slavery's ground zero

I have been spending the holiday season in Richmond, Virginia, my first trip to the former capital of the Confederate States of America and my first trip to the U.S. South in almost 30 years. Before I came to Richmond, I had not thought much about the significance of the trip from an international development perspective, but for the past week I have not been able to avoid it. The reason is simple: in one of my early first year lectures I focus my attention on the role of slavery in facilitating the rise of industrial capitalism in Europe and the United States, and Richmond is the ‘ground zero’ of the American slave trade.

The U.S. stopped the international trade in slaves in 1808. It was Virginia’s slaveholders that stepped in to replace international trade by transforming Richmond into one of the biggest, if not the biggest, slave markets in the U.S., particularly in the neighbourhood known as Shockoe Bottom. What Île de Gorée in Dakar, Senegal, is to the slave trade from Africa, Shockoe Bottom is to the slave trade in the U.S. Owners of slaves from Virginia plantations brought them into Richmond to sell to owners developing new plantations in the Deep South. As a result, between 1808 and 1865 anywhere between 300000 and 3500000 slaves were sold out of Richmond’s slave markets. Considering that in 1865 the African-American population of the U.S. stood at around 4 million, this means that today hundreds of thousands, if not millions, of African-Americans can today trace their ancestry back to the slave markets of Richmond.

However, slavery in Richmond was not only about securing unfree labour for agricultural export production from the South. It was also about ‘developing’ the economy of a Virginia witnessing declining soil fertility and a decaying agrarian economy. Granted, a large proportion of Richmond’s slave population worked as ‘domestics’. Nonetheless, the development of industrial capital in Richmond—a legacy that can still be witnessed today—was predicated upon unfree slave labour. Hired slave labour was an important part of the work force at the Tredegar Iron Works, and the other iron foundries, that provided the industrial basis of the Confederacy’s attempt to sustain the class power of agrarian elites. Hired slaves also dominated the labour force in Richmond’s tobacco industry, performing the hard, back-breaking work needed to process tobacco. Finally, slave labour was necessary to create and maintain Richmond’s transportation networks. Unfree labour worked on the construction of the James River and Kanawha Canal, the first canal in the U.S., while crews of slaves, alongside free African-Americans, made up the bateau crews that navigated cargoes into Richmond.

The truth is thus that the history and development of Richmond, like the United States as a whole, and indeed the North, was, to a large extent, built by slave labour. As I try to argue in my lecture on colonialism and slavery, a convincing case can be made that industrial capitalism in its infancy required slavery in order to gain economic ascendency in the North. Capital was built, initially, on slavery.

This reality demands two final comments. The first is that slaves incessantly resisted their unfree status. Richmond paradigmatically illustrates this. Following the Haitian Revolution of 1792, the first major slave revolt in the south was led by a 24 year old slave named Gabriel (often, incorrectly, named Gabriel Prosser), a deeply Christian blacksmith. In 1800, disgusted by the slavery that bound him, Gabriel made plans to take the city of Richmond by force. By August of 1800 Gabriel had thousands of slave supporters and had secured a cache of weapons, including guns. Gabriel’s plans came to naught: he was betrayed by two of his ‘followers’ and, moreover, on the day of the planned revolt, the bridges into Richmond were destroyed in a flood. The Virginia militia attacked Gabriel and his thousand followers the next day; they were captured, and he and his followers were hanged. Gabriel’s revolt, little acknowledged outside African-American historiography, was the closest the U.S. came to a home-grown slave-led revolution.

The second comment follows from the fact that Gabriel’s revolt is little acknowledged. The history of capitalism’s development, and our globally-privileged life, is predicated upon slavery; yet this is not discussed, freely and openly. Our lives are built on a hidden history of power and privilege, a transcript that needs to be revealed and confronted if the poverty that stalks the world is to be eliminated.

Postscript: It should be acknowledged that Richmond was, in 2007, the first city in the U.S. to formally apologize for slavery. In mid-2008 Gabriel was informally pardoned by the Governor of Virginia. In late 2008, in the Shockoe Bottom area, a Slavery Reconciliation Statue was unveiled. These acts, which are about revealing a hidden transcript, do not come about autonomously, but as the result of citizens seeking to reclaim history. Such acts are a precondition of further, deeper social change.

remembering Samuel Huntington

Samuel P. Huntington, one of the most influential and important American political scientists in the field of international development studies, died on Christmas Eve at the age of 81. Huntington embodied the contradictions of the U.S. intelligensia towards international development: a lifelong Democrat, with ideas that many of his friends and colleagues considered quite liberal, and an ability to move between the academic and the political world, he nonetheless throughout his life articulated a set of ideas that apologized for the powerful and accommodated authoritarianism.

Huntington's first book, The Soldier and the State: The Theory and Politics of Civil-Military Relations, published in 1957, was still required reading when I was an undergraduate. In it, Huntington argued that the U.S. had to protect conservative military institutions and individuals because they in turn protected the U.S. from the foibles of human nature: 'irrationality, weakness and evil'. The argument was developed in relation to the U.S., but it was one that could be used more broadly, in both developed and developing societies. However, it was, in effect, an ideological apology for what Eisenhower had called 'the military-industrial complex': the economic fractions that dominated U.S.--and hence global--capital and shaped a set of hegemonic ideas that sustained their own power.

These ideas were further crystalized in Huntington's Political Order in Changing Societies, published in 1969. In this hugely important book, Huntington argued that international development had not taken place in the South because of a lack of political 'order'. 'Order' mattered, and not the character of the political governance: and thus, for the good of 'development', the U.S. could support authoritarian dictatorships such as those in South Vietnam, Zaire, Iraq and beyond because they brought 'order', which was more important than 'democracy' (however defined). These were the ideas that had allowed Huntington to advise the unsuccessful presidential campaign of Democrat Hubert H. Humphrey in 1968, a campaign that was, in part, based upon ensuring that the Vietnam War was continued until military victory was ensured--and 'order' established.

Huntington will, however, be best remembered for 1996's The Clash of Civilizations and the Remaking of World Order, which argued, well before the September 11 attacks, that differences in history, tradition, language and religion would be the cause of wars to come. Huntington asserted that these differences were particularly evident in the 'continuing and deeply conflictual relationship between Islam and Christianity'. He also asserted that these differences would produce essentially unresolvable conflicts that would continue until one side had secured victory. In essence, Huntington was arguing that as a consequence of this 'clash of civilizations' one side would have to impose order on the other. He was thus providing the intellectual justification for the invasion of Afghanistan and, before the mistruths of the Bush Administration were revealed, the invasion of Iraq.

Samuel Huntington was extremely influential in the world, even if few have heard of him. He provided the intellectual justification for the imperial misadventures of the early 21st century, just as he provided the intellectual justification for the imperial misadventures of the 1960s and 1970s. He was, in the sense of Antonio Gramsci, an organic intellectual of the ruling class: an individual who propogated a set of ideas that shaped the way people think and facilitated their willingness to accede to the deployment of class power, no matter how much it was not in their interest and no matter how relentless it might be.

more on the case of Omar Khadr

As a followup to my weblog entry of 27 October, it is worth highlighting the fact that Lietunant-Commander Bill Kuebler, who is part of Omar Khadr's U.S. government-appointed defence team, last week tried to have entered into evidence at Omar Khadr's military commissions hearing at Guantanamo Bay photographs of Khadr buried under the rubble of a collapsed roof at the time he was supposed to be throwing a grenade that killed a U.S. soldier. The judge at the hearing, Colonel Patrick Parrish, banned Cdr. Kuebler from showing the photographs. Asked why Col. Parrish banned the photographs, Cdr. Kuebler said: 'Because they show he's innocent'.

There has been no response from the Canadian government to these photographs, which have been known about for a year.

senseless sacrifice

On 5 December 2008 a grisly milestone was passed in Canada's war in southern Afghanistan: the 100th solider to be killed died as a consequence of a roadside improvised explosive device.

