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The Sustainable Development Goals: A Siren and Lullaby for Our Times

photo of Stacco Troncoso

Stacco Troncoso
1st October 2015

Continuing our critical coverage of the UN’s Sustainable Development Goals, we are happy to share this article authored by P2P Foundation partners Thomas Pogge and Alnoor Ladha which was originally published at Occupy.com

Most people haven’t heard about the United Nations Sustainable Development Goals (SDGs). And if you have, there’s probably a rosy halo emanating from the deep recesses of your subconscious. If so, the UN, the World Bank, the Gates Foundation, ONE.org, Save the Children and other counterparts of the charitable-industrial complex have done their job well.

On the eve of the Sept. 25 UN summit – when the new SDGs, a set of 17 goals and 169 targets, will replace the Millennium Development Goals (MDGs) – there is a battle for mindshare over the merits of this plan. The SDGs are important because they are a once-in-a-generation declaration of what the world’s power elites are willing to publicly commit. In fact, they are the only shared international agreement to address global poverty. As such, they capture many of the central assumptions and norms that underpin the global political economy.

Keep Calm and Carry on Shopping

At first glance, the rhetoric of the SDGs seems irresistible. They talk about eliminating poverty “in all its forms, everywhere” by 2030, through “sustainable development” and even addressing extreme inequality. None of which we would argue with of course. But as with all half-truths, one just has to dig beneath the surface for motivations to unravel.

Recent research by economist David Woodward shows that to lift the number of people living under $1.25 a day (in “international dollars”) above the official SDG poverty line, we would have to increase global GDP by 15 times – assuming the best-case-scenario in growth rates and inequality trends from the last 30 years. That means the average global GDP per capita would have to rise to nearly $100,000 in 15 years, triple the average U.S. income right now. In a global economy that is so inefficient at distributing wealth, where 93 cents of every dollar of wealth created ends up in the hands of the richest 1%, more growth is only going to enrich the rich while destroying the planet in its wake.

Of course, it is completely possible to achieve the necessary goal of reducing poverty, but not through the UN’s growth-based, business-as-usual strategy. Poverty can only be eradicated by 2030 if we address two critical issues head on: income inequality and endless material growth.

First, we must address the enormous inequality that has accumulated in the last 200 years. The richest 1% of humanity will very soon own over half of private wealth. And indeed, large increases in the socioeconomic position of the poorer half can be achieved through very modest inequality reductions. For example, a hypothetical doubling of their share of global income, from 4% to 8%, even if it came entirely at the expense of the richest 5%, would only reduce the incomes of these top earners by less than 10%.

The SDGs inequality goal (target 10.1) allows current trends of income concentration to continually increase until 2029 before they start to decline. This totally ignores the structure of our economic system which creates inequality in the very rules that enforce and articulate the current distribution of wealth.

The other essential task is for the world’s nations to adopt a saner measure of human progress; one that gears us not towards endless GDP growth based on extraction and consumption, but towards the wellbeing of humanity and our planet as a whole. There are plenty of options to choose from, all of which have been ignored in the SDGs. Instead, Target 17.19 says only that they will, “by 2030, build on existing initiatives to develop measurements of progress on sustainable development that complement GDP.” In effect, the SDGs perpetuate severe poverty and leave this fundamental problem to future generations.

Sustainable Development Goals, Millennium Development Goals, global poverty, global inequality, wealth inequality, gender inequality, international poverty line

Magical Accounting

Much of the credibility of the Sustainable Development Goals rests on the story that their predecessors – the Millennium Development Goals – have, on the whole, been a success. They have, so we are told, halved poverty since 1990.

The clear implication is that the basic model of GDP growth is working so well that we should trust it to finish the job. And whereas it’s certainly true that progress has been made on some problems in some places, many researchers, including the authors of this article, have shown that this does not add up to overall success. In fact, the progress has been so uneven, and the core data has been so massaged over the years, that it’s more accurate to say that the claim to have halved poverty is more magical accounting than verifiable fact.

For example, shortly after the MDGs were agreed, the UN moved from an aim of halving absolute numbers to halving the proportion of people in poverty. Then, they went from halving the proportion of impoverished people globally to just focusing on the developing world. They even went back in time to change the baseline year of recording, from 2000 back to 1990, which conveniently allowed them to co-opt all of China’s gains in lifting people out of poverty in the 1990s, despite the fact that China’s policies bear little resemblance to the UN’s prescriptions. And probably the most brazen of chimeric acts: they even changed the definition of poverty, moving their international poverty line (IPL) multiple times.

It seems the MDGs are a virtual Potemkin Village, stage managed to keep the true poverty trends from being exposed. For the successor goals to have any credibility, they must adopt a more realistic measure of poverty, actually address the root causes, and guard against the kind of statistical manipulation that so blighted the MDGs.

