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Corporate Welfare is a Corrupt Substitute for Energy Policy
Here is a news update from Taxpayers for Common Sense. TCS is the best organization that monitors excessive government spending, corruption and corporate welfare.
Swing State Energy Policy
In a speech in the heart of corn country last week, Senator John Kerry introduced his $30 billion plan to solve our nation’s energy woes, which includes increasing subsidies to the coal industry and to ethanol producers. Seemingly to create a dramatic political moment, the speech was given in Missouri, a state Vice-President Gore lost by 3%, on a farm that grows corn for ethanol production.
All political pundits agree that this presidential election has come down to about 16 battleground states. So, both the President and Senator Kerry are looking for ways to woo (read: pay off) the voters from these zip codes. Just like Senator Kerry’s energy plan is written to win the coal and corn belts, the President is in Oregon today to promise $15 million for the Columbia River Deepening project, a wasteful water boondoggle that the Corps of Engineers has been pushing for years.
Hey, we understand how the system works. Both candidates for president have to promise things they do not like. To paraphrase the popular slogan: don’t hate the political player, hate the political game. There is no better example of pandering to constituencies than ethanol subsidies.
Using Taxpayer Money to Kill the Free Market
Ethanol subsidies started in the 1970s as an attempt to encourage alternative and renewable fuels and to help wean America off Middle Eastern oil. Today, ethanol has failed to make major inroads into the motor fuels market and is not even close to becoming cost-effective, but it costs taxpayers hundreds of millions of dollars a year all the same. Ethanol is now perpetually fueled by parochial interests in corn producing states who have become addicts of the massive corn subsidy program.
In response, Senator Kerry proposes doubling the use of ethanol in the coming decade – requiring 5 billion gallons of ethanol in the nation’s motor fuel supply by 2012. Current presidential candidates must pass the ethanol litmus test or fear offending voters from nine states, including the battleground states of Missouri, Illinois, and Iowa. Bill Bradley and John McCain, the last two candidates with anti-ethanol positions, were KO’d because of it. If ethanol were produced in Maine, where the outcome of the election is not in doubt, ethanol subsidies would not have such a long parade of political support.
Senator Kerry also proposes $10 billion for ‘Clean Coal.’ Like ethanol, the Clean Coal Program has been a failure and a complete waste of money. After 18 years and billions of dollars, the Clean Coal Program has proven ineffective. Taxpayers should not be forced to shovel their hard-earned money into a coal-fueled furnace of waste. Clean Coal technology is about lining King Coal’s pockets and about winning votes in West Virginia, Ohio, and Pennsylvania, all key battleground states. It has very little to do with national energy policy or reducing our dependence on foreign energy sources.
On that note, Senator Kerry should also stay away from the political sound bite, ‘energy independence.’ Politicians from both parties echo that phrase mindlessly, as if simply repeating endlessly will make it come true. Since the United States burns about 11 million barrels of foreign oil a day and consumes a quarter of the total world supply, while sitting on just 3% of the proven reserves, independence is not going to happen until cold crude is replaced with something else.
Senator Kerry’s plan has several things in common with the President’s own policy and with Congress’ recent bills. Guess who wants $10 billion to help make today’s coal plants cleaner, grow more corn in Iowa, and give breaks for consumers to buy fuel efficient cars built by Detroit? All of them do. And surprise, Michigan is a swing state!
You could make the argument that in total the Kerry energy plan is more balanced than anything we have seen so far. Indeed, it might have been impossible to create a plan worse than the $95 billion pork party pushed by the President and Congress last year. But Senator Kerry’s plan still contains a hefty portion of election year goodies designed to increase his chances of being elected, and none of them are good policy for getting us on the path to energy independence.
For more information, contact Keith Ashdown at (202)-546-8500 ext. 110 or by email at email@example.com TCS is at www.taxpayer.net
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South Africa’s apartheid regime was one of the ugliest experiments in human history. It combined racism with 20th century technology to subjugate 86% of the population to the needs of the white minority. In 1994, the world watched with amazement as the apartheid regime peacefully dissolved, avoiding the final climactic bloodbath that had been anticipated for decades.
The democratically elected South African government (led by the African National Congress) committed itself to undertake broad and sweeping efforts to reverse the deprivations institutionalized by apartheid. These efforts were outlined in the Reconstruction and Development Programme (RDP). The RDP is a policy framework developed through extensive consultation between the African National Congress, its tri-partite alliance partners (Congress of South African Trade Unions and the South African Communist Party) and other mass organizations in the broader civil society.
Three years after the promulgation of the Reconstruction and Development Programme, its implementation has been both a spectacular success and an abysmal failure.
The successes of the RDP can be measured in several accomplishments that concretely improve the health and well-being of South Africa’s poorest citizens. Free healthcare has been instituted for women and children; a nutrition program now reaches over 12,000 schools; over 550 new health clinics have been built and nearly 2500 have been or are in the process of being upgraded. More than 1.3 million new electrical connections have been made and the one-millionth water connection was completed in early 1997. Taken together, these are staggering accomplishments for a nation that teeters with one foot in the developing world and one foot in the developed.
In sharp contrast to the RDP success stories stands the nation’s experiment with land reform. The RDP’s land reform goals had three broad thrusts. The first was the strengthening of tenure rights for the rural poor. Second, land restitution was to be made to those who could prove that their or their family’s land had been stolen under apartheid. And third, the nation was to redistribute 30% of agricultural land to the rural poor. All three goals were to be achieved before the year 2000. To date, South Africa is not on its way to achieving any of these goals.
After two years of parliamentary wrangling, new laws were passed to protect the tenure rights of the rural poor but the government is finding them almost impossible to enforce. White farmers who fear the increased legal rights being given to those who they once dominated with impunity have turned to violence and intimidation. Tens of thousands of labor tenants (basically sharecroppers) have found themselves illegally evicted. When they turn to the government for help they often find a bureaucrat who was appointed during the apartheid regime. Many of these apartheid bureaucrats were allowed to keep their jobs so the new government wouldn’t lose the intellectual capital of their administrative expertise. That decision now haunts the rural poor who find that the face who is supposed to protect their tenure rights from unscrupulous white farmers is the same face who denied their very humanity under apartheid.
The land restitution program has bogged down under the sheer weight of the task it is charged with. Beginning with the 1913 Natives Land Act, non-white South Africans were subjected to periodic waves of land confiscations. By the time of the democratic transition in 1994, approximately 60,000 white farmers owned over 80% of agricultural land while 11 million non-whites lived in rural poverty. The Department of Land Affairs estimates that over 3.5 million people and their descendants were victims of racially-based land dispossession and forced removal during the apartheid era. Currently the Commission on Restitution of Land Rights estimates it could take up to 15 years to complete the adjudication of the 13,000 pending land claims affecting more than one million people.
The final component of the RDP’s land reform program is land redistribution. The RDP targeted 30% of land for redistribution to the rural poor before the year 2000. As of June 1997, less than 2% has changed hands.
Although the RDP calls for land expropriation “where appropriate,” only .29% of land has been transferred to the poor though this mechanism. Instead, the government has relied upon a “willing-buyer/willing-seller” mechanism for land redistribution.
The Settlement/Land Acquisition Grant is the primary instrument that the government relied upon to facilitate the land transfer visualized in the RDP. The grant program provides a 20% subsidy for the purchase of land by the poor. This program has failed to effectuate its design because the rural poor have found it quite difficult to come-up with the other 80% of the purchase price and even more difficult to find a willing seller of prime agricultural land.
If the white farmers were content to own the farms while the non- white landless were forced by economic depravation to work for them under the apartheid system, why would they wish to change that relationship after the dismantling of apartheid? Indeed, very few have. The willing-buyer/willing-seller approach to land reform is dependent upon the willingness of white farmers to divest themselves of their land. However, for the most part today’s white farmers are the children and grandchildren of the white farmers who actively supported the apartheid policies that drove non-whites off of their land. Such forced removals benefitted these white farmers by opening-up land for them to farm and providing an agricultural labor pool composed of the now landless non-whites.
Given the dismal results from the willing-buyer/willing-seller approach to land reform, it is clear that adhering to this approach is unrealistic if the goals of the RDP are to be achieved. As a broad policy framework, the RDP provides a wide channel through which the African National Congress can steer the ship of state. However, so far the government’s land reform efforts have steered well to the right. The RDP explicitly acknowledges that reliance upon market forces will not remedy the unjust wealth distribution created by apartheid and the government should amend its land reform program to acknowledge this reality.
Tepid market interventions such as providing 20% subsidies on land acquisition are wholly inadequate to alter the maldistribution of agricultural capacity that is the result of apartheid. Even if there is a willing-seller, the government may find that its subsidies simply contribute to land price inflation leading to further enrichment of the current property holders and providing little net benefit to the landless millions.
The current stage of social transformation in South Africa is ideal for land expropriation and redistribution. The populace is eager for substantial change. If the government delays this fundamental prerequisite to a successful land reform program, they may miss their chance to institute such a program with the minimum of negative consequences. Domestic and foreign investors are made nervous by instability. However, everyone expects that fundamental economic restructuring will be necessary to fully dismantle apartheid. The time for such fundamental change is now. Five to ten years in the future, land expropriation will not be perceived by the international community as the correct and just remedy for apartheid land policies. Instead, delayed land expropriation will be perceived as destabilizing and threatening to international investment.
There are currently 500,000 subsistence farmers and an additional 11 million rural poor who are the potential beneficiaries of a successful land reform program. A successful transfer of agricultural land to those who actually till the soil would ease unemployment, crime and overcrowding in the cities (by stemming the immigration of rural jobless) and provide the foundation for just and equitable development in the countryside. The government gave voluntary land redistribution a good faith try and it is now time for a comprehensive expropriation program.
from the Social Justice E-Zine, January 1998
Is expropriation a recipe for violence? Wouldn’t placing a tax on land holding. based on the value of the land held, yield plenty of “willing sellers”? Tell The Progress Report what you think!
Justice in Voting is a Long, Step-by-Step Struggle
US Voting Timeline Shows Some Highlights
This timeline is being circulated by the American Friends Service Committee (www.afsc.org). We added one item for the year 2000.
Voting Timeline 1776-2000
1776 – White men with property can vote. Free black men can vote in New Jersey, Pennsylvania and Connecticut. (The Progress Report adds — in Maryland between 1776-1783 free black men could vote, but between 1783-1810 only those who were freed prior to 1783 were permitted to vote, and after 1810 no black men at all were allowed to vote.)
1789 – Establishment of US democracy. White men with property can vote. Poor people, Women, Native Americans, and enslaved African- Americans cannot vote.
1790 – From 1770 to 1790 each state has individual naturalization laws. In 1790 the US passes its first naturalization law to grant citizenship to white men and some women. The right to vote is tied directly to citizenship status; it is only for whites who have lived in the country for 2 years. In 1798 the law is changed so immigrant whites have to live in the US for 14 years before they can become citizens. This changed to 5 years after 1902.
1820 – The property laws are taken off the books and whites can vote even if they do not own property. But they must pay a poll tax or be able to read and, in some places, they must pass religious tests before they can vote.
1840 – Poll taxes, literacy taxes and religion tests are taken off the books. Only white men can vote.
1848 – The Treaty of Guadalupe-Hidalgo ends the Mexican-American War. The treaty guarantees citizenship to Mexicans living in the newly acquired territories of Arizona, California, New Mexico, Texas and Nevada. Voting rights are denied. Mexican-Americans are not allowed to vote despite having US citizenship. Property laws, language and literacy requirements are the favored way of keeping people from voting. There are also the Night Riders who use intimidation and violence.
1860 – Five states, Maine, New Hampshire, Vermont, Rhode Island and Massachusetts allow free black men to vote.
1866 – The Civil War ends in 1865. Civil Rights Act of 1866 grants citizenship to native-born Americans but excludes Native Americans.
1870 – The 15th Amendment establishes the right of African-American males to vote. In the South especially, poll taxes, reading requirements, physical violence, property destruction, hiding the polls, and economic pressures keep most African-Americans from voting. The Ku Klux Klan is a major part of the violence and intimidation used to keep African-Americans from voting.
1882 – The Chinese Exclusion Act bars people of Chinese ancestry from becoming citizens. They cannot vote.
1887 – The Dawes Act gives citizenship only to Native Americans who give up their tribal affiliations.
