Showing posts with label economics. Show all posts
Showing posts with label economics. Show all posts

Thursday, 28 May 2020

Long Shadow Of The Locust


Imagine this scenario.

You’re a farmer in a country, let’s call it, oh, just let’s say it’s called India.

You don’t have much of a farm. In your grandfather’s time it might have been quite large, and fertile, and the rains irrigated it plentifully every summer so that his crops never died of thirst. Even if there was a year or two when the monsoon rains failed, there was a tube well and more than enough groundwater to ensure that the harvest wasn’t a failure. And whatever your grandfather produced, the government guaranteed that it would buy it at a certain price, known as the minimum support price, so he knew that even if he couldn’t sell it at a bigger profit in the open market, he could still depend on a certain guaranteed level of income, just so long as his crops continued to grow.

But that was then.

Things happened. First, with increasing health care standards, no matter how imperfect, more of your grandfather’s offspring lived to adulthood than in his father’s time. So your grandfather’s farm was divided among your father and uncles. And, in time, your father married and bred, and more of your siblings survived to adulthood than in your father’s generation, which meant that his share of the farm was divided again between you and your brothers. So, you ended up with only a tiny fraction of your grandfather’s farm.

Meanwhile, other people have been breeding too, and their children, too, have been surviving to adulthood in hitherto unprecedented numbers. So, to house them and to supply food for them, and to rip coal and oil and minerals out of the ground for them, forests have been chopped down; and to supply the thirsty cities with water, rivers have been dammed and their water piped to said cities. Chimneys have been spouting smoke from factories, because the government has decided that unchecked industrialisation is the only path to “growth” – and also because the corporations owning those industries are important sources of funds for elections and to buy up politicians afterwards. All this has done enough damage to the climate that the rain has grown increasingly erratic and unreliable, so that you’ve had to rely more and more on your tube well to irrigate your patch of field. The groundwater level, in consequence, has been falling, and falling, and you’ve had to borrow money to dig your tube well deeper and deeper – and still the water continues to fall.

All this while, your own expenditures are climbing. Things are more expensive. Your tiny patch of field doesn’t bring in enough to pay the bills unless you begin to plant multiple crops a year. This is turn exhausts your soil, leaching out the fertility, which earlier used to be renewed because your grandfather could afford to leave it fallow between planting seasons. So you have to buy huge amounts of fertiliser as well as farm machinery, because the old ways are no longer productive enough. Pests invade your field, and the pesticide you used to use no longer work because the pests have developed resistance. So you have to buy more expensive pesticides. Because the pesticide, fertiliser, and farm machinery are not free, you have to borrow money to buy them, so you slip into debt.

Then the government decides on “economic liberalisation”, which means that it starts systematically pandering to the corporations that provide it with money. Suddenly, your minimum support price is no longer paid on time, or is simply abolished altogether. You can’t pay your loans back to the banks from where you took them. They threaten to foreclose on your land. So, in order to pay them off, you borrow again, this time from the village moneylender. And then an unseasonal storm, which happens more and more frequently, comes along and kills off your entire harvest.

You think you have problems? Your problems are just beginning.

Because there isn’t anything like enough money coming in from your farm to pay your bills and even the interest on your loans, in between plantings and harvests you need some other income. So you look for work, as a labourer or whatever else you can manage. Work isn’t available in the vicinity, so you have to travel long distances, often to the other side of the country – and it’s a big country – to look for work. In a desperate attempt to make ends meet, you hire yourself out as a labourer for some months, rush back home, harvest and plant, try and sell on the market, try to keep your head above water, and then rush off to work as a labourer again.

Meanwhile the cost of machinery and fertiliser keeps increasing, the groundwater levels keep dropping, your debts keep piling up, some foreign company called Monsanto cajoles and bribes the government to compel you to buy seeds from it – seeds that cease to grow after one season, so every year you need to buy seed stock from Monsanto again, instead of using leftover seed from the previous year to plant again. And it begins to rain when it shouldn’t, drowning your crops, and it’s bone dry when it should be raining, so that what you have left withers to straw poking through cracked brick-hard soil. And the government, which you voted for, doesn’t care. It wants to grab your fields to hand over to its capitalist cronies for factory farms or just factories, and the worse things get for you, the better said capitalist cronies like it.

You see where we’re going with this?

Then, just when you think things couldn’t get worse, they do.

You’re in the city, working at a temporary job as a construction worker, and you need to come back to your tiny farm because the harvest is due. But just as you’re about to, suddenly the government imposes a curfew because of some foreign disease that is supposedly killing people left and right. Your employer dismisses you and doesn’t even give you your back pay, on the grounds that he has no money. You can’t even step out into the street without being beaten by the police, even to buy food; and, if you do manage to sneak out of the city, you don’t have any way of getting home. There are no buses, no matter what the politicians claim, no trains, nothing. So, with no other option, you begin walking home along the highways, under the grilling midsummer sun, while the government spends taxpayer money to bring in rich Indians who abandoned the country for greener pastures abroad and suddenly find themselves unwelcome in their new homelands.