Sustainable Development Goals, Millennium Development Goals, global poverty, global inequality, wealth inequality, gender inequality, international poverty line

The Siren’s Call

The obvious question is why the UN and others in the development industry would want to deceive the public, and arguably themselves.

At one level, the objective of the UN, big foundations and other non-governmental organizations is to convince us of their competence, thereby creating enough support and interest to justify their existence and make them seen as worthy guardians of global issues – but not create so much political buoyancy and public attention that they would have to address the rules of the global operating system that has so benefited them. All the structural incentives are there to manipulate the figures and market themselves as a success.

Then, of course, there is the influence of the corporate-political elites who both fund most of these organizations and require the “good news” trend lines to defend and maintain the status quo. Add to that the personal and professional ambition of individuals within some of these institutions and you have the perfect conditions for lies and half-truths to win the day. In this way, the SDGs serve as both our siren and our lullaby.

We must understand that the development sector has two contradictory roles: they tell us that there are critical global issues to which we must pay heed, but then ensure us that they have the issues under control. This is why the UN, the World Bank and others have been so determined to convince us that they are competent and have the right plan. In fact, the UN has reached out to Madison Avenue in the hopes of marketing the SDGs, which they have positioned as the “world’s biggest advertising campaign.” They have even created a child-friendly propaganda kit for schoolteachers. If they can’t actually solve global problems, they can at least make us, and our children, think they’re solving them.

As the fig leaves are being ornately decorated, it would serve civil society well to remember that we cannot fix deeply entrenched social problems with the same logic that created them in the first place. Poverty, inequality and climate change are natural outcomes of our current set of economic rules. More growth in the absence of structural change is only going to worsen the lives of the world’s majority. But in the topsy-turvy world of Western development, facts are malleable, history is irrelevant, public perception is the playing field, self-interest is the foundation of benevolence, and GDP growth will lift all boats. It’s time to separate the siren and the lullaby.

Sustainable Development Goals, Millennium Development Goals, global poverty, global inequality, wealth inequality, gender inequality, international poverty line

Thomas Pogge is the founding Director of the Global Justice Program and Leitner Professor of Philosophy and International Affairs at Yale University. @ThomasPogge

Alnoor Ladha is the Executive Director of The Rules and a board member of Greenpeace International USA. @AlnoorLadha

You can stand with Naomi Klen, Noam Chomsky, Chris Hedges, Medha Patkar, Thomas Pogge, Alnoor Ladha and others by signing their shared Open Letter to the United Nations.


Posted in Activism, Anti-P2P, Campaigns, Cognitive Capitalism, Collective Intelligence, Economy and Business, Featured Trend, Guest Post, P2P Collaboration, P2P Ecology, Peer Property, Sharing | No Comments »

Volkswagen Scandal Confirms the Dangers of Proprietary Code

photo of David Bollier

David Bollier
28th September 2015


There is one notable aspect to the Volkswagen emission-cheating scandal that few commentators have mentioned:  It would not have happened if the software for the pollution-control equipment had been open source.

Volkswagen knew it could defraud consumers and deceive regulators precisely because its software was closed, proprietary and legally protected from outside scrutiny. Hardly anyone could readily check to see if the software was performing as claimed.

Sure, dogged investigators could laboriously compare actual car emissions to emissions in artificial regulatory tests. That’s essentially what broke open the Volkswagen scandal. But that is an expensive and problematic way to identify cheaters.

The larger question is why should a piece of software that has enormous public health and environmental implications be utterly impenetrable in the first place?  A locked box invites lawless, unaccountable and sloppy corporate behavior. It assures that hardly anyone can see what’s going on. Volkswagen exploited the cover of darkness for all that it could.

This lesson was driven home when columnist Jim Dwyer of the New York Times hailed free software attorney Eben Moglen – the former general counsel for the Free Software Foundation and founder of the Software Freedom Law Center – as “a prophet.”  Dwyer quoted Moglen:

Intelligent public policy, as we all have learned since the earth twentieth century, is to require elevators to be inspectable, and to require manufacturers of elevators to build them so they can be inspected.  If Volkswagen knew that every customer who buys a vehicle would have a right to read the source code of all the software in the vehicle, they would never even consider the cheat, because the certainty of getting caught would terrify them.

But since the code is proprietary, automakers know that they have plenty of room to cheat.  Not only is the code inscrutable, automakers realize that the U.S. Environmental Protection Agency has only enough funding to test 10-15 percent of new vehicles. That means “self-certification” is the primary means of enforcement: an utter joke.

