More Bull, Less Beef

The Green Group in the European parliament is engaged in spirited opposition to the negotiation of a new EU-US trade treaty, negotiations that are being carried on behind closed doors and with very little discussion in the UK media. Officially known as the Transatlantic Trade and Investment Partnership, the biggest trade treaty ever negotiated is being strongly supported by the Commission, which argues that it will add 0.5% per year to EU trade. Given that the post-war regime of trade liberalisation has reduced almost all tariff barriers across the Atlantic the focus here is on ‘non-tariff barriers’, a phrase that could cover a multitude of sins.

Emphasis is likely to be on standardising regulation in areas such as agricultural production, where Europe has much stricter laws on issues such as GMOs and hormones in beef and milk production. Other areas where ‘harmonisation’ might lead to a lowering of European standards are the chemical industry, currently restrained by the REACH regulations, and intellectual property, where the fight over the recent ACTA indicates the aims of US pharmaceutical and media corporate.

In his plentary contribution to the parliamentary debate (available on Youtube but only in French), Yannick Jadot,  elected to the parliament in 2009 from the Europe Écologie list in France and Vice-Chair of the Parliament's committee on trade, argued that decisions on trade and on the economy generally should be made democratically since the economy belongs to all those who participate in it, not to the corporations who would benefit from greater international trade. He also criticised the Council of Ministers and the Commission for greatly exaggerating the economic benefits of greater trade liberalisation.

The fundamental Green critique is that, as currently constituted, the trade treaty would allow corporations to claim compensation if national governments introduce laws that they believe have undermined their ability to make profits. Rather than the somewhat limp argument currently used by politicians to justify satisfying the whim of corporate barons, this would give such arguments real legal teeth and shift power further away from the citizen and in the direction of corporations.

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Growing Yen for Truce in Currency Wars

I have been watching Japan's engagement in the global currency wars for some years but this is the first time that I have had a chance to comment on the radical monetary policy being followed since the election of Shinzo Abe as the Prime Minister of Japan at the end of December 2012. Like the country's people, this radical politician has grown tired of decades of capitalist stagnation but, rather than focusing on the transition to a stable and sustainable economic future, he has chosen to use dramatic monetary policy to try to restart the growth engine.

Back in April Haruhiko Kuroda, the newly appointed governer of Japan's central bank, announced a massive money creation policy: the Bank would issue ¥7tn yen (£46bn) of government bonds every month up to a total of $1.4tn (£923bn). Issuing public debt in this way equates to the creation of public money and will double the country's money supply. Although financial commentators greeted this announcement with shock, the quantity of money created is less than the $85bn a month being created by the US Federal Reserve.

Part of the point of the Japanese policy of creating money appears to be to encourage the famously cautious Japanese to hold more risky assets, so to invest in the stock of companies that might then use this money to invest in expansion, leading to economic growth. However, as with the FTSE and the NYSE, investors appear to prefer to speculate, with companies hoarding cash and purchasers of shares watching the value rise and then taking profits, as they did last week, causing a huge and sudden fall in the Japanese stock-market. Nothing, it seems, can persuade those with cash that capitalist enterprise is a safer bet than the speculative casino.

In the UK we have observed that shovelling money randomly into the economy, especially when using financial corporations as intermediaries, has little impact on the productive economy or the lives of citizens. It tends to boost the stock-market and increase the wealth of those who are already rich, while keeping money cheap and so reducing the incomes of those who live from savings. Internationally, however, increasing the volume of one's currency in circulation reduces its value making your exports more competitive, a process known as competitive devaluation. Hence it can be seen as an aggressive policy in trade terms.

Although the discussion of currency machinations happens only in the business section of the news and appears intolerably arcane it is crucial that we understand its import. Even mainstream commentators such as the BBC's Stephanie Flanders are now drawing the connection between the present confrontational deflations and the beggar-thy-neighbour policies of the 1930s that eventually led to war. The failure of world leaders to show leadership and to negotiate an agreed range of exchange rates between currencies to protect the world's economies and the world's people leaves us dangerously exposed.

