Archive for June 2011
The IMF is once again in the news, with its dire warnings about Greece’s debt and the US deficit slowing down global economic growth. This tedious obsession with “growth” and fiscal management, while all other considerations- such as the nature of that growth, who bears the cost of that growth (e.g. deaths by pollution, climate change or rising food prices), and how the benefits of that growth are distributed- recede from public view, only confirms Joseph Stiglitz’s quip that the IMF is staffed by third-rate economists from first-rate universities.
If, say, Germany’s growth rate drops from 4 per cent to 2 per cent, or China’s from 9 to 5 per cent how does that portend global economic disaster? And why is the fate of banks and creditors of greater concern than the fate of the majority poor of the world?
It is refreshing to turn from these insanities to Susan George’s latest book Whose Crisis, Whose Future? Towards a Greener, Fairer, Richer World (Cambridge: Polity, 2010). George has been a tireless campaigner on behalf of the world’s poor, and she puts many of us to shame by her life-long perseverance. In her latest book she repeats something she said in her first book, How the Other Half Dies, way back in 1976, in a chapter called “What Can I Do?”. Let me quote from that:
“Study the rich and powerful, not the poor and powerless… Any good work done on peasants’ organizations, small farmer resistance to oppression or workers in agribusiness can invariably be used against them. One of France’s best anthropologists found his work on Indochina being avidly read by the Green Berets… Meanwhile, not nearly enough work is being done on those who hold the power and pull the strings. As their tactics become more subtle and their public pronouncements more guarded, the need for better spade-work becomes crucial… Let the poor study themselves. They already know what is wrong with their lives and if you truly want to help them, the best you can do is to give them a clearer idea of how their oppressors are working now and can be expected to work in the future.”
She continues: “We still lack sufficient knowledge of those who make the decisions that affect countless lives and are in a position to manipulate the rules to suit themselves- that is, transnational corporations and banks, international financial institutions, global and regional trade bodies, right-wing think tanks and cultural institutions, major state bureaucracies, the media, and so on.”
For instance, over the decade 1998-2008, the financial services industry in the USA, which includes banking, securities, insurance and accounting firms, spent $5,000 million- yes, 5 billion- on lobbying politicians to do away with inconvenient bits of legislation (such as the Glass-Steagall Act of 1933, which Franklin Roosevelt instigated to separate commercial banks from investment houses like Merrill Lynch). By 2007 the financial industry employed 2,996 people to do nothing but lobby politicians. A report entitled Sold Out: How Wall Street and Washington Betrayed America describes in detail twelve deregulatory measures that financial industry lobbyists were able to push through Congress with the enthusiastic cooperation of the legislators. And the regulating agencies were being paid handsomely by the banks whose products they were asked to assess. It’s hard not to call this corruption. In any other country, it would. But in the US, since it’s all legal, we don’t equate the US with, say, Mugabe’s Zimbabwe.
What did the financial services wrecking crew get in exchange for their $5 billion in lobbying and political contributions? They were allowed to create and trade financial derivative products, subject to no regulation whatsoever. Trillions of dollars were subsequently bet on these exotic products. The commodities markets were also stripped of regulation through the Commodities Markets Modernization Act, allowing unbridled speculation and contributing heavily to food riots in more than thirty countries. Whenever the lobbyists or legislators set out to eliminate an useful law, they called it “modernization” or “reform”.
We have been intimidated for far too long by the pseudo-scientific pronouncements of economists and the lies of politicians. Banking is not so complex that we cannot understand how we are being conned. Where are the Christians in economics and finance who dare to think “outside the box” and write the kind of books that Susan George writes, explaining to “ordinary” folk how not to be hood-winked by the games the rich play?
Here is George’s apt summing up of the reigning economic orthodoxy that is playing havoc with God’s earth and human lives:
“Every cultivated field must produce a maximum without fallow or rest; every worker must be infinitely flexible; every factory must produce at lowest cost or perish; every bank must out-risk its rivals. Hundreds of millions are excluded because they are ‘not productive enough’ or ‘cost too much’. Hundreds of millions more produce and consume so little that they serve little or no purpose in a capitalist marketplace. They are dispensable or worse; their perceived uselessness is nothing but another drag on the system. As far as the rich are concerned, so long as they accept to do so quietly, they can rot. If they protest, they will be dealt with. The rich can do without them. Our societies are stretched financially, economically, socially, ecologically to the breaking point and we have no shock absorbers.”