Worse, inquisitive consumers can’t even check the software themselves. Under the Digital Millennium Copyright Act, it is a crime to breach the encryption of copyrighted software and look into its source code.  Wired magazine reported that last year, a number of open source advocates tried to make it legal to scrutinize copyrighted software for “good-faith testing, identifying, disclosing and fixing malfunctions, security flaws or vulnerabilities.”  But of course, the politically powerful auto industry squashed the idea, claiming that open access to the code would pose “serious threats to safety and security.”

The Volkswagen scandal shows that the real, larger threat to security comes from proprietary code controlled by large corporations, not from its open release. Why should we rely upon politically compromised, budget-starved government agencies to enforce the law against corporations who can use technological lockboxes to mask their deceits?  (The Volkswagen scam had been going on for years.)  Why not look to a supremely effective, transparent and virtually free form of enforcement – mandatory open source code?

In the wake of the 2008 financial meltdown, some brilliant minds made the same point about the Securities and Exchange Commission’s oversight of banks and financial institutions.  Why not require the disclosure of key financial statistics so that inquisitive minds could use open data analytics to spot dangerous trends in financial markets with greater speed and ferocity than the SEC?

Volkswagen has shown why open code would make automobiles safer and more environmentally benign.  Why not open code, Moglen asks, for airplanes, medical devices, anti-lock brakes and throttle controls in automobiles? Open source is our best protection against criminal hacking and corporate fraudsters alike.

Memo to government regulators everywhere:  Want to improve public safety and environmental compliance at a fraction of current costs and before the harm happens? Require open source code on critical technologies.


Posted in Activism, Anti-P2P, Cognitive Capitalism, Collective Intelligence, Copyright/IP, Economy and Business, Empire, Open Content, Original Content, P2P Ecology, P2P Legal Dev., Politics | No Comments »

How to hack the mainstream discourse on ending poverty

photo of Adam Parsons

Adam Parsons
27th September 2015

The Rules team have initiated an ambitious campaign to ‘hack’ the official logic of the Sustainable Development Goals, in which they highlight the true reality of poverty and point the way towards real solutions for a fair and sustainable world.

In less than three weeks’ time, the world’s heads of state will gather at the United Nations in New York to officially adopt the post-2015 development agenda, known as the Sustainable Development Goals (SDGs). A massive publicity machine will soon move into gear to promote the good news of this global plan of action, which on the surface appears truly laudable in its quest to “free the human race from the tyranny of poverty and want and to heal and secure our planet”. But is the high-minded and progressive rhetoric everything it’s cracked up to be, or is there more to this ‘feel good story’ of progress than meets the eye?

According to the campaign group The Rules, there’s so much wrong with the SDG process that its 17 goals and 169 targets are not only misleading and inadequate, but even dangerous. They argue that while the SDGs represent a significant step forward by aspiring to completely eradicate extreme poverty by 2030, the new agenda fails to provide an answer for how to realise its objectives within the means of our shared planet. While the overarching goals themselves have always been attainable, there is a delusion at the heart of the SDG process that suggests we can achieve them without challenging dominant economic interests and radically overhauling the status quo.

Hence the danger that hides behind the noble intentions: by playing along with the star-studded narrative that subtly tells us ‘the world is getting better and there is nothing wrong with business-as-usual’, we risk locking in the global development agenda “for the next fifteen years around a failed economic model that requires urgent and deep structural changes”.

The bigger questions                          

For these reasons, The Rules team have initiated an ambitious campaign to ‘hack’ the official logic of the SDGs and reframe the narrative on eradicating global poverty. Rather than buying into the mainstream story that we can “end poverty and hunger everywhere” by 2030 within the defunct economic paradigm of endless growth and debt-fuelled consumption, they have proposed a contending set of questions that encourage engaged citizens to see how the SDGs cannot possibly succeed within the existing political context.

As Joe Brewer explains in his piece on Hacking the SDG Discourse, these three basic questions can help us to acknowledge the root causes of poverty and environmental harm, thereby focusing on the bigger picture issues of power and politics that also point towards the real solutions to our civilisational crisis. Anyone can use these scripts to contradict the ‘feel good story’ of progress and reframe the fundamental issues. In so doing, we can also become more hopeful and empowered if we are asking the same questions, reaching similar conclusions and embracing a shared vision of a better world. To quote one of The Rules’ maxims: “To fix a problem, you first have to know why it exists”.

Click on the links above each question to see the short video animations that neatly summarise each one. See also the infographics further below that succinctly illustrate some of the key points of analysis and highlight the true reality of poverty and hunger, which sharply contradicts the received wisdom of global development. You can also sign The Rules’ open letter to the United Nations that declares how the SDGs are not in fact representing the best interest of the world’s majority – “those that are currently exploited and oppressed within the current economic and political order”.

