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What’s yours is mine

The scramble for the world’s resources has barely abated with the recession, and our ecological debt

The elephant is still standing, and still dead. Around its feet are hundreds of coins thrown by visitors. Room after room at the Royal Museum for Central Africa in Tervuren, on the outskirts of Brussels, is full of stuffed animals perched rigidly against crude backdrops of African forest and grassland. Another exhibit surveys Africa's economic contribution to the world: maps on the wall dissect and label each country, tagging them like the pickled fish and stuffed apes.

This is Africa as a cornucopia of natural wealth to be mined, harvested, picked, squeezed and taken. The maps reduce the continent in general, and Congo in particular, to a series of carefully plotted locations for the extraction of oil, cotton, coffee, sugar, rice, maize, diamonds, jute, cobalt, tin, copper and gold. One term for it is the "resource curse", exemplified by King Leopold II's brutal Central African reign during the first scramble for Africa in the 19th century. Leopold still sits proudly in the central courtyard of the museum, chin imperially upturned: a statue in honour of international relations built on murder, theft and deception.

Is his presence shocking because things are so different today, or because there remain dark continuities? A new report from Nef (the New Economics Foundation) reveals that humanity, driven by European-style consumption patterns, went into "ecological debt" on 25 September. It is based on the "ecological footprint" measure, which adds up all the natural resources we consume and the waste we generate, and compares them with what ecosystems can produce and absorb. As with financial planning, spend more than you earn and, before the year is out, you go into debt. The earlier it happens, the worse things are. This year, "ecological debt day" fell a day later than last year, but still two weeks earlier than the year before that. It has been shifting earlier since first going into the red in the mid-1980s. Strikingly, it suggests that global overconsumption has barely been affected by the recession.

No rich country can support its lifestyle without huge imports of resources. Now we are racking up these ecological debts in a way that looks a lot like a new scramble for Africa. Since 2006, for example, large-scale transnational land acquisitions and leases - so-called "land-grabs" - have laid claim to almost 20 million hectares of farmland in developing countries (an area equivalent in size to all the farmland in France) to grow food and biofuels for consumers in wealthy nations. Countries caught up in the current wave include Ethiopia, the Democratic Republic of Congo (DRC), Madagascar, Mali, Somalia, Sudan, Tanzania, Zambia and Cameroon - all of which are poor and troubled in various ways.

Many of the land acquisitions were triggered by the spikes in food and fuel prices in 2008, when wealthy people suddenly became aware of how vulnerable global markets had become. As a result, direct ownership of resources came to look more attractive than depending on the casino of the commodity markets.

Oil and overconsumption

More than half of the money flowing into Africa as foreign investment (from the United States, Europe and the increasingly competitive China and India) goes straight to the oil sector, according to the UN's World Investment Report. The US is expected to get a quarter of its crude oil imports from West Africa by 2015.

As Europe (and even, falteringly, the UK) recovers from recession, a return to debt-fuelled overconsumption is imminent. And it is energy that fuels it. The UK's relative dependence on imported energy has risen fivefold since the country lost self-sufficiency in 2004. We are less self-sufficient in food now than we were 40 years ago. And because we do not have to pay the full environmental cost of fuel, we engage in bizarre forms of "boomerang trade". The UK imports 5,000 tonnes of toilet paper from Germany, and then exports almost 4,000 tonnes back again. We export 4,400 tonnes of ice cream to Italy, only to import 4,200 tonnes. There are many similar examples of this crazy business.

Today, all respectable European powers must profess commitment to global poverty reduction and sustainable development. But Europe is still hungry for Africa's resources and, for all its sophistication, it is less energy-efficient today at delivering a given level of "life satisfaction" than it was four decades ago. Others are paying the price for our materialism.

Projections for the impact of consumption-driven climate change show potentially catastrophic impacts over the coming decades on Africa - a continent that has made a negligible contribution to the problem. These coincide with the rapacious international exploitation of Congo's tropical forests.

