The Many Brazils

Commentary No. 413, November 15, 2015

Brazil is a major world power – in terms of size, population, and influence. Yet in many ways it is a combination of so many different and contradictory faces that it is hard for anyone, including Brazilians themselves, to know how to define Brazil’s characteristics as a nation and as a force in the world-system.

The currently most important face of Brazil is the Brazil of Lula (Luiz Inácio Lula da Silva) and his party, the Partido dos Trabalhadores (PT). After three previous unsuccessful runs for president, Lula finally won in 2002. The election as president of a trade-union leader of very humble background represented if nothing else a social breakthrough of a person and a party defying the social hierarchies entrenched in the political system.

Lula and the PT basically promised two things. One was to raise significantly the real income of the poorest sectors of the country. And he did this by his program ofFome Zero (Zero Hunger). These were a complex of federal assistance programs aimed at eliminating hunger in Brazil. It included notably the Bolsa Familial (Family Allowance) as well as access to credit and raises of the minimum wage.

The second promise was to reject the neoliberal policies of his predecessors and the government’s fulfilment of pledges to the International Monetary Fund (IMF). Almost immediately, Lula changed his position. He named as the Finance Minister and the president of the Central Bank two persons committed precisely to neoliberal policies and particularly to the pledge to the IMF to maintain a so-called primary income surplus, which is the portion of the government’s income that is not spent. This kind of macroeconomic policy reduces available funds for social investments. Its presumed virtue is to stabilize governments and avoid inflation. The IMF demanded of Brazil a surplus of 4.25%. Under Lula’s presidency the surplus rose even higher, to 4.5 percent.

Lula’s mixed policies existed within the particular political culture of Brazil. Brazil is a country with a very large number of political parties, none of which exceeds a quarter of the seats in parliament. Brazil’s political culture makes it almost normal for individuals and even whole parties to shift allegiances with great frequency. They seek merely power and income. One of the ways Lula and his party remained on top was the mensalao or monthly payment to members of the legislature. Brazil’s level of corruption is probably not really higher than that of most countries, but the rapid shifts in legislative alliances has made it far more visible.

There is also Brazil as a geopolitical force, the Brazil of BRICS – the group of five so-called emerging economies, whose strength rested on a basis of rising worldwide prices for basic commodities. Suddenly, there seemed to be new wealth in Brazil (as in other BRICS countries), until the collapse of these primary commodity prices. It seems today that, economically, it was easy come, easy go.

However, the BRICS were more than an attempt to increase capital accumulation. They were an attempt to assert geopolitical strength. Here too, there were inconsistencies. On the one hand, Brazil became the major force attempting in the first decade of the twenty-first century to construct a unity of Latin America and the Caribbean independent of the United States and the structures it had built to control Latin America. This was the Brazil that took the lead in creating the Union of South American Nations (UNASUR), and keeping within it such politically disparate countries as the Venezuela of Hugo Chavez and the Colombia of Juan Manuel Santos.

The Brazil that championed Latin American autonomy was also the Brazil that sought to impose itself in many ways on its neighbors, notably Argentina. It was also the Brazil that wished to create a worldwide Lusophone group that served its economic interests. It was also the Brazil that learned that its closer links with China (through BRICS) were not located in a structure of geopolitical equals.

Today all these different Brazils are moving towards internal implosions. Lula’s successor as president, Dilma Rousseff, has had a catastrophic decline in popularity in the past year. Lula himself has lost some of his once untouchable standing. The regime is being threatened today by an impeachment of Rousseff. There are rumors as well that the army is considering a coup. The denial of such a possibility by the head of the armed forces seems itself a semi-confirmation of such a rumor.

Yet, there is no clear alternative, which may make both an impeachment and a military coup unlikely. To say there are many Brazils is to say something that may be said of many countries, probably of most countries. But somehow it seems more so in Brazil. Brave is the analyst who would predict the Brazil of 2016 or 2017. But, although the exact details are quite unpredictable, Brazil has strengths that may continue to make it a key locus of world power.

The Important Canadian Elections

To almost everyone’s surprise, Justin Trudeau, leader of Canada’s Liberal Party, won the Canadian elections with a stunning absolute majority of seats in the federal parliament. The surprise was both the winner and his margin. As late as several weeks before the election on October 19, polls showed a three-way virtual tie between the three main candidates: Prime Minister Stephen Harper of the rightwing Conservative Party, Thomas Mulcair of the leftwing New Democratic Party (NDP), and Trudeau whose party was considered centrist. In the predicted votes, Mulcair was leading narrowly and Trudeau was said to be in third place.