How Is Poverty Created? #PovertyIsCreated
“Where do poverty and inequality come from? What is the detailed history of past actions and policies that contributed to their rapid ascent in the modern era? When were these patterns accelerated and by whom?”

Who’s Developing Who? #WhosDevelopingWho
“The story of development is often assumed or unstated. What is the role of colonialism in the early stages of Western development? How did the geographic distribution of wealth inequality come into being? What are the functional roles of foreign aid, trade agreements, debt service, and tax evasion in the process of development? And most importantly, who gains and who loses along the way?”

Why Is Growth The Only Answer? #WhyGrowth
“The mantra that “growth is good” has been repeated so often that it has the feel of common sense. Yet we know that GDP rises every time a bomb drops or disaster strikes. Growth, as defined up till now, is more nuanced and complex than this mantra would have us believe. Why must the sole measure of progress be growth (measured in monetary terms)? Who benefits from this story? What alternative stories might be told?”

Further resources:

The story of poverty – The Rules

How To Feel Good About Global Poverty, by Martin Kirk, Fact Co.Exist

Hacking the SDG Discourse: A Narrative Strategy for Changing the Story of Global Development, by Joe Brewer, Medium.com

Who Framed Global Development? Language Analysis of the Sustainable Development Goals, by Joe Brewer, SlideShare

Three Ways Humans Create Poverty, by Jason Hickel, Joe Brewer, and Martin Kirk, Fact Co.Exist

SDGs and the Problem with Saving the World, by Jason Hickel, Jacobin

– See more at: http://www.sharing.org/information-centre/blogs/how-hack-mainstream-discourse-ending-poverty#sthash.Upii7zpH.dpuf


Posted in Activism, Anti-P2P, Campaigns, Cognitive Capitalism, Commons, Commons Transition, Culture & Ideas, Economy and Business, Empire, Ethical Economy, Open Calls, Original Content, P2P Action Items, P2P Collaboration, P2P Development, P2P Ecology, P2P Movements, P2P Public Policy | 1 Comment »

Biomedical patents reduce innovation by 30%

photo of David de Ugarte

David de Ugarte
9th September 2015


Is intellectual property necessary for innovation? Is it counterproductive? For the first time, the publication of significant quantities of evidence from the Human Genome Project demonstrates the latter.

As much as the official discourse would like it to be, the debate on intellectual property is not about whether authors or inventors would earn the same thing or more if this legal monopoly was abolished. The question is whether we need rents from a monopoly that only exists thanks to legislation for innovation to exist and whether more innovation is created with protection from intellectual property or without it.

In the field of theory, Michele Boldrin made a fundamental contribution which is now part of the corpus of economic theory by demonstrating that under certain conditions, which are common and widespread today, that incentive is not necessary.

Emprical evidence however, in fields like the biomedical and pharmaceutical industry, was scarce, though it did point to the innovator having incentives beyond patents that would be sufficient to justify and profit amply from R&D.

The type of evidence necessary is two similar innovations, one patented and the other not, coexisting in the market from the outset. The record current for illicit duplication is two years, accused but never proved in the case of the Warfarin, the generic version of an anticoagulant called Coumadin, originally patented by DuPont Pharmaceuticals Inc. What’s interesting about the Coumadin case is that it continues to create revenue of some 500 million dollars annually for DuPont. According to the Wall Street Journal, the monthly expense per patient is $35.50, compared with $28.60 for the generic. However, in spite of the difference in prices, Coumadin continues to have almost 80% of the market. Today, Coumadin remains DuPont’s flagship product, and central to the multinational’s bank accounts, in spite of having been one of the few cases where the nearly simultaneous appearance of a generic creates a situation comparable to the absence of patents.

The definitive case: the human genome

We surely owe the definitive empirical proof to the recent paper by Heidi Williams, a Ph.D. student in Economics at Harvard University.

Williams analyzes the consequences of the Human Genome Project, whose results from the sequencing of the genome belong to the public domain, with those of Celera, a business that hoarded its results under patents.

What’s interesting is that there are genes that were originally protected by Celera, which, by being resequenced through public effort, then became patent-free. This way, Williams could really do two different studies: in one, she compared the impact of patented genes with genes in the public domain from the moment of their sequencing, and in the other, the result of genes that were originally Celera’s being devolved to the public domain.

The result in both cases was similar: patents decreased innovation and its results by 30%. Additionally, in the cases where Celera enjoyed a brief period of monopoly, the negative effects on innovation were maintained, though at a smaller scale, after the gene sequencing was released. That is, the negative effects of intellectual property on innovation tend to persist even after the end of legal protection.

If we extend these conclusions to other settings of intellectual property, we’ll understand, for example, why books in the public domain lead to new editions and translations with more regularity that those under Creative Commons.