Meanwhile, your brother, who’s stayed back on the farm, has his own problems. The harvest can’t be sold because the markets and distribution systems are all shut because of the government’s lockdown. There are no preservation or storage facilities, so the produce can’t even be kept relatively fresh, and, even if there were, he couldn’t afford the fees. So what option does he have except to dump the stuff in the fields to rot in the sun?

None.

It isn’t the worst yet, oh, no.

While all this was going on, the climate worldwide has been going to hell, too. Forests have been disappearing, fossil fuels have been filling the skies with smoke and carbon dioxide, ice caps have been melting, the ocean currents have been changing as a consequence, and scientifically illiterate imbeciles have been pretending all of this is a hoax. Evaporation from oceans that are warmer than they used to be has warmed the air above and filled it with moisture. The warm air, rising, has drawn in colder air from around it to warm in turn, pick up moisture, rise, and bring in yet more colder air, until you have a gigantic vortex of rotating cloud and wind, spiralling towards land, bringing not just destruction but heavy rain wherever it goes. This thing is known as a cyclone.

This cyclone hits, shall we say, another – possibly fictional – country called Saudi Barbaria, which is mostly desert. It dumps so much rain that actual, literal lakes develop in the desert. This sudden moisture causes an equally sudden proliferation of vegetation. And, before the sun has an opportunity to parch this vegetation to mummified hay, yet another cyclone comes along and dumps another few thousand tons of water on the desert, creating even more greenery.

Great, right? Green is good, right?

Wrong.

There are animals living in that desert, notably insects, those most adaptable of all creatures. One of those insects is a, usually inconspicuous, middle-sized short-horned grasshopper called Schistocerca gregaria. This is a rather well-known insect; it’s been featured in no less than the Bible and the Koran, and you may even have heard of it under its common name.

Schistocerca gregaria is also known as the desert locust.

Locusts are grasshoppers. Grasshoppers eat vegetable matter. When there is a lot of vegetable matter, the grasshoppers lay a lot of eggs, which hatch to form many more grasshoppers, which live to grow to adulthood because of all that easily available vegetable matter, and lay more eggs, which give birth to more grasshoppers, which...

You get the idea.

And then there are so many grasshoppers that they begin to eat all the vegetation. And the cyclones don’t keep coming, so the lakes dry up, as the desert returns to its usual state, and the greenery, without water, begins to die off. So the grasshoppers crowd together to get at whatever little vegetation remains, because they don’t want to starve to death any more than you do. And when they get packed in tightly enough together, they bump against each other, just as you would in those crowded unreserved railway compartments in which you’d travel back to your hometown from your construction job in the city.

Now, unlike ordinary grasshoppers, locusts – there are many species, all of which are short-horned (that is, with short antennae) grasshoppers – do a special thing when there are a lot of them in such close proximity that their hind legs bump each other. Their biochemistry changes, with increased production of the hormone seratonin. Their bodies change colour, in the case of Schistocerca gregaria to yellowish pink and black. 




Their habits change – normally night-flyers, they now switch to flying during the day, and instead of maintaining distance from each other, they now actually seek out each other’s company. This is known as the gregarious or migratory phase. Soon, the massive agglomeration of these insects takes off in search of new food deposits to devour.



And, because of that global warming, there have been unseasonal rains here and there, so the locust swarms have plenty of food. They land, eat, have sex, lay eggs, and, with their ranks swollen by the new generations, set off again on their mission of conquest, flying up to a hundred and fifty kilometres a day. Oh, and they can cross oceans too, because when they get tired, they rest on the floating corpses of their friends who died of old age or exhaustion and float, bobbing on the waves.

Now these locusts have been migrating east and west for two years, devastating countries with names like “Ethiopia” and “Somalia”, “Yemen” and “Kenya”, which you’ve never heard of. But the government, with its overeducated bureaucrats, has most certainly heard of them. It is aware that two neighbouring countries, let’s call them, for fun, “Iran” and “Pakistan” have been hit hard in recent times. Just the previous year, in fact, Pakistan had some 40% of its crops eaten by locusts, which isn’t a small amount. In fact, a one square kilometre swarm of locusts – which is an extremely small swarm – can eat, in one day, as much food as would be needed to feed, wait for it, 35000 people. Locust swarms can extend over hundreds to thousands of square kilometres.