This weblog has previously argued why the war in Kandahar being fought by Canada's army is a mistake. Canada is not 'fighting global terrorism' or sustaining 'peace in Canada', as the Canadian government has suggested. It is fighting local Pakhtun tribesmen who see the Canadians as a foreign occupying force. Moreover, the local Pakhtuns are becoming increasingly sophisticated in their ability to fight, having won a number of set-piece battles in both Kandahar and neighbouring Helmand province. Fighting in Afghanistan in general, and southern Afghanistan in particular, is getting heavier, not lighter, as time goes by, and more, not fewer, foreign soldiers are dying as more and more of the country falls out of the control of NATO forces. Increasingly, NATO military commanders suggest that the war is not about winning, but about containing an acceptable level of violence. Indeed, given the deep unpopularity of the massively corrupt government of President Hamid Karzai, a former friend of the U.S. Central Intelligence Agency, even achieving an acceptable level of violence may be a difficult, if not impossible task. Insurgents now target heavily-guarded areas of Kabul, the previously safe capital, and increasingly international non-governmental organizations are being targeted.

It is, without a doubt, true that Afghans have better access to health care, to education, and to economic opportunities than was previously the case. However, it is also true that much of the country remains desperately poor, and is unlikely to see its prospects improve during the next 15 years. Hunger is widespread. Finally, of course, there is death: we have no idea of knowing how many Afghans have died during the war (I have seen numbers of around 13000 bandied about), but we know that many that have died have died at the hands of the occupation forces, by accident. Wedding parties have been bombed, drivers have been shot, goat hearders have been strafed. A recent attack in Shah Wali Kowt in Kandahar killed 3 dozen villagers. The price of a life in rural Afghanistan is just under US$2000--that is what the U.S. government pays in compensation for the death of an innocent bystander in the countryside. Those who are injured typically get paid around US$140.

It is the death of innocents, along with tribal grievances, that drives the insurgency--as I forecast would be the case in October of 2001. For many--most?--rural Afghans, NATO forces are no different than the Soviet occupiers of the 1980s; indeed, in some instances, the Soviet occupation is viewed more positively than the NATO occupation, for the government was more coherent. Let us hope that it does not take another 100 dead Canadian soliders to make the government realize this.

recent activities fall 2008

After a wet summer, the first few days of the Fall Term have been extremely pleasant: a fine way to commence the 2008 - 2009 academic year.

In addition to teaching my regular courses at Trent University, Human inequality in global perspective and Agrarian change and the global politics of food, this fall will see me very busy, in terms of research activities. I will continue to work on the draft of my next book, Hungry for Change? Farmers, Global Food Crisis and Agrarian Questions. I have a book chapter, on gender and development, to complete in due course. I also have a commissioned paper for the Journal of Agrarian Change, and a number of book reviews that I have promised. Finally, in October I will be delivering a paper on global food insecurity and the agrarian question to a conference at the University of Manitoba.

Administratively, the new International Advisory Board of the Journal of Peasant Studies, of which I am a member, will assume their duties in the fall, and I will take part in executive meetings of the Canadian Association for the Study of International Development and the Canadian Journal of Development Studies.

I expect that I will be working flat out through the fall.

a possibility of hope?

It has been my unfortunate experience, too many times in my life, to be judged by my name, my (apparent) ethnicity, and even (less apparently) the colour of my skin. I rarely think of myself in those terms, although the reality of my origins are an important part of who I am, of what I have chosen to do, and of how I have chosen to do it. Those origins help explain why, for me, the election last night of Barack Obama as the 44th President of the United States was very emotional.

I have reached the time in my life when I am aware that I have lived through history. I recall, vaguely, Dr Martin Luther King. I recall, vividly, when he was assassinated. I recall, too, from a very early age, being aware of apartheid (I had a special loathing for John Vorster), and of the white-minority regime in what is now Zimbabwe, led by Ian Smith. I remember being aware of the fact that while I was in my teens in some parts of the world if I had wanted to go out with someone who was white it would have been against the law--just as it would have been for my parents if they had lived in another country. Indeed, one of the reasons that my parents opted to immigrate to Canada was because of the history of segregation in the US (along with the ongoing Vietnam War). I remember the Soweto uprising, the horrors of the South African military gunning down schoolchildren, but also the acute knowledge that had I been living in South Africa at the time I would have been told the places where I could live, just like those living in Soweto. I remember the violence in the northern US around school busing and the efforts--sometimes for better, sometimes for worse--to integrate schools. I, of course, marched--and marched!!--and marched!!!--for the release of Nelson Mandela, and consider myself extremely fortunate to have met, albeit briefly, Oliver Tambo. I remember when Nelson Mandela finally walked free: the world stopped, and marveled. Walls indeed can come tumbling down, and the impossible is possible.

This is how I feel about the election of Barack Obama. In the global struggle for dignity, equality and social justice, we as humanity have taken a tremendous step forward. By electing a young African-American from an impoverished single-parent background to replace a deeply unpopular plutocrat from an aging political dynasty, the voters of the United States have struck a blow for equality for all of us. It is an event that will reverberate throughout this century. As I said to my son yesterday, one day someone will ask him: 'Where were you when Barack Obama was elected?'

Barack Obama is not capable of fulfilling the tremendous aspirations that the world has placed on his shoulders. For many--especially those energized by political advocacy for the first time--there will be, in all likelihood, a moment of near-transcendental disappointment, when they come to the realization that, in the cold light of day, Barack Obama is an American politician. For Obama is not going to fundamentally transform American society, let alone global society. This was never part of his political agenda. He is going to govern the United States from the political center, very competently, but also very pragmatically. The evidence for this is demonstrated by his already well-established transition team, and the host of economic advisers that he has surrounded himself with. As President, then, he will resemble, somewhat ironically, a more decent, more efficient, and more effective version of former US President Bill Clinton.

However: Barack Obama will not forget that his grandmother lives in a rural village in Kenya and lacks both electricity and clean water. He will not forget that he went to an Islamic school in Indonesia and had a lot of friends there. He will not forget that it was social provisioning and public support that allowed him to realize that his aspirations were achievable. He will not forget the empty lives that he saw while working on the South Side of Chicago. Barack Obama will, within the constraints of the political economy within which he is enmeshed, try and make a difference; the extent to which he actually succeeds remains to be seen, for the constraints of the US political economy are indeed strong, especially now that US finance capital is in crisis.

So, while the election of Barack Obama is an event that could and should bring both joy and hope to billions of people around the world, the world has not been transformed by his election. Rather, his election brings the possibility of transformation that little bit closer. It is a transformation that will--and must--come. This morning, more than yesterday morning, there is a possibility of hope.

In Age of Extremes the great British historian Eric Hobsbawm accurately described the 20th century as being 'short', having lasted from 1917 to 1991, the life of the Soviet Union and the world that it ushered in. As the great British comic Eddie Izzard said last night, '4 November 2008 is the first day of the 21st century.'

how do you feel about human rights?

Here in Canada the discourse of human rights is ever-present. My own University has a senior management appointment that has the specific task of ensuring that people's human rights are respected. People up and down the country expect that their human rights will be observed. Yet Canada's record on human rights is not what it appears. The 'war on terror' has produced several significant cases of Canadian complicity in quite profound human rights abuses. To my mind, however, none is more damning than that of Omar Khadr.

Born in Ottawa, Omar Khadr was captured in Afghanistan by U.S. forces on 27 July 2002, having been moved to Afghanistan by his family in 1996. He was accused of killing a U.S. soldier, and, following his capture, was transferred to Guantananamo Bay in Cuba. He has been there ever since.

Omar Khadr must define one's attitude to human rights. This is the case for 2 reasons. First, because Khadr was only 15 years old when he was captured by U.S. forces (having been shot 3 times): Khadr was taken to Afghanistan by his family when he was 11, and thus had no say in the matter. Second, Khadr comes from a family that quite openly proclaims their support for anti-Western Islamist fundamentalism, and thus falls within a category that many people would find deeply disagreeable.

The key question in Omar Khadr's case is whether a minor can be held responsible for their supposed actions. The U.S. government thinks so; it argues that as Khadr turned 16 in Bagram base in Afghanistan, after his capture, he can be treated as an adult. As a consequence, he has been treated to the standard techniques used by the U.S. military in dealing with 'terrorists'. The digital footage of Khadr's interrogation is pretty harrowing. He comes across as a frightened boy that is clearly out of his depth with the circumstances that he is facing. From this footage, there can be little doubt that by any stretch of the imagination Khadr has been fairly systematically physically abused at Guantananamo. Moreover, there can also be little doubt that Canadians that visited Khadr in Guantananamo saw the evidence of abuse and did nothing about it.

Omar Khadr is the last citizen of a Northern country to be held at Guantananamo. He is still there because the Canadian government's position on Omar Khadr is that he has to go through the 'legal' processes put in place by the U.S. government. The fact that it has been 3 years since he was charged and that his 'trial' (under a format that has been globally condemned) has still not begun however makes one wonder how meaningful are these processes. Moreover, if found guilty, he faces life in prison. Khadr is now 22.