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Institutionalised Violence in Europe

One of the best moments during my visit to Latin America came during a visit to a project celebrating the life of Dario Santillan. Following the economic disasters of shock-tactic neoliberalism under Menem he was one of the heroic young people known as piquiteros who both resisted and responded with hope and in solidarity. Dario was killed trying to protect his friend Maximiliano Kosteki who was under police fire, as shown in the famous image of him. As part of our exploration of the solidarity economy in Argentina we visited the Frente Popular Dario Santillan where Dario worked and where his comrades continue their emancipatory economic activity and keep his memory alive.

Th visited also produced for me one of the funniest moments of the trip. To raise funds the comrades sell t-shirts that they make on site. Finding the design but not in the colour I wanted I actually heard myself asking 'Can I have Capitalism Kills in the purple please?' I am now the proud possessor of said t-shirt. In the global consumer society my wish is their command, even in a ramshackle printworks in an Argentinian barrio.

One of the things that makes Latin American politics so fascinating to Western radicals is that the oppositions are so much more explicit than they are in the late capitalist countries where we have a system of Danegeld and consumption-based narcotics to undermine our dissent and soothe our sense of powerlessness. In Argentina and Brazil the economic injustice and the violent struggle between capital and labour is still visible.

But it was also in this continent that Catholic social teaching evolved into the idea of 'institutionalised violence', to describe a situation where the institutions of the state defend a situation of such inequality that it stunts and shortens human lives. In the statement from their conference in Medellin in 1968 the Latin American bishops defined institutionalised violence as existing:

'when, because of a structural deficiency of industry and agriculture, of national and international economy, of cultural and political life, "whole towns lack necessities, live in such dependence as hinders all initiative and responsibility as well as every possibility for cultural promotion and participation in social and political life," thus violating fundamental rights.'

Just as labour control through debt crisis and public-sector destruction through austerity began in Latin America and travelled across the Atlantic, including during the Menemismo that Darian fought to resist, so evidence of institutionalised violence is now emerging in Europe. Leading academics have found early evidence of the destructive health effects of cuts in government spending and the psychological and physical impacts of recession.

In Greece the incidence of HIV has doubled since 2011 and the country has also experienced its first malaria outbreak for many years. The book, called The Body Economic, concludes that austerity kills, although the body-count will never be laid at the door of the politicians and bankers responsible.

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Inside the World Trade System: Personal

The idea of travelling on a cargo ship seems so far-fetched that the only way to deal with it was to make the plan work on paper and then go through with it without thinking too much about the personal implications. I had to leave myself entirely open to what might happen, since I had nothing to base my expectations on. Various jokes were made about the likely behaviour of the Filipino crew, jokes that turned out to be wildly inaccurate and probably racist too.

What I discovered on board was the international division of labour in shipping, or perhaps what we might more accurately call the ethnic segmentation of the marine labour market. On our ship the officers were East European and the crew were Filipino, with only a few exceptions. The senior crew had trained during the communist era, learning skills that would then enable them to drive the capitalist trade machine. They welcomed us into the small community and shared with us all their knowledge of the ways of the sea and the workings of their ship. We stood on the bridge watching the pilot guide us into and out of some of the world's large container ports. It was a remarkable experience.

Our best friend was the 'reefer man', largely because he had the best English of the officers. Every container ship needs a skilled mechanic and electrician to maintain the health of the 'reefers' that bring us our bananas. The word 'reefer' comes from the fact that these containers (the white ones you see on lorries) are refrigerated, having their own cooling system driven by electricity. Every day in the tropics Valentin, the reefer man on our ship, had to go down to what he called 'hell', the container hold, where temperatures rose to around 50 degrees, to check that the containers were functioning.

The days of joining the merchant marine to see the world are over. When the ships are in port the corporate owners are losing money, so the crew are busier than ever, working with the robots and automatic cranes to load and unload containers as quickly as possible. They rarely leave the ship while in port except to work on the quay; during my 14 days at sea I was the only person who left the port area. At sea the officers and crew work on regardless of conditions and had some horror stories to tell as soon as the waves reached above 4 metres. They were brave in this physical endurance, but also in the mental endurance of months spent in a tiny space far away from family and friends.