Then in the month or so before the elections, suddenly Trudeau’s figures rose, and Mulcair’s figures plunged, ending with the following division of seats: 184 for the Liberals, 99 for the Conservatives, 44 for the NDP, 10 for the Bloc Québécois, and 1 for the Greens. To understand the significance of these results, one must first understand the relatively unusual voting system in Canada. The federal parliament is divided into 338 so-called ridings, each of which sends one person to parliament. In each riding the winner is the one “first past the post.” This means that all a party needs is a simple plurality of votes in the riding to win the seat. As a result, it is extremely rare for one party to win an absolute majority of seats nationally, which is what happened this time.

The question is why the Liberals had such an upsurge in the last minute, essentially upending the NDP. After all, the NDP had previously surprised everyone in the provincial elections in ultra-conservative Alberta on May 6 by doing well across the board and becoming, seemingly, a major national party. No one can be sure, but most analysts think the upsurge came from a sentiment by voters of “anyone but Harper.” Apparently, the voters thought that the Liberals were more likely to achieve this end than the NDP at the level of the individual ridings. Whatever the explanation, Canada now has a stable government for the next five years. We therefore have to assess how Trudeau is going to use his absolute majority.

Trudeau has made some clear promises. He says he is going to support deficit spending for at least three years, increase taxation on the wealthy, and maintain and expand welfare state provisions. In short, he promises an anti-austerity program of a Keynesian variety. This promise placed the Liberals to the left of the NDP, which had moved to the center in order to attract Liberal and independent voters. In addition, he has promised increased activity in combating climate change, something that the Harper government had strongly opposed. And, on social issues, he would move further by legalizing marijuana.

On domestic issues, the centrist Trudeau has thus promised to act as a classical social-democrat of the kind now gone out of fashion among most social-democratic parties. Does he mean it? That depends on whether Canada will weather the worldwide economic storm relatively well in the next year or two. If not, Trudeau may well swing back to a somewhat more “austere” program.

The real difference will be in the geopolitical arena. Harper’s views were very similar to those of the Tea Party in the United States. He did not believe in the reality of climate change. He was against the Iran nuclear deal. He was against immigration of Syrian refugees and anything else that might make Canada more “multicultural.” He strongly favored building the Keystone pipeline of oil and gas from Canada to the United States. He was a war hawk and therefore had agreed to send Canadian jets to join the U.S.-led “coalition” in Syria, but wished to make the ouster of Bashar al-Assad a priority.

Trudeau’s program was virtually the opposite on every question. This aligned his position with that of President Obama on most questions, with one major exception. Trudeau was against further involvement in the civil wars in the Middle East. In particular, he promised to withdraw all Canadian airplanes from the coalition. True to his word, right after the election results were in, Trudeau telephoned Obama to inform him that the Canadian planes were withdrawn. It was only a matter of six planes, but the symbolism was important. Canada was not going to follow the U.S. lead in the global arena.

By voting Harper out of office, Canada was rejecting the entire conservative movement in the United States. This is why they voted for “anyone but Harper.” And the post-Obama president of the United States will have to live with that. Another locus of change will be the Trans-Pacific Partnership (TTP). Harper lost votes because, in the end, he signed it. There is now going to be considerable resistance in Canada, as well as in the United States, to ratifying the treaty, whose prospects are growing dimmer all the time.

Analysts have noted the stylistic similarities of Obama and Trudeau. Both are essentially centrists – both intellectually and emotionally. Both believe in discussion with opponents to arrive at some sort of consensus. Both invest time and energy in talking with opponents rather than enacting legislation. Obama has paid a high price politically for the consequent delays. And Trudeau is likely to suffer the same setbacks, unless he learns from Obama’s errors, which for the moment he doesn’t seem to be doing.

The bottom line is a reasonably meaningful geopolitical disjunction of Canada from the United States. It is a further blow to the declining ability of the United States to impose its views on the global situation.

Obama’s Impossible Options in the Middle East

Commentary No. 411, Oct. 15, 2015

President Barack Obama is being criticized on all sides for whatever he does these days in the Middle East. And well he might, since there is probably nothing he can do to become the deciding and decisive actor in the whirling geopolitics of the Middle East he would like to be. It isn’t that all his decisions are bad ones. Many are, but there are some that seem sensible. The fact is that virtually no state in the region or having interests in the region is really on his side. They all have their grievances and priorities and are willing to pursue them even if the United States presses them not to do so.

There are four arenas that might be called the hot spots of the region, or perhaps one should say the hottest spots: Iran, Syria, Afghanistan, and Israel/Palestine. Obama’s critics say that he does not have a “coherent” policy in any of these regions. And this criticism is not without merit.