Imagine: a kid is indoctrinated by his family. He is shot. He is abused while in custody. He spends almost a third of his short life in a legal limbo and faces the prospect of spending the rest of his life in prison. I don't know Omar Khadr, and I don't know for a fact what he has or has not done. However: what he has or has not done is irrelevant. Omar Khadr's fundamental human rights have been systematically abused from the time he was a small boy.

Anyone who claims to believe in human rights and who does not support the immediate return of Omar Khadr to Canada is a hypocrite.

dead economists for new times

It really is quite remarkable who the financial and political elite have turned to in order to understand the ongoing crisis. Two economists stand out: John Maynard Keynes and Karl Marx.

As my good friend Ardeshir Sepehri of the University of Manitoba pointed out, in order to understand the times, one would do very well to read Chapter 12 of Keynes' General Theory of Employment, Interest and Money, written in 1936. Indeed, as Keynes wrote in 1933, in the absence of state intervention to save capitalism from its tendency towards crisis, one could expect

'the progressive breakdown of the existing structure of contract and instruments of indebtedness, accompanied by the utter discredit of orthodox leadership in finance and government, with what ultimate outcome we cannot predict'.

The U.S. government, and in particular Treasury Secretary Hank Paulson, along with the U.K. Prime Minister, Gordon Brown, have rediscovered the virtues of Keynesianism after being strongly involved in the deregulation that got the world into this mess in the first place.

French President Nicolas Sarkozy has been doing slightly different reading, stating that 'we need to found a new capitalism, based on values that put finance at the service of companies and citizens'. He reached this conclusion apparently reading Das Kapital volume 1, which some people spotted him reading last week.

Marx understood the mysteries of finance, writing

'To the possessor of money capital, the process of production appears merely as an unavoidable intermediate link, as a necessary evil for the sake of moneymaking. All nations with a capitalist mode of production are therefore seized periodically by a feverish attempt to make money without the intervention of the process of production'.

We have been so seized! I suspect that these two political economists will be read a bit more carefully in the next few months than they have been in the last few decades. At stake: the need to end the de-politicization of money, which has been underway for 60 years, and which has allowed, in an ever increasing way, for government and finance to become increasingly separated. Although this de-politicization took place in the name of Keynes, he would never have subscribed to it; and, of course, Marx would only have seen it as the logical outcome of an increasingly irrational economic system.

is neoliberalism finished?

Readers of this weblog will know that the global financial crisis of the past 3 weeks has, in my view, fundamentally changed the landscape of global capitalism. A world that was effectively born on 4 November 1980, with the election of Ronald Reagan as U.S. President (I was in San Francisco at the time) has ended, and a period of untrammelled global neoliberalism will have to change if global finance capital is to survive.

How much has the world changed? Consider this. In the United Kingdom, where, of course, London is the second most important financial center in the world, the Royal Bank of Scotland, one of Britain's most important financial institutions, will soon be 57 per cent owned by the British state. It is also expected that the British state will own up to 40 per cent of the newly merged (and so far unnamed) Lloyds-TSB-Halifx Bank of Scotland combination, which is also one of the largest and most important British financial institutions. The British state already owns Northern Rock and Bradford and Bingley, specialist mortgage lenders that overreached their market niche and paid the price. In other words: the British state, which was one global center of the de-regulating neoliberal project, now is steering some of the most important components of British finance capital. Consider also another paragon of neoliberalism (indeed, as a consequence of the Wassenaar Accord, possibly the earlist adopter of neoliberalism in the North: the Netherlands' state owns the Dutch rump of ABN-AMRO and Fortis Nederland, two of the three biggest banks in the Netherlands. Again: the Dutch state is steering the most important components of Dutch finance capital. Examples of this degree of state intervention in finance capital abound in the North: in Germany, in Belgium, in Denmark, in Ireland, in Italy, in Iceland and, in all places, in Switzerland. The most significant intervention, of course, is the one that I have saved for last: the U.S. state owns 79.9 per cent of AIG, which at one time was the largest insurance company in the U.S., and as a consequence of the policy moves made by the U.S. Treasury on Monday will soon own significant shares in nine major U.S. financial institutions, including Bank of America (with which one-half of all U.S. households does some kind of banking), Citigroup, Wells Fargo, Morgan Stanley, Goldman Sachs (former firm of the U.S. Treasury Secretary), J.P. Morgan and Merrill Lynch. This is a consequence of their agreement to take part in both the Treasury’s ‘voluntary’ capital purchase programme--which was nothing of the sort, which U.S. finance given no choice by the state--and the Federal Deposit Insurance Corporation’s guarantee programme of senior bank debt and assorted deposit liabilities.

The world has changed; the state has acted to save capitalism, just as it did in the 1930s, and where this will lead is very difficult to know.

some 3 weeks!

The past 3 weeks have been a period of intense scholarly activity for me; a period that has deeply reminded me why I do the work that I do. Indeed, I would go so far as to say that they have been the best 3 weeks, professionally speaking, since I returned to Canada after an effective absence of 25 years. Set against the backdrop of a deepening global financial crisis, and the effective collapse of neo-liberalism, I have been fortunate to be able to engage with a number of leading intellectuals in the field of international development, and this has left me remarkably refreshed.

Three weeks ago I attended the inaugural Development Studies Seminar at York University, organized by my old friend and colleague Sharada Srinivasan. My former colleague at the Institute of Social Studies, Jan Nederveen Pieterse, delivered an outstanding talk on transnational cultures and 'deep culture'. Now at the University of Illinois-Urbana Champaign, Pieterse is a major international figure in post-development thinking, and I must confess that, in this light, I was surprised by how few academics from York University attended his seminar.

Pieterse argued that throughout history relations between cultures has paid attention to difference, rather than the commonalities that he terms deep culture. However, increasingly global communities now articulate their differences in terms of a common global transnational culture, which allows a shared deep culture to come to the foreground, creating, in effect, a global multiculture that balances sedantary cultures, non-place bound culture, and increasingly mobile flexible acculturation. Pieterse reflected afterwards on the place of violent conflict in the processes he described, with violence seen as a means of locating oneself within a transnational culture. Pieterse's seminar was very, very good; and later in the evening we enjoyed our first meal together in a decade, reflecting upon life in the North American academic environment, changes in European society, and his reflections upon U.S. society, as well as, of course, his current thinking on international development issues.

One week later I had dinner with Diane Elson, Professor of Sociology at the University of Essex and one of the world's outstanding feminist economists. The former Chief Economist for the United Nations Development Fund for Women (Unifem), I am privileged to be able to call Elson a friend (I hope!), for along with a sharp and critical intellect she has a remarkably inclusive and open approach to intellectual engagement (something that she shares with another great feminist economist, Nancy Folbre). We had no agenda, per se, but nonetheless had a lively discussion on the role of the International Monetary Fund in Africa, on the Gender Team within the United Nations Development Programme, and on (again!) the North American academic environment. Elson has been actively engaged recently in a major, and important, intervention in international development studies, the creation of a master's degree in gender and economics at Makere University in Uganda, and this we also discussed.

Five days later the Department of International Development Studies at Trent University hosted the first David Morrison Lecture in International Development, and Professor James C. Scott of Yale University, whom I have read for decades but whom I had never met, delivered an outstanding address on globalization and the relationship between the 'vernacular' and the 'official'. Scott described how the state seeks to standardize society by creating national systems of taxation, legal codes and land rights, language and names, and even weights and measures, and that this follows a logic of control, manipulation and management over populations. He then went on to argue that the 'Washington Consensus' represented an international effort led by the International Monetary Fund, the World Bank and the World Trade Organization to standardize the world’s economies even though it was itself a vernacular approach of 19th century North Atlantic world. Hence, globalization is a vernacular that is presented as a universal.

Following Scott's lecture there was a very good open discussion, and this discussion continued amongst colleagues in the Department into the second U.S. presidential debate, and indeed on into the next day. Along the way I learned a great deal about Southeast Asia, the United States, and Scott's own intellectual development.

