Death of the Amazon

In Brazil, environmental technocrats talk of saving the rainforest with satellite technology - but l

Sitting in an air-conditioned office in Brasilia, Brazil's modernist federal capital that always has an unreal feel to it, we found it difficult not to be impressed. Or maybe, after so many depressing stories about the destruction of the rainforest, we just wanted to believe what we were being told. We were both beguiled by the vision so powerfully presented to us.

"A new era is beginning for the Amazon," said Tasso Rezende de Azevedo, the youthful head of Brazil's National Forest Programme, running a hand through his thick, brown hair. Bringing up on his computer a bewildering array of maps and aerial photos, he went on: "Today, thanks to modern satellite technology, we have instant information. We know almost immediately when someone is illegally cutting down the forest and we can send in one of our teams to arrest those responsible. From now on, loggers and farmers will have to obey the law."

Tasso belongs to a young Brazilian generation of environmental technocrats who have a fervent belief in the power of technology. Under the leadership of Marina Silva, the charismatic environment minister, who herself comes from the Amazon, they have developed an ambitious strategy for ending deforestation, now running at 1.3 million hectares a year, making Brazil the fifth largest global contributor to greenhouse gases. At the centre of this strategy lies a vast mosaic of conservation units, stretching across the heart of the Amazon Basin from north to south and already covering some 20 million hectares (an area the size of England and Scotland together), with more units planned.

The idea is that these reserves will act as a buffer and stop the human predators - the land-grabbers, illegal loggers, cattle ranchers and soya farmers - moving into the western Amazon, which is still largely untouched.

Some of these are old-fashioned nature parks, where no human activity is permitted. Others are so-called "extractive reserves" for the Amazon's long-term inhabitants such as the ribeir inhos (riverside dwellers, mainly descen ded from 19th-century rubber tappers or from runaway slaves). Yet others, created under Brazil's Project for Sustainable Development (PDS), are for the Amazon's shifting population of former gold prospectors, dam workers and landless families that have invaded indigenous reserves. Key to the success of all these conservation units are Tasso's satellite images, which will allow the government to ensure that only permitted, sustainable economic activity is undertaken.

But can it work? During 30 years of visiting the region, we have witnessed the relentless advance of the agricultural frontier ever deeper into the Amazon forest. Dared we hope that the destruction might be ending? We visited Santarém, an old port built by the Portuguese, where the mighty Tapajós tributary meets the even mightier Amazon River.

This area is being ransacked for hardwoods (especially ipê, now that mahogany, once known as green gold, has been exhaustively logged and exports banned) and planted with soya, the international wonder crop, fed to cattle all over the world. The riverfront, lined by trading and passenger boats that ply the local waters, is now overlooked by an ungainly soya terminal, built by the giant US commodities trader Cargill. If the government's policies were starting to bite here, then a new era really would be dawning.

We hired a 4x4 to visit Renascer, one of the government's new sustainable projects, situated about 200 kilometres south-east of Santarém. According to figures published at the end of last year by the National Institute for Rural Settlement and Agrarian Reform (Incra), 360 families have been settled here. To reach the settlement, we travelled through dense forest, skidding and sliding along dirt roads made as slippery as soap by recent rains. High up in the jungle canopy, we caught a glimpse of a pair of arara-azuls, a species of endangered macaw almost exclusively found in Brazil. Occasionally, a tapir or an agouti ran across the track. What became clear as we travelled further into the forest and passed countless loggers' tracks leading off either side of the road is that Renascer's 44,000 hectares (109,000 acres) had already been plundered for hardwoods.

We saw no sign of human life as we drove deeper into the settlement. At the end of the road we found several abandoned huts, strewn with discarded clothing. On one hung a hand-painted sign that read, somewhat forlornly, "Agro-Extractive Reserve Renascer, PDS". But where were the settlers? The only people we met within the settlement area were two men and a woman who had moved in on their own initiative, planting cassava between tree stumps in an area cleared by the loggers and rearing ducks in a stream. Having plundered the area, the loggers had moved further into the forest. "We can still hear the whine of chainsaws in the distance," one of them said.

Corrupt officials

On our return to Santarém and after talking to government officials, researchers and settlers, it became obvious that loggers have invented a scam to continue illegal logging. Under the terms of a PDS, settlers can clear one-fifth of the area they are allocated, while the remaining four-fifths goes to a collective forest reserve to be used for renewable activities, such as collecting Brazil nuts, extracting oil from andiroba trees, and sustainable logging. As the government tightens its control over logging, demanding proper forest-management projects and legal titles to the land, bandit loggers who have neither have found the weak spot in the new strategy. They have gone into partnership with corrupt officials within Incra, which authorises and administers the settlements, and have set up fake community organisations to run PDSs. Some of these have become facades behind which the loggers carry on plundering the forest.

