No country on Earth fully safeguards labor rights

There is no country on Earth in which violations of labor rights do not occur. The best rating is for those which are merely “irregular violators of rights,” and only 12 countries managed that.

The International Trade Union Confederation, in its annual Global Rights Index report on the state of labor around the world, has once again provided sobering news. Sixty percent of countries exclude whole categories of workers from labor law, the ITUC report says, indicative that “corporate interests are being put ahead of the interests of working people in the global economy.” The ITUC’s general secretary, Sharan Burrow, said:

“Denying workers protection under labour laws creates a hidden workforce, where governments and companies refuse to take responsibility, especially for migrant workers, domestic workers and those on short term contracts. In too many countries, fundamental democratic rights are being undermined by corporate interests.”

Among the key findings of the report:

  • More than three-quarters of countries deny some or all workers their right to strike.
  • More than three-quarters of countries deny some or all workers collective bargaining,
  • Eighty-four countries exclude groups of workers from labor law.
  • The number of countries in which workers are exposed to physical violence and threats increased to 59 countries from 52 a year earlier.
  • Unionists were murdered in 11 countries, including Bangladesh, Brazil, Colombia, Guatemala, Honduras, Italy, Mauritania, Mexico, Peru, the Philippines and Venezuela.

International labor standards

To assess the state of global labor, the International Trade Union Confederation, “a confederation” of national trade unions, sends questionnaires to its affiliates in 161 countries and territories representing 176 million workers, with the intention of covering as many aspects of the right to freedom of association, the right to collective bargaining and the right to strike as possible. The information collected is then used to assess whether a given country meets standards set by the International Labour Organization.

These standards are examined by answering “yes” or “no” to 97 indicators arranged in five categories: Fundamental civil liberties; the right to establish or join unions; trade union activities; the right to collective bargaining; and the right to strike. The reason for a binary “yes” or “no” rather than a gradated scale is because “this method reduces the normative subjectivity of the analyst who carries out the coding,” the ITUC said. Further, because each of the 97 indicators is based on “universally binding obligations,” companies and government are required to meet them in full.

When the ITUC first carried out this survey, in 2014, the highest score attained was 43, meaning that no country had even half of its questions answered with a “yes.” In other words, every country in the world flunked.

For the 2017 report, the ITUC did not indicate the range of country scores, but followed its previous format of grouping countries into five tiers. The top tier, in which countries merely “irregular violate” labor rights, consists of 12 countries, which are marked in green on the map below. Eleven are found in Europe, and one in Latin America, Uruguay. (Yellow represents the second tier, followed by progressively darker shades of orange and red, the worst violators.)

ITUC map of labor rights. Green represents the highest-ranking countries; red the lowest.

The rankings are as follows:

  • 1. Irregular violations of rights: 12 countries including France, Germany and Sweden.
  • 2. Repeated violations of rights: 21 countries including Canada, New Zealand and South Africa.
  • 3. Regular violations of rights: 26 countries including Australia and Chile.
  • 4. Systematic violations of rights: 34 countries including Brazil, Britain and the United States.
  • 5. No guarantee of rights: 35 countries including India, Mexico and the Philippines.
  • 5+ No guarantee of rights due to breakdown of the rule of law: 11 countries including Burundi, Palestine and Syria.

U.S., Britain systematic violators of labor rights

The United States was also rated a “four” in 2014, while Britain has slipped from being ranked a “three” then. Once again, that means the U.S. and U.K. commit “systematic violations” of labor rights — so much for those governments’ endless attempts to assert moral authority over the rest of the world. The Trump and May governments are not likely to improve upon these rankings. In regards to U.S. deficiencies, the ITUC report says:

“Far from consulting with unions regarding labour law and policy, some states and U.S. politicians have taken deliberate steps to roll back workers’ collective bargaining rights. … The National Labour Relations Act (NLRA) and judicial decisions interpreting the law prohibit workers from engaging in sitdown strikes, partial strikes and secondary boycotts, and impose other restrictions on organisational or recognitional strikes.”

Embarrassingly for a country governed by a party calling itself a “Coalition of the Radical Left,” Greece is among the countries with a ranking of “five.” This ranking is due to harsh restrictions on collective bargaining that were implemented beginning in 2010 through several laws on orders of the “troika” — the European Commission, European Central Bank and the International Monetary Fund — which led to “a significant erosion” of labor rights.

Ironically, the Eurogroup president, Jeroen Dijsselbloem, says that collective bargaining is a “best practice” of the European Union, but the EU continues to block any attempt by the Syriza government to restore labor protections. A proposed law to re-establish collective bargaining was not submitted to the Greek parliament because of troika disapproval.

A sobering reminder of what capitalism offers working people: A race to the bottom and more exploitation. Surely, the world can do better.

The cost of not having single payer: $1.4 trillion per year

You could not devise a worse health care system than that of the United States if you tried. By far the most expensive, with among the worst results.

Perhaps saying “among” the worst results is being too kind. That is an accurate statement if we are simply measuring metrics such as mortality rates and other medical outcomes. But if we consider that tens of millions of United Statesians go without health insurance while none do in any advanced capitalist country (or most any other) — and that tens of thousands annually die because of that lack — then we must reasonably assess the U.S. health care system as the worst.

This is the high cost of private profit in health care. How much? The United States spends more than $1.4 trillion per year than it would otherwise if it had a single-payer system. Such is what happens when a service is left in the hands of the private sector, and allowed to be bent toward profit rather than human need.

To calculate that figure, I took the average per capita health care spending of the three largest EU countries — France, Germany and the United Kingdom — and the neighbor of the U.S., Canada, and compared that average to U.S. per capita spending. The composite average for Britain, Canada, France and Germany for the years 2011 to 2016 is $4,392 per capita per year, converted to U.S. dollars adjusted to create purchasing power parity as reported by the Organisation for Economic Cooperation and Development (OECD). Per capital health care spending in the U.S. for 2011 to 2016 averaged $8,924 — more than twice as much! Taking that difference and multiplying by 317 million, the average U.S. population for the five-year period, and the total annual excess comes to $1.44 trillion.

That excess has been steadily increasing. Doing these same calculations for earlier periods found that for the period of 2001 to 2010, the annual average of excess spending was $1.15 trillion. The annual average for the period of 1990 to 2000 was $685 billion.

For 2016, the OECD reports that only nine of the 35 countries surveyed spent more than half of what the U.S. spent on health care, and the second highest spender, Switzerland, spent $2,000 less per capita than did the United States.

Can this astounding amount of spending be accounted for by more health care? Nope. The average length of a hospital stay in U.S. in 2014 was 5.5 days, seventh shortest of 35 countries surveyed by the OECD. The average hospital stay in each of the four core comparison countries (Britain, Canada, France and Germany) was longer — a composite average of 7.6 days.

Paying more for less

So it really comes down to inferior results. The U.S. does well in combating cancer, but poorly in almost every other category of health care measurement. And people in the U.S. pay dearly for the privilege of health care, if they are lucky enough to have access to it. The cost of health insurance continues to rise, and the amount a patient must pay out of pocket before insurance kicks in (the “deductible” in U.S. lingo) is also steadily rising as employers push more of the cost of health insurance on to their employees.

Phillip Longman, discussing this issue for Popular Resistance, wrote:

“Indeed, the inflating cost of health care is the overwhelming reason why most Americans haven’t received a raise in years, and why employers increasingly make use of contract workers rather than taking on new employees that would receive benefits. This year, the total annual cost of health care for a typical family of four covered by a typical employer-sponsored plan surpassed $25,000, according to the actuarial research firm Milliman. Such a family will typically pay more than $11,000 of this cost directly out of its own pockets, through payroll deductions, copayments, and deductibles. They will also pay much more indirectly in foregone wages and other forms of compensation, and quite possibly more yet in the form of unemployment, as employers seek to escape their share of the mounting cost of providing health care for their employees.”

