A Word in Your Shell-like

Today should surely see the hammering of the final nail into the coffin of the concept of CSR--corporate social responsibility. This trite phrase has always been a contradiction in terms and the implicit admission by oil-giant Shell of their collusion with the Nigerian government in the execution of 11 Ogoni activists including the writer Ken Saro-Wiwa tears away the remnants of the thin veil covering the naked greed of the global corporate elite.

Shell was a leading proponent of CSR, or a leading exponent of Greenwash , depending on your point of view. The global reach of the oil corporate's activities had left a similarly extensive trail of shame reaching all the way from the Niger delta to the North Sea, where Shell's attempt to dump the disused Brent Spar rig in the Atlantic was successfuly opposed by Greenpeace. Shell was also a founding member of the Global Climate Coalition, which fought against the evidence of climate change and may have ensured the extinction of the human species.

As a timely response of questionable scope Shell set up a Foundation and started distributing a tiny proportion of its profits to worthy causes, including environmental organisations naive enough to take the filthy lucre. Attempts to rebuild the company's reputation in Nigeria itself were particularly criticised. Health centres and schools were launched across the Niger delta, only to be left half finished when the TV cameras moved on.

The complaints by international leaders about the poor standards of governance that prevent African governments from improving the lives of their people are illuminated as the rankest hypocrisy by the story of the joint project by the Nigerian elite and Shell to serve their limited self-interest at the cost of the millions of Nigerians. The courage of Saro-Wiwa and his comrades in drawing the world's attention to these iniquities has been vindicated by the court judgment. Tweet

Out of sight but not out of mind

Just as most economic activity is now negative rather than positive, so most of the economic value of the economy is debt rather than credit. The whole economic system is being extracted and replaced with debt.

The most obvious example of this is the takeover of major companies by 'private equity' firms, misnamed because they really have no equity but fund these takeovers from debt. If they can persuade the banks to lend them enough money they can, like Archimedes with his unfeasibly long lever, move the world.

Concern has been raised about the loss of accountability when firms move from public, quoted status to private status--and you thought accountability was poor amongst stock-market corporations! Once removed from any scrutiny who knows what may befall the employees and suppliers of these firms? Ruthless maximisation of profit behind closed doors is to be expected.

The most concerning aspect of the activity of private equity firms is the way they allow the expansion of debt and delay the need for adjustment in the world economy, which will consequently be even more painful when it does occur. This was exactly the process that preceded the 1929 Crash, as more and more wheezes were found to deal with the problem that there was no more debt to be had and the pyramid-selling scam had come to the end of the road. This explains the willingness of banks to lend vast sums to 'private-equity' chancers.

Since debt is the commodity banks trade in, the move towards debt-based capitalism can only lead to their owning an ever greater share of the economy. Most people aged under 40 belong to the bank, as a consequence of vast mortgage and student-loan related debt. Companies facing hard times are likely to find banks eager to swap their equity for debt, a way in which the bank can come to own something of real value (a functioning company) by creating something with no value (bank debt).

As the economy becomes hollowed out only those with a risk-averse attitude and a willingness to take on frightening levels of debt are able to thrive.

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