Dubai to All That

The vaunting towers of Dubai provide an irresistible metaphor for the hubris of globalised capitalism, and the newspapers have been falling over themselves to draw attention to the fact that this small, Gulf emirate is, quite literally, built on sand. For a green economist, however, it is the social and environmental consequences of this artificial paradise that raise the most pressing questions.

In the more 'advanced' economies of the West, the tasteful veil between government and corporation is still maintained - in Dubai this was not the case, and it is difficult when reading some of the press stories to distinguish between Dubai World - the venture capital development corporation responsible for the irresponsible building projects - and the state of Dubai. And surely Sheikh Mohammed bin Rashid al-Maktoum could have used the phrase 'L'etat c'est moi' with more aplomb than Louis XIV ever dared. Reading about his nefarious dealings makes one wonder whether George Clooney followed the Beckhams in the trek to buy luxury apartments on Dubai's palmtree-shaped beach complex.

With energy no object it is possible to summon extraordinary buildings from sand and to make deserts bloom. The environmental consequences of this profligate use of the planet's dwindling oil resources receive far too little attention. While public debate concentrates on China's carbon dioxide emissions attention is distracted form the fact that the oil-producing states have the worst per capita record in this area. The other side of the coin is the human exploitation: the legions of South Asian immigrants who, like Irish navvies during our own 19th century building bonanza, were responsible for the heavy lifting for low pay that brought this crazed dream into existence.

Dubia is the apotheosis of an economy which is unsustainable in every sense: a grossly intensivised playground where the heedless and amoral playboys and playgirls, spawned by globalisation and a capitalist system that has broken all bounds of social control, enjoy pleasure without responsibility. Its gleaming untarnished towers are like the body of Dorian Gray; the abused workers and corrupted atmosphere are the the true picture, hidden away in the attic of our imaginations.*

Dubai is the sort of development you end up with when you let money make all the decisions. The creation of an elite resort for the super-rich is a perfect illustration of the logic of this late and putrescent stage of capitalism. It tempts you to imagine your way into a near future and imagine children being shown pictures of the artificial archipelago to help them learn the lessons of ecology.

*Thanks to Mary Mellor for this metaphor, whose appeal has helpfully been broadened by the recent movie. Tweet

Bread and Circuses

It cannot have come as a surprise to many people that it is money, not a sense of fair play, that drives the activities of the sports corporations like Fifa and the IOC. The amateur sportsman was always something of an imposter, since only those wealthy enough to have leisure and equipment to train were likely to make it, and so few would call for his return.

However, in spite of the advent of the Olympic mascot and the plastering of TV coverage and the stadia themselves with brand advertising, we seem to have continued to nurse some hope that sport was an arena where honest competition and hard work determined the outcome. This illusion was safely laid to rest on Wednesday when Henry handled the ball in the Irish area. Like so many areas of life, in sport too these days it is only about the money, and with such a large population of potential consumers in France, and so small a number in Ireland, the outcome was always predictable.

The French, it seems, are embarrassed about Henry's behaviour. He has followed Zidane along the path from national hero to national disgrace. In an era when our politicians and our corporations alike display their corruption on a daily basis, we need to continue to believe in our sportsmen's commitment to fair play.

It was Juvenal who coined the phrase 'bread and circuses' to describe the way the Roman empire handed out titbits and entertainments to distract the masses from the fundamental injustice of imperial life. However unfair life as a whole might be, the contests in the arena were to be fair fights - and there was always a chance of escape if you fought bravely enough. The corporate empire displays a similar level of unfairness - with the outcome for most of the world's people determined before they are born.

For so many modern-day drones, football is the circus of choice - the only area of life where they dare to let their emotions flow freely, when relationships are so fraught and work so oppressive. The health of the working population requires that, in spite of the evidence of match-fixing in so many sports, the delusion that sport is still about fair play can be maintained. Tweet

Where the Wild Things Are

A river in spate, a screaming baby, a snowy mountain peak: such things stir irresistible emotions. They move us because they are out of control. We cannot help but respond to these calls of the wild. I was reacquainted with my own wild inner journey thanks to a chance meeting with Jay Griffiths. I was paying a flying visit to CAT to teach a session of a course with the rather unpromising title of 'Emergency on Planet Earth'. Jay provided the cultural spot yesterday evening and she charmed us all with readings from her new book, Wild: An Elemental Journey.

