“Home care workers in Rotterdam who will lose their jobs in 2014 will be partly replaced by benefit recipients. The municipality will oblige those on benefits to do volunteer work”, De Volkskrant newspaper wrote towards the end of 2013. “This is substitution pure and simple”, according to Wim van der Hoorn, a union leader of the FNV labour union. “The municipality tries to patch up the holes in its budget by using the free labour of benefit claimants to get work done that previously was paid work. In this way employment is lost”. But the PvdA (Social Democratic party) elderman Marco Florijn tries to keep up appearances and “wishes to underline that the absolute precondition is that no regular jobs are lost”. His political associate Jan Hamming, mayor of Heusden and chairman of the advisory committee “Work and Income” of the association of Dutch municipalities VNG, is a lot more honest on this issue. He admits that the use of benefit claimants can threaten existing jobs. “There is a financial side to this story. We are confronted with substantial budget cuts. That also impacts on the work in municipalities: it does not get done. So it is only logical that we are also considering putting people who are on benefits to work.” Rotterdam is not a unique case for that matter: thousands, possibly tens of thousands and who knows in future hundreds of thousands of benefit claimants are being forced to do unpaid labour.

Sticky fingers

The question is who profits from forced labour and job substitution, and what the amounts are that we are talking about. It is difficult for us to get this information. The implementation is far from transparent. Many municipalities have already introduced forced labour but they all have their own approach, often through structures that differ only slightly. In some instances the benefit claimants have to do forced labour in municipal reintegration centres and sheltered workplaces, in other places they have to work in home care or with ‘volunteer’ organisations, and other municipalities put them to work in commercial reintegration agencies, temp agencies and commercial businesses.

Obviously any commercial business will only want to be involved in such projects if these are financially attractive. In principle forced labourers are cheaper than regular employees because they do not receive wages and have no entitlements regarding better (and thus more expensive) working conditions. But it is usually unclear how much money is involved, and where exactly it disappears into the deep pockets along the way in the outplacement chain. In most cases it will be financially attractive for the municipalities to force benefit claimants into compulsory unpaid labour. After all, their benefits are being paid by the national government, although in practice quite a few municipalities have already been obliged to pay a share of these costs. With or without municipal deficit: all extra income from forced labour is probably welcome. The downside is that an entire system of repression has to be set up to continuously monitor the forced labourers, and this is costly: the minimum that is necessary would be the monitoring infrastructure plus the wages for the guards and ‘coordinators’. But this in a way is employment and can probably be paid out of the so-called ‘employment budget’ which is part of the social benefits budget that the municipalities receive from the government. In addition there have to be employees who bring in customers and orders, and this should not be too difficult with the obviously low labour cost that can be guaranteed through forced labour. Companies and municipalities try to sell forced labour with all sorts of explanations about ‘social return’, ‘gaining experience’, and ‘giving people guidance and support’, as they do for low paid and unpaid internships and other types of worktraining programmes. Usually it is just empty words but not always: sometimes they really do invest some time into explaining the work to people and training them. And in some cases new workers do indeed produce less in the beginning than their experienced colleagues. In short there would have to be an in depth national research with full cooperation from civil servants, businesses, unions and economists to get to the bottom of who really benefits from forced labour and to what extent.

Substitution

The question is: how useful would such research be for the bottom-up activists, for the workers themselves? And what do we mean by ‘substitution’, how would we describe it? If we look at it from the bottom up it is really very simple: any form of labour that is paid less than the minimum wage or the collective labour agreement wage for adults, in whatever way and with whatever excuse possible, in fact means that regular paid jobs are being replaced. This applies to forced labour in the same way it applies to unpaid internships, worktraining programmes, youth minimum wage jobs, and so on. After all the existing work is turned into a lower paid or even unpaid job.

For alderman Florijn ‘substitution’ probably only applies when a regular paid job is replaced one-on-one by ‘voluntary work’. From the position of the forced labourer however it does not matter at all whether or not the work was a decently paid job earlier on. The issue is that work that is done by a forced labourer cannot be done by a regular paid worker any more. To put it bluntly: every forced labourer is made to substitute the paid job that he or she could have had without forced labour. And this also goes for work that has never, or not for years, been paid work. The fact is that this work obviously needs to be done, otherwise no one would be forced to do it, or be recruited for it, and no internships would be established to do it. The authorities and bosses would simply have to pay to get this work done if forced labour and all sorts of vague internship constructions had not been created. In that case the labourers would have had their wages and rights. Basically there is only one exception to this rule and this is the work that was simply made up to keep benefit claimants busy, to discipline them and bully them out of the benefits scheme. You know the type of work: one man digs a hole and the other one fills it up again. Or the type of forced labour where the benefit claimants just have to show up at the workplace but there is nothing to be done except hang around and wait. This is not substitution of course, but out of principle even in those cases people ought to be properly paid for this. Let alone the fact that benefit claimants are being humiliated by this, and that for that reason alone forced labour should be abolished immediately.

But there is more to substitution than this. Forced labour and obligatory ‘volunteer work’ are not only substituting regular paid jobs, but also important unpaid work such as for example first-line care by family or others, political activism, and also a lot of real volunteer work that the government does not approve of. This means that the existing volunteer economy is losing its autonomy and gets to be more and more controlled by municipalities. In this way forced labour harms community and volunteer work, and other activities outside of the capitalist logic that make life worthwhile for many people.

Profit and loss

When we start looking at the financial question from bottom-up things actually become quite simple. The extra revenues that this substitution generates for bosses and municipalities equals exactly the amount that all forced labourers, interns and work experience placements together lose compared to when they would receive a regular (collective labour agreement or adult) minimum wage. This is the amount that the working class as a whole is being deprived of, on top of the added value they produce and that is always appropriated by the capitalist class anyway. These calculations can also easily be made for individual cases: how much money does a benefit claimant who works, receive less compared to when he or she would be paid a regular wage. And if we would add these sums for the by now estimated tens of thousands of forced labourers we quickly end up with huge amounts. In Leiden the forced labourers officially have to work 26 hours a week, and as a result the minimum wage for the hours worked would be exactly the same as their benefits. This would be a financial-technical way to prevent substitution, but in practice most forced labourers work far more than 26 hours. In addition the forced labour placements continue to substitute regular jobs with regular labour rights.

If you look at it from the bottom up it is a false argument used by employers and municipalities, that forced labourers, interns and youth work placements have to learn the work and produce less so should get paid less. Not only is their production not always lower, in some cases it is even higher. The point is that this growing group of underpaid or not paid labourers have to pay for their housing, food, clothing and insurances just like anyone else. It is not about productivity as it is with old-fashioned piece rate, but about the time that workers give to their bosses. The workers can only make use of their time once, and this is a problem when due to these forms of underpayment more and more people working during all the working hours they have only receive an income that is not even a living wage. The issue should be a decent living wage for everyone.

Eric Krebbers

Source of Article: http://www.doorbraak.eu/job-substitution/

Source of Featured Image: http://simplepimple.com/2012/08/are-internships-a-form-of-modern-slavery/

Therefore, the tasks of the working class in the Russian Revolutions of 1905 and 1917 will only be touched upon and I will concentrate instead on the Marxist theory of the state. Lenin and the Bolsheviks successfully applied this theory in their day and were able to overthrow the capitalist ruling class and its supporters in Russia and surrounding areas and to found the Soviet Union in 1922. How should we understand this theory today as we struggle to advance the interests of working people around the world in their effort to free themselves from capitalist exploitation and oppression (including the workers of the former socialist countries)?

I will begin with a few remarks about Lenin’s “Preface” to the first edition of SR. First, Lenin’s characterization of the state is as accurate today as it was when he wrote his preface: The “oppression of the working people by the state which is merging more and more with the all- powerful capitalist associations, is becoming increasingly monstrous.”

Capitalist states have by now practically completed the merge. In the US  the present economic depression initiated, among other reasons, by fraudulent lending practices and other illegal activities by banks and big corporations has seen the state bailing out the big capitalist firms while leaving the working people, the victims of the depression, to fend for themselves. The state has recently cut food stamps and unemployment  insurance benefits for the working people while giving subsidies to big agricultural and energy interests. There is no doubt whose interest the state serves.

In European countries the state is either imposing regimes of extreme austerity on the working population in order to extract wealth to be turned over to bond holders and banks or pushing through measures to revamp the labor laws and retirement plans of the workers to their disadvantage in order that the corporations may more easily fire people and will not have their taxes increased to support social programs.

In the Third World from Bangladesh, Cambodia, and Indonesia, to Mexico, Haiti and Africa, and points in between, we see the state allied with commercial interests and using its police and military to break up strikes and work stoppages in support of the owners of capital.

Lenin also pointed out that those who claim to be champions of the working class, especially so-called “socialist” leaders have sided with the capitalist class against the workers of their own countries, but also internationally. The French socialist government, for example, openly supports the most reactionary elements of the US ruling class in its international quest to dominate Third World countries. This is in line with Lenin’s observation that “the majority of the so-called Great Powers have long been exploiting and enslaving  a whole number of small and weak nations.” Is the world any different today?

One of the most effective ways the capitalist class keeps the workers in thrall and off balance is by appeals to patriotism (USA! USA!) and by pitting the workers of one country against those of another (“Buy made in America!”). The idea that the state is somehow class neutral or can be made to champion the workers against the financial and industrial interests is seen by Lenin as an obstacle to mobilizing the working people to struggle for THEIR interests rather than the interests of the exploiters. Lenin uses the term “opportunism” to describe working class leaders who work to achieve narrow short term and temporary gains at the expense of the long term interests of the working class. Opportunism is not the same as reformism which brings about substantive long term changes under capitalism which will strengthen working class consciousness (such as the struggle for civil and political rights.)