We already knew from theoretical models and the scarce empirical evidence available that a pharmaceutical market without patents would, in all likelihood, see greater investment in R&D because only innovation would guarantee temporary extraordinary rents close to those of monopolies. But it also would see a rapid expansion of innovations, in the form of generics, in less-developed nations.

Now we know also that biomedical patents reduce innovation by a third, but also that as short as the period of monopoly may be, the social cost tends to be maintained over time.

If we add up both results, the political consequences are clear: the political and social objective should no longer be the reduction in time or place for exclusive use, but rather its total elimination.

Translated by Steve Herrick from the original (in Spanish)


Posted in Anti-P2P, Commons Transition, Copyright/IP, Culture & Ideas, Empire, Networks, Open Access, Open Content, Open Models | No Comments »

The Impending Liberation of “Happy Birthday”

photo of David Bollier

David Bollier
4th September 2015


If the culture industries wonder why people have so little respect for copyright law these days, they need look no further than the Warner Music Group’s claimed copyright of the song “Happy Birthday.”  It’s a grotesque mockery of the avowed principles of copyright law and a scam on the public that has persisted for decades.  But with a revenue stream of $5,000 a day, or $2 million a year, Warner Music is not about to stop charging people for the right to perform “its” song.

Thanks to a courageous filmmaker, however, this travesty may soon come to an end.  Jennifer Nelson had been making a documentary about the “Happy Birthday” song when Warner said it would cost her $1,500 to use it in her film.  Nelson filed a lawsuit two years ago, a remarkable challenge in itself to the usual legal bullying by copyright owners. After all, who has the money or stomach to battle large corporations with well-paid lawyers or to lobby Members of Congress whose minds have already been made up by campaign contributions from music, film and publishing companies? Most TV shows simply forbid their hosts and performers from singing “Happy Birthday,” and various restaurants have come up with their own alternative songs, lest they incur licensing fees.

It now appears that Nelson’s legal team has uncovered hard evidence that the copyright to “Happy Birthday” has been invalid for years.  In a storage facility used by the University of Pittsburgh, lawyers found a 1922 songbook that contained the lyrics of “Happy Birthday” in a song entitled “Good Morning and Birthday Song.” This is significant because there was no copyright notice on the song in the book – a requirement for copyright protection under the law at the time – and anything published before 1923 has entered the public domain and is free for anyone to use.

Of course, Warner attorneys have their own highly technical legal responses. That’s what usually happens in such cases – the historical record and legal rules resemble a murky cave from which no one but expensive lawyers emerge. In this case, a judge will have to adjudicate whether there is enough evidence to decide the case now, or whether a trial will be needed. Still the discovery of the 1922 songbook is considered a “smoking gun” by many.

However the arcane legal arguments play out, it’s patently absurd that a song that derived from Negro folk culture and “written” by two sisters, Patty and Mildred Hill, in 1858, is still copyrighted in 2015 and won’t enter the public domain until 2030 — 172 years after its “original” creation. This lengthy copyright monopoly was the supposed “incentive” that the Hill sisters needed to “create” the song.

Thanks to Nelson and other artists who have joined her lawsuit, the expensive copyright joke known as “Happy Birthday” may soon be coming to an end.  But when will copyright law begin to take account of the actual generative power and “authorship” of social commons?  That, I fear, will require a much larger revolution in law.

Robert Brauneis’ 2010 law review article on the copyright of “Happy Birthday” is the most rigorous, full-scale treatment of this subject, available here.  A shorter but still extensive account by Flenn Fleishman appeared recently on Boing Boing.


Posted in Anti-P2P, Campaigns, Cognitive Capitalism, Copyright/IP, Culture & Ideas, Original Content | No Comments »

The anti-democratic and anti-social design foundations of the Euro

photo of Michel Bauwens

Michel Bauwens
7th August 2015

“This was not a mistake; this was not something that they tried to avoid. It is what they wanted to happen, a crisis that would cause a realignment of political power and the end of the European welfare state.”

Excerpted from an interview with Greg Palast:

“Mundell, who taught at Columbia University, won the Nobel Prize for his writings on currency, and what’s interesting is that he won the Nobel Prize for the theory of optimum currency areas, the theory that nations should join currency unions when they have similar economies. Therefore, agriculture economies should have a joint currency; he thought the US and Canada [should] have two different currencies, east-west, not Canadian-American, but the western US should have one currency with Canada, and eastern Canada and the eastern US should have one currency. In other words, he believed that a combination, like putting Germany in the same currency zone as France and Spain, would be ridiculous; it’s a violation of his core theory through which he won the Nobel Prize.