Two days after the Scott lecture I attended the University of Manitoba's Global Political Economy Group conference on the world food crisis. The Keynote Speaker at the conference was Professor Utsa Patnaik of Jawaharlal Nehru University in New Delhi, India, one of the world's most formidable political economists. I had not seen Professor Patnaik in more than 14 years, and she delivered an important address on the contemporary food crisis, arguing that it witnessed the articulation of 3 contemporary contradictions: of food versus feed, of food versus exports, and of food versus fuel. She demonstrated that the structural causes of the food crisis lie in the increasing indirect demand of Northern consumers for grain, in the form of the meat that they consume. She demonstrated the fallacy of free trade and comparative advantage, explaining how the drive to export, imposed as a consequence of the 'Washington Consensus', was predicated upon the compression of demand in the South, a compression that directly contributed to rising poverty and inequality. She also explored the geopolitical ramifications of the quest for agrofuels.

The excellence of this lecture paved the way for a great conference; I was particularly moved by Fred Tate of the National Farmers' Union, who explained how corporate agribusiness was driving farmers out of farming. The conference also allowed me to catch up with old friends from the Department of Economics at the University of Manitoba, Canada's outstanding heterodox economics department: John Loxley, Robert Chernomas, Ardeshir Sepehri and Fletcher Baragar. Much of our time was spent discussing the financial crisis, as last weekend was the watershed of it, with the Canadian dollar collapsing on Friday along with global stock markets before UK Prime Minister Gordon Brown saved the day by beginning a process in which national governments around the world assumed partial ownership of a number of major banks, in order to recapitalize them and thus inject liquidity into the global financial system.

As I have also been teaching my full load at Trent University during this period, it has been a very tiring, but also quite exhilirating, time. I have learned a lot over the last 3 weeks, and am extremely fortunate to be in a position where I can continue to learn, from new acquaintances, old colleagues, students and friends.

activist burnout

People who study or work in international development studies often tend to start from an action-oriented, activist and advocacy perspective. Yet later, they can appear to either become more bureaucratized, or disappear from the scene altogether. There are, in my view, 3 simple rules to trying to sustain an activist life:

1. keep your goals small and feasible, not large and impossible;
2. make sure that you have a life outside of your activism;
3. understand that while your choices matter, being an activist is not the same as denying yourself some of the elementary pleasures that this short life has to offer.

Keep activism grounded in the real world, and one's own real world needs, is how to avoid burnout.

regime change for global finance capital

My undergraduate students commonly seem to think that the world doesn't change very much. Yet last week, between 14 September and 18 September, the world changed in quite dramatic ways. The era of free market fundamentalism, ushered in globally with the election of Ronald Reagan on 4 November 1980 and the continuing tenure of then-US Federal Reserve Chairman Paul Volcker at the time, has, without doubt, come to an end. It was, as Mohamed El-Erian, chief executive of the bond fund manager Pimco, said in the Financial Times, 'regime change'. Nouriel Roubini of New York University put it this way in The Globe and Mail: 'this financial crisis signals the beginning of the decline of the American empire'. To adapt the words of Gil Scott Heron to fit the times, the revolution was televised on MSNBC; but many people missed it.

The origins of the events last week have been well-rehearsed in previous entries on this weblog. The US financial crisis has multiple origins, but two dates stand out. Eight years ago Alan Greenspan, the former Chairman of the US Federal Reserve, argued that over-the-counter (OTC) derivatives, the contracts between banks, insurance companies and other non-bank financial firms, should not be subject to US government regulation. As a consequence, OTC derivatives have not been subject to oversight by the Commodities Futures Trading Commission. A year later, in 2001, the same Alan Greenspan started cutting US interest rates in the wake of the September 11 attacks. Greenspan's role in these two events, in that they laid the groundwork for the creation of a huge speculative financial bubble amongst global finance capital searching for profits and households searching for livelihood security, has meant that the man who was once the hero of global finance capital is now a man whose reputation stands, at long last, in tatters.

As US interest rates went lower, US mortgage providers started to look for new markets for their products: and the principal market turned out to be cheap mortgages that could be offered under the low-interest rate regime to people that, for various reasons, could never before in their life have thought about owning a home. The result: too many Americans started buying homes (and, through re-mortgaging, other big purchases like cars) with loans that they could not afford. These mortgage providers then 'bundled' these mortgages together, and sold them to investment banks, who started to repackage the mortgages into a set of increasingly arcane products that could be sold to investors such as non-bank financial institutions looking for 'safe' products with a better rate of return than that offered by 'conventional' investment products such as US government bonds.

In doing this, the investment banks started entering into a world in which they had little experience. Moreover, in order to continue doing this business, investment banks and other non-bank financial companies (like American Insurance Group [AIG]), who do not have deposits that they can tap into as an inexpensive source of money, depended upon continually securing short-term loans from other financial institutions, which they would secure by using the assets that they held--the 'bundled' mortgages. Investment banks and non-bank financial institutions were thus borrowing against assets that were ultimately held by less-creditworthy consumers. In essence, the investment banks and the non-bank financial companies that bought their products were counting on home prices continuing to rise, and thus that the holders of the mortgages being able to meet their debt obligations; the financial alchemy behind the crisis sees finance capital shuffling risk like a juggler keeping balls in the air, while all the while not really understanding the complex products--and obligations--that they were peddling. Indeed, as John Gapper writes in the Financial Times, it was as if finance capital had become addicted to complexity.

The house of cards started to collapse last year, when American mortgage holders who had been paying sub-prime interest rates suddenly found out that, as a consequence of the terms and conditions of their mortgage, their interest rates ratcheted up, and they were now paying far, far more in repayments than that for which they had budgeted. They couldn't afford it; and a wave of foreclosures followed. US house prices of course started to tumble; and the investment banks and non-bank financial companies were left holding bundled complex financialmort products predicated upon bundled mortgages that no one wanted to buy. These are the 'toxic assets' that people talk about now: bad loans rooted in the decision of US mortgage providers to provide home loans for consumers that were not adequately solvent, with such loans being then converted into bonds and other securities and being traded in a way that, in effect, spread their poison throughout the financial system. As a result, finance capital increasingly had trouble securing the short-term loans that they needed to stay afloat; and thus, for many companies, a crisis of liquidity opened up, as they became unable to borrow to meet their day-to-day needs. This was the background to last week's events, a process that had been unfolding slowly for more than a year.

One irony of recent events was that the American financial system's liquidity crisis took place in a world awash with money. The excess savings of China and other Asian countries, as well as that of the petro-economies, means that globally their is lots of money sloshing about (it is very fortunate for the US that China is not prepared to sell its holdings of US government Treasury bills and bonds; were such to happen, the crisis would be infinitely worse, becoming, no doubt, one of global capitalism). However, increasingly, US investment banks and non-bank financial institutions had a difficult time accessing that money as the awareness of their toxic assets grew. Growing legions of sovereign wealth funds, who at first seemed the most likely corporate partners to solve the crisis, balked when confronted with the true extent of what was going on; hence, the Korea Development Bank walked away from Lehmann Brothers, sealing its fate. In this way, overleveraged US finance generated the foundations of an economic panic amongst global finance capital.

Last week was one of high drama. After the rescue of Fannie Mae and Freddie Mac the previous week, the US government ended up guaranteeing almost half the mortgages in the US. However, the fun really started on Sunday, when Lehmann Brothers (founded 1850) collapsed and Merrill Lynch (founded 1915) was forced to welcome being bought out by Bank of America at a fraction of the stock market value that it had been worth just weeks before. AIG then required a stringent loan of US$85 billion (with the effect that the US government owns one of the largest insurers in the world). Financial markets started to panic. On Wednesday, the 'flight to safety' was so severe that the interest rate on one-month US Treasury bills turned negative, meaning that finance capital would rather lose money holding a safe asset than invest in financial markets awash with unforeseen toxic assets. The yield on three month Treasury bills that day was 0.02 %, the lowest rate since 1941, before the entry of the US into World War Two. Global finance capital was running for cover.

On Thursday and Friday, the US Treasury had no choice: with the financial system threatening to seize up, the world's central banks pumped US$180 billion into global money markets, the US government pledged US$50 billion to guarantee money-market mutual funds, US Treasury Secretary Hank Paulson unveiled a plan to mop up toxic assets with government money, and in both the US and London the short-selling of stocks is halted. In effect, the US government has socialized the US financial system, to deal with toxic assets whose worth has been estimated to be anywhere between US$500 billion and US$1 trillion. Of course, many of these assets will be sold at a fraction of the value; nonetheless, the cost of this socialization of US finance will run into the billions of dollars. The US government acted to save American finance capital.