The relatively clearest policy is that concerning Iran. The United States has been pursuing a major effort to obtain an agreement with Iran that essentially offers a deal: no nuclear arms in Iran in return for lifting of the economic sanctions. Such an accord has in fact been signed. And the legislatures in both countries have taken the first step towards ratification. Future historians may list this as Obama’s greatest foreign policy achievement (along with the resumption of diplomatic relations with Cuba). This is Obama as peacemaker.

However, the agreement must be further ratified in various ways on both sides. While this looks likely, it is surely not inevitable. As is so often said about such agreements, the truth is in the details. The details are complicated, and open to different interpretations on both sides. Different interpretations lead to continuing tensions. Forty years after a similar notable agreement in Northern Ireland was signed, we are still having an argument about interpretations of the agreement, and at this very moment facing a threat of a breakdown.

The situation in Afghanistan is less clear. The Taliban seem to be steadily gathering further strength and controlling further regions, at least at night. The United States sent troops into Afghanistan to oust the Taliban and keep them out. Presumably, the Afghan government wants to defeat the Taliban as well.

Most importantly, Iran also wants to defeat the Taliban. But the United States and Iran do not wish to collaborate openly in this objective. And the Afghan government is torn between asserting its independence of the United States and its need to have its continuing (indeed increasing) military assistance. The Pakistani government seems to be helping the Taliban. And the Indian government seems to want to help the Afghan government more directly than the U.S. government finds desirable.

The policy of the United States is not coherent because it is trying to pursue a set of objectives that interfere with each other. The United States wishes to reinforce a stable government, and therefore is committed to supporting the present Afghan government. To do this, the U.S. military is insisting that more U.S. troops are needed. But Obama has promised to reduce U.S. forces to a small group of non-combatant trainers by the end of the Obama presidency. It is not possible to do this and still ensure the survival of a so-called stable Afghan government, especially since the stability of the government hinges on an unresolved and festering struggle with its non-Taliban opponents.

If we turn to Syria, “coherent” is the last adjective one can apply to U.S. policy. On the one hand, it has sought to form an international “coalition” of countries committed to defeating the still expanding Islamic State (IS, also Daesh or ISIL). The United States also is committed in theory to the destitution of Bashar al-Assad. What the United States does not wish to do is to commit troops to still another Middle Eastern civil war zone. Instead, the United States offers to fight IS with drones that will bomb IS units, without even having any troops on the ground that could guide the drones. The consequence, inevitably, is “collateral damage” that intensifies anti-American feelings in Syria.

Meanwhile, Russia has made it clear that it is committed to keeping Assad in power, at least until there is a “political” resolution of Assad with the so-called moderate opposition. The opposition is itself a complicated group. The United States has poured a lot of money and energy into training a select group of the opposition. The U.S. military has just admitted that this effort has been a total failure. The groups to which they have given support have largely disintegrated. They have not only fled the battlegrounds but actually turned over material to al-Nusra, a group that is affiliated with al-Qaeda and presumably not one that the United States wishes to support.

Nobody is really following a U.S. lead. Turkey, most reluctantly, has agreed to U.S. overflights of their airplanes and drones but has refused to encourage support for the Kurdish troops that are really combating the IS. Saudi Arabia also doesn’t have a coherent policy. They are at odds with al-Qaeda forces but are also giving them some financial and diplomatic support as part of their attempt to counter Iranian influence throughout the Middle East. Great Britain and France say they support the United States but Great Britain will send only drones and France criticizes the United States for not pushing harder against Assad. Israel seems to be totally unclear as to what to do. Israel claims Iran as its biggest enemy, but in fact concentrates on keeping the Palestinians in check, which means one policy in the Gaza strip and another in Syria and Lebanon.

As for Israel/Palestine, there has been a crescendo of violence and of rhetoric on both sides. Many commentators say that this is the third Intifada, some asserting that it started a year ago. Whatever the label, it is obvious that Israel is slowly but surely losing the diplomatic battle in western Europe and even in the United States. While Netanyahu would like to repair frayed relations with Obama, he has to be wary of being outflanked on his right. There is little that he will do to change Israeli policy. And there is little that Obama can make him do. However, the Israel/Palestine conflict remains the potential trigger of an explosion throughout the Middle East, one so severe that it would affect the operations of the entire world-economy, which is already in very fragile condition.

If anyone can see in this potpourri evidence that the United States is able to control the situation and dictate terms to anyone, they are seeing things I cannot see. Not only is the United States not a hegemonic power but it isn’t even the most powerful actor in this fragmented region. Its unwillingness to admit this reality to itself is a danger to the entire world.

Resurgence of the World Left?