It is tempting to read Dominique Strauss-Kahn’s alleged rape of a hotel maid as paradigmatic of the IMF’s attitude towards poor nations and their citizens. It is also tempting to see the incident as typical of the abuse and harassment of women that are taken for granted in corridors of power around the world. I shall avoid both temptations, not because I don’t agree, but because they have been explored at length in the world’s press.
What I do find interesting is that while we are repeatedly told how much Strauss-Kahn’s salary was ($420,000 a year) and how much his luxury Sofitel suite in New York’s Times Square cost the IMF ($3,000 a day), I have not come across any report on what the maid herself was earning. We also don’t know her name. All we know is that this nameless maid was a 32-year old single mother from a village in Guinea, living with her child in the Bronx. She is typical of those employed in the world’s luxury hotel industry. These men and women who clean the rooms of the rich, and wait on their tables, are drawn from the global “underclass” and paid minimum wages or less than the minimum. Barbara Ehrenreich, in her best-seller Nickel and Dimed, took an undercover job as a New York hotel maid and showed how the wages were less than livable and the working conditions subhuman. Many are often undocumented – that is, “illegal” workers- and unsurprisingly, some are forced to turn to prostitution to complement their meagre incomes. Yet without such people, the hotel and restaurant industries in the US and Western Europe, not to mention agriculture in states like California and Texas, would collapse.
Last week, I visited the dormitories of so-called “migrant workers” in the city-state of Singapore, one of the ten richest countries in the world. I say “so-called”, because strictly these are not people who have chosen to migrate; they are, rather, those who have been recruited by companies in Singapore from the poorer Asian countries on short-term contracts. They do work, usually in the construction industry and as domestic helpers, that most Singaporeans would shun. Singapore has over a million such workers, forty per cent of the total population. Some are decently housed and well-treated by their companies. But others live in abysmal conditions, such as disused containers which have been turned into shelters and in which 15 workers may be put up in a small cubicle on three-tiered bunk beds. Depression and loneliness are the biggest emotional problem they face. And hordes of Chinese, Thai and Malaysian women are trafficked into Singapore by criminal gangs in order to provide “sexual services” for these workers separated from wives and families for the whole duration of their contracts.
I spoke with workers from India and Bangladesh who have paid huge amounts of money to unscrupulous local agents in order to get these unskilled or semiskilled jobs in Singapore. Their families back home are plunged into massive debt as a result. On a daily salary of $16-20, it will take two years for the principal, let alone the interest, on the debt to be repaid. Most of the temporary jobs don’t last that long. So, once their contracts are over, they have to scramble to find another job. Only then can they hope to start earning.
The injustice in the global labour market needs to be tackled at both ends. Governments in poorer Asian countries need to regulate these local recruitment agencies and negotiate fair wages and legal safeguards with the foreign governments that want their labour. Some economists have argued cogently for a global minimum wage. Why can’t the arguments used by Lord Shaftsbury and others in early industrial Britain against the sacrifice of men, women and children to the idols of profit and economic growth be marshalled on an international scale by Christians and others with a moral sensitivity? The rights of access to affordable medical care, holidays and a living wage are paid lip-service in international charters and conventions.
Conditions in Singapore are probably better than in many other countries (I have seen worse conditions in Dubai, another darling of the West). But given the affluence of Singapore, it is inexcusable that there is no minimum wage in the country. (There are many poor Singaporeans, not only migrant workers). The answer usually given by politicians is that it will make Singapore “less competitive” in the global market. That is the identical argument given to justify slavery in eighteenth-century Britain and the nineteenth-century American south.
My host during this tour was a small group of volunteer Christian doctors who offer free medical clinics to migrant workers. They also recruit volunteers, including students, to give English classes, and provide legal aid and counselling. (See http://www.healthserve.org.sg). Given the enormous wealth of the Christian church in Singapore, and the huge numbers of Christians serving in government, the judicial system and medical professions, it is tragic that these doctors and helpers struggle to find financial support and people willing to advocate for the rights of these workers on whose backs the rich make their money. Churches raise millions of dollars to send their members on so-called “mission trips” to poor Asian countries, but seem indifferent to the suffering and injustices on their doorsteps.