The Two Causes of the Coming Great Depression

Posted on July 21, 2023 by Reid Mukai

By Charles Hugh Smith

There are two approaches to analyzing a situation:

1. Choose the desired outcome–generally the one that doesn’t require any major changes, sacrifices or downward mobility
2. Identify the initial conditions and systemic dynamics and then follow these to a conclusion back-tested by comparisons with historical outcomes.

Our default setting as humans is 1: select the outcome we want and then find whatever bits and pieces supports that conclusion. Cherry-pick data, draw false analogies–the field is wide open.

This is why we get so upset when our “analysis” is challenged: we’re forced to ask what happens to us if our desired outcome doesn’t transpire, and since the answer might be something less than optimal, we violently reject any data or analogies that conflict with our carefully curated “analysis.”

A great deal of what passes for analysis today is cherry-picked bits and pieces that support a happy story of endlessly expanding prosperity–AI, fusion, etc.–with no mention of limits, constraints, costs or worst-case outcomes rather than best-case outcomes.

Let’s start with an historical analogy most reject: the Great Depression of 1929 to 1942. The conventional account claims that the Depression was the result of a “Federal Reserve policy error”: the Fed tightened credit when it should have loosened it.

This is nonsense. What actually happened was credit expanded rapidly in the Roaring 1920s, which is why they were Roaring. Farmers could borrow money to buy prairie land to put under the plow, speculators could borrow $9 on margin to play the stock market with $1 in cash, and so on.

In other words, what happened was a gigantic credit bubble inflated that pushed stocks and other assets to unsustainable heights of over-valuation, valuations based on the Roaring 20s expansion of credit and consumption continuing forever.

But all bubbles pop, and so the weather changed for the worse and newly plowed prairie turned into a Dust Bowl, wiping out heavily leveraged farmers. Since there was no federal bank deposit guarantee (no FDIC), the bankruptcies of overleveraged borrowers wiped out thousands of small banks, wiping out the savings of prudent depositors.

So even prudent savers got wiped out in the crash of the credit bubble.

Stock speculators gambling on margin (i.e. borrowed money) were quickly wiped out, and the selling became self-reinforcing, accelerating the cascading crash.

The real policy error was protecting the wealthy who owned the debt from a debt-clearing write-down. The wealthy own debt, the non-wealthy owe debt. When the debt is defaulted on, the lender / owner of the debt has to absorb the loss. The debtor is freed of the burden. In a debt-clearing event driven by defaults, insolvencies and bankruptcies, the wealthy are the losers and the debtors are freed of the burden of debt.

Various programs were implemented to stave off the consequences of default, as if pushing losses into the future would somehow enable the credit bubble to reinflate. That’s not how it works: the financial system is like a forest, and if the dead wood of bad debt piles up and isn’t allowed to burn, then the forest cannot foster new growth.

Economies that refuse to accept the wealth destruction that results from credit bubbles popping stagnate. This is the story of Japan from 1990 to the present: the status quo in Japan refused to accept the losses, hiding bad debt (i.e. non-performing loans) behind artifices such as new loans that covered the interest due, listing the non-performing loans in “zombie” categories, i.e. as assets that were still on the books at full value even though they were essentially worthless, and so on.

The net result was 33 years of stagnation and social decay as young people gave up on owning homes and having families.

Now the US has inflated another “debt super-cycle” credit bubble that has pushed assets into over-valuation. Once again the goal is to avoid handing the wealthy owners of all this debt the enormous losses that must be accepted to clear the dead wood of bad debt, money lent to borrowers and projects that were not creditworthy except in a bubble.

The lesson the status quo took from the Great Depression is to cover up private-sector over-valuations and bad debts with vast expansions of credit via the Federal Reserve and the federal government. Please look at these four charts below:
1. total credit (TCMDO)
2. the Federal Reserve balance sheet (2 charts)
3. federal debt

All are in visibly unsustainable parabolic ascents.

Predictably, the status quo will refuse to accept the necessity of clearing the dead wood and accepting the trillions of dollars in losses that will accrue to those who own the unpayable debts.

Consider CRE, commercial real estate. Office towers are now worth one-third of their pre-pandemic valuations, the valuations on which their mortgages were based. There is no way these properties can be magically restored to their previous over-valuation. Massive losses must be accepted by the owners of the debt. If those losses make them insolvent, so be it. That is unacceptable in a system geared to protect the wealthy at all costs.

But bubbles pop anyway, regardless of policy tweaks. Consider these stock market charts of the Roaring 20s and the Great Depression and the present (below). The similarity is remarkable–possibly even eerie.

The big difference between the Great Depression of the 1930s and the Depression we’re entering is the world still had enormous reserves of resources to tap and a (by today’s standards) modest population in the resource-consuming developed nations.

Recall that a developed-world consumer uses up to 100 times more energy and resources than a poor person in a rural undeveloped nation. Recycling a few bottles doesn’t change this.

This means the planet’s “savings account” of abundant, cheap-to-access resources has been depleted. Yes, there is still oil and copper, etc., but it’s of far lower quality and much harder to get now. The rich ores have been mined and the shallow super-giant oil fields have all been tapped long ago. Now the Saudis must pump stupendous quantities of seawater into their oil wells to maintain production. All these technologies consume vast quantities of energy.

The inevitable result is the energy efficiency–how much energy is required to access, process and transport the energy–has plummeted even as consumption has soared.

The outcome many hope for is some new miraculously cheap and abundant sources of energy such as fusion. But fusion is far more complicated and tricky than pumping oil, and oil is a high-energy-density fuel that can be stored rather easily. All the electricity generated by various technologies can’t be stored easily or cheaply, and so the happy story is that a new miraculous battery technology is just around the corner.

But batteries are also complicated and resource-dense, so they’ll always be as expensive as the materials needed to fabricate them. There will never be “low-cost” batteries if the materials needed to make them are scarce and expensive to dig out of the ground, process and transport.

So the policy choices are simple: either protect the wealthy from write-downs of bad debt and the collapse of asset bubbles and usher in decades of stagnation, or force the wealthy to take the losses and clear away the dead wood.

But either choice will be constrained by the reality that humanity has already drained the easy-to-get “savings account” of global resources.

I get emails from readers who say things like “mining techniques are far more efficient now.” That’s fine, but most of these new mines are often thousands of kilometers away from railways or seaports, and thousands of kilometers away from the processing plants that turn the ore into useful metals.

Recall the enormity of the cost and effort required to build a single two-lane highway thousands of kilometers to a new mine, and the oceans of diesel fuel needed to power the mining equipment and trucks hauling the ore to railways or seaports. Recall the immense amounts of energy required to smelt / process these ores, and the near-zero percentage of lithium-ion batteries that are currently being recycled.

Batteries are difficult to recycle because they’re not manufactured to be recycled, and they’re not manufactured to be recycled because that would raise costs considerably, reducing profits.

So on the present course, the idea is to manufacture billions of batteries, throw them all in the landfill in 10 years, and then mine enough minerals to build another couple billion batteries and then repeat the cycle of throwing them away in 10 years forever.

That isn’t realistic, so the status quo will have to adjust to this unwelcome reality.

This is why I keep writing books about relocalizing, degrowth, using less rather than more to yield a higher level of well-being. The resource “savings account” won’t support fantasies of endlessly expanding consumption of hard-to-get resources.

But the status quo has much to unlearn, and it seems the only pathway to a new understanding is a Great Depression that won’t end with a new expansion of credit because the resources required for that new expansion simply won’t be available or affordable.

Reducing our exposure to avoidable risks is a key strategy of Self-Reliance.

Degrowth: closing the global wealth divide

Posted on January 23, 2019 by Reid Mukai

Contradicting the dominant paradigm that economic growth equals development, degrowth theorists argue that serious cutbacks are crucial to protect life on our planet.

By Riccardo Mastini

Source: ROAR

Today, some 4.3 billion people — more than 60 percent of the world’s population — live in debilitating poverty, struggling to survive on less than the equivalent of $5 per day (which is the mean average of all the national poverty lines in the Global South). Half do not have access to enough food. And these numbers have been growing steadily over the past few decades.

With these data, Jason Hickel, an anthropology professor and global development expert, starts his controversial book, The Divide: A Brief Guide to Global Inequality and Its Solutions, in which he meticulously and convincingly debunks the narrative told by the UN and the likes of Bill Gates and Steven Pinker. In fact, while the good-news story leads us to believe that poverty has been decreasing around the world, in reality the only places this holds true are in China and East Asia. And these are some of the only places in the world where free-market capitalism was not forcibly imposed by the World Bank and the IMF, allowing these governments to pursue state-led development policies and gradually liberalize their economies on their own terms.

Development agencies, NGOs and the world’s most powerful governments explain that the plight of poor countries is a technical problem — one that can be solved by adopting the right institutions and the right economic policies, by working hard and accepting a bit of help. As Hickel writes: “It is a familiar story, and a comforting one. It is one that we have all, at one time or another, believed and supported. It maintains an industry worth billions of dollars and an army of NGOs, charities and foundations seeking to end poverty through aid and charity.” But it’s against this narrative that Hickel takes aim.

ECONOMIC UNEQUAL EXCHANGE OVER THE CENTURIES

The main argument presented in the book is that the discourse of aid distracts us from seeing the broader picture. It hides the patterns of extraction that are actively causing the impoverishment of the Global South today and actively impeding meaningful development. “The charity paradigm obscures the real issues at stake: it makes it seem as though the West is ‘developing’ the Global South, when in reality the opposite is true. Rich countries aren’t developing poor countries; poor countries are effectively developing rich countries — and they have been since the late 15th century,” argues Hickel.

In the book it is laid bare for all to see that underdevelopment in the Global South is not a natural condition, but a consequence of the way Western powers have organized the world economic system.

It’s not that the $128 billion in aid disbursements that the West gives to the Global South every year doesn’t exist — it does. But if we broaden our view and look at it in context, we see that it is vastly outstripped by the financial resources that flow in the opposite direction.

If all of the financial resources that get transferred between rich and poor countries each year are tallied up, we find that in 2012, the last year of recorded data, developing countries received a little over $2 trillion, including all aid, investment and income from abroad. But more than twice that amount, some $5 trillion, flowed out of them in the same year. In other words, developing countries “sent” $3 trillion more to the rest of the world than they received.

What do these large outflows from the Global South consist of? “Well, some of it is payments on debt. Today, poor countries pay over $200 billion each year in interest alone to foreign creditors, much of it on old loans that have already been paid off many times over, and some of it on loans accumulated by greedy dictators,” states Hickel. Another major contributor is the income that foreigners make on their investments in developing countries and then repatriate. Think of all the profits that Shell extracts from Nigeria’s oil reserves, for example, or that Anglo American pulls out of South Africa’s gold mines.

