New Zealand and the Tragedy of Neoliberalism

New Zealand – In a Land of Plenty

Directed by Alister Barry (2002)

Film Review

This documentary provides a blow by blow account of the advent of “neoliberalism” [1] to New Zealand in the 1980s and 1990s. The feature films of British filmmaker Ken Loach document the tragic consequences of Margaret Thatcher’s brand of neoliberalism (Thacherism). I have yet to find similar films tracking the brutal effect of American neoliberalism (under Reagan, Bush senior and Clinton).

In 1984, the assent of Labour Prime Minister David Lange (and Finance Minister Roger Douglas [2]  to power resulted in a sudden shift from New Zealand’s 40-year commitment to full employment to a regime in which jobs and living wages were deliberated sacrificed to a brutal campaign to quash inflation.[3]

The film traces the stepwise process by which Douglas collaborated with the Reserve Bank of New Zealand to increase unemployment by massively increasing interest rates. With no access to credit, businesses quickly began shutting down and laying off workers \.

This move was followed by cutting public sector employment (in the government owned railroad, state energy companies and post office) and the elimination of farm support by way of price stabilization and crop subsidies. Squeezed between prohibitive loan rates and loss of government support, thousands of families lost their farms and livelihood. Unemployment skyrocketed as cheese factories and freezing works depending on the agricultural sector shut down.

At the end of 1984, the Lange government also ended protective trade barriers that protected New Zealand manufacturers, immediately flooding the domestic market with cheap imports from China. The move effectively killed New Zealand’s home grown manufacturing sector (mainly auto, shoe, garment and home appliance production).

During its two terms in government, Labour persisted with these draconian reforms despite massive public protest and open rebellion by rand and file Labour Party members. During the 1990 election, Labour voters stayed home, and the conservative National government took over the neoliberal agenda.

by the mid-90s, more than half of New Zealand’s unemployed (many of whom were over 55) had been out of work more than six months. The National government responded to the chronic unemployment crisis by slashing unemployment and welfare benefits. Despite a big increase in free food distribution at schools, foodbanks and other charities, resulting malnutrition levels resulted in an epidemic (which persists to the present day) of rheumatic fever, meningitis, asthma and other illnesses of poverty.

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[1] Neoliberalism is a model of extreme free market capitalism that favors greatly reduced government spending, deregulation, globalization, free trade, and privatization.

[2] It’s unclear how Roger Douglas, a right wing conservative, became Finance Minister under a Labour Government. He later helped form the pro-corporate ACT Party and served as an ACT list MP between 2008 and 2001.

[3] Inflation hurts bankers far more than it hurts workers, especially those relying on credit cards to pay for basic survival needs. In reducing the value of money, it simultaneously reduces the value of debts owned to banks. See Who Does Inflation Hurt Most

 

 

 

The Importance of Economic Relocalization

Local Futures: Beyond the Monoculture

Local Futures (1998)

Film Review

This documentary concerns the early work of Helena Norberg-Hodge, founder of Ancient Futures (formerly the International Society for Ecology and Culture – ISEC) and author of the book Ancient Futures (1991). Her work is also featured in the films Ancient Futures: Learning from Ladakh (1993) and Economics of Happiness (see A Film About Economic Relocalization ).

The film recounts her work assisting the people of Ladakh in resisting globalization pressures that threatened to destroy Ladakhi culture, environment, livelihoods and health.

Norberg-Hodge maintains the effects of globalization are extremely negative for the vast majority of the world. Globalization’s emphasis on ever increasing production and growth destroys ecosystems, cultural diversity and livelihoods, as it drives poor people off their land and into urban slums.

What she and other members of ISEC have learned over the past three decades is that strengthening local economies can help young indigenous people resist psychological pressure (from continual bombardment with Western advertising) to discard traditional farming, production and cultural practices in favor of Western materialism. Without this support, young people become very susceptible to Western disinformation denigrating their traditional way of life. This, in turn, can lead to profound feelings of self-doubt, depression and even violence.

In 1995, Norberg-Hodge established a 3,000+ member network of Ladakhi women that focused on rejuvenating local culture and production methods, small scale renewable energy projects and a reduction in TV viewing.

With the help of ISEC, she also established local ecology networks that became involved in regional government and helped revive ancient Tibetan medicine.

Most importantly, ISEC has played a big role in organizing cultural exchanges between Ladakhi and Western sustainability activists. Sometimes it’s only in visiting the West that young Ladakhi realize how destructive globalization, industrial agriculture and ever increasing production and economic growth really are.

