Gilts and Boars

Now that our national strategy of using finance to energise the economy has been seen so spectacularly to fail, the favoured option of the pro-capitalist, pro-globalisation ideologues is to follow the export-led growth model. Hence our Business Secretary Vince Cable, together with the Prime Minister and several other cabinet members, has headed off to China to advertise what real products we have to sell. The wares as advertised are a motley collection with a resonance of the Sunday-morning car-boot sale. Much of what is on offer, from randy pigs to shit treatment, is distinctly unglamorous. We can only assume that there are major arms deals behind the scenes to justify the cost in sparse sterling and carbon emissions.

Vince Cable has drawn attention to three items which make it intensely challenging to take seriously the Coalition's claim to be the greenest ever government: Jaguar cars, tourism, and education. The environmental impact of encouraging China to consume more in these three areas is deeply disturbing. Latest World Bank Figures show that only 22 people in every 1,000 in China own a car, compared with 463 in the UK. To you this is a relief; to Jaguar it is the biggest market opportunity in the world. You can almost hear them salivating.

In my own sector, education, the encouragement of Chinese students to learn in the UK represents an alternative to supporting our own students in higher education. But the environmental consequences are equally stark. Each return flight a Chinese student takes creates around 5600 kg of CO2, some five times the annual limit under the Contraction and Convergence framework that the Liberal Democrats apparently support. Many of our students travel home and back more than once in a year.

The composition of the trade delegation is also unsurprising. According to the Washington Examiner, the businessmen on the trip include executives from Royal Dutch Shell PLC, Tesco, Barclays bank and Diageo. This is a recovery strategy designed by corporations to serve corporations. Little help here for the struggling small business in a provincial town.

China's dominance in material production is recent; its contribution to spiritual wisdom is ancient and still valuable. Here, in the words of Lao Tzu, Cameron might acquire some strategic guidance:

'When rulers take action to serve their own interests,
Their people become rebellious;'

Verse 75, Tao Te Ching


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Turning Towards Each Other

With the year just turning one's mind also inevitably turns to what we have learned and where we are going next year. For people in Gloucestershire this has been The Year of the Flood - a catastrophe which, fulfilling the hope of the management jargonists, has presented us with many opportunities for growth and learning.

Firstly, the foolishness of 'economic development' within a capitalist mindset was made manifest. Take the town of Tewkesbury. Lying at the confluence of the Avon and Severn Rivers it is always going to be at serious risk of flooding. The Abbey there has stood and remained dry for 700 years, but this year it flooded. The reason was unwise building further up the river, removing the possibility of the water moving onto its natural floodplain. Something those who lived in the Dark Ages were surprising enlightened about.

When new housing developments are put in the flood-plain the supermarkets that enable the profiteering are given a superior position on a concrete plinth. Like the cathedrals of old they are now the most revered constructions. Unfortunately, in Tewkesbury this meant that when the flood came people in Morrisons were stranded on an island and had to spend the night in the cafeteria.

Tewkesbury has another flood-plain development planned. This July it was called The Watermeadows but its name has miraculously changed to The Meadows during the summer.

Surviving the floods was a salutory experience, and a very uplifting one after the initial panic had subsided. We amazed ourselves with our resourcefulness, as we found Heath-Robinsonesque ways to channel rainwater into our toilets and wash five heads of hair with half a bucket of water. We found out who our neighbours were (and look after the vulnerable ones) and we found out where our electricity and water came from (amazed that we had never known!)

We were instructed not to flush our toilets with drinking water - some of us realised that this is in fact what we do everyday and thought about ways to make our water use and distribution system less wasteful in future. The most important thing we learned from the flood was that the greatest resource we have is each other, and that in a crisis we do look after each other.

Looking further afield, I was interested to see how attitudes to economic development have changed in Thailand, partly as a result of the tsunami. The country has turned its economy in the direction of sufficienty rather than export-led growth. They are building self-reliance and reinforcing their local communities, as well as finding inspiration from the workings of nature.

2007 has been the year when many people - sadly not many politicians - have started to think seriously about the economics of climate change: about how it will affect their ways of finding daily necessities and the way they interact with their environment and each other. Tweet

Lilley's Little List

I had the unpleasant experience yesterday of having to endure listening to a Tory being compassionate. This is always a nauseating experience. For those of us over 40 Peter Lilley must be best remembered for his appalling rendition of Gilbert and Sullivan at a Nuremberg-style Tory conference in the 1980s. A hate-list including single parents and the work-shy. No wonder his concern for the world's poor and his magnanimous offer to solve their problems through increased trade rings hollow.

The evidence to support his view that poor countries can grow rich through trading with rich countries is simply not there. The World Bank’s many papers showing improvements in absolute standards of living in developing countries are subject to question. There is a strong suspicion that the only way they can be shown to have grown richer is by a classic tactic of corrupt science: averaging. Based in the utilitarian paradigm which assesses the overall rather than the individual good, this tactic is clearly part of a capitalist worldview which privileges the needs and benefits of the elite over those of the mass. It is from this perspective that a national income measure that has increased and can then be divided equally between all the heads in the country—even when the wealth itself is clearly not—can indicate an improvement in the poverty situation facing that country.

This represents a tactical change for capitalist apologists on the issue of poverty, foremost among them the economists of the World Bank. It has proved necessary in the face of the striking evidence of starvation, destitution, and death. The claim is now that some in the poorer nations may have grown poorer while the country as a whole has improved its position. As well as the averaging problem this line also has the benefit of being conducted at the level of macroeconomic indicators, which are far easier to manipulate and obfuscate than starving children. So, the evidence that the gap between rich and poor is widening is irrefutable, although in some, but not all, of the countries following the IMF model the poor may be becoming better off in absolute, and usually monetary, terms.

Direct evidence of the impact of trade shows that this small and distorting increase in national income is bought at a high price. An UNCTAD report in 1997 showed that out of a sample of ten Latin American countries, in nine of them the differential in earnings between skilled and unskilled workers had increased as a result of opening up markets to international trade and that in most of the countries the real purchasing power of the least skilled workers had actually declined, in several cases by more than 20 per cent. International Labour Office data show that of 30 countries studied in Africa, Asia and Latin America, wages in two-thirds of them had fallen between the late 1970s and late 1980s, and the wages of the least skilled had fallen fastest.

In 1999 a paper from the World Bank reported on data for a sample of 38 countries between 1965 and 1992 to show that opening markets up to trade had reduced the incomes of the poorest 40 per cent of the population, while increasing those of the richer groups. The World Bank’s commentary was that ‘The costs of adjusting to greater openness are borne exclusively by the poor’. Mies and Shiva argue that the liberalization of markets is a deliberate policy to reduce subsistence and force the poor of the world into the capitalist labour-market, ‘The displacement of small farmers is a deliberate policy of GATT’. The policy has had a serious and negative impact on levels of hunger: ‘A conservative estimate of the impact of so-called liberalization on food consumption indicates that in India, by the year 2000, there will be 5.6 per cent more hungry people than would have been the case if free trade in agriculture was not introduced. Free trade will lead to a 26.2 per cent reduction in human consumption of agricultural products.’

Developing countries have spent these thirty years on the economic rollercoaster of international trade, because of the dogma from international bodies suggesting that this will end poverty, while at the same time the richest people in these societies have used this international game to increase their own wealth while the poor in the same societies have grown poorer. The overall gains from trade are minimal to the countries producing agricultural products: between 1986 and 1996 Ghana increased its exports of cocoa by nearly 80 per cent but only earned 2 per cent more in return.

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