As I have previously described, my own wild journey is somewhat more domestic, since I no longer fly and reaching anywhere even halfway exotic by land is fairly demanding in terms of time, energy and money. My adventure with the field mouse became considerably more wild than I was able to cope with, when it was followed into the pantry by rats who disturbed my nights, spoiled my food and chewed their way through beams and possibly electrical cables too. I colluded with John the ratman and my landlord's partner in their death by poison, feeling a mixture of disgust, relief and guilt when a total of four dead and putrid remains were variously disposed of.

As with so many aspects of life, the lesson is about balance. We do not need to travel to the ends of the earth to learn about the wild, which is right here on our doorstep and inside our selves. Society and culture are concerned to maintain an appropriate distance between ourselves and the wild. Wiser cultures than our own cherish those gifted persons - shamans, medicine men and wise women - who can travel further into the wild without becoming destroyed by it.

The learning that has stayed with me from Jay's stirring reading is her description of the Nazis as people who could not tolerate wild wandering. She identified the aberrant nature of their key target groups for extermination: the Roma people; those who wandered in their minds; those who strayed off the straight sexual path; and the wandering Jewish race. She did not link this - as Simon Schama does in his weighty study Landscape and Memory - to the primeval forest and the barbarian heritage of the Teutonic people which the Nazi regime sought both to celebrate and to repress through its obsessive bureaucracy.

We might, as questioners were tempted to do last night, see a parallel in the bland uniformity of the market system, which forces the wild in us to escape into violent computer games or derivatives trading. Giving way to the wild risks insanity and isolation; repressing it creates violence and stifles creativity. Where the wild things are, it turns out, is everywhere there is life. Tweet

Revolving Doors and Revolting Publics

The outcry against our politicians, which has been focused on their scandalous expenses claims, is surely a result of the growing sense that they are a class apart. They work hand-in-glove with the 'captains of industry' to ensure that our legal, economic and social structures work for the benefit of this tiny minority - and against the interest of people and the planet.

I spent some time this week responding to the consultation document on the Research Excellence Framework. This is the structure that will decide how valuable the research produced in our universities is, and therefore how public grants and promotions will be allocated between researchers.

We have moved on from the judgement of our peers about the quality of our work to a system of impact assessment. This might not be such a bad thing, since it encourages academics to think beyond their ivory towers. But the indicators used to measure impact are frightening, focusing heavily on the ability of academics to generate patentable scientific ideas that can be sold to support industry.

Close relationships between 'industry' (undefined) and academia are encouraged - including secondments. Academics who take a critical view of the business community, or who see their research as a service to the citizen, will receive short shrift in the next round of spending allocations. This is a natural consequence of the shifting of universtities out of Education and into the Business department. The taxes paid by citizens are now used to subsidise research that businesses will later exploit to increase their profits.

The forthcoming report of the Public Affairs Select Committee raises related concerns about the influence of industry lobbyists on legislation. PASC notes that 'Ministers can, within all existing rules, use their former ministerial position to help them to gain access for private interests' and has 'specific concerns about former Ministers who take up paid employment after they have left ministerial office but while they remain Members of Parliament paid from the public purse.'

Examples cited include that of Stephen Ladyman, who left the Department of Transport and accrued a consultancy with the road-pricing company ITIS. Lord Bach, Minister for Defence Procurement, moved into 'industry' working for Selex Sensors and Airborne Systems, and then came back through the revolving door to a job as a government whip. And king of the dungheap you will be unsurprised to hear is Tory Blur himself, who is receiving expenses from the British government to tour the Middle East apparently to spread peace but opening doors for the expansion of Tesco in the area as a nice little sideline.*

Thanks to Barbara Panvel for these examples. A new website tracking government corruption will be established soon and will be linked from this blog. Tweet

Queasy Come; Queasy Go

I want to think again about quantitative easing - the government's new favourite policy that enables it to make money by decree. This is necessary because the favoured method of money creation in this late form of financialised capitalism is by banks lending it and then accepting each other's debts. Once they realised their mutual debts would never be paid this source of cash dried up, and so the government stepped in to spend money directly into the economy. In essence, this is exactly the sort of money system that green (and other) critics of debt-based money have been calling for.

So what's the problem? That is easy to answer: the money that is being created is not being spent on the real economy, but rather injected into the financial upper circuits of the global economy, where it does nothing of real value (it would be far better if the policy worked as illustrated in the cartoon). As Colin Hines argued back in the spring, this money should be being spent on building the infrastructure for a low-carbon economy.