Norberg-Hodge’s work has had a major influence on the growing local food movement and the mushrooming of farmer’s markets throughout the industrialized world.

The Link Between Globalization and Violence Against Women

Witches, Witch-hunting and Women

by Sylvia Federici

PM Press (2018)

Book Review

This book is a collection of essays that continue the theme feminist historian Sylvia Federici introduced in her 2004 book Caliban and the Witch: Women, The Body and Primitive Accumulation (see Witch Burning and Women’s Oppression). In addition to re-exploring historical links between witchcraft trials, enclosures, land privatization, and systematized oppression of women, Witches, Witch-hunting and Women extends her analysis to the present day. Federici sees strong links between increasing violence against women and “globalization,” a euphemism for an elitist campaign to dispossess third world peoples of their lands and livelihoods. This dispossession, in turn, has led to the largest mass refugee migration in history.

In tracing its historical origins, the book makes the case that capitalism was actually a “counterrevolution” against the widespread 14th century rebellions that improved both the working and living conditions of both peasants and early urban workers. In constant fear of new rebellions by landless peasants (expelled from common lands under enclosure laws), the landed and merchant classes introduced a totally new form of production that imposed even harsher labor discipline than feudalism.

The witchcraft trials of the 16th and 17th century were essential to this transformation. They were primarily directed against women who resisted enclosure, widows, women who had children out of wedlock, landless women who were driven into the streets (either as market vendors or prostitutes), midwives and women who practiced folk healing.

At a time when thousands of women were killed for accusations of witchcraft, all women were banned from guild membership and prohibited from engaging in crafts other than brewing or spinning and bringing legal cases to court. Under capitalism, they were generally confined to the home to perform unpaid domestic labor in total submission to their husbands.

In looking at modern equivalents, Federici sees a direct link between the massive dispossession occurring under globalization and escalating violence against women. She points to a big increase in domestic violence and rape (especially “handbook” rape*), in sex traffcking, in unprosecuted murders of women (especially women of color), in witchcraft accusations against tribal women in Africa and India, and in dowry and honor killings in India and Pakistan.

She also sees strong links between the current mass incarceration of people of color and the 17th century Great Confinement, in which droves of peasants were incarcerated in prisons and workhouses after being driven off their land.

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*”Handbook rape” rape by trained military and paramilitary forces is deliberately designed to terrorize targeted populations. Examples include inserting knives or guns into a woman’s vagina or slitting open her pregnant belly.

Capitalism: The Role of Violence Against Women

Sylvia Federici

Jan 9, 2019 talk

In this talk, Sylvia Federici, author of Caliban and the Witch (see Witch Burning and Women’s Oppression) discusses her two latest books Witches, Witch Hunting and Women and Re-Enchanting the World.

Witches, Witch Hunting and Women elaborates on two key premises: 1) that the extensive free labor women perform is fundamental to the success of capitalism and 2) that violence against women is never accidental. According to Federici, it’s “structural”, ie fundamental to the human exploitation necessary for capitalist accumulation.

Federici divides violence against women into three main categories: domestic, public and institutional. Domestic violence occurs in the context of a domestic relationship, public violence includes non-domestic rape, paramilitary violence and narco-trafficking, and institutional violence consists of police violence, female incarceration (which is increasing) and criminalization of pregnancy.

Federici is also concerned about the growing frequency of actual witchcraft accusations in Latin America, India and Africa. She blames this on what she refers to as “re-colonization,” aka globalization, whereby millions of poor peasants are being driven off their land and turned into refugees. The original witchcraft trials occurred during the 16th and 17th century enclosures, when people were being violently thrown off of communal land.

Re-Enchanting the World, the second book she describes, depicts how this violent dispossession also destroys the community ties and solidarity working people rely on to resist capitalist violence. It strikes a positive note in describing how Latin American women who are forced to urbanize (after losing their land) are starting to collectivize to meet their survival needs. Examples include organizing to fight for access to water and power and to build schools and clinics.

The Deceptive Promise of Free Trade

A Game of No Rules: The Deceptive Promise of Free Trade

DW (2018)

Film Review

Produced in response to the protective tariffs Trump has enacted, this documentary shows the negative side of globalization and free trade. It maintains that most free trade treaties are one sided and significantly increase inequality. According to the filmmakers, the primary purpose of free trade is to give wealthy countries cheap access to the resources of developing countries.