And because health care is dependent on maintaining a full-time job, bosses have more leverage over their employees, who will lose their insurance should they quit their job. Women with lower-paying work or staying at home to raise a family are also put at greater risk as health insurance for themselves and children are tied to their husband’s job, making it more difficult to leave a bad marriage. This dynamic could also apply to any one person in a non-traditional family or within a gay or lesbian household.

Thus it comes as little surprise that the United States is one of two countries in the world that do not provide paid maternity leave for women workers. Hope to get it at work? Good luck with that — only 9 percent of companies offered fully paid maternity-leave benefits to workers in 2014, down from 16 percent in 2008. By contrast, at least two-thirds of countries have mandatory maternity pay for at least 14 weeks, according to an International Labour Organization report.

You might not have it so good, but that is the price to be paid for high profits. An analysis by Forbes magazine found that health technology had the highest profit margin of any of 19 broadly defined industrial sectors, at 20.9 percent, topping even finance, the second highest. Three of the biggest companies — Pfizer, Merck & Co. and Johnson & Johnson — had profit margins of 25 percent or higher. When a separate study broke down profit margins by smaller, more specific industry categories, health care-related industries were three of the six most profitable. Generic pharmaceuticals topped the list, with a margin of 30 percent. Major pharmaceuticals and biotechnology were also among the top six.

Keeping people sick as a business model

The piles of money vacuumed into pharmaceutical pockets do not sit entirely idle. Big Pharma lavishes vast sums on doctors, state Medicaid officials and regulators to promote their products. Studies have shown that doctors who have received payments from pharmaceutical companies are more likely to prescribe those companies’ medications. But pharmaceutical companies go far beyond wining and dining doctors, or paying them speaking fees. They organize “patient advocacy” groups that pretend to be grassroots organizations. An investigative health reporter, Martha Rosenberg, writes that these front groups fly in “patients” to hearings to ask for expensive drugs to be fast-tracked for approval.

Expensive drugs that have to be taken for years, or even a lifetime, create a business model that “actually wants people sick,” Ms. Rosenberg writes. She says:

“ ‘Mental illness’ is a category deliberately ‘grown’ by Pharma with aggressive and unethical million-dollar campaigns. These campaigns, often unbranded to look like a public service, convince people with real life challenges they are ‘depressed’ or ‘bipolar’ and that their children have ADHD. Despite the Pharma marketing, the New England Journal of Medicine recently reported that the rate of severe mental illness among children and adolescents has actually dropped dramatically in the past generation.”

All this adds up to a 2011 study in the journal Health Policy that ranked the U.S. last in preventing early deaths. Attributing this result to “the lack of universal coverage and high costs of care,” the Commonwealth Fund noted:

“The United States placed last among 16 high-income, industrialized nations when it comes to deaths that could potentially have been prevented by timely access to effective health care. … [O]ther nations lowered their preventable death rates an average of 31 percent between 1997–98 and 2006–07, while the U.S. rate declined by only 20 percent, from 120 to 96 per 100,000. At the end of the decade, the preventable mortality rate in the U.S. was almost twice that in France, which had the lowest rate—55 per 100,000.”

An OECD report found that life expectancy in the U.S. is two years less than the average of OECD countries, a gap that is growing. That statistic isn’t improving at either end of life, as U.S. infant mortality rates are considerably higher than in peer countries. A report prepared by the Peterson Center on Healthcare and the Kaiser Family Foundation explicated this poor performance:

“The U.S. has been slower to improve its infant mortality rate than comparable countries, which we define as countries whose gross domestic products (GDP) and per capita GDP were above average in at least one of the past 10 years. While the infant mortality rate in the U.S. improved by about 13 percent from 2000-2013, the comparable country average improved about 26 percent, according to data from the Organization for Economic Cooperation and Development.

U.S. infant mortality rates appear to be about 42 percent higher than the comparable country average. Looking into specific measures of infant mortality, it also appears that the U.S. has about 66 percent more neonatal deaths (deaths which occur less than 28 days after birth) than the comparable country average. From 2000 to 2013, neonatal deaths decreased by 13 percent in the U.S. and by 23 percent in comparable OECD countries.”

What’s good for big business is good for big business

With such dismal results, why does such a furious campaign continue to insist on privatized health care? Ideology, of course. Ideology no different than that propagated to insist that government is always bad and private enterprise always better. But government doesn’t have to earn a profit; private enterprise expects to and will pack its bags if it doesn’t. Just as privatization invariably results in higher costs and often poorer quality than when the service was provided by a government agency as a public good, health care is provided far more efficiently when in public hands.

Noting that “high administrative costs and lower quality have also characterized for-profit HMOs” (health maintenance organizations funded by insurance premiums that supervise health care), a Journal of the Canadian Medical Association article provides the following figures for the percentage of revenue that is diverted to overhead:

  • For-profit HMOs: 19 percent
  • Non-profit plans: 13 percent
  • U.S. Medicare program: 3 percent
  • Canadian Medicare: 1 percent

Ideology drives the Trump administration and the Republican-controlled Congress to have no problem with adding more than 20 million people to the ranks of the uninsured by attempting to reverse the weak-tea, incremental improvement of Barack Obama’s Affordable Care Act. This is not different from Donald Trump’s chimeric $1 trillion infrastructure program, which is a scam that commits his administration to zero dollars while showering corporations with massive subsidies that would supposedly magically induce private infrastructure investment.

That extra $1.4 trillion paid for health care in the United States is the result of a system designed to deliver corporate profits rather than health care. It’s the “magic of the market” at work. It just isn’t magic for you. In a concise explanation on the Real-World Economics Review Blog, Peter Radford explains:

“Markets, you see, are wonderlands that always and inevitably lead to efficient outcomes. And it is no good any starry eyed liberal tinkering with those outcomes. They are magically correct. By correct we mean that they cannot be improved upon. Economists have this vice like attachment to certain core beliefs. One of those is that, if left unfettered, markets will zero in on an allocation of stuff that can never be improved, especially by meddlesome governments.

The way you get to this particular promised land is by letting the great forces of supply and demand batter away at individual preferences and budgets until all the trading and so on ends with no one able to make another trade without such a trade making someone else worse off. It sounds wonderful. Now to make this all work we have to believe in magic. We have to suspend our intelligence and imagine a world where everyone knows exactly what everyone else is doing, where no one cheats, where everyone is marvelously rational, where they don’t suddenly change their minds, where they can calculate at the speed of light, absorb vast amounts of data, and always — yes always — arrive at precisely that combination of stuff they wanted. Within the constraints of their budget of course.”

Sarcastic, yes, but that is a summation of what passes for economic orthodoxy nowadays. Markets always magically result in fair and just results for all, and any actions by government automatically damage this miraculous machine. And therefore health care should be left in the hands of corporations with as little regulation as possible. And therefore the U.S. is a country in which 22,000 people die and 700,000 go bankrupt per year as a result of inadequate, or no, health insurance in the United States. That’s one of the prices of capitalism.

Analyzing the failures of Syriza

So many put their puts hopes into Syriza; so many were bitterly disappointed. Greece’s Coalition of the Radical Left proved wholly unable to resist the enormous pressures put on it and it is Greek working people who are paying the price, not excepting those who voted for Syriza.