1890 – The Indian Naturalization Act grants citizenship to Native Americans in an application process similar to immigrant naturalization.
1901 – Congress grants citizenship to Native Americans living in Indian Territory (Oklahoma).
1920 – Prior to 1920, some parts of the country let women vote. What or whom they can vote for depends on the area they are in. Some can vote only in school elections. Women in the Wyoming and Utah territory and Colorado have full voting rights. It isn’t until 1920 that all women have the right to vote.
1921 – The Sons of America are organized to fight for equality and the rights of Mexican Americans as citizens, including the right to vote. It will be 1975 before the right to vote is available to all Mexican-Americans.
1922 – In the case of Takao v. United States the US Supreme Court upholds the 1790 Naturalization Act that barred Asian-Americans from becoming citizens. This enforces the policy of no voting rights for Asian immigrants.
1923 – The court ruling in the case Bhagat Singh Thind v. The US rules that Asian Indians are eligible for citizenship. Technically, as citizens, they can now vote. However, almost all immigrants who are people of color continue to be denied the right to vote.
1924 – The service of Native Americans during World War I helps to bring about the 1924 Indian Citizenship Act. The Act grants Native Americans citizenship, but many western states refuse to allow them to vote. Some of the tactics used to discourage voting includes physical violence, destruction of property, economic pressures, poll taxes, hiding the polls and reading requirements.
1943 – The Chinese Exclusion Act is repealed, making immigrants of Chinese ancestry eligible for citizenship.
1946 – Filipinos are now allowed to become citizens.
1952 – The McCarran-Walter Act repeals racial restrictions of 1790 Naturalization Law. First generation Japanese can now become citizens.
1965 – In a direct response to the Civil Rights movement led by Dr. Martin Luther King Jr. and others, The Voting Rights Act of 1965 is enacted. It bans literacy tests in the Deep South and provides federal enforcement of black voter registration and voting rights. This Act affects Virginia, Alabama, Georgia, Louisiana, Mississippi, North Carolina, and South Carolina. It also applies in Alaska.
1970 – The 1970 Voting Rights Act bans literacy tests in 20 states including New York, Illinois, California and Texas.
1971 – The 26th Amendment gives voting rights to 18 year olds in response to protests for men under 21 drafted for the Vietnam War.
1975 – The Voting Rights Act is amended to include language assistance to minority voters. Language requirements have been used routinely to keep the vote from US born citizens who speak other languages. Now the Voting Rights Act has some real impact and enforcement in the Southwest.
1990 – The Americans with Disabilities Act requires access to the polls and to the ballot.
2000 – Vote fraud scandals in Florida and elsewhere. Thousands of eligible voters are prevented from voting. Over one million ballots are never counted.
Something is definitely rotten on the farm. The General Accounting Office (GAO), Congresss fact-finding agency, recently released a study of the U.S. Department of Agricultures management of the farm subsidy program. The findings should horrify lawmakers but probably wont.
The GAO revealed that government employees are ill-trained, and federal laws too vague, to properly monitor the hundreds of thousands of farm subsidies granted each year. Although the USDA fact-checks only about 1,000 applications each year, the GAO found many of these “approved” recipients were ineligible for subsidies. A GAO sample of USDA-reviewed and -approved subsidies revealed that fully 30 percent of even these scrutinized farm subsidies were going to people who shouldnt be receiving them.
The lack of USDA oversight is outrageous, given how much America spends on subsidies. From 1995 to 2002 the U.S. taxpayer doled out more than $114 billion to farmers, and in 2002 President Bush upped subsidies to $190 billion over the next ten years. For perspective, consider that in 2000 alone U.S. spending on farm subsidies exceeded the total output of more than 70 nations.
With so much money being freely handed about, the GAO report should lead to some tough questions for USDA officials on Capitol Hill. Yet for all its detail, the 75-page report artfully avoids the bigger question that no lawmaker wants to hear: why do we even have farm subsidies?
One popular misconception that contributes to support for farm subsidies is that because they result in lower food prices, they are a boon to consumers. This ignores the fact that taxes pay for these subsidies. Any reduction in supermarket prices is paid for by your taxes — or someone elses — whether you buy that ear of corn or not.
Farm subsidies are not intended to reduce the cost of food significantly. If prices fell too much, farmers would lose money. To prevent this, Congress also has environmental conservation subsidies that pay farmers to not cultivate their land, resulting in higher prices for crops made more scarce. Consequently, from 1995 through 2002 we paid $14 billion for farmland conservation subsidies that increased the price of our food!
Another myth is that farm subsidies can help U.S. exports and therefore the U.S. economybecause they make our food cheaper for foreigners to buy. This claim ignores (at least) two realities. First, just as farm subsidies are a wealth transfer from some taxpayers to some domestic consumers, so they are a wealth transfer to foreign consumers.
Second, it ignores the fact that farm subsidies are starting to cost U.S. exporters. Last April the World Trade Organization ruled that U.S. cotton subsidies violated global trade rules, which could lead to billions of dollars in retaliatory tariffs or fines. The ruling will encourage developing countries to bring suit against other subsidized U.S. exports.
But if the U.S. stops subsidizing agriculture, this could encourage others to do the same. Franz Fischler, the European Unions agriculture commissioner, recently assured that, Provided we get a balanced deal, we are ready to put all of [Europes] export subsidies on the table. Given that European agricultural subsidies are almost six times greater than U.S. subsidies per hectare, American exporters would gain tremendously from an end to subsidies. Farmers in the developing world, who struggle in the face of unfair competition from crops subsidized by governments of the developed world, would also gain.
The most enduring political illusion is that farm subsidies are necessary to maintain the small family farmer. In fact, 77 percent of Americans support giving subsidies to small family farms, according to a 2004 poll by the PIPA/Knowledge Network.
Small family farmers are not the primary dollar recipients of federal subsidies, however. According to the subsidy watchdog Environmental Working Group, 71 percent of farm subsidies go to the top 10 percent of subsidy beneficiaries, almost all of which are large farms. In 2002, 78 farms, none small or struggling, each received over a million dollars in subsidies. The bottom 80 percent of recipients average only $846 per year.
The result of subsidizing the rich, more landed farmers is that they can reduce the prices of their goods, making it much harder for small farmers to compete. Rather than being the small family farmers savior, subsidies work against them.
Why then do we have farm subsidies at all?
Rich agribusiness corporations are a powerful lobby in American politics. In the last election, crop producers gave $11.5 million in campaign contributions, according to the Center for Responsive Politics, and they are likely to give much more by this November.
So dont be surprised that the GAOs report wont be taken too seriously on Capitol Hill. Farm subsidies are more than just payoffs for loaded, large landowners. Theyre subsidies for your elected official.
Nicolas Heidorn is a public policy intern at The Independent Institute in Oakland, California.
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Computer Professionals Say Software-based Voting Systems Are No Good
This recent editorial, which originally appeared in eWeek magazine, provides an excellent summary of the fraud dangers posed by software-based voting systems. When computer professionals come out strongly against this use of computers, the rest of us must pay careful attention.
We believe in the power of software and its ability to execute daunting tasks. However, we are also aware that all software has flaws and that, sooner or later, these flaws will appear. Because of this, there are some tasks for which software alone should not be trusted. The process of voting in electoral contests is one of them.
The reason was made clear in research recently completed by the Information Security Institute at Johns Hopkins University (see avirubin.com/vote.pdf). The researchers analyzed code found on a site of Diebold Election Systems, a company with contracts with several states and with tens of thousands of voting systems in the United States.
The Diebold code was riddled with serious holes and flaws that would make it possible to rig voting machines or let someone vote an unlimited number of :times without detection. Of course, representatives of Diebold are protesting that the code in question was old and that they are constantly improving it. Were the code as clean and secure as is possible, we would still be against its use in deciding elections.
The Progress Report says — we gather that Diebold claimed the flawed software was not actually used in elections, but this turns out to have been a lie. If a private company is going to be in charge of elections, it needs to provide total openness, truth, and disclosure. Not coverups.
Chief among our concerns is that the Diebold code in question is closed and proprietary. Because of this, the only people who may know of a flaw would be those exploiting it. And, of course, there is always the possibility that a coder could add a backdoor that could be exploifed. The code used for something as important as elections must be open so that all can be assured of its integrity and security. No independent group of code evaluators can provide the same level of validation that the full tech community can.
We believe that software should be only part of the election process. We agree with security researchers at www.verifiedvoting.org who argue that there must be a paper audit trail in any election.
While software and touch-screens can help avoid election problems such as hanging chads, they should create a paper document that a voter can verify and that can be stored like any paper ballot. The voting machine should stop at creating the ballot, and standard ballot counting procedures should remain in place.
Vote Fraud Scandals Will Grow Worse With Flawed Software-Based Voting Systems
If these software-based voting systems stay in place, it is likely that a flaw will be exploited to change the results of an election — making Florida in 2000 look like a minor occurrence. As technology professionals, we must make sure our congressional representatives understand the serious problems presented by these software-based voting systems.
A bill introduced in May, the Voter Confidence and Increased Accessibility Act of 2003, has among its requirements that voting systems provide a paper audit trail and that the source code must be available for review by any citizen. For more information on this bill, HR 2239, go to Thomas.loc.gov or action.eff.org/action/index.asp?step-2&item=2754. This bill will ensure the accuracy of electronic voting, and we support its adoption.
In a democracy, is vote fraud something that should be tolerated? Do you know whether your vote was counted correctly, or counted at all? Shouldn’t you be able to find out? Tell your views to The Progress Report!
California leads US in incarcerating drug offenders
25-fold increase in Californians incarcerated for drug offenses since 1980
California has the nation’s highest rate of imprisoning drug offenders according to a new report released on July 27. The report by the Justice Policy Institute, found that the number of people imprisoned for drug offenses in California has increased 25-fold since 1980 and that there are twice as many people incarcerated in state prison for drug offenses today as the entire state prison population of 1980.
In releasing these figures, Dan Macallair, Vice President of the Justice Policy Institute noted that, “a 1990 bi-partisan commission established by former Governor George Deukmejian found that California’s criminal justice system is out of balance partly because of its emphasis on imprisoning drug offenders. Since that report the situation has only worsened. It is time for balance and rationality in our criminal justice system.”
The report, entitled Poor Prescription: The Costs of Imprisoning Drug Offenders in the United States also found that it cost Californians over $1 billion last year to incarcerate 44,455 persons for drug offenses in state prison, almost half of whom are incarcerated for simple possession. These figures should be considered conservative, since they do not include the costs of county jail inmates incarcerated for drugs or parolees and probationers incarcerated because they tested positive for drug use.
“More than anyone, I understand the difference between a violent offense and an act in which the offender hurts no one but himself,” stated Marc Klaas, President of the Klaas Foundation for Kids. “Study after study has shown that money spent on treatment and prevention reaps several times as much crime-control as money spent on incarceration for nonviolent offenders.”
Other significant national findings in the report include:
There are almost as many inmates imprisoned nationally for drug offenses today (458,131) as the entire US prisoner population of 1980 (474,368).
Since 1980, the number of violent offenders entering America’s prisons has doubled, while the number of nonviolent prisoners has tripled and the number of persons imprisoned for drug offenses has increased 11-fold.
It will cost state, county, and federal taxpayers over $9 billion to imprison 458,131 drug offenders this year.
The report comes at a time when America’s drug policies are under increased criticism, and when policy alternatives have arisen around the country.
In May, an initiative qualified for the November ballot in California which would substantially reduce drug commitments to prison and fund an additional $120 million in drug treatment.
On June 8, Human Rights Watch released a report that found that the war on drugs had been waged overwhelmingly against African Americans.
On June 22, New York State’s Chief Judge Judith S. Kaye announced a new drug reform initiative that would provide treatment in lieu of imprisonment for 10,000 New York State drug offenders.
On July 27, US Rep. John Conyers will announce federal legislation to divert nonviolent drug offenders from incarceration into treatment.
On July 29 and August 11, two “Shadow” conventions are set to coincide with the Republican and Democratic National Conventions with drug policy reform amongst three issues topping the convention agendas.
“America is discovering that it does indeed have a drug problem,” stated JPI Director and report co-author Vincent Schiraldi. “And that problem is that we’ve focused on imprisonment as the near-exclusive solution to substance abuse, while giving short shrift to treatment and prevention.”