In reality, locusts are such a menace, and have been such a menace through history, that the United Nations’ Food And Agriculture Organisation (FAO) monitors them closely and warns governments when their countries are about to be attacked. Your own government – the same one that has stopped paying your minimum support price and is having you beaten up for coming out in the streets – knows that the locusts invaded the country last year, but did nothing, claiming that the insect swarm had receded without doing any crop damage.

Well, right now, those swarms are back. They’re back earlier than ever, in greater numbers than ever, and they’re eating their way across the west of the country. In fact they’ve been doing it for some time, but that same government and its tame media, which ignored your existence as long as possible, ignored the swarms too, until they blanketed the city of Jaipur, known for its pink sandstone construction, in a pink blanket of hungry insects. Then, suddenly, the media deigned to notice it. Because it had no choice.



So, to recapitulate.

The agriculture sector had already been devastated by shrinking farms, dropping groundwater levels, irregular and unpredictable rainfall, and cyclones, The government has taken a policy decision to let small farmers die, literally and metaphorically, by neglect so that the farming sector can be taken over by corporate cronies to set up factory farms and car manufacturing plants. Farmers are drowning in unpayable debt that keeps piling up as their land becomes agriculturally unsustainable. And then you’re walking the highways starving after being thrown out of your job without pay, the economy has packed it in, what of the harvest was collected is unsaleable and had to be thrown out to rot, and now a plague of ravening pinkish grasshoppers is eating every bit of vegetation in sight.

Right. Not only was much of this – in fact every bit of it except the COVID-19 outbreak – totally predictable, none of it just turned up overnight. All of this has been developing over years to decades, and the successive, post-1990, governments of India not just ignored it, they actively connived and encouraged most of the worst of it. They, and their paid media prostitutes, actively promoted the idea that the manufacturing industry was the only way to economic “progress”, and, to do this, the farm sector would have to be sacrificed. I remember asking multiple times on internet fora over the years whether people would be expected to eat cars and television sets, and being downvoted en masse every time.

But people cannot eat cars and television sets, and with the economy sliding downhill into the nether doldrums, there is no longer any market for cars and televisions; the vehicle industry has been moribund for well over a year. And the farm sector isn’t doing exactly well for the reasons I’ve already mentioned, so that, for the first time in thirty years, the level of average nutrition is actually dropping in India. And the Modi regime has systematically ignored all of this, including the gigantic locust plague which has been moving towards India for over two years now.

And by gigantic, I mean that this is the largest plague in 78 years. It’s also much more dangerous than any plague of comparable size 78 years ago. Why? For the simple reason that the population of the planet is much, much higher than 78 years ago, and vulnerable areas – east Africa and west and south Asia – are infinitely more stressed than they were 78 years ago. Not to speak of the fact that global warming causes more and more of the flood-drought cycle that promotes swarming, and that two of the worst affected countries, North and South Yemen (I do not consider them to be one country any longer, as a supporter of the now fait accompli South Yemeni independence), have been under invasion and a starvation blockade by Saudi Barbaria and the Imperialist States of Amerikastan since 2015.

Therefore, the chances of famine are extremely high, and, since the Modi regime has shown absolutely no signs of changing its policies, have been growing higher and higher. And now the locust swarm, which is spreading steadily eastward and northward towards the agricultural heart of India, is in the act of delivering the coup de grace.

I have noticed that the Modi regime’s pet media, after a couple of days of finally admitting the existence of the locusts, have suddenly made a point of repeatedly mentioning that the locusts “entered from Pakistan”. I assume that this is not accidental; nothing the Modi regime’s media does is innocent, accidental, or without the acquiescence of the regime. I can only speculate that if the regime fails to halt the locusts through the measures it is now allegedly taking – spraying pesticides from drones – it will move on to accusing Pakistan of deliberately sending the hordes of Schistocerca gregaria over the border to harm India. This would be on a par with the Trump regime in the Imperialist States of Amerikastan accusing China of creating COVID-19, a claim parroted by paid CIA agents on Indian social media.

Speaking of which, the Modi regime – in a desperate and transparent attempt to divert attention from its endless failures – is trying to provoke a border confrontation with China. Except for the fantasy world of Modi’s pet television channels, Republic and Times Now, this is going over like a lead balloon.

Starving people have more immediate concerns than that.

Anyway, if and when the Modi regime decides to blame Pakistan for the locusts, I’ll make it easy on them and give them proof. Here’s your Jihadi Locust, Jihadocerca pakistaneria.



You’re welcome.

Wednesday, 16 November 2016

Dispatches from Hindunazistan: The Winter of Our Discontent

Listen, and I will tell you a story.

Once upon a not very distant time, in the none too magical land of Hindunazistan, there was a man called Narendrabhai Modi. He’d become the prime minister of this ancient and sometimes disreputable nation by defeating the Congress Party, which had ruled it as though by monarchical right, and increasingly ineffectively as the time went by. Modi made big promises of a Golden Age to come if the Congress was defeated, and the people believed him, because, indeed, what had they to lose?