How should we analyze the depressing spectacle of what had been a genuinely Left party, indeed a coalition of leftist forces from a variety of socialist perspectives, self-destructing so rapidly? The simplistic response would be to wash our hands and condemn Syriza as “opportunists,” but we’ll learn exactly nothing with such an attitude. If we are serious about analyzing Syriza’s spectacular failure — including those who expected this outcome in advance — digging through the rubble is unavoidable.

There were many currents coursing through Syriza, in addition to other Left tendencies outside. Nor were there shortages of people who feared what the fate of Syriza might become, including leaders inside it, before it took power, reminds Helena Sheehan in her new book The Syriza Wave: Surging and Crashing with the Greek Left.* Written in exhilaration and sorrow, Professor Sheehan, a veteran of solidarity work with the Greek Left, rides those tides as she recounts the anticipation and optimism before, and the depression and shock afterward, inside Greece and among Syriza’s allies across Europe.

The prologue to this failure is well known, but Professor Sheehan takes us through it in a “you are there” style reflecting what was happening then and her own optimism. That we know how this story will end does not detract from this writing style; rather it heightens the emotions as we re-live what at the time appeared to be the imminent first serious blow against global austerity and the ever tightening grip of finance capital. This was not a pollyannaish optimism, for no one serious had doubts about the immense task facing Syriza should it be elected. Certainly Greece could not be a small socialist island in an immense sea of capitalism — Greece’s problems then and now can have only European and international solutions.

Still, someone has to go first. The international Left saw hope in Syriza, and Syriza economists worked on solutions. There was much political seriousness as Syriza was seen as the last hope; that fascism might well be next given the growing menace of Golden Dawn focused minds.

Professor Sheehan sets this stage, opening her book in 2012, a year in which a second memorandum is signed, forcing more harsh austerity on Greeks, and in which Syriza rose from a minor parliamentary presence to finishing a close second to Greece’s main party of the Right, New Democracy. Providing the analyses, hopes and fears of a variety of Greek activists gathered on repeated visits, she recounts Syriza’s strong efforts to engage social-movement groups (in contrast to the Greek Communist Party’s sectarianism) and for Syriza to be inter-generational in its leadership.

Tip-toeing to the election by backtracking?

Nonetheless, there was Left criticism that Syriza was “watering down its wine” or wanting only to manage capitalism instead of creating socialism. Syriza officials vigorously denied this, saying they would reverse austerity cuts, restore wages and pensions, and re-distribute wealth and power. This would not yet be socialism, but “was intended to open a new path to socialism for the twenty-first century.” One danger sign, however, was that the party was split on whether to remain within the eurozone, even if the euro and the European Union as a whole were seen as a site of struggle. Some within Syriza, such as Costas Lapavitsas, argued that Syriza should be prepared for a break with the European Union. Despite these warnings, no systematic preparatory work on any “Plan B” was formulated.

Austerity might have been coming down harder on Greeks than elsewhere in Europe, but this was no aberration specific to one small country EU officials saw as easy to bully. This was not a local battle, Professor Sheehan writes:

“These cuts to pay, pensions, and public services, this privatization of public property, this redistribution of wealth from below to above: these were not temporary contingent measures. These were integral to a systemic restructuring of capitalism. … Where there were once experiments in socialism in the east, there were now oligarchies. Next on the agenda: advances achieved by the labor movement in the west were to be stripped.” [page 58]

Yet no success in a single European country will be sustainable unless it is followed by similar successes in other countries.

“Yiannis Tolios, an economist, also elected to the [Syriza] central committee, articulated the problem starkly, but with a different stress: ‘If having socialism in a single country is considered hard, having socialism in all countries at the same time is nearly impossible.’ Greece needed to forge ahead, whether the rest were ready or not, but it was perilous path.” [page 59]

Syriza would reconstitute itself as a unified party, with its previous constituent groups, including its largest, Synaspismos, dissolving themselves (although some remained outside). One-quarter of the central committee were members of Left Platform, an organized faction advocating reversing austerity by any means necessary, with the central committee majority heterogeneous but pro-Alexis Tsipras. Internal critics complained that too much power was being concentrated in the hands of the party leader and his inner circle, nor was concern that Syriza was moving too far toward the right confined to the Left Platform.

Most active members of Syriza believed capitalism was the problem and socialism the solution, the author writes, but had “stopped dreaming of storming winter palaces.” She writes:

“They were not holding out for an all-encompassing insurrection, which would destroy capitalism one day and inaugurate socialism the next day. They were planning for a protracted process, which would include winning multiparty elections, entering into difficult negotiations, agreeing to unattractive alliances, undoing damage done, building the new inside the shell of the old.” [page 85]

Winning an election, but not necessarily power

Anticipation grew as Syriza prepared to take office, but the party’s 2014 Thessaloniki Program was seen by many as a significant retreat. Was Syriza watering down its wine even before the next election? Whatever the strength of the wine, Syriza won the election of January 2015. The “troika” of EU institutions and the International Monetary Fund that had been dictating austerity to the previous Greek governments wasted no time in tightening the screws on the new government in what was seen as an outright attempt to humiliate Syriza. Negotiations dragged on, and amidst much international solidarity, Prime Minister Tsipras called a referendum that summer to supposedly buttress his negotiating position.

Greeks responded by heavily voting “no” to further austerity. The Syriza government then did a remarkable about-face. Eight days later, Prime Minister Tsipras signed an agreement even more unfavorable that what had been demanded by the troika. More than half of Syriza’s central committee signed an opposition letter and most Syriza members were furious. This was ignored.

View of Vikos Gorge, Greece (photo by Skamnelis)

Some Syriza officials offered public justifications for this turn of events, arguing that the party was in a marathon and not a finished race, and that the party retained scope for maneuver and to continue to be a Left party through links with solidarity networks. Others, however, argued that the new agreement was a disastrous capitulation. One alternative path to austerity was to exit the eurozone. The counter-argument was that the analysis supporting a eurozone withdrawal was correct but nonetheless such a road should not be taken due to the balance of forces tilted heavily against the Greek economy.

There were arguments both for remaining in and for leaving the eurozone, but anti-austerity advocates on both sides recommended strong steps such as renouncing the debt, nationalizing the banks and imposing capital controls. These were not considered — Syriza never had a “Plan B.”

Staying in the eurozone was favored by a majority of Greeks, a factor undoubtedly an influence on the party. But by taking office without an alternative plan to negotiating with the troika, in particular EU officials completely cold to any Greek argument, Syriza had boxed in itself. Excuses by Syriza officials for why, rather than reversing austerity, they had agreed to its intensification were just that, excuses. Professor Sheehan challenges those excuses sharply:

“It was one thing to allude to a gun to the head and to admit to defeat, but another to turn around and to claim a great moral victory and to aim the attack on anyone who said otherwise. There was much violation of elementary logic, evasion of empirical evidence, and denial of ethical culpability. … The point about conceptualizing contradiction is not to affirm it and to wallow in it, but to struggle to resolve it, to transcend it, to create a new synthesis from it. As if intensified economic expropriation and political capitulation were not bad enough already, they added intellectual obfuscation and moral degradation to the dreadful reality unfolding. … You cannot build a left when you trash the very basis of our beliefs. It came from a mix of blatant opportunism, genuine confusion, psychological distress, and postmodernist sophistry.” [pages 133-134]

Syriza, despite all the bustle of the previous three years, had taken office unprepared. And, bizarrely, holding a belief that the troika could be reasoned with.