The Justice Policy Institute is a research and public policy organization in Washington, DC. JPI is a project of the Center on Juvenile and Criminal Justice. This research was funded by a grant from the Open Society Institute
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Recently I had to travel from Maine to New York City, via public transportation. I brought along book, Facing East from Indian Country by Daniel K. Richter (2003, Harvard University Press). On the cover is a beautiful Hudson River School painting, “The landing of Henry Hudson” by Robert Weir. It shows the English travelers being greeted, from the Algonquins’ point of view, with the beautiful palisades in the background. The book’s subtitle is “A Native History of Early America”.
I waved goodbye to Lisa and the kids at 7 AM in Bangor, feeling, when it came down to it, not at all unhappy about the prospect. A chance to sit, and think, read a book and watch scenery, for a few hours? OK by me.
I have long marveled at the American disdain for public transportation. We have this lone-cowboy myth: “Yep, I’m gonna climb up into my SUV and drive where I want and make good time!” But it’s nothing like that in reality. There are few things in life more conformist than a modern road trip. These are “limited access” highways. We don’t stop when we want to stop; we stop at the stop, fuel up, hit the head and grab some grub. The standard Interstate rest stop is efficient, adequate, and utterly devoid of flavor; there’s something downright Soviet about it. Rugged American individualism? I’m not seeing it.
Not only is Interstate driving unpleasant, it’s dangerous. There’s another oddity: mainstream Americans are very safety-conscious; we strap into approved restraining devices, vaccinate our children, rinse our food and hit the power-locks in questionable neighborhoods. Yet we’re willing to pilot our machines at speed over bumpy, ill-maintained highways, mere inches from hundreds of drivers in who-knows-what mental states. Someday, history will look back with bemusement upon our odd notions about transportation.
I had read about the transportation systems of the Wabanakis of the Maine area, who had charted the myriad lakes and streams so thoroughly that one could travel by canoe hundreds of miles with only a few short, well-labeled portageways in between. As my motorcoach thundered over its hard, smooth path, I thought about how hard it is to envision such a way of life. Prehistorians marvel at ancient earthworks, but you want to talk earthworks? Look at these roadbeds! How many of those old stream paths did they close off? Biologists have recently begun studying how the imposition of a modern highway can divide an ecosystem into two utterly separate parts: if we still have squirrels in 200 years, why, we may very well have a different species of them on the west side of I-95 than on the east!
The movie was starting. I opened my book.
Richter acknowledges that history has striven to weave in greater understanding of the Native contribution to the history of North America but he offers a more radical reorientation: his quest is to understand the longer view, in which Europe was the “new world” that was “discovered”:
…if we shift our perspective to try to view the past in a way that faces east from Indian country, history takes on a very different appearance. Native Americans appear in the foreground, and Europeans enter from distant shores…. Cahokia [the ancient Mississipian city, near what is now St. Louis, that once was home to some 20,000 people] becomes the center and Plymouth Rock the periphery, and themes rooted in Indian country rather than across the Atlantic begin to shape the larger story. The continent becomes a place where diverse people had long struggled against and sometimes worked with one another, where societies and political systems had long risen and fallen, and where these ancient trends continued right through the period of colonization.
One of the first surprises, when we look at North American history from this perspective, is the fact that Indians discovered European goods long before they discovered European people. Metal tools and weapons, jewelry and other goods made their way through centuries-old trade networks and became familiar items long before most people saw a white man. These goods weren’t imposed on the natives as part of some imperial strategy; they were good; they actually supplied a growing market demand. Hence, the initial contacts with their makers would not have been antagonistic. They quickly became so, in many cases as with the brutal march of Hernando de Soto’s 600-man strike force across what would become the American South (1539-42). De Soto’s adventure was outstanding in its utter savagery. In one respect, though, it was typical of Indians’ first contact with Europeans: the Spaniards seemed less like fearsome conquistadores than hapless bumblers.
“Who are you? What do you want? Where are you going?” A chief from the town of Ichisi, in present-day northern Georgia, asks during one of these encounters. De Soto replies that he is “A Captain of the great King of Spain; that in his name he came to give them to understand the sacred faith of Christ, that they should know Him and be saved, and give obedience to the Apostolic Church of Rome…. And they would treat them as well, and with peace and justice…” if and only if they submit.
De Soto was very taken with the string of pearls one Chief gave him, as a traditional gift of welcome; he interrupted the ceremony to demand more of them. Seeing that it was riches de Soto was after, the Chief sent him off with vague directions to a much richer city further inland. Village after village did the same thing. At length, having made it as far as the Mississippi River, having lost their leader and a third of their men, the Spaniards pounded the chains of their remaining Indian slaves into nails, built seven vessels and sailed for Mexico.
At about the same time, the French explorer Jacques Cartier was making his third voyage up the St. Lawrence River. He and his crew spent a horrendous winter on their ship, dying of scurvy. Cartier forbade contact with the natives, who were also dying of some mysterious ailment, probably a new infection carried by the Frenchmen. The Micmacs, however, could have completely cured the French crew’s vitamin C deficiency with a brew they made from cedar bark; instead, they grew suspicious, thinking the newcomers were planning an invasion. Cartier soon returned to France bearing a cargo of what he thought was gold and diamonds, but were actually only pyrite and quartz.
So it went, for at least the first fifty years of Indian-European contact. The Indians were comfortable in their long-established ways of life, and the newcomers, erecting huge crosses and lacking even the most basic survival skills, seemed to say the least very misguided.
We arrive at the newly-remodeled bus station in Portland to take on more southbound riders. Nearby, travelers can avail themselves of Amtrak’s “Downeaster”, by which passenger train service was recently returned to Maine, with much fanfare. I had wanted to try it on this trip, but it proved impossible: having had to ride for two hours to board the train, I would be taken to Boston’s North Station, from which I’d have to travel across town by taxi to make a connection at Boston’s South Station. Ah well bus travel may be a last resort, but at least it’s available. We have train tracks as rusty hiking trails in forests all up and down this country but passenger trains barely run at all anymore.
In Portland I get a seat-mate, a natty chap, who seems (thank goodness) content to watch the movie. I’ve already ignored the Bangor-to-Portland movie (pretty much; my eyes did keep straying up to admire the ingenue). Luckily, this is Trailways, where you can choose not to use the headphones. The “people professionals” at Peter Pan blast the audio at you whether you want it or not.
I had always pretty much bought into the myth that the Europeans’ technological superiority doomed the Indians to defeat, when push came to shove but Facing East from Indian Country details many dimensions of error in that view. Trade was increasingly important to both sides, and it was never a matter of the Indians being fascinated with what trinkets the Europeans tossed them. In fact, goods were produced in Europe explicitly to meet the demands of the Indian market and, Indians routinely modified and refitted European tools for uses that they deemed sensible. It’s true that Europeans had metal and brass-tipped arrowheads were a significant improvement. In agriculture, however, the Indians had a strong advantage. They had been cultivating the “three sisters” corn, squash and beans for many generations. The three crops provided more high-quality food for less labor than anything the Europeans did. Corn stalks provided support for bean vines; broad squash leaves kept down the weeds; the beans’ roots provided nitrogen fixation that enriched the soil. The crops could be grown on small plots that were readily reclaimed by the forest when they became depleted. Because native farming methods placed so little stress on the land, farming and hunting could easily coexist. Despite their “superior technology”, the lives of 16th and 17th century settlers were far rougher and their advancement far slower than they would have been, if they’d adopted Indian farming methods. Instead, they cleared large fields and planted single crops on them which created erosion, and allowed pests to thrive and they raised livestock, which competed for the ecological niches occupied by the Indians’ staple game animals. Hogs, which went everywhere and ate everything, were particularly reviled by the natives.
When you consider how sumptuously productive Indian agriculture was, compared with the meager fruits of the settlers’ hard labor, you have to wonder why there was so little cooperation and reciprocal learning. The settlers’ lives were hard. If Indian ways of making a living were superior, why did they not catch on? Why could not a hybrid, cooperative culture have taken hold at the grassroots, rather than becoming ever more adversarial and violent?
That happy outcome was precluded by two huge trends one economic and the other bio-medical. First, the tremendous European demand for beaver pelts brought unprecedented material prosperity but resulted in great alterations of traditional economic patterns, leaving many communities dependent on the fur trade for nearly all their supplies. Meanwhile, European microbes, to which the Indians had no immunity, were cutting a deadly swath through Indian country.
Exact statistics will never be known, but in 1492 the diverse but interconnected area east of the Mississippi may have been home to more than two million Native people…. As late as 1700, the European population had barely exceeded 250,000, and the colonists were confined almost exclusively to coastal and riverine enclaves…. By 1750 the population balance had shifted decisively, with Europeans and their enslaved African workforce exploding to nearly 1.25 million and the native population shrinking to less than 250,000.
So many people died, so quickly, that one Indian nation after another was irrevocably pulled away from its cultural and economic patterns. Because contact was most frequent with adult men, they died in greatest proportion. Increasingly, there were not enough men to do the work that needed doing. This further weakened cultural patterns, and increased the reliance on the fur trade, in a vicious circle. Indeed, many of the “tribes” thought to have survived into the 19th century were actually cobbled-together amalgamations of separate, decimated nations. “Mourning wars” were conducted to raid other communities of their able-bodied adults. The Five Nations Iroquois were the most successful in this desperate competition. Richter quotes “a nineteenth-century descendant of the ethnic mixing that resulted”:
The plan was to select for adoption from the prisoners, and captives, and fragments of tribes whom they conquered. These captives were equally divided among each of the tribes, were adopted and incorporated with them, and served to make good their losses. They used the term, we-hait-wat-sha, in relation to these captives. The term means a body cut into parts and scattered around. In this manner, they figuratively scattered their prisoners, and sunk and destroyed their nationality, and built up their own.
While these horrific struggles were going on in the Indian community, the three Imperial powers of Britain, France and Spain were maneuvering for a position to gain control of the North American continent, in a long and complex series of battles which culminated in what we learned in high school to call “The French and Indian War”.
As we come into Boston, I surface, and find myself in a tunnel. “Oh!” I remark, “This must be the Big Dig.” I get into a conversation with my seatmate, who turns out to be from Sweden, about this public works monstrosity. “It’s the largest and most expensive highway construction project in history,” I report. “I don’t know what it cost, but it is at least four times what was projected to cost when it started.” (Actually: the 1993 projected cost was $2.6 billion; the projected full cost at completion whenever that might be ranges from $10.8 to $12.6 billion.) The part we’re driving through seems smooth enough, but when we emerge into the towering maze of ramps at the south end of the city, it becomes clear that their goal of finishing this thing before the Democratic Convention later this year just ain’t gonna happen.
What’s the cultural significance of the Big Dig? Seems to me it’s gotta be a monument to over-arching stubbornness, a massive commitment to staying the course against all common sense. I mean, we are so committed to private auto transportation that we’re willing to dig an eight lane tunnel under an entire city? Ah, but can you imagine the immense real estate values that will be created, once they finally remove the above-ground expressway? Come to think of it, there’s an opportunity there for Boston to recoup some of those cost overruns. Instead of higher fares, fees, taxes and interest payments, they could collect the rent that the Big Dig has created along the new “Greenway”. It makes a lot of sense, but I have not heard anyone, at any level of government, suggest anything even remotely like it.
Amazing. At least, though, when passengers get off of Amtrak’s Downeaster at North Station, their taxi can zip thru the Big Dig to make that connection across town.
My friend Mike Curtis suggested some years ago that for the cost of maintaining a busy section of arterial highway, we could transport the same number of people by rail. They would make their commute in the same span of time, and they would be far more productive, having had the chance to use their commute for resting, meditating or working. Why not? New York City straphangers commute to work in far less time than it would take to make their way through the city by car and now the center-city rush-hour jams have spread far and wide across the megalopolis. Today’s technology could apply the model of the New York Subway system to the entire East Coast. And if we financed it as we should from the land-rent fund that its provision had created people could ride for free. There are so many things that we could do. The United Nations has estimated that the cost of providing safe drinking water for the entire continent of Africa would be roughly equal to that of the Big Dig (and less than the F-22 advanced tactical fighter, which, unlike the Big Dig, is completely superfluous). Our age may come to be known for the splendor of the opportunities it missed. When it comes to erecting giant mounds of stuff that’s just not much use, the ancient Pharoahs had nothing on us.
