the failings of (financial) markets

As the world recession continues to unfold, and every day brings more bad news, in terms of job losses, home foreclosures, and large and small companies going under, the high priests of global finance capital are beginning to doubt the strength of their convictions. Last week I was shocked to read that Jean-Claude Trichet, who, as president of the European Central Bank is the second most important central banker in the world after Ben Bernanke of the United States Federal Reserve, appears to be losing his faith in the self-correcting features of financial markets. Trichet said, in the context of European banks and financial markets hoarding capital rather than lending, and in so doing deepening the recesion, that 'what the markets are suggesting is not appropriate'.

Similarly, Alan Greenspan, who was Bernanke's long-serving predecessor at the Fed, has, since last autumn, recanted some of the core beliefs that drove his decision making years: that free markets would handle the risks involved as the financial system created what Warren Buffet called 'financial weapons of mass destruction'; that because free markets would self-correct too much regulation was wrong, because it would damage Wall Street, and hence the US economy; and that banks would always put the protection of their shareholders first, rather than the protection of their executives, as witnessed in the US$4 billion in bonuses paid by Merrill Lynch just as it was being taken over, with government money, by Bank of America (US bilateral aid to Sub-Saharan Africa last year was about US$5 billion).

Perhaps global finance capital needs to read Marx to understand what is going on. Old grey beard, as he used to be called by the Chinese, warned that financial crises were inevitable 'where the ever-lengthening chain of payments, and an artificial system of settling them, has been fully developed'. Where's my copy of Capital?

the York University strike

As a resident of Toronto, with friends who work and study at York University, I have, like many Torontonians, followed the strike by contract faculty represented by CUPE local 3903 with great interest. The voices that seem to be aired in this labour dispute seem to be of those who do undoubtedly lose out: the students. Nonetheless, while I have a great deal of empathy for the difficulty that the 50000 undergraduates at York have faced, I sometimes wonder if they 'get it'.

CUPE 3903 has 3412 members, and, like many universities in Canada and the US, does more than 50 per cent of all undergraduate teaching at York. The union wants a wage settlement that is above the rate of inflation, a 2 year contract to harmonize the York contract with those of other CUPE university locals, job security, better working conditions, an end to the student code of conduct at York, and post-residency fees. Utlimately, though, this strike is about improving job security.

It is, in my view, important to remember just who are striking. Within the membership 871 are 'contract faculty' who sign a contract to work a certain number of months a year. The remainder--teaching assistants and graduate assistants--work part-time. So the York strike is above all else a strike by part-time workers for improved terms and conditions of employment, including some job security. It is the sort of thing that sensible people take for granted.

In this light, that the provincial government feels that it is necessary to pass back-to-work legislation to force the local back to work should be seen as an affront to sensible people. Back-to-work legislation, which I disagree with in principle, is usually passed to get essential services back up and running. This is what happened last year, for example, when the Toronto Transit Commission, which runs public transport in the city, went on strike. However: how can part-time workers be deemed an essential public service? If their work is essential, why don't they have a properly paid and secure job? These are the key questions that are missing in discussions about the strike.

The reliance of North American universities on part-time and insecure faculty demonstrates the extent to which neoliberalism has reconfigured tertiary education. Neoliberalism in the public sector relies on insecurity and fear to get the job done. However, casualization and flexibilization are not the basis by which to create a worldclass tertiary education sector where students actually learn. The strike demonstrates that some people are not prepared to kow-tow to such a regime. CUPE 3903 continue to deserve the full support of the people of this city.

the contradictions of hope

Last week there was near euphoria around the world when Barack Obama was inaugurated as 44th President of the United States. I must confess that I spent most of the day glued to the television, watching a remarkable event unfold: one of those moments when you had to be there, at least watching, as when 9/11 occurred, Nelson Mandela walked free, the Berlin Wall came down, or Nixon stepped into the helicopter to leave the White House for the last time.

Obama has been extremely active in his first 6 days in office, and has already done some remarkable things. There was widespread press coverage of Barack Obama signing a Presidential order on 22 January 2009 mandating that the Guantanamo Bay detention camp in Cuba be closed. In the same order it was decreed that all detainess held by the US would be covered by the Geneva Conventions. Less well noted were the fact that in the same order Obama ordered the closure of the Central Intelligence Agency's network of secret prisons, and that the CIA had been banned from using interrogation methods that are not contained in the US army field manual. At last, water boarding will come to an end as the official policy of the US government.

I don't expect the CIA or the US military not to resort to torture, or rendition; but if they do, at least now they can be held, to some degree, accountable. That is a positive return to a previous status quo--and after 8 years of Bush, a positive return to a status quo appears fresh and new.