A suicide mission followed by a purge

Next was a “suicide mission for the Left” — Syriza introduced into parliament a 977-page bill to be voted on immediately with no time to be read. The Left Platform voted no as a unified faction and a separate Syriza parliamentary faction, the 53+ Group, complained about the stifling of party democracy, yet Syriza overall voted yes and the new agreement was approved with support from most other parties. “I do not believe that you can do bad to do good,” is the author’s succinct appraisal.

In the wake of shameful capitulation, rather than call a party congress, Prime Minister Tsipras decided to call a snap election, which he would use to purge Syriza of its left wing. He distinguished this campaign by attacking the Left and international supporters. The Left Platform members of parliament resigned to form a new party, Popular Unity, but with little time and no resources it failed to reach the 3 percent vote threshold. Syriza won again.

Defections from Syriza and attempts to build a new Left party have continued since as not only is no debt relief in sight despite one humiliating concession after another but Syriza lurches right in foreign policy and the prime minister falls to his knees in front of the church. It had taken Syriza only six months to travel the path that the former socialist party, Pasok, had traveled in 20 years but without the genuine reforms that Pasok had implemented early in its time in government. Implementing and expanding expropriation in order to end it is not dialectical; it is nonsense, Professor Sheehan points out.

So why had Syriza taken such a road? No one answer could suffice, but the author, in a wide-ranging survey, explores several opinions offered by various Greek activists. In short form these include:

  • That Syriza’s actions constitute a retreat, not a betrayal, as transformation is a painful marathon with many retreats.
  • Syriza had no coherent program but its left was too focused on a transformation of the state.
  • Syriza failed to contest the narrative of “there is no alternative” and should have renounced the debt, nationalized the banks and elaborated an anti-capitalist narrative.
  • Syriza’s failure is rooted in its class compromises and constant reassurances to the Right since 2012.
  • Popular Unity has a future despite “messing up” its first election.
  • It is impossible to control the economy inside the eurozone.
  • The power of money destroyed Syriza.

Helena Sheehan has written a most useful study of Syriza and in particular the range of platforms and outlooks, and the evolution of these, as the party prepared to take power and then found itself unable to manage, let alone solve, internal and external contradictions. That this is a “you are there” document from a personalized standpoint does not at all mean that The Syriza Wave is anything other than a serious political analysis. The work could have been strengthened in two ways: one, a deeper discussion of the economic issues, including the ramifications of staying in (or exiting) the eurozone, and, two, a discussion of how virtually every euro of the troika loans are going to creditors and banks rather than to the Greek people, a topic barely mentioned in passing only once. These are topics that would have added to the narrative.

Nonetheless, a reader wishing political analysis and to understand what activists and leaders in Syriza were thinking and doing, including ministers before and after taking up their posts, would do well to read this book. Professor Sheehan, despite the appropriately bitter denouncements of the party’s performance in office in contrast to her earlier support, ends on an optimistic note. We are, after all, supposed to learn from defeat so we can do it better in the future, yes?

* Helena Sheehan, The Syriza Wave: Surging and Crashing with the Greek Left [Monthly Review Press, New York 2016]

The toll of pollution: How many lives vs. how much profit?

Frequently lost in the arguments over financial costs and benefits when it comes to pollution is the cost to human health. Not only illness and respiratory problems but premature death. To put it bluntly: How many human lives should we exchange for corporate profit?

Two new studies by the World Health Organization should force us to confront these issues head on. This is no small matter — the two WHO studies estimate that polluted environments cause 1.7 million children age five or younger to die per year.

Spent shale from a Shale oil extraction process (photo by U.S. Argonne National Laboratory)

Indoor and outdoor air pollution, second-hand smoke, unsafe water, lack of sanitation, and inadequate hygiene all contribute to these 1.7 million annual deaths, accounting for more than one-quarter of all deaths of children age five or younger globally. A summary notes:

“[W]hen infants and pre-schoolers are exposed to indoor and outdoor air pollution and second-hand smoke they have an increased risk of pneumonia in childhood, and a lifelong increased risk of chronic respiratory diseases, such as asthma. Exposure to air pollution may also increase their lifelong risk of heart disease, stroke and cancer.”

One of the two reports, Don’t pollute my future! The impact of the environment on children’s health, notes that most of humanity lives in environmentally stressed areas:

“92% of the global population, including billions of children, live in areas with ambient air pollution levels that exceed WHO limits. Over three billion people are exposed to household air pollution from the use of solid fuels. Air pollution causes approximately 600,000 deaths in children under five years annually and increases the risk for respiratory infections, asthma, adverse neonatal conditions and congenital anomalies. Air pollution accounts for over 50% of the overall disease burden of pneumonia which is among the leading causes of global child mortality. Growing evidence suggests that air pollution adversely affects cognitive development in children and early exposures might induce development of chronic disease in adulthood.” [page 3]

These types of calculations on health and mortality are absent from debates on environmental regulations. And not only is the human toll missing from cost/benefit analyses, but this pollution is actually subsidized.

Trump administration’s assault on the environment

These World Health Organization reports were published in the same month that the Trump administration mounted a full-scale assault on the U.S. environment. Not only has the Trump administration proposed draconian cuts to the Environmental Protection Agency and signaled its intention to rescind air-pollution rules for motor vehicles scheduled to come into force between 2022 and 2025, it has issued an executive order requiring a “review [of] existing regulations that potentially burden the development or use of domestically produced energy resources and appropriately suspend, revise, or rescind those that unduly burden the development of domestic energy resources.”

One of the targets of this order is the Clean Power Plan, which requires a 32 percent reduction in carbon dioxide emissions from existing power plants by 2030, compared to 2005 emission rates. The standard, implemented by the Obama administration, was already seen as inadequate. The increased danger raised by President Donald Trump’s order was succinctly summed up by this headline on a Weather Underground article written by Jeff Masters: “Trump’s Executive Order Threatens to Wreck Earth as a Livable Planet for Humans.”

Threats don’t get much graver than that, do they?

Given the gigantic size of the United States economy and the pollution thrown into the atmosphere, this is of serious concern to the entire world. The World Resources Institute estimates that the U.S. accounts for almost 15 percent of Earth’s current greenhouse-gas emissions, second only to China’s 20 percent. Russia and the U.S. emit more than twice the global average on a per capita basis, as does Canada, which, due to its heavy reliance on fossil fuel extraction, has the world’s largest per-person greenhouse-gas footprint.

When greenhouse-gas emissions are calculated on a cumulative basis, then the responsibility of the global North comes into sharper focus: The United States has accounted for 27 percent of all greenhouse gases emitted since 1850, and the countries of the European Union contributed another 25 percent.

Carbon dioxide is the biggest single contributor to global warming — which is why the U.S. Environmental Protection Agency had sought to regulate carbon dioxide emissions as a pollutant — but methane is also a significant contributor. The EPA in 2016 issued an order requiring that owners and operators of oil and gas facilities provide data needed to help it determine how to best reduce methane and other harmful emissions. But the Trump administration has withdrawn the order to provide data.

Not everything can be reversed at the stroke a pen, however. The larger attack on the Clean Power Plan will likely take years to carry out, Dr. Masters wrote:

“The Clean Power Plan will be difficult to undo quickly. The plan was finalized by EPA in 2015, and is currently being reviewed in the U.S. Court of Appeals for the District of Columbia Circuit. Under the new executive order, the Department of Justice will ask the court to suspend the case until the EPA can review and write a new version of the rule. (Before that happens, the court may still rule on the Plan as written, which will influence how the EPA can rewrite the rule.) Once the case is removed from the court, the EPA will have to legally withdraw the existing rule and propose a new rule to take its place, a process that could take years, as the new rule will have to be justified in court, and would likely be challenged in court by environmental groups.”

