Memorandum of Understanding for Cooperation in Agriculture and Food Security, signed almost a year ago by Obama and Singh. On 24 November 2009, they had agreed on a Memorandum of Understanding on Agricultural Cooperation and Food Security that will, according to the US State department, ‘’set a pathway to robust cooperation between the governments in crop forecasting, management and market information; regional and global food security; science, technology, and education; nutrition; and expanding private sector investment in agriculture”.

‘Agriculture Dialogue’ is the new name given to a US-India plan for trade and investment in agriculture, which saw its genesis on 18 July 2005 when Singh and then US President George W Bush announced the ‘US–India Knowledge Initiative on Agricultural Education, Teaching, Research, Service, and Commercial Linkages (AKI)’. At the time, apart from government officials from both sides representing agriculture and crop bureaucracies, Indian and American universities and the private sector were on the AKI board. The Indian agri universities were the Govind Ballabh Pant University of Agriculture and Technology (Pantnagar, Uttaranchal), the Tamil Nadu Agricultural University (Coimbatore, Tamil Nadu) and the Indian Veterinary Research Institute (Bareilly, Uttar Pradesh). India’s private sector was represented by Venkateshwara Hatcheries Ltd, Masani Farms (its owner was a National Horticultural Board director), ITC Ltd’s Agribusiness chief executive and Wal-Mart India. The American private sector was represented by Archer Daniels Midland Company and Monsanto.

The US-India AKI has been criticised from the outset as being the means with which American agribusiness will enter India’s farm and food logistics sector. It is the AKI and its associated trade and investment programmes (apart from the research collaborations between US agri industry and Indian state agriculture universities) which have helped the conversion of India’s national agriculture research system from being farmer- and cultivator-oriented to being business- and trade-focused. The key agent of such a change is the Indian Council of Agricultural Research (ICAR) and its network of 49 institutes, six national bureau, 25 project directorates, 17 national research centres and 78 all-India coordinated research projects. Moreover, ICAR controls research, education and extension education in 44 state agricultural universities, five deemed universities, one central agricultural university (for the North-East) and four central universities. For the American agri industry-crop science combine, the ICAR network represents both scientific labour and ready access to a field testing system that is a tradition well over a century old, for the Imperial Council of Agricultural Research was established in Pusa (Bihar) in 1905.

How will American corporate farms, seed, biotech and agri equipment corporations make use of this access? The US-India Business Council drafted, in advance of the Obama visit, three ‘advocacy priorities’: (1) Opening up of multi-brand retail sector to ‘organised players’, by which it means American retail chains. ”As study after study has shown, doing so would bring efficiency, infrastructure, technology, and know-how to Indian farmers, food processors, food service providers, and other suppliers,” claims USIBC. (2) Backing up the Agriculture Dialogue by the lowering of tariff and non-tariff barriers which are ”affecting trade in fresh fruits and vegetables, poultry, pistachios, dairy products, and horticultural products - we also seek reduced customs duties on items such as processing equipment, restaurant equipment, and related goods”, says the USIBC. (3) Encouraging US companies to display to India their ‘’success stories of business sector intervention in agriculture and food processing”. Doing so can ”raise awareness in a positive way about how ‘best practices’ and technologies can deliver greater efficiencies” so that India can achieve the ‘Evergreen Revolution’.

During Obama’s visit, in both Mumbai and New Delhi, the business and financial media were already being treated to ‘awareness raising’ on this subject: ”Monsanto’s revolutionary cotton seeds have helped double India’s cotton output in just six years”, ”PepsiCo has helped Punjab diversify its agriculture by introducing major citrus orchards”, ”Cargill’s Nourishing India program provides nutrient-fortified edible oils to 25 million Indians per month”, ”McDonalds and Heinz have developed new efficiencies, transforming the lettuce and tomato industries in India” and ”Walmart’s wholesale cash and carry stores connect farmers directly to small retailers, eliminating costly intermediaries”. This barrage of propaganda has been carefully orchestrated on both sides, the Indian and the American.