But by far the biggest chunk of outflows has to do with capital flight. A big proportion of this takes place through “leakages” in the balance of payments between countries. Another takes place through an illegal practice known as “trade misinvoicing.” Basically, corporations report false prices on their trade invoices in order to spirit money out of developing countries directly into tax havens and secrecy jurisdictions. A similarly large amount flows out annually through “abusive transfer pricing”, a mechanism that multinational companies use to steal money from developing countries by shifting profits illegally between their own subsidiaries in different countries. But perhaps the most significant loss has to do with exploitation through trade.

Hickel explains that “from the onset of colonialism through to globalization, the main objective of the North has been to force down the cost of labor and goods bought from the South. In the past, colonial powers were able to dictate terms directly to their colonies. Today, while trade is technically “free,” rich countries are able to get their way because they have much greater bargaining power.” On top of this, trade agreements often prevent poor countries from protecting their workers in ways that rich countries do. And because multinational corporations now have the ability to scour the planet in search of the cheapest labor and goods, poor countries are forced to compete to drive costs down. As a result of all this, there is a yawning gap between the “real value” of the labor and goods that poor countries sell and the prices they are actually paid for them. This is what economists call “unequal exchange.”

Since the 1980s, countries of the West have been using their power as creditors to dictate economic and trade policies to indebted countries in the South, effectively governing them by remote control, without the need for bloody interventions. “Leveraging debt,” argues Hickel, “they imposed “structural adjustment programs” that reversed all the economic reforms that Global South countries had painstakingly enacted in the previous two decades. In the process, the West went so far as to ban the very protectionist and Keynesian policies that it had used for its own development, effectively kicking away the ladder to success.”

DEGROWTH FOR SUSTAINABLE AND FAIR LIVELIHOODS

Hickel then ponders over how — if these unfair trade and business practices were amended — poor countries could actually go about developing their economies following the same path as the one embraced by the Global North over the past two centuries. He references a study by the economist David Woodward in which the latter shows that given our existing economic model, poverty eradication can’t happen. Not that it probably won’t happen, but that it physically can’t. It is a structural impossibility.

He explains that:

Right now, the main strategy for eliminating poverty is to increase global GDP growth. The idea is that the yields of growth will gradually trickle down to improve the lives of the world’s poorest people. But all the data we have shows quite clearly that GDP growth doesn’t really benefit the poor. While global GDP per capita has grown by 65 percent since 1990, the number of people living on less than $5 a day has increased by more than 370 million. Why does growth not help reduce poverty? Because the yields of growth are very unevenly distributed. The poorest 60 percent of humanity receive only 5 percent of all new income generated by global growth. The other 95 percent of the new income goes to the richest 40 percent of people. And that’s under best-case-scenario conditions.

Given this distribution ratio, Woodward calculates that it will take more than 100 years to eradicate absolute poverty at $1.25 a day. At the more accurate level of $5 a day, eradicating poverty will take 207 years. To eradicate poverty at $5 a day, global GDP would have to increase to 175 times its present size. In other words, we need to extract, produce and consume 175 times more commodities than we presently do. It is worth pausing for a second to think about what this means. Even if such outlandish growth were possible, the consequences would be disastrous. We would quickly chew through our planet’s ecosystems, destroying the forests, the soils and, most importantly, the climate.

According to data compiled by researchers at the Global Footprint Network in Oakland, our planet only has enough ecological capacity for each of us to consume 1.8 “global hectares” annually — a standardized unit that accounts for resource use, waste, pollution and emissions. Anything over this means a degree of resource consumption that the Earth cannot replenish, or waste that it cannot absorb; in other words, it locks us into a pathway of progressive degradation. The figure of 1.8 global hectares is roughly what the average person in Ghana or Guatemala consumes.

By contrast, Europeans consume 4.7 global hectares per person, while in the US and Canada the average person consumes 8 — many times their fair share. To get a sense of how extreme this overconsumption is: if we were all to live like the average citizen of the average high-income country, we would require the ecological capacity equivalent to 3.4 Earths. Hickel elaborates:

Scientists tell us that even at existing levels of aggregate global consumption we are already overshooting our planet’s ecological capacity by about 60 percent each year. And all of this is just at our existing levels of aggregate economic activity — with the existing levels of consumption in rich and poor countries. If poor countries increase their consumption, which they will have to do to some extent in order to eradicate poverty, they will only tip us further towards disaster. Unless, that is, rich countries begin to consume less.

If we want to have a chance of keeping within the 2°C threshold — which the Paris Agreement on climate change sets as an absolute cap — we can emit no more than another 805 gigatons of CO2 at the global level. Now, let’s accept that poor countries will need to use a portion of this carbon budget in order to grow their incomes enough to eradicate poverty; after all, we know that for poor countries human development requires an increase in emissions, at least up to a relatively lowish point. This principle is already widely accepted in international agreements, which recognize that all countries have a “common but differentiated responsibility” to reduce emissions. Because poor countries did not contribute much to historical emissions, they have a right to use more of the carbon budget than rich countries do — at least enough to fulfill basic development goals (as I also argue in this article). This means that rich countries have to figure out how to make do with the remaining portion of the budget.

Professor Kevin Anderson, one of Britain’s leading climate scientists, has been devising potential scenarios for how to make this work. If we want to have a 50 percent chance of staying under 2°C, there’s basically only one feasible way to do it — assuming, of course, that negative emissions technologies is not a real option. In this scenario, poor countries can continue to grow their economies at the present rate until 2025, using up a disproportionate share of the global carbon budget. That’s not a very long time, so this strategy will only work to eradicate poverty if the gains from growth are distributed with a heavy bias towards the poor.

As Hickel writes: “The only way for rich countries to keep within what’s left of the carbon budget is to cut emissions aggressively, by about 10 percent per year. Efficiency improvements and clean energy technologies will contribute to reducing emissions by at most 4 percent per year, which gets them part of the way there. But to bridge the rest of the gap, rich countries are going to have to downscale production and consumption by around 6 percent each year. And poor countries are going to have to follow suit after 2025, downscaling economic activity by about 3 percent per year.” This strategy of downscaling the production and consumption of a country is called “degrowth.”

Hickel describes this visionary idea as follows: “All it means is easing the intensity of our economy, cutting the excesses of the very richest, sharing what we have instead of plundering the Earth for more, and liberating ourselves from the frenetic consumerism that we all know does nothing to improve our wellbeing or happiness.” And since the book first came out in 2017, Hickel has been developing an increasingly clearer position on how we can go about making such changes happen.

His thinking on degrowth was recently encapsulated in a captivating blog exchange he had with Branko Milanović, another global development expert. But Milanović still maintains that economic growth should be at the core of poverty relief. Paraphrasing a passage from Kate Raworth’s Doughnut Economics, we could summarize Milanović’s position as “economic growth is still necessary, and so it must be possible,” while Hickel argues that “economic growth is no longer possible, and so it cannot be necessary.” I side with the latter, simply because the laws of physics trump the laws of economics.

In light of this, perhaps we should regard countries like Costa Rica not as underdeveloped, but rather as appropriately developed. We should look at societies where people live long and happy lives at low levels of income and consumption not as backwaters that need to be developed according to Western models, but as exemplars of efficient living — and begin to call on rich countries to cut their excess consumption.

For Economic Truth Turn To Michael Hudson

Posted on September 18, 2018 by Reid Mukai

By Paul Craig Roberts

Source: PaulCraigRoberts.org

Readers ask me how they can learn economics, what books to read, what university economics departments to trust. I receive so many requests that it is impossible to reply individually. Here is my answer.

There is only one way to learn economics, and that is to read Michael Hudson’s books. It is not an easy task. You will need a glossary of terms. In some of Hudson’s books, if memory serves, he provides a glossary, and his recent book “J Is for Junk Economics” defines the classical economic terms that he uses. You will also need patience, because Hudson sometimes forgets in his explanations that the rest of us don’t know what he knows.

The economics taught today is known as neoliberal. This economics differs fundamentally from classical economics that Hudson represents. For example, classical economics stresses taxing economic rent instead of labor and real investment, while neo-liberal economics does the opposite.

An economic rent is unearned income that accrues to an owner from an increase in value that he did nothing to produce. For example, a new road is built at public expense that opens land to development and raises its value, or a transportation system is constructed in a city that raises the value of nearby properties. These increases in values are economic rents. Classical economists would tax away the increase in values in order to pay for the road or transportation system.

Neoliberal economists redefined all income as earned. This enables the financial system to capitalize economic rents into mortgages that pay interest. The higher property values created by the road or transportation system boost the mortgage value of the properties. The financialization of the economy is the process of drawing income away from the purchases of goods and services into interest and fees to financial entities such as banks. Indebtedness and debt accumulate, drawing more income into their service until there is no purchasing power left to drive the economy.

For example, formerly in the US lenders would provide a home mortgage whose service required up to 25% of the family’s monthly income. That left 75% of the family’s income for other purchases. Today lenders will provide mortgages that eat up half of the monthly income in mortgage service, leaving only 50% of family income for other purchases. In other words, a financialized economy is one that diverts purchasing power away from productive enterprise into debt service.

Hudson shows that international trade and foreign debt also comprise a financialization process, only this time a country’s entire resources are capitalized into a mortgage. The West sells a country a development plan and a loan to pay for it. When the debt cannot be serviced, the country is forced to impose austerity on the population by cutbacks in education, health care, public support systems, and government employment and also to privatize public assets such as mineral rights, land, water systems and ports in order to raise the capital with which to pay off the loan. Effectively, the country passes into foreign ownership. This now happens even to European Community members such as Greece and Portugal.

Another defect of neoliberal economics is the doctrine’s denial that resources are finite and their exhaustion a heavy cost not born by those who exploit the resources. Many local and regional civilizations have collapsed from exhaustion of the surrounding resources. Entire books have been written about this, but it is not part of neoliberal economics. Supplement study of Hudson with study of ecological economists such as Herman Daly.

The neglect of external costs is a crippling failure of neoliberal economics. An external cost is a cost imposed on a party that does not share in the income from the activity that creates the cost. I recently wrote about the external costs of real estate speculators. https://www.paulcraigroberts.org/2018/04/26/capitalism-works-capitalists/ Fracking, mining, oil and gas exploration, pipelines, industries, manufacturing, waste disposal, and so on have heavy external costs associated with the activities.

Neoliberal economists treat external costs as a non-problem, because they theorize that the costs can be compensated, but they seldom are. Oil spills result in companies having to pay cleanup costs and compensation to those who suffered economically from the oil spill, but most external costs go unaddressed. If external costs had to be compensated, in many cases the costs would exceed the value of the projects. How, for example, do you compensate for a polluted river? If you think that is hard, how would the short-sighted destroyers of the Amazon rain forest go about compensating the rest of the world for the destruction of species and for the destructive climate changes that they are setting in motion? Herman Daly has pointed out that as Gross Domestic Product accounting does not take account of external costs and resource exhaustion, we have no idea if the value of output is greater than all of the costs associated with its production. The Soviet economy collapsed, because the value of outputs was less than the value of inputs.