Many innocent people are caught up in the scam. We discovered that a few years ago one logger had enticed some 80 people, desperate for a plot of land, to join his fake community organisation. He had taken them by lorry to Renascer to have a look at the land and dumped them there. But Renascer, set up with the interests of the loggers in mind, is located in difficult, hilly terrain. Marooned in this remote area, the would-be settlers began to get hungry and grew frightened after a few days. They started to trudge back to Santarém on foot. After walking 27 kilometres, they came to the nearest house, built by a soya farmer, who gave them food and water and even drove the eldest couple, in their late sixties, in his jeep back to Santarém. All that is left of this failed experiment is abandoned huts.

None of these people wants ever again to hear talk of Renascer, but others continue to fall into the same trap. We spoke to C, too scared to give his full name. A small weather-beaten man of 47 with five children, he is hoping to get a piece of land in Renascer. Like many in Santarém, he migrated to the Amazon from the dirt-poor state of Maranhão, working as a gold miner, sawmill employee and book salesman - whatever turned up. When he heard about the new settlements, he thought it was at last a chance to get land. He eagerly began paying five reals (£1.25) a month to the association of would-be Renascer residents set up by the timber company stooge. Two years have passed; meetings are held, but "nothing happens", says C. "They keep telling us we'll get our plot in two weeks' time . . . I know they're fooling us, but I daren't complain. If I say anything, they'll kill me."

We showed him a photo of Renascer, his first glimpse of his promised land. If these settlers ever get their land, they will be able to survive only with support from the timber companies. But the loggers will leave once they have stripped out all the timber. The community will then collapse and Renascer will be seen as another failed attempt to bring sustainable development to the Amazon. The settlers will be blamed, because the loggers will have airbrushed themselves out of the story.

Near Renascer is another PDS called Santa Clara. This is on a flat plateau - unusual in the Amazon - that is devoid of rivers and streams, and is unsuitable for any kind of settlement because of the risk of forest fires. Yet soya farmers from Mato Grosso have moved in, attracted by cheap (in reality, illegal) land. Cargill has agreed to purchase the soya - no questions asked about origins. Caught unawares by the tougher strategy from Brasilia, the soya farmers have been given hefty fines for clearing virgin forest, but they are determined to stay in the area, even if it means allying themselves with land sharks and corrupt local officials.

Since 2005, almost 100 conservation units of various kinds have been created in the Santarém area. One researcher told us that nine-tenths of them were facades behind which loggers and farmers are hiding. By claiming that their timber and soya come from environmentally sustainable projects, they may even get better prices.

Over the past 30 years, the Amazon has become a byword for violence and lawlessness. As we should have remembered, listening to the head of the forest programme describe his brave new world in Brasilia, technology alone cannot change this. Many government officials have a commitment to stopping the senseless destruction of the forest but, on the ground, corruption, understaffing and inadequate resources undermine their efforts.

This article first appeared in the 02 July 2007 issue of the New Statesman, The Brown revolution begins

Picture: Archives Charmet / Bridgeman Images
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What Marx got right

...and what he got wrong.

1. You’re probably a capitalist – among other things

Are you a capitalist? The first question to ask is: do you own shares? Even if you don’t own any directly (about half of Americans do but the proportion is far lower in most other countries) you may have a pension that is at least partly invested in the stock market; or you’ll have savings in a bank.

So you have some financial wealth: that is, you own capital. Equally, you are probably also a worker, or are dependent directly or indirectly on a worker’s salary; and you’re a consumer. Unless you live in an autonomous, self-sufficient commune – very unusual – you are likely to be a full participant in the capitalist system.

We interact with capitalism in multiple ways, by no means all economic. And this accounts for the conflicted relationship that most of us (including me) have with capitalism. Typically, we neither love it nor hate it, but we definitely live it.

2. Property rights are fundamental to capitalism . . . but they are not absolute

If owning something means having the right to do what you want with it, property rights are rarely unconstrained. I am free to buy any car I want – so long as it meets European pollution standards and is legally insured; and I can drive it anywhere I want, at least on public roads, as long as I have a driver’s licence and keep to the speed limit. If I no longer want the car, I can’t just dump it: I have to dispose of it in an approved manner. It’s mine, not yours or the state’s, and the state will protect my rights over it. But – generally for good reason – how I can use it is quite tightly constrained.

