Showing posts with label GDP. Show all posts
Showing posts with label GDP. Show all posts

Monday, July 8, 2019

The climate change and its impact on democracy

A good opinion piece. On one end, the developed countries keep screaming that world keeps getting hotter & hotter, & the weather patterns keep getting drastic, which in turn, is throwing everything else out of whack; people's lives & their livelihoods are in severe danger. On the other hand, these same developed countries, while asking developing countries to not use fossil fuels, are using fossil fuels themselves, & have built an economic system, which is globalized, so it affects everyone around the world, & that economic system measures a country's development based on exploitation of earth's limited resources, esp. fossil fuels.

Companies of these developed countries get in contract with developing countries, where they exploit (dig up) these fossil fuels, without any regard to the climate change, due to them being cheaply available, & then export these products around the world & make a handsome profit. All the while, the developing countries, might be showing a good GDP & a positive Current Account figure, but they are also suffering due to those fossil fuels being used abundantly & adversely affecting the climate around the world. Their public is far susceptible to fighting each other for limited amount of healthy food, clean water, & clean air, & in absence of these items, these developing countries are also bear the responsibility of adverse health conditions of their public, due to unavailability of basic necessities of life.

As the author correctly suggests, the world economic system needs to separate itself from this usage & exploitation of fossil fuels. Countries should be measuring exports & current accounts based on export of solar & wind-generated energy, instead of oil & coal, & this change needs to happen now, because we have already crossed the red line, & in some places, weather patterns have drastically changed. Remember, today, it's them; tomorrow, it'll be us, fighting for healthy & clean food, clean water, & clean air.

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Climate change intensifies conflicts and creates mass migrations. Tens of millions of people are displaced owing to climate change, according to the United Nations. Severe droughts and heatwaves in Syria and the Middle East at large preceded the war, leaving people without jobs, food or hope - and migrating for their lives.
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Climate change is a result of the Bretton Woods institutions and their deliberate policy to globalise the world economy based on extensive exports of natural resources from poor nations. This means petroleum, coal and gas, minerals, metals, forest products and meat.

Since their creation in 1945, the World Bank, the International Monetary Fund, and the World Trade Organization have been based on hyper-exploitation of natural resources that they encouraged and even coerced from poor nations.

Low prices of natural resources have contributed a several fold increase in the wealth gap between the poor and the rich nations since World War II. This was the most successful period of industrialisation the world ever saw. It was based on extensive overconsumption of natural resources, and the direct result is climate change.
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Almost a decade ago, the UN warned that "indigenous people are among the first to face the direct consequences of climate change owning their dependence upon, and close relationship with the environment and its resources." ...

Water is now one of the scarcest resources globally, according to the UN. The story is the same around the entire developing world.

What to do?

We need to replace the Bretton Woods system. They were the first global financial institutions the world ever saw. They fulfilled their mission and now they are dragging the world into an environmental disaster.

New global financial institutions are needed to get things right. We need to limit the exploitation of the planet's atmosphere, its bodies of water and its biodiversity. These are basic needs for human survival: we need clean water, clean air and food without which we cannot survive. All this is possible and must be done.

The limits on resource use can be flexible over time with the creation of equitable and efficient global markets for the global commons.

Limits on the use of water, air and biodiversity is what humanity needs to survive. This parallels the limits on emission of CO2 nation by nation, which was achieved by the Kyoto Protocol in 1997 and its carbon market that became international law in 2005.
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The recent Paris Agreement - which has no emission limits and no teeth - must be improved. The establishment of a new system that respects our planets' vital resources for life will change the global capitalistic system - as they value the global commons, clean air, clean water and biodiversity. These have no economic value today, but it can be and should be done.

We need to decouple economic progress from fossil fuels if we are to survive as a species. The International Energy Agency recently reported that this is already starting. A detailed footprint and the attendant economic policies must redress economic growth to be harmonious with the world's resources and with the survival of humankind.


Graciela Chichilnisky is a professor of economics and of statistics at Columbia University and the Director of the Columbia Consortium for Risk Management.

Monday, March 4, 2019

How Prisons Ripoff and Exploit the Incarcerated (1/2)

Just astonishing to see the depravity of people; exploit anyone anywhere. As I always say in my blogs, that slavery has not been abolished from Western societies, it's been transformed in another format, & the world thinks that Western countries & the "White man" is so fair & honest.