Most of the film focuses on the  protective (aka “punitive”) tariffs Europe has been using for years to protect their domestic industries from cheap imports. In contrast, most US politicians have rejected protective tariffs in favor of free trade. The result has been the failure of many domestic American industries unable to compete with cheap Asian imports.

The film starts with the example of Germany, which charges punitive tariffs (50%) on imported Chinese bicycle frames. In all, the EU imposes punitive tariffs on 53 Chinese products, including steel, porcelain and ironing boards.

At the same time the EU imposes tough “free trade” treaties on African countries, prohibiting them from enacting protective tariffs to protect their farmers. This allows European countries to dump cheap agricultural surpluses on their economies, putting local farmers out of business when they can’t produce food cheaply enough to compete.

A Game of No Rules argues that local food production should be sheltered (by protective tariffs) in both developing and developed countries and that Third World countries should be allowed to enact protective tariffs while they establish local industries. Prohibiting Third World countries from enacting protective tariffs ultimately creates mass unemployment and a flood of economic refugees to the industrial North.

 

 

David Rockefeller: Billionaire Architect of Corporate Globalization, CIA Coups and US Resource Wars

The Unauthorized Biography of David Rockefeller

by James Corbett (2017)

Film Review

This is a documentary about the late David Rockefeller, billionaire architect of corporate globalization, international free trade treaties (eg TPPA) and most CIA coups and US resource wars of the late 20th century (eg the US war on Iraq). Activists have known for decades that the US is run by billionaire oligarchs – and not Congress and the President. However it’s only with the advent of the Internet and Information Age that we could start to identify who these oligarchs are and how they control our democratic institutions. As in other documentaries, James Corbett does an excellent job exposing these secret levers of power.

According to Corbett, David, the last grandson of oil tycoon J.D. Rockefeller to die (in 2017), principally exerted his influence through foreign leaders he befriended in his role as CEO of Chase Manhattan Bank and World War II military intelligence officer; through his membership in secret round table groups (eg the Council on Foreign Relations, the Trilateral Commission and the Bilderberg Group) that craft foreign policy for all so-called western democracies; the insertion of his high level errand boys (eg Henry Kissinger and Zbigniew Brzezinski) into every presidential administration from Lyndon Johnson on; and the the vigorous role played by Rockefeller-funded foundations, universities, think tanks and media outlets in shaping public opinion.

In 1973, Kissinger (under David’s interest) was instrumental in launching the 1973 CIA coup in Chile to protect Rockefeller mining interests. Via David’s leadership role in the Bilderberg Group, he played a principle role in instigating the 1973 oil embargo (which jacked up oil prices and Rockefeller oil profits, the formation of the Eurozone and the euro and the 2003 invasion Iraq.

The Trilateral Commission, which David and Brzezinski co-founded in 1973, has been largely credited for Carter’s selection as the 1976 Democratic candidate – and (thanks to fawning coverage in the corporate media) his ultimate election as president.

With his five billionaire brothers, David also played a key role in founding the United Nations in 1945 (on donated Rockefeller land). The latter was openly designated the “world capitol” in historical newsreels.

The Myth of Internet Freedom

Stare Into the Lights My Pretties

Jordan Brown (2017)

Film Review

This documentary takes an honest look at the dark side of what they call “screen culture.” The notion that the Internet is “free” is a total myth propagated by the corporate PR industry. The Internet has maximized corporate power more than any other technology, while significantly accelerating globalization.  It also enables government and corporations to spy on virtually every aspect of our lives

The overall premise of the film is that technology never arises in a vacuum. Although falsely portrayed as fulfilling our needs and desires., it ALWAYS serves the ideology and interests of ruling elites who pay for its development. Moreover once people allow new technology into their lives, it changes the way they think.

In Stare Into the Lights My Pretties, neuroscientists express concern about the harmful effect of six-plus hours a day of screen time on concentration, memory, problem solving, empathy and collective awareness.

Far more alarming, though, are the social control aspects of screen culture, all the while masquerading as Internet freedom.

Previously I had no idea of the absolute gatekeeping function of giant monopolies like Google and Facebook in filtering information that reaches individual Internet users. Despite the apparent wealth of information that bombards us via the Internet, the average American is less knowledgeable about US foreign and domestic affairs than prior to the 1990s Internet explosion. This mainly relates to sophisticated algorithms used by Google, Facebook, Yahoo News and even the Huffington Post, Washington Post and New York Times to selectively show us information they think we want to see (based on our clicking behavior).