Supply-side economics, with which I am associated, is not an alternative theory to neoliberal economics. Supply-side economics is a successful correction to neoliberal macroeconomic management. Keynesian demand management resulted in stagflation and worsening Phillips Curve trade-offs between employment and inflation. Supply-side economics cured stagflation by reversing the economic policy mix. I have told this story many times. You can find a concise explanation in my short book, “The Failure of Laissez Faire Capitalsim.” This book also offers insights into other failures of neoliberal economics and for that reason would serve as a background introduction to Hudson’s books.

I can make some suggestions, but the order in which you read Michael Hudson is up to you. “J is for Junk Economics” is a way to get information in short passages that will make you familiar with the terms of classical economic analysis. “Killing the Host” and “The Bubble and Beyond” will explain how an economy run to maximize debt is an economy that is self-destructing. “Super Imperialism” and “Trade, Development and Foreign Debt” will show you how dominant countries concentrate world economic power in their hands. “Debt and Economic Renewal in the Ancient Near East” is the story of how ancient economies dying from excessive debt renewed their lease on life via debt forgiveness.

Once you learn Hudson, you will know real economics, not the junk economics marketed by Nobel prize winners in economics, university economic departments, and Wall Street economists. Neoliberal economics is a shield for financialization, resource exhaustion, external costs, and capitalist exploitation.

Neoliberal economics is the world’s reigning economics. Russia is suffering much more from neoliberal economics than from Washington’s economic sanctions. China herself is overrun with US trained neoliberal economists whose policy advice is almost certain to put China on the same path to failure as all other neoliberal economies.

It is probably impossible to change anything for two main reasons. One is that so many greed-driven private economic activities are protected by neoliberal economics. So many exploitative institutions and laws are in place that to overturn them would require a more thorough revolution than Lenin’s. The other is that economists have their entire human capital invested in neoliberal economics. There is scant chance that they are going to start over with study of the classical economists.

Neoliberal economics is an essential part of The Matrix, the false reality in which Americans and Europeans live. Neoliberal economics permits an endless number of economic lies. For example, the US is said to be in a long economic recovery that began in June 2009, but the labor force participation rate has fallen continuously throughout the period of alleged recovery. In previous recoveries the participation rate has risen as people enter the work force to take advantage of the new jobs.

In April the unemployment rate is claimed to have fallen to 3.9 percent, but the participation rate fell also. Neoliberal economists explain away the contradiction by claiming that the falling participation rate is due to the retirement of the baby boom generation, but BLS jobs statistics indicate that those 55 and older account for a large percentage of the new jobs during the alleged recovery. This is the age class of people forced into the part time jobs available by the absence of interest income on their retirement savings. What is really happening is that the unemployment rate does not include discouraged workers, who have given up searching for jobs as there are none to be found. The true measure of the unemployment rate is the decline in the labor force participation rate, not a 3.9 percent rate concocted by not counting those millions of Americans who cannot find jobs. If the unemployment rate really was 3.9 percent, there would be labor shortages and rising wages, but wages are stagnant. These anomalies pass without comment from neoliberal economists.

The long expansion since June 2009 might simply be a statistical artifact due to the under-measurement of inflation, which inflates the GDP figure. Inflation is under-estimated, because goods and services that rise in price are taken out of the index and less costly substitutes are put in their place and because price increases are explained away as quality improvements. In other words, statistical manipulation produces the favorable picture required by The Matrix.

Since the financial collapse caused by the repeal of Glass-Steagall and by financial deregulation, the Federal Reserve has robbed tens of millions of American savers by driving real interest rates down to zero for the sole purpose of saving the “banks too big to fail” that financial deregulation created. A handful of banks has been provided with free money—in addition to the money that the Federal Reserve created in order to take the banks’ bad derivative investments off their hands—to put on deposit with the Fed from which to collect interest payments and with which to speculate and to drive up stock prices.

In other words, for a decade the economic policy of the United States has been run for the benefit of a few highly concentrated financial interests at the expense of the American people. The economic policy of the United States has been used to create economic rents for the mega-rich.

Neoliberal economists point out that during the 1950s the labor force participation rate was much lower than today and, thereby, they imply that the higher rates prior to the current “recovery” are an anomaly. Neoliberal economists have no historical knowledge as the past is of no interest to them. They do not even know the history of economic thought. Whether from ignorance or intentional deception, neoliberal economists ignore that the lower labor force participation rates of the 1950s reflect a time when married women were at home, not in the work force. In those halcyon days, one earner was all it took to sustain a family. I remember the days when the function of a married woman was to provide household services for the family.

But capitalists were not content to exploit only one member of a family. They wanted more, and by using economic policy to suppress pay while fomenting inflation, they drove married women into the work force, imposing huge external costs on the family, child-raising, relations between spouses, and on the children themselves. The divorce rate has exploded to 50 percent and single-parent households are common in America.

In effect, unleashed Capitalism has destroyed America. Privatization is now eating away Europe. Russia is on the same track as a result of its neoliberal brainwashing by American economists. China’s love of success and money could doom this rising Asian giant as well if the government opens China to foreign finance capital and privatizes public assets that end up in foreign hands.

Five Ways to Curb the Power of Corporations and Billionaires

Posted on August 22, 2018 by Reid Mukai

These six men own as much wealth as half the world’s population

By Jeremy Lent

Source: Patterns of Meaning

We need to rein in the destructive power of corporations and billionaires before it’s too late. These five ideas would do that, while leaving global capitalism intact. Ultimately, only a complete transformation of our economic system will save our future, but these proposals could set changes in motion that might eventually take us there.

Transnational corporations have become the dominant force directing our world. Humanity is accelerating toward a precipice of overconsumption, and the large transnationals are the primary agents driving us there. We’re rapidly losing the earth’s forests, animals, insects, fish, even the topsoil we require to grow our crops. The earth is becoming denuded of its bounty as every living system is ransacked for resources—not to mention the looming emergency of climate breakdown. As a result, twenty thousand scientists have recently issued a public warning to humanity, while prominent academics consider the collapse of civilization this century to be a serious threat.

Changes in our personal consumption patterns are important, but are ultimately inconsequential compared with the impact of the transnationals that have come to dominate our global economic and political system. Of the world’s hundred largest economies, sixty-nine are now corporations. Political parties in many of our so-called democracies are funded in large part by billionaires, while government cabinet positions are staffed by corporate executives. International bodies setting global policy are infiltrated by corporate agents so successful at entrenching corporate power that even those governments that still prioritize their people’s needs can no longer make autonomous decisions without risking crippling lawsuits from the transnationals whose interests they threaten. Meanwhile, countries and cities compete with each other to beg their corporate overlords for investment dollars, even it means undermining public services and legal protections for their own populations.

Environmental groups, recognizing where ultimate power resides, try to pressure corporations to improve practices through the threat of public shaming, with some appreciable results. However, these attempts are necessarily constrained by the very structure of big corporations, which exist to enrich their shareholders regardless of the consequences. The common goal of corporations around the world is to monetize human activity and what’s left of nature’s abundance as rapidly and efficiently as possible. The overriding purpose of the world’s powerful institutional force is thus directly at odds with a flourishing earth or a viable future for humanity.

Having spent the first part of my career in the heart of the capitalist system, consulting to major international banks and corporations, I developed a sense of the underlying forces that direct the centers of financial power. These ideas are my distillation of what I believe could be effective levers for humanity to take back some control from the increasing hegemony of corporations and billionaires.

If we are to avoid disaster, our global economic system with its gaping inequities and deranged consumption will eventually need to dismantled and replaced by one based on life-affirming principles rather than wealth maximization. These suggestions, even in aggregate, wouldn’t do that. They represent mere tweaks in a system that ultimately needs to be completely transformed. But like a modest trim tab that helps redirect an ocean liner, perhaps they could begin to curb the destructive force of transnationals and redirect their enormous power toward a more sustainable path.

1. Triple bottom line required for corporate charters

A fundamental reason for the rapacious behavior of transnational corporations is their drive to maximize shareholder value above anything else. While there is no explicit requirement for this in the standard corporate charter, a century of case law has entrenched this principle into the behavior of large corporations to the point that is has become the de facto standard of operation. As a result, if corporations were people, they would be considered psychopaths, utterly devoid of any caring for the harm they cause in the pursuit of their goals.

It is easier, however, to change a corporation’s values than those of a human psychopath. All you need to do is change the legal basis of their charter. Instead of pursuing shareholder interests alone, they could be re-chartered with the explicit purpose of achieving a triple bottom line of social and environmental outcomes as well as financial—sometimes known as the “triple Ps” of people, planet, and profit.

This alternative corporate value system is already available through chartering as a benefit corporation or certifying as a B-Corp, and has been adopted by over 2,000 corporations in over fifty countries around the world—including several multibillion-dollar transnationals. My proposal is that, instead of being a voluntary step taken by a select few, this would be a requirement for all corporations above a certain size.

Overnight, the intrinsic character of the corporation would be transformed. Currently, CEOs and corporate boards are faced with continual pressure to grow their earnings at all cost. If they chose to make a humane decision, such as not to exploit a copper mine because of the consequent pollution, they could expect to be sued by shareholders, and possibly acquired by a more ruthless competitor. However, if they were legally required to achieve a triple bottom line, they would weigh up decisions in a more balanced way, as a rational person might. With the board responsible for all three bottom lines, they would have to consider the risk of being sued if they caused excessive pollution, or if they were callous to the needs of the communities where their plants were located.

Currently, large corporations boast of their corporate social responsibility departments that are supposed to care about issues such as employment practices of their suppliers, sustainability of their raw materials, environmental impact of their packaging, gender balance and ethnic diversity in the workplace, and investments in local communities. Suddenly, they would have to stop paying mere lip service to these issues and take them as seriously as marketing costs, revenue growth and distribution channels—the things that CEOs actually worry about when they go home at night.

2. Charter renewal required every five years

Changing the corporate charter requirement might not, however, be enough by itself to halt the relentless pursuit of profits by large transnationals. After all, executive pay packages consist of dollars rather than goodwill, and those dollars are linked directly to the share price, which is driven by shareholders’ expectation of financial returns. If they could get away with it, they might continue their rapacious practices, while trying harder to look like they’re meeting the other two bottom lines.

That’s the reason for my second proposal, which is to require that corporations, which currently enjoy what’s known legally as a “perpetual existence,” get their charters renewed every five years. If they failed to meet pre-established criteria on their two non-financial bottom lines, they would not be permitted to continue in business. Currently, if a company can’t meet its financial obligations, it’s forced into Chapter 11 bankruptcy proceedings and the value of its stock generally tanks to zero. Under my proposal, executives would also have to consider the risk of declaring “social bankruptcy” or “environmental bankruptcy” as they made their business decisions.