Perhaps of all varieties of economists a Marxist economist would understand the causes of the crisis best. US finance capital has become increasingly divorced from the real economy where goods and services are produced. As such, it is increasingly having to slice and dice ever smaller amounts of the surplus value that is produced in the real economy and then redistributed from the productive economy into the financial sector. As it has to slice and dice, it was finding ever-more esoteric ways of trying to make money on top of an asset base that was not fundamentally changing. It was, in effect, a massive Ponzi scheme, and was bound to come crashing down.

Many things are going to change for global finance capital as a consequence of the past week. No doubt other financial institutions may fail. Investment banking is, as a business, finished, and global finance will start to shift back towards using assets based in the real economy as the basis of its activity. Thus, the market for credit derivatives is also finished, for now, and if it is revived, it will be very, very different. There is also little doubt that for the next little while the ability of consumers and firms to access credit will be heavily constrained; the US government has seen its public debt increase substantially with the socialization of US finance, which suggests that increases in US interest rates will be forthcoming, with implications for economic growth in the US economy, because it is so heavily reliant on debt, and for the rest of the world, because it is so heavily reliant on the US economy.

However, the most critical outcome of this past week is that the era of free market fundamentalism, in which is was believed that the system would work best if left to its own devices, has drawn inexorably to a close in the home of capitalism, the US. If the US government believes the only way to save finance capital is to nationalize assets on a scale greater than that witnessed in Russia under Vladimir Putin, then the era of free market capitalism is finished.

We should not be surprised. This past week has highlighted the fact that in deregulated financial markets market-based outcomes are not necessarily the best for society. If they were, there would have been no need for the socialization of US finance. Those who participate in markets are often motivated by private and professional greed, and will try and do what they can get away with, even if regulatory laws are in place. The financial bubble is a clear demonstration of this greed: financiers chased their astronomical bonus payments, and households jumped at the chance to buy something valuable--their homes--that they never thought they could afford because the mortgage providers told them they could afford it. As Adam Smith said, 'people of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public'. Today, Smith might put it thus: markets cannot be trusted to work in the public interest, because they are a function of the legal and social environment within which they are created, and that environment may encourage actions that are detrimental to the public good in the pursuit of private profit. That has happened, recklessly, in the US over the past 5 years. The truth of Smith's insights have once again been revealed this past week.

elections (III): Canada

According to polling done for the CBC just before Prime Minister Stephen Harper asked the Governor-General to issue the writ to dissolve Parliament and have an election on 14 October 2008, the three most important issues on the minds of Canadians were: 1) healthcare; 2) the environment; 3) the economy.

Fourth on the list, being of most concern to only 5% of those polled, was the Afghan war. This is, to my mind, very disappointing. My reasoning here is fairly straightforward: in an election a country can consider those issues that affect the citizens of the country, and make a judgment as to which political party is most likely to address their concerns. What directly affects Canadians? Healthcare, our environment, and the economy.

Alternatively, in an election a country can consider those issues through which the citizens of a country directly affect the citizens of another country, and make a judgement as to which political party is most likely to address their concerns. Where in the world is Canada most directly affecting the citizens of another country? Afghanistan.

Much of what Canada is doing in Afghanistan is entirely laudable: supporting the education system, supporting the healthcare system, supporting the economy--issues of which Canadians know the importance, because we face similar issues, although of a different magnitude. Where what we are doing is different, however, is obvious: the military mission.

Today the Prime Minister has said that Canada's mission in Afghanistan 'as we've known it' will end as agreed by Parliament in 2011. Presumably, that means reducing the military role and increasing even more the developmental role. To my mind, that date is too far away. It is not too far away because of the numbers of dead Canadians: 97 soldiers, 1 diplomat, and, of course, 2 aid workers. Terrible as that is, it is too far away because of that other matter which the media tends not to report: the number of dead innocent Afghan children, women and men. No one seems to accurately know how many civilians have been killed in the Afghan war. It is a statistic that, if known, is not released. Human Rights Watch, a respected New York-based non-governmental organization, has offered a number of figures for civilian deaths in recent years, most of which are inconsistent with previous reports. Thus, in its most recent 8 September 2008 report on civilian bombing casualties Human Rights Watch suggests that in 2006 116 Afghan civilians were killed in 13 bombings. In 2007 321 Afghan civilians were killed in 22 bombings, while hundreds more were injured, and more Afghan civilians were killed by airstrikes than by US and NATO ground fire. In the first seven months of 2008 at least 119 Afghan civilians died from airstrikes, according to Human Rights Watch.

While we do not know how many innocent have died, this is clearly too many. Moreover, one cannot hide from an inescapable fact: Canada is an active perpetrator in these civilian deaths. We do not know how many innocents Canadian soldiers have killed, but let us not forget that on 28 July 2008 cannon fire from a Canadian troop carrier killed a 2 year old boy and a 4 year old girl--children killed because their father's car came within 10 meters of the troop carrier. What makes this case unique is that most civilian deaths by Canadian troops go unreported (although not for lack of trying--I am sure The Globe and Mail's Graeme Smith would report it if he could obtain such information). These 2 deaths are not only 2 too many, but are also in all likelihood the tip of the iceberg, in terms of civilian deaths and injuries directly attributable to the activities of the Canadian Forces.

The response of the Department of Defence to those lamentable deaths is a keen indication of how this war is being fought, and its attitude to civilian deaths, most notably amongst the Department of Defence: the Department has hired Blackwater, the US company that supplies 'contractors' (for which read mercenaries) to train Canadian troops in better understanding Afghan culture and society. This is the company which in 2007 killed 17 Iraqis, of whom at least 14 were killed 'without cause'. Blackwater's training is to enhance force protection, not reduce the numbers of dead civilians.

Canadian soldiers are killing innocent non-Canadians in a land that is far away: our country is doing harm to families, to communities in a place that we do not know. Surely this should be what the election is about?

elections (II): Angola

On 5 September Angola went to the polls for the first time in 16 years to elect a new parliament. It is expected that the governing Popular Movement of the Liberation of Angola (MPLA), led by President Jose Eduardo dos Santos, and in power since 1979, will win a handsome victory in what is currently Sub-Saharan Africa's fastest-growing economy, with gross domestic product per person having increased several times over in the past 6 years.

The secret to Angola's 'success'? Oil. With production of close to 2 million barrels a day, Angola will soon become the biggest oil producer in Sub-Saharan Africa, surpassing Nigeria. In 2007 the country exported US$30 billion worth of oil, and according to the Financial Times US$250 million flow into the government's bank accounts every day. This begs a question: why do two-thirds of the population of 17 million live on less than US$2 a day, why is 40 per cent of the workforce unemployed, and why does a bucket of water in Boa Vista, one of Luanda's worst slums, cost C$0.75? The answer is simple: corruption on a kleptocratic scale generating unimaginable inequality.

Senior MPLA ministers own the key companies with which the international oil companies do business in order to work in Angola. Dos Santos and a small group of advisors personally oversees the overall oil industry, according to the ever-reliable Stephanie Nolen of The Globe and Mail, while his daughter, Isabel dos Santos, is the majority shareholder in many important national companies. This allows the MPLA leadership to enrich itself with wealth that is, by first world standards, immense, showering themselves, while many cannot get access to clean water.

However, it is important to always remember that it is the foreign oil companies that do business in Angola. In other words, they are part of this deeply corrupt system that impoverishes the majority of Angolans. The misery facing Angolans, which Friday's election will have done nothing to help, is a function of oil (soon to be joined by diamonds), a corrupt political elite that is transforming itself into a rentier class, and transnational oil corporations that make sure that our cars get cheap oil. We too are implicated.

elections (I): President Asif Ali Zardari

On 6 September in Islamabad Pakistan's 702-member electoral college, consisting of members of the upper and lower federal houses of parliament and the four provincial legislatures, gave Asif Ali Zardari, the leader of the Pakistan People's Party (PPP) and the widow of assasinated former Prime Minister Benazir Bhutto, a resounding victory in a presidential election to replace former military dictator-turned President Pervaiz Musharraf. Zardari received 482 votes from the electoral college, and will become President of Pakistan on 9 September.

On the face of it, the replacement of a military dictator-turned President by a civilian politician should be welcomed. However, such a proposition fails to account for the murky goings-on within Pakistan's ruling political and military classes; for my part, I am concerned.