Expected deforestation up to the year 2050 - feeding the demand for wood floors, garden furniture and ministerial front doors - will have the effect of releasing more than 34 billion tonnes of CO2, somewhere close to the UK's entire emissions over the course of 60 years. Overall, up to a quarter of greenhouse-gas emissions are thought to come from clearing tropical forests. When the World Bank began lending, post-conflict, to the DRC in 2001, 107 new contracts to log 15 million hectares of forest in total were signed in just four years. But the benefits that were promised to local people from the trade have failed to materialise, and tax avoidance and timber smuggling are reportedly rife.

In late 2008, the DRC again stood on the edge of full-scale conflict and calamity. It is estimated that even before then, in the decade from 1998, 5.4 million people died from war-related causes in the Congo. The continent is still seen as a lucky dip of natural resources - be those oil, wood, diamonds or minerals - with little concern for the consequences.

Leopold's legacy

I visited the museum in Tervuren to understand better an "official" version of the events by which Europe and Africa emerged with such different fortunes, after two and a half centuries of rapid global economic expansion and huge divergence between rich and poor. Such unequal development has been paid for, in large part, by the creation of an enormous ecological or carbon debt, which has taken the form of global climatic upheaval. We are left in a world that is divided, volatile and living beyond its environmental means.

In 1972, Sicco Mansholt, then president of the European Commission, asked if Europe would "continue to produce 'bigger, faster and more' for some to the detriment of the global environment and the welfare of the rest". As long as Leopold II's statue stands in the heart of Europe, the answer is probably yes.

Andrew Simms is policy director and head of the climate change programme at Nef (the New Economics Foundation). He is the author of "Ecological Debt: Global Warming and the Wealth of Nations", published by Pluto (£13.99)

 

Behind Conrad's Heart of Darkness

Leopold II of Belgium fixed his sights on Africa from the start of his reign in 1865. In 1878 he employed the English explorer Henry Morton Stanley to buy up 100,000 square kilometres of the Congo Basin. By 1885 he had expanded his fiefdom to 2.3 million square kilometres: the "Congo Free State" was formed.

As sovereign, the king established the Force Publique, an army of Congolese conscripts commanded by European officers. Under the pretence of protecting his African subordinates from Arab traders, Leopold created what was, in effect, a huge labour camp.Employment laws allowed workers to be indentured for up to seven years, and enforced daily quotas of rubber and ivory. Punishments for failing to meet these were brutal - beatings, rape and the amputation of hands, as well as killings, were common.

The invention of the rubber tyre in 1891 made the rubber trade even more lucrative. However, the regime's brutality was attracting international attention. In 1904, Roger Casement published a report on Congolese genocide - the death toll had run into millions - forcing Belgium to commission an inquiry. The Belgian government annexed the colony in 1908 and declared the Belgian Congo. In disgrace, the king attempted to cover up his crimes by burning archives. When he died a year later, booing crowds followed his coffin through the streets.

Stephanie Hegarty

This article first appeared in the 19 October 2009 issue of the New Statesman, The Strange Death of Labour England

Jeremy Corbyn. Photo: Getty
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Lexit: the EU is a neoliberal project, so let's do something different when we leave it

Brexit affords the British left a historic opportunity for a decisive break with EU market liberalism.

The Brexit vote to leave the European Union has many parents, but "Lexit" – the argument for exiting the EU from the left – remains an orphan. A third of Labour voters backed Leave, but they did so without any significant leadership from the Labour Party. Left-of-centre votes proved decisive in determining the outcome of a referendum that was otherwise framed, shaped, and presented almost exclusively by the right. A proper left discussion of the issues has been, if not entirely absent, then decidedly marginal – part of a more general malaise when it comes to developing left alternatives that has begun to be corrected only recently, under Jeremy Corbyn and John McDonnell.

Ceding Brexit to the right was very nearly the most serious strategic mistake by the British left since the ‘70s. Under successive leaders Labour became so incorporated into the ideology of Europeanism as to preclude any clear-eyed critical analysis of the actually existing EU as a regulatory and trade regime pursuing deep economic integration. The same political journey that carried Labour into its technocratic embrace of the EU also resulted in the abandonment of any form of distinctive economics separate from the orthodoxies of market liberalism.