And so, lo and behold, the Congress was swept aside, and the Bharatiya Janata Party (BJP, Indian People’s Party) of this same Narendra Modi took over the country. The people sighed with relief, sat back, and waited for the promised miracles to come.

And the miracles did not come.

As the months of Modi’s rule turned to years, unemployment continued to soar, prices kept rising towards the ceiling, social discord increased dramatically, and his threat to “punish” a certain obstreperous neighbouring realm known as Pakistan turned out to be hot air. Indeed, so hollow did his promises turn out to be that he began losing state elections, one after the other, and had to depend on an army of online trolls and arbitrary bans on dissenting television channels to bully opponents and silence criticism. Indeed, it seemed fairly evident that only total disunity among the other political parties, which could agree on literally nothing, could prevent Modi from going the way that the Congress had gone before.

It was at that point that Modi unleashed what was supposed to be a “masterstroke”. As I may have mentioned en passant, on the night of 8th November, he abruptly announced that effective midnight – three hours from his speech – one thousand and five hundred rupee currency notes would no longer be legal tender. This was somewhat significant, seeing that 1000 and 500 rupee notes made up well over 80% of the cash in circulation in Hindunazistan, and abruptly removing them from circulation might – you know, just possibly, potentially, perhaps, maybe – have one or two teensy weensy negative effects on the economy.

I had – and since I have never sat in an economics class and have no training in the subject whatsoever, it was all strictly guesswork – made these wildly insane predictions about what might happen:

1.There is going to be a huge downturn in all but essential economic activity because nobody has enough 100 rupee notes in hand and will not have enough for a long time to come.
2. People who know enough to conceal their real income do not keep it, contrary to common supposition, inside their mattresses. They know well enough that inflation alone will wipe out their ill gotten gains so they either buy something like gold or land with it or they invest it in bonds or if they can they bank it abroad.
3. Their remaining 500 and 1000 rupee notes are therefore not in any larger amounts than anyone else's, and there are perfectly easy ways of processing them through the system like, for example, *selling* them to criminals to exchange through the banks.
4. In future, they can simply demand that bribes be paid in kind rather than cash or in denominations of hundred rupee notes instead of 500s or 2000s.
5. Therefore the corrupt will be affected by this not at all.
6. In the short run this will lead to an enormous increase in the drain on the exchequer because of these factors:First, to print additional 100 rupee notes to replace the 500s and 1000s being taken out of service.Second, to replace the 500s with new design 500s and issue the new and allegedly high tech 2000 rupee note.Third, to destroy the 500s and 1000s being taken out of service.
7. Don't forget the huge economic loss that will hit India today because nobody will have enough 100 rupee notes for any transaction, and all banks and ATMs are shut. In effect the entire country has been put on a one day business shutdown.

And...believe it or not...those things have happened! Who could ever have predicted them? How was it possible?

It was possible because, from the start, this was all about one thing, and one thing only, and that was for Modi to show the country what a humongous, take-charge leader he was. After all, it was all for the country’s good that this whole exercise was carried out, wasn’t it?

It was.

It is for the country’s good that the economy has essentially ceased to exist, with nobody buying anything unless it’s absolutely essential. It is for the country’s good that people are lining up outside banks from early morning till late into the night, desperate to change their former money for new notes. It is for the country’s good that villagers have had to trek kilometres to the nearest town with a bank, letting their work fall idle, to stand in line all day only to find that the cash has run out and the bank’s coffers are empty. It is for the country’s good that people who survive on their daily earnings – like labourers and taxi drivers, fishermen and ragpickers, vendors and cobblers, not to mention their families – have to starve so they can get their money changed. It is for the country’s good that people in remote forest villages or hamlets up in the Himalayas, with neither the ability or the time to keep up with big city news, will discover in a few weeks that their life savings have turned into worthless scrap paper.



All for the country’s good.

ATMs, which were supposed to be out of action for one day, were actually defunct for three or four, all across the country; and when they opened, they were almost instantly stripped of cash by frantic people. Not that they could do much, anyway, because there simply weren’t enough 100 and 50 rupee notes to go around to replace all the 500 and 1000 rupee notes taken out of service.

Please remember that about 85% of the cash in circulation comprised 1000 and 500 rupee notes, and that to replace them you’d need five or ten 100 rupee and ten or twenty 50 rupee notes...each. This is, frankly, a lot of notes, and the government would have to do a hell of a lot of printing.

