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Lessons from the COVID-19 crisis for climate change politics

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COVID-19 and climate change bear striking – and worrying – similarities and differences. Both are characterized by high uncertainty, but while COVID-19 has been identified as an immediate threat and action has been taken despite the absence of comprehensive knowledge, uncertainty has been touted as impeding concerted efforts to transform energy systems to combat climate change. The global economic system has strongly contributed to our failure to make radical changes. A different system – one that is not so fundamentally focused on maximizing profits over all other concerns – could have been better placed to make the undeniably painful economic adjustments we are forced to make, both before the emergence of COVID-19 and to prevent a catastrophe arising due to climate change. While both crises require dramatic societal transformations, we need to be aware of the potential negative political consequences of declaring them as emergencies.

One thing is certain about COVID-19: we simply do not know enough. Some aspects about it are simply unknown, on others we have conflicting information. Scientists are asked to take shortcuts from their rigorous methods and to offer their ‘best guess’ on hugely consequential questions. Policy makers then take decisions within a fog of uncertainty since experts have also argued that doing nothing is the absolute worst option. This is a terrifying situation for us all, but it is not entirely without precedent.

While the threat of COVID-19 might seem unique, there are some interesting parallels between this threat and that of climate change. At a general level, neither is simply a ‘natural’ phenomenon. This is not to suggest – as some have – that they are a ‘hoax’. Viruses exist, mutate, and infect ‘naturally’. Similarly, the climate of the earth shows variation due to various factors outside of human influence. But what imbues both COVID-19 and contemporary climate change with a catastrophic potential is the political economic context in which they are developing.

More specifically, it is global capitalism that takes what is ‘natural’ and weaponizes it against humanity.

In the case of climate change, the problem is not that humans are extracting natural resources in order to secure their livelihoods. The manner in which this extraction is carried out, its continuous intensification and, most importantly, the extraction of resources not necessarily to meet the human need to exist and to thrive, but rather to fulfil the need of capitalism to continuously expand, is what transforms extraction into a planet-altering force captured in the concept of the Anthropocene.

Similarly, the astonishing spread of COVID-19 could not have been possible without the incredible powers of global capitalism. The virus has spread so quickly and so effectively on the back of a global structure that transports goods, humans and – let us not forget – ideas at almost magical speeds. But it is important to not fall into the trap of blaming connectivity and mobility for the spread of the virus but the underlying economic structures that made combatting it so difficult and painful.

While such a pandemic could also occur under a different global economic order, the precarity of not just individuals or classes but even some of the richest and technologically sophisticated economies is what makes COVID-19 so dangerous. A different system – one that is not so fundamentally focused on maximizing profits over all other concerns – could have been better placed to make the undeniably painful economic adjustments we are forced to make.

The parallels between climate change and coronavirus do not end there. Climate scientists – those in the natural as well as the social sciences – have long been arguing that if drastic changes are not made to the way we produce and consume, in other words to the way we live, we can expect apocalyptic changes to global ecosystems. When these materialize, their impacts are likely to be just as and probably even more colossal than the toll that COVID-19 will have exacted.

Yet scientists’ pleas for radical action have been rebuffed on two grounds – we do not know enough, and dramatic curbs to economic activities are fundamentally against public interest. The effectiveness of these arguments has been far greater in the case of climate change than in COVID-19! As the COVID-19 crisis shows, these two grounds have not prevented governments across the world from acting in response to the COVID-19 threat.

Can we expect a change in attitude to climate change politics once the COVID-19 crisis is over? That is certain though it is possible to expect two dramatically different responses which will depend on how, in the aftermath of COVID-19, societies around the world come to understand the now evolving response. If the response to COVID-19 comes to be seen as an overreaction or a form of mass delusion, this would have massively negative effects on ongoing efforts to respond to climate change.

That would mean not only that scientific authorities – not just the epidemiologists or immunologists but the entire enterprise itself – will be discredited, opening the door to an ever-intensifying challenge that will dwarf the anti-vaccination movement. Worse still, such an impression will embolden the Trumps and Bolsanaros of the world (unfortunately not a rare breed!) to challenge and pull back all too necessary measures to reduce greenhouse gas emissions.

However, if the experts as well as politicians and policy makers who follow them are vindicated in making draconian changes (and if those who do not do so are vilified), we can expect a new era in which scientific authority is once again celebrated and valorised (rather than challenged by baseless arguments as has been the case with the anti-vaccination movement). It can also be expected that the spectre of an ecological apocalypse will be taken more seriously, bringing it with it meaningful socio-economic and cultural transformations to adapt to and mitigate climate change.

Authoritarianism creeping in through the back door

Implementation of dramatic societal transformation in response to anticipated catastrophes might at first be seen as an entirely positive outcome. But it is important to remember that all appeals to emergency, such as the declaration of a state of emergency, regardless of how justified they are, contain within them the seed of authoritarianism.

A call to urgent action is almost by definition a call to silence dissent, to short-circuit deliberative democracy and to privilege the opinion of a select few over all others.

While rare, the climate movement has long had an authoritarian streak as demonstrated by this statement by no less than the developer of the Gaia hypothesis, James Lovelock:

“We need a more authoritative world. We’ve become a sort of cheeky, egalitarian world where everyone can have their say. It’s all very well, but there are certain circumstances – a war is a typical example – where you can’t do that. You’ve got to have a few people with authority who you trust who are running it”[1].

A few years ago, such statements could have been considered fringe opinions intended more for provocation than for actual implementation. With countless leaders and scientists comparing COVID-19 to a war, there is genuine reason to be actively worried about ending up in a situation where climate change too becomes securitized in this manner.

This brings us back to the question of uncertainty and authority. While our knowledge of climate change – how it works, what its impacts are and how we can reverse it – are incomparably better than what we know about COVID-19, the socio-economic and ecological decisions that need to be taken are far from obvious if we are to avoid an economic crisis similar to the one brewing at the moment. How can we transition towards a carbon neutral economy? Which fossil fuel reserves need to be designated as ‘unburnable’? Where do we restore ecosystems and to what state? How, if at all, do we prevent flooding of cities and towns? What are the ecological tipping points and how can we prevent them if they remain largely unseen? These and countless other questions require not only authoritative scientific input but genuine deliberative discussion as well.

No society – regardless of how extensive its education and research attainment – is ready for this challenge. This is because the model of economic development that has dominated since World War II has created a relationship with science that Ulrich Beck has brilliantly described as “organized irresponsibility”[2], in which global capitalism has powerfully capitalized on the explosion of productivity enabled by modern science and technology while brushing under the metaphorical carpet its risks and uncertainties. Debates about the safety of genetically modified foods and nuclear power were harbingers of a brewing crisis of how science and technology can be socialized. COVID-19 is a stark reminder that the challenge remains great. If it is not addressed, we can expect many more war-like situations, not least in relation to climate change.

[1] https://www.theguardian.com/environment/blog/2010/mar/29/james-lovelock
[2] https://www.theguardian.com/education/2015/jan/06/ulrich-beck

About the author:

Murat ArselMurat Arsel is Professor of Political Economy of Sustainable Development. His research and teaching focus on the tensions between nature, capitalism, and emancipatory socio-economic development. Additional details of his work can be found at www.marsel.me

EADI ISS Conference 2021 | For the redistribution of water, framing matters!

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In the face of increasing pressure on global water resources, a degree of inventiveness in finding just and sustainable ways to ensure access to water is required. The redistribution of water is one possible way in which this could be done. But ongoing research on elite responses to a recent water scarcity crisis in South Africa shows that the redistribution of water resources will not go uncontested by water elites and that existing narratives on the sharing of water are not creating the extent of solidarity needed. We need to frame this action differently, writes Lize Swartz.

Water is intricately linked to development, both to ensure or improve people’s quality of life, as well as to help secure livelihoods such as subsistence farming. But increasing pressure on water resources due to a changing climate, as well as an increased demand for water, amongst others, is making it difficult to even sustain current access to water, let alone provide new access to populations that are not yet connected to formal water networks.

Millions of people around the world are still waiting for the moment they can turn on a tap and watch water gushing from it, to be able to flush a toilet, or to bathe under running water. In light of the need to keep an expanding access to water and sanitation facilities, but also with the realisation that less and less water is available per capita, new ways of thinking about ensuring access to water are needed.

‘Sharing is scaring’

During a recent panel session on inclusive development and water governance linked to the 2021 EADI ISS Conference, the likelihood of having to share water came up toward the end of the discussion. Emanuele Fantini[1] suggested that it’s not as straightforward as ‘sharing is caring’ when it comes to water, pointing to the many complexities that would affect the governance of water redistribution by using the term ‘sharing is scaring’. Joyeeta Gupta[2], one of the panel convenors, observed that it is likely that “there will be no win-win situation; it will be a win-lose situation” when it comes to sharing water. As one of the main challenges, she recognised the need to convince water elites of the necessity of sharing water.

