Monday 18 June 2018

Global (in)Justice


Last Saturday I attended in York the AGM of Global Justice Now (GJN), fancy new title of the World Development Movement (WDM) of which I've been a member and supporter since its inception in the 1960s.

One of the speakers in  the "workshop" sessions which followed the meeting was Jason Hickel, author of "The Divide".  Thankfully he kept his "Powerpoint" presentation down to one slide, which made the information it gave all the more telling.

Here's a summary:

 Annually the "Rich North" transfers  around $130bn  to the "Poor South" in Aid.(of which the UK's contribution is around $30bn).

Annually the "Rich North" sucks out of the"Poor South" as follows:

  • $60bn in patent licenses as a result of TRIPs;
  • $200bn in interest payments;
  • $480bn in repatriated profits (a greater amount that FDI);
  • $875 in trade mis-invoicing (GFI);
  • $875 in transfer pricing;
  • $700 in lost export revenues (through WTO rules):
  • 571bn through climate change (CVM);
  • $2.5trn  in "unequal exchanges."
I do not actually understand all of the negatives, and suspect they may be exaggerated.  I hope soon to generate the energy to read the book.  But the message that the way capitalism and trade are organised enables the rich world to take far more from the poor word than we give back with our paltry amount of aid is clear..

Or to out it another way, international trade works very well for international conglomerates, their directors and shareholders, and less well for people of poorer countries.  There needs to be a change, and GJN is one of the campaigning organisations working towards one.

All power to our elbow.

You can obtain more information and join the campaign via: http://www.globaljustice.org.uk/  

We may even bribe you with a free copy of the book

Key:

TRIPs: Agreement on Trade-Related Aspects of Intellectual Property Rights
FDI:  Foreign Direct Investment
GFI:  Global Financial Inequality
WTO: World Trade organisation
CVM:  Climate Vulnerability Monitor
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4 comments:

  1. Anonymous18 June 2018 at 20:17

    I, too, don't understand what all those categories are, but if this is true, then how come the poorest countries have got so much richer over the last fifty years, the last century?

    Surely if it were true that the the rich countries take out more than they give, the populations of the poorest countries would be getting poorer ever year, instead of, as is in fact the case, getting richer every year?

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    1. Peter Wrigley19 June 2018 at 15:41

      Well, I suppose they have to peddle faster and faster to keep ahead.

      Much of the improvement in "third world" living standards in the past three decades is due to the very high rate of economic growth in China. Africa has achieved much less. I think there is not doubt that, given the way the world economy is organised, we take out much more than we put in.

      Measures of progress depend on the bench-marks. "Absolute poverty" used to be defined as living on less than $US1 per day, which I think is now upgraded to about $US1.60. This, I think,(I can't check as I've lent the book to someone else) is the measure that Hans Roslin uses in "Factfulness" to support his view that the world is getting a much better place.

      Hickel argues that $US5 per day is a more realistic measure, which you may feel is changing the goal posts in order to emphasise his point. On that measure, in Africa at least, things are at best remaining stable and in some areas getting worse.

      Wars are one of the main causes of poverty, and selling arms enables if it doesn't actually promote them. The case for stopping the export of arms is, in my view, unanswerable.

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    2. Anonymous19 June 2018 at 23:03

      I can't immediately find statistics broken down enough to check, but it does seem at least plausible that most of the reduction of poverty has happened in China, and Asia generally, and much less in Africa.

      However I suppose this gets to my biggest problem with the article, which is that it only counts aid as 'transfers' in one direction. Whereas a far bigger way in which the standards of living of the poor get raised is not aid, but trade. That's why most of the rise in living standards has happened in China and the rest of Asia: because those are the countries that have embraced global capitalism, which is the best system for lifting people out of poverty ever invented.

      In order to repeat the success in Africa we need to do the same thing and get Africa integrated into the global capitalist system. Only then will we complete the job that has been begun in Asia of making sure that no one is poor. And, yes, it's difficult to get involved in global trade when your country has no stable government or, worse, is in the middle of a civil war, so yes, that has to be sorted out (though as for our exports, I doubt many of the factions involved in civil wars in Africa can afford to buy the latest BAe drone systems; I suspect their weapons are mostly old ex-Soviet gear they get on the black market).

      (When looking for stats on this I kept coming across things that advertised that they had found 'the causes of poverty', which is a bizarre idea. Poverty doesn't have a cause. Poverty is the natural state of humankind. Thousands of years ago we were all poor, and if we stopped generating wealth, we'd pretty soon all be poor again. Poverty is entropy: the natural state that all economic systems tend to. The correct thing to analyse is not the causes of poverty, but the causes of wealth, and the best one of those is, you guessed it, global capitalism.)

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    3. Peter Wrigley20 June 2018 at 18:01

      Thanks. we have a large measure of agreement here.

      I have always recognised, and taught, that trade is far more important than aid in raising living standards (along with good governance, recognition of human and civil rights and a measure of equality of participation).

      One trouble is that trade rules are heavily skewed in favour of the already developed nations. My understanding may now be a bit out of date but when I was teaching about these things the QUAD (EU,US, Canada and Japan, I think) dominated the WTO and often produced rules which the poorer countries had no option but to accept (even if they could actually afford to send delegates.) Practices such as higher tariffs against manufactured goods than for raw materials, , and the "race to the bottom" by the poorer countries in lowering profits taxes in order to lure FDI were just two of the things that inhibited development.

      You are right about poverty rather than prosperity being the natural order of things. I would suggest that applied not just "thousands of years ago" but that it persisted until about four hundred years ago, when various developments enabled economies (often with Britain in the lead) to escape from a vicious circle of poverty to a virtuous circle of affluence.

      And you are right that we must not take its continuance for granted. We have to work at maintaining it, and extending it to the rest of the world.

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