Boston’s South Station is an imposing stone train station in the classic model: solid and reassuring, built to last. Its bus terminal, however, attached like a growth on the old station’s neck, is a very unpleasant space. Its design motif is of a steel wheel, and its narrow promenade, the tire on the wheel, affords travelers little useful space. Half of the benches face the iron fence of the promenade, inaccessible for use; half the tables at the food court are at standing height, without seats. It’s jangly and loud, and seems to be designed to make travelers want to get out of there as soon as possible. People stand in line waiting for their buses for at least half an hour before departure. I wolfed down my McSlab o’Grease and managed to catch a bus for New York before my scheduled departure time. I was glad to get it I couldn’t read my book in that place.
By the eighteenth century, European nations had a long-standing tradition of negotiating with each other in terms of power. Ideally, perhaps, the power would be strong enough to preclude negotiation the conquering king would simply have new subjects. When things were not so clear-cut, international negotiation in the European model could rely on the power of law and custom. Relationships played little role. To be sure, there were protocols and formalities but although such matters had some importance, they were not, as we might now say, “deal-breakers”. If negotiation was needed at all, it was only to clarify the underlying power structure.
Negotiations among Indian nations, however, had an entirely different character a fact that threw most Europeans for a loop, but did serve to enrich the careers of an imaginative few. When Indian nations had to decide matters of national import, such as territorial rights or alliances, they simply would not do so without establishing the proper context of respect, gift-giving and shared experience. Gift-giving was especially important, and the value of the things given was raised with the importance of the matter being decided.
Many of us have been taught that the Indians used wampum intricate beaded belts woven with mnemonic designs as money; the word “wampum” has been translated as “money” in lots of bad literature. The truth is much more complex, of course, and our educational system misses a great opportunity when it refuses to emphasize this matter. Wampum was extremely labor-intensive. That made it a most appropriate emblem for agreements that affected the economic life of a community. If an agreement was important enough to seal with belts of wampum, then it was important indeed, and commanded attention. And, the design of the wampum belt served as a permanent record of what had been agreed to.
The process of negotiating matters of national import between Indian nations and White colonies must have frustrated and puzzled both sides. Native traditions called for days of ritualized hospitality, gift-giving and establishment of a properly peaceful environment. It took considerable effort for two Indian communities to get on the same page in this manner; probably the Europeans never really managed it. They wished to transact the business of a treaty council in a matter of hours, shake hands and be done with it. Nevertheless, for many years, Indians insisted that treaties with the White people be done in this traditional manner, and only considered themselves bound by them if they were.
Drying tears, setting minds straight, establishing clear channels of communication, reciprocal exchanges of friendly words and symbolic gifts these, not the mundane details of whether Mohawks would agree to stand still and lay down their arms when they ran into a Virginian in the woods were the essence of eastern North American Indian diplomacy. In societies in which no leaders had a monopoly of force and in which a single grieving family could start a mourning war and provoke a devastating cycle of raids and counterraids, detailed agreements thrashed out by a few leaders in a smoke-filled longhouse had little hope of keeping peace between peoples. It was far more important to address the root causes of violence between people and groups and to create a climate in which peaceful rather than murderous thoughts prevailed and people saw the concrete benefits of their relationships to each other.
Undeniably the white colonists would have had more incentive to take these treaty protocols seriously had not the Indian nations been so grievously weakened by disease. However, they did have reasons to pay attention to them, to some degree at least, even as late as the eighteenth century. The English, French and Spanish, seeking to expand their control over North America, were compelled to make alliances with the Indians throughout, even though the Indians’ military and economic power was much less than it had previously been. According to Richter, from the native point of view the “French and Indian War” was less a matter of a fight between the imperial powers than a matter of their having been drawn into a complex series of territorial disputes among tribes that were desperately reconsolidating their decimated populations. In fact, the Five Nations Iroquois once ceded the same lands at the same time to both the English and the French, maintaining for a time their indispensability to both sides. Geopolitcal concerns also led the British to promise to the Indians in general all the “western waters” of the Appalacians.
The British success in that contest and the subsequent victory of the American colonists over the British put an end to all that. No longer were the Indians useful as a bulwark against imperial challengers and no longer did the Indian nations have the numbers or the vitality to repel whites’ westward movement. By this time, also, white Americans had little inclination find anything worthwhile in native culture; relations had become too hostile for that. What Richter brings to life for us, though, is how long the various Indian nations, despite having been severely weakened and thrown off balance, negotiated on their own terms, in their own ways, and remained political players in North America right through to the middle of the eighteenth century.
A few weeks before I made this trip, a tanker full of fuel oil had crashed into a car and burned on a bridge on I-95 in Bridgeport, Connecticut. The bridge melted, and sagged about five feet. The southbound lane of I-95 remained closed for two weeks after the accident. In an effort to get the highway open as soon as possible, the street below it was closed; the area was completely filled and new roadway installed on top. The resulting traffic snarls were horrendous even by Connecticut standards, but the Metro-North commuter railway picked up some of the load.
I’m never happier to “leave the driving to them” than on this stretch of 95 between New Haven and New York. Here, the highway has reached a curious state of perpetual construction. There is no room to widen it, and with existing technology it is simply not possible to repair any stretch of it before the next part breaks down. Consequently, the lanes are narrower than they should be, and they swerve in and out of current construction zones, rendering the painted lines unreliable. One hundred and twenty thousand motorists subject themselves to this insanity every day. Our driver, bless his heart, has been conferring by radio with his colleagues for the last half-hour, trying to identify the least-clogged route into Manhattan.
When British control over North American was consolidated, at the close of the French and Indian War in 1763, the native bulwark against the French was no longer needed west of the Appalacians, and settlers started moving west, despite Britain’s long-standing promise not to let them. Soon after, seeded by the visions of Neolin, the “Delaware Prophet”, began the first of many waves of spiritually motivated, pan-Indian resistance to white people and white ways. Indians, the prophet said, had brought their misfortune on themselves by adopting the tools, ways and beliefs of Europeans. The white man had to be removed from their lives and from their lands.
These storm clouds had been a long time building, and they needed no help from England to burst. Nevertheless, it was this heavy weather that Thomas Jefferson referred to in the Declaration of Independence, accusing King George of having “endeavored to bring on the inhabitants of our frontiers the merciless Indian savages, whose known rule of warfare is an undistinguished destruction of all ages, sexes and conditions.” By the 1770s this characterization was often true but the same could be said of the pioneering work of Columbus and de Soto, and many others since. Brutal retaliation was long in coming. When it did come, it was the result of a breakdown of the traditional checks and balances that Indian nations had maintained against the temptation to such desperate and self-defeating actions. The white settlers, of course, had no way to grasp these subtleties; they saw only the bitter hatred and rage of the “savages”, and became that much more determined to remove them.
Facing East from Indian Country examines the legends of Pocahontas (the Disney version of which is familiar to us) and King Philip, or Metacom, the Algonquin leader who led a revolt against the Massachusetts colonists in the 1670s. Metacom was, at one time, a significant figure in popular culture; a popular play about his story was widely performed in the nineteenth century. Richter notes that it has been important for white Americans to believe in stereotyped versions of these representatives of Native Americans: a Pocahontas who wholeheartedly embraced John Smith, his culture and his religion, and a Metacom who fought against white incursions on his homeland. The real life stories of each of them were far more nuanced, of course, and Richter gives fascinating accounts of them. For the most part, Native Americans don’t enter the commonly-taught history of the United States of America until the nation is caught up in “manifest destiny”. By then, of course, white America was firmly and ruthlessly committed to a policy of ethnic cleansing. These facts, Richter believes, explain why historians have seldom been able to bring themselves to really consider Indian history.
…conflict with stereotyped Indians could indeed had to become central to the American story, but flesh-and-blood Indian people and the histories they made for themselves could not. So, as white Americans wrote their nation’s past, their greatest erasure of all was of memories of Indians who neither uncompromisingly resisted like the King Philip of their imagination or wholeheartedly assimilated like the Pocahontas of their fantasies. Native people who instead struggled to find ways to incorporate European people, objects and ideas into Indian country on their own terms who adapted and changed in accordance with their own histories and traditions rather than in accordance with Euro-American scripts could find no place in the mythology of a nation marching triumphantly westward across the continent.
Sometimes, arriving at Manhattan from the north, one catches a glimpse across the Harlem River of stony outcrops and a little patch of forest and for a split second you can imagine the place as it might have looked 500 years ago. The Hudson River, the glorious palisades, the indestructible granite backbone of the island, the overwhelming richness of wildlife in the woods and the waters, the ease of access by water to so many other good places: undoubtedly, this was always the finest piece of real estate in North America. In Maine there are 1.3 million people, living 41 to the square mile; that is about as many as live in Brooklyn, where they sometimes live ten or twelve to the bedroom. The great gift of Facing East from Indian Country the thing that makes it, I think, a must-read for students everywhere is the revelation that relations between Indians and Europeans need not have happened as they did. Is it not incredibly arrogant, after all, to discuss Indian “contributions” to the history of America? By changing our vantage point, we compel ourselves to examine the missed opportunities in detail. What kind of city might New York have been, as the metropolis of a nation where natives and immigrants had found ways to learn from each other? When I look at the New York skyline now, I see more missing than just the Twin Towers.
Should your supply of drinking water be controlled locally, or by absentee landlords? Water is a precious natural resource, part of the common heritage of all humanity. But artificial situations can endanger the rights of individuals.
Here are some excerpts from a long article that appeared at nacla.org
by Maude Barlow and Tony Clarke
Latin Americans take the global lead in demanding water democracy
Latin America is blessed with an abundance of fresh water. The region contains four of the worlds 25 largest rivers — the Amazon, Paraná, Orinoco and Magdalena — and their combined run-off of 5,470 cubic miles almost equals the combined run-off of the other 21. Some of the worlds large lakes are also located in Latin America, including Maracaibo in Venezuela, Titicaca in Peru and Bolivia, Poopo in Bolivia, and Buenos Aires, shared by Chile and Argentina. Twenty percent of global runoff — the renewable water source that constitutes our fresh water supply — comes from the Amazon Basin alone. The region as a whole has one of the highest per capita potential supplies of fresh water in the world — a little less than 110,500 cubic feet per person per year. Geography, pollution and social inequality, however, badly skew Latin Americans access to water.
As a relatively parched country, Mexico has a miniscule potential supply of approximately 13,000 cubic feet per person/year. Natural desert is merging with a spreading human-induced desert over much of the Valley of Mexico, the countrys cradle of pre-conquest civilization and present-day home of the nations capital. Once called the Venice of the New World due to its being built atop a lake and intersected with canals, Mexico City is now sinking in on itself as it drains the last of its accessible aquifers from the lakebed below.
In South America, human-induced salination is causing desertification in significant parts of Peru, Bolivia and northwestern Argentina. In total — factoring in the large natural deserts of Patagonia in southern Argentina and the Atacama in northern Chile — about 25% of Latin America is now arid or semi-arid. Most of the Caribbean is also fresh water deprived, since the islands are too small to have substantial rivers.
Poor farming practices, unregulated industrialization and urban poverty have massively and negatively affected Latin Americas water resources. In most large cities, over 50% of the water supply is lost through infrastructure leakage. Some cities lose almost 90% through leaky pipes. Mexico City now depends on aquifers for 70% of its water and is mining these underground sources up to 80 times faster than they are naturally replenished. Meanwhile, São Paulo is threatening residents with water rationing. The city is relying on sources farther and farther away, hiking the cost of delivery beyond many peoples ability to pay for it.
Throughout the region, water basins and aquatic habitats are routine dumpsites for garbage, mining effluent, and industrial and agricultural waste. Pollution in the waterways along the U.S.-Mexico border is so bad that some refer to it as a 2,000-mile Love Canal, in reference to an upstate New York neighborhood that was declared a federal emergency in 1978 because of chemical contamination. And only parts of Eastern Europe and China exceed Brazils levels of waterway contamination. Most of Latin Americas wastewater still flows untreated back into its rivers, lakes and canals.