Pakistan has witnessed varying degrees of political instability since the death of former military dictator Zia-ul-Haq in August 1988. Through the 1990s Pakistan had a series of civilian governments, led alternately by Benazir Bhutto and Nawaz Sharif. These governments were notorious for their corruption, for their implicit support for Islamist fundamentalism in Afghanistan, and for their failure to improve the living standards of ordinary Pakistani peasants and workers. Many middle-class Pakistanis, and leaders of the advanced capitalist countries, therefore welcomed Pervaiz Musharraf's coup in 1999 while Nawaz Sharif was out of the country. Following September 11, and a clear warning from US Vice-President Dick Cheney that if Pakistan did not sign up to the 'war on terror' it would be 'bombed back to the Stone Age', Musharraf eagerly signed up to the overthrow of the Taliban. Musharraf's legacy for Pakistan is really quite remarkable: he turned an unstable country into what The Economist described, in an editorial in January 2008, as 'the most dangerous country in the world'. With nuclear weapons, with increasingly wider swathes of the country under the effective control of armed Islamist militants, with a deepening inability to promote living standards amongst the often illiterate poor of urban and rural Pakistan, Musharraf, an apparently socially-liberal man, laid the groundwork for the resurrection of a deepening fundamentalism amongst segments of what is more generally a society that is religious but not fundamentalist.

It might appear that, in these circumstances, the return of civilian government would be welcomed, and indeed it would: but not the current alignment. Asif Ali Zardari assumes an office whose powers were expanded under the Musharraf regime; while traditionally the Pakistani President had been a figurehead, Musharraf gave the presidency the power to appoint provincial governors and service chiefs and to dissolve parliament independently. Zardari will thus be the most powerful civilian President in decades.

And what a President! He has no political experience in Pakistan, having only entered politics upon the assassination of Bhutto. Instead, during the prime ministership of Benazir Bhutto, Zardari was widely known as 'Mr 10 Per Cent': that was the cut that he was rumoured to demand from government-awarded contracts. Certainly, while Bhutto was alive, during the period of her marriage to Zardari the family fortune, which was already stupendous, grew; but while Zardari was imprisoned for corruption and murder by Nawaz Sharif and remained in prison under Musharraf, and while the Spanish and Swiss governments have investigated him for money-laundering and other crimes, he has never been convicted by an impartial court of anything. Nonetheless, corruption allegations will undoubtedly dog his presidency.

Moreover, as the Financial Times revealed last week, corruption charges laid in a British court were postponed when his lawyers presented to the court documents said to substantiate major psychological problems: dementia, depressive disorder and post-traumatic stress disorder. That such an individual will have some say in the deployment of nuclear weapons should give everyone pause for concern; I certainly believe that in the global sweepstakes for the role most unstable nuclear power, Pakistan has now reinforced its claim to the title. Iran, by way of contrast, the country that US presidential candidate John McCain has said that he is prepared to bom in order to prevent its acquisition of nuclear weapons, is, in my view, far less of a threat to world peace than a country run by a possibly corrupt, possibly pyschologically ill person.

Not that I would want Nawaz Sharif to have the power to appoint the President! Prior to becoming prime minister, Sharif amassed a fortune in Punjab through a variety of shady deals involving government pharmaceutical purchases, which in turn allowed him to diversify the family business portfolio to the point that the family became one of the richest in the province. Sharif's principal interest is, like that of Silvio Berlusconi in Italy and Thaksin Shinawatra in Thailand, protecting his family business interests.

Behind these political machinations lie the Pakistani 'deep state': the Directorate of Inter-Services Intelligence (ISI), a security service with a long history that was built up and 'Islamicized' by former President Zia, armed by the US CIA during the Soviet occupation of Afghanistan, and is now a formidable political power behind the scenes in Pakistani life. Beyond civilian control (despite a recent attempt to rein it in), the ISI is accountable only to the military. It was a major factor in the Taliban assuming control of Afghanistan, and its rumoured involvement in the bombing of India's embassy in Afghanistan in July 2008 is but the most recent of many rumoured involvements in terrorist activity.

The ISI is the real source of political power in Pakistan at present: and no one, to my knowledge, understands its true objectives and operations. Most importantly, the relationship of the ISI to the military is entirely unclear. It is, however, important to remember that the current military chief of staff, General Ashfaq Kiyani, who many see to be as a neutral bystander in Pakistan's political machinations cannot be so, for he is a former director of the ISI. President Zardari will not challenge the power of the intelligence-military 'deep state'; his concern is to remain out of jail. Nawaz Sharif will not challenge the power of the intelligence-military 'deep state': his concern is to keep the family business empire running. The only challenge to the ISI can come, not from the fossilized remains of the political parties that dominate Pakistani politics in order to promote the ambitions of a venal political class, but from the workers and peasants of Pakistan, who continue, as they have for the past 60 years, to bear the brunt of the development failure that is the legacy of Pakistani politics.

recent activities, summer 2008

I will be commencing my summer holidays in the next week, after a very busy early summer.

The proofs of my next book, again co-edited with C Kay, and entitled Peasants and Globalization: Political Economy, Rural Transformation and the Agrarian Question, have been completed, and the book is now in process. Ihope to see it late in August. It looks very, very good.

I have completed work on a review essay on the World Bank's World Development Report 2008: Agriculture for Development and have started work on my next book, Hungry for Change: Farmers, Agrarian Questions and the Global Food Crisis. I am extremely excited about this project: although I have not been able to work on it for a month, it was almost writing itself--the easiest writing experience I have had.

I attended the annual meetings of the Canadian Association for the Study of International Development, where I gave 3 papers, and also took part in the Inaugural North American Historical Materialism Conference, where I delivered a very well received paper on the agrarian question in the 21st century.

Finally, I have all but completed my course preparation for 2008: I need a rest.

Canada and nuclear proliferation

Over the course of the summer, there have been a number of major global stories with international development dimensions: but one in particular, with major ramifications for the future security of the planet, has been completely missed by the world's media, for reasons that both baffle and disappoint me.

On 2 August, the Saturday of what in Canada is a long weekend, The Globe and Mail's Campbell Clark reported that Canada will 'accommodate India's entry into the club of countries that can trade openly in nuclear fuel and technology'. If correct, Canada has, during the lull of a long weekend during the height of the summer, when no one pays attention to international news, effectively killed the most effective international treaty preventing the spread of nuclear weapons, the Non-Proliferation Treaty (NPT).

Opened for signature on 1 July 1968, the NPT was designed to halt the spread of nuclear weapons beyond those that acknowledged that they had such weapons at the time of the NPT's agreement. Initially proposed by Ireland, signatories to the NPT agreed that:

• if they are not in possession of nuclear weapons they will not acquire them;
• if they are in possession of nuclear weapons they will seek to eliminate them;
• the use of nuclear technology for peaceful purposes was acceptable.
  

Currently, 190 states have signed the NPT, and only 4 significant countries have failed to sign: the nuclear-armed states of Israel, India and Pakistan, and the nuclear-capable state of North Korea.

Campbell Clark's report in The Globe stated that Canada was later this month going to agree to back an exemption being proposed by the United States for India at a meeting of the Nuclear Suppliers Group, an informal club of countries that trade in nuclear materials. The United Sates and the Indian government reached a contentious agreement to trade in nuclear materials a few years ago, and in order for the deal to proceed, the US and India must ratify it, but, crucially, the Nuclear Suppliers Group must exempt India from its restrictions on trade in nuclear technology and fuel such as uranium. Many believe that such an exemption, because of India's existing nuclear arms capabilities, has the potential to fuel a South Asian nuclear arms race with India's arch-rival, Pakistan.

Canada's change of stance is dramatic, because Canada has a long and troubled history of dealing with India on nuclear matters, going back to 1974, when Canadian technology acquired in the 1950s was used by India for a 'peaceful' nuclear explosion. In the aftermath of India's abuse of Canadian co-operation, Canada became an even more vocal supporter of the NPT, and Canada was traditionally viewed as being a proliferation hawk in the Nuclear Suppliers Group. However, this hostility now seems to have evaporated, with Foreign Minister David Emerson's commenting that 'you can't keep somebody in the penalty box forever'.

What Emerson fails to apparently appreciate is that to make India an exception to the NPT treaty will effectively kill it; why would any country abide by a nuclear technology control regime that exempts a non-signatory nuclear power from paying attention to the underlying principles of the regime? Or, to carry Emerson's analogy further, how sensible is it that if the team in the penalty box reaches agreement with another team in the division to ignore the rules of the game then the rules of the game have to be changed? Just as with the transformation of Canada's military from a peacekeeping to a war-fighting machine, which has been chronicled in this weblog, Canada's willingness to grant an exemption to India heralds a major transformation in the country's foreign policy, increasing its willingness to accommodate American foreign policy interests at the expense of its previous Pearsonian internationalism.

