Mar 212013

Stratospheric economics can be a crude and blunt instrument.  In particular, crude:

PIGS (also PIIGS[1]) is an acronym used by international bond analysts, academics, and the economic press that refers to the economies of PortugalIreland and/or ItalyGreece, and Spain – often in regard to matters relating to sovereign debt markets. Some news and economic organisations have limited or banned its use due to criticism regarding perceived offensive connotations.

More background thus:

With the onset of the financial crisis of 2007–2008 several variations appeared.[25] When rendered as “PIIGS”[26][27] some commentators added the additional “i” for comparative purposes to include Ireland from the 2008–2013 Irish financial crisis, with alternatively the “I” which originally referred to Italy occasionally becoming an interchangeable reference to Ireland[28] by some during this period.

Additional permutations gained prominence during the 2009 United Kingdom bank rescue package period and into the European sovereign-debt crisis as some commentators used numerous variations such as PIIGGS[29][30] which includes the United Kingdom (as Great Britain).[31][32][33]



Such acronyms – and their casual usage – clearly indicate a degree of casually unhappy prejudice.  And the current difficulties surrounding the economies of Greece, Italy, Spain and most recently Cyprus indicate that it’s going to be easy for careless voices to continue justifying their unwholesome belief systems for quite a while yet.

Under such an umbrella of attitudes, we might consider the idea that Europe is slowly being “Latin-Americanised” as utterly negative and critical.  But Teivo Teivainen (more here) sees the situation – and the implications of the language used – in a quite different way.  In his short paper, “Desde la crisis hacia transformaciones democráticas”, published this month in Spanish (you can find the .pdf itself here – the paper from page 20 onwards), he describes a series of fairly recent quasi-colonial attitudes which have underpinned Europe’s attitude to South America, and defined the direction in which learning and teaching should take place.  Essentially: the world has everything to learn from Europe, Europe little to learn from the world.

This is a felicitous definition and understanding of where much of economic Europe sees itself – in particular because he provides the evidence to show it is not true.  Whilst we currently see the Europe of German financial power apparently looking to kick Cyprus into orbit, and into the embrace of the waiting Russian bear, we realise just how commonplace these prejudices are: even within Europe, the North now sees the South as irresponsible wastrels, and whilst this may be true about the leaders and their often corrupting behaviours (see Spain, their banks, their mortgage laws and so on), the blame can hardly be placed at the feet of the people themselves.

What’s clear, then, is that the European experience of engagement with economic matters is extremely rarefied.  There are experts who make and shake and there are ordinary citizens who are made and shaken.  And in the ever-increasing circles of crisis which begin to assail us all, there seems little we can do to rescue ourselves from the consequences of acts which the rich and wealthy are in the process of benefiting from, even as the European economies begin to stumble and stutter for everyone else.

So what lessons does Teivainen offer us?  As he points out in his introduction:

[…] Hoy estamos viendo en Europa que nos pasa algo que los latinoamericanos pueden conocer mejor que nosotros. Ello nos abre a la posibilidad de aprender del Sur de una nueva manera.

[…] Today, in the Europe which is happening to us, we are living something which Latin-Americans may know better than ourselves.  This opens up the opportunity to learn from the South in a different way.

And as he goes on to indicate of the pedagogical process which many South American movements and institutions have engaged in:

Un aspecto fundamental en este proceso pedagógico es que los movimientos y algunos gobiernos latinoamericanos están llamando nuestra atención sobre aspectos políticos de lo económico. Al buscar soluciones que enfatizan la participación popular en temas tradicionalmente concebidos como económicos, están haciendo un gran servicio al imaginario de proyectos democráticos en otras partes del mundo.1

A fundamental aspect of this pedagogical process is that movements and some Latin-American governments are drawing our attention to the political implications of economic matters.  As they look for solutions which underline popular participation in subjects traditionally understood to be economic, they are providing a grand service to the collective imagination of democratic projects in other parts of the world.

In essence, the learning process has come full circle.  The skills for dealing with the consequences of an economic deficit – which quite fairly can be argued is as a result of a weighty democratic deficit in both the North and South of Europe (after all, it doesn’t seem to make much difference if you speak English, French or German – on the watch of everyone, the bankers have ultimately got away with financial murder, and have created in the people real hardship) – are no longer ours to proudly give away to the rest of the world.  Europe, and here I include the United Kingdom, is no longer the place where the technical, never mind the moral, high ground can be found.

Yes.  It is true.  We prevented centuries of internecine conflict with the cushion of comfort which the European Union became – but at what cost now as Russia’s Gazprom and Merkel’s Germany appear to both want the carving up of supposedly small sovereign states?