Rampant poverty is another factor. After years of ‘structural adjustment’ imposed by the World Bank and International Monetary Fund, as a region, Latin America has the most inequitable income distribution in the world. Mirroring this is a pattern of tremendously unequal access to water. More than 130 million people have no safe drinking water in their homes, and only an estimated one out of every six persons enjoys adequate sanitation service. The situation worsens as policies favoring industrial agriculture drive millions of subsistence farmers into the cities overpopulated slums every year.
The destruction of water sources, combined with inequitable access, has left most Latin Americans water poor. And millions live without access to clean water at all. While the regions available resources could provide each person with close to 110,500 cubic feet of water every year, the average resident has access to only 1,010 cubic feet per year. This compares to North Americas annual average of 4,160 cubic feet and Europes 2,255.6
An influx of private, for-profit corporations into the region over the last decade has exacerbated the problems of scarcity, urbanization, pollution and inequitable access. Private water companies, determined to take advantage of Latin Americas water crisis, are operating or planning to operate in most countries of the region, including Argentina, Bolivia, Brazil, Chile, Colombia, Dominican Republic, Ecuador, El Salvador, Honduras, Mexico, Nicaragua, Panama, Peru and Uruguay.
Most of these companies are local subsidiaries of the three largest multinational water service companiesSuez and Vivendi of France, and RWE-Thames Water of Germany (the Big-3). A decade ago, the Big-3 serviced only 51 million people in just 12 countries. Together, the three now deliver water and wastewater services to almost 300 million customers in over 130 countries. Suez and Vivendi control over 70% of the existing water service market worldwide. All three are ranked among the wealthiest 100 corporations in the world with combined annual revenues in 2002 of almost $160 billion and an annual growth rate of 10%, outpacing many of the national economies in which they operate.
Often, the World Bank and the Inter-American Development Bank (IDB) facilitate the aggressive entry of these companies into Latin American markets. Both Suez and Vivendi use their considerable clout among multilateral lenders to make private water delivery a condition for debt relief or new loans. In fact, some of the largest IDB loans of the last decade went directly to transnational water companies for the operation of private water concessions in countries like Argentina, Bolivia and Honduras.
Meanwhile, the World Bank has decided to triple its annual financing commitments to global private sector water projects. After a decade of lucrative assistance from the World Bank, the Big-3 are now demanding guaranteed financing to insulate themselves from foreign currency fluctuations before making any new investments in developing countries. At the same time, the major water privateers are facing mounting and fierce public opposition to their operations in many parts of Latin America. As in the rest of the world, the damaging effects of water privatization are well-documented: rate hikes, cut-offs, reduced water quality, secret contracts, bribery and corruption.
Arguably, the best-known reaction to water privatization occurred in Cochabamba, Bolivia when the engineering giant Bechtel set up its subsidiary, Aguas del Tunari, in early 2000 and immediately raised the price of water beyond the reach of the vast majority of the population. Its contract even gave the company the right to charge people for the water they took from their own wells and to send collection agents to homes to charge for rainwater collected in cisterns on roofs.
Consumers were hit with up to 200% rate increases as the company planned for annual profits of $58 million.8 Public protests forced the government to reverse this privatization effort, but Bechtel is now suing Bolivia for $25 million in “lost profits.” Despite the fiasco in Cochabamba, the Bolivian government is still pursuing several other privatization schemes, including plans to export and sell bulk water to neighboring Chile for use in its mining industry.
In 1992, the Salinas administration in Mexico modified the Constitution to allow foreign-based corporations to obtain water contracts and concessions and introduced a new national water law permitting global corporations to invest in Mexicos water utilities. Later, as part of its national development agenda, the Zedillo government handed over responsibility for water and sewage services to municipal governments.
Former Coca-Cola executive Vicente Fox, the current Mexican president, has been even more aggressive in pursuing privatization. In the wake of September 11, his administration declared water a matter of national security. That actually meant allowing military operations and anti-terrorism measures to be applied against anyone seen as opposing the governments plans for restructuring and privatizing the water sector.
Also in 2001, the Mexican government created a special program to advance privatization, and received hundreds of millions of dollars from the World Bank for it.
All across Latin America, citizens are taking to the streets, organizing referenda and petitions, and fighting for access to water. Latin American activists and academics are on the front line of the global “water justice” movement, speaking at international conferences, protesting World Bank policies and organizing for a binding UN Convention on the right to water.
On August 22, 2003, 47 grassroots organizations from 16 countries in the Americas met in San Salvador where they launched a new movement called RED VIDA. This Inter-American network of water activists issued the San Salvador Statement for the Defense of and the Right to Water. Many of the member groups of this new network played pivotal roles at the World Water Forum in Kyoto, Japan in March 2003, where the World Bank and the big water companies tried unsuccessfully to sell their privatization consensus to the world.
When the Big-3, the World Bank and their allies tried to convince the Forum participants in Kyoto to adopt public-private partnerships as the best model for the delivery of water services, civil society organizations and water activists from around the world formed an alliance to obstruct this agenda. Calling themselves water warriors, alliance members went on to effectively challenge the predetermined consensus as it applied to nine other theme topics of the Forum. RED VIDA also played a prominent role in launching the Peoples World Water Movement, which took place at a summit in New Delhi on the eve of the 2004 World Social Forum in Mumbai, India. RED VIDA members forged strong alliances with Indian groups that are also battling the invasion of private water companies.
For almost 20 years, the people of Latin America have been combating neoliberalism, with varying degrees of success. But the move to commodify their water for the benefit of faraway investors has injected new life into this effort. It is as if a line in the sand has been drawn. Because people cannot live without water, there is a distinctive urgency and tenacity to this struggle. Their demand for water democracy will not be silenced.
Maude Barlow is Chairperson of the Council of Canadians and Tony Clarke is the Director of the Polaris Institute. Their book, Blue Gold: The Fight to Stop Corporate Theft of the World’s Water (New Press, 2003) is now available in Spanish.
Here is the third version of a pretty strange article. The first two versions had to be withdrawn by the authors because they attempted to present some actual statistics, and in each case the statistics were mistaken.
So, perhaps taking a cue from the Bush administration, the economist authors simply deleted the statistics. Or were they victims of an evil hex? This junk analysis emanates from, of all places, the Federal Reserve Bank of St. Louis.
by Kevin L. Kliesen and Frank A. Schmid
Economists have long been interested in why some countries are rich and why some countries are poor. Differences in labor productivity, inflation, and saving and investment rates are traditional economic explanations for variations in wealth across countries. But when these explanations fall short, researchers sometimes turn to noneconomic factors. Two such factors are a countrys legal and social institutions. Religious factors can also help explain variations in economic growth, many economists are increasingly finding.
Over time, a countrys economic growth is ultimately a function of growth rates in population and labor productivity (output per hour worked). But since population growth tends to change slowly, a nations labor productivity growth is what ultimately determines whether it will be rich (high productivity growth) or poor (low productivity growth).
The Progress Report notes — that assumption is convenient but quite false. As regular readers of The Progress Report know, it doesn’t matter how much is produced, what matters is how much the producers actually receive, after payments to government and landowners. We won’t go into further details here, but please be aware that if writers start out with incomplete premises, they are on the path to ridiculous conclusions.
What causes productivity growth rates to speed up or slow down? Improvements in the quality of labor, such as a more educated workforce, seem to matter, as do the quantity and quality of the tools and equipment that each worker uses. Also generally deemed important is a countrys saving rate, since saving is used to finance investment in capital goods. Other factors that improve a countrys prospects, but which are not readily captured by measured labor and capital inputs, are improvements in the distribution of goods and services that arise from just-in-time inventory processes.
Another significant influence seems to be a countrys public and private institutions. These include laws and regulations that enforce contracts, guarantee property rights and promote well-developed financial markets. Secure property rights, such as patents and software piracy laws, provide individuals and firms the needed incentive to take economic risks, while deep capital markets better enable financial resources to flow toward promising but unproven technologies.
Also critical are laws that promote good corporate governance by imposing harsh penalties against firms or government officials that have enriched themselves from illegal or immoral activities. When these public and private institutions are lacking, or not very well-developed, there tend to be high levels of corruption and financial malfeasance, which can create economic uncertainty and destroy wealth. Recent examples of corruption and other misconduct can be found even in advanced economies, as in the United States (Enron, Tyco and WorldCom), Italy (Parmalat) and the Netherlands (Ahold).
The Progress Report notes — there’s plenty more to observe in both the private sector and the public sector: Riggs Bank, Diebold, Halliburton, the 2002 Olympic scandal, the 2000 Florida vote fraud scandal, torture and rape in U.S.-run prisons, Bush’s cocaine scandal, Monica Lewinsky, Bush’s AWOL scandal, the Catholic priest sex abuse scandal, corporate welfare, Bush administration lies leading up to war against Iraq — please note such things occur just as easily even among politicians who insist very loudly that they are very Christian.
While traditional growth theories go far in explaining cross-country patterns of economic growth, some economists believe they do not go far enough. Instead, many researchers are increasingly turning to noneconomic factors, such as religion.
Religions Early Role
Adam Smith wrote that one of religions most important contributions to the economic development process is its value as a moral enforcement mechanism. He argued that, in a society imbued with these religious mechanisms, fewer resources will be devoted to determining the veracity of an individuals or firms business ethics what economists call the credit or default risk associated with lending to an unknown individual. In short, argued Smith, in societies where there is a widespread belief in God, the values of honesty and integrity are more prevalent.
In a similar fashion, Alexis de Tocqueville, writing about early 19th century America, said that religion . . . for if it did not impart a taste for freedom, it facilitates the use of free institutions, so that Americans held it to be indispensable to the maintenance of republican institutions. To de Tocqueville, a religious country lessened its dependence on the public sector, which not only left a larger amount of resources for the private sector but enhanced the countrys moral fiber.
German sociologist Max Weber argued that the work ethic that was inspired by the Protestant Reformation helped to explain the rise of capitalism in Western Europe and America. According to Weber, capitalism existed in antiquityfor example, in China, India, Rome and Babylonand even during the Middle Ages, but it couldnt have matched the rise and sustainability of Western European and American capitalism because a particular ethos was lacking. The ethos that set the Protestant apart from all other religions, and which facilitated economic growth, was an intense commitment to work, dependability, diligence, self-denial, austerity, thrift, punctuality, fulfillment of promises and fidelity to group interests. Webers critics instead argued that the Protestants, rather than helping to spur the rise of Western capitalism, were much better than other religious adherents in adapting to this newfound economic structure.
Current Topics, Controversies
According to the secularization hypothesis, as a countrys inhabitants become richer and more educated, their faith in religion and religious institutions wanes, and they attend church less regularly. Economists Edward Glaeser and Bruce Sacerdote find some support for this hypothesis. They wrote in 2002 that increased education results in a decrease in the extent of religious beliefs, perhaps because public school systems tend to reinforce secular education that, the economists argue, conflicts with traditional religious beliefs. By contrast, economist Laurence Iannaccone wrote in 1998 that church attendance rises with education, which suggests that rich Western countries should have higher rates of church attendance. Ultimately, then, the issue is whether religious beliefs, as Weber and Smith argued, can be shown to have an effect on a countrys economic growth.
In a paper last year, economists Robert Barro and Rachel McCleary provided evidence that church attendance and economic growth are negatively related, but a belief in helltheir measure of religious beliefswas positively related to increased economic growth. According to Barro and McCleary, increased church attendance could lower growth because of more resources flowing to the religious sector. However, the net effect would be uncertain because increased church attendance may also increase religious beliefs, which, as Weber believed, raises economic growth by spurring individual behavior and actions that are thought to encourage productivity. Interestingly, Barro and McCleary also found that economic performance was largely unrelated to the dominant religious theology of the nation.
Kevin L. Kliesen is an economist and Frank A. Schmid is a senior economist at the Federal Reserve Bank of St. Louis. Thomas A. Pollmann provided research assistance.
Ellen Johnson, president of American Atheists Inc., called the study the latest gimmick from the religious establishment to drum up government support.
“Religious people cannot rely on their theology to promote what they do so they turn to other things,” she said.
“I cannot imagine what the belief in mythological beings or things that don’t exist can do for business. What about the pornographic industry? That is probably very good for growth.”
Say, what about all those corrupt televangelists? Or maybe all the corrupt politicians who claim to be Christian are lying to us? Hmm. Tell your views to The Progress Report!
A soap bubble is a ball made of a thin film of soap dissolved in water. Soap bubbles are ephemeral, lasting a short time before bursting. There are also bubbles in the economy, classes of assets whose prices inflate like air in an expanding balloon and then collapse.