In fact it is being used to buy two sorts of debt. Most is being spent on government debt, which means that the government's debt management agency can afford to sell more government bonds without having to offer impossibly high rates of interest on them - the more UK national debt there is out there the more expensive it becomes to create more. Some is also being used to buy junk corporate debt, thus 'helping the banks to rebuild their balance sheets', otherwise known as 'new lamps for old'.

The pushing of all this new money into the financial system was proposed on the basis that it would miraculously find its way into the real economy. There is no evidence or even convincing argument as to why that might happen. In this form of capitalism, the reverse process is dominant - with money being sucked out of the real economy into financial operations where more money can be made more rapidly.

The policy has two real consequences - both iniquitous. As more cash floods into financial organisations, they use it to buy assets of various sorts, so QE causes a new asset bubble. This value can then be used by the wealthy members of society who own assets to purchase other assets, such as more property or land, hence exacerbating the inequality that already haunts our economy.

Secondly, the policy extends the gap between the money supply and the real economy. The money that has been created is a claim on future goods, and hence this policy is creating a pressure for more economic growth, with the consequent exploitation of more energy and resources. Hence QE to support the finance sector is an environmental disaster in the making.

As it is being used currently, quantitative easing is magnifying the worst consequences of the financialised economic system we are suffering under. The one glimmer of light is that it has proved beyond question that money can be created in this way, but when it is, it should be used to invest in positive outcomes for society, rather than to support the unequal distribution of resources. Tweet

The Grand Larceny

When I was young we once played a fantastic game with this name. It involved drawing up a list of items which would be very hard to access, then assembling a week later in teams and thieving said items. The most daring raids garnered the most points. I was a wimp even in those days and spent much time gathering many, many milk bottles.

I'm not proud of relating this tale, but even now I remember the excitement of the game - the edginess and competitiveness attached to doing something that was not permitted and involved the thrill of the chase, since some items were unique and had to be stolen before others reached them.

This game was brought to my mind recently, when I read for the first time about the true nature of the extraordinary deception that was practised on the US people under the guise of 'rescuing' financial institutions. Here is the story that set my teeth of edge, and reassured me that there are some journalists who still understand that their job involves investigation and not mere reportage.

The reporters from Bloomberg have picked over the ashes of the dodgey deals between the US Treasury Department, Goldman Sachs, the New York Federal Reserve Bank and the insurance giant AIG. The latter had been creating the infamous ‘credit default swaps’ that bundled up worthless unpayable loans as assets. After the bubble burst, AIG had been trying to persuade the banks to share the losses by taking less than the full value of these ‘assets’ – the article mentions a rate of only 60% of the stated value.

This was all happening a year ago – when most of us were looking on aghast at the instability and destructiveness of the financial system – but the sharks were looking for a killing. The then Treasury Secretary Hank Paulson (the former CEO of Goldman Sachs) used his political power to force AIG to recompense the banks in full. On the basis of this, current Treasury Secretary Timothy Geithner (then President of the Federal Bank of New York) refused to accept any deal with AIG, precipitating its collapse. This collapse was only prevented by an injection of public money amounting to $182 billion dollars.

So here is the larceny. A massive sum is transferred from the working people of the US to a few powerful and extraordinarily rich men. We cannot trace the exact details of how two former bankers who now run the US economy receive their ill-gotten gains, but the picture is fairly clear even without this detail. We are no longer watching politicians bailing out banks; we are being governed by bankers for their own benefit. Tweet

Bloated Economic System Produces More Hot Air

If you have, like me, been wondering how climate change can so suddenly shift from being a consequence of a bloated and over-industrialised hypercapitalist economy to being the result of our decadent eating habits, you may find it useful to have a quick trawl through the report that has caused the recent furore. And before you go any further you should keep in mind that the authors of the report have both spent their careers at the World Bank. So they are unlikely to conclude that climate change might result from a design flaw in the existing economic system.

Goodland and Anhang have not carried out any new research. Had they followed research methods established by others to attempt to measure the CO2 impacts of farming methods it would have been impossible for them to find a jump from 18 to 51 per cent in the proportion of climate-forcing gases that are the responsibility of domestic ruminants. Their shocking statistics result from reinterpretation of previous research and changed assumptions.