Struggles for reform increase class consciousness in the working class, while opportunism decreases it. This is why Lenin thinks understanding the nature of the state is of vital importance. “The struggle to free the working people from the influence of the bourgeoisie in general, and the imperialist bourgeoisie in particular, is impossible without a struggle against opportunistic prejudices concerning the ‘state’”.

Up to this point I think the ideas expressed by Lenin in his preface are still applicable today. However, there are three issues that I now turn to which have questionable merit today:

1. “The world proletarian revolution is clearly maturing.” This was an overly optimistic, if understandable, position in 1917. But subsequent events actually led to the derailment of the “world proletarian revolution” which shows no sign of getting back on tract anytime soon. However, events in North America and Europe, Cuba and South America, as well as Africa and the Middle East are indicative of a general malaise of the international capitalist order the outcome of which is not now predictable.

2. While there are many lessons to be learned from the Russian Revolution, Lenin was incorrect, I think, in seeing it as the first link in a chain of revolutions which would overthrow capitalism. Capitalism ultimately overthrew it, hopefully for the nonce.

3. The emphasis on refuting the ideas of Karl Kautsky, while essential in the era of WWI, are no longer as relevant as they were in light of the developments in Marxist theory attributable to Gramsci, Trotsky, Mao and others.

Finally, Lenin ends the preface with the following words regarding the understanding of the nature of the state and its relation to the struggle for socialism which he says “is a most urgent problem of the day, the problem of explaining to the masses what they will have to do before long to free themselves from capitalist tyranny.” Well, it’s a long time since Lenin’s “before long” but the problem is still urgent and the explanation must still be made.

Read the book here

Source: http://www.opednews.com/articles/Lenin-s-State-and-Revoluti-by-Thomas-Riggins-Capitalism_Class_Consciousness_Lenin-140112-871.html

In my analysis, capitalist and socialist are adjectives referring to class processes. The class processes are different from – other than – the processes that comprise ownership of property and also different from the processes of market exchanges, including the exchange between wages and labor power. Class processes are defined precisely as the producing, receiving, and distributing of surplus labor. It is these processes together that comprise a class structure. Thus, my approach differs from the traditional debates over capitalism and socialism by focusing attention upon a different variable that others choose to make the distinction between the systems. In my approach, capitalism and socialism or communism refer to the issue of class structure, the particular form of the processes of producing, receiving, and distributing surplus labor. Class processes so defined are interactive and interdependent with, but also irreducibly different from such nonclass processes as ownership (private, collective, or state), distribution (markets, command allocation, custom), and power (distribution of authority among individuals, levels of government, and so on).

2.If it is not wage labor, markets, and private property that determine capitalist class processes, what exactly is capitalism?

Crucial to my argument about systems is that there is no necessary or mechanical linkage between any of these factors and the presence of a particular form of the class process. It is not wage labor, markets, private property, parliamentary democracy, natural resource availability, or any other one or a subset of factors that are the key or essential determinants of, say, capitalist class processes. It is, rather, the ensemble of conditions, the totality of all the factors that interact and thereby generate the particular form of the class processes. So capitalism is that particular class process, i.e. organization of the surplus, in which those who produce the surplus are different people from those who appropriate and then socially distribute that surplus with the goal of reproducing that capitalist class process. In this way, capitalism is like feudalism and slavery. What differentiates capitalism from feudalism and slavery is the relationship between the surplus producers and appropriators. In capitalism, there is a contractual relationship (unlike ownership, as in slavery, or the personal relation of serfdom, as in feudalism) between surplus producer and appropriator via the wage system. But to push the argument to a logical extreme, if capitalist class processes can coexist in a society without wage labor, without markets and without private property, can this society still be called capitalist? The answer that flows from the definition I am advancing is, yes, if we can demonstrate that all the other social factors (other than wage labor, markets, and private property) impacting on its particular organization of the production, receipt, and distribution of surplus labor have overdetermined a capitalist form.

3. This is to say, then, that who predominates in state, economy and society, which has been the position of various socialists and communists, from Lenin to Lange and Sweezy, is not what differentiates capitalism from socialism?

Yes, exactly. What differentiates a systems is, as Marx showed, “how the surplus is pumped out of the producers.” If the surplus producers themselves collectively (i) determine the size of the surplus they produce, (ii) appropriate it, and (iii) distribute it socially, then you have socialism or communism as clearly differentiated from capitalism in which the surplus producers are precisely excluded from making that determination or that appropriation or that distribution.

4.From the perspective of Marxian class analysis you employ, what was the nature of Soviet economy and society?

I think it’s beyond contention that the system in the USSR did not generally arrange for the workers themselves to appropriate and distribute their surpluses. As such, the Soviet system did not end capitalism. They did change its form. Instead of private capitalism (appropriators chosen by shareholders and holding no state positions), they instituted state capitalism (state officials functioned as surplus appropriators). Lenin acknowledged that, hoping that state capitalism might serve as a step on the road to socialism. Except for a short time on collective farms in the 1930s and 1940s, a socialist or communist class structure was not widespread in the history of the USSR.

There is a major theme in Marx’s work that uses a careful specification of what it calls necessary and surplus labor to differentiate among economic systems. Briefly, this theme holds that in all human societies, some members work to transform nature into the objects of human needs and desire. These members do necessary work – the quantity of work required to secure whatever standard of living they demand – yet, they also do more work than that. This additional quantity of work is what Marx calls their surplus labor. In Marx’s definition of surplus labor, exploitation (defined precisely as any situation in which the producers of the surplus are different people from its appropriators) does not occur only in a capitalist system. It can occur in other systems that Marx only briefly and tentatively distinguished from capitalism, especially slavery and feudalism. And it did occur in the Soviet Union for the reasons already outlined with regard to the appropriation and distribution of surplus labor. The full details of this argument are available in S. Resnick and R. Wolff, Class Theory and History: Capitalism and Communism in the USSR (New York: Routledge, 2002).

5.Socialism and direct participatory democracy seem to be intertwined in your analyses of future social orders. Some critics might point out that this view carries the implication that humans are totally capable of pushing aside their selfish nature, which is to say that the future of socialism depends indeed on a “new man.” How would you respond to this charge?

The shortest answer to this question is that the “nature” of human beings is a socially overdetermined, evolving quality. Capitalism shapes various forms of behavior which are conditioned and determined by the contradictory demands placed upon them by economic and social components of the system. The evolution of human nature to now is what   produces growing demands for social change beyond capitalism. The change to socialism will in turn further develop human beings and their “nature.”

6. Many on the Left suggest that the crisis facing advanced capitalism today is life- threatening to the system.  Yet, profits for major corporations, banks and other financial institutions are at an all time high while the standard of living for the average workers is shrinking and the scourge of long-term unemployment constantly grows. What kind of a capitalist crisis is this?

Capitalism has always sought to turn its internal contradictions and periodic crises to its own advantage, to turn, as Mao said, bad things into good things. The current crisis since 2007 has provided capitalists with opportunities they have seized.  In the US, for example, financial and other mega-corporations rushed to mobilize massive government assistance to save them from collapse.  Clear to all, that rush mocked the previous era’s glib contrast of the private sector as efficient and the public sector as useless or worse.  No political gridlock prevented the government from swiftly and nearly unanimously providing those mega-corporations with trillions in loans, guarantees, investments, and other forms of stimulus spending.

In the meantime, the system has stopped delivering “goods to the people.”  Millions of people throughout Europe and the United States are condemned to the repeated ravages of lost jobs, job benefits, and job security plus foreclosed homes and bleak job prospects for their children.  The personal, family, and economic costs of the failure to deal with capitalist crises are staggering. Over 20 million of Americans today are without a job, millions more limited to part-time jobs.  Similar situations exist in Europe, and much worse in parts of southern Europe. As example of the kind of capitalist crisis we are facing, according to the US Federal Reserve System, roughly 20 percent of the economy’s tools, equipment, factory, office, and store space, and raw materials stand idle. This capitalist system deprives us all of the output and wealth that could be produced if the people denied jobs were combined with the idled means of production.

The capitalist crisis has also provided, in dialectical fashion, opportunities for anti-capitalists, but they have only begun to seize them.Many of today’s radicals largely avoid the language, concepts, and imagery associated with earlier forms of anti-capitalism: traditional socialism, the USSR, China, and the marginalized, often sectarian, groups who remain identified with those forms. Various sorts of anarchism and unorthodox Marxisms (old and new) have surfaced and found followings on the left.  These diverse movements have formulated critiques of the crisis focused on its roots in capitalism, but they have not yet coalesced into or with political, enduring, and self-consciously anti-capitalist organizations.

7.What examples from around the world would you say point to the future of socialism?

In countless countries, including Greece, there is a fast-growing anti-capitalist consciousness and anti-capitalist components of social protest. This consciousness raising is extremely important, notwithstanding the frustration that it has not yet been matched, in most countries, by more developed organization. In the US,  for so long the bastion of uncritical celebration of capitalism, the level of anti-capitalist criticism is greater than at any time since the Great Depression of the 1930s.