I suddenly understand why climate deniers are so unshakable in their beliefs. When they search for the term, “climate change,” they end up with a totally different set of articles than I do – thus strongly reinforcing their existing beliefs.

Other more sinister elements of this social control relate to sophisticated behavioral modification techniques that addict us to our screens and to get us to click on specific sites and remain there as long as possible. When we use the Internet, we get confused what the real product is. The real product isn’t the web content we are offered – the real product is us and the massive amount of data collected every time we go online. This, in turn, is sold on to corporate advertisers who use it to entice us to buy their products.

 

 

 

The End of Globalization

From Global to Local: The Making of Things and the End of Globalisation

by Finbarr Livesey

Profile Books Ltd (2016)

Book Review

In From Global to Local: The Making of Things and the End of Globalisation, Finbarr Livesey challenges the common neoliberal claim that globalization is the be-all and end-all of global prosperity.

Livesey’s premise, which he supports with an impressive array of data, is that globalization peaked shortly after 2008 and the world economy is in a period of deglobalization. World trade is slowly declining as a percentage of GDP, and many companies who moved factories to the third world are improving their bottom line by reshoring them to the US and Europe.

Livesey contends that, to a large extent, last year’s vote for Britain to leave the EU and for a US president who promised to withdraw from the TPP and bring back American jobs, merely reflect an economic trend that began nearly a decade ago.

The present deglobalization was triggered by the 2008 financial crash that sucked trillions of dollars out of the global economy. However, Livesey identifies a number of other factors that influence this trend – chief among them the volatility of oil prices and shipping costs (containers must be booked months in advance) and the growing cost of labor in China and neighboring countries. At the same time, technological advances, including 3D printing and “additive manufacturing,” have led to an upsurge in “on demand” industries and consumer frustration with being limited to millions of identical mass produced items.

At present many companies find it more profitable to shorten their supply chain by producing most or all component parts locally or regionally. Between 2010 and 2015, over 1300 companies brought production back to the US. Even Apple and Google have started to reshore significant manufacturing operations.

At present three-fourths of everything bought in the US is made in the US.

Originally published in Dissident Voice

Corporatization, Globalization and Indian Farmer Suicides

Nero’s Guests

Directed by Dhepa Bhatia (2013)

Film Review

Nero’s Guests is about Indian rural affairs journalist Palagummi Sainath and his investigation of farmer suicides (see The Ugly Side of the Fashion Industry) in India and the neoliberal policies responsible for them.

Sixty percent of India’s population depends on agriculture for their livelihood. Sainath has been one of very few journalists reporting on the brutal effect of neoliberalism and globalization on India’s rural sector – where 836 million people live on less than fifty cents a day.

He specifically blames the corporatization of agriculture, which has driven hundreds of thousands of farmers off their land, and “free trade” policies that allow Europe and North America to destroy local markets with cheap coffee, cotton and other commodities. All to increase the profits of a handful of western corporations.

Thanks to “fair trade” provisions enforced by the World Trade Organization, India exports twenty tons of grain a year to feed European livestock at lower prices than India’s poor are charged for grain.

When Indian farmers are driven off their land, they migrate to the cities for jobs that don’t exist. Since the 2008 economic downturn, more than one million urban jobs have disappeared due to “austerity” cuts.

The film provides poignant close-ups of rural families that have lost family members to suicide. These contrast starkly with cameos of Indian celebrities and their condescending superficiality in addressing poverty.

 

Did Global Economic Growth End 15 Years Ago?

According to London Broker, Global Economy is Shrinking

The main premise of Life After Growth: How the Global Economy Really Works – and Why 200 Years of Growth are Over  is that global economic growth has ended. Western governments conceal this fact through debt creation, inflation and clever manipulation of statistical economic indicators. According to Tim Morgan, leading analyst at the London financial brokerage Tullett Prebon, economic growth ended in 2000 and the economy has been shrinking ever since.

Morgan attributes the end of global economic growth to the high cost of fossil fuels.* This is because the real economy (which many people confuse with the financial economy) is a direct function of surplus energy. In pre-agricultural times, there was no energy surplus: human beings derived exactly the same amount of energy from their food as they expended acquiring it. With the advent of farming, they managed to produce a small surplus of energy that enabled a small minority to engage in work other than food production.