It’s been astounding to witness so many left-wingers, in meltdown over Brexit, resort to parroting liberal economics. Thus we hear that factor mobility isn’t about labour arbitrage, that public services aren’t under pressure, that we must prioritise foreign direct investment and trade. It’s little wonder Labour became so detached from its base. Such claims do not match the lived experience of ordinary people in regions of the country devastated by deindustrialisation and disinvestment.

Nor should concerns about wage stagnation and bargaining power be met with finger-wagging accusations of racism, as if the manner in which capitalism pits workers against each other hasn’t long been understood. Instead, we should be offering real solutions – including a willingness to rethink capital mobility and trade. This places us in direct conflict with the constitutionalised neoliberalism of the EU.

Only the political savvy of the leadership has enabled Labour to recover from its disastrous positioning post-referendum. Incredibly, what seemed an unbeatable electoral bloc around Theresa May has been deftly prized apart in the course of an extraordinary General Election campaign. To consolidate the political project they have initiated, Corbyn and McDonnell must now follow through with a truly radical economic programme. The place to look for inspiration is precisely the range of instruments and policy options discouraged or outright forbidden by the EU.

A neoliberal project

The fact that right-wing arguments for Leave predominated during the referendum says far more about today’s left than it does about the European Union. There has been a great deal of myth-making concerning the latter –much of it funded, directly or indirectly, by the EU itself.

From its inception, the EU has been a top-down project driven by political and administrative elites, "a protected sphere", in the judgment of the late Peter Mair, "in which policy-making can evade the constraints imposed by representative democracy". To complain about the EU’s "democratic deficit" is to have misunderstood its purpose. The main thrust of European economic policy has been to extend and deepen the market through liberalisation, privatisation, and flexiblisation, subordinating employment and social protection to goals of low inflation, debt reduction, and increased competitiveness.

Prospects for Keynesian reflationary policies, or even for pan-European economic planning – never great – soon gave way to more Hayekian conceptions. Hayek’s original insight, in The Economic Conditions of Interstate Federalism, was that free movement of capital, goods, and labour – a "single market" – among a federation of nations would severely and necessarily restrict the economic policy space available to individual members. Pro-European socialists, whose aim had been to acquire new supranational options for the regulation of capital, found themselves surrendering the tools they already possessed at home. The national road to socialism, or even to social democracy, was closed.

The direction of travel has been singular and unrelenting. To take one example, workers’ rights – a supposed EU strength – are steadily being eroded, as can be seen in landmark judgments by the European Court of Justice (ECJ) in the Viking and Laval cases, among others. In both instances, workers attempting to strike in protest at plans to replace workers from one EU country with lower-wage workers from another, were told their right to strike could not infringe upon the "four freedoms" – free movement of capital, labour, goods, and services – established by the treaties.

More broadly, on trade, financial regulation, state aid, government purchasing, public service delivery, and more, any attempt to create a different kind of economy from inside the EU has largely been forestalled by competition policy or single market regulation.

A new political economy

Given that the UK will soon be escaping the EU, what opportunities might this afford? Three policy directions immediately stand out: public ownership, industrial strategy, and procurement. In each case, EU regulation previously stood in the way of promising left strategies. In each case, the political and economic returns from bold departures from neoliberal orthodoxy after Brexit could be substantial.

While not banned outright by EU law, public ownership is severely discouraged and disadvantaged by it. ECJ interpretation of Article 106 of the Treaty on the Functioning of the European Union (TFEU) has steadily eroded public ownership options. "The ECJ", argues law professor Danny Nicol, "appears to have constructed a one-way street in favour of private-sector provision: nationalised services are prima facie suspect and must be analysed for their necessity". Sure enough, the EU has been a significant driver of privatisation, functioning like a ratchet. It’s much easier for a member state to pursue the liberalisation of sectors than to secure their (re)nationalisation. Article 59 (TFEU) specifically allows the European Council and Parliament to liberalise services. Since the ‘80s, there have been single market programmes in energy, transport, postal services, telecommunications, education, and health.