Canada in the world: what happened?

the US mortgage crisis and international development

Previous posts to this weblog have discussed the relationship between the US sub-prime credit crunch, and hence the ongoing US cyclical recession, and developing countries--most specifically, my post of 6 September 2007. That this link continues to bite was highlighted today in the Lex column of the Financial Times, which noted that US Treasury data now indicates that Chinese investors now own US$376 billion of the long-term debts of Fannie Mae and Freddie Mac, which, in its guise as a government-sponsored enterprise, is the principal US mortgage lender. As Lex drily notes--and as I all but suggested last September--the People's Bank of China is now a lender of last resort to a reeling US Treasury and Federal Reserve.

How this works was nicely illustrated by a graphic in the Financial Times this week, which is at the head of this post. US mortgages are sold by lenders to potential American homeowners. The lenders sell the debts on, to large US banks or, more commonly, Fannie Mae and Freddie Mac. All three institutions bundle their mortgage debts together into mortgage-backed securities, which are sold to credit market investors--pension funds, university endowments, as well as the large global financial institutions. This is where China comes in: for they have become either a substantial component of the credit market itself; or Chinese sovereign wealth funds, which are state-backed investment funds seeking ways of earning decent returns for the masses of foreign exchange that Chinese companies and the Chinese state have been amassing, have been buying parts of the large global financial market institutions that are heavily involved in the buying of mortgage-backed securities. In either instance, then, Chinese money is propping up the US financial system, and through that, the global economy, allowing it to adjust much more slowly to the changing realities in oil and commodities that it faces.

It is ironic indeed that global finance capital has come to rely upon developing countries for their salvation, ahead of the capitalist states that support their international operations. Ironic, but now new: we have been here before, but in a different guise, during the debt crisis.

prolonged absence

This weblog has been silent more often than not over the past 6 months. Much has happened around the world that is worthy of critical appraisal--Zimbabwe, Tibet, Burma...amongst others.

I hope that the weblog will resume normal service in the next little while. Please be patient.

the World Bank and poverty

According to the World Bank's website, 'at the heart of the World Bank’s work in more than 100 countries is the focus on poverty reduction. Almost one billion people live on less than $1 a day; 2.5 billion live on less than $2 a day. Beyond causing hunger and malnutrition, poverty makes people vulnerable to economic shocks, natural disasters, violence, and crime. They are often denied access to education, adequate health services, and clean water and sanitation.'

Excluding China, the number of people living on less than $1 a day has gone up since 1985. Excluding China, the number of billion living on less than $2 a day has gone up since 1985. This begs the question: if 'working for a world free from poverty' is at the heart of the World Bank's mission, why have the numbers of poor people increased in the past 20 years?

The people that work in the World Bank are not evil. They do not arrive at their office, in Washington, or in Hanoi, or in Maputo, and think 'How much poverty can I create today?' Indeed, the World Bank is full of well-meaning people who care passionately about poverty, who have learned a lot about the causes and consequences of poverty, and who have often worked very, very closely with poor people, in order to try and make the world a better place. I should know: many people I know have worked with, or still work for, the Bank, and they are not wicked people.

At issue, then, is how an institution full of well-meaning people can end up deepening the very phenomenon that they purport to want to remedy. How is it that the doctor ends up making the disease worse?

The answer lies in the institutional structure of the World Bank, and the career structure for those that work within it. The World Bank as an institution is dominated by representatives from the North, and, as Robert Wade of the London School of Economics has admirably shown in work that was published almost a decade ago, within those representatives, the role of the United States Department of the Treasury (the US finance ministry) is paramount. The US Treasury ultimately decides who becomes President of the World Bank. It has a disproportionate degree of influence in who assumes senior positions within the World Bank. Further, non-American Executive Directors at the Bank, who, along with the President, tend to set day-to-day policy and do pivotal things like approve loans, tend to understand the need to follow the lead of the United States in decision making. Thus, the Bank, which is staffed by a heterogeneous group of often very talented people, is an extremely hierarchical structure--almost Leninist in its design--in which those at the top make decisions in light of their belief system, and often (willingly) ignore good advice from those at lower levels of administration.

In terms of career structure, the World Bank tends to reward the orthodox. The World Bank is dominated by economists trained in the United States in neoclassical economics, which formally demonstrates the efficiency of free markets and private producers and the benefits of international trade and competition. People whose economic ideas stray from this agenda--people like Branko Milanovic and Joesph Stiglitz--have had a very hard time getting their ideas listened to, let alone accepted, and the message to the vast majority of the staff of the Bank is clear: don't upset the apple cart if you want to maintain the privileges that being a World Banker brings. Again, then, the career structure of the Bank is one that reinforces a pre-existing set of views, rather than challenging those views.

It is this combination of a hierarchical institutional structure and a career path that rewards orthodoxy over challenge which results in the World Bank clinging to a set of policy prescriptions that have, in essence, changed very little in 25 years and which have had a significant global impact, in that they have contributed to increasing the number of poor people in the world.

goodbye Rick Hillier

This weblog has been very quiet, for several months. The pressures of work have not allowed me to follow up several issues on which I have wanted to comment--the protests in Tibet, the elections in Zimbabwe, and the character of the World Bank and IMF, to name three. However, I have been roused out of my silence by the news yesterday that General Rick Hillier, Canada's Chief of Defence Staff since February 2005, is retiring.

Rick Hillier has been portrayed in the press as a straight-talking soldier concerned above all with the troops under his command, who has waged a struggle for the hearts and minds of Canadians to support the military while it undertakes its twice-extended mission in Khandahar. I have no reason to doubt the sincerity of Hillier's beliefs, but I do have reason to question them.

When Hillier became Chief of Defence Staff, Canada had 600 soldiers stationed in Kabul with NATO's International Security Assistance Force, known as ISAF. These soldiers were undertaking a fairly 'classic' Canadian international military operation: peacekeeping in the comparative safety of Kabul. Peacekeeping was what Canada's military, globally, was known for up until the appointment of Hillier. With that appointment, though, things changed.

As Janice Gross Stein and Eugene Lang convincingly demonstrate in their excellent The Unexpected War: Canada in Kandahar, it was Hillier who, in the wake of the Chretien government's opposition to the Iraq war and the Martin government's withdrawal from the United States' missile defence program, recognized an opportunity to placate the United States while at the same time fundamentally transforming Canada's military. That opportunity was the 'mission' in Kandahar, an infinitely more demanding assignment than Canada had undertaken in Kabul. The Martin government's agreement to send Canadian soldiers to Kandahar was basically Hillier's doing; those in the government had little idea about Afghanistan or Kandahar. They agreed because the 'mission' eased pressure on the United States military, both in Afghanistan but also in Iraq, and in so doing pleased those who had been unhappy with several foreign policy decisions that directly affected the United States.

It also did something else, however: Kandahar was and is a war zone. It is not a place where peacekeepers try to keep warring parties apart and maintain order. It is a place where order must be imposed through the use of force, because local warlords oppose the intervention in Afghanistan. As a result, Canadian forces have been heavily engaged, for the first time since the Korean War, in offensive military operations against opponents that the media dubs 'the Taliban' but whom, as Graeme Smith of The Globe and Mail has so ably demonstrated, are not the remnants of the former government of Afghanistan as rather an assortment of those opposed to Western military involvement in Kandahar. At best, the Pashtuns fighting the Canadians might be termed 'neo-Taliban'.

The point, then, is that Hillier has transformed the Canadian military from a peacekeeping force into a war-fighting machine. This has, no doubt, greatly increased the cohesion of the military themselves, and has also increased the recognition of the military amongst ordinary Canadians. It has, however, also led to the deaths of 82 Canadian soldiers and a significant reinforcement of opposition in Kandahar to the Canadian presence (many of whom are mistaken for American soldiers), which now totals 2500 soldiers. Most importantly, however, while the 'mission' has to terminate in 2011, Canada--and NATO--has no strategy in place to deal with the possibility that the country will remain largely hostile for the foreseeable future. This is a conflict that cannot be won militarily, as the history of Afghanistan shows, and will be difficult to win politically, given widespread views that the government of Hamid Karzai is not a national government but, at best, a weak Kabul government. Hillier has led Canada into what is, in essence, a no-win scenario; and for this, his tenure as Chief of Defence Staff will probably, over time, be viewed much more negatively than is currently the case.

recent activities, winter 2008

The new year promises to be a busy one. My teaching a Trent University will, of course, dominate a lot of my time between now and late April. Both the courses I teach, Human inequality in global perspective and Agrarian change and the global politics of food, are going well--the fall term results were as I would have hoped them to be.