Commentary No. 410, October 1, 2015

The sweeping triumph on September 24 of Jeremy Corbyn to be the leader of Great Britain’s Labour Party was stunning and totally unexpected. He entered the race with barely enough support to be put on the ballot. He ran on an uncompromisingly left platform. And then, standing against three more conventional candidates, he won 59.5% of the vote in an election that had an unusually high turnout of 76 percent.

Immediately, the pundits and the press opined that his leadership and platform guaranteed that the Conservative Party would win the next election. Is this so sure? Or does Corbyn’s performance indicate a resurgence of the left? And if it does, is this true only of Great Britain?

Whether the world political scene is moving rightward or leftward is a favorite subject of political discussion. One of the problems with this discussion has always been that the direction of political trends is usually measured by the strength of the extreme position on the left or the right in any given election. This is however to miss the essential point about electoral politics in countries with parliamentary systems built around swings between center-left and center-right parties.

The first thing to remember is that there is a large gamut of possible positions at any given moment in any given place. Symbolically, let us say they vary from 1 to 10 on a left-right axis. If parties or political leaders move from 2-3, 5-6, or 8-9, this measures a swing to the right. And reverse numbers (9-8, 6-5, 3-2) measure a swing to the left.

Using this kind of measurement, the last year has seen a striking shift to the left worldwide. There are a number of clear signs of this shift. One is the steadily rising strength of Bernie Sanders in the race for the U.S. presidential nomination in the Democratic Party. It doesn’t mean that he will defeat Hillary Clinton. It does mean that, to counter the poll ratings of Sanders, Clinton has had to assert more leftward positions.

Look at a similar event in Australia. The right-wing party now in power, the Liberal Party, on September 15 ousted Tony Abbott as its leader. Abbott was known for his acute skepticism on climate change and his very tough line on immigration to Australia. Abbott was replaced by Malcolm Turnbull, who is considered somewhat more open on these questions. Similarly, the British Conservative Party has softened its austerity proposals to win over potential Corbyn voters. These are shifts from 9-8.

In Spain, Prime Minister Mariano Rajoy of the conservative New Democracy Party is facing rising poll figures from Pablo Iglesias of Podemos, running on an anti-austerity platform similar to what was long promoted by Greece’s Syriza Party. New Democracy did quite badly in the May 24 local and regional elections. Rajoy is resisting any “leftward” shift by his party and as a result has been doing even worse in the polls for the future national elections. After his current defeat in the “independencist” elections in Catalonia, Rajoy has dug in his heels even further. Question: Can Rajoy survive as leader of his party, or will he be replaced as was Tony Abbott in Australia by a slightly less rigid leader?

Greece turns out to be the most interesting example of this shift. There have been three elections this year. The first was on January 25, when Syriza came into power, again to the surprise of many analysts, on an anti-austerity platform, using traditional left rhetoric.

When Syriza found European countries unwilling to budge on Greece’s demands to be relieved of many commitments concerning its debt, Prime Minister Alexis Tsipras called for a referendum on whether or not to “reject” Europe’s terms. The so-called Oxi (No) vote on September 18 won hugely. We know what happened subsequently. The European creditors not only made no concessions but offered even worse terms to Greece, which Tsipras felt he had to accept in large part.

Once again, analysts concentrated on the “betrayal” by Tsipras of his pledge. The left caucus within Syriza seceded and formed a new party. In the melee, few commented on what happened in the New Democracy Party. There, its leader Antonis Samaras was replaced by Vangilis Meimaraki, a shift from 9-8 or maybe from 8-7, in an attempt to reap centrist votes away from Syriza.

The conservative shift leftward did not succeed. Syriza won again. The breakaway left group was wiped out in the elections. But why did Syriza win? It seems that the voters still felt they would do better, if only slightly better, with Syriza in minimizing the cuts to pensions and other “welfare state” protections. In short, in the worst possible situation for Greece’s left, Syriza at least did not lose ground.

What, you may wonder, does all this mean? It is clear that, in a world that is living amidst great economic uncertainty and worsening conditions for large segments of the world’s populations, parties in power tend to be blamed and lose electoral strength. So, after the rightward swing of the last decade or so, the pendulum is going the other way.

How much difference does this make? Once again, I insist it depends on whether you observe this in the short run or in the middle run. In the short run, it makes a lot of difference, since people live (and suffer) in the short run. Anything that “minimizes the pain” is a plus. Therefore, this kind of “leftward” swing is a plus. But in the middle run, it makes no difference at all. Indeed, it tends to obscure the real battle, the one concerning the direction of the transformation of the capitalist world-system into a new world-system (or systems). That battle is between those who want a new system that may be even worse than the present one and one that will be substantially better.