Hundreds of thousands of lives in the balance

Nonetheless, a fightback is essential. Lives are literally at stake, in large numbers, if regulations safeguarding air quality are reversed. The EPA estimates that 160,000 premature deaths were prevented in 2010 by the Clean Air Act, and estimates that 230,000 lives will be saved and 120,000 emergency-room visits saved in 2020 if the act is left intact. The EPA said the benefits of the act “exceeds costs by a factor of more than 30 to one.” This study, at least for the moment, hasn’t been expunged from the Internet by the Trump administration.

A separate study by the Massachusetts Institute of Technology (MIT) estimates that air pollution causes 200,000 early deaths each year in the United States alone. The two biggest contributors to that death toll, the MIT report found, are emissions from road transportation and power generation, which together account for just more than half the total. One of the study’s authors, MIT professor Steven Barrett, said a person who dies from an air pollution-related cause typically dies about a decade earlier than he or she otherwise might have.

The Canadian government estimates that a 10 percent reduction in particulate-matter and ozone levels would result in a net social welfare benefit for Canadians of more than $4 billion. A separate study estimates that the cost to Canadian health care from air pollution will total $250 billion by 2031 without significant reductions.

Grangemouth oil refinery at sunset (photo by Steve Garvie, Dunfermline, Fife, Scotland)

This exercise can be repeated around the world. A 2015 World Health Organization study estimates that indoor and outdoor air pollution costs European economies as much as €1.2 trillion annually in deaths and diseases. This includes £54 billion and 29,000 deaths per year in Britain. For Australia, the cost from air pollution was estimated at $5.8 billion in 2010, a doubling in only five years.

Globally, air pollution could lead to nine million premature deaths and US$2.6 trillion in economic damage from the costs of sick days, medical bills and reduced agricultural output by 2060, according to an Organisation for Economic Cooperation and Development study.

Only a drastic reduction in emissions can reverse these costs in human health and the mounting dangers of global warming.

We’ll have to go well beyond current plans

Cap-and-trade schemes, promoted by North American liberals and European social democrats, simply don’t work. The European Union system, for example, issued so many free certificates that the price of pollution is a small fraction of the target price, and attempts by environmentalists to reduce the number of certifications are consistently rebuffed. Moreover, cap-and-trade plans often allow “offsets,” whereby companies can buy emission credits from outside the program to “offset” emissions above the allowable level, allowing polluters to substitute unverifiable reductions elsewhere for real reductions locally.

Nor are renewable energy sources, as vital as they are to any rational future, a substitute for reducing energy usage. Renewable energy is not necessarily clean nor without contributions to global warming. Wind power and biomass, for example, have their own problems. The primary source of bioenergy is wood, which portends an increase in logging, counter to winning a struggle against global warming. Denmark and Britain are among the biggest users of biomass but must import wood to sustain that. The turbines used to produce electricity from wind increasingly are built with the “rare earth” element neodymium, which requires a highly toxic process to produce. Production of rare earths are environmentally destructive; increasing their extraction means more pollution and toxic waste.

The argument here certainly isn’t that a switch from fossil fuels to renewable energy as quickly as practical isn’t necessary; of course such a switch needs to be made. But if reversing pollution and greenhouse-gas emissions is the goal, then renewables are at most a partial measure.

Haze from forest fires in St. Mary Valley, Glacier National Park in August 2015, during the hottest and driest summer in Pacific Northwest history. (photo by Pete Dolack)

The Paris Climate Summit ended with a surprise decision by the world’s governments to limit the rise of the global average temperature to 1.5 degrees Celsius above the pre-industrial revolution average instead of the previously intended limit of 2 degrees. The difficulty here, however, is that even if every national goal were met, the Earth’s temperature would rise 2.2 to 3.4 degrees by 2100 with more to come, and the Paris summit contains no mechanism to enforce these goals.

Adding to the difficulty of reducing fossil fuel usage sufficiently to meet the Paris summit’s goals (and which would also reduce the damage to human health) is the astounding total of subsidies for them. A 2015 study that attempted to quantify the size of these subsidies on a global basis estimated them at US$5.6 trillion! That includes not only direct government subsidies through tax breaks and other programs, but damage to the environment — these are not inconsequential as the costs of air pollution and global warming transferred to society account for nearly two-thirds of that total.

“Fracking” (hydraulic fracturing) of rock to blast out natural gas alone accounts for billions of dollars of damages through contaminated water, health problems from the chemicals used in the process, air pollution, methane that contributes to global warming, disruption to agriculture and damage to roads from trucks. That the cost of those is transferred to society is another mammoth subsidy to the energy industry.

Overshooting Earth’s carrying capacity

The most recent estimate of planetary consumption is that humanity is using the equivalent of 1.6 Earths per year. By 2030, at present rates of increase, we’ll be consuming two Earths — that is, twice the capacity of our planet to sustain.

Then there is the matter of global warming. Two scientific studies issued in 2015 suggest that so much carbon dioxide already has been thrown in the air that humanity may have already committed itself to a six-meter rise in sea level. A separate 2015 study, prepared by 18 scientists, found that the Earth is crossing several “planetary boundaries” that together will render the planet much less hospitable.

What is the price of making Earth uninhabitable? No amount of strip-mining the Moon or the asteroid belt will reverse mass die-offs on Earth.

Illusions that “green capitalism” will save us really must be abandoned. Beyond that capitalism requires constant growth (infinite growth is impossible on a finite planet) and discourages corporate responsibility because enterprises can offload their responsibilities onto society, every incentive is for more production. Adding to that, capitalist economics discounts the future so much that future life is seen as nearly worthless. Thus, in this type of accounting, there is no cost for future pollution.

Authors Richard York, Brett Clark and John Bellamy Foster put this plainly in a thoughtful May 2009 article in Monthly Review. They wrote:

“Where [orthodox economists] primarily differ is not on their views of the science behind climate change but on their value assumptions about the propriety of shifting burdens to future generations. This lays bare the ideology embedded in orthodox neoclassical economics, a field which regularly presents itself as using objective, even naturalistic, methods for modeling the economy. However, past all of the equations and technical jargon, the dominant economic paradigm is built on a value system that prizes capital accumulation in the short-term, while de-valuing everything else in the present and everything altogether in the future.”

As for the present day, capitalist enterprises aren’t going to guarantee jobs to workers displaced from energy-extraction industries, and if those workers don’t have any viable alternatives, it can’t be expected they will do anything other than join their bosses in fighting for their industry. Thus any rational plan to drastically shrink fossil fuel extraction has to be able to provide alternative jobs. Nor do the costs in human lives discussed above factor into capitalist economic calculations.

The drastic changes that are necessary to reverse the human and environmental tolls of pollution will come with a hefty price tag. But the cost of continuing business as usual is much higher — a price our descendants will pay if we don’t move to an economic system that values life rather than only profits.

Eight people own as much as half the world

Just when it seemed we might be running out of superlatives to demonstrate the monstrous inequality of today’s capitalism, Oxfam has provided the most dramatic example yet: Eight individuals, all men, possess as much wealth as the poorest 50 percent of humanity.

Eight people have as much as 3.7 billion people.