As in currently regulated industries such as banking, the final step of losing their charter would not have to be immediate. If a corporation failed to meet its basic parameters, it could be given a warning, with a time period set to fix things. However, the mere threat of this happening would lead corporate executives to make sure they were well above the criteria required to keep their charter.

Corporations are, of course, highly adept at using their financial resources to influence regulatory bodies through bribes and other mechanisms. To avoid this, panel members responsible to renew the charter would be representatives of the communities and ecosystems covered in the company’s scope of operations. Their task would be to weigh up the findings of experienced independent auditors on the company’s performance. To minimize corruption, the panel could be chosen by a process of random selection called sortition, just a like a trial jury is chosen in our legal system.

3. Tax stock trades based on the length of the holding period

Powerful as they are, even corporations have their masters: their shareholders. But don’t think of the typical shareholder as a Warren Buffet type, sitting back in his leather armchair perusing his holdings. Instead, corporate stocks are subject to the frenetic activity of financial markets, where split-second computer algorithms govern much of the trading. Investment firms spend hundreds of millions of dollars enhancing their computing networks to shave as little as three milliseconds off the timing of their trades. The hyper liquidity of global markets means that investors are obsessed with short-term market trends, which leads corporate CEOs, forever anxious about their stock price, to focus their time horizon on the next quarterly earnings report. Financial valuations apply discount rates to future earnings, which means that an investment paying off thirty years in the future can be worth as little as five percent of its future payoff in the present. Under these conditions, why would any CEO care about the state of the planet—or even their company—thirty years from now?

During the 2016 US election campaign, Bernie Sanders proposed a Financial Transaction Tax to pay for free college tuition, setting the rate at 0.1% of the transaction. In Europe, discussions are under way to apply a similar EU-wide tax. My proposal increases the tax rate by orders of magnitude, and differentiates based on the length of the stock holding. For example, the tax rate might look like this:

10% if the stock is held less than a day
5% if less than a year
3% if less than 10 years
1% if less than 20 years
Zero if more than 20 years

The effects of this single step would be enormous. The financial services industry would be transformed overnight. High frequency stock trading and same-day traders would disappear. The short-term orientation of the stock market would be replaced by carefully considered long-term investment decisions. A typical mutual fund, which in the US currently turns over its portfolio at the rate of 130% a year, could no longer afford to do so, and would have to change its investment decision-making based on sustainable returns. The tax could be waived for individuals experiencing a life-changing event or for simple hedging techniques where, for example, farmers need to lock in the price of their produce at a future time.

The result would be a massive shift away from destructive extractive industries and toward sustainable businesses. For example, the fossil fuel industry is recognized to be vastly overvalued as a result of its “unburnable carbon”: the amount of fossil fuels in the ground that can never be burned if the world is to keep climate change below the 2° rise agreed at COP21 in Paris. A recent study estimates the overvaluation as high as $4 trillion. Investors, however, play a game of musical chairs, hoping they won’t be the ones left holding the stranded assets. This proposed transaction fee would incent them to dump fossil fuel investments immediately for opportunities in renewable energy with longer-term payoffs.

4. Cap on billionaire’s assets over $5 billion

As corporations have taken increasing control of the global system, they have catapulted founding shareholders and their heirs to previously unimaginable pinnacles of wealth. The combined wealth of the world’s 2,754 billionaires is now $9.2 trillion, an amount that has doubled in the past six years, and increased tenfold since the beginning of this century. The magnitude of this wealth is difficult to conceive. The top six billionaires own as much as the lower half of the entire world’s population. Taken together, the world’s billionaires would represent the third largest economy in the world, behind only China and the United States, with wealth equivalent to the GDP of Germany and Japan combined.

There is no legitimate rationale for this outrageous concentration of such wealth in a few individuals. The argument that the founders of Microsoft, Amazon, or Facebook deserve such excessive wealth is no more valid than the belief of the ancient Egyptians in the divinity of their Pharaoh, or the Medieval notion of the divine right of kings. Mark Zuckerberg, aged 33, currently owns over $70 billion. If someone had singlehandedly miniaturized the transistor, developed the logic for computer code, invented the PC, and come up with the internet, then maybe they’d deserve having close to that amount as a reward for the value they created. But all Zuckerberg did was figure out a way to connect people up in a network that became a bit more popular than other networks, and because of the internet’s scale effects, he was the lucky one who hit the jackpot. Zuckerberg merely took advantage of all the other infrastructure work that led to the internet, painstakingly pieced together by millions of people over decades, which has been the real value creator for the world.

In response to this excess, my proposal is to cap billionaires’ wealth at, say, $5 billion. It’s an arbitrary amount, still obscenely high and presumably more than enough for those who argue that people should receive ample financial rewards for success. Beyond a certain level of wealth, however, what drives these people is power and prestige. This could be tapped by requiring them to donate their excess wealth to a trust over which they could retain some influence.

Such a trust, however, would need to have some strict criteria. While the billionaire could influence the trust’s priorities, he would not have control over its activities. The current Bill and Melinda Gates Foundation, for example, while a step in the right direction, is under the total control of the Gateses and Warren Buffet. The foundation set up with much fanfare by Mark Zuckerberg is viewed by experts as little more than a fancy tax dodge.

Each trust would need to avoid interference in a country’s political system and be dedicated to life-affirming activities, the scope of which could be based, for example, on the principles of the Earth Charter, a framework for building a just, sustainable and peaceful global society endorsed by over 6,000 organizations.

The positive impact that these trillions of dollars could have on human and natural welfare would be prodigious. Imagine a country the size of Germany and Japan combined dedicated entirely to serving human and natural flourishing. It would have the resources to end extreme poverty, increase regenerative agriculture to over a billion acres worldwide, educate hundreds of millions of girlsthrough the Global South, disseminate up to a billion clean cookstoves, and much, much more.

The billionaires of the world, meanwhile, would continue to enjoy enormous wealth, and when they jet to Davos to hobnob with other luminaries for the annual World Economic Forum, they could finally have something worthwhile to boast about.

5. Declare a crime of ecocide at the International Criminal Court

Even with all these constraints, the powers of transnational corporations would remain enormous, and there would still be times when, through willful negligence or intentional bad faith, corporate action causes massive environmental damage. A UN study, which remained unpublished, found that the world’s largest companies had caused over $2 trillion of environmental damage, which would cost a third of their overall profits if they were forced to pay for it. Because of their extensive political influence, even their most damaging activities go unpunished. This leads to my final proposal: to declare a crime of ecocide at the International Criminal Court (ICC).

The ICC is an independent judicial body set up by international treaty, the Rome Statute, in 2002 to prosecute war crimes, genocides, and crimes against humanity. While it continues to face serious challenges to its enforcement powers, it has had the effect of putting tyrants everywhere on notice that they can no longer act with impunity. If ecocide—the loss, destruction, or severe damage of an ecosystem—were declared a crime by the ICC, this could have a similarly daunting effect on those corporate tyrants who currently know they can get away with devastating the world’s “sacrifice zones” where they are pillaging the earth’s resources for profit.

There is a campaign, Eradicating Ecocide, already under way to make this happen. A model law has been drafted, and an Earth Protectors Trust Fund has been set up to permit common people everywhere to become legal Earth protectors. If a two-thirds majority of the Rome Statute signatories were to approve this as an amendment, it would become enforceable globally. Suddenly, corporate boards and CEOs everywhere would realize they are no longer above the law.

* * * * *

There is a strange paradox to consider about these proposals. One the one hand, notice how limited they are in scope. Even if they were all implemented overnight, the global system would not be overturned. People would still go to work and get paid, food would still be on the shelves of the grocery store, the same governments would still be in power, and the internet would still work. The gaping structural inequities of our current world order would continue unabated, and we’d still be consuming far more than our planet can sustain. Ultimately, we need a complete transformation of our global system if our civilization is to survive intact through this century.

On the other hand, it doesn’t take a political genius to realize that these ideas are so far from mainstream thinking that they have virtually no chance to be adopted any time soon. They would be considered too radical for even the most progressive mainstream politician to endorse. What does this tell us about our current political dialogue? To me, it suggests that our conversations are too severely constrained by what we’re “allowed” to think in terms of how our system works. We need to cast our gaze outside the norms that our billionaire-controlled mainstream media permits us to consider.

Imagine a world where these ideas (or others like them) began to be seriously entertained. How would they even be enforced? The only way corporations could be brought to heel, or billionaires compelled to give up their excess billions, would be a concerted effort led by the United States in conjunction with the European Union, and joined by the preponderance of other countries.

This, of course, could only happen if grassroots demand for these ideas spread so powerfully that politicians had to take notice. This is not such an unrealistic scenario, given the worldwide disavowal of the dominant capitalist model: most Europeans have a higher opinion of socialism than capitalism, and even in the US, the overwhelming majority see big business as unethical and unfair.

Then, there is the potential “trim tab” effect of adopting these ideas. Even though these proposals alone wouldn’t fundamentally transform our system in the way that’s needed, they might set changes in motion that could eventually take us there. There may be other ideas more effective than these, and of course each proposal contains within it complications that would need to be worked out carefully. However, my hope is that these ideas invite a new mode of political dialogue, along with a recognition that even in the darkest times, realistic pathways exist toward a thriving future for humanity and the natural world.

When the Occupy movement failed to achieve its initial promise, many people pointed to its lack of specific demands as a reason for its demise. If and when the next radical grassroots movement emerges, which may be sooner than you expect, let’s make sure they have an array of ideas such as these in their quiver to focus public opinion on actual political deliverables.

There are very few people who really want to see our civilization collapse. If these proposals eventually did get implemented, perhaps even the executives of the transnational corporations might sleep better at night, knowing that they can become part of the solution rather than a force of destruction.

Jeremy Lent is author of The Patterning Instinct: A Cultural History of Humanity’s Search for Meaning, which investigates how different cultures have made sense of the universe and how their underlying values have changed the course of history. He is founder of the nonprofit Liology Institute, dedicated to fostering a sustainable worldview. For more information visit jeremylent.com.

500 years is long enough! Human Depravity in the Congo

Posted on May 30, 2018 by Reid Mukai

By Robert J. Burrowes

I would like to tell you something about human depravity and illustrate just how widespread it is among those we often regard as ‘responsible’. I am going to use the Democratic Republic of the Congo as my example.

As I illustrate and explain what has happened to the Congo and its people during the past 500 years, I invite you to consider my essential point: Human depravity has no limit unless people like you (hopefully) and me take some responsibility for ending it. Depravity, barbarity and violent exploitation will not end otherwise because major international organizations (such as the UN), national governments and corporations all benefit from it and are almost invariably led by individuals too cowardly to act on the truth.

The Congo

Prior to 1482, the area of central Africa now known as the Democratic Republic of the Congo was part of the Kingdom of the Kongo. It was populated by some of the greatest civilizations in human history.