U.S. Presidential Elections

Commentary No. 408, Sept. 1, 2015

If one follows the media, and especially U.S. media, the prospective 2016 presidential elections in the United States are showing a striking shift in tone and process from anything previously known. I don’t believe that is true. To see why, I propose to review the alleged special features of this latest electoral cycle.

The major characteristics to which the media point in making this argument are two: The first is the unusually large polling figures thus far for two “outsiders” in the campaign – Donald Trump on the Republican side and Bernie Sanders on the Democratic side. The second is the seemingly unmovable deadlock in the U.S. Congress, where compromise seems to have become a dirty word, especially to a sizable group of Republican members of the House of Representatives as well as to some Republican Senators.

Trump and Sanders have quite different programs. Trump is running on an anti-immigrant platform. Sanders is running on a proposal to increase “welfare state” expenditures that require tax increases, which are blocked by the rigid anti-“compromise” group in the legislature.

Despite the opposite platforms, each is getting consistently high figures in the polls and also seem to draw amazingly large audiences for their speaking engagements. Furthermore, they seem not only to break all the so-called rules governing behavior in the campaigns, but seem also to be rewarded precisely for doing this. So, the media seems to conclude we are now in a different kind of political situation, one whose outcome is quite unpredictable and one that will probably leave a lasting imprint on U.S. politics.

Let us start with the structure of electoral politics, in the United States and most other countries, especially in the North. The normal situation has long been that they hold periodic elections in which there are two main parties in competition, one center-right and one center-left. Of course, they all from time to time have seen the emergence of some third party whose votes in a particular election have hurt one or the other of these two main parties. But nowhere has the two-party structure been affected more than briefly, although in some cases the so-called third party has replaced one of the two previous mainstream parties and become the member of the two-party grouping. A good example of this latter shift in who are the two main parties is the rise of the Labour Party in Great Britain, a “third party” that replaced the Liberal Party as one of the two mainstream parties.

Of course, every electoral system has its peculiarities, which make it easier or more difficult to play the game. But the bottom line is that the system with two parties that have only limited differences from each other (usually primarily on the size of “welfare state” allocations) has been remarkably resilient for a very long time.

In the United States in 2015, there is not even a whiff of a serious third party. On the contrary, the angry people who are dissidents seem to have decided to seek their objectives by going inside the two parties rather than by going outside them. Where will these activists be after the actual elections, if their preferred candidate does not even win the primary nomination? Probably they will return to where they were before – either reluctant voters for the more conventional candidate or abstainers from the electoral process.

The media also assert that the U.S. presidential campaign seems to be going on forever, as though this was somehow unusual. But is this really not true of France or Germany or Great Britain or Japan or for that matter Greece? The reason seems obvious enough. Even if a two-party system offers the voters a very limited choice, the limited choice seems to matter for a very large percentage of voters. And so the prospective candidates and the two main parties can never stop seeking electoral advantage, whatever the formal restrictions on campaigning may be.

Does not the Trump/Sanders phenomenon reflect significant anxiety on the part of the electorate? Yes, indeed it does. But the anxiety is a worldwide phenomenon, in no way an exclusively U.S. affair. And, once again, as we look around the world, there is almost everywhere a rise of support for parties and/or individuals who speak the language of anxiety and discontent.

The economic reality of the world-system has become one of steadily increasing unemployment and ever-wilder fluctuations of market prices and currency valuations. The most common response to this has been a major increase in anti-immigrant rhetoric. It is hard to think of a country in which this is not true. Protectionist rhetoric has come to dominate the political scene, not only in the United States but also almost everywhere else.

But then comes the final riposte of the media: Suppose one of these “outsider” candidates actually wins and/or becomes a part of the government? The answer to that seems all too simple: We have seen such parties become the government (Hungary) or part of the government (Norway). Not all that much changes. If an anti-immigrant party does well, there is some tightening on the entry of migrants and some tightening of welfare state expenditures for the poorest sectors of the population. There is some increased anti-minority violence within the country. These are all negatives. But in the end neither the geopolitics of the country nor the middle-run economic options of the country seems to have changed. Why do we assume that this would not be true of the United States in 2016?

I don’t wish to imply that the elections don’t matter. They do matter, especially in terms of the short-run. But they matter far less than we frequently assume. To be sure, there are real political battles going on. But these battles take place largely outside the electoral processes.

So, I come back to my repeated theme. We are in a structural crisis of the modern world-system. We need to have two time frames: One is the very short-run, in which we have to fight electoral battles in order to “minimize the pain” for the vast numbers of persons who are suffering in the short run. But we also have to fight the longer middle-run (20-40 years) battle of transforming the capitalist system into the kind of post-capitalist one that will be better and not worse than the present one.