How could this be? Oxfam calculated that 85 people had as much wealth as the poorest half of humanity in 2014, a staggering finding that researchers with the anti-poverty organization discovered through crunching numbers provided by Forbes magazine in its rich list and by the investment bank Credit Suisse in its global wealth distribution report. Oxfam found wealth distribution to be even more unequal than did Credit Suisse, which calculated that the top one percent equaled the bottom 50 percent. Oxfam, in its report, “An Economy for the 99%,” released this month, explains:

“This year we find that the wealth of the bottom 50% of the global population was lower than previously estimated, and it takes just eight individuals to equal their total wealth holdings. Every year, Credit Suisse acquires new and better data sources with which to estimate the global wealth distribution: its latest report shows both that there is more debt in the very poorest group and fewer assets in the 30–50% percentiles of the global population. Last year it was estimated that the cumulative share of wealth of the poorest 50% was 0.7%; this year it is 0.2%.” [page 11]

 

The "wealth pyramid" as calculated by Credit Suisse. Oxfam's findings are that even this is an under-estimation of inequality.

The “wealth pyramid” as calculated by Credit Suisse. Oxfam’s findings are that even this is an under-estimation of inequality.

Because Oxfam includes among the bottom 50 percent people in the advanced capitalist countries of the Global North who have a net worth of less than zero due to debt, some critics might argue that these people are nonetheless “income-rich” because they have credit available to them and thus distort the inequality outcome. Oxfam, however, says that almost three-quarters of those among the bottom 50 percent live in low-income countries, and excluding those from the North with negative wealth would make little difference in aggregate inequality. That total debt is equal to only 0.4 percent of overall global wealth. The Oxfam report says:

“At the very top, this year’s data finds that collectively the richest eight individuals have a net wealth of $426 bn, which is the same as the net wealth of the bottom half of humanity. …  [E]stimates from Credit Suisse find that collectively the poorest 50% of people have less than a quarter of 1% of global net wealth. Nine percent of the people in this group have negative wealth, and most of these people live in richer countries where student debt and other credit facilities are available. But even if we discount the debts of people living in Europe and North America, the total wealth of the bottom 50% is still less than 1%.” [page 10]

Profiting from cheap labor and forced labor

We are accustomed to hearing that chief executive officers in U.S.-based corporations earn hundreds of times more than their average employee, but this dynamic can be found in the developing world as well. No matter where the CEO lives, brutal and relenting exploitation of working people is the motor force of inequality. Oxfam reports:

“The CEO of India’s top information firm earns 416 times the salary of a typical employee in his company. In the 1980s, cocoa farmers received 18% of the value of a chocolate bar — today they get just 6%. In extreme cases, forced labour or slavery can be used to keep corporate costs down. The International Labour Organization estimates that 21 million people are forced labourers, generating an estimated $150 bn in profits each year. The world’s largest garment companies have all been linked to cotton-spinning mills in India, which routinely use the forced labour of girls.” [page 3]

appleoxfam-graphicPeople become sweatshop workers out of desperation; often these are men and women driven off the land their families had farmed for generations. Land, even small plots that provide only subsistence for those who work it, represents wealth taken away when those subsistence farmers are forced into migrating into urban slums. Displacement from global warming is also a factor.

“[M]any people experiencing poverty around the world are seeing an erosion of their main source of wealth — namely land, natural resources and homes — as a consequence of insecure land rights, land grabbing, land fragmentation and erosion, climate change, urban eviction and forced displacement. While total farmland has increased globally, small family farms operate a declining share of this land. Ownership of land among the poorest wealth quintile fell by 7.3% between the 1990s and 2000s. Change in land ownership in developing countries is commonly driven by large-scale acquisitions, which see the transfer of land from small-scale farmers to large investors and the conversion of land from subsistence to commercial use. Up to 59% of land deals cover communal lands claimed by indigenous peoples and small communities, which translates to the potential displacement of millions of people. Yet only 14% of deals have involved a proper process to obtain ‘free prior and informed consent.’ Distribution of land is most unequal in Latin America, where 64% of the total wealth is related to non-financial assets like land and housing and 1% of ‘super farms’ in Latin America now control more productive land than the other 99%.” [page 10]

As entire areas of the world like Latin America have been plundered for the benefit of multi-national corporations based in the Global North, with those benefits flowing to the executives and financiers who control those corporations, it is no surprise that most of the wealth remains concentrated in the advanced capitalist countries. Although steering well clear of so much as a hint of the imperial nature of uneven development, the Credit Suisse report that Oxfam drew upon does note that North America and Europe together account for 65% of total household wealth with only 18% of the world’s adult population.

The sociologist James Petras estimates that the corporations and banks of the North took US$950 billion of wealth out of Latin America for the period 1975 to 2005. Thus it is no surprise that global inequality, when measured by the standard statistical measure of income distribution, the gini coefficient, is greater than inequality in any single country.

More programs on the way to make inequality still worse

Few countries of the Global North are more unequal than the United States, the imperial center of the world capitalist system that seeks to impose its ways and culture on the rest of the world. The new Trump administration is determined to make U.S. inequality even more extreme. Not only through intentions of cutting taxes on the wealthy and corporations, but via many less obvious routes.

For example, the Center on Budget and Policy Priorities reports that the repeal of Barack Obama’s Affordable Care Act, a process already in motion, would result in tax cuts of $2.8 billion per year for the country’s 400 highest-income taxpayers. Special Medicare taxes that fund subsidies for low-income United Statesians to buy insurance under the act are assessed only on those with annual incomes higher than $200,000. Conversely, the loss of tax credits to buy health insurance would lead to a tax increase for about seven million low- and moderate-income families.

Through the end of 2016, the central banks of Britain, the European Union, Japan and the United States have shoveled a colossal total of US$8 trillion (€7.4 trillion) into their “quantitative easing” programs — that is, programs that buy government bonds and other debt in an effort to boost the economy but in reality does little other than fuel stock-market bubbles and, secondarily, real estate bubbles. Vast rebuilding of crumbling infrastructure — a program that would actually put people to work — would have cost less.

CEO-to-worker ratioStandard economic ideology insists that the real problem is that wages have not fallen enough! Consistent with that, the Federal Reserve released a paper in 2015 claiming that “rigidities” “prevent businesses from reducing wages as much as they would like” during economic downturns.

Oh yes, falling wages instead of stagnant wages will bring happy times! Never mind that productivity has soared over the past four decades, while wages have consistently not kept pace. The average Canadian and U.S. household would earn hundreds of dollars per week more if wages had kept up with rising productivity, while wages in Britain and many other countries are also lagging.

What to do? The Oxfam report, in its conclusions, advocates a switch to a “human economy,” one in which governments are “accountable to the 99%,” businesses would be oriented toward policies that “increase prosperity for all,” and sustainability and equality would be paramount.

“Oxfam firmly believes humanity can do better,” its report concludes. Surely we can do better. But not under capitalism. Does anyone believe that the world’s elites, who profit so enormously and believe they can build a wall high enough to keep the world’s environmental and social problems away, are going to suddenly accept business as usual can no longer go on and willingly give up their enormous privileges?

Any way you calculate it, income inequality is getting worse

A flurry of new reports have provided yet more data demonstrating that inequality is getting worse. All right, this does not qualify as a shock. But it really isn’t your imagination.

The economic crisis, nearly a decade on now, has been global in scope — working people most everywhere continue to suffer while the one percent are doing just fine. One measure of this is wages. A newly released report by the Organisation for Economic Co-operation and Development finds that median wages in the OECD’s 35 member countries are still below where they were in 2007. For the bottom 10 percent of wage earners, the news is worse; wages for this bottom decile have declined 3.6 percent since 2007. But wages have risen for the top 10 percent.