Why is this important? This is the very same guy who is the inventor, you could say, of the euro, which he called the “europa” – that there should be one single common currency for all of Europe, damn the optimum currency theory. Now why would someone suggest a currency that is exactly the opposite of everything he’s taught? I spoke to him about this, and he said that it has nothing to do with creating a good currency. It has everything to do with changing the politics of Europe. He was very, very right-wing. He is the creator of another economic theory, which wouldn’t get him the Nobel Prize; in fact, it’s called “voodoo economics,” supply-side economics. That is, the more you cut taxes, the more tax revenue you get. The more deregulation of business you get, the better your economy – and if you deregulated the banks, there would be less risk in the banking system. All of those supply-side systems, which we call “Thatcher economics,” “Reaganomics,” after Ronald Reagan, it’s all been discredited; it’s all called “voodoo economics,” and yet, that’s what the euro is. It’s an instrument of voodoo economics.

“This was not a mistake; this was not something that they tried to avoid. It is what they wanted to happen, a crisis that would cause a realignment of political power and the end of the European welfare state.”

By having one currency for Europe, and with it, a rule – remember, with the euro comes the rule that you cannot have more than a 3 percent deficit or 60 percent of debt compared to your gross domestic product. That means that no nation, because you don’t have your own currency, has any control over monetary policy or fiscal policy or currency exchange rates. Basically, you lose complete control of your financial system, and he said, “It gets rid of the meddling of parliaments and congresses and governments to fool around with fiscal and economic policy.” What he meant is that democracy gets in the way of good economics.

So, what happens when you get rid of democracy? He says, “That leaves government only one choice,” the only choice when there’s a crisis, as we have now. When there is a crisis, governments will eliminate labor union power, will eliminate government regulation, will privatize industry, power companies, water companies, because they’ll need to pay off their debts, and basically, the power of government and labor unions, the working class, those powers will be eliminated, and wages will fall. In order to maintain employment, governments will allow wages to fall and regulations to die.

In other words, this crisis, in Mundell’s terms, is what he had planned and what the creators of the euro had planned. Crisis is part of the euro plan, a crisis that would cause a realignment between business and labor in Europe, and that the welfare state of Europe will be destroyed, and that’s exactly what has happened. What you’re seeing now, with the collapse of the southern European economies, including Greece and Spain and Portugal, what’s happening here was part of the euro plan. This was not a mistake; this was not something that they tried to avoid. It is what they wanted to happen, a crisis that would cause a realignment of political power and the end of the European welfare state. By the way, the end of the European welfare state caused by a crisis is a quote from Mundell. That’s exactly what he told me and I have it on tape.”


Posted in Anti-P2P, P2P Money, P2P Public Policy | 1 Comment »

Small Loans, Big Problems: The False Promise of Microfinance

photo of Stacco Troncoso

Stacco Troncoso
4th August 2015


We would argue that there are other winners in what Hickel calls “the microfinance game”. Corporate interests of all stripes have a vested interest in seeing millions of people drawn more deeply into the debt-based globalized money economy.

Reposted from Local Futures talks about the false promise of Micro-finance.

Ever since Bill Clinton and the World Bank enthusiastically embraced the microfinance concept in the 1990s, we at Local Futures have been skeptical of its benefits, seeing it as part of a whole package of “market solutions” to our social and environmental crises that, in the long run, make things much worse. We have pointed out that these loans often target rural populations who were not previously in debt: they represent the long arm of capitalism reaching into remote rural areas, encouraging a shift away from dependence on the land and the local community, towards competition in a resource-depleting global economy.

It has not been easy to oppose micro-credit: many well-intentioned grassroots activists have bought into the idea that giving ‘Third World’ women a loan would eradicate poverty and reduce population. This thinking was promoted with missionary zeal, and spread rapidly across the world. In trying to counter it, we have often felt like heretics. (One of the most difficult moments was when I was asked to debate Muhammad Yunus, the founder of the Grameen Bank, at the height of his popularity, on BBC radio.)

For this reason we’re very happy to see this article by Jason Hickel, a professor of anthropology at the London School of Economics, in the UK Guardian: The microfinance delusion: who really wins? As Hickel says, “microfinance usually makes poverty worse”, because the vast majority of microfinance loans are used to fund the purchase of consumer goods that the borrowers simply can’t afford: “they end up taking out new loans to repay the old ones, wrapping themselves in layers of debt.” Even when used to finance a small business, the most likely outcome is that the new businesses fail, which leads to “vicious cycles of over-indebtedness that drive borrowers even further into poverty.” The only winners are the lenders, many of whom charge exorbitant interest rates. Hickel concludes that “microfinance has become a socially acceptable mechanism for extracting wealth and resources from poor people.”