There must, of course, be better ways – and it is Teivainen’s thesis that they already may exist in other parts of the world.  As I suggested a few posts ago, we may yet be able to save the NHS’s principles by looking to the experience of health service provision in the Third World.  So why not understand a more participatory way of agreeing on and defining the economic experience and infrastructures?  What not apply the same ideas to the fundamentals of our societies?

It would be a delicious irony indeed if from colonial times and places past we found the First World’s future salvation.

I’ve already made some slow and uncertain steps in this direction.  With my first Revolution ’13 post not long ago, I suggested we recover the idea of disruptive revolution by asserting it could be both efficient and bloodless at the same time (perhaps, in fact, the former would even require the latter).  And only yesterday, this project came to my attention:


We cherish sustainability: meeting the needs of people now without compromising the ability of future generations to meet their own needs. But today, human activities have exceeded the earth’s natural limits. As a species we have created great inequalities and torn resources away from those yet to be born.

We cherish democracy: the rule of the people, by the people, and for the people. But democracy is undermined by decision-making that is democratic in name only. It is threatened by conflict, apathy, inequality, manipulation and corruption. It is failing to deliver sustainability.

Together, if we take immediate action, we have the power to transform democracy so that it is an engine for sustainability. This Manifesto for Democracy and Sustainability has been developed to guide a global movement for change. As its signatories, we confirm that we want to be part of this movement. What we create together will be part of our bequest to future generations.

  1. Sustainability needs flourishing democracy
  2. Take the long view
  3. Sustainability must be a central goal of governments everywhere
  4. Education must link citizenship and sustainability
  5. Knowledge must be inclusive
  6. Nothing about us without us

So good things are happening out there.  People, ordinary citizens, are finally beginning to see for themselves – in the light of the destruction by ineffective elites of social and economic support networks various – that democratic deficits are not only undemocratic but economically and socially inefficient.

And so we come back to Peter Levine’s two-fold definition of “good democracy”:

  1. Inclusive, yes.
  2. But efficient, too.

So why not let the Latin-American learning paths lead their way?  For by so doing,  we may also one day understand – from those best placed, wherever they find themselves – how to turn grave crisis into the serious opportunities we surely all agree we will need.

Feb 272013

Time to be totally honest about this.  I’m officially diagnosed – have been for most of my life – both epileptic and paranoid schizophrenic.  I’m not quite sure about the second diagnosis – my doctor refuses politely to revisit it any more.  But I have been – and still am – dependent on expensive medication in order that I might function.

Without it, I would at the very least be having multiple fits every day of my life.

This, therefore, has profoundly shocked me – not only shocked me but revolted and disgusted me:

[In Greece, hundreds] of drugs are in short supply and the situation is getting worse, according to the Greek drug regulator. The government has drawn up a list of more than 50 pharmaceutical companies it accuses of halting or planning to halt supplies because of low prices in the country.

More than 200 medicinal products are affected, including treatments for arthritis, hepatitis C and hypertension, cholesterol-lowering agents, antipsychotics, antibiotics, anaesthetics and immunomodulators used to treat bowel disease.

The Guardian goes on to report that:

Chemists in Athens describe chaotic scenes with desperate customers going from pharmacy to pharmacy to look for prescription drugs that hospitals could no longer dispense.

The government list includes some of the world’s leading pharmaceutical companies, such as Pfizer, Roche, Sanofi, GlaxoSmithKline and AstraZeneca. Pfizer, Roche and Sanofi all said a few products had been withheld. GSK and AstraZeneca denied the claims.

So why are the drugs being withheld?  It would appear that traders as well as wider corporate greed are both, once more, at the heart of our problems:

“Companies are ceasing these supplies because Greece is not profitable for them and they are worried that their products will be exported by traders to other richer countries through parallel trade as Greece has the lowest medicine prices in Europe,” said Professor Yannis Tountas, the president of the Greek drug regulator, the National Organisation for Medicines.

I’m truly sorry for the language I’m about to use here but I see no other way of expressing my rage.

On second thoughts, nothing in the English language fully expresses the way I feel right now.


Of course, you’ll be thinking, and I bet you are, Greece is one of those reasonably faraway countries we like to nastily describe as PIGS.  Which, in truth, says far more about ourselves than any unfortunate object of our prejudices.