By mid-2010, the position of the Ministry of Agriculture, Government of India, became clear. In an address during the 28-29 July 2010 ICAR-Industry Meet, Union Agriculture Minister Sharad Pawar said that his ministry recognises the role of the private sector in critical areas of agricultural research and human resource development. The conventional approach of public sector agricultural R&D has been to take responsibility for priority setting, resource mobilisation, research, development and dissemination. He then explained that agricultural extension, which has been neglected for several years now, is ”no longer appropriate”. The alternative, Pawar advised, is public-private partnerships through which public sector institutes (such as those in the ICAR network) can ”leverage valuable private resources, expertise, or marketing networks that they otherwise lack”. This is the undisguised merchant reasoning behind the creation of ‘Business Planning and Development units’ in five ICAR institutes (Indian Agricultural Research Institute, Indian Veterinary Research Institute, Central Institute for Research on Cotton Technology, National Institute of Research on Jute and Allied Fibre Technology, Central Institute of Fisheries Technology). These units will tackle intellectual property management, commercialisation of research, find investors and begin businesses. India’s National Agricultural Research System, therefore, has decided to now become a broker of its own output (publicly funded) and a speculator seeking profits from the country’s agricultural and food price crises.

In the same month (July), the Department of Industrial Policy and Promotion (DIPP) of the Ministry of Commerce released a discussion paper entitled ‘Foreign Direct Investment (FDI) in multi-brand retail trading’. This paper, said the DIPP, was circulated to “generate informed discussion on the subject” which will ”enable the Government to take an appropriate policy decision at the appropriate time”. However, that consultative pose was neutralised by the central government taking a position against the arguments protesting FDI in retail. The ‘limitations’ of current conditions in the Indian retail sector were described as:

London Students Demonstrate Against the Education Cuts - Dare to Struggle Dare to Win - Salute the Courage of Student Resistance

David Harvey on Marx's Method - Lecture at Berkeley

A Talk on Marx's Method from David Harvey on Vimeo.

Neoliberalism : The root of the economic crisis by Saba Navalan

The United States and European countries, which dominated every nook and corner of the world by constructing their own system of social justice, are now in a state of shock. The uncertainty about future has made experts convene meetings by the hour in European and US capitals. They spent billions of dollars of hapless taxpayers to bail out giant corporations.

They blame the inevitable failure of capitalism on excessive borrowing and consumption. They find fault with the “have-nots” and have started drafting policies to exploit them more. Imperialism is a system that serves the powers that be. It has no connections with democracy.

The present scenario has once again has proven economist’s observation that the capitalist system based on exploitation of the people will not sustain itself. World’s superpowers, which colonized other countries using military power for creating new markets, restructured their politico-economy after the first world war.

Unlike the feudalistic social structures of the past, capitalism has witnessed several falls within a short span of its birth.

Structural Crisis

The economic crisis of the early seventies created the neo-liberal models which are crumbling today. The new order of liberalism and globalisation was created to withstand the economic crisis of the seventies. Italy’s former finance minister Giulio Tremonti who saw in globalisation a big hope, later (within a span of few months) wrote a book on the dangers of globalisation.

As socialist countries emerged as a challenge to western capitalism in the seventies, capitalists started moving their investments to Third World countries in order to make more profits and to weaken the labour force in the US and the Europe.

The price paid by Western labourers for globalisation and neo-liberalism is unemployment. This rampant unemployment helped capitalism create a reserve army of labour in their own countries. The excessive profits capitalism earned by exploiting third world’s workforce went a long way in funding the social security guarantee schemes to please the unemployed.

The structural crisis of economy which began in the seventies lasted till early eighties. Reduction in industrial productivity, lesser growth rate, unemployment, macro instability of boom and recessions forced would-be US president Ronald Reagan and would-be British Prime Minister Margaret Thatcher to frame globalisation as a policy, according to George Soros. Further he elaborates that today’s economic crisis has several unsolvable features within an entirely different capitalist structure.