We would argue that there are other winners in what Hickel calls “the microfinance game”. Corporate interests of all stripes have a vested interest in seeing millions of people drawn more deeply into the debt-based globalized money economy. Interestingly, at the bottom of the webpage where Hickel’s article appears there are links to articles sponsored by the credit card giant Visa, all of them urging more “financial inclusion” in the global South – in other words, bringing more people into the economic system that corporate interests like Visa dominate. “Helping the world’s one billion unbanked women” turns out to be about how “more than 200 million women lack access to a mobile phone, meaning they’re excluded from digital banking opportunities.” Another article argues that one of the greatest challenges facing policymakers involves “providing some 2.5 billion people with access to formal financial services.”

This is propaganda, pure and simple: it is part of a drumbeat coming from think-tanks and corporate-friendly pundits that have been very effective in convincing people – including well-meaning philanthropists and activists – that the solution to global poverty requires pulling ever more people into the global economic system. That system is failing the majority even in the “wealthy” countries, while spurring rampant consumerism and unsustainable resource use worldwide.

The solutions to our many crises – including poverty – will not come from a global marketplace rigged by de-regulatory trade treaties to favor the biggest multinational corporations. They depend on preventing further deregulation of global corporations, while shifting towards more localized economies in which people can have real control over their own lives.


Posted in Anti-P2P, Cognitive Capitalism, Culture & Ideas, Economy and Business, Empire | No Comments »

Video of the day: Dmytri Kleiner on Germany’s treason scandal

photo of Stacco Troncoso

Stacco Troncoso
3rd August 2015

Activist and software developer Dmytri Kleiner gives his perspective on Germany’s treason scandal to RT International.


Posted in Activism, Anti-P2P, Collective Intelligence, Culture & Ideas, Empire, Featured Video, Videos | No Comments »

The neoliberal background to the Greek crisis

photo of Michel Bauwens

Michel Bauwens
16th July 2015

The crushing of political choice is not a side-effect of this utopian belief system but a necessary component. Neoliberalism is inherently incompatible with democracy, as people will always rebel against the austerity and fiscal tyranny it prescribes. Something has to give, and it must be the people. This is the true road to serfdom: disinventing democracy on behalf of the elite.

Excerpted from George Monbiot:

“The IMF is controlled by the rich, and governs the poor on their behalf. It’s now doing to Greece what it has done to one poor nation after another, from Argentina to Zambia. Its structural adjustment programmes have forced scores of elected governments to dismantle public spending, destroying health, education and all the means by which the wretched of the earth might improve their lives.

The same programme is imposed regardless of circumstance: every country the IMF colonises must place the control of inflation ahead of other economic objectives; immediately remove barriers to trade and the flow of capital; liberalise its banking system; reduce government spending on everything bar debt repayments; and privatise assets that can be sold to foreign investors.

Using the threat of its self-fulfilling prophecy (it warns the financial markets that countries that don’t submit to its demands are doomed), it has forced governments to abandon progressive policies. Almost single-handedly, it engineered the 1997 Asian financial crisis: by forcing governments to remove capital controls, it opened currencies to attack by financial speculators. Only countries such as Malaysia and China, which refused to cave in, escaped.

Consider the European Central Bank. Like most other central banks, it enjoys “political independence”. This does not mean that it is free from politics, only that it is free from democracy. It is ruled instead by the financial sector, whose interests it is constitutionally obliged to champion through its inflation target of around 2%. Ever mindful of where power lies, it has exceeded this mandate, inflicting deflation and epic unemployment on poorer members of the eurozone.

The Maastricht treaty, establishing the European Union and the euro, was built on a lethal delusion: a belief that the ECB could provide the only common economic governance that monetary union required. It arose from an extreme version of market fundamentalism: if inflation were kept low, its authors imagined, the magic of the markets would resolve all other social and economic problems, making politics redundant. Those sober, suited, serious people, who now pronounce themselves the only adults in the room, turn out to be demented utopian fantasists, votaries of a fanatical economic cult.

Those sober, suited, serious people turn out to be demented utopian fantasists, votaries of a fanatical economic cult
All this is but a recent chapter in the long tradition of subordinating human welfare to financial power. The brutal austerity imposed on Greece is mild compared with earlier versions. Take the 19th century Irish and Indian famines, both exacerbated (in the second case caused) by the doctrine of laissez-faire, which we now know as market fundamentalism or neoliberalism.

In Ireland’s case, one eighth of the population was killed – one could almost say murdered– in the late 1840s, partly by the British refusal to distribute food, to prohibit the export of grain or provide effective poor relief. Such policies offended the holy doctrine of laissez-faire economics that nothing should stay the market’s invisible hand.