Slavery

However, in that fateful year of 1482, the mouth of the Congo river, which flows into the Atlantic Ocean, became known to Europeans when the Portuguese explorer Diogo Cao claimed he ‘discovered’ it. By the 1530s, more than five thousand slaves a year (many from inland regions of the Kongo) were being transported to distant lands, mostly in the Americas. Hence, as documented by Adam Hothschild, the Congo was first exploited by Europeans during the Atlantic slave trade. See King Leopold’s Ghost: A Story of Greed, Terror, and Heroism in Colonial Africa.

Despite the horrific depredations of the militarized slave trade and all of its ancillary activities, including Christian priests spreading ‘Christianity’ while raping their captive slave girls, the Kingdoms of the Kongo were able to defend and maintain themselves to a large degree for another 400 years by virtue of their long-standing systems of effective governance. As noted by Chancellor Williams’ in his epic study The Destruction of Black Civilization: Great Issues of a Race from 4500 B.C. to 2000 A.D. the Kingdoms of the Congo prior to 1885 – including Kuba under Shyaam the Great and the Matamba Kingdom under Ngola Kambolo – were a cradle of culture, democracy and exceptional achievement with none more effective than the remarkable Queen (of Ndongo and Matamba), warrior and diplomat Nzinga in the 17th century.

But the ruthless military onslaught of the Europeans never abated. In fact, it continually expanded with ever-greater military firepower applied to the task of conquering Africa. In 1884 European powers met in Germany to finally divide ‘this magnificent African cake’, precipitating what is sometimes called ‘the scramble for Africa’ but is more accurately described as ‘the scramble to finally control and exploit Africa and Africans completely’.

Colonization

One outcome of the Berlin Conference was that the great perpetrator of genocide – King Leopold II of Belgium – with the active and critical support of the United States, seized violent control of a vast swathe of central Africa in the Congo Basin and turned it into a Belgian colony. In Leopold’s rapacious pursuit of rubber, gold, diamonds, mahogany and ivory, 10 million African men, women and children had been slaughtered and many Africans mutilated (by limb amputation, for example) by the time he died in 1909. His brutality and savagery have been documented by Adam Hochschild in the book King Leopold’s Ghost: A Story of Greed, Terror, and Heroism in Colonial Africa which reveals the magnitude of human suffering that this one man, unopposed in any significant way by his fellow Belgians or anyone else, was responsible for inflicting on Africa.

If you want to spend a few moments in touch with the horror of what some human beings do to other human beings, then I invite you to look at the sample photos of what Leopold did in ‘his’ colony in the Congo. See ‘“A Nightmare In Heaven” – Why Nobody Is Talking About The Holocaust in Congo’.

Now if you were hoping that the situation in the Congo improved with the death of the monster Leopold, your hope is in vain.

The shocking reality is that the unmitigated horror inflicted on the Congolese people has barely improved since Leopold’s time. The Congo remained under Belgian control during World War I during which more than 300,000 Congolese were forced to fight against other Africans from the neighboring German colony of Ruanda-Urundi. During World War II when Nazi Germany captured Belgium, the Congo financed the Belgian government in exile.

Throughout these decades, the Belgian government forced millions of Congolese into mines and fields using a system of ‘mandatory cultivation’ that forced people to grow cash crops for export, even as they starved on their own land.

It was also during the colonial period that the United States acquired a strategic stake in the enormous natural wealth of the Congo without, of course, any benefit to the Congolese people. This included its use of uranium from a Congolese mine (subsequently closed in 1960) to manufacture the first nuclear weapons: those used to destroy Hiroshima and Nagasaki. See ‘Patrice Lumumba: the most important assassination of the 20th century’.

Independence then Dictatorship

By 1960, the Congolese people had risen up to overthrow nearly a century of slavery and Belgian rule. Patrice Lumumba became the first Prime Minister of the new nation and he quickly set about breaking the yoke of Belgian influence and allied the Congo with Russia at the height of the Cold War.

But the victory of the Congolese people over their European and US overlords was shortlived: Patrice Lumumba was assassinated in a United States-sponsored coup in 1961 with the US and other western imperial powers (and a compliant United Nations) repeating a long-standing and ongoing historical pattern of preventing an incredibly wealthy country from determining its own future and using its resources for the benefit of its own people. See ‘Patrice Lumumba: the most important assassination of the 20th century’.

So, following a well-worn modus operandi, an agent in the form of (Army Chief of Staff, Colonel) Mobutu Sese Seko was used to overthrow Lumumba’s government. Lumumba himself was captured and tortured for three weeks before being assassinated by firing squad. The new dictator Mobutu, compliant to western interests, then waged all-out war in the country, publicly executing members of the pro-Lumumba revolution in spectacles witnessed by tens of thousands of people. By 1970, nearly all potential threats to his authority had been smashed. See ‘“A Nightmare In Heaven” – Why Nobody Is Talking About The Holocaust in Congo’.

Mobutu would rape the Congo (renamed Zaire for some time) with the blessing of the west – robbing the nation of around $2billion – from 1965 to 1997. During this period, the Congo got more than $1.5 billion in US economic and military aid in return for which US multinational corporations increased their share of the Congo’s abundant minerals. ‘Washington justified its hold on the Congo with the pretext of anti-Communism but its real interests were strategic and economic.’ See ‘Congo: The Western Heart of Darkness’.

Invasion

Eventually, however, Mobutu’s increasingly hostile rhetoric toward his white overlords caused the west to seek another proxy. So, ostensibly in retaliation against Hutu rebels from the Rwandan genocide of 1994 – who fled into eastern Congo after Paul Kagame’s (Tutsi) Rwanda Patriotic Army invaded Rwanda from Uganda to end the genocide – in October 1996 Rwanda’s now-dictator Kagame, ‘who was trained in intelligence at Fort Leavenworth in the United States, invaded the Congo with the help of the Clinton Administration’ and Uganda. By May 1997 the invading forces had removed Mobutu and installed the new (more compliant) choice for dictator, Laurent Kabila.

Relations between Kabila and Kagame quickly soured, however, and Kabila expelled the Rwandans and Ugandans from the Congo in July 1998. However, the Rwandans and Ugandans reinvaded in August establishing an occupation force in eastern Congo. Angola, Zimbabwe and Namibia sent their armies to support Kabila and Burundi joined the Rwandans and Ugandans. Thus began ‘Africa’s First World War’ involving seven armies and lasting until 2003. It eventually killed six million people – most of them civilians – and further devastated a country crushed by more than a century of Western domination, with Rwanda and Uganda establishing themselves as conduits for illegally taking strategic minerals out of the Congo. See ‘Congo: The Western Heart of Darkness’.

During the periods under Mobutu and Kabila, the Congo became the concentration camp capital of the world and the rape capital as well. ‘No woman in the path of the violence was spared. 7 year olds were raped by government troops in public. Pregnant women were disemboweled. Genital mutilation was commonplace, as was forced incest and cannibalism. The crimes were never punished, and never will be.’

Laurent Kabila maintained the status quo until he was killed by his bodyguard in 2001. Since then, his son and the current President Joseph Kabila has held power in violation of the Constitution. ‘He has murdered protesters and opposition party members, and has continued to obey the will of the west while his people endure unspeakable hells.’

Corporate and State Exploitation

While countries such as Belgium, Canada, France, Germany, the Netherlands, South Korea, Switzerland and the UK are heavily involved one way or another (with other countries, such as Australia, somewhat less so), US corporations make a vast range of hitech products including microchips, cell phones and semiconductors using conflict minerals taken from the Congo . This makes ‘companies like Intel, Apple, HP, and IBM culpable for funding the militias that control the mines’. See ‘“A Nightmare In Heaven” – Why Nobody Is Talking About The Holocaust in Congo’.

But many companies are benefitting. For example, a 2002 report by the United Nations listed a ‘sample’ of 34 companies based in Europe and Asia that are importing minerals from the Congo via, in this case, Rwanda. The UN Report commented: ‘Illegal exploitation of the mineral and forest resources of the Democratic Republic of the Congo is taking place at an alarming rate. Two phases can be distinguished: mass-scale looting and the systematic and systemic exploitation of resources’. The mass-scale looting occurred during the initial phase of the invasion of the Congo by Rwanda, Uganda and Burundi when stockpiles of minerals, coffee, wood, livestock and money in the conquered territory were either taken to the invading countries or exported to international markets by their military forces or nationals. The subsequent systematic and systemic exploitation required planning and organization involving key military commanders, businessmen and government structures; it was clearly illegal. See ‘Report of the Panel of Experts on the Illegal Exploitation of Natural Resources and other Forms of Wealth of the Democratic Republic of the Congo’.

For some insight into other issues making exploitation of the Congo possible but which are usually paid less attention – such as the roles of mercenaries, weapons dealers, US military training of particular rebel groups and the secret airline flights among key locations in the smuggling operations of conflict minerals – see the research of Keith Harmon Snow and David Barouski: ‘Behind the numbers: Untold Suffering in the Congo’ and ‘Merchants of Death: Exposing Corporate-Financed Holocaust in Africa; White Collar War Crimes, Black African Fall Guys ’.

Has there been any official attempt to rein in this corporate exploitation?

A little. For example, the Obama-era US Dodd-Frank Financial Reform Act of 2010 shone a spotlight on supply chains, pressuring companies to determine the origin of minerals used in their products and invest in removing conflict minerals from their supply chain. This resulted in some US corporations, conscious of the public relations implications of being linked to murderous warlords and child labor, complying with the Act. So, a small step in the right direction it seemed. See ‘The Impact of Dodd-Frank and Conflict Minerals Reforms on Eastern Congo’s Conflict’ and ‘Congo mines no longer in grip of warlords and militias, says report’.

In 2011, given that legally-binding human rights provisions, if applied, should have offered adequate protections already, the United Nations rather powerlessly formulated the non-binding ‘Guiding Principles on Business and Human Rights’.

And in 2015, the European Union also made a half-hearted attempt when it decided that smelters and refiners based in the 28-nation bloc be asked to certify that their imports were conflict-free on a voluntary basis! See ‘EU lawmakers to limit import of conflict minerals’.

However, following the election of Donald Trump as US President, in April 2017 ‘the U.S. Securities and Exchange Commission suspended key provisions of its “conflict minerals” rule’. Trump is also seeking to undo the Obama-era financial regulations, once again opening the door to the unimpeded trade in blood minerals by US corporations. See ‘“A Nightmare In Heaven” – Why Nobody Is Talking About The Holocaust in Congo’ and ‘Trump Moves to Roll Back Obama-Era Financial Regulations’.

Today

Despite its corrupt exploitation for more than 500 years, the Congo still has vast natural resources (including rainforests) and mineral wealth. Its untapped deposits of minerals are estimated to be worth in excess of $US24 trillion. Yes, that’s right: $US24trillion. With a host of rare strategic minerals – including cobalt, coltan, gold and diamonds – as well as copper, zinc, tin and tungsten critical to the manufacture of hitech electronic products ranging from aircraft and vehicles to computers and mobile phones, violent and morally destitute western governments and corporations are not about to let the Congo decide its own future and devote its resources to the people of this African country. This, of course, despite the international community paying lip service to a plethora of ‘human rights’ treaties.