My ongoing research on elite responses to water scarcity shows exactly how difficult it will be to get ‘buy-in’ from those who are able to share water: I  investigate the way in which elite water users navigated the collapse of three urban water supply systems in South Africa in 2016. With ‘buy-in’ I mean that those who have sufficient water agree to share it, provided that they still have enough water to meet their own basic water needs. ‘Elite water users’ in the context of South Africa can be considered those who either have water and sanitation connections within their own homes, or who have access to non-municipal water resources such as groundwater (through boreholes) that can replace or supplement municipal water.

Some of the preliminary conclusions of my research are that:

  • Basic water needs are different for different socio-economic groups in South Africa. For example, irrigating private gardens to ensure that lawns remain green and plants continue to grow may be considered a basic need by those owning gardens, but not by those without gardens. This may be linked to the pride that is taken in being able to maintain ‘life’ by tending to an urban nature.
  • The way in which water is used is closely linked to the socio-economic and cultural identity and status of water users; water is much more than a product linked to hygiene, for example – having abundant water is a reminder of a high standard of living and prosperity. Swimming pools, fountains, and running water in general is considered part and parcel of a ‘good life’.
  • Water is closely linked to emotional and mental health; having sufficient water creates a sense of peace and safety among water users, which turns into anxiety when the threat of water scarcity or shortages looms. My research found that retaining a sense of water security seems to trump other considerations that may inform how water is used and whether and how it is shared.

Allegations of mismanagement stand in the way of viewing water scarcity as collective problem  

In addition to the symbolic importance of water that moves beyond the idea of water needs as largely material, political factors may also affect the willingness of water elites to share water. My research found, for example, that specific interpretations of the collapse of urban water supply systems as being caused by municipal mismanagement and water losses through leakages in general may prevent water users from seeing water scarcity as a collective problem and responding to it in a similar way. Those who hold such views are unlikely to cooperate with local governments to ensure that those without water are helped out of own accord. My research also shows that water is hoarded by households out of fear of not being able to access it in the future and is mostly shared with those elites’ own social networks.

Also, in the communities studied, distrust stretches beyond the local level and is rooted in perceptions regarding the legitimacy and accountability of the national government. A certain level of mistrust is based on its perceived disability to govern in the interests of water elites, who in South Africa for the most part are also socio-economic elites. This also affects the extent to which water scarcity is considered a collective problem requiring collective action, similar to the above observation.

Capping the water use of elites?

Thus, ensuring elite buy-in of the need to redistribute water will not be a simple task. The sharing of water may involve the limiting of water use for elites by imposing a maximum daily or monthly limit (‘holding back’ water) and making greater amounts of water available for other water users who have used less water. Another example is the redistribution of groundwater by pumping it into municipal water tanks that are accessible to all. But limiting the water use of some households and not others is likely to cause dissatisfaction and perhaps even resistance.

What complicates matters further is that the amount of water used in informal urban areas is generally far lower than that of the amount used in formal urban areas – while the redistribution of water is likely to reduce the amount of water used by water elites, water use may not increase in areas where there are different water needs and priorities and where the majority of residents still share taps and toilets. This may thus not create the impression that water has been distributed more equitably so that everyone gets ‘more or less the same’.

The overall reduction of water on the other hand may be beneficial in countries like South Africa where the water supply is under severe stress. But convincing water users that it is possible – and desirable – to use less water will be a challenge.

In light of this difficulty, the redistribution narrative – and indeed a narrative of ‘sharing is caring’ – will need to be reconsidered. A reduction in the amount of water used by water elites that frees up water for a municipal ‘reserve’ may be achieved more easily if it is framed in light of the need for a water reserve to prevent the water scarcity and corresponding water use restrictions – the idea of ‘using less water now so that there will be water in the future’. This de facto would free up water that is needed elsewhere in urban areas. Elite water users may have to be convinced that limiting their water use will benefit them in the future, and that this sacrifice is worth making.

[1] Senior Lecturer in Water Politics and Communication at IHE Delft

[2] Professor of Environment and Development in the Global South at the Amsterdam Institute for Social Science Research of the University of Amsterdam and IHE Delft Institute for Water Education in Delft

Opinions expressed in Bliss posts reflect solely the views of the author of the post in question.

About the author:

Lize Swartz

Lize Swartz is the editor-in-chief of ISS Blog Bliss and a PhD researcher at the International Institute of Social Studies of Erasmus University Rotterdam, where she researches political dynamics of socio-hydrological systems. She is part of the newly formed Transformative Methodologies Working Group situated in the Civic Innovation Research Group

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The rise of Big Tech cements the fall of the US economy

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While the US economy is going through its worst crisis in the last eight decades, with small businesses shutting down en masse and millions of Americans losing their jobs, one wouldn’t know anything is wrong solely from looking at the largest US companies. The crisis, triggered―but not caused―by the COVID-19 pandemic measures, has enabled some of the world’s largest corporations to amass record profits. It allows them to capture ever-larger shares of a market that is increasingly monopolised. How could that happen and what will it lead to?

The widening gap between the Big Five and the rest

It is no secret that Amazon has done well throughout the pandemic, with both the company’s profits and Jeff Bezos’ personal wealth shooting up to record highs in the middle of one of the worst recessions the US has ever seen. While brick-and-mortar retailers have suffered tremendous damage as a result of the measures implemented in response to COVID-19, Amazon has thrived off the accelerated shift to online services.

And it is not alone in this: The so-called US tech companies―also referred to as the Big Five―have all managed to keep increasing their profits while the US economy is contracting. Apple, Alphabet (Google’s holding company), Amazon, Facebook, and Microsoft saw their combined pre-tax profits rise by an annualised 5% in the second quarter; starkly contrasting profits of the rest of corporate America, which fell by an annualised 27% (excluding finance).

A company experiencing profits growth during a recession is highly unusual, and the Big Five’s outperformance has led to a dramatic increase of their share in total non-financial profits made by US companies. Having already risen from 4% in 2011 to 11% in 2019, the Big Five have increased their slice of the pie to 16% in the first half of this year.

To put this into perspective: The concentration of US non-financial profits in the top five companies has historically been around 7-9% while the current top five, which includes three of the large tech companies, accounted for an astounding 19.3% in 2019. Since the onset of the pandemic, this figure is estimated to have risen further to 25%. This would mean that five companies now receive one quarter of all non-financial profits made in the US.

Profits of financial entities are excluded here because we are examining the production side of the US economy. But Wall Street, too, is an almost insane case of monopolisation and control over public policy that might be explored in another article.

A long-standing trend of market concentration

There is no question that the pandemic measures have accelerated the ever-widening gap between the Big Five and the rest, but at the same time it cannot be ignored that the US economy has seen a long-standing trend of market and profits concentration. Even before Big Tech came along, many of the major industries, ranging from beer to healthcare, had already seen the emergence of oligopolies (a few dominant firms), duopolies (two dominant firms) and even monopolies (one dominant firm).

A prime example is the case of high-speed internet provision in the US, for which the market is almost completely controlled by the three telecom giants AT&T, Verizon, and Comcast. By carving up the market, they have avoided competing in the same regions, forcing as many as 75% of US households to ‘choose’ from just one provider. Health insurance is another industry for which the market has been sliced up by the companies who dominate it, ensuring that competition is avoided as much as possible. As a consequence, in many states 80-90% of the health insurance market is controlled by just two companies.

Capitalism is a system in which competition drives innovation and growth. The natural strategy for a company to become dominant in an industry is to outcompete its rivals by producing better and cheaper products―i.e., by innovating. The problem in the US today is that more often than not, it has been a lack of competition which has allowed for high levels of market concentration and abnormally high profit margins in the US.

But it wasn’t always like this. The US government used to pay great attention to market concentration and threats to competition, which was why they had created antitrust regulation in the first place around the turn of the 20th century. According to Jonathan Tepper and Denise Hearn, who documented the vast extent of uncompetitive and increasingly concentrated industries in the US in ‘The Myth of Capitalism’, point to the dismantling of antitrust regulation since the 1980s as one of the major causes for the growing degree of what they refer to as ‘industrial concentration’.

An illustration of when antitrust was still applied in full force is the case of IBM in 1969. The US government brought an antitrust lawsuit to PC maker IBM who held 70% of the market at the time. The lawsuit instigated IBM to make its hardware compatible with software other than the programmes it sold itself, allowing for new companies such as Microsoft (founded in 1975) to emerge and produce software for IBM machines and, eventually, for those produced by other companies.

In 1998, when the number of antitrust cases was already much lower than before, the US government brought an antitrust lawsuit against Microsoft because it was starting to monopolise the PC software market. The tech giant was using its popular Windows operating system to favour its own programs such as the Internet Explorer. And with the internet on the rise, the company was also well positioned to block competitors from areas such as search engines. The lawsuit helped curb Microsoft’s growing power and allow other software companies to compete. Perhaps more importantly, it also allowed tech startups―such as a little company called Google―to grow.

The Big Five and the abandonment of antitrust regulation

The irony of Google owing its existence to antitrust is that the tech giant is currently one of the largest violators of antitrust principles, which appear to no longer be enforced by the US government. Apart from being a monopoly in the market for search engines, Google together with Facebook controls the market for online advertising with both companies actively barring new entrants to the industry. When Facebook bought social media rival Instagram in 2012, there was not a single antitrust case brought against them to block the acquisition.