This exploitation of prisoners is one of the major reasons that American governments keep harping that crime is increasing because they need to be tough on crime. They want so many restrictions on the general public that the general public needs to, eventually, get permission to even move an inch. The American government officials, who are in bed with people who are profiteering from this prison-industrial complex, want to pack prisons with latinos & African-Americans, just so, those people can be used, & abused, by the prison system, to help make obscene profits for the shareholders of the private prison owners. Of course, a country's GDP will increase & it will develop when the labour costs are virtually nil for producing products.

Prisons are supposed to be places where an individual, who has committed a crime, & needs to be punished, or sort of given a time-out from society, just so that person can think what he / she has done wrong to the society, & how he / she can become a better person. Instead of rehabilitating that criminal, the prison system of America is actually making those criminals even more hardened criminals. Prisons of third-world countries are in much more abysmal conditions, but, at least, the world knows about it & even the developing countries are transparent about it. Ironically, Americans tout their human rights record a little too much, considering how they treat their own citizens during their incarceration.

A decent person won't even treat an animal this bad in a "developed" country, but these actions are taking place, with official knowledge & assent, in the most powerful, & supposedly, "democratic" & "developed" country of the world. Wouldn't this be called corruption of the mind & body of the general public & their elected leaders? Wouldn't this be called injustice when a person is not given decent food & clothes when that person is wholly dependent on you, since he / she cannot earn a dime by himself / herself, due to the restrictions placed on him / her by society? Wouldn't this be called exploitation of the poor & needy when these people are put into prison system, & then taken advantage by being charged to call family, receive things from family, or never allowed to visit family at the time of their death?

Where's that so-called humanity of the "white man" or good, honest, Americans? As I always say, that the biggest lie the "white man" told to the world that he is fair, honest, & hardworking.

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EDDIE CONWAY, FMR. BLACK PANTHER, BALTIMORE CHAPTER: Welcome to The Real News. I’m Eddie Conway from Baltimore.

Today in the studio with me I have a Pulitzer Prize-winning author of Days of Destruction, Days of Revolt. Please join me in welcoming Chris Hedges.

CHRIS HEDGES, JOURNALIST, SENIOR FELLOW AT THE NATION INSTITUTE: Thank you, Eddie.

CONWAY: Okay. I have been talking to you earlier about the business of the prison-industrial complex and how it’s impacting the lives of prisoners and their families. And you shared that you had some experience. Can you share a little bit of that with me now?

HEDGES: Yeah. Well, I’ve been teaching in prisons in New Jersey for a long time, almost ten years. And what I’ve watched over the last decade–and it’s probably something you saw when you were incarcerated–is how they increasingly prey on the prisoners and their families to make money. And that occurs by turning commissaries over to private corporations. And because it’s a captive market, they can charge anything they want. So, for instance, we got commissary prices from 1996. We compared them with prices today. And we’re talking about basic staples–toothpaste. We were talking earlier about noodles. What people don’t know is most prisoners live on those noodles that they have to heat up. Price increases as high as over 100 percent, almost everything at least over 50 percent, and yet what they earned has remained the same. So the minimum wage–I’m talking for eight hours of work. And in many of these prisons we have for-profit corporations exploiting prison labor, the neo-slavery under the 13th Amendment, which permits prisoners to work for far below reasonable wages. So their minimum wage is $1.30 for eight hours of work, which is roughly $28 a month. But their commissary prices–and we’re talking about things that they need–deodorant, toothpaste–have risen by over 100 percent.

The other way that they exploit the people under the system of mass incarceration is turning phones over to private corporations. So in New Jersey it’s $0.15 a minute, plus the premium that you have to pay in order to put the money on your account, the surcharge tax that the state puts on all commissary items of 10 percent. So if you have a $0.05 comb–this is an actual example–it costs you $0.06. And then the removal of items that people who, when they were incarcerated, used to get–jackets, blankets–they used to give you two blankets; now they give you one. They don’t give you thermals anymore; you have to buy them from the commissary. And, most importantly, shoes.