Graphic via the Institute for Policy Studies

Graphic via the Institute for Policy Studies

The report on wage inequality by the OECD, the club of the world’s advanced capitalist countries and a few of the biggest developing countries, also found that inequality has increased in most of those countries. No part of the world has been immune. The report, “Income inequality remains high in the face of weak recovery,” states:

“The crisis has not only heavily affected the number of jobs but also their quality. … Even in countries where labour market slack has been re-absorbed, low-quality jobs and high disparities among workers in terms of work contracts or job security weigh heavily on low-earning households and contribute to maintaining high levels of income inequality. Wages have stalled in most countries, including those that were largely spared by the recession (e.g. Japan) and fallen in those hard hit (e.g. Greece, Portugal, Spain, and the United Kingdom).”

Chile and Mexico are the most unequal countries among the OECD members, followed by the United States, as measured by the gini coefficient. Iceland, Norway and Denmark are the least unequal. (The gini coefficient, the standard statistical measure of income distribution, is equal to zero if everybody has the same income and to one if a single person takes all income.) To put that scale into some tangible form, Iceland’s gini coefficient is 0.24 and Chile’s is 0.46.

Global inequality worse than any country’s

The world’s most unequal country is South Africa at 0.65. Calculating this scale on a global basis gives a better idea of the scale of inequality but is a difficult statistic to find. One measure, as calculated for a United Nations Food and Agricultural Organization paper, estimates the world gini coefficient in 2005 was 0.68, significantly higher than in the 19th century but a bit lower than it had been in 1981. That’s higher than South Africa. The Economist, crunching data from several sources, estimates a global gini coefficient of 0.65 in 2008, a very slight dip from the 1980s peak.

Global inequality has very likely worsened since but no more recent statistics appear to be available.

Rising inequality has been particularly acute in the global center of world capitalism, the United States, and a quick examination of trends there are useful as capitalists elsewhere seek to emulate the new U.S. gilded age. Those at the top of the pyramid are grabbing ever more. The Economist reports:

“Including capital gains, the share of national income going to the richest 1% of Americans has doubled since 1980, from 10% to 20%, roughly where it was a century ago. Even more striking, the share going to the top 0.01%—some 16,000 families with an average income of $24m—has quadrupled, from just over 1% to almost 5%. That is a bigger slice of the national pie than the top 0.01% received 100 years ago.”

Another new study, by economists Thomas Piketty, Emmanuel Saez and Gabriel Zucman, found that the average pre-tax income of the bottom 50 percent of U.S. adults is flat since 1980 in inflation-adjusted dollars — and this includes government transfers, other public spending and the value of job-derived fringe benefits — and thus the share of national income going to the bottom half of United Statesians declined to 12 percent in 2014 from 20 percent in 1980. The top one percent, meanwhile, hauled in 20 percent of income in 2014. Another way of looking at this inequality, the authors write, is that the top one percent of U.S. adults earned on average 81 times more than an adult in the bottom 50 percent. This ratio was 27 times in 1980.

The top of the pyramid does well around the world

To zero in on the tip of the pyramid, the U.S. Internal Revenue Service released a report this month on the 400 tax returns showing the highest incomes reported to it. Those 400 taxpayers reported an aggregate income of $127 billion in 2014 — a fourfold increase in inflation-adjusted dollars since 1980. Those 400 taxpayers by themselves accounted for 6 percent of all interest income and 11 percent of all capital gains (profits from financial assets such as stocks and bonds). To put that in perspective, 149 million tax returns were filed in the U.S. in 2014. Stock-market bubbles and other forms of financial speculation truly are the province of the super-wealthy.

In Canada, Statistics Canada reports that, in 2013, the top one percent grabbed 10.3 percent of income; the average Canadian in this grouping received $450,000 that year. In Britain, the top one percent have doubled their income since 2005, collectively adding another £250 billion to their wealth. Meanwhile, a fifth of Britons live below the poverty line and life expectancy in some areas is lower than in many developing countries, The Independent reports. Australian inequality has not yet reached the above levels, but is getting wider — the percentage of total Australian income grabbed by the top 0.1 percent there has more than doubled since 1980.

Again, nothing here is going to make you fall off your chair in shock. The question becomes: What will we do about all this? This is the internally logical result of the development of capitalism — the upward distribution of income as exploitation accelerates through work speedups, layoffs, movement of production to low-wage havens and the panoply of deregulatory measures resulting from corporate capture of governments.

So-called “free trade” agreements, with their use of clauses enabling multi-national corporations to use secret private tribunals controlled by their lawyers to overturn laws they don’t like, are an exemplary example of the processes used to ratchet up inequality, even if but one of many manifestations. Capital is international and our resistance to it must be international as well. The rise of far right and even fascist movements across Europe and in the United States, decked in the cloaks of nationalism and fake populism, is all the more dangerous because the scapegoating that is always front and center in such movements deflects attention from the real problems.

If the beginning of the end of capitalism is upon us — admittedly something that none of us can yet be certain of — then the need to build movements that can move societies toward a better world is all the more a necessity. Even if the final decay of capitalism has arrived, that decay is likely to unfold over decades unless a global Left movement, uniting the variety of social and environmental movements and struggles across borders, can speed up the process. The only alternative is for inequality to get worse and the repression necessary to impose that inequality to get still more severe.

Regulation of financial industry is history if Trade In Services Agreement passes

The most secret of the international “free trade” agreements being negotiated around the world is the Trade In Services Agreement, which also might be the most draconian yet. If TISA were to go into effect, regulation of the financial industry would be effectively prohibited, privatizations would be accelerated and social security systems would potentially be at risk of privatization or elimination.

The Trade In Services Agreement is multi-national corporations’ backup plan in case the Trans-Pacific Partnership and the Transatlantic Trade and Investment Partnership are not brought to fruition. It is being promoted as the right to hire the accountant or engineer of your choice, but in reality is intended to enable the financial industry to run roughshod over countries around the world.

Protest against the Trade In Services Agreement

Protest against the Trade In Services Agreement

TISA is being negotiated in secret by 50 countries, with the unaccountable European Commission representing the 28 EU countries. Among the other countries negotiating are Australia, Canada, Japan, Norway, Mexico, New Zealand, Switzerland, Turkey and the United States.

Earlier leaks have revealed that Internet privacy and net neutrality would become things of the past under TISA. European rules on privacy, much stronger than those found in the United States, for example, would be eliminated. Further, any rule that in any way mandates local content or provides any advantage to a local technology would also be illegal, locking in the dominance of a handful of U.S. Internet companies.

The latest snapshot of the ongoing TISA negotiations is provided by WikiLeaks, which released several chapters on May 25.

Say goodbye to your retirement

Among the portions of TISA published by WikiLeaks in its latest publication is the financial services annex. Articles 1 and 2 of the annex are unchanged from an earlier leak in 2014 — there are no limits on what constitutes covered “financial services.” Article 2 specifically references central banks, social security systems and public retirement systems. It is unclear how these would be affected, but it is possible that TISA could be interpreted to mean that no public or other democratic check would be allowed on central banks and that public systems such as Social Security might be judged to be illegally “competing” with private financial enterprises.

Financiers around the world would dearly love to get their hands on social security systems, a privatization that would lead to disaster, as has already been the case with Chile, also a TISA participant. Chileans retiring in 2005 received less than half of what they would have received had they been in the old government system.