Buying the competition certainly has been a favorite tool for retaining dominance. Since 2005, the Big Five have acquired 549 companies, which in many instances were direct competitors. From 1985 to 2017, the number of mergers and acquisitions completed annually rose from 2,308 to 15,361 nationwide. Unsurprisingly, Tepper and Hearn are able to show that the rise in acquisitions has a clear inverse relationship with the number of antitrust cases.

On top of acquisitions, the Big Five have found other ways to cement their market dominance. As US President Donald Trump correctly pointed out, Amazon is subsidised massively by their exclusive access to state-owned US postal services (USPS) at cheap rates. It is estimated that the USPS undercharges Amazon by $1.47 per package―no wonder Amazon accounts for more than 43% of online retail sales.

Boosting profits without being more competitive

Highly concentrated industries allow for two major distortions that boost corporate profits without the dominant companies having to be more competitive: price gouging and suppressing wages.

For price gouging, the internet provision industry serves as a good example. New York University economist Thomas Philippon found in a 2019 study that prices for a monthly broadband connection were almost twice as high in the US than in Europe or South Korea. Similar price differences were observed for air travel in the US when compared to Europe. Flights in the US are dominated by four major airlines that often enjoy regional monopolies and have solidified their market dominance since the US deregulated the airline industry in 1978. Having been fairly stable until that point, inflation-adjusted flight prices jumped by 50% in the first ten years after deregulation.

Being often one of the few employers (in some cases the only employer) in small-town America, monopolies also hold significant power over labour, which they exert through lobbying for laxer labour laws, inserting non-compete clauses in labour contracts, and consequently depressing wages. Marshall Steinbaum, Ioana Marinescu and Jose Azar found that wages are typically 10-25% lower in a ‘highly concentrated’ industry than in a ‘very competitive one’. Overall, wages adjusted for inflation have been stagnant in the US since the 1970s.

The suppression of wages has no doubt elevated profits margins, as Tepper and Hearn show in an almost perfectly inverse relationship between the two. What they further show is that the income distribution to the lower percentiles has a remarkably close correlation to union membership, the latter of which has been on a steady decline since the 1960s, implying that the large US corporations have successfully worn down the power of labour.

The consequences of not having to compete

Higher prices and lower wages are the reason for the exorbitant profit margins we see in today’s economy. But apart from that, they also lead to a complete loss of the capitalist drive that usually spurs companies to innovate. This decline in innovation is for a large part indicated by the number of US-American start-ups―which usually account for a large portion of total innovation―having fallen by nearly half since the 1970s.

What’s more, the large companies that dominate their industries are themselves not driven to innovate anymore. Instead, they have found a new way to inflate the value of their company: share buybacks. A study conducted by the Harvard Business Review found that between 2009-2018, companies listed on the S&P500 spent $4.3 trillion, or 52% of net income (profits), on share buybacks and $3.3 trillion, or 39% of net income, on dividends. This increases the wealth of both owners and managers, but does not make the company any more productive as little capital remains for research and development (R&D). In 2018, only 43% of all companies listed on the S&P500 index invested in any R&D.

Of the Big Five, the loss of competitiveness is perhaps the clearest in the case of Apple. The American electronics manufacturer that once pioneered and dominated the smartphone market for almost a decade has been knocked to the fourth place in global smartphone sales, losing out to East Asian competitors Samsung, Huawei and Xiaomi. The only market Apple still dominates is the US, although it is worth wondering whether this would be the case if Huawei were allowed to sell its phones in the American market.

It is not to say innovation in the US has completely left the scene (for instance, the US is still a leader in microprocessors), but that the dynamism that once allowed for rapid technological change and global dominance is in decline. Tesla is another good example of a monopoly born in the US and having received billions worth of government support (see Mazzucato’s 2013 book ‘The Entrepreneurial State’) that now has increasing difficulty remaining competitive in an international setting.

The concentration of profits in the largest US companies and their dominance of entire sectors is essentially not a reflection of their superior competitiveness, but the result of a system benefiting them disproportionately while allowing them to accumulate wealth without becoming more competitive.

The lack of innovation is significant because an economy thus hollowed out of its productive capacity is bound to crumble, and, in the case of the US, allow a new power to rise and take its place in the global economy. There is only one reason that the loss of international competitiveness has not yet fully translated itself into a deterioration of living standards for Americans: the Dollar.

Further reading

  1. Jonathan Tepper (2018): Why American Workers Aren’t Getting A Raise: An Economic Detective Story. https://www.mythofcapitalism.com/worker-s-wages
  2. Jay Shambaugh, Ryan Nunn, Audrey Breitwieser, and Patrick Liu (2018): The state of competition and dynamism: Facts about concentration, start-ups, and related policies. https://www.brookings.edu/research/the-state-of-competition-and-dynamism-facts-about-concentration-start-ups-and-related-policies/
  3. Patrick Bet-David and Jonathan Tepper (2019): The Missing Link To Modern Day Capitalism. https://www.youtube.com/watch?v=HTGzUVH9LsA
  4. John Coumarianos (2019): How corporate monopolies fuel wage stagnation, inequality, and populism. https://www.marketwatch.com/story/how-corporate-monopolies-fuel-wage-stagnation-inequality-and-populism-2019-05-06
  5. Walter Frick (2020): Big tech’s 15-year acquisition spree had a hidden cost. https://qz.com/1883377/how-big-techs-acquisition-strategies-suppress-entrepreneurship/

This article was originally published on Kapital Economics, the platform for evidence-based economic analysis.

Josephine Valeske

About the authors:

Josephine Valeske holds a MA degree in Development Studies from the ISS and a BA degree in Philosophy and Economics. Apart from contributing to Kapital Economics, she currently works for the research and advocacy organisation Transnational Institute.

 

Bram Nicholas holds an MBA from the University of Western Sydney and is in the process of writing a PhD on the subject of exchange rates and forex markets at the University of Colombo. He is the founder and CEO of Kapital Economics and currently lectures at HUTECH, Vietnam.

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Haemorrhaging Zambia: Underlying sources of the current sovereign debt crisis

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Following a stand-off with commercial creditors and protracted but unresolved negotiations with the IMF, Zambia defaulted on its external sovereign debt on 13 November this year. While most commentary has focused exclusively on the government’s sovereign borrowing, our own research has detected massive outflows of private wealth over the past 15 years, hidden away in an obscure part of the country’s financial account. The outflows are most likely related to the large mining companies that dominate the country’s international trade. With many other African countries also facing debt distress, this huge siphoning of wealth from Zambia provides crucial lessons that need to be central in discussions about debt justice in the current crisis. We explain here what we’ve found.

Zambia was already debt-stressed going into the COVID-19 pandemic. The economy was hard hit following the sharp fall in international copper prices from 2013 to 2016, especially given that copper made up about 72% of its exports in 2018 (including unrefined, cathodes and alloys). Following a severe currency crisis in 2015, the government entered into negotiations with the IMF for a balance of payments support loan, but until now they have failed to reach an agreement on the conditions and accompanying programme. There was some improvement in its macroeconomic outlook in 2017 due to rising copper prices, which sent international investors throttling back into optimism.

However, international investors again turned against the country in 2018 in the midst of the global emerging market bond sell-off, which compounded the effects of severe droughts in 2018-19. As a result, the government was already teetering on the edge of default on the eve of the COVID-19 pandemic. The economic fall-out of the pandemic has since pushed the country over the edge (see an excellent analysis here).

Inductive quantitative balance of payments analysis

Most of the commentary on Zambia’s default focuses exclusively on the government’s sovereign borrowing. Our own analysis peers behind this headline focus into the intricacies of financial flows into and out of the economy.

This is part of our ERC-funded project on the political economy of externally financing social policy in developing countries. As the principal investigator, I have focused on researching aid and financial flows related to social protection programmes and their place within broader macroeconomic and political economy dynamics. The rest of the research team (three PhDs: Ana Badillo Salgado, Emma Dadap-Cantal, Benedict Yiyugsah, and one postdoc, Dr Charmaine G. Ramos) have been focusing on how these external dynamics influence the adoption and implementation of social protection programmes.

As one of my main methods, I have been conducting historical-structural inductive analysis of balance of payments and related macroeconomic data. This might be best described as a form of investigative or forensic analysis of the external accounts of the respective case countries, of which Zambia happened to be one.

Financial account anomalies in the post debt-relief period

It is through this analysis that I identified a difficult-to-explain data anomaly on the financial accounts of the Zambian balance of payments that started with the debt relief of the Multilateral Debt Relief Initiative (MDRI) in 2005. The anomaly is a sharp rise in net acquisitions of debt instruments by resident non-financial ‘other sectors’ on the ‘other investment’ account. In other words, Zambian residents – which include the local subsidiaries or affiliates of transnational corporations – were massively increasing their holdings of debt assets abroad even in the midst of debt distress at home.