Not that Modi made the slightest attempt to do that, of course. His government had instituted a rule that each person, each day, could only exchange a maximum of 4000 rupees worth of ex-money for money (the limit has been marginally raised to 4500 rupees, and this rule, as we shall see, has since been changed in certain ways). Since there were no 1000 rupee notes any longer, and the alleged new 500 rupee note has yet to see the light of day, what happened to anyone who deposited 4000 rupees (after filling in a form and showing ID, incidentally, which must have been an interesting experience for villagers with neither education nor necessarily identity cards) was that they were handed two of the new two thousand rupee notes.

This is the new two thousand rupee note, which is as tacky-looking as it is flimsy (it feels like Monopoly money, only not nearly as substantial), and as flimsy as it is useless.




Useless, did I say? Yes, that is what I said. This note is perfectly useless, and almost nobody is using it for anything at all.

Let’s see why.

Imagine that I have 4000 rupees in ex-money, which is, of course, useless for buying anything. After standing in line at a bank for the whole day, I am fortunate enough to get hold of two of these toffee-wrapper-like things. On the way home, I decide to buy groceries. The groceries cost me 300 rupees.

So what the hell happens? When I hand the shopkeeper a 2000 rupee note, does he have 1700 rupees in 100 and 50 rupee notes to give me? Don’t be daft, he’d have to have sacks of 100 and 50 rupee notes all ready to do that for all his customers. He either asks me to give him the 300 rupees in 100 rupee notes...which I don’t have...or he offers me change including 1000 and 500 rupee notes. Which are no longer legal tender, so if I accept them, I need to go back the next day to the bank...to start the whole rigmarole over again.

So I simply don’t buy the groceries, or anything else, unless I absolutely have to. Nobody buys anything, and the economy virtually ceases to exist.

Again, this was so utterly predictable that even I had predicted it.

Another thing I’d predicted was that one way people would get rid of their 1000 and 500 rupee notes was to sell them to agents, who would hire people to exchange them. This not only happened, it’s become such a major thing that as of today the banks are supposed to mark the fingers of those who come to exchange notes (at banks where they don’t have accounts) with indelible ink which renders them ineligible to exchange money again.

Please take a moment to understand what this means. Two thirds of Indians still don’t have bank accounts. Of the 1/3 who do, a lot don’t live at or near the bank where they have an account. For all these people, what’s just happened today is that they’ve been told that they can only exchange 4500 rupees, and if the rest of their money happens to be in 1000 and 500 rupee notes...well, in an inelegant phrase, they’re fucked.

Right?

[Incidentally, the banks don’t actually have a supply laid in of said ink, so how they are going to achieve this is another mystery. It’s a world of mysteries now.]

As day after day passes by, and India still stands at an essential standstill – standing still outside banks, post offices and ATMs – it seems to have finally filtered through to Modi and his acolytes that their cherished masterstroke is a disaster in the making. They have, accordingly, unleashed four weapons to handle the fallout.

The first is the online troll army, which has been accorded the job of bullying and shouting down dissent online and in social media. The troll army’s effectiveness has been reducing steadily over time from overuse; if you have to keep bullying people to silence them, they soon get the message that bullying is the only weapon you have, while they have the truth. There’s little that lines such as “You must be a corrupt anti-national, or else you’d be supporting this surgical strike on black money” can achieve after the 20000th repetition. The troll army is shrill and abusive, but it is also as inconsequential as it is cowardly and hypocritical.

The second is the changing narrative. Originally, the excuse was that this exercise was to eradicate “black money”. Soon, reports began to filter into the media that Modi’s own BJP had made massive cash deposits in 500 and 1000 rupee notes into its bank accounts literally hours before the man himself had made his announcement. Also, pictures of the 2000 rupee note had been Tweeted by one of Modi’s ministers at a time when it was still supposed to be top secret. Ergo, if it had indeed been meant to handle “black money”, Modi’s own party had apparently been exempt. So, it started being claimed that it was part of the “war” against Pakistan, because that entity had allegedly been flooding Hindunazistan with fake 1000 and 500 rupee notes.

Oh, please. Let’s assume, for the sake of argument, that this is true. Let’s assume that Pakistan had, indeed, been flooding the Hindunazistani economy with such enormous amounts in fake currency that the only option was to, you know, actually ditch all the said currency altogether. I have no idea how Pakistan would manage a feat on such a large scale, but let’s assume that it did. Then what?

Pakistan isn’t, you know, some forger sitting in the back room of a slum workshop cranking out fake currency on some cartoonish printing press. Assuming Pakistan can manage to print such enormous amounts of 1000 and 500 notes that Hindunazistan has to wreck its own economy as a damage control measure, how long, exactly, before it forges the toffee-wrapper 2000 rupee note as well? A week? Two?