The expansion of asset-price bubbles is unsustainable, as the prices rise above what is warranted by normal returns and demands. The asset prices crash. A recent bubble was the technology boom of the late 1990s, when Internet and other stocks rose to levels that could not be justified from the likely profits of the firms.
The most important bubble in the economy is that of real estate. There has been a real estate cycle with a duration of 18 years since the early 1800s. Real estate booms have often become a bubble. It happened during the 1920s in the US, especially in Florida. It happened in Japan during the 1980s. And it is happening again now in the US.
The last bottom of the real estate cycle in the US was in 1990, when there was a recession. Real estate prices have been rising since then, and were not at all deterred by the downturn of 2001. Real estate speculation has carried real estate prices in some parts of the US, such as California, to heights that cannot be sustained when interest rates rise as the Federal Reserve reverses its low-interest policy. Another crash is coming.
Henry George, the American economist and social reformer of the latter 1800s, originated one of the first theories of business cycles. The basic cause, he said, was land speculation. During an economic boom, at first, a growing demand for real estate is met by reducing vacancies. But then new real estate is constructed, and rent and land values rise. Speculators notice this and buy land expecting to sell at higher prices later. This speculative demand, added to the demand for use, carries land prices so high that investments in enterprise become unprofitable. Land becomes priced for expected future uses, rather than present-day uses.
The fall in new investments then reduces demands for labor and goods, which then reduces other demands, and the whole economy falls into a recession and then a depression. Faced with rising vacancies, real estate prices collapse, bankruptcies rise, loans default, banks fail, and then the cycle begins anew. This theory of the business cycle was original with George and not part of the previous classical school thought. Georgist theory, which I coined as ‘geoclassical’ for emphasizing land, was a major advance in classical thought.
Even though a third of investment is related to real estate, the real estate cycle is ignored in neoclassical business-cycle theory. Mainstream economic doctrine tells us that unexpected shocks create the fluctuations in the economy. But the regularity of the major business cycle cannot be explained by random shocks. Neoclassical economic fails to explain the trade cycle.
The Austrian school of economic thought has its own theory of the business cycle, which does pay attention to real estate. In the Austrian theory, an injection of money into the banking system artificially reduces interest rates, as indeed has been happening in the US in recent years with the Fed increasing the money supply by 25 percent since 2001. With rates so low, borrowing for long-term slow-maturing investments – such as real estate construction and purchase – becomes profitable.
The money expansion is unsustainable; monetary inflation causes price inflation. As prices and interest rates rise, many of these projects become unprofitable. Austrian economists call them ‘malinvestments,’ investments that looked promising when interest rates and other prices were lower, but are not profitable when the price distortion caused by the money expansion reverses. The reduction and abandonment of investment projects leads to a depression.
The Austrian and the Georgist explanations are complementary. The Austrian half emphasizes the role of money and interest rates, and the geoclassical half emphasizes the importance of land and the role of land speculation. A geo-Austrian synthesis creates a powerful business-cycle theory that is consistent with history and goes a long way in explaining major business cycles.
The article ‘This Inflated House’ by Mark Thornton in the August 2004 Free Market journal, published by the Ludwig von Mises Institute, illustrates the Austrian-school attention to real estate. Thornton notes the widespread practice of extracting equity from real estate as owners have refinanced at lower interest rates. As recognized by the Austrian school, monetary inflation often does not at first lead to rising prices in consumer goods. The injection of money often first goes into investments, commodities, and land purchases.
As Thornton explains, ‘the cause of higher home prices is that the Federal Reserve has kept interest rates, and thus mortgage rates, at historically low rates so that people find it easier to finance homes.’ Real estate is bought mostly with borrowed money, and lower interest rates keep the financing cost, the monthly payments, low, even as real estate prices rise. Banking practices contribute to the bubble as they make interest-only loans with no money down. Lending standards typically relax as the bubble approaches its peak.
But the collateral of land value is an illusion. Land has no cost of production, and its price can fall to zero. But why should the banker worry? The bank deposits are insured by the federal government! If the bank fails, the government will bail out the depositors. This encourages more risky loans, which provide temporary profits and perhaps more stock options and bonuses for the banking executives.
Also, home loans can be sold in the secondary market facilitated by agencies which were established by the federal government. As Thornton tells it, ‘The Federal Reserve and the Mac-May family (Freddie, Fannie, Sallie, etc.) have conspired to create a housing bubble in the US.’ It’s not a secret conspiracy but simply all these agencies breathing together to blow up the housing balloon that eventually has to burst.
Thornton says that it ‘is difficult to predict how long bubbles will last,’ but the geoclassical half of the geo-Austrian theory does provide an indication. Historically, the real-estate cycle has had a duration of 18 years, aside from the interruption of World War II. That puts the next real estate bottom around 2008. If past patterns continue, and so far they are right on schedule, we can expect the next recession to take place towards the end of this decade. With all the distortions caused by monetary policy and real-estate speculation and lax bank lending, the recession could be a major crash and the worst depression since the 1930s, an ‘economic nightmare,’ as Thornton calls it. And that nightmare does not even take into account the threat of terrorist attacks or the effects of continuing war and a possible oil crisis.
What is clear is that the tragedy and madness of the business cycle is not a natural outcome of a nonexistent free market, but caused by foolish government policy. Two remedies are essential: free banking and the public collection of land rent. Free-market banking would eliminate the monopolization of money and manipulation of interest rates by central banks such as the Federal Reserve, and leave money expansion to a competitive market of private banks. The elimination of taxes on income, sales, and produced wealth, replaced by tapping land rent for public revenue, would take the profit out of market-hampering land speculation fueled by tax-funded public works along with monetary inflation. Both reforms are necessary in order to completely eliminate the business cycle and the agony of business failures and idled workers.
But both reforms are ignored and disparaged by mainstream economics, so they are not enacted or even talked about. At least those who understand geo-Austrian theory will be warned in advance and can arrange their affairs to minimize the losses that others will suffer from.
Copyright 2004 by Fred E. Foldvary. All rights reserved. No part of this material may be reproduced or transmitted in any form or by any means, electronic or mechanical, which includes but is not limited to facsimile transmission, photocopying, recording, rekeying, or using any information storage or retrieval system, without giving full credit to Fred Foldvary and The Progress Report.What are your views? Share your opinion with The Progress Report!
To the disappointment of independent environmental and development groups, the executive board of the World Bank Group (WBG) has given general approval to a management plan to invest in oil, gas, and mining projects despite a three-year Bank-sponsored review that called for an immediate halt to the WBG’s support for coal projects and a four-year phase-out of its lending for oil projects in poor countries.
In an all-day meeting at WBG headquarters August 3, the 24 executive directors, who supposedly represent the Bank’s 184 member-countries, agreed to management’s response to the “Extractive Industries Review” (EIR), headed by former Indonesian Environment Minister Emil Salim, subject to a further “refinement” of some provisions regarding poverty reduction and local participation in mining and energy-related projects.
Most important, however, the board backed up management’s determination to continue investing in oil, gas, and mining projects in developing nations while only gradually increasing its portfolio for renewable-energy projects which the EIR had recommended be increased by as much as US$500 million a year.
“The harsh reality is that some 1.6 billion people in the developing nations still do not have electricity, and some 2.3 billion people still depend on biomass fuels that are harmful to their health and the environment,” said Bank president James Wolfensohn after the meeting. “That underscores the need for our continued but selective engagement in oil, gas, and coal investments,” he stressed, claiming that the Bank will give greater emphasis on how these projects can better reduce poverty in its lending to extractive industries.
He also announced that the WBG will initiate an annual review with the board on progress toward achieving its goals, particularly reducing poverty, improving governance and transparency in host countries, ensuring that local communities are included in the design and implementation of future projects, and increasing loans for renewable-energy and energy-efficiency projects by about 20 percent annually over the next five years.
Reaction to the results of Tuesday’s meeting from non-governmental organizations (NGOs) that had favored the original recommendations of the EIR was negative across the board.
“By largely ignoring the (EIR’s) recommendations, the Bank’s management has ensured that the poverty pipeline will continue to flow,” said Keith Slack, Oxfam’s Extractive Industries policy advisor. “The Bank’s unwillingness to change means that this process will likely result in precious little for the poor communities affected by oil and mining projects around the world.”
“Despite its mandate to reduce poverty, the Bank has been unable to demonstrate that its extractive projects have actually done this,” he added, noting that Oxfam was particularly concerned that the EIR’s recommendations on fully integrating human rights into Bank-supported extractive projects had been largely ignored by the WBG.
The reaction from environmental groups was much the same. “The World Bank has ignored the EIR recommendations and endorsed business as usual,” said Jon Sohn of Friends of the Earth (FoE). “The EIR called for an ‘extreme energy makeover,’ and the World Bank opted for a cheap pedicure. It has missed a historic opportunity to bring its lending more in line with its mission to alleviate poverty.”
Launched three years ago, the EIR was designed to address a series of increasingly urgent questions about the generally poor record that extractive industries have in developing countries, most importantly why oil, gas and mining projects in countries such as Nigeria, Indonesia, Bolivia, and the Democratic Republic of Congo had historically done so little to alleviate poverty – the WBG’s core mission — particularly in local communities where the projects were carried out.
NGOs and some of the WBG’s government shareholders have also become increasingly concerned about the environmental impacts of such projects, particularly amid growing consensus in the scientific community that emissions from fossil fuels – oil, gas, and coal – are contributing to global warming and climate change.
The WBG — which includes the World Bank; its soft-loan affiliate, the International Development Association (IDA), and the International Finance Corporation (IFC), which provides loans and other support to the private sector – has long been a major backer of extractive-industry projects in developing countries. While it has provided on average only about $1 billion a year in lending to that sector over the past decade, its mere endorsement of such projects – through such instruments as co-financing, advisory services, and insurance – still acts as a powerful magnet for private capital that would otherwise be reluctant to invest in certain countries.
After three years of wide-ranging consultations with civil society, local communities, extractive-industry officials, national governments, and Bank staff, the EIR commission headed by Salim issued an unexpectedly sweeping and critical report calling for the WBG to get out of the coal business, phase out its involvement in oil-related projects by 2008, impose tight social and environmental conditions on mining projects, and devote a much greater percentage of its portfolio to promoting renewable-energy sources, such as wind and solar power.
These recommendations were greeted with great enthusiasm by environmental, human rights, and development NGOs, but with undisguised horror in other quarters, most especially big oil and gas companies and the private banks that underwrite their projects. Developing-country governments, particularly those that rely on extractive industries as a major source of export earnings, also expressed strong reservations about such sweeping changes in the Bank’s lending practices.
Unsurprisingly, WBG officials indicated already several months ago that the Group would reject the most far-reaching proposals, a position that became official in June when management issued a report thanking Salim and the commission for their work and committing itself to a “more selective” approach to extractive projects that put place greater emphasis on poverty reduction and promoting transparency and good governance. It was that response that the executive board generally endorsed Tuesday.
For one EIR consultant who asked to remain anonymous, the WBG’s reaction was all too typical of its approach to many outside reviews. “The Bank has really developed to an art form high-minded ways of saying that the (EIR’s) conclusions are misguided; everything is this way for a reason, and much as we all want a better world, we are already doing about as much as can reasonably be expected,” he said, adding that the Bank’s past record, particularly in reducing poverty, invited skepticism about its ability to follow through.
“The surprising thing is that while there has been a lot of big talk about how these industries do or don’t reduce poverty, the Bank has until very recently done almost nothing to find out the answer, at least in any rigorous or objective way.”
That is also one of the major concerns of the NGOs.
“The EIR’s key conclusion was the Bank should do much more to ensure that its extractive industries projects contribute to measurable poverty reduction, especially with respect to the severe impacts suffered by the poorest and most vulnerable groups, such as indigenous peoples and especially women and children,” Oxfam noted.
“While the Bank has taken some steps, such as requiring revenue transparency and disclosure of more information, it failed to address the most fundamental question posed by the EIR: how will World Bank investments in extractive projects reduce poverty and help the poor?” it added.