The magnitude of these acquisitions of debt assets far exceeded the amount of Eurobonds that are now in default (worth $3 billion USD). They started at the same time as the MDRI debt relief, when this category jumped from non-existence in 2003 to over $600 million in 2005 and over $900 million in 2006, more than counteracting the gains of debt relief.[1] These obscure debt asset acquisitions then jumped to almost $1.5 billion in 2007 and peaked at over $5 billion in 2012, over $3 billion in 2015, and over $1.8 billion in 2017. While they subsided in 2018 and 2019, they had already reached over $1.3 billion in the first half of 2020 (based on the latest quarterly reporting).

In proportional terms, these outflows reached peaks of almost 20% of GDP in 2012, 15% of GDP in 2015, and over 7% of GDP as recently as 2017. They thereby siphoned off most of the gains from both the commodity boom of the early 2010s and the government’s borrowing, undermining any hope for achieving external financial stability.

What could such debt assets represent? Local subsidiaries of transnational corporations have been known to borrow heavily offshore, as is commonly discussed in the financialization literature.[2] However, such financial operations would appear as debt liabilities, not as debt assets, so this explanation does not make sense.

In exploring this puzzle during fieldwork in Zambia in 2017,[3] we came to understand that the debt assets in question represent an accounting discrepancy that is mostly likely explained by unreported profit remittances by large mining companies in Zambia. Other corporates might have also been involved, although given the conventional wisdom that most things occurring on the external accounts of Zambia are somehow related to the mining majors, it follows that so too were the discrepancies.

The monetary authorities in Zambia have been aware of this anomaly.[4] They admitted to us that they had been trying to figure it out with the help of the IMF. It was not related to private capital flight through banks given that the banking sector is well regulated by the central bank (the Bank of Zambia or BoZ). In contrast, mining companies are not required to report to the BoZ given that they are non-financial firms and hence are not covered by banking regulations, even though they dominate much of the financial activity in the economy, especially on the external accounts.

Indeed, the anomaly itself was a creation of the BoZ based on their observation of discrepancies between their own data versus the reporting of assets held by Zambian residents by the Bank of International Settlements, to which international banks are required to report even when they fall outside Zambian jurisdiction. This led the BoZ to believe that the discrepancies belonged in this category of international debt assets. Technically, however, they should have been reported in the category of errors and omissions or even as profit remittances, although this would have of course raised alarm bells given the magnitude of these flows.

More than just debt relief is needed

The enormous sums involved provide a vital counterperspective to the rise of sovereign borrowing by Zambia. In effect, sovereign borrowing has helped sustain these private outflows, especially once the commodity boom came to an end. Foreigners have profited, much of the wealth of Zambia is now offshore, and yet the Government of Zambia has continued borrowing in a desperate attempt to keep the financial ship afloat despite these massive holes in its hull. Regular Zambians are now paying the price.

The argument for this economic model since the beginning of the century has been, to put it crudely, that Africans are better off being exploited than not being exploited at all, in terms of the extra jobs, investment, demand, and revenue that transnational corporations bring. With governments returning to the spectres of hard adjustment and deep recession, so soon after debt relief and commodity boom were squandered by massive outflows of wealth that open capital accounts facilitated, it is hard to see how this logic retains any credibility. More than just debt relief, a complete rethink of the model is required.

[1] Cancelled multilateral debt was close to $2 billion in both 2005 and 2006 although the actual gains from this were only accrued through reduced interest payments on debt, which only fell by $73 million USD in 2016 and $37 million USD in 2017.

[2] For instance, see Serena JM, Moreno R. 2016. ‘Domestic financial markets and offshore bond financing’. BIS Quarterly Review, September: 81-97. For more critical discussions, see Bortz PG, Kaltenbrunner A. 2018. ‘The International Dimension of Financialization in Developing and Emerging Economies’. Development and Change. 49(2): 375-393; or Kaltenbrunner A, Painceira JP. 2015. ‘Developing countries’ changing nature of financial integration and new forms of external vulnerability: the Brazilian experience’. Cambridge Journal of Economics. 39(5): 1281-1306.

[3] While the PhDs in the project spent four to six months in each of the case study countries conducting political economy process tracing of social protection agendas and programmes, I joined them in each of the countries for a shorter period of time and focused specifically on conducting elite interviews with a range of specialized actors that had technical knowledge and experience over the external financing of domestic spending. These actors included staff from major donors, international organisations, central banks, finance ministries, and other government departments, especially those involved in social protection programmes.

[4] These must remain anonymised given the political sensitivity of these issues.

This article is an abridged and slightly modified version of the full analysis, including detailed data analysis, posted on the Developing Economics blog, which can be found here.

About the author:

 

Andrew Fischer

Andrew M. Fischer is Associate Professor of Social Policy and Development Studies at the ISS and the Scientific Director of CERES, the Dutch Research School for International Development. His latest book, Poverty as Ideology (Zed, 2018), was awarded the International Studies in Poverty Prize by the Comparative Research Programme on Poverty (CROP) and Zed Books and, as part of the award, is now fully open access (http://bora.uib.no/handle/1956/20614). Since 2015, he has been leading a European Research Council Starting Grant on the political economy of externally financing social policy in developing countries. He has been known to tweet @AndrewM_Fischer

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Are we in a crisis? Learning from Trump’s lawfare endgame

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Is there a crisis in the United States, as many commentators would make us believe? If so, what is the nature of that crisis? It has become very fashionable to speak of innumerable ‘crises’ while most of these events can be traced to something far deeper, namely lawfare. It is becoming increasingly clear that the use of lawfare has been Trump’s game plan from the beginning until the end of his administration; accordingly, he is now seeking to bypass the will of the voters and entrench himself in the White House.

Marchers with signs at the March on Washington, 1963. Source: Library of Congress Archive https://www.loc.gov/pictures/item/2013648849/.

Americans, and indeed people around the world, have tried to make sense of the US election, in particular its incomprehensible system of tallying Electoral College votes, as well as a plethora of legal challenges to elections across the country. A quick scan of the latest news items from around the world reveal claims of a range of nebulous ‘crises’ in the US: a political crisis, a crisis of democracy, a constitutional and potentially post-election crisis, a crisis of bourgeois democracy, and even a crisis of the American Dream.

But do any of these depictions of ‘crisis’ really help us understand what has been happening? And why is it that the courts rather than the voter (or Electoral College for that matter) seem to end up deciding an election, as Trump hoped would happen for this presidential election when he complained about electoral fraud?

Simplistic descriptions of ‘crises’ without a deeper examination of the root causes won’t help us understand what is transpiring. As my ISS colleague Karim Knio has consistently argued, we should not waste a good crisis. Accordingly, he insists that one must resist the simplistic tendency to speak of a crisis IN or a crisis OF something, but rather should seek to understand the potential of such events to trigger political change.

To be sure, this is not to dismiss the importance of potentially calamitous events – whether they are political, economic, ecological, sociological or indeed medical (the COVID-19 pandemic comes to mind). However, the crucial thing is to learn from how such events have been (mis)managed to get to the underlying causes. In other words, explaining the pedagogy of crisis management is much more important than the crisis itself.

Amidst a cacophony of voices, each seeking to provide their own explanation of the ‘crisis’ in the US, and even how to solve it, very few speak of the underlying reasons why the US is in such a mess. This is a far more fundamental matter, including the insidious ways in which law is instrumentalised to suppress basic democratic and legal values, and indeed to suppress people as well. I argue that the illegitimate misuse of the legal system in the US through the use of lawfare is underpinning many of these ‘crises’.

It was evident from the very beginning of the Trump administration that it would use lawfare to accomplish its goals. Lawfare is about instrumentalising law to suppress people and to undermine rule of law values. This use of law assumes “delegitimising and oppressive forms, justifying retrogressive policies and even reinforcing the hegemonic actions of states”.

Throughout the four years of the Trump administration, there has been an expansive mis-use of the law through lawfare to accomplish what would otherwise have been impossible through legitimate legal procedures. All branches of government have been affected by it. In the legislature, following an impeachment by the Democrat-controlled House of Representatives, Trump’s strong alliance with key members of the Republican-held Senate ensured that, through lawfare, he would be duly acquitted in a sham trial that failed to call any witnesses. Trump also waged lawfare in the judiciary: he appointed two Justices with right-wing political views – Brett Kavanaugh and Amy Comey Barrett – to the US Supreme Court, the latter one week before the presidential election. But most of all, Trump made extensive use of lawfare by way of executive orders, from the so-called ‘Muslim ban’ to the separation of migrant children from their families after being detained at the US border.

Trump was hardly the first president to make use of Executive Orders—Bush and Obama made extensive use of them as well. Indeed, Trump capitalised on this expansion of executive power. Notwithstanding their shaky legality (they were frequently overturned after being challenged in court), it seems that this form of lawfare has mainly been intended as a source of distraction, for example from the administration’s ‘dangerously incompetent’ handling of the COVID-19 pandemic or the Republican party’s systematic unravelling of the US social safety net.

However, Trump arguably took lawfare to a whole new level in the context of the 2020 Election. In the run-up to the election and even as Biden was proclaimed victorious, lawfare has been Trump’s principal strategy, his endgame for attempting to win re-election in 2020 by way of voter suppression, which another commentator refers to as a ‘crisis’ in itself.