I know that my perspective on trade has been changed and that I will feel differently when I see a container on the road or see the imported fruit in the supermarket. We are the consumers of the world: we earn money in other ways to pay people from countries where wages are lower to do the heavy lifting to support our lifestyles. Every time you eat a banana or a melon you rely on that huge energy-intensive system where human lives are spent in sad and lonely work.
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Inside the World Trade System: Financial

Leaving Natal on the north-eastern coast of Brazil for Europe we had expected to enjoy tropical fruits at every meal, but we were to be disappointed. The chief cook, we were told, bought all fruit in that well-known fruit-growing paradise The Netherlands. The absurdity was made worse by the fact that our cargo included 140 'reefers' or refrigerated containers, many of which contained fruit bound for the European market.

We questioned the captain who told us that fruit is cheaper in Europe than in Brazil--even tropical fruit. He told us of carrying a cargo of melons across the Atlantic on his own ship only to discover that the price for the fruit was less after the voyage of some 8,000 miles. This is a clear example of the inequities of the global trading system which ensures that while the Brazilians grow the fruit the profits are made in Europe. It is also evidence of how global inequality is now the result of currency fixing, since the Brazilian real is high relative to the Euro.

The captain also told us about a voyage where he had carried grain to the port of Philadelphia, where he unloaded it into a silo and took his ship into dock. The following morning he returned to the same silo to reload the grain, which he then carried back across the Atlantic to be sold as US grain.

Maersk are the lords of the sea, with the largest fleet of the fastest ships. This Danish based company has ruled the waves since 1996 and has its own designated areas in the large ports. All shipping gives way to their monstrous vessels, which are also some of the fastest on the sea. You will know the other companies that control this vast trade in containers from reading the logos on the sides of lorries: Hamburg Sud and Hapag Lloyd (both German owned), Marfret and CMA-CGM (both French owned).

The logistics of the global trading system revolve around Rotterdam, which is where the world's container fleet stop for refitting and for purchasing supplies. It seems that the trade wars between the Dutch and the British that began in the 17th-century have been won by the Dutch although perhaps only because the British decided that to actually touch the physical aspects of trade was beneath them and focused instead on the finance and insurance. Although the purpose of containerisation was to mechanise and remove the need for (unionised) labour, the number of jobs that have been lost to the UK is vast:  the Port of Rotterdam website estimates that 87,000 people are directly employed there. the multipliers are clearly also significant. Britain is now responding by dredging a huge area of land near Tilbury for the creation of a vast container port called London Gateway.
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Inside the World Trade System: Technical

The lengthy hiatus in posts is the result of my spending two weeks aboard a cargo ship without an Internet connection. The lack of connection was an interesting experience in itself, but seeing the global trading system from the inside was even more remarkable.

Before boarding the 170m vessel that would bring us back to Europe from Brazil I had seen the extraordinary documentary 'The Box that Changed the Britain' so knew something of what to expect from the vast logistical complexity and technological sophistication of the global trading system. But seeing the huge machines lift 40-tonne containers as though they were match-boxes was truly impressive.

The first thing we learned was metaphorical rather than technological. I cannot remember now many times I have been told that things cannot be changed because it would be like 'trying to turn around a supertanker'. Well, from the vantage-point of a ship of similar size I can tell you that it can be turned around in little more than its own length, as we were when leaving our berth in Natal. Somehow this proof that the metaphor is nonsense cheered me immensely, undermining another ideological block to the rapid structural changes we need to make to the global economy.

The largest port we visited was Rotterdam, which is actually three ports in one with another one under construction and a third on the drawing-board for 2020. Altogether these ports span 50km of land, much of it reclaimed from the sea, it is only the fourth largest port in the world. Our ship, the MV Homere was 'small' at just 170m long. We saw ships three times the size, capable of carrying 12,000 TEU and there are plans to build ships nearly twice this size. Physically this is overwhelming but the energy it takes to construct and maintain such facilities is horrifying.

The reason for my cargo-ship passage was to hitch a ride on a voyage that was already committed and so reduce my carbon impact. Although this may have worked at a personal level it was reduced to absurdity by the flights taken by the 23 crew members who made my journey possible. The shipping company that employs them flies them home after each 42-day contract from wherever they are to wherever their home is. Since our crew had more Filipino crew than Romanians (the two countries that make up the majority of the world's fleets) this meant at least 15 return flights to Asia to enable my air-free passage plus a slightly smaller number of European flights.

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