In the last twenty years, globalisation has become so widespread that one feared of every nook and corner of the world would become the backyard of American imperialism. When globalisation, the highest form or manifestation of imperialism, is shaken, it is natural for economists and common folks to raise a question if the imperialist structure and its dependent countries could sustain themselves.

Every time capitalism collapsed, a new order such as the neo-liberalism of the 1970s was created to sustain it. However the present situation is completely different. Many capitalist economists have admitted that an all-new restructuring appears to be impossible. Many predict that the dominance of the US and the Europe would last only for a few more years.

Karl Marx’s Vision

When Karl Marx predicted this crisis 160 years ago, he was depicted as a terrorist and a mischief-monger. Karl Marx’s thoughts on economics referred to popularly as ‘Trajectories a la Marx’, explains scientifically why capitalism cannot sustain itself. Marx and Engels, establishing this by dialectical method, say that a communist society would be born from the ashes of a capitalist society. Karl Marx, who introduced to the world scientific socialism, is now remembered not just by capitalist magazines but also by religious leaders. “Karl Marx is proved right. Capitalist economics is suffering blows from all sides,” says the editorial of The Guardian in Britain.

“The criticism of capitalism by Karl Marx, the father of modern Marxism, is partly true,” says the religious leader from Canterbury. Keeping the capital and property under individual ownership is one aspect of capitalism; agency of capital is the other side of the same coin. Macro economic features help this structure sustain itself.

Capital will be accumulated in one place, either with individuals or with giant corporations. The owners of capital want to save it up. Credit Mechanism is born here. It is carried out through banks and money distribution. The nature of money distribution, being an endless one, becomes a threat to the capital accumulated through profits according to Gerard Dumenil and Dominique Levy in their essay Neo Liberalsim: It’s nature and contradictions. The present economic crisis has its roots here.

As Karl Marx rightly pointed out, one of the basic requirements of capitalism is buying labour force. Periodic replenishment of army of labour is central to determine the price of labour from time to time. Creating unemployment for a section of workforce and thereby stopping the pay hike of the rest of the workforce is a strategy to keep up the profits. These two aspects of capitalist mechanism has led to the 2008 economic crisis and the fall of capitalism. The economic crisis of the seventies and its resultant globalization helped free movement of capital. Giant corporations moved to third world countries such as India to increase their profits. Western giant corporations flourished. Capital kept accumulating.

The basics of today’s crisis

Capitalism drafted new plans after its crisis of the 1970s. They found new ways to circumvent the protests of the organized labour force and the struggles of the trade unions for pay rise. A new order is created to overcome the threat of Marxism and the united struggle of the oppressed sections.

Capitalist economic structure, which has profits as its basis, escaped from the well-organised workforce of the West and moved to poorer countries in search of cheap labour. This is what Karl Marx termed as the agenda of creation of unemployed labour force. This jobless army of labour helped control the pay hike of existing workforce in Britain. For instance, the oil tanker drivers of Britain did not enjoy any pay hike after 1992. If the present workforce is sacked, there is an army of labour waiting outside to fill up the vacant posts. This modus operandi has naturally created a change. This has driven capitalism to plunge into the present crisis. The crisis began when the capital and production were moved to third world countries.

With industrial manufacturing sector literally off-shored to third world countries in the last ten years, small productions, banking capital became the source of capital in imperialist or English-speaking countries. After the digital electronics boom of the 1990s, IT became widespread. 80 per cent of the population in Britain and US handle computers and are familiar with them. But the manufacturing of computers by giant corporations such as HP, Dell take place in countries like India and China. While the production was carried out elsewhere, it was the money from sales which helped accumulation of capital in the West. The owners of the capital, which was accumulated by exploiting cheap labour, found in their governments protectors. The governments created credit mechanism to please their people and help the movement of the capital.

Credit Mechanism through the banks

Credit mechanism is the business dynamism of providing the capital invested in stock markets and savings as loans to people and making profits from it in the form of interests. Housing loans are the highest form of this mechanism. As the interest rates of housing loans were slashed, the number of people opting for housing loans went up. The demand for houses increased. In US and Britain, the prices of homes went up by 60 per cent in 10 years. This helped increase the capital of corporations in the housing sector and that of the banks offering home loans. As a result, the dynamism of the capital went up and helped save capitalist economic structure. Thus capitalist credit mechanism helped rotation of the capital and capitalism. The profits associated with the capital invested in third world countries increased. Though there was a guarantee for the pay hike of the European workforce, it was deducted in the form of interest for loans and taxes.