Voter suppression through lawfare has a long history that is rooted in the country’s racist past. This has involved the systematic use of lawfare at municipal and state levels, and has taken various specific forms. A common form has been to require voters to produce specific IDs, based on a spurious claim (i.e. little to no evidence) that voter fraud was rampant. A second form of lawfare has been to exclude those with a previous felony conviction (i.e. record of having committed a serious crime). A further form of lawfare has been to re-design voter districts so that Republicans have a greater chance of winning elections according to a particular set of demographics. Much of these lawfare aimed at voter suppression were pushed by a private organisation known as the American Legislative Exchange Council (ALEC).

In the weeks prior to election day on 3 November, Trump and his associates issued frequent warnings of the potential for voter fraud, citing mail-in ballots as a major cause. As often accompanies lawfare, there was little to no evidence for making such claims.

By 8 November, it became increasingly clear that Biden would win the US Presidential election by more than 4 million votes. By then he had already collected well more than the 270 electoral votes needed to win and was on track to secure more than 300 in total. Accordingly, every single major US news network—including the Trump-friendly FOX news— projected by 8 November that Biden would win the election.

The response of Trump and his associates was not to concede, but to step up their lawfare game by launching multiple lawsuits in different states, albeit lacking the support of large law firms that are required to mount such complex litigation. As with many other previous lawfare actions, this action was also led by former New York mayor Rudy Giuliani, again alleging ‘fraud’, though still based on little to no evidence. Nevertheless, these false allegations have been bolstered by Trump’s allies in the Senate—in particular Lindsey Graham and Ted Cruz—all aimed at questioning the legitimacy of the 2020 presidential election, or potentially at maintaining the Republican voter base.

This all reveals the importance of learning how lawfare has been used to undermine fundamental pillars of governance. Despite the claims of pundits that the US is facing innumerable, unspecified crises, the biggest crisis facing the US is much deeper and fundamental. It is a crisis in how lawfare is systematically used to undermine the very fundaments of liberal democracy and, most recently (and visibly), the integrity of the electoral system.

Learning from how Trump and his associates have misused the law through their disingenuous campaign of lawfare is also key to understanding why challenging the election is not as important as Trump’s lawyers make it out to be. Lawfare is used to exclude legitimate voters and to foster a deep and growing polarisation that will make it all the more possible for right-wing Republican candidates—even those with no qualifications or experience other than starring in a reality TV programme or running loss-making businesses—to seek presidential office in future.

In other words, Trump’s endgame of lawfare is a crude strategy for undermining basic principles of governance in order to secure re-election. While this strategy of polarisation is proving unlikely to work for this election, it may well secure a Republican victory in future.

About the author:

 

Jeff Handmaker

 

Jeff Handmaker is a senior researcher at the International Institute of Social Studies (ISS) and focuses on legal mobilisation.

 

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COVID-19 | Putting COVID-19 into context(s)

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Covid Checks in India

COVID-19 is a hazard, but does not produce the risks that we now see unfolding throughout the world, says ISS researcher Dorothea Hilhorst, who recently participated in a webinar organized by Humanitarian Knowledge Exchange platform Kuno to reflect on how the COVID-19 pandemic is being handled and what could be done differently. Here’s what she had to say.

Covid Checks in IndiaCOVID-19 is sweeping the globe and widely triggers top-down and centralised emergency measures. I don’t recall another crisis that has created such a response, even though the actual numbers of people affected have been very modest compared to many of the other crises we have in this world, including the lack of access to clean water, resource competition in mining areas, conflict and refugee problems, and climate change. In the beginning, I often found myself thinking if only the world would muster the courage to also address these other crises, and give them more priority than short-term economic gain.

However, it is also clear that there are strong limitations to the bold and robust responses of top-down emergency management. Firstly, I really resent how we seem to conflate the hazard of COVID-19 with subsequent risks. Yes, COVID-19 is a nasty and infectious virus. But it is not a virus that dictates that it should lead to widespread food shortages or increased marginalisation of the poor and vulnerable populations. These are spillover crises that relate to but are not directly caused by the virus.

These spillover crises are not just happening, they are let be by policy. When we signal the risk of food insecurity in the wake of COVID-19, I see agencies jumping to raising funds and stockpiling to feed the world. However, why don’t we talk about preventing this crisis? Why not focus on diplomacy to continue food exports from surplus-producing countries? Why not ensure that markets stay open and continue to function? Why not give peasants free range to go to their fields (at distance from other human beings) instead of locking them down in their houses?

Secondly, we have to be really aware about the many instances where governments have instrumentalised COVID-19 for other purposes, such as to curb the freedoms of civil society, to silence the media, or to undermine political opponents. Hungary is a case in point, where the government, under the pretext of misinformation about COVID-19, has closed critical media outlets. Authorities in many areas are seen to instrumentalise COVID-19 to increase surveillance and control, at the detriment of human rights and civil society, with rumours increasing the mistrust between people and their state.

Thirdly, while there is no doubt that top-down policies and expert knowledge is required to address the crisis, there are also indications about the limitations of this approach. Top-down approaches may ignore, stifle, or expire local coping capacities, social networks, and small-scale formal and informal institutions. Based on previous experiences and research, this may have grave consequences and render the COVID-19 response counter-productive:

  1. Local institutions are people’s first and very often only line of defence against crises. Where top-down policies don’t reach out to communities to provide services and when people cannot rely on local institutions, they become increasingly vulnerable. Why close schools instead of mobilising teachers to help spread messages about personal hygiene in relation to COVID-19?
  2. In areas where state-society relations are already characterised by mistrust before the crisis, there is a high risk that people will not believe the messages about COVID-19 coming from the authorities and will try to circumvent policies aiming to prevent the spread of the virus. A notorious example was found when the Ebola pandemic erupted in Sierra Leone: people sometimes hid patients to avoid their hospitalisation.
  3. One-sided top-down policies can contribute to spillover crises at the local level, including crises of livelihoods and food security. This can lead to adverse coping mechanisms that actually increase the risks of COVID-19. There are signals that some women in the Eastern DRC who are prohibited to cross the border with Rwanda for their petty trade now resort to transactional sex to feed their families.

Let’s stay alert, or as we say nowadays, let us be ‘woke’ about these consequences of responding to COVID-19. The virus is a hazard, but does not produce the risks that we now see unfolding throughout the world. Top-down measures need to be linked up with bottom-up initiatives and coping mechanisms to effectively deal with the crisis.

Hilhorst’s discussion was part of a webinar titled ‘How COVID empowers local civil society organizations’. Other speakers included Hero Anwar, Program Director at REACH Iraq; Gloria Modong, Executive Director, Titi Foundation South Sudan, and Deputy Chair, NGO Forum South Sudan; and Feliciano Reyna, Executive Director and founder of Accíon Solidaria in Venezuela and representative of Civilis.

The entire webinar can be (re-)watched here: https://www.kuno-platform.nl/events/kuno-covid-cafe-how-covid-empowers-local-civil-society-organizations-in-the-south/

This article is part of a series about the coronavirus crisis. Read all articles of this series here.

Thea Hilhorst

About the author:

Dorothea Hilhorst is Professor of Humanitarian Aid and Reconstruction at the International Institute of Social Studies of Erasmus University Rotterdam. She is a regular author for Bliss. Read all her posts here.

Title Image Credit: Gwydion M. Williams on Flickr

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Resisting environmental and social injustice through commoning

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Gustavo Garcia Lopez

Lize Swartz in conversation with Dr Gustavo García-López, 2019-2021 Prince Claus Chair

Social and environmental injustice are increasing globally as neoliberalism tightens its grip. Crisis upon crisis are hitting especially vulnerable populations, interacting to create precarious and untenable living conditions. These issues become more pressing in the context of the COVID-19 pandemic, which has made more visible to the world the environmentally destructive and socially unjust patterns of our societies. The recovery of more equitable and sustainable ways of life based on communality and interconnectedness is needed to address the hypercomplex global crisis generated by globalized neoliberal capitalism, argues Dr Gustavo García-López, current Prince Claus Chair holder at the ISS. Lize Swartz spoke to him about his work and how commoning can transform the world we live in.

The ISS is one of two research institutes hosting Prince Claus Chair holders—researchers who are selected to spend a period of two years at the institute (or at Utrecht University on alternate years) to conduct research aligning to the position’s theme of ‘development and equity’. Dr Gustavo García-López started his tenure as Prince Claus Chair holder at the ISS in September 2019, focusing on ‘sustainable development, equity and environmental justice’, and regularly visits the Institute, where he spends time working on his research and interacting with other researchers.

Having done his PhD on community forestry initiatives under Nobel Prize winner Elinor Ostrom at Indiana University Bloomington, during his tenure at the ISS Dr García-López will continue to focus on commoning initiatives and community-based natural resources governance, in particular initiatives to recover the commons. To this end he is developing two projects. One of them is comparing initiatives in Portugal (Baldios) and in Galicia, Spain (Montes Vecinales) that are attempting to recover a rural commons and sustain rural livelihoods that are in crisis. He will work with organizations to facilitate collaborative learning processes and the co-production of knowledge to find out what is working and how it is working so people can recover their ties to the land, culturally and economically. While these two study areas have many cultural commonalities, they have different political and legal systems, and García-López with other colleagues hopes to look at the type of policy reforms needed to facilitate the recovery of the commons for each of the contexts.