Hence, violent conflict, including ongoing war, over the exploitation of these resources, including the smuggling of ‘conflict minerals’ – such as gold, coltan and cassiterite (the latter two ores of tantalum and tin, respectively), and diamonds – will ensure that the people of the Congo continue to be denied what many of those in western countries take for granted: the right to life benefiting from the exploitation of ‘their’ natural resources.

In essence then, since 1885 European and US governments, together with their corporations and African collaborators, have inflicted phenomenal ongoing atrocities on the peoples of the Congo as they exploit the vast resources of the country for the benefit of non-Congolese people.

But, you might wonder, European colonizers inflicted phenomenal violence on the indigenous peoples in all of their colonies – whether in Africa, Asia, Central and South America, the Caribbean or Oceania – so is their legacy in the Congo any worse?

Well, according to the The Pan-African Alliance, just since colonization in 1885, at least 25 million Congolese men, women and children have been slaughtered by white slave traders, missionaries, colonists, corporations and governments (both the governments of foreign-installed Congolese dictators and imperial powers). ‘Yet barely a mention is made of the holocaust that rages in the heart of Africa.’ Why? Because ‘the economy of the entire world rests on the back of the Congo.’ See ‘“A Nightmare In Heaven” – Why Nobody Is Talking About The Holocaust in Congo’.

So what is happening now?

In a sentence: The latest manifestation of the violence and exploitation that has been happening since 1482 when that Portuguese explorer ‘discovered’ the mouth of the Congo River. The latest generation of European and American genocidal exploiters, and their latter-day cronies, is busy stealing what they can from the Congo. Of course, as illustrated above, having installed the ruthless dictator of their choosing to ensure that foreign interests are protected, the weapon of choice is the corporation and non-existent legal or other effective controls in the era of ‘free trade’.

The provinces of North and South Kivu in the eastern Congo are filled with mines of cassiterite, wolframite, coltan and gold. Much mining is done by locals eking out a living using Artisanal and Small-Scale Mining (ASM); that is, mining by hand, sometimes with rudimentary tools. Some of these miners sell their product via local agents to Congolese military commanders who smuggle it out of the country, usually via Rwanda, Uganda or Burundi, and use the proceeds to enrich themselves.

Another report on South Kivu by Global Witness in 2016 – see ‘River of Gold’ and ‘Illegal gold trade in Congo still benefiting armed groups, foreign companies’ – documented evidence of the corrupt links between government authorities, foreign corporations (in this case, Kun Hou Mining of China) and the military, which results in the gold dredged from the Ulindi River in South Kivu being illegally smuggled out of the country, with much of it ending up with Alfa Gold Corp in Dubai. The unconcealed nature of this corruption and the obvious lack of enforcement of weak Congolese law is a powerful disincentive for corporations to engage in ‘due diligence’ when conducting their own mining operations in the Congo.

In contrast, in the south of the Congo in the former province of Katanga, Amnesty International and Afrewatch researchers tracked sacks of cobalt ore that had been mined by artisanal miners in Kolwezi to the local market where the mineral ore is sold. From this point, the material was smelted by one of the large companies in Kolwezi, such as Congo Dongfang Mining International SARL (CDM), which is a smelter and fully-owned subsidiary of Zhejiang Huayou Cobalt Company Ltd (Huayou Cobalt) in China, one of the world’s largest manufacturers of cobalt products. Once smelted, the material is typically exported from the Congo to China via a port in South Africa. See ‘“This is what We Die for”: Human Rights Abuses in the Democratic Republic of the Congo Power the Global Trade in Cobalt’.

In its 2009 report ‘“Faced with a gun, what can you do?” War and the Militarisation of Mining in Eastern Congo’ examining the link between foreign corporate activity in the Congo and the military violence, Global Witness raised questions about the involvement of nearly 240 companies spanning the mineral, metal and technology industries. It specifically identified four main European companies as open buyers in this illegal trade: Thailand Smelting and Refining Corp. (owned by British Amalgamated Metal Corp.), British Afrimex, Belgian Trademet and Traxys. It also questioned the role of other companies further down the manufacturing chain, including prominent electronics companies Hewlett-Packard, Nokia, Dell and Motorola (a list to which Microsoft and Samsung should have been added as well). Even though they may be acting ‘legally’, Global Witness criticized their lack of due diligence and transparency standards at every level of their supply chain. See ‘First Blood Diamonds, Now Blood Computers?’

Of course, as you no doubt expect, some of the world’s largest corporate miners are in the Congo. These include Glencore (Switzerland) and Freeport-McMoRan (USA). But there are another 20 or more mining corporations in the Congo too, including Mawson West Limited (Australia), Forrest Group International (Belgium), Anvil Mining (Canada), Randgold Resources (UK) and AngloGold Ashanti (South Africa).

Needless to say, despite beautifully worded ‘corporate responsibility statements’ by whatever name, the record rarely goes even remotely close to resembling the rhetoric. Take Glencore’s lovely statement on ‘safety’ in the Congo: ‘Ask Glencore: Democratic Republic of the Congo’. Unfortunately, this didn’t prevent the 2016 accident at a Congolese mine that one newspaper reported in the following terms: ‘Glencore’s efforts to reduce fatalities among its staff have suffered a setback with the announcement that the death toll from an accident at a Congolese mine has risen to seven.’ See ‘Glencore reports seven dead in mining accident’.

Or consider the Belgian Forrest Group International’s wonderful ‘Community Services’ program, supposedly developing projects ‘in the areas of education, health, early childhood care, culture, sport, infrastructure and the environment. The FORREST GROUP has been investing on the African continent since 1922. Its longevity is the fruit of a vision of the role a company should have, namely the duty to be a positive player in the society in which it operates. The investments of the Group share a common core of values which include, as a priority, objectives of stability and long-term prospects.’

Regrettably, the Forrest Group website and public relations documents make no mention of the company’s illegal demolition, without notice, of hundreds of homes of people who lived in the long-standing village of Kawama, inconveniently close to the Forrest Group’s Luiswishi Mine, on 24 and 25 November 2009. People were left homeless and many lost their livelihoods as a direct consequence. Of course, the demolitions constitute forced evictions, which are illegal under international human rights law.

Fortunately, given the obvious oversight of the Forrest Group in failing to mention it, the demolitions have been thoroughly documented by Amnesty International in its report ‘Bulldozed – How a Mining Company Buried the Truth about Forced Evictions in the Democratic Republic of the Congo’ and the satellite photographs acquired by the American Academy for the Advancement of Science have been published as well. See ‘Satellite imagery assessment of forced relocations near the Luiswishi Mine ’.

Needless to say, it is difficult for Congolese villagers to feel they have any ‘stability and long-term prospects’, as the Forrest Group’s ‘Community Services’ statement puts it, when their homes and livelihoods have been destroyed. Are company chairman George A. Forrest and its CEO Malta David Forrest and their family delusional? Or just so familiar with being violently ruthless in their exploitation of the Congo and its people, that it doesn’t even occur to them that there might be less violent ways of resolving any local conflicts?

Tragically, of course, fatal industrial accidents and housing demolition are only two of the many abuses inflicted on mining labourers, including (illegal) child labourers, and families in the Congo where workers are not even provided with the most basic ‘safety equipment’ – work clothes, helmets, gloves, boots and facemasks – let alone a safe working environment (including guidance on the safe handling of toxic substances) or a fair wage, reasonable working hours, holidays, sick leave or superannuation.

Even where laws exist, such as the Congo’s Child Protection Code (2009) which provides for ‘free and compulsory primary education for all children’, laws are often simply ignored (without legal consequence). Although, it should also be noted, in the Congo there is no such thing as ‘free education’ despite the law. Consequently, plenty of children do not attend school and work full time, others attend school but work out of school hours. There is no effective system to remove children from child labour (which is well documented). Even for adults, there is no effective labour inspection system. Most artisanal mining takes places in unauthorized mining areas ‘where the government is doing next to nothing to regulate the safety and labour conditions in which the miners work’. See ‘“This is what We Die for”: Human Rights Abuses in the Democratic Republic of the Congo Power the Global Trade in Cobalt’.

In addition, as noted above, given its need for minerals to manufacture the hitech products it makes, including those for western corporations, China is deeply engaged in mining strategic minerals in the Congo too. See ‘China plays long game on cobalt and electric batteries’.

Based on the Chinese notion of ‘respect’ – which includes the ‘principle’ of noninterference in each other’s internal affairs – the Chinese dictatorship is content to ignore the dictatorship of the Congo and its many corrupt and violent practices, even if its investment often has more beneficial outcomes for ordinary Congolese than does western ‘investment’. Moreover, China is not going to disrupt and destabilize the Congo in the way that the United States and European countries have done for so long. See ‘China’s Congo Plan’ and ‘China vs. the US: The Struggle for Central Africa and the Congo’.

Having noted the above, however, there is plenty of evidence of corrupt Chinese business practice in the extraction and sale of strategic minerals in the Congo, including that documented in the above-mentioned Global Witness report. See ‘River of Gold’.

Moreover, Chinese involvement is not limited to its direct engagement in mining such as gold dredging of the Ulindi River. A vital source of the mineral cobalt is that which is mined by artisanal miners. As part of a recent detailed investigation, Amnesty International had researchers follow cobalt mined by artisanal miners from where it was mined to a market at Musompo, where minerals are traded. The report summarised what happens:

‘Independent traders at Musompo – most of them Chinese – buy the ore, regardless of where it has come from or how it has been mined. In turn, these traders sell the ore on to larger companies in the DRC which process and export it. One of the largest companies at the centre of this trade is Congo Dongfang Mining International (CDM). CDM is a 100% owned subsidiary of China-based Zhejiang Huayou Cobalt Company Ltd (Huayou Cobalt), one of the world’s largest manufacturers of cobalt products. Operating in the DRC since 2006, CDM buys cobalt from traders, who buy directly from the miners. CDM then smelts the ore at its plant in the DRC before exporting it to China. There, Huayou Cobalt further smelts and sells the processed cobalt to battery component manufacturers in China and South Korea. In turn, these companies sell to battery manufacturers, which then sell on to well-known consumer brands.