I would, in fact, love a full, audited, checkable accounting of just how much this exercise is costing Hindunazistan. Let’s assume Modi is right and that this will bring in gigantic, enormous, amounts of unaccounted wealth into the government’s coffers. Of course it won’t, because of reasons I have already mentioned, but let’s assume it anyway. I would then like to know how much that adds up to in comparison to the costs, both direct (in terms of printing new money, distributing it, modifying ATMs to handle new notes, destroying old notes, and so on) and indirect (in terms of the losses to the economy because buying and selling has almost ceased to exist). If the latter is greater than the former, even if everything that Modi claimed is true, it would still be not worth it.

The third weapon Modi’s minions unleashed is the tame media, which is Modi’s handmaiden as well as the self-appointed voice of the Great Hindunazistani Muddle Class. This tame media stood by and watched, quite complacently, as dissenting media channels critical of Modi, or merely reporting that things weren’t all sweetness and light in Modi’s Hindunazistan, were punished with bans to force them to fall into line. Now, it is being used to push the idea that, not only is opposition to the demonetisation experiment “treasonable”, but that the average person is actually strongly in favour of it as well.

Attention, media. Let’s say I’m the average poor person who’s given up his daily labour, not to speak of his family’s supper tonight, to stand in line outside a bank all day in the dust and smog in the hope of being able to exchange his pathetic few old 500 rupee notes for a couple of violet candy wrappers posing as money. Some pretty young thing, made up to the gills, with a posh accent and a designer smile thrusts a microphone into my face and asks me...in front of a thousand other people, you know... “Well, sir, are you a supporter of black money and corruption, or are you willing to undergo a little minor, temporary inconvenience in the greater national good?”

What the hell do you think I’ll say? Do you seriously expect an honest answer from me on this?

This reminds me a lot of Killary’s alleged “shock” defeat in the Imperialist States of Amerikastan. There, the liberal scum and their tame media had so set the official tone that nobody dared to even question their narrative in public for fear of being termed “racist”, “sexist”, “homophobic”, and all the other liberal slurs. But that, of course, didn’t change what people really thought, and they expressed said thoughts in the privacy of the voting booth. And we all know how that turned out.

Attention, once again, media: it happened in Amerikastan to Killary, and it can happen here.

The fourth weapon is Modi’s ministers and Modi himself. Initially blissfully smug in his belief that he’d put one over the other political parties nice and proper, Modi had gone gallivanting off to Japan, on yet another of his endless foreign trips, the cost of which is a carefully guarded secret. It was left to his ministers, especially the finance minister, one Arun Jaitley (who happens to be a lawyer, not an economist) to handle the fallout. When it became evident that they weren’t exactly up to the task, it was Modi himself who tried to show himself the Hero of the People in a series of speeches.

They weren’t very edifying speeches. In one, Modi set out to claim that poor people were “sleeping soundly” while the corrupt were “spending sleepless nights”. Exactly how said poor people were sleeping with empty bellies was something that Modi didn’t see fit to explain, nor did anyone ask. In another speech, he squeezed out some tears, claimed he’d “sacrificed” much for the nation, and said he might be bumped off by those who were eager to safeguard their loot.

Not exactly the stuff of which deathless oratory is made.

Modi had one more trick up his sleeve. In order to show how even handed he was, he made his mother – the lady is 96 years old – stand in line at a bank to change a few notes. Obviously, she was far too old and frail to manage this on her own, so Modi’s siblings had to accompany her and hold her up...instead of, I don’t know, just going and changing the notes themselves. And, to put the crowning touch on this bad joke, the media was in full attendance to photograph it for posterity.



I really need to ask, just how much contempt do these people have for us? How stupid do they imagine we are?

The rage building in the people has finally percolated up to the point that the other political parties have started making moves towards uniting against the BJP. Unfortunately, they are still far too riddled with internal fractures and rivalries to cooperate with each other in any meaningful way. So it is virtually inevitable that they’ll finally coalesce, in some manner or other, behind the only party other than the BJP which still has a presence in all parts of Hindunazistan.

Which party is that? The Congress. Its de facto chief, Rahul Gandhi, is a nearly mindless nonentity, but even he isn’t so stupid as to miss a golden chance like this when it’s dropped right into his lap.

And so we have the latest story by the late HP Lovecraft! It’s called  Narendra Modi: Reanimator, and it’s about the man who single handedly raised the Congress Party from the dead.

As things go from bad to worse, I’m just wondering what kind of war with Pakistan Modi will start in a desperate attempt to salvage the situation.

But I am afraid I already know.




Further Reading

[And I strongly suggest you read these]





Tuesday, 28 August 2012

The Potter's Wheel: Thoughts on the Economic Foundations of Imperialism


Statutory disclaimer: The author of this article has never been inside an economics classroom, and has no background in economic theory. He is also of the opinion that academic economics ranks alongside astrology as one of the most fundamentally useless facets of human study. Therefore, the contents of this article are not unbiased, and may be wrong.