The second project he is currently engaged in is centered in the Caribbean and focuses on the climate crisis, in particular just transitions to a system that is not based on fossil fuel, extraction and private profit, but rather is based on the commons and is more sustainable and equitable. His interest in this area is based on his personal ties to the area, as a Puerto Rican, but also his observations as a political and environmental activist of growing disaster capitalism following the historic damages caused by Hurricane Maria in September 2018.

“[Hurricane Maria] was a moment of dramatic change,” he said. “Many people had to self-organize to survive, so many community kitchens called Centres of Mutual Aid emerged. Those centres also became spaces for discussing how we can change our society. People discussed how resilient they were, but also the economic crisis, the housing crisis in Puerto Rico, the education crisis, or the food crisis.” According to García-López, one of the biggest issues in Puerto Rico is that 85% or 90% of Puerto Rico’s food is imported “because our agriculture was killed historically to give way to industrialization”.

García-López is also involved in JunteGente, an organization started by a group of friends following Hurricane Maria that focuses on building a collective of professors at the Universidad de Puerto Rico (University of Puerto Rico) to intervene in debates on the economic crisis, the debt crisis, etc. and shape the conversation on this, but also to provide a space for encounters among organizations and academics working on issues of energy, health, environmental justice, urban issues, education, and so forth to develop ways to strengthen cross-sector solidarity.

The loss and recovery of rural livelihoods

The loss of rural livelihoods due to the commercialization of agriculture and rapid, ongoing urbanization, reduced government support for peasant farming, the privatization of land, as well as ecological problems all contribute to what García-López refers to as a rural crisis. In Spain and Portugal, as in many other parts of the world, however, communities are resisting the crisis by attempting to recover the rural commons through various initiatives.

For his PhD, García-López studied community forest management initiatives in Mexico, where similar initiatives were taking place. “Community-based natural resource management is globally recognized as one strategy to integrate proverty reduction, inequality and sustainable livelihood agendas,” García-López says. In Mexico, communities had their own forest enterprises—small, cooperative businesses operating at the community level—that controlled the land and sold timber as an income. But beyond that, forests were recognized as being complex ecosystems with multiple benefits that can be derived from them. Allowing communities to control the land and financially benefit from forests ensured that they were protected by the communities dependent on them. But, García-López highlights, forests are also protected because the value of conserving them—their tangible and intangible benefits beyond source of income are recognized by communities. “There is a conservation mentality in some of the communities.” In Oaxaca, for example, communities created their own community conservation areas, where forests were conserved for other reasons as well: “It’s also an identitarian issue—they are also proud that they have this beautiful forest that they conserve.”

While communities in the Global South are focused strongly on conservation, García-López notes that the Global North is seeing the reversal of trends related to natural resources overexploitation and deforestation. “Centuries ago, the idea of private property owernship did not even exist. In Europe, common lands were given to peasants to enjoy… there was a global shift, and now especially after 2009, after Elinor Ostrom received the Nobel Prize for Economics for the study of the commons… the global discussion started to change, and nowadays in urban cities you see a lot of initiatives to recover urban commons—to recover urban gardens, or housing as a commons, a cooperative—as a reaction to the expansion of private property.” Reconceptualizing natural resource use would change how we think about our relationships and with nature: “Everything that you do to a commons happens to everybody.”

The notion of a commons also can be applied to understand our human interconnectedness globally, remarks García-López. “Everything we do in life is affecting others and is benefiting others in positive and negative ways because of our interconnections. And I think climate change demonstrates that the whole planet is a commons. Anything you do is going to affect the whole world. Climate change changed everything because it shows that everything is interconnected… so we should manage it collectively.”

One of the big problems we have today is the equality issue associated with private property, class and power, where a few people have too much and many are excluded, says García-López. “The commons invites us to think about redistribution, about equality, about the problem of democratic governance—how we make decisions collectively instead of privately. It has a great potential while always recognizing that there will always be challenges. Politics has to remain self-reflective and critical and we have to keep in mind who is excluded.”

Besides this tendency to exclude that has to be kept in check, he mentions an additional, ideological challenge. “Our mindsets, our imaginaries have been so distorted by the idea of private property or self-interest, ownership… if you look at other cosmovisions or ontologies they recognize that precisely because of interconnectedness, ownership doesn’t make so much sense, but it’s difficult to get out of it when you’ve spent your whole life in that system… self-interest is a reality. Ostrom showed us that you could have self-interest, but that you could transcend it by recognizing that acting together would be in everybody’s interest.”

García-López remarks that we’re currently a short-term society, which impedes the ability to envision sustainable futures. Individualism is a major challenge to transformations to collectivity, he says. “It’s hard to do it when you’re overexploited in your work and you don’t have time to do things, because the style of our society is the compartementalization of life. To do things collectively becomes harder when your everyday patterns are individual. That’s why these discussions are linked to discussions about rethinking work—how we do everything. Some commons scholars talk about social reproduction needs that we require for basics of life.”

What García-López stressed throughout the conversation is that academics should be engaged in collective efforts and commoning initiatives that can start within academe as an effort to collectivize and share knowledge and co-create knowledge, reaching out beyond academia to engage with commoning initiatives that are visible in urban and rural contexts around us. While García-López’s research focuses on studying commoning initiatives—the recovery and reimagination of way of life in which things are communal, shared—anyone can create commoning initiatives in their own neighbourhoods or work space to help shape a new society based on degrowth and post-development.

Watch Gustavo García-López in a recorded webinar by JunteGente with the topic “How can we build a counter-hegemonic, supportive and ecological political power from below that challenges the lethal virus of the colony?”

About the authors:

Gustavo Garcia-LopezGustavo García-López is an engaged scholar-activist with a transdisciplinary training, building on institutional analysis, environmental policy and planning, and political ecology approaches. His research and practice centers on grassroots collective commoning initiatives that advance transformations towards socially-just and sustainable worlds. He is currently Assistant Researcher at the Center for Social Studies, University of Coimbra, and Associate Professor at the Graduate School of Planning, University of Puerto Rico- Rio Piedras (on leave). He is co-founding member of the editorial collective of the Undisciplined Environments blog, and of the JunteGente collective, a space of encounters between organizations fighting for a more socially-just, ecological and decolonized Puerto Rico.  

Lize SwartzLize Swartz is a PhD researcher at the ISS focusing on water user interactions with sustainability-climate crises in the water sector, in particular the role of water scarcity politics on crisis responses and adaptation processes. She is also the editor of the ISS Blog Bliss.

Are We Having One or Two Capitalist Crises? Mapping Social Reproduction in Capitalism by Maryse Helbert

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In June, a colloquium called ‘capital accumulation: Strategies of Profit and Dispossessive Policies’ was organised for the 50th anniversary of the University of Paris Dauphine. The colloquium provided a snapshot of the current debates and concepts within the field of Marxism. The discussion between the main key Marxist speakers – David Harvey and Nancy Fraser– revolved around conceptualising various challenges that capitalism is facing. The different conceptual mapping of the crises provides different paths to emancipatory changes.

Capitalism is facing many heterogenous ills: Economic, financial, environmental and care deficits. Harvey analyses these ills under the single umbrella of economic crisis that found its origin in the contradictions that the capitalist system carries. Basically (and we all know the drill), capitalism is a process of circulation. Capitalists put some money to buy labour power and means of production, make them work together under a given technology and organisation to produce a commodity that will be sold on the market for a value. In this process, workers are not being paid according to the value they have produced but rather are being paid wages that barely cover the socially necessary costs of their own reproduction. The difference between waged labour and the real value produced by the workers fuels capitalist profit. Given that the capitalist system is a process, a part of that profit has to be capitalised and put again into circulation to extract more profit. The quest for more profit compels capitalists to promote endless growth rates.

In David Harvey’s view, the two classes’ social relations of exploitation are at the crux of the accumulation process of capitalism, overaccumulation and consequent crisis. Overaccumulation as a crisis is defined as surpluses of labour and capital which cannot get together in a profitable enterprise. In this understanding, social reproduction of labour and nature are what Harvey calls free gifts for the capitalist system and are not conceptualised as independent mechanisms of accumulation.

The economic crisis or overaccumulation gets temporarily solved through spatio-temporal fixes or what Harvey also calls accumulation by dispossession[1]. The crises of capitalism are being temporarily tamed by geographical expansion and restructuring. Indeed, capitalist accumulation works within a fixed space where there are built environments such as transport, factories, roads etc. leading to dispossession of the local population to produce profit. The process of capitalism destroys the space as it needs to increase profit through growth. Once the space is destroyed, at a later point, capitalism re-creates a new space to reproduce the capitalist system of overaccumulation. So, this process of creation and destruction is at the very core of globalisation and understanding the geographical principles of globalisation will help to find a path for emancipatory changes.