Some of the provisions in TISA’s financial services annex includes:

  • Requirements that countries must conform their laws to the annex’s text (the U.S. and EU are proposing the most draconian language) (annex Article 3).
  • A prohibition on “buy local” rules for government agencies (Article 7).
  • Prohibitions on any limitations on foreign financial firms’ activities (Articles 9 and 12).
  • Bans on restrictions on the transfer of any data collected, including across borders (Article 10).
  • Prohibitions of any restrictions on the size, expansion or entry of financial companies and a ban on new regulations, including a specific ban on any law that separates commercial and investment banking, such as the equivalent of the U.S. Glass-Steagall Act. Only one country, Peru, opposes this. (Article 14).
  • A provision that purports to allow protection for bank depositors and insurance policy holders, but immediately negates that protection by declaring such duties “shall not be used as a means of avoiding the Party’s commitments or obligations under the Agreement” (Article 16).
  • The standard language on dispute settlement: “A Panel for disputes on prudential issues and other financial matters shall have all the necessary expertise relevant to the specific financial service under dispute.” The effect of that rule would be that lawyers who represent financiers would sit in judgment of financial companies’ challenges to regulations and laws (Article 19)
  • A requirement that any government that offers financial products through its postal service lessen the quality of its products so that those are no better than what private corporations offer. It is possible this measure could also threaten social security systems on the basis that such public services compete against financial companies. (Article 21).

Rules designed to force privatizations

Some of those article numbers have changed since the earlier financial services annex leak; one change is the disappearance of an article that would have required countries to “eliminate … or reduce [the] scope” of state enterprises. But that may be because there is a chapter with more stealthy language devoted to the topic: The TISA annex on state-owned enterprises.

The annex on state-owned enterprises would restrict their operations, requiring they be operated like a private business and prohibiting them from “buying local.” Furthermore, governments would be required to publish a list of state-owned enterprises, with no limit on what information must be provided if a corporation asks. Article 7 of this annex would enable any single government to demand new negotiations to further limit state-owned enterprises, which would give the U.S. the ability to directly attack other countries’ state sectors or to demand privatizations in countries seeking to join TISA.

Jane Kelsey, a University of Auckland law professor who has long studied “free trade” agreements, notes that these TISA provisions are modeled on the Trans-Pacific Partnership. She writes:

“The goal was always to create precedent-setting rules that could target China, although the US also had other countries’ SOEs in its sights – the state-managed Vietnamese economy, various countries’ sovereign wealth funds, and once Japan joined, Japan Post’s banking, insurance and delivery services. All the other countries were reluctant to concede the need for such a chapter and the talks went around in circles for several years. Eventually the US had its way.”

The substitution of language unambiguously requiring elimination or shrinkage of state-owned enterprises with less obvious language may be a public-relations exercise, so that the specter of forced privatizations will not be so apparent.

Domestic regulations in the cross hairs

Another portion of TISA that has been published by WikiLeaks is the annex on domestic regulation. This annex is so far reaching that it would actually eliminate the ability of governments to regulate big-box retailers. This is one of the goals of corporate lobbyists, a WikiLeaks commentary points out. Referring to a U.S. business group, the commentary says:

“The National Retail Federation not only wants TiSA to ensure their members can enter overseas markets but to ease regulations ‘including store size restrictions and hours of operation that, while not necessarily discriminatory, affect the ability of large-scale retailing to achieve operating efficiencies.’ The National Retail Federation is therefore claiming that a proper role for the public servants negotiating TiSA is to deregulate store size and hours of operation so that large corporations can achieve ‘operating efficiencies’ and operate ‘relatively free of government regulation’ – completely disregarding the public benefit in regulations that foster livable neighbors and reasonable hours of work.”

In other words, behemoths indifferent to the lives of its employees, like Wal-Mart, would have an even freer hand.

Blockupy 2013: Securing the European Central Bank (photo by Blogotron)

Blockupy 2013: Securing the European Central Bank (photo by Blogotron)

The annex on domestic regulation would also require governments to publish in advance any intention to alter or implement regulations so that corporations can be given time to be “alerted that their trade interests might be affected.” The ability of a government to quickly issue a regulation in response to a disaster would be severely curtailed. Environmental rules, even requiring performance bonds as insurance against, for example, oil spills, would be at risk of being declared unfair “burdens.” The WikiLeaks commentary says:

“This draconian ‘necessity test’ would create wide scope for regulations to be challenged. For example, the public consultation processes that are required for urban development are about ensuring development is acceptable to the community rather than ‘ensuring the quality’ of construction services. They would fail the necessity test as more burdensome than necessary to ensure the quality of the service. Environmental bonds that mining and pipeline companies are required to post in case of spills and other environmental disasters are another licensing requirement that would not meet the test of being necessary to ensure the quality of the service.”

New Zealand has gone so far as to propose a rule that might eliminate standards for teachers and for protection against toxic waste. Wellington proposes that regulations in all areas be “no more burdensome than necessary to ensure the quality of the service”:

“Under New Zealand’s proposals, qualifications for teachers in both public and private schools, hospital standards, and licenses for toxic waste disposal are just some of the regulations that would have be reduced to the very low standard of being no more burdensome than necessary.”

You’re not allowed to know what’s in it

Secrecy protocols for handling TISA documents are in place, similar to those of the Trans-Pacific and Transatlantic agreements. These protocols include these requirements:

“[D]ocuments may be provided only to (1) government officials, or (2) persons outside government who participate in that government’s domestic consultation process and who have a need to review or be advised of the information in these documents.”

What that means in practice is that only the corporate lobbyists and executives on whose behalf these “free trade” agreements are being negotiated can see them. Consider that 605 corporate representatives had access to the Trans-Pacific Partnership text as “advisers” while it was being negotiated, with the public and even members of parliaments and Congress blocked from access. Or that the public-interest group Corporate Europe Observatory, upon successfully petitioning to receive documents from the European Commission, found that that of 127 closed meetings preparing for the Transatlantic Partnership talks, at least 119 were with large corporations and their lobbyists.

Perusing government trade office Web sites for useful information on TISA (or any other “free trade” agreement) is a fruitless exercise. To provide two typical specimens, the European Commission claims that “The EU will use this opportunity to push for further progress towards a high-quality agreement that will support jobs and growth of a modern services sector in Europe” and the Australia Department of Foreign Affairs and Trade asserts that “TiSA is an opportunity to address barriers to international trade in services that are impeding the expansion of Australia’s services exports.”

The same sort of nonsense that we hear about other secret agreements. The economic health of Australia, or any other country, is not likely to be dependent on sending more financial planners overseas. What reads as bland bureaucratic text will be interpreted not in ordinary courts with at least some democratic checks, but by unaccountable and unappealable secret arbitration panels in which corporate lawyers alternate between representing multi-national corporations and sitting in judgment of corporate complaints against governments.

Let’s conclude with some sanity. Almost 1,800 local authorities have declared themselves opposed to the various “free trade” agreements being hammered out, including TISA. The “Local Authorities and the New Generation of Free Trade Agreements” conference in Barcelona, attended by municipal and regional governments and civil society groups, concluded with a declaration against TISA, the Transatlantic Trade and Investment Partnership and the Canada-European Union Comprehensive Economic and Trade Agreement. In part, the declaration says:

“We are deeply concerned that these treaties will put at risk our capacity to legislate and use public funds (including public procurement), severely damaging our task to aid people in basic issues such as: housing, health, environment, social services, education, local economic development or food safety. We are also alarmed about the fact that these pacts will jeopardise democratic principles by substantially reducing political scope and constraining public choices.”

That is the very goal of “free trade” agreements. TISA, like its evil cousins TPP, TTIP and CETA, are a direct threat to what democracy is left to us. It promises a corporate dictatorship that in theory raises the level of corporations to the level of national governments but in reality raises them above governments because only corporations have the right to sue, with corporate “rights” to guaranteed profits trumping all other human considerations. We ignore these naked power grabs at our collective peril.