*****************

One of the recurrent themes I’ve come across in right-wing economic discourse is the idea that the cycle of production and consumption is a never-ending route to permanent prosperity. On the surface of it it’s a rather plausible idea, of course; someone makes something, sells it, gets money and buys something else. He’s happy, his customer is happy, and the guy from whom he’s buying is happy.

Only, what happens after the customer has bought whatever it is the man has made? Once he’s bought something with which he’s happy, what then?

This is a rather fundamentally interesting question, because, as I’ll illustrate, the entire foundation of modern society is based on a flawed understanding of it.

Suppose our craftsman is a potter. He sells a nice set of pots to a housewife, gets money for this, and uses part of that money to buy himself a shirt from the tailor, and with the money left over buys food for his family. Right, so he’s clothed and fed, and presumably content. But what happens next?

If the housewife is satisfied with his pots, and they serve her needs well she’s not going to be back in the morning with an order for a further set. So, what does our potter do tomorrow to put food on the table?

Let’s suppose yesterday’s customer has friends, and these friends see the pots and come over to buy more. Business does well for a few days, but sooner or later everyone has pots.

So what’s our potter to do then? He might hire a crier to sing the praises of his pots far and wide, and that might bring an uptick of business, but ultimately he’ll have sold so many pots that people don’t want any more.

Some of the pots, of course, will break over time, and if the potter is a tad unscrupulous he might ensure the pots are brittle and would break easily. But that would be stupid, because the people might decide that it makes more sense to buy their pots from the other potter two villages over. In fact, making better pots ensures staying ahead of the competition.

So far, so good. But the potter’s customers have stopped coming, and he requires a source of income  so as to be able to continue affording shirts and food. What is he to do?

If this is a village-level economy, the potter can probably work as a farmhand for a few months until enough of the pots he’s sold have broken in the course of daily use that he has a customer base again to sell to. In fact, this is something a lot of people do even now, in the villages of this country; during the farming season they work in the fields, and when the crops have been gathered in, they manufacture pots or cloth or wicker baskets enough to supply the customers until the next manufacturing season. And while they’re off working in the fields, the bamboo or cotton they use for their raw material has a chance to grow and replenish itself.

It’s a relatively sustainable and low-wastage solution to the problem. But it works well only at the level of a simple (I will not say “primitive”) economy.

The problem with these simple economies, of course, is that they operate on a small scale and do not allow a few people to become extremely rich. For that, you need economies which operate on a much, much larger scale, with organised factories working without an off season to supply a large scale market. That can only be done on an industrial scale, of course, and that’s what the Industrial Revolution was all about – the factories which ran round the clock to produce an endless supply of goods.

Of course, the setting up of factories and mass production also requires several other things.

First of all, there has to be a regular supply of raw materials and power, as well as cheap labour. All these cost money, add to the finished cost of the product, and therefore directly affect the margin of profit. And since the cost of raw materials and power isn’t – generally speaking – something that can be skimped on, the cost of labour is the one part of this which can be lowered. The ultimate in this lowering is the assembly line, especially the ultra-modern robotised assembly line.



This is the point at which right-wing economists generally sit back complacently and declare that this is the acme of modern capitalism, where the producer and consumer both benefit, and the money earned is passed down to the workers in the form of wages and upstream to the suppliers of raw material and power as payments for goods. Actually, compared to the village potter, an assembly line can look like a marvel of modernity, but actually it’s far less sustainable in the long run. There are several reasons for this, but ultimately it all comes down to the necessity of finding a market for the stuff you produce.

Unlike the village potter, the assembly line can’t afford to switch to alternative work when the demand dies down. If it’s going to keep in business, it has to stay in production – and it has to keep moving the finished product. Unless it can keep producing, and selling what it produces, in the long run it has no future.

This simple fact means that the modern industrial system has to have absolutely assured and constant sources of raw material and power; at all times, and can’t wait to have them regenerate themselves (for the former, generally speaking, regeneration isn’t even an option). And it also has to have a constantly expanding consumer base, so that it can sell its products despite competition and the changing tastes of various people.

At first, the producer can try to reduce the selling price of its products to a minimum to attract purchasers and undercut competitors, but that’s not a policy which can be sustainable. The selling price, after all, can’t be less than the cost of production, quite apart from such recurrent expenses as wages, maintaining and replacing equipment, transport and so on. Again, while right-wing economists love to extol the alleged benefits of reduced prices to the consumer, this is not something that ever happens in the long run. Instead, the producers end up forming cartels and rigging prices to around the same level, but even so they end up in a situation where they have to find new customers for their products if they are to survive.