Britain has long been an extreme outlier on privatisation, responsible for 40 per cent of the total assets privatised across the OECD between 1980 and 1996. Today, however, increasing inequality, poverty, environmental degradation and the general sense of an impoverished public sphere are leading to growing calls for renewed public ownership (albeit in new, more democratic forms). Soon to be free of EU constraints, it’s time to explore an expanded and fundamentally reimagined UK public sector.

Next, Britain’s industrial production has been virtually flat since the late 1990s, with a yawning trade deficit in industrial goods. Any serious industrial strategy to address the structural weaknesses of UK manufacturing will rely on "state aid" – the nurturing of a next generation of companies through grants, interest and tax relief, guarantees, government holdings, and the provision of goods and services on a preferential basis.

Article 107 TFEU allows for state aid only if it is compatible with the internal market and does not distort competition, laying out the specific circumstances in which it could be lawful. Whether or not state aid meets these criteria is at the sole discretion of the Commission – and courts in member states are obligated to enforce the commission’s decisions. The Commission has adopted an approach that considers, among other things, the existence of market failure, the effectiveness of other options, and the impact on the market and competition, thereby allowing state aid only in exceptional circumstances.

For many parts of the UK, the challenges of industrial decline remain starkly present – entire communities are thrown on the scrap heap, with all the associated capital and carbon costs and wasted lives. It’s high time the left returned to the possibilities inherent in a proactive industrial strategy. A true community-sustaining industrial strategy would consist of the deliberate direction of capital to sectors, localities, and regions, so as to balance out market trends and prevent communities from falling into decay, while also ensuring the investment in research and development necessary to maintain a highly productive economy. Policy, in this vision, would function to re-deploy infrastructure, production facilities, and workers left unemployed because of a shutdown or increased automation.

In some cases, this might mean assistance to workers or localities to buy up facilities and keep them running under worker or community ownership. In other cases it might involve re-training workers for new skills and re-fitting facilities. A regional approach might help launch new enterprises that would eventually be spun off as worker or local community-owned firms, supporting the development of strong and vibrant network economies, perhaps on the basis of a Green New Deal. All of this will be possible post-Brexit, under a Corbyn government.

Lastly, there is procurement. Under EU law, explicitly linking public procurement to local entities or social needs is difficult. The ECJ has ruled that, even if there is no specific legislation, procurement activity must "comply with the fundamental rules of the Treaty, in particular the principle of non-discrimination on grounds of nationality". This means that all procurement contracts must be open to all bidders across the EU, and public authorities must advertise contracts widely in other EU countries. In 2004, the European Parliament and Council issued two directives establishing the criteria governing such contracts: "lowest price only" and "most economically advantageous tender".

Unleashed from EU constraints, there are major opportunities for targeting large-scale public procurement to rebuild and transform communities, cities, and regions. The vision behind the celebrated Preston Model of community wealth building – inspired by the work of our own organisation, The Democracy Collaborative, in Cleveland, Ohio – leverages public procurement and the stabilising power of place-based anchor institutions (governments, hospitals, universities) to support rooted, participatory, democratic local economies built around multipliers. In this way, public funds can be made to do "double duty"; anchoring jobs and building community wealth, reversing long-term economic decline. This suggests the viability of a very different economic approach and potential for a winning political coalition, building support for a new socialist economics from the ground up.

With the prospect of a Corbyn government now tantalisingly close, it’s imperative that Labour reconciles its policy objectives in the Brexit negotiations with its plans for a radical economic transformation and redistribution of power and wealth. Only by pursuing strategies capable of re-establishing broad control over the national economy can Labour hope to manage the coming period of pain and dislocation following Brexit. Based on new institutions and approaches and the centrality of ownership and control, democracy, and participation, we should be busy assembling the tools and strategies that will allow departure from the EU to open up new political-economic horizons in Britain and bring about the profound transformation the country so desperately wants and needs.

Joe Guinan is executive director of the Next System Project at The Democracy Collaborative. Thomas M. Hanna is research director at The Democracy Collaborative.

This is an extract from a longer essay which appears in the inaugural edition of the IPPR Progressive Review.

 

 

This article first appeared in the 19 October 2009 issue of the New Statesman, The Strange Death of Labour England