Of the things that make me nervous about this new 'science' the first, which is a political rather than a scientific insight, is that the person who first put the issue of farting cows into the climate change debate was former President Bush. It may be the alacrity with which the 'findings' were beamed around the world that makes me wonder who has the most to gain from a shift in responsibility for the global catastrophe from a fossil-fuelled economy to individual consumption decisions and agrarian practices.

Reading the report in more depth than the journalists appear to have bothered to do immediately makes clear that the real problem is the industrialised nature of the global farming system - itself so intensive in the use of oil - together with the clearing of carbon-storing forests to make way for mass grazing to feed the US hamburger market:

'Livestock (like automobiles) are a human invention and convenience, not part of pre-human times, and a molecule of CO2 exhaled by livestock is no more natural than one from an auto tailpipe. Moreover, while over time an equilibrium of CO2 may exist between the amount respired by animals and the amount photosynthesized by plants, that equilibrium has never been static. Today, tens of billions more livestock are exhaling CO2 than in preindustrial days, while Earth’s photosynthetic capacity (its capacity to keep carbon out of the atmosphere by absorbing it in plant mass) has declined sharply as forest has been cleared. (Meanwhile, of course, we add more carbon to the air by burning fossil fuels, further overwhelming the carbon absorption system.)'

The equating of living sentient beings with machines in this quotation is distasteful, and representative of the reductive thinking that fails to distinguish between technical measurements of gases and social and cultural systems.

Methane is known to be a gas that is more powerful at forcing climate change than CO2, but it also disperses more rapidly (8 years compared to 100 years, according to the best current scientific modelling). The reason for the sudden massive increase in the harmfulness of methane as calculated by the report's authors is a decision to take a shorter-term perspective on climate change and hence to increase the multiplier applied to methane as compared with CO2. Presumably this is governed more by the need to reach immediate GHG targets than by a concern for our grandchildren.

'The new widely accepted figure for the GWP of methane is 25 using a 100-year timeframe — but it is 72 using a 20-year timeframe, which is more appropriate because of both the large effect that methane reductions can have within 20 years and the serious climate disruption expected within 20 years if no significant reduction of GHGs is achieved.'

This ability to use maths to shift problems through time is the speciality of the economist, and allows massive leeway for interpretations favourable to the dominant economics paradigm. (Another example highly relevant to the climate change negotiations is the questionable technique of discounting.)

The most serious omission from the article appears to be any attempt to measure the carbon impact of the production of alternative foods that should replace the meat and dairy industry that provides basic nutrition to the mass of the world's population today. It includes consideration of the processing of by-products of the meat industry - such as turning hides into leather - but does not consider the carbon produced in the manufacture of alternatives to these products.

The report makes a direct appeal to corporations to take up the route of 'non-meat meat':

'among the least risky strategies might be for a company subsidiary to build a chain of fast-food outlets featuring soy burgers, soy chicken products, sandwiches made with various meat analog products, and/or soy ice cream. If the chain’s growth were rapid, then other food companies would be tempted to copy from the first mover.'

Nothing could make clearer the difficulty those within the existing scientific and economic paradigm have in grasping that the real problem is structural. More than cows and their problematic digestion, it is the unquestioning commitment to chains, fast foods, and growth that is really driving the upward curve of GHG emissions.

The hyping and rapid dissemination of such research into pseudo-scientific news stories trivialises a vital debate and allows the disinterested and those in denial to claim that, since the scientists cannot agree with each other, there is no point in their engaging with this issue at all. There are so many scientific uncertainties in just this one small corner of the climate change discussion that it is no wonder that most people - even those who can find the time and mental energy to struggle their way through a report like this - are left feeling utterly disempowered.

At this point I always revert to what I can do in my own community. We debated this issue in the Stroud coffee house more than a year ago. Between biodynamic meat-eaters and committed vegans we agreed that we should all avoid the globalised industrial meat system, as much because of its inhumanity as its climate impact. We should also eat fewer meat meals, and the vegetables we eat as a substitute should be locally grown, without oil-based fertilisers and pesticides, on our local allotments and community farm. (Graham Harvey reaches much the same conclusion in his book The Carbon Fields)

As Copenhagen approaches we can expect to see more examples of attempts to skew the debate away from the bloated and inherently unjust global economy and towards individual life-style choices. We should not be convinced by the World Bank that it is our consumption choices, rather than the economy whose design they defend, that are the root cause of climate change. Tweet