Editorial work on my next book, again co-edited with C Kay, and entitled Peasants and Globalization: Political Economy, Rural Transformation and the Agrarian Question will (finally) be completed in January; I will be glad to put that project to bed.

A review essay on Sardar Sarovar, entitled 'State, society and Sardar Sarovar', and dedicated to the memory of Ranjit Diwedi, will finally be published by Contemporary South Asia in March, as will my book chapter on gender relations and macroeconomics. Both have been in the pipeline for some time. Work on a book chapter on gender relations and the macroeconomics of the Millennium Development Goals is also almost complete. I will start work on a review essay on the World Bank's World Development Report 2008: Agriculture for Development, a note on landlessness in Vietnam's agrarian transition for the Journal of Agrarian Change, and catch up with two (somewhat delayed) book reviews for Development and Change. Finally, I will be giving seminars in the next 3 months at Queen's University in Kingston as well as at Trent University.

In terms of professional activities, I will be, as part of a team of external evaluators, be undertaking a review of York University's International Development Studies Program; that work will be done in January. I have also been asked, in my capacity as Co-Chair of the Editorial Board of the Canadian Journal of Development Studies, to review, along with other colleagues, the publishing model of the Journal, with an eye towards concluding deliberations on the future way in which the Journal will be published.

Clearly, it will be, as usual, a very busy few months.

revenge of the slums: the aftermath of the elections in Kenya

The events that have swept Kenya since the rigged re-election of President Mwai Kibaki on 27 December offer a deeply unsettling reminder of how the manipulation of identity, such as ethnicity, by dominant political elites can produce carnage on a mass scale. The international media has, in trying to interpret recent events, emphasized the ethnic dimensions of the conflict that has been ignited by the election by explaining the last 10 days in tribal terms—Kikuyu, Luo, and Kalenjin most especially, and indeed, these differences run deep. However, what has been missing in these accounts is the extent to which these differences have been and are politically constructed. The British, when they ruled Kenya, reinforced ethnic difference as a means of sustaining the power of the colonial state. After independence the elite that came to rule Kenya did the same, setting poor Kenyan against poor Kenyan by highlighting the ethnic ‘differences’ within the poor. This was particularly so in the Rift Valley region, where, as a result, there is a long-standing history of interethnic conflict; this was especially so under the regime of former President Daniel arap Moi, who used ethnic differences as a principal excuse to maintain a repressive state for many years.

The use of ethnicity as a means of politically organizing the subordinate, for the benefit of the ruling elite, and the use of repression as a means to sustain an elite privilege that is predicated upon the use of ethnicity, cannot however hide the fact that Kenya is a deeply stratified society. Class dynamics must be understood if the political economy of recent events are to be interpreted. Dominant political groups have used politics as a means of plundering the country, and thus enriching themselves, turning themselves into a indigenous ruling class. Kleptocracy runs deep in this elite. A principal exhibit: the Goldenberg scandal of the early 1990s, which witnessed, possibly, 10 % of the country’s GDP being extorted by members of the elite through questionable exports of gold and diamonds, a scam for which no member of the ruling class has ever been prosecuted. A second exhibit: the Anglo Leasing affair, in which government money was paid to companies that did not exist, or was paid to companies at dramatically over-inflated prices, diverting millions of dollars to shady businessmen who in turn passed on money to corrupt senior politicians. Repression and kleptocracy have been tolerated by the West, as Kenya has always been a key strategic ally in East Africa. Western indulgence, even during the last few years of Moi, when, in theory, the West was trying to clamp down on corrupt excesses, has allowed Kenyan political elites to turn a blind eye to the poverty, unemployment and landlessness that confronts a population of 38 million, half of which live on less than US$2 a day, and half of which are under 20. Kenya’s economy must create several hundred thousand jobs a year just to stand still, yet the capital-intensive export agriculture that supplies high-value fresh flowers and vegetables to Europe that is favoured by the government, and the import-intensive tourism industry that is favoured by Northern holidaymakers, do not produce those types of labour-intensive jobs.

No wonder the citizens of Kenya wanted change. They thought they were going to get it in 2002, when Kibaki was first elected, promising to fight corruption and produce hundreds of thousands of jobs. There was, amongst Kenyans, at the time a remarkable, rejuvenating sense of possibility. Instead, they got more of the same, as anti-graft campaigns were quickly dissipated, stalwarts of the Moi years quickly returned to positions of authority, and oppositional figures such as Raila Odinga were forced to quit.

That this cabal would seek to rig the presidential elections is thus not surprising, although the blatant character of it has shocked many, not least of all me. As is clear, the outcome of the parliamentary elections was a disaster for the President. The President’s Party of National Unity, which includes remnants of Moi’s former Kenyan African National Union party, lost the vote, and half the President’s cabinet, including some very nasty people such as Nicholas Biwott, Moody Awori, and Gideon Moi, son of the former President, lost their seats. Kibaki and his entourage therefore put into play a long-standing plan to rig the Presidential election results by delaying the results from Central Province, a Kibaki stronghold. Kibaki was being trounced outside Central Province; therefore, the results in Central Province were altered, so that, in some instances, apparently greater than 98 % of the electorate voted in some precincts for the President, a ludicrous ploy that would have made Nicolae Ceausescu proud. As a result, Kibaki was declared the winner by 230000 votes by the tainted Kenyan electoral commission. When the result was announced, security forces sealed off central Nairobi, because the political class knew what the impact of the declaration would be; the President was hurriedly sworn into office. The electorate, robbed of the change that it sought, exploded, particularly in the slums of Kibera and Mathare outside Nairobi, pools of humanity that Mike Davis would recognize as ‘existential ground zeroes’ which, because of their desire for change, had the potential to become volatile in the wake of their political expression being thwarted.

Raila Odinga, the Orange Democratic Movement’s (ODM) candidate for president, and a long-standing opponent of the one-party rule of former President Moi, expected the vote to be rigged; indeed, the ODM engaged in some irregularities as well. Reliable accounts suggest that the ODM had a pre-existing plan to react to the announcement of a Kibaki victory by calling on a campaign of civil disobedience. Thus, on the ground, there has been some encouragement of young hoodlums rampaging through the streets of Kisumu, Mombassa, Eldoret and the Nairobi slums; the ODM is not innocent. Nonetheless, the assignation of blame must be laid at the door of Kibaki, who has robbed the Kenyan people of the change that they clearly indicated they wanted.

The venality of Kenya’s ruling and middle classes cannot be overemphasized. They do not have to see the sea of poverty in which they live. They are ferried by car from place to place, living behind fairly secure walls, where they can bemoan the rioting on the street outside, and ignore their own culpability in it. That culpability runs deep: they have materially benefited from the kleptocratic repressive state run by Moi and Kibaki, and they believe in their right to rule. Many hardliners in the elite will therefore argue that the reduction in repression under Kibaki was a mistake, and what is needed, to manage the ‘tribal tensions’ of Kenyan society, is a return to repression.

Indeed, what that repression would entail has already been witnessed in the past few days; the security services have been responsible for a significant share of the violence. What is not clear, however, is how ordinary Kenyans would respond. Previously, politically-motivated ethnic conflict occurred in rural areas removed from the capital. What is now different is that conflict has moved full-scale into the slums of Nairobi, where the frightening possibility of these politically-constructed identities fostering neighbour turning on neighbour is very real; in the absence of political accountability the poor have started to devour the poor. Accentuating the possibility of a deepening quagmire of conflict are the presence of young criminal gangs that have sought to use the troubles in the slums as an excuse to terrorize and loot, while at the same time trying to increase the control of slumlords over the impoverished population that lives there; many of these gangs, which draw from unemployed and disempowered youth, are linked to political parties. In this existential ground zero, 300 are dead, upwards of 250000 people are displaced, rape gangs stalk the countryside, and children are burnt alive in a place of sanctuary.

Cote d’Ivorie has tragically demonstrated that the myth of stability can quickly degenerate into civil war when the demons of ethnicity that have been used by the ruling elite turn on the political choices that have been made by that very elite. The flame has been lit, and while political leaders dither in the safety of their sanctuary it is only ordinary Kenyans who can put it out. One can only hope that that is what they do.