Around the world, movements to replace capitalist organizations of the surplus with collective (socialist, communist) organizations of the surplus are growing. So far these are largely dispersed and small (with crucial exceptions such as Mondragon in Spain), but their growth and the growing focus on worker coops are yet another expression of growing anti-capitalist consciousness. As for Mondragon,it isthe world’s largest and perhaps most successful example of Workers’ Self-Directed Enterprises, competing effectively with conventional capitalist enterprises. Begun in 1956 with six workers organized into a cooperative enterprise by a Spanish priest, the Mondragon Cooperative Corporation (MCC) now employs over 100,000 workers, is the largest corporation in the Basque part of Spain and the tenth largest corporation in all of Spain. It has extensive research and development labs generating new ways to produce new products and maintains its own university to train its workers and interested others in all the ways of running and building democratically cooperative enterprises. MCC is thus a remarkable testimony to the contemporary viability and strength of non-capitalist production systems. It is one of the proliferating models of an alternative to capitalist economics and politics.

Source: http://www.rdwolff.com/content/richard-wolff-capitalism-and-socialism-interview-c-j-polychroniou

So Forbes contributor, Alex Berezow launched into an attack on socialist economics and Sawant (http://www.forbes.com/sites/alexberezow/2013/11/11/why-is-seattle-socialist-kshama-sawant-allowed-to-teach-economics/).  Berezow said he was not an economist, but more important was a proper scientist (a micro-biologist).  For him economics was not a science as it “generates research and commentary that employs more voodoo than a witch doctor.”  I’ll return to that claim about economics and its failure to get anything right about the world, but first let’s consider Berezow’s main beef.

He reckons that the only proper contribution that economics makes is to confirm the “basic and obvious” fact of “human nature” i.e everybody is out for their own self-interest and the world only goes round and round economically if people can gain money or things for themselves. “Unfortunately,” says our biologist scientist writer, “socialists never learned this lesson. In a socialist economy, incentives play little (if any) role. Therefore, as University of Michigan-Flint economist Mark J. Perry wrote, “By failing to emphasize incentives, socialism is a theory inconsistent with human nature and is therefore doomed to fail.”

But how scientific is that assertion? There are thousands of biological and social studies in both human and animal behaviour that show individuals are not just driven by individual greed or self-interest, even in most situations.  What about people fighting in wars (for the benefit of capital, or ‘the country’)? What about the giving to charities (mainly by poorer people to even poorer people); or voluntary work; or looking after their families and older parents, or jumping off bridges to rescue people from drowning etc?.

Human behaviour depends on the circumstances – and in economic behaviour too.  Tax evasion and fraud exist in all economies but it is rife in countries where people have no faith in the fairness or honesty of governments. The level differs accordingly.  And why are some countries wealthier and more productive than others, grow faster or slower or have greater inequality or less?  Is this all to be explained simply by levels of greed and ‘incentives’; or could it be due to social and cultural structures; uneven developments in economic history.  After all, the economic theory of ‘free markets’ refers to very recent phenomenon in human history, even if it is now the central ideology of ‘political economy’. It seems that our Forbes biologist knows little about his own branch of science, let alone economic behaviour.

Berezow cites Greg Mankiw’s book, Principles of Economics, to support his view that proper economics is about ‘self interest’.  This textbook is now the standard work for all economics students in mainstream economics departments globally. The irony is that a section of the privileged students of Harvard University where Mankiw teaches boycotted his lectures because he provided no alternative economics to compare with his brand of neoclassical theory – and there are plenty of alternative views to the ‘free market’, Ayn Rand approach (http://en.wikipedia.org/wiki/Ayn_Rand) presented by the Forbes columnist as the only ‘rational’ brand of economics.

And elsewhere there has been a revolt against mainstream economics as the best explanation of what is happening in economies. Recently some students in Manchester, UK set up a Post-Crash Economics Society who believe that neoclassical economic theory should no longer have a monopoly within economics courses. “At the moment an undergraduate, graduate or even a professional economist could easily go through their career without knowing anything substantive about other schools of thought, such as post-Keynesian, Austrian, institutional, Marxist, evolutionary, ecological or feminist economics. Such schools of thought are simply considered inferior or irrelevant for economic “science”. The current state of affairs is not good enough. Our classmates tell us that they are embarrassed when their family and friends ask them to explain the causes of the current crisis and they can’t. “

But Berezow ploughs on in his column. He says “shockingly, socialists can regularly be found on college campuses. Kshama Sawant, an economics teacher at Seattle Central Community College, openly endorses socialism….How on earth can somebody who rejects basic academic knowledge win a city council seat? Even more troublingly, how can somebody with her beliefs be allowed to teach an economics course? This would be analogous to allowing an AIDS denier to teach a medical microbiology course, or a creationist to teach an evolution course.”   Really?  Is socialist economics equivalent to AIDS denial or the denial of evolution!  More vindictively, our Forbes columnist wants to see an end to socialists in Seattle colleges: “why would Seattle Central Community College allow Dr. Sawant (yes, she actually has a Ph.D. in economics) anywhere near students?”  So no free market there then?

Even worse for Berezow, Socialist economics professor Sawant has called for the nationalisation of Amazon and rent controls.  What an idiot!  Apparently, rent control has been proved by our very own Greg Mankiw in a paper to be ‘totally destructive’.  This is the Greg Mankiw who recently wrote a paper designed to prove that the increased inequality of wealth and income to the top 1% of American population was perfectly rational and indeed beneficial to the rest of us (see my post, http://thenextrecession.wordpress.com/2013/06/19/defending-the-indefensible/).

Well, Marxist economists may agree that rent controls are not an effective way of providing decent housing at reasonable cost to the majority of the population; they are more a defence against rampant exploitation by landowners.  But the proponents of ‘free markets’ in housing have dismally failed to show that leaving such an essential need for people (somewhere to sleep) to private landowners seeking rents and to building corporations seeking profit will deliver efficiently housing for all.  Supply is not meeting demand, even at exorbitant prices.  For example, in the UK right now, house building is an all-time low and rents in London have rocketed to all-time highs, driving average households out of the British capital and forcing them into areas with long commuting times or into overcrowded dwellings and young people back into their parents homes.  And those without work are now having their housing benefits reduced if they have ‘too many’ bedrooms in their flats.  The government reckons this will allocate housing resources more efficiently!  So much for free markets in housing.

Behind this lunacy lies the philosophy of greed and self-interest propounded by Ayn Rand, the main influence over such Tea Party followers like Ron Paul and Congressional finance leader, Paul Ryan.  Another follower of Rand is the erstwhile head of the US Federal Reserve bank, Alan Greenspan, who presided over the deregulated ‘free markets’ in financial and over the great credit binge of the early 2000s that led to the credit crunch, the banking crash and the subsequent Great Recession. When the slump came, Greenspan was asked what had happened. “I am in a state of shocked disbelief.”, he replied, “because I have been going for 40 years or more with very considerable evidence that it (free markets) was working exceptionally well”.   Greenspan went on: “unless there is a societal choice to abandon dynamic markets and leverage for some form of central planning, I fear that preventing bubbles will in the end turn out to be infeasible. Assuaging the aftermath is all we can hope for.”   Nothing can be done about crises in free markets because of ‘human nature’.  Greed and incentives breed instability and crisis, not prosperity, it seems.

Modern mainstream economics failed to forecast the crisis because its explanation of how economies work is really ‘voodoo economics’,as the Forbes columnist stated his contribution (and see my paper, The causes of the Great Recession, The causes of the Great Recession). Take the forecasting skills of the leading mainstream economists in the US.  Many of these have prestigious posts as members of the current Federal Reserve Bank monetary policy committee that tries to guide the capitalist economy towards prosperity. Recently, the Wall Street Journal examined and scored on accuracy over 700 predictions made between 2009 and 2012 in speeches and congressional testimony by the current 14 Fed policymakers. The newspaper used the following benchmarks: gross domestic product for growth, the unemployment rate, and the change in Commerce Department’s personal consumption expenditure price index for inflation.

Despite the efforts of the British Conservatives, particularly under Margaret Thatcher, the winer and diner-in-chief of all reactionaries globally, and the other imperialist leaders, the South African regime was eventually brought to its knees by the sacrifices of millions of black South Africans: the labour forces in the mines; the children in the schools and the people in the townships. They were backed by the solidarity actions of workers and people in the major countries through boycotts, strike action and political campaigning. It was a big defeat for the forces of reaction in Britain and America.

But the timing of the end of apartheid was also due to a change of attitude by the white ruling class in South Africa and the ruling classes of the major capitalist states.  There was a hard-headed decision to no longer consider Mandela ‘a terrorist’ and recognise that a black president was inevitable and even necessary.  Why?  South Africa’s capitalist economy was on its knees.  That was not just because of boycotting, but because the productivity of the black labour in the mines and factories had dropped away.  The quality of investment in industry and availability of investment from abroad had fallen sharply.  This was expressed in the profitability of capital reaching a post-war low in the global recession of the early 1980s.  And unlike other capitalist economies, South Africa could find no way of turning that around through the exploitation of the labour force.

The ruling class had to change strategy.  The white leadership under FW de Klerk reversed decades of previous policy and opted to release Mandela and go for black majority government that could restore labour discipline and revive profitability.  For his deserts, De Klerk got the Nobel Peace Prize along with Mandela, who became president at the age of 76!  And profitability did indeed rise dramatically under the first Mandela administration as the rate of exploitation of the workforce rocketed.

The rise in profitability tapered off in the early 2000s as the organic composition of capital rose sharply through increased mechanisation even though that yet a further rise in the rate of exploitation.  South African industry is now in difficulty, unemployment and crime remain at global highs and economic growth is foundering.

South Africa under Mandela and later Thabo Mbeki has seen some improvement in the truly awful living situation of the black majority, in sanitation, housing, electricity, education, health etc, ending the cruel and arbitrary control of movement and the inequality of the apartheid regime. But South Africa has the highest inequality of incomes and wealth in the world still and inequality has never been higher as black capitalists have joined the white ones in the economy.  Despite its professed socialist ideology, the ANC never went towards replacing the capitalist mode of production with common ownership, not even of the mines or resource industries.