In the 18th century the invention of the heat engine enabled surplus energy (and the real economy) to grow exponentially over the next 200 years. Now that the cheap fossil fuel has been used up, our energy surplus is declining. This, in turn, is reflected in the gradual shrinkage of the global economy.

Measuring Surplus Energy

Energy surplus is measured as EROEI (Energy Returned Over Energy Invested), the ratio between the energy produced and the energy consumed in the extraction or production process. 1930s oil fields had an EROEI of 100:1. Once the easily accessible oil was used up, the EROEI began to decline. It was 30:1 in 2000 and it declines by about 2% a year. In 2014 it stood at 14:1. Unconventional oil sources have an extremely low EROEI (eg tar sands and fracked shale oil have an EROEI of 3:1).**

Declining EROEI’s are always accompanied by a spike in oil prices. This translates into higher prices for everything, due to the energy required for food production and manufacturing. Owing to higher prices, people consume less and the economy slows.

Globalization Has Been Extremely Damaging

Morgan is highly critical of politicians who fail to distinguish between the real economy of goods and services and the shadow economy of money and finance. He also feels globalization and rampant consumerism have been extremely damaging to the real economy. The mistake western countries made with globalization was reducing their production without reducing consumption. Instead they increased consumption levels by increasing borrowing and debt. Globalization was extremely beneficial for banks, due to the voracious demand for their product (loans). Meanwhile the diversion of large sums from production to the finance sector – aggravated by consumerism and the rise of consumer debt – hastened the decline of the real economy.

This wholesale debt creation and the widening split between the real economy and the financial economy is largely reflected in inflation and the destruction of the value of money. The US dollar lost 87% of its purchasing power between 1962 and 2012, which the government systematically conceals through misreporting of key economic indicators.

All economies function best when the financial economy coincides with the real economy. At present the primary methods of debt destruction are quantitative easing*** and inflation (it’s always easier to repay debts with devalued money). Other methods in the wings are cuts in pensions and Social Security payments and eventually bank failures and government defaults. Morgan feels that resource poor countries like Japan and the UK are at highest risk for default.

How Governments Lie with Statistics

My favorite chapter details the decades of statistical manipulations that have made government indicators of inflation, growth, output, debt and unemployment totally meaningless. John Kennedy was the first to exclude “discouraged” workers (who weren’t actively seeking work) from the unemployment rate. Johnson was the first to conceal the size of the government deficit by including the Social Security surplus in the federal budget. Nixon was the first to exclude energy and food costs (which rise the fastest) from core inflation calculations.

I was most shocked to learn that 16% of GDP consists of “imputations” or dollars that don’t actually exist. The largest single imputation the US government adds is “owner equivalent” rent. This is an amount equivalent to the rent all rent homeowners would have to pay if they didn’t own their own home. In 2011, this added up to $1.2 billion (out of a total GDP of $12.7 trillion).

The second largest imputation involves non-cash benefits employers give their workers (medical insurance, meals, accommodation, etc) and free banking services.

The US Government is Technically Bankrupt

This over-reporting of GDP, combined with under-reporting of inflation, makes it appear that the US economy is growing when it’s not. .

Morgan estimates that as of 2011 true US debt (government, business and personal) was 449% of GDP. Technically this means the US is insolvent as collective liabilities far exceed any realistic prediction of future income.

Politicians Need to Stop Lying

Morgan maintains that industrialized societies urgently need to living with less surplus energy. Rather than continuing to delude themselves (and us), our political leaders must face up to the reality that our claims on future energy surpluses (aka debt) are totally unrealistic.

They need to end globalization and rampant consumerism and enact policies (support for renewable energy, public transport and strong local economies) that will help people adapt to the new economic reality.

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*Most analysts predict oil prices will return to $100+ a barrel in June 2015, once the US surplus is used up.
**Some other EROEI’s (for the sake of comparison):
• Coal 8:1
• Solar PVC panels 8:1
• Solar concentrating power: 17:1
• Large hydro generation: 22:1
• Small hydrogenation 32:1
• Landfill/sewage gas cogeneration 40:1
• Onshore wind 20:1
*** Quantitative easing (QE) is an unconventional form of monetary policy where a Central Bank creates new money electronically to buy financial assets, like government bonds. This differs from conventional money creation, in which private banks create money out of thin air as new loans (see An IMF Proposal to Ban Banks from Issuing Money).

Also published in Veterans Today