28 April 2013

Solidarity Economy in Brazil

One of our most stimulating meetings during the Latin American tour was at the social economy incubator (ITCP: Incubadora Tecnologica de Co-operativas Populares) at the Universidade de São Paulo. The incubator was established in 1998 by Paul Singer, who now works as the minister for social economy as part of the federal government. We met with Diogo Tsukumo, who will shortly be moving to Brasilia to work with Singer, and Reinaldo Pacheco da Costa, who is a professor in the engineering department.

ITCP is engaged in developing small businesses in the favelas along the lines of genuine auto-gestion, including the production of soap and herbs and services such as cleaning. They support the businesses with finance, capacity-building and networking. The history is that in 1998 a group of Singer's students discussed the economic situation with unemployment at 25% and suggested new forms of working, especially co-operatives. They explored the history of co-operatives in Brazilian agriculture and found that they were really consortia of producers and not economically empowering for the poor. They wanted to encourage the development of real grass-roots autonomous co-operativas and so set up the incubator.

Their well-meaning intention was to to do what they call 'extension work' in an urban context on the basis that, as a public university, USP has a duty to create knowledge in collaboration with society. An opportunity presented itself closer than they had imagined: one of the communities they work with is a favela right next to the university that was built by unskilled wokers who built the university! Once it was built they were out of work so the students worked with then to set up a restaurant and organised a grounds-maintenance service. They spread this model across the city and into the southern favelas.

Like many things in Brazil the scale of the solidarity economy is somewhat overwhelming. In 2007 there were 22,000 co-ops compared with 30,000 in 2011. Today there are more than SSE incubators in Brazil. They have recently worked to have a solidarity economy law passed through congress, and the level of support in terms of funding, fiscal advantages, and funded co-operative development work is also impressive.

The ideology of this grassroots economic empowerment is also somewhat unexpected. There are three main influences on the solidarity economy in Brazil:

• liberation theology;
• anarchism;
• communism.

In a synthesis that would seem impossible in any other society, in Brazil somehow they manage to create a positive synthesis between these three.

24 April 2013

Greens Celebrate EU Policy to Control Tax Havens

Readers of this blog will remember Green MEP Sven Giegold as a staunch campaigner against the excesses of the finance industry and for his attempt to discover the most destructive so-called 'financial product'. Now Giegold is celebrating another success: his campaigning to open up the festering sore that is the global tax system and to shine the light of transparency into the dark recesses of global tax havens appears to be contributing to change in the EU finance regime.

As Giegold writes in his newsletter:

'It is music to my ears. The finance ministers of the six largest EU countries Germany, France, United Kingdom, Italy, Poland and Spain held a memorable press conference in Dublin on Friday night. Their requests have been put forward by Attac and the Tax Justice Network since their establishment more than 10 years ago: Closure of tax havens, automatic exchange of information for all income from capital, an end to the abuse of banking secrecy for tax evasion and disclosure of the real beneficiaries of companies. I have given uncountable interviews, written articles and shown presentations campaigning for the subject, and now it has all become mainstream.'

German Finance Minister Schauble, who had longed campaign to maintain banking secrecy, turned the tables during discussion in Dublin last Friday and argued for a new regime of transparency so that all data relevant for taxation purposes must automatically be made available to the tax authorities in the home country of the foreign investor. Campaigning by Greens and Socialists in the European parliament had created sufficient momentum to undermine the long pact between German finance ministers and the gnomes of Zurich who they had been sheltering. You can watch the press conference here: George Osborne's discomfiture is particularly enjoyable.

The message of the press conference is that the members of the EU will set the standard of financial transparency, and will then expect other countries to reach this standard. This would appear to be a significant challenge to the world's tax havens, at least those that rely on secrecy. Amazingly, and with no apparent irony, the agreement is called FATCA, with just a missing letter to get to the real heart of the matter.

In these days of austerity the pressure is on for all to pay their share, so we should not be immediately sure that these fine words will butter the necessary legal parsnips. It was when I heard that 'Italy has always been committed to fighting in the field of tax evasion' coming from the lips of Italian finance minister Vittorio Grilli that I wondered whether Sven was being somewhat naive. But hey ho, even hearing these suited guys who have for so long taken the side of bizniz without question talking tough on tax evasion is an enjoyable change and it looks as though even arch-nemesis of the tax cheats Richard Murphy thinks that we are getting somewhere. The race to the bottom in terms of corporate tax rates must become the next objective. 

19 April 2013

When is A Free Market Not a Free Market?

We have a joke in the South-West Green Party along the lines of the Monty Python sketch about the Romans but ours revolves around the question 'What has the EU ever done for us?' As someone who is critical of Europe, although not a Euro-sceptic, I am glad to be reminded that Europe has constrained the worst excesses of neoliberalism in Britain, and that much of this results from the actions of the powerful Green Group in the European Parliament. Now it looks as thought the EU is the last hope to stop the dangerous decision to build a new nuclear station at Hinkley Point in Somerset.