This web of rules and constraints, which both defines and restricts property rights, is characteristic of a complex economy and society. Most capitalist societies attempt to resolve these tensions in part by imposing restrictions, constitutional or political, on arbitrary or confiscatory actions by governments that “interfere” with property rights. But the idea that property rights are absolute is not philosophically or practically coherent in a modern society.

3. What Marx got right about capitalism

Marx had two fundamental insights. The first was the importance of economic forces in shaping human society. For Marx, it was the “mode of production” – how labour and capital were combined, and under what rules – that explained more or less everything about society, from politics to culture. So, as modes of production change, so too does society. And he correctly concluded that industrialisation and capitalism would lead to profound changes in the nature of society, affecting everything from the political system to morality.

The second insight was the dynamic nature of capitalism in its own right. Marx understood that capitalism could not be static: given the pursuit of profit in a competitive economy, there would be constant pressure to increase the capital stock and improve productivity. This in turn would lead to labour-saving, or capital-intensive, technological change.

Putting these two insights together gives a picture of capitalism as a radical force. Such are its own internal dynamics that the economy is constantly evolving, and this in turn results in changes in the wider society.

4. And what he got wrong . . .

Though Marx was correct that competition would lead the owners of capital to invest in productivity-enhancing and labour-saving machinery, he was wrong that this would lead to wages being driven down to subsistence level, as had largely been the case under feudalism. Classical economics, which argued that new, higher-productivity jobs would emerge, and that workers would see their wages rise more or less in line with productivity, got this one right. And so, in turn, Marx’s most important prediction – that an inevitable conflict between workers and capitalists would lead ultimately to the victory of the former and the end of capitalism – was wrong.

Marx was right that as the number of industrial workers rose, they would demand their share of the wealth; and that, in contrast to the situation under feudalism, their number and geographical concentration in factories and cities would make it impossible to deny these demands indefinitely. But thanks to increased productivity, workers’ demands in most advanced capitalist economies could be satisfied without the system collapsing. So far, it seems that increased productivity, increased wages and increased consumption go hand in hand, not only in individual countries but worldwide.

5. All societies are unequal. But some are more unequal than others

In the late 19th and early 20th centuries, an increasing proportion of an economy’s output was captured by a small class of capitalists who owned and controlled the means of production. Not only did this trend stop in the 20th century, it was sharply reversed. Inherited fortunes, often dating back to the pre-industrial era, were eroded by taxes and inflation, and some were destroyed by the Great Depression. Most of all, after the Second World War the welfare state redistributed income and wealth within the framework of a capitalist economy.

Inequality rose again after the mid-1970s. Under Margaret Thatcher and Ronald Reagan, the welfare state was cut back. Tax and social security systems became less progressive. Deregulation, the decline of heavy industry and reduction of trade union power increased the wage differential between workers. Globally the chief story of the past quarter-century has been the rise of the “middle class”: people in emerging economies who have incomes of up to $5,000 a year. But at the same time lower-income groups in richer countries have done badly.

Should we now worry about inequality within countries, or within the world as a whole? And how much does an increasing concentration of income and wealth among a small number of people – and the consequent distortions of the political system – matter when set against the rapid ­income growth for large numbers of people in the emerging economies?

Growing inequality is not an inevitable consequence of capitalism. But, unchecked, it could do severe economic damage. The question is whether our political systems, national and global, are up to the challenge.

6. China’s road to capitalism is unique

The day after Margaret Thatcher died, I said on Radio 4’s Today programme: “In 1979, a quarter of a century ago, a politician came to power with a radical agenda of market-oriented reform; a plan to reduce state control and release the country’s pent-up economic dynamism. That changed the world, and we’re still feeling the impact. His name, of course, was Deng Xiaoping.”

The transition from state to market in China kick-started the move towards truly globalised capitalism. But the Chinese road to capitalism has been unique. First agriculture was liberalised, then entrepreneurs were allowed to set up small businesses, while at the same time state-owned enterprises reduced their workforces; yet there has been no free-for-all, either for labour or for capital. The movement of workers from rural to urban areas, and from large, unproductive, state-owned enterprises to more productive private businesses, though vast, has been controlled. Access to capital still remains largely under state control. Moreover, though its programme is not exactly “Keynesian”, China has used all the tools of macroeconomic management to keep growth high and relatively stable.

That means China is still far from a “normal” capitalist economy. The two main engines of growth have been investment and the movement of labour from the countryside to the cities. This in itself was enough, because China had so much catching-up to do. However, if the Chinese are to close the huge gap between themselves and the advanced economies, more growth will need to come from innovation and technological progress. No one doubts that China has the human resources to deliver this, but its system will have to change.