“The World Bank has once again demonstrated that it is all talk and little action,” according to Shannon Lawrence, international policy analyst at Environmental Defense (ED), while Jim Vallette, research director of the Sustainable Energy and Economy Network (SEEN) complained that ultimately the main beneficiaries of the extractive industries supported by the WBG were western multinationals. “The Bank likes to think of itself as an organization that promotes positive change, but when it comes down to it, it refuses to serve the poor rather than transnational corporations.”
The World Bank’s own review board recommended transparency and non-polluting energy investments. But the Bank seems tied to the old ways of secrecy and pollution. Many feel that the World Bank should be closed entirely. What are your opinions? Tell your views to The Progress Report!
Why is the U.S., and other governments, wimpily winking at horrific violence in Sudan? Cynics would say “if the victims weren’t black or if their land contained oil, only then would the U.S. government do something.”
Here is a recent report from Refugees International.
by Daniel Wolf
SOUTH DARFUR, Sudan — On the morning of July 12, hell descended on the village of Donki Dereisa. Shortly before sunrise, Fatima Ibrahim, 28, awoke to the deafening sound of exploding ordnance falling from the sky. As she emerged from her mud hut with her 10-year-old daughter, she saw fires blazing all around and scores of heavily armed men on horseback attacking from every direction. With bullets whistling past, Ibrahim and her daughter ran for their lives, ducking into a nearby ravine, where they hid without food or water for the next two days.
From the ditch, Ibrahim witnessed a horrific avalanche of violence that will haunt her for life. With Sudanese foot soldiers at their side, the mounted attackers shot the panicked and unarmed villagers in cold blood. Approximately 150 people, including 10 women, were killed. But the worst was to come.
Ibrahim told Refugees International about a week after the attack that among those captured during the assault were four of her brothers and six young children, including three of her cousins. As Ibrahim watched in horror, several of the attackers began grabbing the screaming children and throwing them one by one into a raging fire. One of the male villagers ran from his hiding place to plead for their lives. It was a fatal error. The raiders subdued the man and later beheaded him and dismembered his body. All six of the children were burned. Ibrahim’s four brothers have not been heard from since.
The violence in Donki Dereisa is part of a broader conflict that began between government and rebel forces in March 2003. Since then the Sudanese government has exploited the rising tension between the impoverished villagers who form the rebels’ base and the nomadic herders who have been competing with them for what remains of the region’s arable land after decades of deforestation.
Armed to the teeth by the Sudanese government, hordes of mounted nomadic warriors, known locally as the Janjaweed, have waged a war of terror against Darfur’s local population that has claimed the lives of as many as 50,000 defenseless civilians and driven more than 1.2 million from their homes. While many have fled to Chad, most of the displaced languish in squalid camps dispersed throughout Darfur, where they lack food, clean water and other necessities. International relief workers warn of famine, epidemics and a death toll that could reach into the hundreds of thousands.
In an effort to stop the killing and head off a looming humanitarian disaster, Secretary of State Colin Powell and U.N. Secretary General Kofi Annan visited Sudan this summer. On July 3, the United Nations and the Sudanese government issued a joint communiqué in which Khartoum formalized commitments it had made to Powell and Annan to immediately disarm the Janjaweed, prosecute egregious abuses of human rights and honor a cease-fire agreement reached two months earlier.
But recent events suggest that in making these commitments, Khartoum’s objective was to stall for time in the hope it might deceive the international community into believing the crisis had been brought under control. This cynical approach is graphically illustrated by the recent arrest and prosecution of a group of alleged Janjaweed militiamen on charges of robbery and murder in southern Darfur’s provincial capital of Nyala. According to reliable sources inside the government, these “Janjaweed” were in fact common criminals plucked from a Nyala jail, who were informed that they would be sentenced to death unless they agreed to pose as Janjaweed and confess to the crimes. The true killers remain at large.
Nor is there any indication that Khartoum intends to disarm or otherwise rein in the Janjaweed. To the contrary, the government and the Janjaweed have continued jointly and relentlessly to pursue their terrorist campaign in the few remaining regions of Darfur under government control where African villagers have not yet been driven from their homes.
Ironically, at the same time that it has been sponsoring these assaults, the Sudanese government has been aggressively attempting to persuade the displaced people of Darfur to return home. But returnees have been killed, beaten, raped and threatened by roaming bands of Janjaweed. It is hardly surprising that most of the displaced have heeded the Janjaweed’s warning and spurned the government’s invitation to return home. The government, however, appears to be committed to its policy of repatriation, and there is a danger that in the face of continued resistance by the displaced it will begin to forcibly return people en masse and declare an end to the crisis. If that happens, they will all be vulnerable to the same kinds of deadly violence that caused them to flee in the first place.
World leaders cannot afford to sit idly by while Khartoum continues to play games with the lives of its people. Consistent with its international commitments, the government of Sudan must immediately end offensive operations against its civilian population, disarm the Janjaweed and permit deployment of U.N. human rights monitors throughout Darfur. The U.N. Security Council has adopted a resolution calling on Sudan to disarm the Janjaweed and accelerate the flow of humanitarian aid. Now the United Nations must make sure that Khartoum complies.
Daniel Wolf is a Washington lawyer and president of the George Wolf Operating Foundation. He has just returned from a fact-finding mission in Sudan with Refugees International.
Can anything good come out of this disaster? Should your government stand up against terrorism? What’s your opinion? Tell your views to The Progress Report!
This important article recently appeared in Business Day (South Africa).
by Peter Meakin
President Thabo Mbeki’s new economic vision is hard to follow. One of his valid criticisms of the free market is the tendency for land to become unaffordable. This means landless citizens have to rely on landowners for jobs.
Apart from that being colonial, the free market idea of land ownership can have disastrous effects: for instance, residential land values in Japan grew seven times faster than wages between 1950 and 1988. This wrecked Japan’s economy and it has taken 16 years to recover.
Ironically, however, land prices will also climb in response to government’s public works programme.
Land prices depend entirely on nature’s endowment, public infrastructure and services, public administration of zoning and title protection, and population growth. Raw land prices are literally the common wealth.
In the free market land system, which SA has inherited, this common wealth is captured by private landowners as in Japan. In a free-land economy, titles are free but the state reserves this endowment so land access becomes free but subject to annual user charges or rents. This is an economic system where land and resource values generated by nature or society are returned to the state.
We are so used to buying land it never occurs to us that there is no need for that. Do ducks, sharks, eagles or lions buy ponds, oceans, air and savannahs? No, but man who is no less umbilically dependent on land for his very life has to purchase his birthright.
Buying land in SA did not occur in precolonial times. In those days, there was enough land for all to enjoy a dignified life. People were also free. They were free not to accept conventional employment contracts from settlers and it is well documented they resisted jobs until Rhodes’s “hut” tax sent them to the mines and plantations, where Chinese and Indians had also been brought in to work.
How would a free-land economy sit in SA today, where most resources are in the hands of whites who have also financed vast improvements in cities and mines? Put another way: what would have to occur for land to be freed for productive use by the very poor?
The answer is that no title deed needs be altered, no nationalisation needs to occur and no expropriation is needed. All that is necessary is for Finance Minister Trevor Manuel to substitute user charges on land and natural resources for his conventional taxes. Municipalities will collect the charges just like their current rates and taxes.
Under a free-land regime citizens will realise their exclusive use of natural resources is costly and will abandon whatever it is they are not using, or improve the land so that they can pay the charges.
The free-land economy is therefore a deal between rich and poor where the poor get affordable land and the rich continue to fill Manuel’s pockets but on the basis of user charges that do not tax their skills, hard work, savings and trade.
The land question was not resolved in 1994 and it continues to itch.
Yet a number of important attributes are attached to any free-land economy, and we can briefly touch on some of the more topical here.
The free-land economy resolves the ownership issue by allowing affordable title to the poor without them having to wait for bureaucracies to buy land for them.
The willing buyer-seller formula disappears. It also halts the trade in the country’s natural wealth which whites have monopolised for centuries.
Participants in a free-land economy understand that the annual charges the state appropriates from owners for the alienation of common lands (or minerals or water or the airwaves spectrum) for private use compensates South Africans for the loss of that resource.
This will also assuage the fear of foreign ownership because in a free-land economy they can take nothing more out of SA than what they bring in. The most startling topical benefit of the free-land economy, however, is that it will help save millions of mining jobs threatened by the strength of the rand.
This reduces mine revenue, but the current value added tax, pay as you earn, Site, corporate taxes and customs and excise duties are all based on higher rand revenue. This puts pressure on companies, which might have no relief except by closing.
It is easy to see if all of these taxes are withdrawn, the “royalty” user charge will become the only charge. Royalties are a function of the currency rate and can be adjusted monthly to ensure jobs are saved and profit continues.
Countries which have partly used free-land principles include, Hong Kong, Taiwan and China but in different forms than are explained here. Samuel Brittan, Joseph Stiglitz and Mason Gaffney are prominent international economists who back aspects of the free-land economy.
Locally, Brian Kantor is also well-versed. They will know this as the ‘single tax.’ Other Nobel Prize professors who endorsed the system were Franco Modigliani, James Tobin, Robert Solow and William Vickrey.
What about it, Mr. Manuel?
Peter Meakin is a professional value and director of the Centre for Land and Natural Resources Studies (SA).
Also see some examples of what we get when serious free-land reforms are NOT used:
The Democratic Party of the USA has now selected its candidates for president and vice president. They have given rousing speeches, and now the voters should carefully analyze the substance of their proposed policies.
On Iraq, the democratic party candidate for president says that if he is president, he will bring in allies who have not wanted to become involved. But just because there is a different president is not a sufficient incentive for other countries to send troops. Iraqi terrorists are kidnapping foreigners and threatening to chop their heads off if the country and its companies do not withdraw. Countries are departing under this threat, which induces more kidnappings.
If other countries, including Arab nations, send in troops into Iraq and reduce the burden and dominance of the U.S., that would be very good. But any foreign troops will be seen by the terrorists and rebels as part of the occupation. The violence will continue, and hamper the elections. Candidates as well as office holders in Iraq are being threatened with death.
Extra troops from other countries will not establish order in Iraq. We need to eliminate the political cause, the feeling by many Iraqis that they are still under occupation, and that the allegedly sovereign government is a puppet of the United States. The only effective remedy is real democracy, starting with local elections. With many thousands of neighborhood council elections, the terrorists will not be able to wreck the voting, because there will just be too many elections, and more importantly, they will be seen as coming from the people.
The second problem with Democratic party policy is their proposal to increase the minimum wage. If employers are forced to pay higher wages, the money has to come from someplace. The cost will be passed on to customers. Some of the cost is also imposed on the least able workers who lose their jobs because they are no longer worth hiring, and that cost is in part passed on to taxpayers in paying more for welfare assistance. The more effective way to help the poorest workers, aside from more fundamental changes, is to directly subsidize their wage. Then all taxpayers would bear the cost. The minimum wage is in effect a tax unfairly focused on employers who hire low-skilled workers. It just treats the bad effects of other interventions, and does so badly, by eliminating enterprise and jobs and reducing investment.
The third problem with the Democrats is their policy on trade, especially outsourcing to foreign countries. They want to increase taxes on companies that shift some labor costs to foreign countries. This will do little to stop the outsourcing, because this involves fundamental changes in technology that are creating an ever more global economy. The economies of the world are being restructured to a more productive mix of industries, which is providing great savings in costs and making labor more productive world-wide. The problem with American labor is the artificial costs imposed by taxation and excessive regulation and litigation, problems that the Democrats do not acknowledge and don’t want to talk about.
A fourth problem with Democrats is their opposition to privatizing the Social Security system. Young workers today would obtain much more wealth for retirement by investing in private accounts that maximize returns relative to risk. There is, of course, a big transition cost in privatizing Social Security, but it could be handled with direct federal taxes on land value. The U.S. federal government collected direct taxes, mostly on land value, in the late 1700s and early 1800s, and could do so again. A direct tax on land value, apportioned by state population as specified in the Constitution, would not hurt the economy, since the land is not going to flee abroad. The land is not going to hide underground. Land is not going to shrink when taxed.
Social Security is a bad deal for most workers. A few benefit from being forced to have a retirement plan when they would squander their earnings or be too lazy or ignorant to plan well for their future. But why shackle everybody because of the self-negligence of the few? Why punish the industrious and the wise to reward the lazy and foolish?