While Fraser agrees that the crux of accumulation lies in the two classes’ social relations, she thinks that this view is too narrow[2] as it focuses only on social processes and social relations that are accorded value in the capitalist system by the capitalists and that the capitalists themselves define as having economic value. It does not integrate the non-economic phenomena of global warming, care deficits and the hollowing out of public power. Rather, Fraser believes that currently, capitalism is having two crises: the economic and the non-economic crisis. While the economic crisis is the one described by Harvey, the non-economic crisis is coming from activities which are not recognised by the capitalist system. The non-economic activities are the borders of the capitalist economy. These activities are for instance the non-wage labour of social reproduction which provides the supply of labour but also activities such as social bounds, solidarity and forms of trust. There are other spaces than the private home where activities of social reproduction and its associated care activities are occurring. For instance, public education and health care systems as well as leisure facilities are all part of the activities of care. Slavery and immigration are the two most common ways capital has replaced labour. The separation between social reproduction and production enables capitalist forms of women’s subordination while being the indispensable background precondition for the possibility of capitalist production (Fraser, 2014).

Particularly, Fraser focused on the crisis of the activities of social reproduction.  The division between social reproduction and production have shifted overtime. In the 20th century there has been mutations of social reproduction activities within the state. After the Second World War, some aspects of the social reproduction moved from the realm of the private home to the realm of public services and public good while in the Neoliberal era, social reproduction and care mutated from the realm of public services to the realm of the market forces.

The last mutation has accentuated care extractivism and hence the crisis of care. The concept of care extractivism as development by Wichterich is an analogy to the concept of resource extractivism and posits the increasing reliance of the extraction of care, through commodification and, economisation in the market forces . For instance, this concept can be used for transnational reproductive networks where the Global North recruits through the free market care workers from the Global South to provide care activities. This process creates a deficit of care in the family of the care worker of the global south. In other words, care workers who work in a family in the Global North do not have as much time for their own families in the Global South. As Wichterich argues, the neoliberalisation of care ‘depletes care as commons in societies and families of the Global South’. Moreover, the extraction of care workers in the Global South are not the only source of crisis.

The neoliberal mutation has led to a deficit – crisis – of care in other domains. It has led to a deficit of teachers and care givers because the state abandoned supporting these public good services. It also has led to a deficit of the quality of care as the persistent drive for growth and expansion while focus on profit has pushed capitalism to intensify efficiency to reduce costs. As Witchery points out, in many domains such as industrial process, efficiency can lead to quality. However, care is different. For instance, it is not possible to increase efficiency and productivity of feeding a baby or a dement person. It means that the emphasis of efficiency to cut on cost will impede the quality of the care provided.

Last, the privatisation of care has reconfigured the gender and race order as these activities are mostly carried out by cheap workers constructed along social hierarchies of gender, class, race and North South and, post-colonial division. By looking at social reproduction and care extractivism, Marxist theory opens up then to feminism, and colonialism while still acknowledging class struggles.

Mapping social reproduction is at the core of Marxist discussions. While traditional Marxists such as Harvey places it at the point of production and value, others such as Fraser wants to go at the border of the capitalist activities and consider social and care activities that occur outside and inside the private home. It also recognises social resistances outside class struggle such as movement for free education or free childcare. Finally, the points of resistances at the border of the capitalist system can be seen as sources of emancipatory changes.

References
[1] David Harvey, “The ‘New’ Imperialism: Accumulation by Dispossession,” Socialist Register 40 (2004): 63–87.
[2] Nancy Fraser, “Behind Marx’s Hidden Abode: For an Expanded Conception of Capitalism,” New Left Review 86 (2014): 55–72.

Mryse.jpgAbout the author:

Maryse Helbert is a Post-doctoral Research Fellow at the ISS. Prior to that, she was a Post-doctoral Research Fellow at the Rachel Carson Center for Environment and Society. She has been an advocate for women’s rights for decades, having worked for AWID (Association for Women in Development), DIPD (Danish Institute for Parties and Democracies), and she is a gender-based violence research expert to achieve the Sustainable Development Goals for the United Nations Development Programme. Taking an ecofeminist approach, her PhD looked at oil industry and its economic, social and environmental impacts on women in three countries. In her latest work, she takes on the lessons learnt from the fossil fuels industry to explore the challenges of a post-carbon society.

 

 

IHSA Conference 2018 | How to defend a common humanity? by Khaled Mansour

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In a gripping account of his witnessing of the gross human rights violations inflicted on others, Khaled Mansour asks why aid workers are becoming apathetic toward the crimes against humanity that are still occurring today. He shows how genuine change is made possible by a group of aid workers that are countering worrying trends in the humanitarian sector by means of a global movement called United Against InHumanity. This post is based on his keynote address for the 5th conference of the International Humanitarian Studies Association that took place at the ISS on 27 August 2018.

Fifteen years ago, I survived the attack against the UN headquarters in Iraq, but the explosion killed 22 of my colleagues, also demolishing a personal barrier that I have had for years. This barrier ostensibly had helped me to cope with the scenes of abject poverty and degradation; violent deaths and inexplicable violence; and the looming menace that I have had to live close to for years.

For months, I stood at the brink of an abyss of dark and bloody recollections. Memories came flooding back: a flattened refugee camp in Jenin; small tombs for children that had died of malnourishment in Hirat; stories of torture inflicted on political prisoners or suspects from Syria to Pakistan, to name but a few.

I no longer try to forget these scenes. The barrier that I had erected between myself and even harsher and more frequent atrocities in areas of conflict is gone. And for that I am grateful. Like many people who engage in humanitarian aid and the defense of human rights in situations of conflict, I have had to grapple with occasional attacks of depression and waves of sadness, but I see them as signs of a shared humanity and a healthy vulnerability.

They are also a call for resistance through writing, teaching, volunteering and, most important, working with others to defend the dignity and rights of people in conflict. It is a call for action to build and rebuild what our common humanity means and how we can work together to protect it.

The growing apathy of aid workers

However, there is a dominant sense among critics of the humanitarian aid system that the old has disintegrated while the new is not yet born, as Grasmsci said almost a century ago.

There is also a shocking indifference in global and regional centers of power as to the fate of hundreds of millions of people whose lives and livelihoods are decimated in conflicts. Over the past few years, millions have been killed, maimed or forced to flee their homes because of such horrific violence. Civilians are suffering in what has become normalised military operations in Syria, Yemen, the Gaza Strip and many other places. The Assad forces have used indiscriminate barrel bombs and chemical weapons against civilians, while the Israeli and the Saudi forces simply disregard the concept of military advantage as they bomb densely populated areas or vital infrastructure installations, killing and harming far more civilians than members of the Houthi or Hamas militias. Armed non-state actors, ISIS for example, have also committed their share of spectacular atrocities.

Compliance with the laws of war and holding violators to account are becoming increasingly difficult tasks. The refugee law is not faring much better. The EU deterrence measures against possible refugees are an abomination that resulted in thousands of people seeking asylum drowning at sea.

This is fueling cynicism among aid workers as well as recipients. Aid agencies are reportedly jockeying for a bigger slice of the USD930 million promised by Saudi Arabia and the UAE to the gigantic aid operation in Yemen. These two countries have led a merciless war against Yemeni Houthi militias, killing as many as 20,000 civilians. Starvation and blocking essential humanitarian supplies as a war tactic has been regularly used in Syria since 2012, predominantly by the regime, while aid agencies simply acquiesced as the authorities rejected one request after another to access besieged areas. And now, we face the criminalisation of both asylum seekers and those who help them in western countries.

These are disturbing trends.

What is more disturbing is how human empathy is eroding. With an unprecedented rise in populism, rights (legal and otherwise) are increasingly limited to citizens and then not even to all of them. Within societies from the US to India, more demagogue chauvinists advocate that all humans were not equal and that not all cultures can peacefully co-exist. They are not the majority yet, but their influence is mushrooming.

A need for greater political will

There is a glaring absence of political will at the state and intrastate levels. The cosmopolitan values that are at the root of much of the humanitarian and human rights movements seem to be in retreat. This absence of political will was very evident in the ICRC’s failure to introduce a new mechanism for compliance with the Geneva conventions in 2015, or in the miniscule outcome of the World Humanitarian Summit in 2016, or the failure of the Refugee Summit in New York after two years of work to produce any real change to the grim reality.

So, to quote another Marxist, who was maybe luckier than Gramsci, what is to be done?

There is a large body of literature and policy studies that deconstruct the current aid system. There is a ton of policy papers and many think tanks that have ideas to reform/fix or change the humanitarian enterprise.

But what seems to be missing is sustained popular pressure to force a genuine change or quicken the pace of reform. There is a clear need for a movement of people to struggle alongside those who are affected in conflicts in order to ensure their rights to protection and basic needs.

United Against InHumanity: reason for optimism?

This is why a group of former and current aid workers, researchers, and activists have come together last year and started working to build such a global movement to produce action-oriented knowledge, engage in policy advocacy and, most important, organise and play an active political role against atrocities and the rising inhumanity in conflicts around the world.