According to economist Michael Robert, home loans were the prime mover of European capitalism as there was hardly any investment in the manufacturing sector. With most of the industrial manufacturing sector moving to the third world, the credit mechanism-dependent structure is crumbling down. Capitalism which kept itself going by reinvesting its profits, earned in the third world, is now struggling to find an alternative.

The consumerist society without the capacity for manufacturing in Britain has left each family with a debt burden of 59,350 sterling pounds. The debt has increased by 10.6 billion sterling pounds in the last 12 months. During 2007, the average per capita income was 1338 pounds and the average daily expenses were a little higher than this.

The ever-increasing cost of living in the West and the inability of the people to pay up their debts created a crisis for the banks. With the prices of homes increasing at 90 per cent rate, people stopped buying houses and the prices of homes hit an all-time low. The giant corporations and business tycoons started withdrawing their shares from the banks and the banks started to fall.

In the US, banks started take a beating since 2006. Yet the crisis accentuated only in 2008. Savings banks took the first blow followed by the commercial banks.

What do we do now?

Capitalism is attempting to create an illusion that the present crisis is just a credit crisis. It has been taking efforts and doing the campaign to avoid any pessimism arising among the public in the system of capitalism.

The dynamics of imperialist capitalism has come to a screeching halt. With the production capacities of manufacturing forces coming to a standstill and no alternative economic models in place, the capitalist structure presents temporary models to buy time. US government paid 700 billion dollars of taxpayers’ money to bail out banks. Britain’s Gordon Brown government acquired 50 billion shares to overcome the crisis temporarily. They are still searching for other coping mechanisms.

Imperialist countries talk about controlled capitalism and cooperation between banks; they don’t even whisper about the huge capital accumulated by giant corporations. They cannot exploit poorer countries like before by devising new schemes. The boom of Chinese capitalism and the modernization of manufacturing sector in the third world have become new external factors while dealing with the crisis. US-led economic monopoly is coming to an end. It will try to regain control again. What alternatives do the Leftists have? The mere boasting that Karl Marx predicted movement of capitalism from the West to the East and the fall of capitalism will not suffice.

Bibliography:

Britain: The housing tsunami: Michael Robert. 2008

The politics of financial service revolution: Michael Morgan. 1991

The Globalisation Decade: A critical Reader : AAKAR BOOKS. 2006

Financial Time UK

The New Paradigm for Financial Markets: The Credit Crisis of 2008 and What It Means : George Soros.2008

UNLOCK THE GATES OF THE FOOD GODOWNS

PROTESTS OUTSIDE FCI GOWDOWNS (AND DISTRICT COLLECTORATES AND STATE SECRETARIATS)

DEMANDING FROM THE GOVERNMENT -

# DISTRIBUTION OF FOOD FOR FREE OR AT SUBSIDISED RATES TO ALL THE POOR AND VULNERABLE IN THE COUNTRY, INSTEAD OF LETTING GRAINS ROT

# LEGISLATION OF A COMPREHENSIVE NATIONAL FOOD SECURITY ACT WITH A UNIVERSAL PDS AND ENTITLEMENTS FOR CHILDREN, OLD AND THE SOCIALLY VULNERABLE.

In light of the recent Supreme Court order to distribute food grains to the poor rather than rotting in the FCI godowns, we announce the “Godamo Ke Tala Kholo Abhiyan”, a week of action and protests in the state, from 22nd to 28th September. This will be part of National Action Week which will be held across the country on behalf of Right to Food Campaign, with participation from PBKMS, Udayani Social Action Forum and many other organisations in West Bengal. Padyatras, meetings and press conferences will be organised throughout the week.

Will Chinese workers Challenge Global Capitalism ?