CONWAY: Well, I’m just–you know, because I personally have experienced that myself in terms of seeing young guys in the population that are just arriving in the last two, three years no longer get the things that we used to get when we came in the prison. So I see guys walking around in the dead of the winter without coats and without, actually, boots. They’re running around in summer tennis shoes and stuff. Why? What’s this cutback? I thought that the prison-industrial complex was making a lot of money. Why is this happening?

HEDGES: Well, because it forces those who are incarcerated to go to the commissary and buy the item. So let’s talk about shoes. And I don’t know what your experience was, but this is how it is in New Jersey. You’re not issued shoes anymore. You have to buy them. You pay $45. Now, remember, these people are making $28 a month. And we haven’t even spoken about the fines. So a lot of those people get into the system and they owe thousands of dollars of fines, which are chipped out of their monthly salary. So, for instance, one of the students that I teach, who was incarcerated when he was 14–he’s now 39–still owes $6,000 of fines. So if they want to buy a pair of Reeboks, it costs–if they don’t have the $45–and most people don’t get–80-plus percent do not get money from the outside on a monthly basis. They may get over the holidays or something, but they’re kind of on their own. If they can’t afford the $45 Reeboks or the boots, they sell these sneakers with cardboard soles. It’s like something out of Dickens that as soon as you got out into the yard, they’re shredded. Because many of these prisons are quite old, they need the thermals.

And then we haven’t even spoken about bereavement, so that if you want to visit with a dying member of your immediate family, a mother or father or whatever, you can do so for 15 minutes, either a deathbed visit or you can go for viewing, but you have to pay for the guards to accompany you, which is $800. And that immediately–. So what I have seen over the last few years–.

CONWAY: Woah. Woah. Let me just [incompr.] this. That’s happening in New Jersey. In Maryland, they don’t even allow you to do that anymore. They actually cut that out completely.

HEDGES: You mean the bereavement visits?

CONWAY: Yeah, the bereavement visits. And that’s very harmful to the prisoner, because you don’t get a chance to kind of, like, make your peace with that person that you love who’s departed. So you end up suffering that loss and no way of figuring out how to grieve, right? But go ahead. I’m just curious.

HEDGES: Well, it’s just all the ways they have found mechanisms to economically exploit prisoners and their families. It used to be that you could send up to 50 pounds, I think it was, a year of goods like sneakers and stuff, which they’ve now abolished. And that, of course, makes it harder, because now the prisoner has to buy the items from this kind of in-house Walmart. And it also hurts the families, who are unable to feel, in a way, that they can care for their sons or their daughters or their husbands or wives or whatever.

But what I find most disturbing is there seems to be every year some new mechanism to squeeze more money out of the poorest of the poor and the most vulnerable of the vulnerable. And I think that probably is something you saw within the system as well.

CONWAY: Yeah. Well, I mean, one of the things that they turned–the state, the state of Maryland, actually was responsible for supplying all the items in the commissary. So toothpaste, deodorant, food, something to drink, that kind of stuff, they turned all of that commercial stuff over to a company that–it’s out of Ohio, I believe, called Keefe. And that company operates commissaries in several states, including Florida. And they were up, in fact, for a class-action suit because of the way they changed the prices.

And one example is the envelopes. We used to get a pack of 50 envelopes for $0.99. They would come in a box. If you want to write, you would buy a box of envelopes, and it would last you for 50 letters. What Keefe took over, you could only get single envelopes, and they cost $0.10 apiece, so that the price of that 50 envelopes turned into $5 just automatically and you did not have a choice. You either buy from them or you didn’t send out any mail. And they did that time and time again with the basic foodstuff that they knew we needed to eat. They upped the price 200, 300 percent. You know. So yeah, that, and the state of Maryland in turn gets a fee for that.

HEDGES: Right.

CONWAY: You know. So just like they get a fee from the phone company that, as you were saying, exploits the families and the prisoners because if a prisoner calls home and the person accepts the phone call, it’s extra money for accepting that phone call above and beyond what it would be if it was [incompr.]

HEDGES: Well, and they have to put money on the account, and they have to pay a fee. So if you’re putting–I can’t remember the exact figure, but if you’re putting $10 on the account, you’re paying $3 or $4 just for the privilege of putting the $10 on.