An article in the Guardian last month suggested that the EU Commission looks set to set up a full-scale inquiry into the massive government subsidies that are needed to encourage EDF to build at Hinkley Point in Somerset following the disastrous planning decision gave the new station the go ahead last month. Ironically, it is the hugely destructive single market regulations that this time might delay or even scupper the project, since that mythical 'level playing-field' must be ensured for all energy generators and, although EDF is not a UK company, if the UK government offers it financial incentives to build at Hinkley Point that could still contravene what is considered to be free competition.

The comment from Doug Parr, policy director for Greenpeace, is most pertinent: 'The government wouldn't need state aid approval for nuclear if it wasn't trying to subsidise a risky technology that could wind up costing more than the renewable alternative'. The misguided policy to give life support to a dying and obsolete industry is also a dangerous diversion from the urgent investments we need to make in the energy generation of the future, the renewable forms of energy generation such as windpower, wavepower and solar that are clean and do not damage the health of current and future generations.

Meanwhile, South-West MEP Graham Watson has told the somewhat ironically titled Business Green that he supports subsidies for nuclear in the South-West. Following the change of direction of the party, led by Energy Secretary Ed Davey, Watson 'defended the UK government's right to offer hefty state aid support for new nuclear reactors'. He argued that the nuclear industry has a fair case for subsidies because fossil fuel suppliers also receive generous government support. To which we can only suggest that two wrongs do not make a right, and when the risks are as high as they are with nuclear any price is too high a price to pay.

16 April 2013

Of Land and Liberation in Bahia

It is quite clear that a more locally based self-provisioning economy would require a change in the pattern of land ownership from that which prevails across the world today. This is why I am a strong supporter of land value tax and land reform, both of which are policies necessary for the transition to a bioregional economy. I am currently in the north-east of Brazil in the state of Bahia. Although it was the area first settled by Portuguese colonisers and then fought over by them, the Dutch and the French, much of its land is extremely arid and away from the rivers the possibilities for agriculture are very poor. Salvador, the colonial capital, was also the centre of the slave trade and still has a strong African influence in the culture and the cuisine, and for this reason was the place where the secret martial art of capoeira was developed.

The African and slave history also gave rise to some interesting patterns of community and land ownership. Most directly we have the quilombros, communities of escaped slaves who fled into the interior and set up villages where they reproduced their African culture and created new traditions of shared use of land and systems of commons. Perhaps the experience of slavery had convinced the of the importance not only of freedom but also of distributive justice? Many of these communities survive today and the federal government of Brazil is supporting them in finding ways to legally defend their access to and use of the land.

Since its independence Brazil has, in a limited sense, taken an emancipatory approach to land ownership. If land is left unused then it reverts to the state. Other communities, known as fundos de pasto, have taken advantage of this by moving onto this state-owned land to find the means for a sustainable livelihood. These communities are made up of poor rural farmers without their own land, and people from the cities who cannot make a living there. We met Gilca Oliveira at Salvador University who is part of a research team that has produced a wealth of research on these alternative land-based communities, including those connected to end MST movement.

We also found here a hero to inspire resistance to neoliberalism. Zumbi dos Palmares is commemorated with a statue in one of Salvador's main squares. Zumbi was born in Palmares, the most famous and successful quilombro but was not content until all other slaves had been freed. He fought a violent struggle for emancipation and is today commemorated as the first freedom fighter for African slaves in the Americas with a national holiday in Brazil called the National Day of Black Conscience.

14 April 2013

Thatcher is Dead: May Thatcherism Follow

This is a guest post from Chris Hart of Lancaster Green Party

It has been a slightly surreal week, partly because a fifth week of dry, sunny weather making Lancaster look more like a desert than the waterlogged swamp it normally resembles. Primarily though, it is surreal for the events surrounding the death of Margaret Thatcher. The praise and tributes that seem to be coming in from all sides have made me start to question my own sanity and memory. The deification of Mrs T is starting to resemble that of Lady Di. Thank goodness for George Galloway who against the general gushings maintained an outspoken surety that the fires of hell are well stoked and will be well fed this week.

By a strange coincidence our local cinema was holding a rare morning film showing on the day following her death. The film was Ken Loachs' Spirit of 45 , as perfect a piece of aversion therapy as one could imagine. It is lovely and poignant film, showing how the will of people and Parliament were able to completely redirect the devastated landscape and economy after the Second World War.
Spirit of 45 showed starkly through the voices of working-class men and women of the time just how incredibly ambitious and visionary the nationalisation of the previously private health, energy, transport, housing and education systems was. That it was done in five years and transformed the lives of millions - and all at a time of the greatest national debt. It also showed in contrast how tepid in comparison our attempts at transformation seem today in response to the rampant neo-liberal agenda.