As the OECD put it their report on inequality of income in emerging economies: “At one extreme, strong output growth during the past decade went hand-to-hand with declining income inequality in two countries (Brazil and Indonesia). At the other extreme, four countries(China, India, the Russian Federation and South Africa) recorded steep increases in inequality levels during the same period, even though their economies were also expanding strongly.”

The tiny mostly wealthy white minority have remained pretty much unaffected by the ending of apartheid rule.  Again, as the OECD put it: “This is a particularly serious challenge for South Africa, where geographical divides reflect inequality between races. Although real incomes have been rising for all groups since the end of apartheid, many Africans still live in poverty. At any poverty yardstick, Africans are very much poorer than Coloureds, who are very much poorer than Indians/Asians, themselves poorer than whites. “

And now the rich whites are joined by rich blacks who dominate businesses and exert overwhelming influence over the black leadership of the ruling ANC party.  The ANC expresses the sharp divisions between the majority of working class blacks and the small black ruling class that has developed.  These fissures erupt every so often as yet without a decisive break (as we recently saw with the shooting of striking miners by police under a black government).  Mandela’s legacy was the end of apartheid; the struggle for equality and a better life continues with subsequent generations of his people.

Noam Chomsky: The term neoliberal is a bit misleading. The doctrines are neither new, nor liberal. As you say, big business and the rich rely extensively on what economist Dean Baker calls “the conservative nanny state” that they nourish. That is dramatically true of financial institutions. A recent IMF study attributes the profits of the big banks almost entirely to the implicit government insurance policy (“too big to fail”), not just the widely publicized bailouts, but access to cheap credit, favorable ratings because of the state guarantee and much else. The same is true of the productive economy. The IT revolution, now its driving force, relied very heavily on state-based R&D, procurement and other devices. That pattern goes back to early English industrialization.

However, neither “neoliberalism,” nor its earlier versions as “liberalism,” have been myths, certainly not for their victims. Economic historian Paul Bairoch is only one of many who have shown that “the Third World’s compulsory economic liberalism in the 19th century is a major element in explaining the delay in its industrialization,” in fact, its “de-industrialization,” a story that continues to the present under various guises.

In brief, the doctrines are, to a substantial extent, a “myth” for the rich and powerful, who craft many ways to protect themselves from market forces, but not for the poor and weak, who are subjected to their ravages.

What explains the supremacy of market-centric rule and predatory finance in an era that has experienced the most destructive crisis of capitalism since the Great Depression?

The basic explanation is the usual one: It is all working quite well for the rich and powerful. In the US, for example, tens of millions are unemployed, unknown millions have dropped out of the workforce in despair, and incomes as well as conditions of life have largely stagnated or declined. But the big banks, which were responsible for the latest crisis, are bigger and richer than ever, corporate profits are breaking records, wealth beyond the dreams of avarice is accumulating among those who count, labor is severely weakened by union busting and “growing worker insecurity,” to borrow the term Alan Greenspan used in explaining the grand success of the economy he managed, when he was still “St. Alan,” perhaps the greatest economist since Adam Smith, before the collapse of the structure he had administered, along with its intellectual foundations. So what is there to complain about?

The growth of financial capital is related to the decline in the rate of profit in industry and the new opportunities to distribute production more widely to places where labor is more readily exploited and constraints on capital are weakest – while profits are distributed to places with lowest [tax] rates (“globalization”). The process has been abetted by technological developments that facilitate the growth of an “out-of-control financial sector,” which “is eating out the modern market economy [that is, the productive economy] from inside, just as the larva of the spider wasp eats out the host in which it has been laid,” to borrow the evocative phrase of Martin Wolf of the Financial Times, probably the most respected financial correspondent in the English-speaking world.

That aside, as noted, the “market-centric rule” imposes harsh discipline on the many, but the few who count protect themselves from it effectively.

What do you make of the argument about the dominance of a transnational elite and the end of the nation-state, especially since its proponents claim that this New World Order is already upon us? 

There’s something to it, but it shouldn’t be exaggerated. Multinationals continue to rely on the home state for protection, economic and military, and substantially for innovation as well. The international institutions remain largely under the control of the most powerful states, and in general the state-centric global order remains reasonably stable.

Europe is moving ever closer to the end of the “social contract.” Is this a surprising development for you?

In an interview, Mario Draghi informed The Wall Street Journal that “the Continent’s traditional social contract” – perhaps its major contribution to contemporary civilization – “is obsolete” and must be dismantled. And he is one of the international bureaucrats who is doing most to protect its remnants. Business has always disliked the social contract. Recall the euphoria in the business press when the fall of “Communism” offered a new work force – educated, trained, healthy and even blond and blue-eyed – that could be used to undercut the “luxurious lifestyle” of western workers. It is not the result of inexorable forces, economic or other, but a policy design based on the interests of the designers, who are rather more likely to be bankers and CEOs than the janitors who clean their offices.

One of the biggest problems facing many parts of the advanced capitalist world today is the debt burden, public and private. In the peripheral nations of the eurozone, in particular, debt is having catastrophic social effects as the “people always pay,” as you have pointedly argued in the past. For the benefit of today’s activists, would you explain in what sense debt is “a social and ideological construct?” 

There are many reasons. One was captured well by a phrase of the US executive director of the IMF, Karen Lissakers, who described the institution as “the credit community’s enforcer.” In a capitalist economy, if you lend me money and I can’t pay you back, it’s your problem: You cannot demand that my neighbors pay the debt. But since the rich and powerful protect themselves from market discipline, matters work differently when a big bank lends money to risky borrowers, hence at high interest and profit, and at some point they cannot pay. Then the “the credit community’s enforcer” rides to the rescue, ensuring that the debt is paid, with liability transferred to the general public by structural adjustment programs, austerity and the like. When the rich don’t like to pay such debts, they can declare them to be “odious,” hence invalid: imposed on the weak by unfair means. A huge amount of debt is “odious” in this sense, but few can appeal to powerful institutions to rescue them from the rigors of capitalism.

There are plenty of other devices. J.P. Morgan Chase has just been fined $13 billion (half of it tax-deductible) for what should be regarded as criminal behavior in fraudulent mortgage schemes, from which the usual victims suffer under hopeless burdens of debt.

The inspector-general of the US government bailout program, Neil Barofsky, pointed out that it was officially a legislative bargain: the banks that were the culprits were to be bailed out, and their victims, people losing their homes, were to be given some limited protection and support. As he explains, only the first part of the bargain was seriously honored, and the plan became a “giveaway to Wall Street executives” – to the surprise of no one who understands “really existing capitalism.”

The list goes on.

In the course of the crisis, Greeks have been portrayed around the globe as lazy and corrupt tax evaders who merely like to demonstrate. This view has become mainstream. What are the mechanisms used to persuade public opinion? Can they be tackled?

The portrayals are presented by those with the wealth and power to frame the prevailing discourse. The distortion and deceit can be confronted only by undermining their power and creating organs of popular power, as in all other cases of oppression and domination.

What is your view about what is happening in Greece, particularly with regard to the constant demands by the “troika” and Germany’s unyielding desire to advance the cause of austerity?

It appears that the ultimate aim of the German demands from Athens, under the management of the debt crisis, is the capture of whatever is of value in Greece. Some people in Germany appear to be intent on imposing conditions of virtual economic slavery on the Greeks.

It is rather likely that the next government in Greece will be a government of the Coalition of the Radical Left. What should be its approach toward the European Union and Greece’s creditors? Also, should a left government be reassuring toward the most productive sectors of the capitalist class, or should it adopt the core components of a traditional workerist-populist ideology?  

These are hard practical questions. It would be easy for me to sketch what I would like to happen, but given existing realities, any course followed has risks and costs. Even if I were in a position to assess them properly – I am not – it would be irresponsible to urge policy without serious analysis and evidence.

Capitalism’s appetite for destruction was never in doubt, but in your recent writings you pay increasing attention to environmental destruction. Do you really think human civilization is at stake?

I think decent human survival is at stake. The earliest victims are, as usual, the weakest and most vulnerable. That much has been evident even in the global summit on climate change that just concluded in Warsaw, with little outcome. And there is every reason to expect that to continue. A future historian – if there is one – will observe the current spectacle with amazement. In the lead in trying to avert likely catastrophe are the so-called “primitive societies”: First Nations in Canada, indigenous people in South America and so on throughout the world. We see the struggle for environmental salvage and protection taking place today in Greece, where the residents of Skouries in Chalkidiki are putting up a heroic resistance both against the predatory aims of Eldorado Gold and the police forces that have been mobilized by the Greek state in support of the multinational company.

Those enthusiastically leading the race to fall off the cliff are the richest and most powerful societies, with incomparable advantages, like the US and Canada. Just the opposite of what rationality would predict – apart from the lunatic rationality of “really existing capitalist democracy.”

The US remains a world empire and, by your account, operates under the “Mafia principle,” meaning that the godfather does not tolerate “successful defiance.” Is the American empire in decline, and, if so, does it pose yet a greater threat to global peace and security? 

US global hegemony reached a historically unparalleled peak in 1945, and has been declining steadily since, though it still remains very great and though power is becoming more diversified, there is no single competitor in sight. The traditional Mafia principle is constantly invoked, but ability to implement it is more constrained. The threat to peace and security is very real. To take just one example, President Obama’s drone campaign is by far the most vast and destructive terrorist operation now under way. The US and its Israeli client violate international law with complete impunity, for example, by threats to attack Iran (“all options are open”) in violation of core principles of the UN Charter. The most recent US Nuclear Posture Review (2010), is more aggressive in tone than its predecessors, a warning not to be ignored. Concentration of power rather generally poses dangers, in this domain as well.