And then we get the whole issue of privatizing the way money is sent into the prison. So it used to be that you could send a money order or something in and you could put it on a prisoner’s account. Now it is all done through a company in Florida, where, again, if you want to put $20 on the account, you’re charged quite a draconian fee. And, again, I don’t have figures right in front of me, but again, I think it’s up to $5. And that $5 evaporates, at least from your pocket, into the pocket of the for-profit company that’s handling this. So this has been a kind of momentum that we’ve seen internally within the prison system. I think it reflects the kind of predatory nature of unregulated capitalism throughout the society, because those corporations, which are in essence kind of squeezing all of us, will squeeze the defenseless. And that’s what prisoners are, in essence, a captive society. They will squeeze the defenseless in ways that are just inhuman, because they can.

CONWAY: And let’s look at it from the other side, because while I was in the prison system, they made chairs, they made clothes, they trained dogs. There’s all kinds of industries or, obviously, the license tags. There’s–.

HEDGES: Military industries. Kevlar.

CONWAY: Yeah. Yeah. So while they’re squeezing the prisoners and fleecing the population for whatever pennies they can get, aren’t they making a tremendous amount of money by using that slave labor to produce stuff? I mean, what’s–.

HEDGES: It’s neo-slavery, which under the 13th Amendment is legal. You can force people under the 13th Amendment to work without adequate wages as part of your punishment, in essence. And so we have seen, along with this exploitation, a growth of for-profit industries, private companies that are going in there and exploiting the prison labor. So, on the one hand, they’re using the prison labor to make profit, and on the other hand they’re taking that underpaid–you know, I mean, we can’t even call it underpaid when you’re making $1.30 for an eight-hour day. They’re taking that. And they’re taking what little money they have. And that’s not a new phenomenon for African Americans. It replicates precisely what sharecroppers went through, where they had to borrow to buy the seed and often the farm implements and pay the rent. And by the end, especially if the crop didn’t do well, they can work a whole season and end up in debt. So now you’re seeing people released from the prison system and they owe money to the state. And if they can’t pay that money, they get picked up again.

CONWAY: Yeah. You know. And there’s something–even as you were talking, there was another aspect that I was thinking of. Early on, several decades ago, I can clearly remember that there was this huge campaign to stop prisons from being built in certain neighborhoods, in certain counties, and there was a desperation. The population was exploding in the prison system, and the state needed places in which to build prisons, and they went to different counties and whatnot, and they could not get authorization to build prisons. And so at some point they start de-industrializing America and jobs disappeared, not only just out of the black community, but jobs disappeared out of the rural communities. And then, all of a sudden, in all of these counties, there were requests like put a prison here. And when you talk about that economic slavery thing, just remind me of Hagerstown and it reminds me of Cumberland. And in Cumberland, Maryland, there’s a massive prison complex up there now, and it’s the source of jobs and economics in that region. And inside those prisons is population from the urban centers, a black–the population is mainly black, the guard forces mainly white, and it’s an economic arrangement similar to slavery that you were saying.

HEDGES: Right. Of course. Well, the students that I teach often refer to prison as being a plantation, having the dynamics of a plantation, including which is something writers like Richard Wright, Baldwin, and others talk about, understanding the demeanor by which you can comport yourself in front of the guards who are all-powerful. And when you get up to these communities–and Mumia Abu-Jamal is up in Frackville, Pennsylvania. And when you go into the prison, you will see on the list of the corrections officers who work in the prison three, four, maybe up to eight of the last names, because their brother’s in there, their cousin’s in there, maybe even their spouse is in there.

CONWAY: Their sons.

HEDGES: Their son’s in there. It’s–.

CONWAY: And daughters.

HEDGES: And daughters. It’s the only business going. And I think what’s so heartbreaking–I’ve driven up and see Mumia a couple of times–is those buses that leave at about midnight or one in the morning from places like Newark or wherever or Philly, you know, bringing the families and bringing the kids. And we haven’t even spoken about how visitors are treated.

Wednesday, May 13, 2015

To move beyond boom & bust, we need a new theory of capitalism

Although, this op-ed piece is a good one, posing an important question to think about in regards to the economic policy of a country & for countries, worldwide, my own view says, regardless of which economic policy we come up with, we will still have these booms & busts.
 
The idea of free markets, capitalism, democracy, social democracy etc are all good & noble, but the problem in them lie in the proper implementation of these ideas. We cannot ever properly implement it ... without religion.
 
Now, people will groan, what religion has to do with free markets or democracy or capitalism?
 