Free-Trade Treaties are Anti-Free Trade

Commentary No. 407, August 15, 2014

Free trade is one of the principal mantras of capitalism as an historical system. Free trade is preached as the optimal arrangement for expanding production, lowering costs of production and therefore prices for consumption, and increasing income equality over the long run. This all may be true. We shall never know since we have never ever known a world of free trade. Protectionism has always been the dominant mode of economic relations between states.

But, you may think, are not states constantly ratifying treaties that are termed free-trade treaties? Yes, they are. But such treaties are not really based on free trade but rather on protectionism. Let us start with the first basic fact. There is no such thing as free trade that does not include every state in the world-system.

If a treaty includes any number of states running from two states to n-1 states (n being the totality of states at any given time), this means by definition that some other states are excluded from the provisions of that treaty. The collectivity of states within this so-called free-trade treaty are in fact creating a protectionist zone against the excluded state or states.

One of the reasons why it always seems so difficult for states to agree upon a so-called free-trade treaty is that the states involved have to negotiate a trade-off. Each of these states is deciding which protectionist measures it is ready to sacrifice vis-à-vis the limited group of states to be included in the treaty in order to obtain the advantages it would obtain from the readiness of some other state or states to sacrifice some particular protectionist measure.

We can see this how this works by looking at a major negotiation that has been going on for some time under the heading of the Trans-Pacific Partnership (TPP). There are currently twelve states involved in the prospective treaty: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, United States, and Vietnam. This group of 12 began negotiations in 2008 and they set a date of 2012 for completion. The year 2012 is behind us. They now are claiming in 2015 that the current negotiations will be a final phase and presumably completed this year.

If one looks at the list of states involved, it is a curious hodgepodge geographically. In addition, the countries are quite different in size, in GDP, and in importance in the world-economy. There is said to be a long list of potential other countries that may seek to enter once the TPP is functioning. There are however two very large countries that are not being talked about as potential members – China and India. Why is that?

The current and potential list is obviously based first of all on political, not economic, considerations. However, rather than discussing the politics of choosing the outer boundaries of the TPP zone, let us rather look at why it has taken so long to arrive at a treaty that all twelve states will be ready to ratify.

Take the question of dairy products. Canada protects them. New Zealand exports them. Canada is about to have elections. The party that governs Canada currently is afraid of losing these elections. Hence, there is no way Canada will sign on to a reduction of protection for its dairy farmers. New Zealand’s prosperity depends on being able to expand sales of dairy products.

Take another issue that involves New Zealand. It keeps its extensive medical benefits by using generic drugs extensively. So does Australia. Pharmaceutical companies in the United States are anxious to impose severe restrictions on use of generics, which hurt income from protected drugs. They call this “safeguarding intellectual property,” safeguarding being a euphemism for protecting.

Or take another issue: so-called human rights concerns. Trade-unions in the United States assert that there is an exodus of jobs from the United States because other countries permit conditions for their workers that seriously abridge their rights, thereby lowering the cost of production. The trade-union opposition is joined by opposition from human rights groups.

To achieve this objective however various other countries in the TPP would not only have to promise multiple unpalatable measures but actually enforce them. The political problem for the United States is how to arrive at wording that will keep these other states in the TPP but not alienate a sufficient number of members of the U.S. Congress to endanger ratification of the TPP. So far, it has proved difficult.

One could go on about protecting sugar or defining what is a truck produced within the TPP zone. The essential point is that the TPP states have now missed the most recent “final” date for an accord. The headline reporting it by The New York Times was “What Was to Be the Last Of the Trade Pact Sessions Ends With Heels Dug In.”

Given various requirements of U.S. Congressional schedules, even if an accord were now to be reached, no vote could be taken in the U.S. Congress before 2016, an election year. It seems at the very least unlikely that the treaty would be ratified. If this is true of TPP, it is even more true of the negotiations for a trans-Atlantic treaty, which are at an earlier stage of discussion.

I return to my fundamental point. So-called free-trade treaties are about managing the protectionist interests of the various parties to these treaties. Whatever they do, the results are anti-free trade. To understand what is going on, we have to start with that, and evaluate any proposal with that in mind.

Greece: Who’s to Blame, and For What?

Commentary No. 406, August 1, 2015

Anyone who has been following world events recently could not have failed to read endless analyses in the media concerning economic realities in Greece. The most remarkable thing about these analyses is how radically different they are, the ones from the others. They nonetheless can be divided into two main camps.