Regarding the Israeli-Palestinian conflict, you have said all along that the one-state/two-state debate is irrelevant.

The one-state/two-state debate is irrelevant because one state is not an option. It is worse than irrelevant: It is a distraction from the reality.

The actual options are either (1) two states or (2) a continuation of what Israel is now doing with US support: keeping Gaza under a crushing siege, separated from the West Bank; and systematically taking over what it finds of value in the West Bank while integrating it more closely to Israel, taking over areas with not many Palestinians; and those who are there are being quietly expelled. The contours are quite clear from the development and expulsion programs.

Given option (2), there’s no reason why Israel or the US should agree to the one-state proposal, which also has no international support anywhere else. Unless the reality of the evolving situation is recognized, talk about one state (civil rights/anti-apartheid struggle, “demographic problem”, etc.) is just a diversion, implicitly lending support to option (2). That’s the essential logic of the situation, like it or not.

You have said that elite intellectuals are the ones that mainly tick you off. Is this because you fuse politics with morality? 

Elite intellectuals, by definition, have a good deal of privilege. Privilege provides options and confers responsibility. Those more privileged are in a better position to obtain information and to act in ways that will affect policy decisions. Assessment of their role follows at once.

It’s true that I think that people should live up to their elementary moral responsibilities, a position that should need no defense. And the responsibilities of someone in a more free and open society are, again obviously, greater than those who may pay some cost for honesty and integrity. If commissars in Soviet Russia agreed to subordinate themselves to state power, they could at least plead fear in extenuation. Their counterparts in more free and open societies can plead only cowardice.

Michel Gondry’s animated documentary Is the Man Who Is Tall Happy? has just been released in selected theaters in New York City and other major cities in the US after having received rave reviews. Did you see the movie? Were you pleased with it? 

I saw it. Gondry is really a great artist. The movie is delicately and cleverly done and manages to capture some important ideas (often not understood even in the field) in a very simple and clear way, also with personal touches that seemed to me very sensitive and thoughtful.

Source: http://www.zcommunications.org/chomsky-it-is-all-working-quite-well-for-the-rich-powerful-by-noam-chomsky.html

The state’s current approach to intellectual property has come under scrutiny of late, as its disconnect from anything that might have once legitimated it has become more and more obvious. The activities of rent-seeking patent trolls, who accumulate patents solely for the purpose of filing lawsuits, have been highlighted by National Public Radio’s “Planet Money” program. And the absurdities of strict copyright enforcement are apparent in the life-destroying legal judgments leveled against small-time downloaders — $220,000 against Mille Lacs Band of Ojibwe employee Jammie Thomas-Rasset for twenty-four songs, $675,000 against college student Joel Tenenbaum for thirty.

Faced with these outrages, it’s tempting to demand the immediate destruction of the entire edifice of patent and copyright protection. All the more since intellectual property compounds the general socialist discomfort with private property, because the right it encodes is such an expansive one. No longer just the right to control a particular physical space or object, it abstracts the property form into the control of patterns and processes, wherever and whenever they appear. Instead of owning a book or a factory, the intellectually propertied class controls all copies of the book, and all implementations of the production process within the factory.

This issue of Jacobin includes a pair of essays that explain the origins and implications of this new property form. Sean Andrews traces IP to the laws of seventeenth- and eighteenth-century England and the ideas of John Locke, showing how intellectual property protections go back to the beginnings of capitalism itself. It is the scope of these laws, and their relative economic importance, that has changed in recent years.

Anne Elizabeth Moore gives a more contemporary reading, as she describes the patent and copyright regimes in detail and explores their spread around the world. She makes the point that intellectual property, no less than the material kind, supports a system of class power that is both bourgeois and patriarchal. Gendered conceptions of credit and reward are written into the structures of the property laws themselves, from the range of things that can be covered by it (novels, but not recipes) to who can claim control over it.

Both of these essays demonstrate the absurdities and injustices of a strengthening IP regime. Yet each, in a different way, shows that simply denouncing all intellectual property is inadequate, as are the political battle lines that are often drawn today. On one side, we find pirates and free-culture advocates, insisting that “information wants to be free” and that any attempt to enclose the copying of patterns within legal restrictions is an affront and an inanity. This view unites a sort of Left-Right coalition that can encompass the libertarian economist David K. Levine and the amorphous rebellion of Europe’s Pirate parties. Arrayed against them are those who may acknowledge the corporate corruption of the patent and copyright systems, but who nevertheless hold up a reformed IP system as a bulwark against the depredations of a “sharing economy” that all too often amounts to a handful of Internet monopolists profiting from the uncompensated labor of creative workers. Jaron Lanier, author of the recent Who Owns the Future?, is one of the more strident proponents of this view.

We have here something a bit like the old “reform or revolution” dichotomy, which arrays the advocates of smashing the existing system against the timid meliorism of those who only want to make it more humane. But the contrast fails here just as it did in the larger drama of twentieth-century socialism, where revolution and reform both ultimately led back to capitalist restoration and neoliberal retrenchment. We need another path — one that recognizes the necessity of reformist struggles within capitalist institutions, while still attempting to move toward a break with the system and the creation of a fundamentally new kind of economy and society. André Gorz called this the “non-reformist reform”: a project of “reforms which advance toward a radical transformation of society” by making a “modification of the relations of power” which could “serve to weaken capitalism and to shake its joints.”

What would constitute a non-reformist reform of intellectual property? The revolutionary overthrow of all intellectual property, even if it were possible, leaves unanswered the question of how to ensure that those who create knowledge and culture are provided for, and how to control the exploitation of the cultural commons by digital capitalists. The anarchist championing of online piracy only allows for some resistance around the edges, without posing a fundamental challenge to the system. And yet the idea of reforming IP into something better and more egalitarian, something that truly rewards all who participate in the work of creation, seems like another iteration of the naïve dream of a just and democratic capitalism.

Anne Elizabeth Moore and Sean Andrews approach this bundle of contradictions in different ways. For Moore, the central point is that IP is now and has always been gendered, and therefore any path toward its transformation and abolition must explicitly work toward addressing inequities that are embedded in our notions of culture, even if that sometimes means more IP rather than less. “An across-the-board loosening of IP protection,” she fears, would “lead to the increased piracy of those cultural productions already less protected, worsening the economic gender gap.” The task is to “correct for generations of cultural misogyny,” which entails fundamentally rethinking what counts as IP, beyond an isolated male inventor in his study, the image of whom forms the explicit or implicit basis of much of our current regime.

Insofar as the socialist perspective is taken to be hostile to the existence of intellectual property and private property more generally, Moore’s argument might be taken as a challenge to it. But this is to confuse a socialist approach with a libertarian one. The libertarian absolutist case against IP is consistent with the movement’s anti-statist trappings, and depends on the inference that because intellectual property is a debased, false form of property, it therefore does not fall within the purview of the state’s property-defending mission.

A socialist, however, can recognize that law and the state are contested terrain, and that replacing the regime of capitalist private property requires erecting, at least in the interim, an alternative form of socialized property, in order to defend the commons against the persistent efforts of the capitalist class to enclose and appropriate it. The struggle over traditional physical property provides many examples of this. Land trusts that are available to the public are an alternative to private ownership. Worker coooperatives and B Corporations, which are dedicated to a social purpose rather than only maximizing profit, are being pursued as alternatives to the traditional corporate form.

This is an appealing model for a potentially non-capitalist approach to the cultural commons that isn’t simply hostile to the legal system, but attempts to use it as a mechanism for contesting the narrow capitalist definition of property. But as we attempt to forge new property forms, new contradictions and unintended consequences will arise. In embracing a superficially appealing new licensing model, we could end up accidentally imprisoning ourselves in something just as bad as or worse than what we have now.

Take, for example, a project that Andrews mentions, the Creative Commons license. This is, as he notes, a legal property form just as much as traditional copyright. However, where copyright gives an owner the right to keep knowledge closed, Creative Commons is designed to facilitate creators who want to ensure their creations remain open, while at the same time making sure that they receive credit for them. One of the more common versions is the CC BY license, which allows unlimited distribution and repurposing as long as the original creator receives credit in any new version or copy. Another, CC BY-SA, adds the provision that those who redistribute or remix something must “license their new creations under the identical terms,” a provision with the potential to virally spread Creative Commons protection to other non-covered work. Going further in a superficially anti-capitalist direction, CC BY-NC-SA also prohibits commercial use, while CC BY-NC-ND also prohibits the creation of modified and derivative works.

These licenses might seem like a promising ways to protect the rights of creators and keep work out of the hands of corporate content monopolists. But they also pose contradictions and compromises for those who would like the commons to be as open and accessible as possible, but who recognize that a short-run strategy of total IP rejectionism is susceptible to exploitation by capitalist interests. Creative Commons demonstrates this, as does the simpler GNU Public License (GPL) for software.

The attribution and share-alike components of Creative Commons are the least problematic, since they enforce an ethic of author credit and mutual sharing that is fundamental to the operation of a non-capitalist commons. The non-commercial and no-derivatives provisions, however, turn out to have some problematic unintended consequences, as explained in a set of twocritiques published by the Free Culture Foundation. Marking a work for non-commercial use sounds like just a way to draw a line between capitalist exploitation and socialist sharing, and the no-derivatives clause can be defended as a way of protecting the integrity of a creator’s work. But NC licenses don’t distinguish between a small-time DJ sampling a song and a massive streaming service making millions from advertising. Moreover, they replicate traditional copyright’s grant of a commercial monopoly to the original creator. The ban on derivative works, meanwhile, is only justified if IP law is regarded as a safeguard on the natural rights of the creator, rather than a utilitarian and pragmatic mechanism for ensuring a free and open cultural commons.