I can't talk about this from other religions since I don't know what other religions say or don't say about the problems the whole world is having by adhering to these ideals. I can, though, talk about economic policy & capitalism from Islamic perspective.
 
Since, this is a very long & deep topic to discuss even from a religious perspective, so I'll talk at a high-level. I will say here that Islam doesn't forbid capitalism. Today's problems are not with Capitalism itself; it's other factors making problems for Capitalism. What are those problems?
 
1. Greed: Islam abhors greed. Even Christianity has greed as one of its 7 deadly sins. One of the 10 commandments, "thou shall not steal," includes greed (when one is greedy, they will steal to satisfy their need).
 
Problem is greed is actually considered good in secular or atheist world. For instance, entrepreneurs are told to be hungry & greedy to achieve greatness or whatever they are trying to achieve. So, if Facebook takes your personal data & sell it to third parties for profits, then you can't complain, because it's part & parcel of free markets. Nothing is right or wrong in free markets.
 
After the 2008 crisis, there was, & still is, a lot of noise about market regulations in US & Europe. Well, the government agencies were made. Regulations were enacted (after they were heavily watered down, thanks to the heavy lobbying efforts from the Wall Street crowd). But, the implementation of those regulations are nowhere near to their initial objective. Why?
 
Because, for every law a human makes, an "anti-law" a human finds. What's an "anti-law"? A loop hole. We can see all around us that for every law, there are loop holes available.
 
We humans, regardless of how hard we try to make the strongest possible law, there will always be a loop hole. That's why, religion stopped it at the spiritual level; no greed. So, if bankers or executives or government leaders turn all devout Muslims, or Christians, or Jews or religious people tomorrow, they can't steal from the public to line up their own pockets. They have to shun greed for the public good.
 
What's that has to do with Capitalism? Capitalism says a society should have private enterprises. That's good & ok. But then, businessmen take that concept & open private companies & then to always earn more money (nobody can satisfy greed), they commit abuses (labour abuses, market abuses, corruption, lies, bribery etc etc) to fatten up their accounts. Of course, the result ends up being a major part of the populations keep becoming poorer & poorer. Inequality & injustice take the rein of society. A few elites take control of the liquidity in the market (money) & start controlling government so it makes policies favouring them (government leaders are paid handsomely). All because of few people became greedy.
 
2. Interest economy: Islam forbade interest because an economy based on interest creates a rich class & a poor class. Since, the money the rich has is making him/her more money, he/she will always make money without putting in that much effort, whereas, the poor does not have enough money, he/she will have to borrow more money (& hence, pay interest to the rich) to survive.
 
Relation to capitalism? As I said earlier, nothing is wrong with Capitalism as an idea, but this is one of the many factors which create problems for a society & its people, & then we blame capitalism.
 
3. Consumerism: It's sort of part of greed; a greed of accumulating / buying more things for yourself. So, of course, Islam abhors consumerism. Modern marketing thrives on this notion. Economy measurement tools, e.g. GDP are dependent on it. The more people buy, the more GDP goes up, the more a country is shown to be developing or doing good, economically.
 
Relation to capitalism? Again, one of the factors adversely affecting capitalism. In the race to sell more, business people abandon all ethics & morals (lying to people to buy houses with ultra-cheap interest rates, even when they know these people can't afford these houses) & people getting greedy to become homeowners at any cost. Result is in front of you all. After the house mortgages, credit card debts are the next mountain of the world. With ultra cheap interest rates around the world, people are on the hunt to load up their houses with things, even at the cost of racking up huge credit card debts. When interest rates are going to increase, & then people unable to pay their credit card bills or even service interests, the market gonna crash.
 
We are ready to blame Capitalism for all our economics ills but capitalism has nothing to do with whatever problem we are having. Capitalism only says private  enterprises. It doesn't say anything about interest economy, consumerism, human greed, or economic measurement tools (e.g. GDP). But these, & other factors, affect how the economy performs, domestically & internationally. Most of these factors can be controlled only through religion.
 