When drought struck India in 1877 and 1878, the British imperial government insisted on exporting record amounts of grain, precipitating a famine that killed millions. The Anti-Charitable Contributions Act of 1877 prohibited “at the pain of imprisonment private relief donations that potentially interfered with the market fixing of grain prices”. The only relief permitted was forced work in labour camps, in which less food was provided than to the inmates of Buchenwald. Monthly mortality in these camps in 1877 was equivalent to an annual rate of 94%.

As Karl Polanyi argued in The Great Transformation, the gold standard – the self-regulating system at the heart of laissez-faire economics – prevented governments in the 19th and early 20th centuries from raising public spending or stimulating employment. It obliged them to keep the majority poor while the rich enjoyed a gilded age. Few means of containing public discontent were available, other than sucking wealth from the colonies and promoting aggressive nationalism. This was one of the factors that contributed to the first world war. The resumption of the gold standard by many nations after the war exacerbated the Great Depression, preventing central banks from increasing the money supply and funding deficits. You might have hoped that European governments would remember the results.

Today equivalents to the gold standard – inflexible commitments to austerity – abound. In December 2011 the European Council agreed a new fiscal compact, imposing on all members of the eurozone a rule that “government budgets shall be balanced or in surplus”. This rule, which had to be transcribed into national law, would “contain an automatic correction mechanism that shall be triggered in the event of deviation.” This helps to explain the seigneurial horror with which the troika’s unelected technocrats have greeted the resurgence of democracy in Greece. Hadn’t they ensured that choice was illegal? Such diktats mean the only possible democratic outcome in Europe is now the collapse of the euro: like it or not, all else is slow-burning tyranny.

It is hard for those of us on the left to admit, but Margaret Thatcher saved the UK from this despotism. European monetary union, she predicted, would ensure that the poorer countries must not be bailed out, “which would devastate their inefficient economies.”

But only, it seems, for her party to supplant it with a homegrown tyranny. George Osborne’s proposed legal commitment to a budgetary surplus exceeds that of the eurozone rule. Labour’s promised budget responsibility lock, though milder, had a similar intent. In all cases governments deny themselves the possibility of change. In other words, they pledge to thwart democracy. So it has been for the past two centuries, with the exception of the 30-year Keynesian respite.

The crushing of political choice is not a side-effect of this utopian belief system but a necessary component. Neoliberalism is inherently incompatible with democracy, as people will always rebel against the austerity and fiscal tyranny it prescribes. Something has to give, and it must be the people. This is the true road to serfdom: disinventing democracy on behalf of the elite.


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The Real Question of the Referendum: The Enclosure of the Greek Commons

photo of Vasilis Kostakis

Vasilis Kostakis
4th July 2015


Being a typical academic, allow me to begin with a definition: the commons is a term used to describe shared resources (such as land, water, air, culture, science, infrastructures) in which each stakeholder has an equal interest.

The devastating enclosures of the English commons, between 16th and 19th centuries, has been labeled as the “revolution of the rich against the poor” by the eminent political economist Karl Polanyi. They forced peasants into the labor market and the factories of the industrial revolution and “marked the beginning of a worldwide process of commodifying the land, ocean, and atmosphere of the earth”.

So, what is the relevance of the loss of the English commons with the imminent Greek referendum?

Much discussion has been taking place around the meaning of a question posed in a relatively technical language. To put the matter bluntly, I would like to argue that the real question of the referendum is whether Greek citizens approve or disprove the enclosure of their commons. The proposed changes in the pension, taxing, labour and insurance systems are supposedly aimed at ensuring that Greece can service its foreign debt. However, these are not the biggest perils although they fill most of the pages of the notorious document the Greeks are called to approve or disprove.

In short, on page 17, the creditors suggest that Greece irreversibly privatizes its airports, harbors, railways, water supply and sewerage companies, energy infrastructures and public power corporations, motorways, post offices, thermal springs, cultural treasures and other properties (seaside land, marinas etc). These are assets which we have inherited or jointly created and, instead of delivering them intact or even enhanced to the next generations, we are called, under the pressure of an economic collapse, to sell them off to the rich. In addition, no hybrid forms of public-private partnership are explicitly mentioned (for instance, OTE, a profitable telecommunication public-private corporation, is to be entirely privatized).

Conditions in Greece today are not only reminiscent of those in Germany in 1933, as Prof. Sachs writes, but also of those in 16th-19th century England and Wales. Another revolution of the ultra-rich is taking place and the endgame playing out between Greece and its creditors might be only the beginning of a new global wave of enclosures.


Vasilis Kostakis is Senior Research Fellow at the Ragnar Nurkse School of Innovation and Governance (TUT), longtime collaborator of the P2P Foundation, and member of the CommonsTransition Team.

Images: (Top) (Bottom) by OpenSource.com


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