Another issue is that new licenses and property forms may not take into account all of the people who have a need for rights with respect to a given cultural object. Several years ago, a Texas family sued the Creative Commons Corporation along with Virgin Mobile Australia, charging them with libel and invasion of privacy. Virgin had found a CC-licensed image taken by a youth counselor, which included an image of the family’s teenage daughter, and used it in an advertising campaign without the family’s permissions. In this case, the CC license replicated a problem that Anne Elizabeth Moore identifies in traditional copyright: the rights of (disproportionately male) creators of images are protected, while the (more often female) people who become the content of the image are not.

The tensions inherent in new intellectual property forms are closely related to a tension running through all discussions of intellectual production — and indeed, production generally — between the rights of the producer and the rights of the user or consumer. In a recent essay on the tech guru Tim O’Reilly, Evgeny Morozov explains how this distinction plays out in the world of software development, in the late-nineties split between the free softwareconcept developed by Richard Stallman and the Free Software Foundation and the rival notion of open source software promoted by the libertarian Eric Raymond. Stallman was and is preoccupied with the rights of users to examine and modify the software they use; Raymond, in contrast, was more interested in protecting the rights of developers to control the terms on which their software is distributed.

The distinction between the rights of the user and the rights of the developer resembles, but does not neatly map onto, a more traditional political distinction between the rights of consumers and the rights of producers. The analogy is not exact, because users who modify and repurpose software can also be thought of as producers, and because the category “developers of software” is ambiguous between the software engineers who actually write the code and the capitalist enterprises that frequently employ them and retain the licenses to the software they produce. A similar ambiguity exists in the contrast between the creators and consumers of cultural objects like books or songs.

In considering various “copyleft” alternatives to the existing IP regime, there is a danger of being seduced by a facile identification with the moral priority of creators over consumers. It’s the same impulse that leads to the slippage between emancipatory critiques of capitalism and a more politically ambiguous producerism, which attempts to divert society’s bounty away from unproductive parasites and toward those who are allegedly the direct producers.

But the point of defending the commons isn’t that producers and creators are better than users and consumers — a moral economy more suited to Ayn Rand than Karl Marx. Rather, it is that we are simultaneously creators and consumers, and that we should strive for legal forms that keep us from being exploited or manipulated in either role.

by Peter Frase

Source: http://jacobinmag.com/2013/09/property-and-theft/

Source Link allegralaboratory

ALLEGRA: Dimitris, you are a Senior Lecturer at the University of Sussex. In the past you have studied highways and infrastructures and currently you are carrying out a research project entitled « The City at the Time of Crisis », funded by an ESRC Future Research Leaders grant. Can you briefly introduce yourself to those who are not familiar with your work and describe your projects?

DIMITRIS: For my PhD I studied anthropologically political transition via infrastructures and vice versa. More precisely I studied the main cross-border motorway between Albania and Greece and via that peculiar -at the time- ethnographic site I studied in a new way -via the road and its flows- the postsocialist conditions in the Balkans. By extension this study of infrastructure provided an insight into the materiality of the wider European neoliberalisation project.

We have to understand that the project of European neoliberalisation of the 1990s and 2000s passed precisely via a mass development of built environment in the continent. Moreover an additional element of that process was the re-determination of European boundaries and a related inter-European movement of populations which crossed these re-determined borders. Indeed, the replacement of State-run economies by market-based capitalism in half of the continent and the parallel expansion of Western European capitalist interests in Eastern Europe had a crucial role in this neoliberalisation project. So given this context the cross-border road between postsocialist and non-socialist peripheral European states looked like an ideal ethnographic locus for analysing such process anthropologically.

Today we are seeing one more stage of that neoliberalisation process with a capitalist crisis centered on the periphery of Western Europe.

In 2012, together with a team of colleagues, we started the ‘City at the time of Crisis’ project funded by ESRC. In this project we study the new forms of governance implemented in that periphery of Western (as political determination rather than geographic) Europe. A basic idea is that one of the most important parts of this new form of governance is the transformations of the notions of public. So ethnographically we study political transitions and social change in the form of socio-spatial changes in the public urban and infrastructural materialities of Athens.

ALLEGRA: You seem to suggest that Athens is the ideal ‘laboratory’ from which to observe the global financial crisis. In their recent book, Theories from the South, the Comaroffs argue that it is rather the global South that is best placed to help us understand contemporary world transformations. The obvious fact that you are Greek put aside, can you tell us why you chose Athens as your primary site of inquiry?

DIMITRIS: The Commaroffs are right, but they are also wrong. The reality is that we first saw extreme capitalism being applied in the global South. Gradually, more advanced and elaborated versions of capitalism were applied there. However, a very similar version of extreme neoliberalism -like the one that emerged in the 1970s in the South- was then applied in Eastern Europe in the 1990s. Now it is the turn of the Western European periphery to experience a similar regime.

The anthropologists who happen to have ethnographic knowledge of both the postsocialist and non-socialist European periphery would be able to confirm the similarity between e.g. the loan and “aid” agreements between EU and postsocialist states and the current agreements between e.g. the Greek or Spanish governments and EU institutions.

So in the current historical stage it is not only organisations like the IMF:  there are other institutions involved in the shaping of the world political economy. For instance the EU leadership and especially the European Central Bank along with several other European banks play a crucial historical role in the expansion of an extreme neoliberalist form of governance that is applied in the crisis-ridden euro-zone countries. More and more populations are subjected to that regime and what we used to call Global South governance extends well beyond the South. So the category itself is a bit problematic.

As I mentioned in the previous question Greece is centrally located in a process of global proportions that is unravelling at this very moment. Greece’s centrality in this project starts from the re-definition of Greek borders which changed radically after 1990, given that it was surrounded by socialist European countries. Phenomena like migratory flows, big construction projects and capitalist expansion of Greek capitalist entreprises in Eastern Europe just complete this picture.

Under such circumstances the anthropology of Europe and European politics keep asking the same questions since the 1990s: How did the continent change after the collapse of socialism? What will come next? These questions are very similar to the ones we ask about e.g. China or India and especially North African countries.

The end of the cold war has led to radical transformations globally and we are still seeing them in front of our eyes. If European communism had really been the point of reference for the Left everywhere we would not have the squares movements occuring around the Mediterranean. So it is not a process that is detached from what is happening in the so-called Global South. Overall I think that unless anthropology starts including more substantially Europe and the West in its own perception of the world we will end up running behind change.

ALLEGRA: A few weeks ago, ALLEGRA launched a discussion on the future of universities, and tried to define the nature of the ‘space’ that current movements against cuts are seeking to preserve. Some of our conclusions were relatively optimistic, in the sense that we also tried to highlight the regenerative potential of the public to achieve positive change. In the past when ASA asked you to write a text on the crisis of higher education you jumped to similar conclusions. However, seeing your more recent work you seem to suggest that the current global crisis has deeply transformed notions of ‘public space’, ‘public good’, ‘public interest’ and so on…to the extent that the public as we used to know (or fantasize?) it seems to be slowly disappearing. To a certain extent, one is left with an impression of Athens as a city under a permanent state of exception, to use an Agambian expression. What has changed?

DIMITRIS: Since you used the term of a political philosopher I will respond with a political answer. In that ASA article I concluded that higher education in Britain does not deserve to be defended for what it is or what it was, but for what it may potentially become. I guess this applies in the case of Athens and Greece as well.

In the last two decades, as  European neoliberalisation reached a more intensified form,  we saw some of the resistance movements in the Western world romanticise or imagine a capitalism with better public social provisions. Much of the Occupy movement in the US had such demands, while many of the European movements suggest a return to a recent past of better social provisions. While I see the value of these benefits for the better quality of life of many, as a political proposition I think that implies a crucial mistake. If the middle classes of the Western World had a better life during the recent past, the majority of the world, the poor in the West or globally had very bad time.

The issue is that the current crisis is quite crucial for the evolution of capitalism in Europe and probably globally, and as we know in anthropology crises signify a transition while they also provide a window for anti-structural events to take place. This is our case at the moment and unless societies come up with a radical alternative (way forward from just better social policy) the future of European people will look very bad.

I think that the potentialities of the crisis are visible to economic elites and state authorities who are trying to make sure that no anti-structural events will occur. This is the reason why they employ some of the most violent apparatuses, like e.g. extreme police violence or armed neo-Nazi groups.

For example when the large anti-austerity and anti-governmental movement in Greece appeared in the summer of 2011 the police brutality was profound. Soon the neo-Nazis were funded with huge amounts of money and were activated on the streets of Athens but also electorally.

Neoliberal governance since its birth was ready to employ fascists such as Pinochet or go to fascistic extremes such as declaring national wars out of the blue like e.g. Margaret Thatcher did in the case of the UK or her social democratic offsprings did with Iraq and Afghanistan.

Researching the use of extreme violent apparatuses in Greece these days might make you pessimistic. In order for the austerity experiment to work, in order for the bankers’ interests to be protected, the current form of governance in Greece is ready to spill a lot of blood. A similar escalation in state’s violence has been seen in Britain in the last couple of years when the student movement emerged: police brutality against the protesters has been profound in recent British history. We even saw the police being invited on campus to arrest protesting students:  I personally saw it twice in my university, Sussex, and I have worked there only for only five years!