Only, quite interestingly, this acronym has been expanded on two occasions – and can occasionally be now seen even as PIIGGS.  Yes.  Great Britain is joining the band of merry men and women whose sociopolitical and economic environments do unpleasant things to their peoples in the name of financial probity.  Looking for examples?  Try this one, again from the Guardian tonight:

The acrimonious debate over soaring energy bills and mounting fuel poverty reignited when British Gas – the biggest energy supplier in the UK – unveiled an 11% increase in profits and its parent group, Centrica, promised a £1.3bn handout to its shareholders just months after pushing through an increase in household bills.

Campaign groups warned that 160,000 children had been dragged into fuel poverty by the actions of the big six energy suppliers since 2010, while trade union bosses accused energy chiefs of “creaming off” profits. Dividends of more than £3.5bn have now been paid out by Centrica over the last five years. Anger was exacerbated by confirmation that Phil Bentley, British Gas’s managing director, will stand down with a combined pay and pension package worth more than £10m.

Curious, isn’t it?  After the credit-crunch years, and as all those little shareholders of people’s-capitalism fame found their investments slipping like sand through their once expectant and optimistic fingers, so the big corporate blue chip companies – riding out the storm – have begun to handsomely reward not only their managerialist executives but also their cleverly deep-pocketed gargantuan corporate investors.

As people’s capitalism went into reverse gear, so the corporates learnt to bide their time.

As people’s capitalism lost the support of the people, so the brutal corporations remembered how to keep their resources ever closer to their (war) chests.

And all of the above on the backs of 160,000 children.

All of the above on the backs of the most poverty-stricken.

Brute corporate force, exerted brutally – is this really what we deserve?

Transnational pharmaceutical companies which hold cancer patients, schizophrenics, heart-condition sufferers and people with depression to the kind of ransoms only bastard kings would ever consider.

Energy conglomerates which pile the pain on every winter as they force the poor and elderly to choose between food and fuel.

Where the HELL is your HUMANITY, for Christ’s sake?  Where the HELL is your SHAME?  Where the HELL did you leave your CHARITY?

Where the HELL do you THINK this will LEAD you in the end?

Or IS this HELL we already inhabit?

Mar 182012

In response to a somewhat rambling post from myself, Paul pointed out the following:

No, it’s not true that 97% of British Aid goes to tax haven domiciled equity funds. CDC is not aid, but the government’s investment arm. Formed in 1948 (as Colonial Development Coporationn, hence the dropping of the full title), it has around 3bn invested at the moment worldwide and is a fund of funds. Sarah is certainly right to say that there are major governance problems with it, and for more detail read her submission to the parliamentary enquiry

But CDC is small compared with overseas aid overall, the operational budget for which is roughly 10bn per year. This is managed properly, and increasingly (as it should be) via developing countries’ government bodies. It’s not perfect, of course, but it’s a lot better than is made out by the right wing press.

I hope CDC and the aid budget don’t get mixed up in people’s minds.

Yesterday, at #econ99, I certainly did get the impression that people believed there was essentially very little difference between British aid and what CDC were administering.  Perhaps – as Paul clearly indicates – there are finer details which make an essential difference patent.  But I still have, as yet, to clearly understand them.

And just to clarify the point I was also trying to make.  Kathryn helpfully pointed me in the direction of this myth about donating aid:

Myth 4.   ‘Aid is useless due to corruption in the governments who receive it’

The grain of truth:

Corruption is a big problem in many developing countries and it can sometimes lead to aid money being diverted from its intended purpose.

The full picture:

While corruption can lessen the impact of aid, it is important to understand that most aid money gets to its proper destination. This is especially true for money that is not given to a foreign government, but is instead directly spent on an aid project. Even taking corruption into account, you can realistically hope to greatly improve the lives of thousands of people through your donations, especially if you donate to programs which don’t involve any valuable goods for corrupt officials to divert. Moreover, if you are particularly concerned about the effects of corruption, then you can donate to programs which fight corruption in developing countries.

The point I was making wasn’t, however, that there is a big problem of corruption in developing countries.  The point I was making was that people in developed donor countries were using instruments such as tax havens to administer government and other funds, many investors of which remained absolutely anonymous, to create massive infrastructure projects which benefited the corporations and funds involved to the long-term apparent detriment of the client countries:

  • firstly, because the funds refused to carry out sustainability and environmental impact studies – and even, in some cases, attempted to game the system (one example given was the recent construction of a huge coal-fired power station in a southern African state, whilst at the same time a small wind farm was constructed in order to allow an essentially fictitious trade in carbon emission offsets to take place; another example was a mine of some kind which paid zero corporation taxes due to its tax-havened nature and, instead, contributed a highly popular though particularly miserly donation to a local HIV hospital);
  • secondly, because of their legal figure and nature, these private equity funds exist for the lifetime of their donor projects – after this time, say five or ten years, they close down; all risk and liability is avoided; the investors withdraw their funds and profits to move on to the next project; and any issues with the essence of the project in question – pollution, quality of construction, injuries or deaths which take place in the succeeding years – then fall not on the initiators (ie the private equity funds – for they no longer exist) but on the governments of the corresponding nation states which end up having to pick up the tab for anything and everything which goes wrong;

So the problem – the problem I’m focussing on here at least – isn’t corrupt governments in foreign countries but entirely legal financial instruments which have polluted and invaded the developing global south for decades from investors in the developed world.

Investors who travel the globalised economies of the planet and own every piece of real estate they can.

Not only in the south but now in the Icelands, Greeces, Spains and Irelands of the north.

And so the circle comes full circle.  Private industry has been paying off political parties since time immemorial.  The results of New Labour’s compromises with such industry are now bearing full fruit.  From the 2006 NHS act to PFI-funding exercises everywhere, the Tory-led Coalition is only putting into practice the philosophies which New Labour helped to properly enshrine in law and UK political culture.

As I grapple inexactly with the concepts of British aid, I begin to sense that the financial chicken comes home to roost.  Whilst our own economies sustained an illusion of economic strength, we felt ourselves relatively safe from the self-interest of the rapacious tax-havened private equity funds.  But now many of the developed world economies find points of reference and similar sadness to the global south, perhaps the time is coming when the development injustices apparently imposed on struggling democracies in the south will become part and parcel of our northern European mindsets: our English NHS, Legal Aid and education systems, welfare benefits, police services and a whole raft of other taken-for-granteds we used to believe we had a right to.

For this is nothing more nor less than the total financialisation of civic society.

And as we pay homage to the benefits of driving a world economy exclusively in terms of profit margins, 99.9 percent of us will become not richer in the least but evermore poorer because of these selfish and anti-human ways of seeing and doing.

Apr 302011

Takes one to know one, mate.  The other day I kind of berated the sensitive left for allowing David Cameron to so easily bait them with his “Calm down, dear” remark – and thus allow media attention to be diverted from the underlying news of import: this being that the NHS is going to be required to make savings of 37 percent over the next few years.

Today, however, I’m inclined to think I ought to have sided with the sensitive left from the start.  A pattern is beginning to emerge, methinks.  Don’t believe me?  Well, the Mirror has another story, coming my way today via Brian’s Facebook profile, which makes me wonder if this political incorrectness is actually designed – whether in a coordinated manner or, alternatively, much as an intuitive flock of casually evil birds changing direction in mid-flight – to destroy the niceties of British life from the top-down.  From “dears” and “sluts” to “PLEBS” and “PIGS”, Cameron, Osborne and company’s main responsibilities now seem to reside in generating a barrage of disrespectful language and prejudices – presumably softening us up and preparing us for far worse things to come.

But I think it goes deeper than that.  I think this is actually turning out to be what we might call an example of “referred politics”.  In much the same that “referred pain” may confuse us as to its source, so “referred politics” deliberately aims to confuse us as to its true focus.  Easy targets are as old as the history of politicking itself, of course.  So calling women “dears” and “sluts” and the unskilled “plebs” (historically speaking, rather inexactly it would appear) is actually par for the course.

What does seem to me, however, a far more serious matter is how the right in Britain appear to have finally realised that the Labour Party and its wider movement is just too resilient, just too big, to be brought down with a frontal assault.  Let us be clear, here: the Tories have a long-term strategic objective to destroy Labour – just as New Labour aimed to do the same to the Tories.  But where New Labour was generally quite honest about this as a goal, the Tories have decided they must first – quite indirectly – destroy institutions and structures that may be interpreted (consciously or subconsciously) as representing socialism as its best and most effective.  And thus we come to the “referred politics” I mention above.

This they have been doing in fits and starts ever since they came to power last year: selling off publicly owned woodlands didn’t work because, with all the land already in private ownership anyway, this was just one brazen step too far for even the patient and long-suffering British public to accept.  Increasing tuition fees by a multiple of three got through, however, because New Labour had already foolishly initiated the slippery slide towards prior wealth determining future opportunities to learn beyond compulsory education – and in any case we were talking about students here: subjects of this unhappy realm who every tabloid-reading repository of facile prejudice knows generally have it easier than the rest of us …

Meanwhile, the disabled clearly live off both the state and the rest of us; don’t do a decently productive stroke of work from day to day; and don’t deserve – in this Darwinian arc of economic practice – the support of anyone lucky enough never to have been touched by disability.