‘Using public records, including investor documents and statements published on company websites, researchers identified battery component manufacturers who were listed as sourcing processed ore from Huayou Cobalt. They then went on to trace companies who were listed as customers of the battery component manufacturers, in order to establish how the cobalt ends up in consumer products. In seeking to understand how this international supply chain works, as well as to ask questions about each company’s due diligence policy, Amnesty International wrote to Huayou Cobalt and 25 other companies in China, Germany, Japan, South Korea, Taiwan, UK, and the USA. These companies include some of the world’s largest and best known consumer electronics companies, including Apple Inc., Dell, HP Inc. (formerly Hewlett-Packard Company), Huawei, Lenovo (Motorola), LG, Microsoft Corporation, Samsung, Sony and Vodafone, as well as vehicle manufacturers like Daimler AG, Volkswagen and Chinese firm BYD. Their replies are detailed in the report’s Annex.’ See ‘“This is what We Die for”: Human Rights Abuses in the Democratic Republic of the Congo Power the Global Trade in Cobalt’.

As backdrop to the problems mentioned above, it is worth pointing out that keeping the country under military siege is useful to many parties, internal and foreign. Over the past 20 years of violent conflict, control of these valuable mineral resources has been a lucrative way for warring parties to finance their violence – that is, buying the products of western weapons corporations – and to promote the chaotic circumstances that make minimal accountability and maximum profit easiest. The Global Witness report ‘Faced with a gun, what can you do?’ cited above followed the supply chain of these minerals from warring parties to middlemen to international buyers: people happy to profit from the sale of ‘blood minerals’ to corporations which, in turn, are happy to buy them cheaply to manufacture their highly profitable hitech products.

Moreover, according to the Global Witness report, although the Congolese army and rebel groups – such as the Democratic Forces for the Liberation of Rwanda (FDLR), a rebel force opposed to the Rwandan government that has taken refuge in the Congo since the 1994 Rwanda genocide – have been warring on opposite sides for years, they are collaborators in the mining effort, at times providing each other with road and airport access and even sharing their spoils. Researchers say they found evidence that the mineral trade is much more extensive and profitable than previously suspected: one Congolese government official reported that at least 90% of all gold exports from the country were undeclared. And the report charges that the failure of foreign governments to crack down on illicit mining and trade has undercut development endeavors supposedly undertaken by the international community in the war-torn region.

Social and Environmental Costs

Of course, against this background of preoccupation with the militarized exploitation of mineral resources for vast profit, ordinary Congolese people suffer extraordinary ongoing violence. Apart from the abuses mentioned above, four women are raped every five minutes in the Congo, according to a study done in May 2011. ‘These nationwide estimates of the incidence of rape are 26 times higher than the 15,000 conflict-related cases confirmed by the United Nations for the DRC in 2010’. Despite the country having the highest number of UN peacekeeping forces in the world – where the United Nations Organization Stabilization Mission in the Democratic Republic of the Congo (MONUSCO) has operated since the turn of the century – the level of sexual violence soldiers have perpetrated against women is staggering. ‘Currently, there is still much violence in the region, as well as an overwhelming amount of highly strategic mass rape.’ See ‘Conflict Profile: Democratic Republic of Congo’.

Unsurprisingly, given the international community’s complete indifference, despite rhetoric to the contrary, to the plight of Congolese people, it is not just Congolese soldiers who are responsible for the rapes. UN ‘peacekeepers’ are perpetrators too. See ‘Peacekeepers gone wild: How much more abuse will the UN ignore in Congo?’

And the Congo is a violently dangerous place for children as well with, for example, Child Soldiers International reporting that with a variety of national and foreign armed groups and forces operating in the country for over 20 years, the majority of fighting forces have recruited and used children, and most still exploit boys and girls today with girls forced to become girl soldiers but to perform a variety of other sexual and ‘domestic’ roles too. See Child Soldiers International. Of course, child labour is completely out of control with many impoverished families utterly dependent on it for survival.

In addition, many Congolese also end up as refugees in neighbouring countries or as internally displaced people in their own country.

As you would expect, it is not just human beings who suffer. With rebel soldiers (such as the Rwanda-backed M23), miners and poachers endlessly plundering inadequately protected national parks and other wild places for their resources, illegal mining is rampant, over-fishing a chronic problem, illegal logging (and other destruction such as charcoal burning for cooking) of rainforests is completely out of control in some places, poaching of hippopotamuses, elephants, chimpanzees and okapi for ivory and bushmeat is unrelenting (often despite laws against hunting with guns), and wildlife trafficking of iconic species (including the increasingly rare mountain gorilla) simply beyond the concern of most people.

The Congolese natural environment – including the UNESCO World Heritage sites at Virunga National Park and the Okapi Wildlife Reserve, together with their park rangers – and the indigenous peoples such as the Mbuti (‘pygmies’) who live in them, are under siege. In addition to the ongoing mining, smaller corporations that can’t compete with the majors, such as Soco, want to explore and drill for oil. For a taste of the reading on all this, see ‘Virunga National Park Ranger Killed in DRC Ambush’, ‘The struggle to save the “Congolese unicorn”’, ‘Meet the First Female Rangers to Guard One of World’s Deadliest Parks’

and ‘The Battle for Africa’s Oldest National Park’.

If you would like to watch a video about some of what is happening in the Congo, either of these videos will give you an unpleasant taste: ‘Crisis In The Congo: Uncovering The Truth’ and ‘Conflict Minerals, Rebels and Child Soldiers in Congo’.

Resisting the Violence

So what is happening to resist this violence and exploitation? Despite the horror, as always, some incredible people are working to end it.

Some Congolese activists resist the military dictatorship of Joseph Kabila, despite the enormous risks of doing so. See, for example, ‘Release the Congolese activists still in jail for planning peaceful demonstrations’.

Some visionary Congolese continue devoting their efforts, in phenomenally difficult circumstances including lack of funding, to building a society where ordinary Congolese people have the chance to create a meaningful life for themselves. Two individuals and organizations who particularly inspire me are based in Goma in eastern Congo where the fighting is worst.

The Association de Jeunes Visionnaires pour le Développement du Congo, headed by Leon Simweragi, is a youth peace group that works to rehabilitate child soldiers as well as offer meaningful opportunities for the sustainable involvement of young people in matters that affect their lives and those of their community.

And Christophe Nyambatsi Mutaka is the key figure at the Groupe Martin Luther King that promotes active nonviolence, human rights and peace. Christophe’s group particularly works on reducing sexual and other violence against women.

There are also solidarity groups, based in the West, that work to draw attention to the nightmare happening in the Congo. These include Friends of the Congo that works to inform people and agitate for change and groups like Child Soldiers International mentioned above.

If you would like to better understand the depravity of those individuals in the Congo (starting with the dictator Joseph Kabila but including all those officials, bureaucrats and soldiers) who enable, participate in or ignore the violence and exploitation; the presidents and prime ministers of western governments who ignore exploitation, by their locally-based corporations, of the Congo; the heads of multinational corporations that exploit the Congo – such as Anthony Hayward (Chair of Glencore), Richard Adkerson (CEO of Freeport-McMoRan), George A. Forrest and Malta David Forrest (Chair and CEO respectively of Forrest Group International), Christopher L Coleman (Chair of Randgold Resources) and Srinivasan Venkatakrishnan (CEO of AngloGold Ashanti) – as well as those individuals in international organizations such as the UN (starting with Secretary-General António Guterres) and the EU (headed by Jean-Claude Juncker, President of the European Commission), who ignore, provoke, support and/or profit from this violence and exploitation, you will find the document ‘Why Violence?’ and the website ‘Feelings First’ instructive.

Whether passively or actively complicit, each of these depraved individuals (along with other individuals within the global elite) does little or nothing to draw attention to, let alone work to profoundly change, the situation in the Congo which denies most Congolese the right to a meaningful life in any enlightened sense of these words.

If you would like to help, you can do so by supporting the efforts of the individual activists and solidarity organizations indicated above or those like them.

You might also like to sign the online pledge of ‘The People ’s Charter to Create a Nonviolent World ’ which references the Congo among many other examples of violence around the world.

And if you would like to support efforts to remove the dictatorship of Joseph Kabila and/or get corrupt foreign governments, corporations and organizations out of the Congo, you can do so by planning and implementing or supporting a nonviolent strategy that is designed to achieve one or more of these objectives. See Nonviolent Defense/Liberation Strategy.

If you are still reading this article and you feel the way I do about this ongoing atrocity, then I invite you to participate, one way or another, in ending it.

For more than 500 years, the Congo has been brutalized by the extraordinary violence inflicted by those who have treated the country as a resource – for slaves, rubber, timber, wildlife and minerals – to be exploited.

This will only end when enough of us commit ourselves to acting on the basis that 500 years is long enough. Liberate the Congo!

Biodata: Robert J. Burrowes has a lifetime commitment to understanding and ending human violence. He has done extensive research since 1966 in an effort to understand why human beings are violent and has been a nonviolent activist since 1981. He is the author of ‘Why Violence?’ His email address is flametree@riseup.net and his website is here.

Robert J. Burrowes
P.O. Box 68
Daylesford, Victoria 3460
Australia

Email: flametree@riseup.net

Websites:
Nonviolence Charter
Flame Tree Project to Save Life on Earth
‘Why Violence?’
Feelings First
Nonviolent Campaign Strategy
Nonviolent Defense/Liberation Strategy
Anita: Songs of Nonviolence
Robert Burrowes
Global Nonviolence Network

I Participate

Posted on October 16, 2016 by Reid Mukai

By Jonathan Bessette

Source: Adbusters

Recall that you’re sitting in a rapid transit vehicle, carried along the sky-line above cement highways, paved in homage to the Romans, who designed a system of militarized paths stretching everywhere, causing everything to lead back to one place. Here we are everyone, the year of the Monkey, 2016, 98 years after The Great War … too bad it isn’t the year of the Dalmatians … Mickey Mouse recently Tweeted that Disney is working on buying the rights to the Chinese lunar calendar. Imagine 12 animated classics framing each and every year for the remainder of humanity’s existence.

At this point human society is so vast, so complex, so multilayered, that it is impossible to stay updated, engaged, and participating in every area of local and global importance. Education takes us from a place of innocence, creativity and joy, forcing us to fall into the institutional lines of desks and faced forward attention. As a nodal point of knowledge each new person will be filled to the brim with information that makes them useful to the status quo.

Neuroscience now tells us that the brain has plasticity and the neurosynaptic networks that are created through nurturing, which become identity and personality, can be changed and overwritten. Newer pathways can be formed and strengthened and older ones can be reduced. Does this mean that our free-will has a physical manifestation as identity, as culture, and every choice affects the people, animals and objects around us? Everything we think and do reinforces everything we think and do, creating a strange logical loop which justifies our lives as ourselves. Without any major impetus, what reason do we have to change? Why compromise our internally consistent narrative and accept the narrative of someone else? What stands to be different?

Surreality is becoming a more constant state as life in the present starts to look like Science Fiction of the future from the past. The last historian wandering around Paris in the 21st Century, forgotten by a technologically advanced world that cares only for materialism. A beguiled Case, the lead character of Gibson’s Neuromancer, disenfranchised because he can no longer participate in the romance of cyberspace, looking something like a hacker barred by the law to approach or touch a computer. Of course cyborgs, robots, virtual reality and AI dance at the periphery, the momentum of current technological trends, yet we titillate ourselves with the practical possibility of these totems nearing our hearts and minds.