The trouble with Democrats is that they seek only to treat the effects of social problems, rather than eliminate the cause. They are welfare statists who promise ever more government aid to the poor, the unemployed, the sick, and the old. People support these policies because they are superficially appealing. Folks are mostly uneducated about the economics of social problems. Even worse, they are not educated to ask why. Why poverty? Why unemployment? Why homeless? Why war? Why outsourcing?
Do you hear a dog barking? Well, they say, shoot it. Don’t ask why it is barking.
When Henry George asked us to think for ourselves, this involves not just relying on our own reasoning, but also thinking more deeply, asking why. He urged us to inquire as to causes and remedies, not just about ways of treating symptoms and effects. The Democratic Party is mostly made up of welfare statists who only seek superficial treatments of social problems which perpetuate and worsen the problems.
The Republican Party has been no better, but I will await their convention before turning my geolibertarian eye to the Republican guy.
Copyright 2004 by Fred E. Foldvary. All rights reserved. No part of this material may be reproduced or transmitted in any form or by any means, electronic or mechanical, which includes but is not limited to facsimile transmission, photocopying, recording, rekeying, or using any information storage or retrieval system, without giving full credit to Fred Foldvary and The Progress Report.
Idiotic laws are being used by corporations to fight against the free market and against consumers’ rights.
Here is a ray of hope, first reported in the July 5, 2004, issue of Eweek magazine.
We have condemned before the poor balance between benefit and harm struck by the grandiosely named and poorly conceived Digital Millennium Copyright Act of 1998. As we observed at the end of last year, the act’s broad anti-circumvention clause — Section 1201 — has become a multiedged tool that corporations are invoking to kill competition.
We therefore applaud the move in Congress to shift the balance back toward the well-established conception of fair use of copyrighted material, as embodied in HR 107, the Digital Media Consumers’ Rights Act of 2003 — now in the Subcommittee on Commerce, Trade and Consumer Protection.
The DMCRA’s opening gun is a prohibition on the sale of “a prerecorded digital music disc product which is mislabeled or falsely or deceptively advertised or invoiced.” The mislabeling or deception in question is failing to disclose intrusive copy-protection measures that might interfere with playback on computers.
A few paragraphs later, though, are what we consider the much more important provisions of the law, stating that Section 1201 of the DMCA is amended to say that “it is not a violation of this section to circumvent a technological measure in connection with access to, or the use of, a work if such circumvention does not result in an infringement of the copyright in the work”; also, that “it shall not be a violation of this title to manufacture, distribute, or make noninfringing use of a hardware or software product capable of enabling significant noninfringing use of a copyrighted work.” Bravo — and about time, too.
Without this long-overdue correction, Section 1201 makes as much sense as prohibiting the sale of hammers merely because they can be used to break windows. That conceptual flaw lurks on the periphery of almost every legislative attempt to regulate specific digital technologies, precisely because those technologies are so versatile and so accurate in their capture and manipulation of every form of data.
It’s a fool’s errand to try to limit the use of digital tools by passing nit-picking laws aimed at individual technologies. We see that flawed approach in the Inducing Infringement of Copyrights Act of 2004, introduced late last month, which assigns to the operators of peer-to-peer networks an overly broad responsibility for the ways those networks are used.
The IICA approach reminds us of the hopes of medieval astronomers that the universe would make sense with just one more layer of Ptolemaic epicycles. Things made much more sense when the center of the solar system was identified as the Sun, not Earth. In the same way, the center of the system of content protection must be the consumer of content, not the content producers and their obsolete business model.
a scientific look at how we divvy up the work and the wealth, how some of us end up with too much or too little effort or reward. That’s partly due to Ricardo’s Law of Rent, showing how wasteful use of Earth cuts wages. And it’s partly due to how a society’s elite runs government around like water boys, dishing out subsidies and tax breaks. While geonomists look political reality right in the eye, without blinking, conventional economists flinch. When Paul Volcker, ex-chief of the Federal Reserve, moved on to a cushy professorship at Princeton cum book contract, the crush of deadlines bore down. So Volcker asked a junior associate to help with the book. The guy refused, explaining that giving serious consideration to policy would ruin his academic career. The ex-Fed chief couldn’t believe it and asked the department chair if truly that were the case. That head honcho pondered the question then replied no, not if he only does it once. And economics was AKA political economy!
in part the Great Green Tax Shift maxed out. Economically, taxing pollution and depletion does reduce pollutants and extracts – and thus the tax base; plus such taxes are regressive, requiring a safety net. On the other hand, collecting site rent is progressive and generates a revenue surplus payable as a dividend to residents, which can serve as the safety net. Environmentally, taxes on waste and extraction do not drive efficient use of land, as does getting site rent.
a scientific look at how we divvy up the work and the wealth, how some of us end up with too much or too little effort or reward. That’s partly due to Ricardo’s Law of Rent, showing how wasteful use of Earth cuts wages. And it’s partly due to how a society’s elite runs government around like water boys, dishing out subsidies and tax breaks. While geonomists look political reality right in the eye, without blinking, conventional economists flinch. When Paul Volcker, ex-chief of the Federal Reserve, moved on to a cushy professorship at Princeton cum book contract, the crush of deadlines bore down. So Volcker asked a junior associate to help with the book. The guy refused, explaining that giving serious consideration to policy would ruin his academic career. The ex-Fed chief couldn’t believe it and asked the department chair if truly that were the case. That head honcho pondered the question then replied no, not if he only does it once. And economics was AKA political economy!
shaped by reality. In the 1980′s, the Swedish government doubled its stock transfer tax. Tax receipts, however, rose only 15%, since traders simply fled to London exchanges. Fearing a further exodus, the Swedish government quickly rescinded the tax altogether. (The New York Times, April 20) That willingness to tax anything leads us astray. Pushing us astray is that unwillingness to pay what we owe: rent for land, our common heritage. Assuming land value is up for grabs, we speculate. We cap the property tax on both land and buildings and the rate at which assessments can go up; while real market values rise quicker, assessments can never catch up. Our stewards, the Bureau of Land Management, routinely sell and lease sites below market value, often to insiders, says the Government Accounting Office. Once we grasp that rent is ours to share, we’ll collect it all, rather than let it enrich a few, and quit taxing earnings, which do belong to the individual earner. That shift is geonomic policy.
not a panacea, but like John Muir said, “pull on any one thing, and find it connected to everything else.” Recall last month’s earthquake in El Salvador. We felt it and its formidable after-shocks in Nicaragua. Immediately afterwards, my host nation, one of the poorest in the Western Hemisphere, sent aid to its Central American neighbor. The Nica newspapers carried photos of the devastation. They showed that the cliff sides that crumbled had had homes built on them while the cliffs left pristine withstood the shock. Could monopoly of good, safe, flat land be pushing people to build on risky, unstable cliffs? If so, that’s just one more good reason to break up land monopoly. What works to break up land monopoly, history shows, is for society to collect the annual rental value of the underlying sites and resources. That’d spur owners to use level land efficiently, so no one would be excluded, forced to resort to cliffs. To prevent another man-induced landslide is yet another reason to spread geonomics.
of interest to Dave Lakhani, President Bold Approach (Mar 8) and Matt Ozga (Jan 29): “I write for the Washington Square News, the student run newspaper out of New York University. Geonomics seems like it has great significance, especially in this area. When was geonomics developed, and by whom?”
About 1982 I began. Two years later, Chilean Dr Manfred Max-Neef offered the term geonomics for Earth-friendly economics. In the mid-80s, a millionaire founded a Geonomics Institute on Middlebury College campus in Vermont re global trade. In the 1990s, CNBC cablecast a show, Geonomics, on world trade as it benefits world traders. My version of geonomics draws heavily from the American Henry George who wrote Progress & Poverty (1879) and won the mayoralty of New York but was denied his victory by Tammany Hall (1886). He in turn got lots from Brits David Ricardo, Adam Smith, and the French physiocrats of the 1700s. My version differs by focusing not on taxation but on the flow of rents for sites, resources, sinks, and government-granted privileges. Forgoing these trillions, we instead tax and subsidize, making waste cheap and sustainability expensive. To quit distorting price, replace taxes with “land dues” and replace subsidies with a Citizens Dividend.
Matt: “This idea of sharing rents sounds, if not explicitly socialist, at least at odds with some capitalist values (only the strong survive & prosper, etc). Is it fair to say that geonomics has some basis in socialist theory?”
A closer descriptor would be Christian. Beyond ethics into praxis, Alaska shares oil rent with residents, and they’re more libertarian than socialist. While individuals provide labor and capital, no one provides land while society generates its value. Rent is not private property but public property. Sharing Rent is predistribution, sharing it before an elite or state has a chance to get and misspend it, like a public REIT (Real Estate Investment Trust) paying dividends to its stakeholders – a perfectly capitalist model. What we should leave untaxed are our sales, salaries, and structures, things we do produce.
one of many words I coined over 20 years ago: geoism, geonomics, geonomy, geocracy, etc – neologisms that later others came up with, too. CNBC once had a Geonomics Show, and Middlebury College has a Geonomics Institute. If “economy” is literally “management of the household”, then geonomy is “management of the planet”. The kind of management I had in mind is not what CNBC was thinking – top-down. My geonomics is not hands-on, interfering, but hands-off, organic. It’d strive to align policy with natural processes, similar to what holistic healing does in medicine, what organic farming does in agriculture. Geonomics attends to two key components: One, the crucial stuff to track is fat – or profit, especially profits without production, such as rent, or all the money we spend on the nature we use. Society’s surplus is the sine qua non for growth, needed to counter death – not merely more, but sustainable development, more from less. Two, the basic process to respect is the feedback loop. These let nature maintain balance automatically and could do the same for markets, if we let them. Letting them would turn our economies, now our masters, into a geonomy, our servant, providing us with prosperity, eco-librium (to coin a term) and leisure, time off – a hostile environment for economan but a cradle for a loving and creative humanity.
an answer for Jonathan of the Green Party (Nov 7): “What does ‘share our surplus’ mean?”
Our surplus is the values that society generates synergistically. It’s the money we spend on the nature we use: on land sites, natural resources, EM spectrum, ecosystem services (assimilating pollutants). It’s also the money we pay to holders of government-granted privileges like corporate charters. We could share it by paying for the nature we use and privileges we hold to the public treasury then getting back a fair share of the recovered revenue. Used to be, owners did owe rent (“own” and “owe” used to be one word). And presently, some lucky residents do get back periodic dividends: Alaska’s oil dividend and Aspen Colorado’s housing assistance. Doing that, instead of subsidizing bads while taxing goods, is the essence of geonomics.
Jonathan: “Is local currency what you mean?”
Editor: It’s not. Community currency is a good reform, but every good reform pushes up site values. That makes land an even more tempting object of speculation. Now, any good will eventually do bad by widening the income gap – until you share land values.
suitable for framing by Green Parties. When Greens began in Germany two decades ago, they defined themselves as neither left nor right but in front. Geonomics fits that description. The Green Parties have their Four Pillars; geonomists have four ways to apply them:
Ecological Wisdom. Want people to use the eco-system wisely? Charge them Rent and, to end corporate license, add surcharges. To minimize these costs, people will use less Earth.
Nonviolence. Want people to settle disputes nonviolently? Set a good example; don’t levy taxes, which rely on the threat of incarceration, to take people’s money. Try quid pro quo fees and dues.
Social Responsibility. Want people to be responsible for their actions? Don’t make basic choices for them by subsidizing services, addicting them to a caretaker state. Let people spend shares of social surplus.
Grassroots Democracy. Better have grassroots prosperity. Remember, political power follows economic. Pay people a Citizens Dividend; to keep it, they’ll show up at the polls, public hearings, and conventions.
a way to have everybody pulling on the same end of the rope. Last summer’s expansive forest fires shed light on growing class resentment in the West. Old log-gers and ranchers rankled at the new urgency to stamp out the blazes that threatened the recent Aspenesque settlers. The newcomers expected working class firemen to make protecting their expensive homes top priority. (Chr Sci Mntr, Spt 7) The tinder for this envy? Rich people moving in bid up the price of land, making it hard to afford by people on the margin. The fault really lies with our system of privatizing land value. If this rising value were collected by land dues and shared by rent dividends – the essence of geonomic policy – who’d complain? The more people move in, the higher the land value, and the fatter the dividend paid to residents. Then people on the margin might go out of their way to invite rich outsiders in.