And then there’s the NHS.

A clearer example of “referred politics” we cannot find.  Whilst Ed Miliband and his team put up a decent fight at most PMQs, even finding time to grin at the foolishnesses of the opposition, the Labour Party as an organisation is as resilient and coherent, as broad a broad church, as it has ever been.  So.  Down that way we cannot dismantle.  As I pointed out earlier, frontal assaults will achieve nothing here.  Far more effective, surely, as a way of undermining Labour positivity, is the slow but inevitable grinding down of recognisable achievements such as the NHS, such as the Forestry Commission, such as the BBC (once hallowed arbiter of “objective” journalism but now little more than an appendage to official government agendas) – all examples of sensible socialism, all to be wounded fatally not because they are broken but simply because the right now can.

This is the politics we now have to deal with and understand.  As the right gratuitously aim to deconstruct, simply because gratuitous signals and equals the victory of raw power over sense and sensibility, we must work out a way of understanding that Labour as a political entity is the object of all their unhappy antics – yes, the right wish to destroy institutions like the NHS, I don’t deny that; but not primarily because they want to destroy the NHS: it is, rather, far more likely that their final and ultimate objective is to wipe the Labour movement off the face of Planet UK – and this they can achieve far better through the soft focus of this “referred politics” I describe.

In a sense, we only have ourselves to blame.  New Labour’s avowed aim was to exact the same terrible revenge on the Tories for all the ills of Thatcherism.

If only our politicians could follow their voting publics a little more closely: live and let die a little less cruelly, live and let live a little more kindly.

The world would then be a much better place.

Don’t you think?

Apr 092011

No.  It’s not a new observation.  But the fact that people don’t insist on making it, each time we hear the term PIGS, does rather infuriate me.  I’ve never heard the French-UK relationship within the European Union called the FUKs, though many a time in recent years it might quite easily have been described thus – so why do we insist on allowing the term PIGS to pervade our airwaves and newsprint?  By what right do these ivory-towered economists and lazy churnalists reserve themselves the luxury of spreading their special blend of prejudices?

And therefore, to the wider implications of my initial question: does economics – or at least some of its more influential practitioners – inscribe casual racism as part and parcel of its modus operandi?

I’m not the best person to answer this question.  I did study the subject at school – and rather fell in love with the writings of J K Galbraith, whose “El nuevo estado industrial” (originally written in English) I have on the Spanish part of my bookshelf.  This book has influenced me muchly in how I perceive the modern corporate landscape – so when I spit and fume over the subject of corporate socialism, please do understand that I have intellectual reasons as well as the more emotional.

And I could never imagine someone like Galbraith using the term PIGS.  Could be wrong, mind – and if so, I’d be mightily disillusioned …  But I do have to recognise that my knowledge of economics is glancing at best – and there are lots of things clever people say in the context of their fields of expertise which refuse to abide by the normal rules of engagement of a wider society.  Even one’s heroes can get themselves into holes on occasions.

And they do say a little knowledge is dangerous.  On the other hand, those that tend to say this are people who prefer to reserve knowledge for themselves and for their own inner circles.  So we come back to our starting point and the importance of prejudice.  As Paul quotes for our benefit whilst rescuing from academia the following observations by some good clever guys:

The recent financial crisis revealed that the judgment of private rating agencies can have a huge impact on economic outcomes – and that it can be utterly mistaken.

Given these past failings concerning structured products on US mortgage loans, it would be surprising if market participants again rely on the same rating agencies when assessing the default risks of governments in the current European sovereign debt crisis. And it could even be cataclysmic if these sovereign debt ratings were driving government bond yields irrespective of the development of the underlying economic fundamentals.

This would put the fate of entire nations into the hands of private agencies, since bad ratings which are not in line with economic fundamentals could be justified ex post via self-fulfilling prophecies.

Then even innocent lambs could be turned into and treated like pigs.

Racism is bad – whoever is caring to inject it into the body social.  Just because you sit safely behind your computer screen in your glass tower doesn’t give you the right to forget how people feel.  And just remember this: we all reveal ourselves through the prejudices we cannot fail to hold.  The only way forward is to be prepared to recognise them for what they are and apologise each time we commit an error as a result of their operation.

Eradication is not an option here.  Honest recognition and humility, however, may help improve our sometimes fragile relationships with each other.

The term PIGS exhibits none of the latter.

When, then, will economics learn to number-crunch with an appropriate degree of humanity?