Information overflows like never before. Some cry Apocalypse! End Times! The Rapture! But most of the world is still filling up their gas tanks, believing that the day when Climate Change will actually affect them is the day that it will be clearly outlined in a power point presentation, at their offices or wherever they work, explaining the equity found in maintaining current profit margins while in the same breath rearranging the economic vehicle of prosperity.

“Change without Changing!” might be the Party Slogan for whoever runs for the Presidency after Obama sputters to a close.

Take my hand and run through the ever-increasing fields of soya beans, where we can hear the Monsanto genetically-modified breeze blowing the answer in the wind, whispering corporate sonatas, proving that commercial capitalism is a system of religion. Faith in Profit! The Gospel of Endless Progress! Join our Church of Business! Maybe Monsanto can use its private militia to assassinate Thomas Piketty, because of the seeds he’s sowing about capitalism being a mechanical beast that needs regulation because its fuel is the disparity between rich and poor … the larger the gap the more efficacious the fuel.

Then I think whether or not you’ll be reading this on paper or a flat-screen … whether either will be made from recyclable resources, and the argument that the printed word is less sustainable than the digital, so let’s put them to the test, right here, right now:

What can you do with a single piece of printed paper? Read it, eat it, burn it, re-write on it, make origami, a paper airplane or a boat, use it as a funnel, snort powders with it, wipe our bums? What can we do with a tablet? Access every possible available medium via the Internet and software?

It takes at least a lumber, ink, metal, and print industry to create the basic elements to manufacture printed media on a large scale. The average printed matter, kept in modest condition, can last up to 100 years and still be usable. The space that a single printed work takes up is quite large, creating the need to provide space of the material itself. When recycling an old book there are few components to worry about, making it rather simple.

It takes at least most types of mining and the processing of raw materials (petroleum, silicon, zinc, aluminum), software and hardware development, manufacturing, and the assembly of components to create a tablet. The average tablet, kept in modest condition, can remain functional until it’s obsolete. It certainly will not last 100 years, and even if it did the components, chips and circuitry would be so worn down that anything you might have used it for would no longer be possible. Of course you can store a million, a billion, even a zillion books on a single tablet, but will everyone have equal access to it? Tablets are extremely difficult to recycle, their components don’t just make up another tablet. The loss from entropy alone assures destruction, and we cannot grow more zinc, petroleum, or aluminum.

But really none of this matters, we don’t have any control over what corporations choose to do with our futures, or what medium we will use. These new, futuristic developments, intended to define human culture, are being devised and formed inside of grand boardrooms, in tall skyscrapers, by CEOs and shareholders. They, the 1%, are only concerned with whether the product they create for us will become a necessary commodity, like food, like water, like shelter … like Subway, like Coke Cola, like Single Room Occupancies (SROs).

You hear someone talking about the protest on Burnaby Mountain. People don’t want Kinder-Morgan expanding the capacity of an already existent pipeline because it will significantly increase the traffic of oil tankers in the Burrard Inlet. Someone else discusses the unrest of activist groups in Vancouver; about the substandard living conditions; the war on the poor; the two new prisons … they care about housing those who arise from poverty and have been given nowhere else to go. Anger overtakes you for a moment and you think, I don’t like this, why is there so much injustice, maybe I can do something about it…

A flabbergasted voice backtracking intellectual missives comes on over the radio, you’re not sure if it’s in your head or not:
“Revolution is just going around and around, it’s a cycle, it begins with violence and it ends with violence and it only achieves the same power structure that precedes it.”

You think about the French Revolution, the Arab Spring, Anonymous, and realize grass-roots change can rise up from the ground, from the dirt, from the dust whence we came, to challenge the oligarchical deities of the political / corporate aristocracy. We can sell everything we own and buy whole streets collectively, live there together, change the land and what’s on it together. We can join all kinds of innovative communities. We can gather in massive groups and walk through the streets, calling attention to everything corruption has built up around us. We can participate in Civil Disobedience, because the obedience that is asked of us causes harm to someone or something that is alive and is not fairly allowed to defend itself.

No matter how much Ayn Rand and Alan Greenspan and Justin Trudeau tell you that the money will trickle down, no matter how much they tell you that they are the ones who created the railroads, produced the banks, developed the industries that sustain our economies … they didn’t do a damn thing. We laid the tracks, we hammered the spikes, we drove the trains, we maintained the services, we built the buildings, we painted the walls, we fitted the plumbing, we opened the doors, we mopped the floors, we surveyed the land, we mineral tested the rock, we operated the drills, we processed the crude and we shipped the products. None of these things that they presume to own did they make or build. They didn’t put one brick in the wall, they didn’t dig one trench, and they didn’t turn one switch. It’s all ours…

Now an unsettling feeling might skitter across you when you realize that you are implicated in this whole thing. Why do we feel so disenfranchised? Why does the 1% own so much more influence, so much more than we little peons? I feel powerless but every day I participate in the construction of human society. Every action contributes to a massive effect called the singularity of my life. Don’t fall into the kinds of aporia that Jacques Ellul observes in The Technological Society, where no one claims responsibility for the projects of technology. Who made this computer? Was it the engineers, or the design team, the software developers, the hardware makers? Or was it the companies who mined the silver, the petroleum, the zinc, the aluminum, the silicon? No single person in the process can take responsibility for the whole … so no one does, they just accept it, and its justification is its presence.

Well then … we are in a pickle aren’t we? But maybe revolution is the act of taking responsibility? Clips of revolution flicker through your mind-film, you see riots, Molotov cocktails, police lined up with transparent plastic shields. You realize you do not want to risk your comfort, your coziness, your conformity, so you fit in and play nice and salute whoever is in power. Or maybe you are just not interested, you have your soma, your serial monogamy, your fair trade Americano. Besides, you’re too busy, you’ve got kids, you work 60 hours a week, you recently bought a home in one of the most expensive housing markets in the world, you already have enough responsibilities …

Weird Parallels: Helium Waste and 19th-Century Logging

Posted on August 13, 2015 by Reid Mukai

By Kowality Jesus

Source: Disinfo.com

There is plenty of regret to go around about the wholescale waste of the immense virgin forests in pre-20th century America. These forests represented a cheap, high-quality building material to early Americans and a profitable export that only required rudimentary tools and a healthy portion of elbow grease to attain. Unfortunately, the citizens of 19th century America (a few of whom became very rich) did not exhibit the conscientiousness nor collective restraint to prevent from despoiling the vast majority of these invaluable and dignified forests. It simply did not occur to them (until Teddy Roosevelt spearheaded the conservation movement and hippies formed the environmental movement) that this timber resource is exhaustible, and once exhausted practically irreplaceable.

For example, during the early history of my home state of Michigan, it is said that a squirrel could traverse from Lake Huron to Lake Michigan without ever touching the ground. Yet it took an incredibly small amount of time (mostly 1870-1890) for men with hand-drawn felling saws to systematically evacuate every virgin tree on the entire peninsula. The scale and speed of this relentless logging machine still baffles me to this day. In fact, the harvest was so unimaginably great that a profitable industry exists today of recovering the very small percentage of fine old-growth logs that sank during transport and have rested on the bottom of the Great Lakes for 150 years.

Imagine, if you would, that we had saved some portion of these magnificent, centuries-old trees until today. What would a good violin luthier do these days for some now-rare, quality old-growth tone wood? How impressive would Michigan’s tourism industry be if we had thought to save more than just a few monument virgin trees? We can never know.

Yet we find numerous analogs to this 19th-century state-of-mind today. One remarkable example is our prodigious waste of what is a very finite and valuable resource, helium. Helium and its fellow noble gas, argon, both naturally occur on Earth because of radioactive decay (argon as a decay product of potassium-40, helium as an alpha particle from the decay of various radioactive substances inside the earth, mostly thorium). Interestingly, argon composes about 1% of the Earth’s atmosphere whereas helium is only found in trace quantities. This is because helium is SO light that, once released, it actually floats completely out of the atmosphere, which means once it is extracted from its underground home (through a natural gas well) it must be contained or it will literally disappear into outer space during the next solar storm.

But why is helium valuable, you say? Interesting question. As well as being widely used in arc-welding, manufacture of computer chips, and fiber optics, helium finds applications in ultra-low temperature measurements and experiments (since liquid helium is the coldest liquid there is at 4 degrees Kelvin), and is 2nd to none. Liquid helium is used to cool the magnets in MRI scanning, NMR spectroscopy, and a variety of other low-temperature scientific experiments (96 metric tons of it are used in the particle accelerator at CERN, and 120 metric tons were used to launch the Saturn V rocket). In fact, universities and scientific laboratories have large and expensive apparatuses to recycle the copious amounts of helium that is regularly used in scientific experimentation.

The United States actually has a National Helium Reserve based near Amarillo, Texas which was established in 1925 as a source for airships in a time of war. It expanded during the Cold War as a resource for the Space Race and other scientific research (unfortunately we still live in an era of our nation where technological advancements are almost invariably spearheaded by military research). By 1995 the reserve had accumulated not only 450 million tons of helium but also $1.4 billion in debt, so congress decided to offset the liability through completely selling off the helium by 2015 and privatizing the helium production industry. The Strategic Helium Reserve being the only helium reserve in the world, this rather abrupt selling-off had the effect of greatly reducing the price.

As happened in the 19th century when huge forests were being felled as quickly as possible, a glut of supply and a cheap price creates the natural propensity for wanton waste of a product. Even though party balloons are the most visible and frivolous waste of helium, (at some dollar stores one can purchase a balloon WITH helium for $1) they only account for about 8% of overall consumption. The larger users in industry currently have no incentive to purchase helium recycling systems and collect the helium they use, because it is not currently necessary, or profitable, to do so. More fundamentally, with no government organization stockpiling it, natural gas producers here and around the world have no price incentive to capture helium which naturally occurs in some deposits at a concentration of 1-3% and is not difficult to refine. Most natural gas producers currently vent their helium into the atmosphere. According to Nobel laureate Robert Coleman Richardson, in order to reasonably protect the supply of helium for current and future high-tech applications, the price should be 20 times greater than it currently is.

Much like old-growth forests, we will never truly run out of helium because it is constantly being produced by alpha-decay 0f radioactive particles inside the earth, though at an incredibly slow rate. Thus, it will become progressively less and less accessible, and eventually make industrial applications and invaluable scientific research more difficult to execute without enormous funding. So in other words, the 1996 US congress via Public Law 104-273 helped America go from “hero” to “zero” yet once again.

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After the Crash

Dispatches From a Long Recovery (Est. 10/2024)

Tag Archives: Natural Resources

500 years is long enough! Human Depravity in the Congo

Weird Parallels: Helium Waste and 19th-Century Logging