There is one group who say that Greece’s difficulties are self-created because successive Greek governments and Greek citizens have spent recklessly money they didn’t have in order to sustain a collective life style beyond their level of collective income. This group has a simple solution for Greece’s ills. It is to cut sharply Greece’s collective expenditures in order for it to repay its extensive loans. The advocates of this position call this proposed program “reform” and say that over time Greece will emerge stronger. This view is held to varying degrees by most members of the Eurozone of the European Union. Its most vocal and uncompromising spokesperson has been Germany’s Finance Minister Wolfgang Schäuble. He has been making two main arguments: Greece should leave the Eurozone “temporarily” and Greece should be held to the strict payment of all outstanding debts.

The critics of this program call it “austerity” and argue that it is cruel and heartless, forcing an ever-growing part of the Greek population into abject poverty. Furthermore, they say, a regime of austerity will not, cannot lead to an end to the present acute depression in Greece. They say that each successive loan has increased, not decreased, the rate of unemployment and has made it less possible to achieve its ostensible goal of restoring Greece’s “competitivity” in the world market. They call instead for substantial debt forgiveness and a reversal of the demands of creditors that Greece make cuts in pensions and other parts of the social security net. The demand of debt forgiveness has gained increasing support from prominent economists like Joseph Stiglitz and from Christine Lagarde, the president of the International Monetary Fund (IMF).

How did Greece arrive at this point of economic distress? The first debate is about when to date the starting-point of Greece’s misfortunes, itself a major point of contention. The partisans for the neoliberal reforms start the story quite recently, essentially when the military dictatorship was overthrown in 1974 and a left party, PASOK, led by Andreas Papandreou, emerged as a major force on the scene. This date puts the blame solidly on Greece itself for adopting the social-democratic policies of successive governments. The critics start the story much earlier, somewhere in the 1930s, when the West European governments, and particularly Germany, imposed a subordinate quasi-colonial system in Greece. This puts the blame squarely on capitalist and imperial forces.

Greek politics after 1974 were in many senses the usual division between a center/right party, New Democracy, and an initially left but increasingly center/left party, PASOK. As the successive governments accepted the conditions for loans and therefore more and more austerity, the vacant left space came to be occupied by Syriza, a new party founded in 2004, whose name is a Greek acronym for the Coalition of the Radical Left.

In the beginning, Syriza was indeed a coalition bringing together a variety of small parties ranging from the far left to the center/left. This party distinguished itself by its strong opposition to austerity. Its leader came to be Alexis Tsipras. In successive elections, Syriza gained more and more strength, finally obtaining first place in 2015 with 36% of the vote. Since Greek electoral rules award a bonus to the leading party, this was enough to give it 149 seats out of 300 and enabled Syriza to form a government with the support of one small party.

It was at this point that Syriza had to face up to the dilemmas of being the government, which does not allow the easy positions of being a radical opposition movement. The new government chose Yanis Varoufakis as its Finance Minister and chief negotiator with Greece’s creditors.

One of Syriza’s electoral promises had been not to deal with the so-called troika about what should be done. The troika was composed of the IMF, The European Central Bank, and the European Union. Varoufakis found that no one would talk with him if he didn’t talk with the troika. Nonetheless, Varoufakis was quite persistent and voluble about the need for debt forgiveness and for a transition loan to permit Greece’s banks to remain solvent. He wanted to buy time to enable Syriza to reduce the damages that years of austerity had wrought. And he wished to do this without Greece leaving the Eurozone, the so-called Grexit.

When the negotiations got nowhere, Syriza suddenly called for a referendum in Greece about whether or not to accept the terms offered by the troika. Everyone, including Syriza itself, expected that the results of the referendum would be close. Instead, when it was held on July 5, the no vote against yielding to the troika (called OXI in Greek) received a remarkably high percentage of 61.3 percent.

What to do now was the issue before Syriza. Its decision lay with a restricted committee of six persons including Tsipras and Varoufakis. Varoufakis proposed a so-called Plan B that he had been preparing for five months. It involved setting up a parallel payments system that would have permitted monetary transactions if there were a bank holiday and capital controls. It was a sort of Grexit on Greece’s terms. It would have faced maximum retribution by the neoliberal forces. The small committee of six voted 4-2 against implementing Plan B and Varoufakis resigned as Finance Minister. Syriza was then forced to agree to a still harsher set of “reforms” than it had faced at the beginning of the negotiations.

The locus of the political storm has now passed to Syriza itself. There are those who give priority to the survival of Syriza as a party. There are those in the so-called Left Platform inside Syriza who are denouncing Tsipras as a “traitor” and are perhaps intent on creating a new party. And there are those like Yaroufakis who think Tsipras has erred seriously in his tactics but remains committed to ending austerity.