United Against InHumanity (UAI) is still emerging, propelled by the outcome of extensive consultations with diverse groups and potential stakeholders in Africa, Asia, the Americas, Australia and Europe since late 2017 to turn a common feeling of indignation into a repertoire of impactful actions.

The overall purpose of UAI is to initiate and facilitate joint action by civil society at global, regional and national levels to challenge warring parties, their sponsors, governments and relevant international organisations in order to reverse the normalisation of indiscriminate warfare and the erosion of the right to asylum.

This is a tall order! But it is probably our only way to effectively stand against unbridled and murderous acts of inhumanity in conflicts instead of building barriers that we falsely think could save us.  

KhaledAbout the author: 

Khaled Mansour is a member of the emerging movement United against Inhumanity. He is a senior fellow at the Arab Reform Initiative. For the past 30 years he has been a writer in addition to working in aid, peacekeeping and human rights organisations around the world.

IHSA Conference 2018 | Aid behind walls? A spatial view of humanitarian security by Janine Bressmer

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The humanitarian aid community in reaction to security risks facing its staff is slowly but surely building a Fort Knox around itself. This article details only some of the risks associated with the building of physical and psychological walls, showing that ultimately, this act negatively influences the relationship between humanitarian staff and local populations. Humanitarian aid workers and scholars must actively investigate how they manage the security of humanitarian staff to prevent this from happening.

Ahead of 2018 World Humanitarian Day on 19 August, organisations are again pushing for recognition of the safety of their staff and operations in countries such as Yemen, South Sudan, Syria and the DRC. In 2017, 313 aid workers were victims of major attacks, of which over 90% were national staff.[1] The perception of this type of violence is hugely influential for how the humanitarian community engages with and responds to the environment where aid work aims to alleviate suffering.

The discourse on violence in humanitarian work, and specifically that of severe violence, has helped exaggerate existential threats and foster a climate of heightened fear.[2] It is in this context that humanitarian risk management found significant traction.[3] Although the delivery of aid has always been in areas experiencing severe violence and suffering from natural disasters or conflict for example, humanitarian security is increasingly seen as a vital part of protecting both the concept and practice of aid.

The need for ways to assess humanitarian security risks

However, there exists no common framework for assessing and responding to risks for humanitarian programming and staff. Ideally, such frameworks are used to identify harm, the probability and severity of the impact, and the development of an appropriate response by the organisation.[4] However, the widespread use of “standard” risk management approaches in humanitarian work represents an increased reliance on standardised assessments and “expert” opinion. The knowledge of staff on the ground, whether in senior management positions or not, arguably no longer feeds into the creation and implementation of security protocols and manuals.

Blanket approaches to the management of security, including both operational and staff security, may mean that stringent restrictions on the movement and visibility of aid workers results in their distancing from those they aim to help. Building concrete walls, setting up barbed wire fences, and posting a security guard in front of the main gate may be a way to deter violence, yet this approach to security can do more harm than good in the long run.

Humanitarian organisations must do more

Presently, the international community approaches security from a reactive stance, often putting in place measures only after major incidences have occurred and without institutionalising dedicated security advisor roles. Yet, and indeed, while aid will never be delivered in entirely “peaceful” spaces, humanitarian organisations must do more to approach their security in ways that neither threaten their own existence, nor that of their staff and the local population.

The current environment of risk management does not allow for the consideration of individual decisions based on available information.[5] This “new” risk management approach is, arguably, institutionalised in aid organisations and erodes individual and local autonomy in favour of distant security experts.[6] Further, the use of security protocols and fortification procedures, in combination with continuous attacks against aid workers, continues to push organisations to react by putting up walls, setting up perimeter lining of their buildings, and reducing the movement and visibility of staff.

This discourse of fear poses significant problems for the future of humanitarian action:

“Risk” leading to invisibility, separation, or absence: Approaching risks in humanitarian programming from a reactive stance can result in the visible separation of aid workers from the local population through their withdrawal into fortified aid compounds. Beyond the visible separation, security protocols can generate a discourse of fear of the “Other”, and can even lead to the absence of humanitarian aid programmes or a transfer of risk to local partner organisations without an accompanying transfer of capacities.

Top-down and divisive approaches to security: Not only does a blanket approach to security fail to consider local information and experiences, but it also can significantly hinder the communication between HQ and the field, as well as between the senior positions on the ground and the national staff. This divide can lead to a loss of trust between the two, resulting in a stop of reporting on security incidences to protect jobs and the program as a whole.[7] The stark divide between both the number of national versus international staff affected by violence, as well as the different security procedures for each, significantly contributes to this.

Materiality of reactive security management and its impact on everyday life inside and outside the compound: The materiality of the actual fortification can serve to enable and hinder, shape and change the way in which aid workers inhabit the space inside the compound. Daily routines of requiring permission to exit the compound, using armored vehicles when doing so, and physically and visually reducing ‘seeing’ the beneficiary are results of existing security measures. This can not only have implications for how aid workers act inside the compound, but also for how they perceive their own security, positionality in the local context, and their relationships with other organisations and actors in the space. The compound’s spatial manifestation itself can also influence the local economy. Building materials required for fortification (or even the building of an office space) can impact and alter demand, potentially resulting in price inflation, a reduction of available goods, and an undermining of both local building practices and businesses.

The translation of security protocols and manuals into the everyday: Whereas the generation and implementation of security manuals and protocols is most likely not going to be phased out anytime soon, the way in which aid workers interact with these structures and guidelines every day can greatly improve or undermine how humanitarian aid is carried out and perceived on the ground. Protocols become operationalised through their interpretation, use and adaptation in the context in which they are employed. Restrictions on movements and strict reporting chains can lead to aid workers not only experiencing the local environment in very “securitised” ways, but can also visibly signal to the local population that the organisation sees their space as insecure outside the walls of their own “safe” compound.

Rather than ignoring some of these issues, the humanitarian community must actively investigate its own security management and understand how their actions, materiality and visibility can contribute to safely delivering the assistance they are set up to do. This involves recognising their complicity, through their own discourse and everyday actions, in generating an environment that would rather build walls than find ways to safely integrate themselves in the local society they aim to serve.

[1] Humanitarian Outcomes, “Aid Worker Security Report: Figures at a Glance” (London: Humanitarian Outcomes, 2018), https://aidworkersecurity.org/sites/default/files/AWSR%20Figures%202018.pdf.
[2] Larissa Fast, Aid in Danger: The Perils and Promise of Humanitarianism (Philadelphia: University of Pennsylvania Press, 2014), 51.
[3] Important to note here that there is a distinction between risk and security management of aid organizations. Risk management encompasses, as one of its dimensions, the management of security.
[4] Victoria Metcalfe, Ellen Martin, and Sara Pantuliano, “Risk in Humanitarian Action: Towards a Common Approach?,” Policy Brief, HPG Commissioned Paper (London: Overseas Development Institute: Humanitarian Policy Group, 2011), 2.
[5] Mark Duffield, “Risk-Management and the Fortified Aid Compound: Everyday Life in Post-Interventionary Society,” Journal of Intervention and Statebuilding 4, no. 4 (2010): 463, https://doi.org/10.1080/17502971003700993.
[6] Duffield, 463.
[7] Ashley Jackson and Steven A. Zyck, “Presence and Proximity: To Stay and Deliver, Five Years On” (Geneva: Norwegian Refugee Council; UNOCHA; Jindal School of International Affairs, 2017), 41, https://www.nrc.no/globalassets/pdf/reports/presence-and-proximity_to-stay-and-deliver—five-years-on_final_2017-web-version.pdf.
References
Duffield, Mark. “Risk-Management and the Fortified Aid Compound: Everyday Life in Post-Interventionary Society.” Journal of Intervention and Statebuilding 4, no. 4 (2010): 453–74. https://doi.org/10.1080/17502971003700993.
Fast, Larissa. Aid in Danger: The Perils and Promise of Humanitarianism. Philadelphia: University of Pennsylvania Press, 2014.
Humanitarian Outcomes. “Aid Worker Security Report: Figures at a Glance.” London: Humanitarian Outcomes, 2018. https://aidworkersecurity.org/sites/default/files/AWSR%20Figures%202018.pdf.
Jackson, Ashley, and Steven A. Zyck. “Presence and Proximity: To Stay and Deliver, Five Years On.” Geneva: Norwegian Refugee Council; UNOCHA; Jindal School of International Affairs, 2017. https://www.nrc.no/globalassets/pdf/reports/presence-and-proximity_to-stay-and-deliver—five-years-on_final_2017-web-version.pdf.
Metcalfe, Victoria, Ellen Martin, and Sara Pantuliano. “Risk in Humanitarian Action: Towards a Common Approach?” Policy Brief. HPG Commissioned Paper. London: Overseas Development Institute: Humanitarian Policy Group, 2011.

Bressmer_photoAbout the author: 

Janine Bressmer is a PhD Candidate at the Graduate Institute in Geneva. Her research examines how humanitarian organizations approach the security of their operations and staff, the spatial manifestations of security in terms of fortified aid compounds, and the implications for the practice and concept of humanitarian action. The project is funded by the Swiss National Science Foundation.