After 70 minutes of documenting the changes in people's lives from the 1930s to the 1950s the film suddenly cut to Margaret Thatcher outside Number Ten giving her inauguration Francis of Assisi speech: 'Where their is hatred let me show love', a sentiment that I am not sure the 'enemy within' of the miners or millions of others thrown out of work were able to appreciate the irony of. The film then embarked on showing the dates of the re-privatisation of industries. It largely missed out on the greatest failing of Thatcher though, the deregulation of the financial markets that led to the inevitable collapse of the banking system
Spirit of 45 showed the need for a new 'post war economic revolution' to follow the end of credit wars, but this time that vision and passion is put into a demand for a more collective ownership of the creation of finance, the means and outcomes of production and the commons of the Earth. It needs to be one that transcends the state-led nationalisation ideal and the individual-led privatisation ideal.
Margaret Thatcher probably died happy: she lived 7 days long enough to see the end of the NHS and the basic right of the welfare state to provide for those in need. Let's hope though that Thatcherism has died with her and new ecologically aware and socially convivial society rises where she saw there was none.

7 April 2013

Over-Consumption Sampa-style

The city where I am writing this has 11 million people. Were it not for the fact that I have been teaching in London for the past year I am not sure I would have had the courage to come to São Paulo at all. It is one of the world's megalopolises and takes urban to a whole new dimension. My response was to wander the streets in my hand-made rush hat looking for a cakeshop where the cakes had been made by a white-haired old lady. I hope that I will be better adjusted by the time I wake up.

The city has helped to me to think again about the Brazilian obsession with crime. Every Brazilian person I have spoken to has warned me about the likelihood of being robbed and their gated communities and security guards suggest and innate feeling of lack of safety. The rapid move to a consumer society that typifies São Paulo provides me with a speculative explanation in terms of the imbalance between the consumers and the hungry and whether this generates a sense of guilt and insecurity. Perhaps the Victorian obsession with crime in the UK had similar roots?

Brazilians are rushing into the consumer paradise with unprecedented speed, as portrayed in their favourite current soap Brazil Avenue, which tells the story of the lower-middle-class in Rio who are aspiring to standards of living their parents could only watching on the popular novelas of their day. Aspiration is the flavour of the decade, with a desire for more and better but little thought of enough or sustainable consumption. One negative consequence has been a rise in obesity from 11% in 2006 to 15.8% in 2011: 52.6% of Brazilian men and 44.7% of women were overweight in 2011.

The Avenida Paulista where we are staying is intensely high-rise. It once housed the super-rich coffee barons in their mansions surrounded by tropical gardens. But in the 1950s the Paulistas decided to compete for height with their North American neighbours and the mansions were ripped out to be replaced with skyscrapers. The city has the air of self-satisfaction that capital accords to those who play by its rules. For my money it is a city designed for business rather than pleasure.

5 April 2013

Lessons from Porto Alegre

Having come half way across the world to learn about participatory budgeting it was rather a disappointment to learn that it was now a shadow of its former self. Our informant, Sergio Baierle of the Central Bank of Brazil, spoke of the emancipatory endeavour in the past tense and with some sadness, as we discussed it in the staff canteen on the top floor of his office in leafy Porto Alegre.

Participatory budgeting is that most unlikely thing: a policy move where politicians actually relinquish power to the people they govern. Perhaps more unlikely is the fact that the politicians in question, the Workers' Party, were socialists who might traditionally have been expected to centralise and control power. The reality was that when they came to power in the city in 1989 expectations were vast but the coffers empty. Participatory budgeting was a system for mediating these demands.

The process worked by neighbourhoods across the city creating assemblies which met to discuss how they would like to see the city prioritise its spending across a range of categories such as housing, sewerage, pavements, social services, and so on. In a simple and transparent process these priorities were then weighted according to the quality of existing services in the neighbourhood and the size of population to create proportions of need, from which proportions of the city budget followed.

This idea of asking the people themselves to choose priorities for spending was truly revolutionary, particularly in a political culture dominated b clientelism, where the power of the strong men relied on the patronage they could offer in terms of new roads and schools. It was also an extremely effective means of redistribution, especially when combined with a large increase in the rate of corporation tax for those who had benefited from the increase in value of commercial property.

But as Baierle shared with us, the system has diminished and virtually disappeared since the Democratic Workers' Party returned to power in the city in 2005. In 2011 none of the projects prioritised through the participatory budgeting process were funded, compared to rates of 98 or 100% in the early years. Commitment and participation have also inevitably been affected by this ineffective implementation, as well as by the increasing ability of local businessmen to game the system.

Participatory budgeting is a radical idea and one that has a particular relevance in a time when money is short. The most important contribution is the genuine negotiation between citizens and their politicians about the limited nature of resources and how they should be spent. This is a clear contrast with our politics of austerity, where the message is that we cannot have anything that we want and yet the government can still follow its priorities such as a costly reorganisation of health services and a new generation of nuclear power stations and nuclear weapons. If money is short it should be our business to decide whether we want it spent on these white elephants.