ALLEGRA: Your work brings an important contribution to the scholarship on statehood, by documenting changing everyday experiences in public spaces. With the mass privatization of public infrastructures, it seems like the only means left for the state to manifest itself is through violence, symbolic or real. What do you think is remaining of the state in Greece today?

DIMITRIS: Well, violence is a crucial part of statecraft anyway. Even the most democratic socialist or mild state mechanisms have used and/or use apparatuses of death and pain. For example, one of the most quoted of such examples: the Swedish state was force sterilising women until the 1970s. For another example, we have to remember that every state apparatus discriminates against people: citizens and non-citizens alike.

As the history of Europe shows in the best case scenario such division just implies less rights for the non-citizens and in the worst case scenario it implies exterminating non-citizens massively.

Even the most democratic states are still states and have the monopoly of legal violence, so potentially the state authorities or their agents can crash, kill, torture, and imprison any of us at any moment they will decide. They do not have necessarily to do it, but the fact that apparatuses are ready to do so is violent enough. And indeed these days they have a nice army of journalists, academics and so on who will provide good excuses about public order and social peace that need to be restored.

When the revolt of 2008 happened in Greece you had people like Greek Yale professors up to famous journalists supporting the government and indirectly excusing the police assassination of a teenager, and this is precisely what triggered the revolt.

Within this barbaric mechanism modern states provided various things to their citizens and selected citizens from other states to become part of the national body. That happened for many reasons, which I do not have the time to analyse at the moment. However, such provisions maintained some kind of social peace and consent between the State (or what we imagine to be the state) and a critical mass of state residents.

So in our case, EU citizens and migrants with visas probably had a better life at some point, but a substantial part of the population was faced with a state that did not even give them the right to exist, that arrested them, deported them and killed them. The same dynamics stands for the new poor, for example: many young people in Europe mainly experience the state as an apparatus that deregulates labour and that makes sure that the majority will work like slaves for small salaries, will have no job or social security etc. If they protest, the state will beat them up or in some cases may even kill them just for being around a protest, as Metropolitan Police did with Ian Tomlinson a few year ago. It is just that today we see this state of exception expanding towards social groups who have not had direct experience of state as violence before.

And certainly we are in a very difficult position, because the state and the capitalist market have ended up being the main controllers of social provisions, so now that state policies enforce poverty and austerity and fewer and fewer can afford private provisions, we see suffering of important proportions of the European population. This has been a usual phenomenon outside Europe though and among the non-citizens within Europe!

What one should stress is that the last few decades when the state has been as social provider have been nothing more than a happy break in the history of capitalism, based on the fear of social unrest.

Today that states have achieved so advanced repression and silencing mechanisms, is probably what allows them not to find it necessary anymore to provide social provisions. Anyhow, Western European middle classes as consumers of the products of global capitalism lose their significance given that we have new consuming classes emerging in other places of the planet. So their future is that of most Eastern Europeans: lots of work for peanuts, extreme inequalities etc. When it was happening there very few Western Europeans complained or protested against the barbaric form of postsocialist capitalism.

Indeed while European states decrease social provisions to the citizens in a drastic manner and provide only violence for non-citizens, simultaneously great proportions of state’s wealth is chanelled to global financial institutions and other corporations through various paths.

To end this answer with a final note though. I think that when the elites start busting their cards one after the other, namely when the police violence is not anymore enough to control social disappointment and rage and they have to use the para-state neo-Nazis apparatuses, we are in a situation where they are running out of legal responses, running out of cards, while running towards a potential dead end.

ALLEGRA: Michael Herzfeld, in his now famous books The Social Production of Indifference, argues that Greeks have always maintained some kind of indifference or at least, some kind of distance towards the state. In which ways does your work confirm or contradict this argument? How has the current crisis transformed citizens relationship towards the state? Is this pattern illustrative of broader transformations taking place in European/Western democracies?

DIMITRIS: Herzfeld’s question was phrased in the right way, one could summarise it like this perhaps: If Greeks are generally polite and welcoming people how comes when they become civil servants they are so unhelpful? My take on that phenomenon can be summarised like this: generally people are polite and nice until State and other power apparatuses intervene. For example when the civil servant’s role provides them with e.g. three options to the way s/he will treat a citizen and all three are nasty options, going for the least nasty one is actually a good option. At the same time remember that the official state does its best to create obedient people who will follow the rules.

It is like the banality of the evil argument of Hannah Arendt who suggested that some of the people who carried out the Holocaust were just civil servants who saw the mass extermination of people as just doing their job, like they would do any other job. They were good civil servants.

Back in 2011 when the people in Greece rose against the government, more than 500 people were hospitalised only in Athens due to police brutality.

Last summer when I was in Gezi park in Istanbul, I saw how Turkish policemen attacked the camp beating up people while, in the meantime, they were chatting and having cigarette breaks. Similarly in London, when Occupy London started in front of St Paul, the riot cops brutally attacked peaceful demonstrators without any reason, when 10 minutes before they were queuing next to each other in front of the same toilet in a nearby cafe. While I do not consider police or Nazi officials as simple civil servants, the reality is that the modern state apparatus filters and fractures its violence so much that the actual state’s employees/attackers often feel that they are merely serving the state and the government that feeds them. Indeed the state makes sure that they can do whatever they want, that they are fully potected and that they will never have to face the consequences. Most Nazi officials never paid for their crimes and quite a few of them were happily integrated in capitalist post-war state apparatuses. This does not imply that police officers who beat up demonstrators or shoot migrants are innocent. Only certain kinds of people can remain silent under such circumstances or blindly obey orders. So this is not an excuse: it is just an analysis of the production of indifference.

The reality is that civil servants (with the exception of riot police!) are on the forefront of salary and personnel cuts in Greece these days. The same mechanism that was programming them to misbehave, by e.g. giving them few resources, poor training, unjust promotion or employment system, poor and misleading explanation of tasks and roles etc. is the same mechanism that now blames them for doing what they were told to do. In other words everyone, even the cops are just consumable for the political and financial elites. So people do come to a realisation with great potentialities, as far as insecurity and state violence reaches one of the most secure social class such as permanent civil servants, there is a discontinuity in the continuums that have made the system sustainable so far.

At the same time as we radical Marxist lefty academics were discussing all sorts of issues about capitalism, including the nature of the current crisis, the great and good economists and strategists of capital were doing the same at a conference under the auspices of the IMF in Washington with the very appropriate title, Crises, yesterday and today(http://www.imf.org/external/np/res/seminars/2013/arc/index.htm).  As at the HM conferences, lots of papers were presented on subjects such as capital controls, will the US and Europe stagnate like Japan has done?; important papers on central bank monetary policy to exit the depression (these are the ones that excited the financial markets); and what is happening in Latin America and Asia etc.

As the organisers put it: “Several years out from the global financial crisis, the world economy is still confronting its painful legacies. Many countries are suffering from lackluster recoveries coupled with high and persistent unemployment. Policymakers are tackling the costs stemming from the crisis, managing the transition from crisis-era policies, and trying to adapt to the associated cross-border spillovers.  Against this background, the IMF will take stock of our understanding of past and present crises.”

So what did they come up with?  Well, the answer is best summed in the keynote speech to the conference from the current head of the US Federal Reserve, the world’s most powerful bank, and the leading expert on the causes of the Great Depression, Ben Bernanke.  Bernanke is shortly to step down as head of the Fed to be replaced (subject to Congress approval) by Janet Yellen, very much in the same mould as Bernanke, in believing that active and massive injections of Fed liquidity (i.e ‘printing money’ in the old terminology) has worked to save the capitalist economy and will work to enable it to recover.

But what did Uncle Ben say (http://www.federalreserve.gov/newsevents/speech/bernanke20131108a.htm)?  For Ben, it was very clear: the global financial collapse and the ensuing Great Recession was very much “a classic financial panic”, no more and no less.  “I think the recent global crisis is best understood as a classic financial panic transposed into the novel institutional context of the 21st century financial system.” 

He likened it to the ‘financial panic’ of 1907.  This was triggered by speculative activity – in 1907 by “a failed effort by a group of speculators to corner the stock of the United Copper Company.” Similarly the 2008 ‘panic’ was “had an identifiable trigger–in this case, the growing realization by market participants that subprime mortgages and certain other credits were seriously deficient in their underwriting and disclosures.”  In both cases, a fire sale of bank assets and a collapse in the stock market led to a run on bank deposits and liquidity.  “In 1907, in the absence of deposit insurance, retail deposits were much more prone to run, whereas in 2008, most withdrawals were of uninsured wholesale funding, in the form of commercial paper, repurchase agreements, and securities lending. Interestingly, a steep decline in interbank lending, a form of wholesale funding, was important in both episodes.”  And in both 1907 and 2008, there was insufficient regulation of financial institutions to ensure that they were not up to their necks in risky dud assets.

In 1907, liquidity injections stopped the rot and “eventually calmed the panic. By then, however, the U.S. financial system had been severely disrupted, and the economy contracted through the middle of 1908.”  It was the same outcome in 2008. In 1907, extra ‘liquidity’ had to come from the stronger banks like JP Morgan.  The experience of 1907 led to the big banks deciding to form the Federal Reserve Bank in response, set up in 1913.  The Federal Reserve remains formally owned by the major investment and retail banks and is not owned by the taxpayer, although the Fed is a government-directed agency under the law.  So from the beginning, the Fed’s task has been to meet the interests of Wall Street first and the wider economy second.