Most remarkable of all, from an international development perspective, was a Presidential order that once more allows US aid agencies to deal with global groups that advocate family planning, like Marie Stopes and the International Planned Parenthood Federation. George W. Bush had imposed a moratorium on dealing with these groups within days of taking office; there can be little doubt that lifting the moratorium will save the lives of thousands of women throughout the developing world. This move reinforces the emphasis on development made by Hillary Clinton when she first addressed State Department staff last week--she is going to try and have development activities that lie under the control of the Defence department moved to State, where they clearly belong.

Cynics might decry these immediate--and fairly politically easy--changes under the new US President. I don't. These former US policies were an afront to the American people, served to galzanize opposition to the United States around the world, violated international law, and violated the rights of women. It was important that these wrongs be righted.

Nonetheless, it is still necessary to confront these changes against a more mundane and messy reality. On 23 January a US missle strike in North Wazirstan, Pakistan killed at least 21 people, including 3 children. These were the first such strikes--there were 30 in 2008--under President Obama, and as such must have received the direct approval of the President. On 24 January a US military raid in Aghanistan killed 22, including 2 women and 3 children--although the US military, with no observers on the ground, claimed that all the dead were militants. It is likely that a raid of this sort, in a civilian area of Afghanistan, was also explicitly authorized by President Obama. Thus, with the hopes that Obama has raised comes the contradictions of continuity. Such contradictions, however, are inevitable, as Barack Obama cannot and will not transform the US political economy. His role is to manage it better: and as such, President Obama will do much that will disappoint.

voices from Gaza

From the Financial Times of 23 January 2009:

'Sabah Abu Halema lies on her bed in Gaza's Shifa hospital, her arms and legs covered in once-white bandages and her hands covered in brown scabs.'

'Mrs Abu Halema is a victim of white phosphorous burns after being caught in a bombing early in the 22-day Israeli assault on Gaza...'

'Mrs Abu Halema and her family were eating lunch during the second week of the conflict when three bombs hit her house. Her husband and four of their nine children were killed.'

'"You should tell everyone about these scandalous acts by the Israelis', she told the Financial Times yesterday.'

From the Financial Times on the day of Barack Obama's inauguration, 20 January 2009:

'When an Israeli airstrike destroyed the Imad Akl mosque in the Jabaliya area of Gaza City that night, it also took his house.'

'Tahreir, 17, Ikram, 14, Samar, 12, Dina 7 and Jawaher, 4, were all killed when the mosque collapsed through their bedroom wall. Baraa, who was only 12 days old when the war began, was saved when the force of the explosion flipped her cot over and gave her shelter.'

'"Before, I used to count my children when we went out for family lunch or dinner, to make sure all 9 were there," says Mr (Anwar) Baalousha, 37. "Now I don't need to."'

'The airstrike has change Mr Baalousha's life in more than one way. "I'm ready to become a martyr now", he says dispassionately.'

'His brother, Nafez, chimes in: "The thing is, he wasn't political at all before the attack"'.'

From The Economist, 17 January 2009:

'"My brother was bleeding so much and right in front of my eyes, he died. My other brother Ismail, he also bled to death. My mum and my youngest brother, they are gone. Four brothers and my mother, dead. May God give them peace."'

1500 dead. 5000 wounded. Why?

Gaza's silent victims

The Israeli Defence Force's air and ground assault on Gaza has been disproportionately deadly on one group of Palestinians: children. It is not widely enough known that of the 1.5 million people that live in Gaza, half are children under the age of 15. In any military operation, then, it was inevitable that children would die. Since the assault began, of the 636 Palestinians that have been killed, at least 115 have been children, according to reports in the Financial Times.

The Israeli assault on Palestinian children is easily seen in the repeated bombing of schools, which has been roundly condemned around the world. The latest tragedy, in which 40 civilians, including children, were killed when a United Nations school was bombed, reminds the international community that despite repeated assertions by the Israeli Defence Forces that they seek to minimize civilian casulties the reality is that civilian populations, whether they be in private homes, schools, or medical facilities, are systematic targets, and this includes children.

Who can forget the murder--for that was what it was--of Rami Jamal al-Durra in September 2000? French television filmed the scene of the 12 year old huddled next to his father, hiding, as his father pleaded with the Israelis to stop shooting. In response, the Israelis shot at the father, wounding him, and killing Rami Jamal al-Durra. It is a scene that we have, unfortunately, had to witness again this month.

Prior to the assault, as a consequence of the Israeli blockade of the territory, some 50000 children were malnourished; as in Iraq in the 1990s, there can be no doubt that some children have died as a consequence of the conditions created by the blockade. To this horror must now be added the horror of the deaths of far too many wholly innocent children.

The irony of this assault on children is not lost on the Israeli leadership: as Ehud Barak, the defence minister who is directing the assault, once said when asked what he would do if he were a Palestinian facing the Israeli Defence Forces, 'I would join a terror organization'. In attacking Gaza's children, the Israelis are creating the conditions that perpetuate the cycle of violence that plagues the region.

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.