What conclusions can Syriza (and the rest of us) draw from what has happened? The first thing to note is what is not being debated. From the very beginning in 2004 Syriza has been engaged in seeking state power to implement its objectives. It seems that alternative political routes were not envisaged. But of course, seeking state power brings with it certain very serious costs. One of these costs is that governments, all governments everywhere, are forced to make compromises in their dealing with the rest of the world. Eventually this leads to the kind of split that Syriza is undergoing now.

What is being debated is whether it is a plus or minus to remain in the Eurozone. And obviously this is a matter of short-term tactics. The Eurozone as presently constructed is a pressure to further neoliberal policies. But withdrawing from it involves serious short-term negative impact on the lives of Greeks. The enormous support for OXI was a vote for Greece’s dignity, against austerity, and for remaining in the Eurozone all at the same time.

We may expect now early parliamentary elections, in which Syriza under Tsipras will have a difficult time to get a renewed mandate. But there is no alternative for Tsipras. He is trapped by his previous decisions and the priorities of a party that wishes to remain in power.

Flags and Other Symbols: Do They Matter?

Commentary No. 405, July 15, 2015

The short answer is: very much. The United States as a whole, and in particular the states in the south that were part of the attempted secession in 1861 called the Confederacy, have been embroiled in a passionate debate for several weeks now. On June 17, a young man named Dylaan Roof, a self-avowed White supremacist, killed eight persons and wounded many others at the Emanuel AME church, a historic Black church in Charleston, South Carolina. Among the dead was the pastor, the Rev. Clementa C. Pinckney, who was a member of the South Carolina State Senate.

Violence against Black persons is not unusual throughout these states. It has indeed been frequent and rarely punished seriously. What has also been true in the states of the former Confederacy is the persistent use in legal symbols of the flag of the Confederacy. It was used as part of state flags and as part of state automobile license plates. There were many statues on state grounds of persons prominent in the secession.

Many people, especially in the Black population, have long argued that these symbols were racist and actually encouraged the frequent violence. They called for removing these symbols. However, for over a century, such calls were not only not heeded but actively denounced. The leading voice to retain these symbols was an organization called the Sons of Confederate Veterans (SCV).

The SCV asserted that these symbols merely honored the sacrifices of the individuals who fought in the war. This group held such great sway in these states that the whole issue had long been considered the third rail of politics in these states. Any White legislator who called for removing the symbols was sure to be defeated at the subsequent election.

Something astonishing happened now. The slaughter was so egregious and so obviously motivated by racism that major political leaders in South Carolina and throughout the neighboring states ignored the “third rail” and called for the removal of the symbols. And, rather swiftly, this occurred throughout these states.

The scene then passed to the national legislature, where many called for removing all the symbols honoring figures of the Confederacy from all structures controlled by the federal government. This is now being deliberated.

Lest one think that such a debate about symbols is solely a USA phenomenon, let us remember the large number of quite recent such debates elsewhere. In Ukraine, the Lyiv government has had a major debate about the inclusion of symbols that referred to the fascist government of Stepan Bandera. The same defense of such symbols was offered here, that the symbols predated Bandera and actually referred to a traditional Ukrainian flag of very long ago.

In Russia, there is a debate about reopening to public view Lenin’s tomb. In Venezuela, the opposition complains of the many uses by the government of symbols referring to Hugo Chavez. In France, the kind of headwear women may use in public has been a constant debate for at least the last twenty years. This French debate has now spread to many other countries of northern Europe. In Spain, there has been a debate about the remaining symbols referring to the Franco era. In India, Prime Minister Narendra Modi has called for practice of yoga, which many consider a way of promoting Hindu values and pre-eminence. And one could go on.

It is very clear that flags and other symbols are never neutral terrain. They matter, and people know that they matter. But why do they matter? It is because symbols create attitudes as much as, or quite possibly more than, attitudes create (or are reflected in) the symbols.

Flags and other symbols are major socializing instruments of children. Children learn what they are supposed to believe from these symbols. Adults are reminded by these symbols of what they are supposed to believe. Groups feel justified in excluding (even killing) members who do not conform to the recognition of these symbols.

So yes, symbols matter. The next question is whether changing the symbols matter. Now that the flag of the Confederacy no longer flies in South Carolina, is there less racism? Will there be less violence against the Black population? Quite possibly not, in the short run. The racism may be more covert, but no less real. So why then bother about changing the symbols? Because it may matter in the longer run. It is a part of a continuing struggle about the world in which we live and hope to build. It is only a part of the struggle. But it needs to be pursued because it is an indispensable part of the struggle.

That brings us to the last danger. It is all too easy in the struggle against one noxious set of symbols to install in our collective value system another noxious set of symbols. There is no magic formula in the real world where many groups are struggling for their place in the sun, and we are all members of multiple, overlapping groups. We have to find the space for reasonable compromises about symbols.