Uncle Ben is very proud that the ‘lender of last resort’ and the provider of liquidity and monetary injection that stopped the 2008 financial collapse turning into meltdown was the Federal Reserve, led by him.  You might pause to ask Ben that if the Federal Reserve was such a successful institutions set up to avoid financial panics like 1907, why it failed to see the panic of 2008 coming and then stop it happening.

But let’s move on – at least the Fed under Bernanke acted to avoid a global financial meltdown and is now helping to avoid another. “Once the fire is out, public attention turns to the question of how to better fireproof the system”.  And Ben reckons, as in 1907, when the banks decided to set up the Fed, measures taken since 2008 in regulation of ‘shadow banking’ and capital ratios for the banks will ensure that another ‘financial panic’ can be avoided.  Really?  Did the setting up of the Fed avoid the 1929 crash and did it help then to avoid a meltdown?  Milton Friedman. the doyen of monetarist economics, reckoned that the Fed actually caused the ‘panic’ of 1929 by injecting too much credit into the economy and then subsequently taking it out too quickly and causing the Great Depression.  In 2002, Bernanke famously remarked that Friedman was right and he would not make that mistake with the Fed again.  And certainly since the panic of 2008 started, the Fed has been pumping in cash to the tune of $4trillion so far – although apparently to no avail in getting the economy going and unemployment back to pre-crisis levels.

Bernanke posed the problem for the strategists of capital at the conference: “Our continuing challenge is to make financial crises far less likely and, if they happen, far less costly. The task is complicated by the reality that every financial panic has its own unique features that depend on a particular historical context and the details of the institutional setting.”   What we need to do is to “strip away the idiosyncratic aspects of individual crises, and hope to reveal the common elements” of these ‘panics’.  Then we can “identify and isolate the common factors of crises, thereby allowing us to prevent crises when possible and to respond effectively when not.”

Indeed!  But that challenge does not seem to have been met by Bernanke and the other important participants at the IMF conference.  What are the common elements of these crises identified by Bernanke?  Well, that speculative investment in different forms of financial assets gets out of hand every so often and there is not enough regulation of what financial institutions are doing, so that a panic follows.  The common factors in capitalist crises thus appear to be that all crises are banking crises; and that they are due to excessive speculation and risk-taking by uncontrolled bankers.  There is nothing in Bernanke’s analysis to suggest that anything could be wrong with the capitalist mode of production itself: namely production for profit; or that recurrent crises ultimately originate in the productive sectors of the economy, even if they are ‘triggered’ in the financial or other unproductive sectors like real estate.

And yet there were such clues to this explanation in Bernanke’s own speech. He said: “Like many other financial panics, including the most recent one, the Panic of 1907 took place while the economy was weakening; according to the National Bureau of Economic Research, a recession had begun in May 1907″.  Exactly.  And Bernanke could have added that the 2008 recession was preceded by the credit crunch of 2007 and before that by a sharp fall in the mass of profits generated from early 2006 onwards.  It was the same story before the panic or crash of 1929 that led to the Great Depression.  A fall in profits and output had started a year before.  So there was a crisis in production underlying the financial ‘trigger’ of ‘excessive’ speculation in copper (1907); stocks (1929); real estate (2008).  Speculation was ‘excessive’ and ultimately ‘risky’ because the value generated to deliver gains on such investments did not materialise.  This is a much more coherent explanation of the recurrence of crises; namely the tendency for profitability in capitalist production to decline and eventually lead to an outright fall in profits.  Then a credit-fuelled boom turns into a speculative panic or crash.

At the end of the IMF conference, the great and good got together in a plenum and panel debate on whether there would be another financial crisis down the road.  Their conclusion was summed up by Larry Summers, former Treasury secretary under Bill Clinton, an economic guru and former top executive at Goldman Sachs, who was the favourite choice for the new Fed Chairman after Bernanke, but withdrew before selection.  Summers reckoned that another financial crisis was a long way away.  Some combination of complacency and euphoria has preceded all the major financial crises of the past, including the one that struck in 2008, he observed.  And “it feels to me like we’re a way away from complacency and euphoria.” Summers said:“So I think it’s going to be awhile, quite awhile before we have another financial crisis that will fit the pattern of the 2008 crisis, and others such as Japan in the late 1980s or the Great Depression. I think those type of crises are a long time off.”

That is a conclusion you might reach if you reckon crises of capitalism or financial panics are purely financial in origin and are caused by ‘excessive speculation’ as the IMF conference seems to have decided.  But bankers are always speculating: they never stop.  Sure, regulation is tighter, but only despite a barrage of criticism from bankers who rightly see this as a restriction on ‘business as usual’.  Bankers are always ‘naughty’.  This cannot explain why some of the time their activities appear to boost the economy and other times destroy it.

If crises are not generated by naughty bankers but are due to inherent flaws in the ‘profit economy’, then another slump is not so far away – in my view. Global capital, especially in the G7 economies, is still weighed down by unprofitable old stock and ‘inefficient’ firms, so that profitability remains below pre-crisis levels in most economies and the stock of financial and corporate debt especially in small businesses remains a huge burden, and indirectly for the taxpayer .  All this keeps investment at near lows, unemployment well above pre-crisis levels and delivers permanent damage to the productivity of labour and real GDP growth.

Capitalism needs another round of ‘cleansing’ in order reestablish higher profitability – just as it did in the Long Depression from the mid-1870s to the mid-1890s, when it took several slumps before there was a sustained boom, or spring period, for capitalism.  For now, the major economies remain in the doldrums and the Fed, the ECB, the BoE and BoJ have run out of ideas.

By Michael Roberts

Source: http://thenextrecession.wordpress.com/2013/11/11/why-the-crisis-and-will-there-be-another-imf-speaks/

The Financial Secrecy Index ranks jurisdictions according to their secrecy and the scale of their activities. A politically neutral ranking, it is a tool for understanding global financial secrecy, tax havens or secrecy jurisdictions, and illicit financial flows.

The index was launched on November 7, 2013.

Shining light into dark places

An estimated $21 to $32 trillion of private financial wealth is located, untaxed or lightly taxed, in secrecy jurisdictions around the world. Illicit cross-border financial flows add up to an estimated $1-1.6 trillion each year. Since the 1970s African countries alone are estimated to have lost over $1 trillion in capital flight, dwarfing their current external debts of ‘just’ $190 billion and making Africa a major net creditor to the world. But those assets are in the hands of a few wealthy people, protected by offshore secrecy, while the debts are shouldered by broad African populations.

Yet rich countries suffer too: in the recent global financial crisis, European countries like Greece, Italy and Portugal have been brought to their knees by decades of secrecy and tax evasion.

Secrecy jurisdictions – a term we often use as an alternative to the more widely used term tax havens – use secrecy to attract illicit and illegitimate or abusive financial flows.

A global industry has developed involving the world’s biggest banks, law practices and accounting firms which not only provide secretive offshore structures to their tax- and law-dodging clients, but aggressively market them. ‘Competition’ between jurisdictions to provide secrecy facilities has, particularly since the era of financial globalisation took off in the 1980s, become a central feature of global financial markets.

The problems go far beyond tax. In providing secrecy, the offshore world corrupts and distorts markets and investments, shaping them in ways that have nothing to do with efficiency. The secrecy world creates a criminogenic hothouse for multiple evils including fraud, tax evasion and aggressive tax avoidance, escape from financial regulations, embezzlement, insider dealing, bribery, money laundering, and plenty more. It provides multiple facilities for insiders to extract wealth at the expense of societies elsewhere, creating political impunity and undermining the healthy ‘no taxation without representation’ bargain that has underpinned the growth of accountable modern nation states. Instead of depending on tax, many countries are forced to depend on foreign aid.

This is not just a ‘developing country’ issue either: it hurts citizens of rich and poor countries alike.

Click here for the full 2013 ranking

What is the significance of this index?

In identifying the providers of international financial secrecy, the Financial Secrecy Index reveals that the traditional stereotype of tax havens is misconceived. The world’s most important providers of financial secrecy are not small, palm-fringed islands as many suppose, but some of the world’s biggest and wealthiest countries.

It shows that the illicit financial flows that keep developing nations poor are predominantly enabled by rich OECD member countries and their satellites, which are the main recipients of or conduits for these illicit flows. The trillion-dollar figure for annual illicit financial flows out of developing countries, above, compares with just US$130 billion or so in global foreign aid. So for every dollar of aid provided by OECD countries to developing nations, ten dollars or so flow back, under the table, towards OECD nations and their offshore satellites.

The implications for global power politics are clearly enormous, and help explain why widely heralded international efforts to crack down on tax havens and financial secrecy have been rather ineffective, despite many fine words from G20 and OECD countries: for it is these countries — which receive these gigantic inflows — that set the rules of the game.

Although there have been some positive changes since our last index in 2011, the infrastructure of global financial secrecy remains alive and well.

For too long, governments and campaigners concerned with cross-border finance focused on narrow problems such as terrorist financing and on certain kinds of money laundering, while ignoring much bigger flows involving tax evasion, abusive trade pricing and a range of other crimes and abuses. These larger problems operate through, and perpetuate, exactly the same mechanisms of offshore financial secrecy that facilitate cross-border flows of terrorist and drug financing. Tackling the smaller issues, while ignoring the bigger ones, cannot work.

The only realistic way to address these problems comprehensively is to tackle them at root: by directly confronting offshore secrecy and the global infrastructure that creates it. A first step towards this goal is to identify as accurately as possible the jurisdictions that make it their business to provide offshore secrecy.

This is what the FSI does. It is the product of years of detailed research by a dedicated team, and there is nothing else like it out there.

 

http://www.financialsecrecyindex.com/