Of course the reader will see where this is heading. Since the very existence of the industry, and by extension the economy dependent on the existence of this industry, depends on these three factors, they have to be secured by any means possible. And, equally obviously, if these means require that government policy be “influenced” in favour of that industry, by lobbying, bribes, or other means, that’s quite all right. Forests can be made to vanish and the ground strip-mined of coal and minerals, and poison dumped into rivers because it’s cheaper than treating effluents. But that doesn’t remove the requirement for consumers to buy the products.

This situation is worse for the producers of consumer durables like cars or refrigerators, aeroplanes or office furniture. After all, how many cars can a man own? What happens after each member of the family has one? (I once asked this question to an economics professor. His reply: “Then they want better cars.” Really? What happens to the old cars? And what happens when there’s no more road space to drive those cars on?)

In the nineteenth century, the solution was relatively simple; the industrialised nations would routinely invade and occupy Asian and African countries, destroy their local small-scale production, strip them of their raw materials, and force them to buy the finished products of the Western factories. It was easy to do, because owing to the industrial revolution and constant warfare the European nations were militarily much stronger than most rival countries. It was also easy to justify, in the name of spreading Western civilisation among the “lesser breeds without the law” (who, in general, were far more civilised than the Europeans doing the civilising). The heights of this policy of securing captive markets was reached by the British (who else?) in the nineteenth century, when they went to war against China to compel the Middle Kingdom to buy opium, the use of which was then rampant and which the Chinese government of the time was trying to suppress.

Imperialism, in its foundations, was always primarily an economic phenomenon.

After the Second World War, there was a brief period when imperialism seemed to have ebbed, and it appeared that the time of the old imperialist powers was past. In reality, the temporary ebbing of that imperialism can be ascribed to the rebuilding of the shattered European and Japanese infrastructures and economies after the war, and the economic boom which followed as people back home bought cars and TV sets, dishwashers and vacuum cleaners, things which they hadn’t had before.

But then, soon enough, the same problem raised its head; the domestic market was glutted, and there were industries all dressed up with nowhere to go.

Coincidentally, around this time, for the first time in history the world suddenly found itself under the hegemony of a single power; a power, moreover, which had no scruples about changing the rules to suit itself, including imposing its own currency on the planet as a reserve so that it had no need to earn foreign exchange in order to purchase foreign goods. The equivalent is to print your own money, so that you can buy whatever you want instead of working for it.

As a somewhat famous bearded German Jew once said, history repeats itself. This hegemonistic power, and its European vassals, found themselves again in virtually unchallenged military superiority over the rest of the world at just the time when their own (economically accessible) raw materials were running short, and they desperately needed new secure markets for their products. Is it a coincidence that it was just then that they set about another series of wars meant to “spread Western values” among non-white peoples? Of course not.

As the war criminal and mass murderer William Jefferson Clinton openly stated, his country was 

entitled to resort to "unilateral use of military power" to ensure "uninhibited access to key markets, energy supplies and strategic resources"

... a rare bit of honesty which soon gave way to the camouflage of a “Global War On Terror”, as promoted by his successor, the war criminal and mass murderer George W Bush, and continued under his successor, the war criminal, mass murderer, and Nobel Peace Prize recipient Barack Hussein Obama. Remember what the very first objective the Empire’s forces secured after the capture of Baghdad was, before all others? The Oil Ministry. Recall what happens to every single nation taken over by the Empire or its vassals? Privatisation of the economy, with assets sold off to the Western multinationals which also finance the election campaigns of those in power and their primary opponents. What is the first condition for a loan imposed by the World Bank or the International Monetary Fund on a desperate and poor nation? “Economic restructuring”. Basically, it’s the Opium Wars all over again, but on a global scale. Greed is still the motivating factor.

The reader will understand that what the people of the occupied nations want or need does not matter in this situation. What the people of the industrialised nations want, too, no longer matters. What matters is only profit, and the continuing ability to generate profit. Everything else is secondary to that goal.

Not that this will continue indefinitely, of course. Even on a global scale, the neo-imperialists can’t compel people to buy their products forever any more than the village potter can compel the housewives to buy his pots. And, sooner rather than later, the raw materials will run out, leaving the industries with no way to produce and no way to sell (this will actually be exacerbated by the impoverishment of the majority of people of nations whose economies have been forcibly privatised, as a direct result of said privatisation; in all newly privatised economies, a small minority becomes very wealthy and the rest become poor). That will be a complete collapse, compared to which a mere depression, or even Depression, will look like a party.

At that point, it’s impossible to predict just what will happen, but massive wars over dwindling resources are a distinct possibility.  If anything is left over at the end of it all to start over again, it will probably be on a subsistence level. Something like...

...a village potter, for instance.