7. How much is enough?

The human instinct to improve our material position is deeply rooted: control over resources, especially food and shelter, made early human beings more able to reproduce. That is intrinsic to capitalism; the desire to acquire income and wealth motivates individuals to work, save, invent and invest. As Adam Smith showed, this benefits us all. But if we can produce more than enough for everybody, what will motivate people? Growth would stop. Not that this would necessarily be a bad thing: yet our economy and society would be very different.

Although we are at least twice as rich as we were half a century ago, the urge to consume more seems no less strong. Relative incomes matter. We compare ourselves not to our impoverished ancestors but to other people in similar situations: we strive to “keep up with the Joneses”. The Daily Telegraph once described a London couple earning £190,000 per year (in the top 0.1 per cent of world income) as follows: “The pair are worried about becoming financially broken as the sheer cost of middle-class life in London means they are stretched to the brink.” Talk about First World problems.

Is there any limit? Those who don’t like the excesses of consumerism might hope that as our material needs are satisfied, we will worry less about keeping up with the Joneses and more about our satisfaction and enjoyment of non-material things. It is equally possible, of course, that we’ll just spend more time keeping up with the Kardashians instead . . .

8. No more boom and bust

Are financial crises and their economic consequences part of the natural (capitalist) order of things? Politicians and economists prefer to think otherwise. No longer does anyone believe that “light-touch” regulation of the banking sector is enough. New rules have been introduced, designed to restrict leverage and ensure that failure in one or two financial institutions does not lead to systemic failure. Many would prefer a more wholesale approach to reining in the financial system; this would have gained the approval of Keynes, who thought that while finance was necessary, its role in capitalism should be strictly limited.

But maybe there is a more fundamental problem: that recurrent crises are baked into the system. The “financial instability” hypothesis says that the more governments and regulators stabilise the system, the more this will breed overconfidence, leading to more debt and higher leverage. And sooner or later the music stops. If that is the case, then financial capitalism plus human nature equals inevitable financial crises; and we should make sure that we have better contingency plans next time round.

9. Will robots take our jobs?

With increasing mechanisation (from factories to supermarket checkouts) and computerisation (from call centres to tax returns), is it becoming difficult for human beings to make or produce anything at less cost than a machine can?

Not yet – more Britons have jobs than at any other point in history. That we can produce more food and manufactured products with fewer people means that we are richer overall, leaving us to do other things, from economic research to performance art to professional football.

However, the big worry is that automation could shift the balance of power between capital and labour in favour of the former. Workers would still work; but many or most would be in relatively low-value, peripheral jobs, not central to the functioning of the economy and not particularly well paid. Either the distribution of income and wealth would widen further, or society would rely more on welfare payments and charity to reduce unacceptable disparities between the top and the bottom.

That is a dismal prospect. Yet these broader economic forces pushing against the interests of workers will not, on their own, determine the course of history. The Luddites were doomed to fail; but their successors – trade unionists who sought to improve working conditions and Chartists who demanded the vote so that they could restructure the economy and the state – mostly succeeded. The test will be whether our political and social institutions are up to the challenge.

10. What’s the alternative?

There is no viable economic alternative to capitalism at the moment but that does not mean one won’t emerge. It is economics that determines the nature of our society, and we are at the beginning of a profound set of economic changes, based on three critical developments.

Physical human input into production will become increasingly rare as robots take over. Thanks to advances in computing power and artificial intelligence, much of the analytic work that we now do in the workplace will be carried out by machines. And an increasing ability to manipulate our own genes will extend our lifespan and allow us to determine our offspring’s characteristics.

Control over “software” – information, data, and how it is stored, processed and manipulated – will be more important than control over physical capital, buildings and machines. The defining characteristic of the economy and society will be how that software is produced, owned and commanded: by the state, by individuals, by corporations, or in some way as yet undefined.

These developments will allow us, if we choose, to end poverty and expand our horizons, both materially and intellectually. But they could also lead to growing inequality, with the levers of the new economy controlled by a corporate and moneyed elite. As an optimist, I hope for the former. Yet just as it wasn’t the “free market” or individual capitalists who freed the slaves, gave votes to women and created the welfare state, it will be the collective efforts of us all that will enable humanity to turn economic advances into social progress. 

Jonathan Portes's most recent book is “50 Ideas You Really Need to Know: Capitalism” (Quercus)

Jonathan Portes is senior fellow The UK in a Changing Europe and Professor of Economics and Public Policy, King’s College London.

This article first appeared in the 22 June 2017 issue of the New Statesman, The zombie PM

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