Regardless of how much we think we are intelligent to make laws to control these factors, we can never completely eliminate them (there are always loop holes), & they will always win, & when these factors take over the society, the majority of human population suffers. This is not the first time we have seen human greed destroying the world; be it the Roman emperors pillaging other colonies (& for example, heavily taxing the public) to satisfy their greed or the 1 percenters of the current world keep amassing wealth, at the expense of the other 99%, to satisfy their greed.
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This is the year that economics might, if we are lucky, turn a corner. There’s a deluge of calls for change in the way it is taught in universities. There’s a global conference at the Organisation for Economic Co-operation and Development in Paris, where the giants of radical economics ... will get their biggest ever mainstream platform. And there’s a film where a star of Monty Python talks to a puppet of Hyman Minsky.
 
Terry Jones’s documentary film Boom Bust Boom hits the cinemas this month. Using puppetry & talking heads (including mine), Jones is trying to popularise the work of Minsky, a US economist who died in 1996 but whose name has become for ever associated with the Lehman Brothers crash. Terrified analysts labelled it the “Minsky moment”.
 
Minsky’s genius was to show that financially complex capitalism is inherently unstable. Under conditions of stability, firms, banks & households will, over time, move from a position where their income pays off their debt, to one where it can only meet the interest payments on it. Finally, as instability rises, & central banks respond by expanding the supply of money, people end up borrowing just to pay back interest. The price of shares, homes & commodities rockets. Bust becomes inevitable.
 
This logical & coherent prediction was laughed at until it came true. Mainstream economics had convinced itself that capitalism tends towards equilibrium; & that any shocks must be external. It did so by reducing economic thought to the construction of abstract models, which perfectly describe the system 95% of the time, but break down during critical events.
 
In the aftermath of the crisis ... Minsky’s insight has been acknowledged. But his supporters face a problem. The mainstream has a model; the radicals do not. The mainstream theory is “good enough” to run a business, a finance ministry or a central bank – as long as you are prepared, in practice, to ignore that theory when faced with crises.
 
That, effectively, describes the situation among the policymaking elite today. They are trying to wrestle the economy back into a state where their models can cope with it again, using measures their theories say are not needed: quantitative easing, bank nationalisations, partial debt defaults & currency devaluations.
 
The radical, pro-Minsky faction is at a disadvantage because it does not possess a complete alternative model of capitalism. Some have generated computer programs showing how financial crises happen. But, by their own admission, they do not have a complete alternative model of how capitalism works.
They are, admits Dutch finance professor Theo Kocken, “roughly right” rather than “exactly wrong”. Kocken’s solution is to concentrate on why we misperceive risk. Behavioural economics has had a field day since 2008, identifying problems for the human brain when faced with complex risks: oversimplification, overconfidence & “confirmation bias”, where we ignore facts that challenge our existing beliefs. But adding behavioural insights to the Minsky model of financial mania does not turn it into a theory of capitalism.
 
Here, the parallels with events in physics are obvious. After Einstein’s big breakthrough, we were left with 2 competing – & mutually incompatible – accounts of the laws of physics. Einstein himself was dissatisfied with this, pursuing from the 1920s a “theory of everything”. It is a laudable aim in economics too. And this is where we come to the turning point. The defenders of orthodox economics & the Minsky rebels are, essentially, asking the same question: “What does capitalism normally look like?” The one answers “stable”; the other “unstable”. But it’s the wrong question. The right question is: Where are we in the long arc of capitalist development? Nearer the beginning, the middle or the end? But that question goes to the heart of darkness.
 
For the mainstream, their convictions about equilibrium & abstract models were always founded on the belief that capitalism is an eternal system: the social arrangement most completely reflecting human nature. Minsky’s followers, as with all followers of JM Keynes, assume that a better understanding of financial mania can stabilise an inherently unstable system. But even physicists, who study a universe that has lasted 13bn years, are prepared to countenance – indeed, are obsessed with modelling – its death.
 
So the pursuit of theory is obligatory in economics. The holy grail is not a new orthodoxy, cobbled together from Minsky & the remnants of mainstream thought so that bankers can construct trading models to iron out problems created by the way our brains work. The aim should be something bigger to model capitalism’s current crisis within an understanding of its destiny.
 
For me, the most fundamental question in economics still concerns the 2008 crisis. Was this event the last in a series of shocks needed to allow a third technological revolution to take off? Or was it evidence that capitalism’s tendency to adapt and reshape in response to technology has stalled, or is even finished? That is the shadow we have to jump over in economics. Amid a mania for “new economic thinking”, it is what we need to think hardest about.