peak privatization

The Wall Street Journal’s David Luhnow and Jose de Cordoba turn in a good article on Bolivia’s nationalization – it puts it in the broad picture of the global trend away from privatization. The least LI can say about this is that we wrote an article for the Austin American Statesman a long time ago – in November, 2001 – predicting that the tide had turned on privatization. It is nice to be proven right. And Daniel Yergin can eat his hat.

However, while it makes sense from the standpoint of a country that depends on a primary product export to make as much off that export as possible, there are various problems with doing so. The Gulf states long ago nationalized their major export, and nobody calls the Gulf states hotbeds of communism – it is, in fact, a mistake to take the ideological tenor of nationalization too seriously. Whether Bolivia’s nationalization will just be a passing affair, or whether it will take, will depend on whether Morales’ government can attract the capital to build up a supervisory structure. And the time really is fortunate, insofar as Venezuela, if it was so inclined, could be a source of seed money.

"Chavez and Morales are both playing a game of chicken with foreign oil companies," said David Mares, a professor of political science at the University of California at San Diego who studies the regional oil industry.
It remains to be seen whether the moves by Messrs. Chavez and Morales will lead to a broader regional backlash against foreign oil companies and further complicate the global energy market. "Obviously there are concerns" about a ripple effect, "but we don't know what the future impact is going to be," said Bob Davis, an Exxon Mobil Corp. spokesman.”

Interestingly, Ecuador, mistaking itself for a free and autonomous country, has recently tried to put a surplus tax on oil companies sucking out Ecuador’s petroleum wealth. Of course, the Bush White House has decided that decision just won’t stand:
“Proposed legislation will increase the Ecuadorean government’s income from oil revenues by some US$600m a year at current prices, but could ruin the chances of a bilateral trade agreement with the US, which must be initialled by a May 15th deadline. Negotiations between the two countries have been in abeyance since March.
As have other oil-producing countries, Ecuador has moved to capture a greater share of the windfall earnings arising from a tripling of oil prices since 2002. Talks on a free-trade agreement (FTA) deal with the US began two years ago, at the same time as Andean neighbours Peru and Colombia. The latter two have both now signed agreements, which must now be ratified by their respective legislatures (as well as by the US Congress).

In all three countries there has been substantial domestic opposition to freer trade with the US, largely from producers such as farmers who see it as prejudicial to their interests but also from a vociferous nationalist lobby that considers it a capitulation to US pressure. In Ecuador, however, indigenous groups form the backbone of opposition to the trade accord. They have proven to be a potent force of protest in the recent past, contributing to direct action that has given rise to successive bouts of extreme political instability.
…
Although the US government is not bound to interfere in the foreign dealings of its domestic companies, the issue is closely tied to FTA negotiations because rules guaranteeing the enforceability of contracts are a central part of bilateral trade deals. FTA talks were suspended when the oil plans were first announced, and are yet to resume. Unless a comprise solution can be worked out by mid-May, a trade deal is unlikely to be brought before the US Congress for ratification before the mid-term elections later this year. Manuel Chiriboga, Ecuador’s chief trade negotiator, denies Ecuador is reneging on its commitment to investment protection clauses in established contracts, but has acknowledged that completing the trade deal on time is now a remote possibility.”

The Bush White House position is simple. In order to become independent of foreign oil, we have to start thinking of companies where American hq-ed oil companies work as secretly American. That way, it isn’t foreign anymore. And as American hq-ed companies do a lot for America – they lower the taxes they pay, they cycle money through offshore banks, and they send American legislators on very fun junkets – it is all to the good of your average American citizen.

One does have to laugh a bit, though. Here the biggest collection of senile cold warriors in the world sit on their asses in the Executive branch, losing a war in Iraq, while under their noses Latin America has tilted so far to the left that it makes the late seventies, when Carter was president, look like reactionary heaven. Plus, even Mexico has recently passed a reasonable law decriminalizing private possession, within reasonable limits, of most drugs.

All of the seams are coming out of the baseball.

hurray for the swinish multitude

For who can tell but the Millennium
May take its rise from my poor Cranium?..


LI has been reading a lot about the English radicals around Tom Paine in the 1790s. Interesting lot of characters, and very a propos for May Day. One of them, Thomas Spence, was a refugee from the North of England, coming to London after being expelled from a Dissenter congregation for publishing a pamphlet proposing that land itself was common – land, like air, could not be bought. A proposition that John Stuart Mill entertained, later, and that made up the bulk of Henry George’s radicalism. In London, Spence continued to emit his radical views through a wonderfully named weekly journal:

“Edmund Burke's reference to "the swinish multitude" provided Spence with a title for his greatest publishing venture. Between 1793 and 1796, he issued a weekly paper called "Pigs' Meat; or, Lessons for the Swinish Multitude," consisting of excerpts from many writings on liberty, attacks on despotism, and frequent verse. These papers were later issued as complete volumes; there were three in all, each with an engraved frontispiece by Spence's son.

The frontispiece for Volume I depicts a well-fed missionary and three graceful Indians. The missionary says: "God has enjoined you to be Christians, to pay rent and tythes, and become a Civilized People." One Indian replies: "If Rent we once consent to pay, Taxes next you'll on us lay, And then our Freedom's poured away;" at which the Indians chorus: "With the Beasts of the Wood We'll ramble for Food, And live in wild deserts and Caves; And live poor as Job, On the Skirts of the Globe, Before we'll consent to be Slaves, My Brave Boys, Before We'll consent to be Slaves!"

The frontispiece for Volume II has two Indians gazing at an unhappy donkey. One Indian says: "Behold the civilized Ass, Two pairs of Panyers on his Back; the First with Rents a heavy mass; With Taxes next his bones do crack." To which the donkey brays in response: "I'm doomed to endless Toil and Care-I was an Ass to bear the first Pair."

Spence apparently grew rather disgusted, at times, with the swinish multitude. While pigs “squeal most seditiously,” Spence found the people much too passive and compliant to live up to the piggish standard. Well, here’s to a May Day of squealing seditiously. Here’s Spence in a more satiric and bitter mood (from Carl Fisher’s essay on Politics and Porcine Representation):

“Ye swinish multitude who prate,

What know ye `bout the matter?'

Misterious are the ways of state,

Of which you should not chatter.

Our church and state, like man and wife,

Together kindly cuddle;

Together share the sweets of life

Together feast and fuddle.

Then hence ye swine nor make a rout,

Forbearance but relaxes;

We'll clap the muzzle on your snout,

Go work, and pay your taxes.”

galbraith, RIP

Loneliness. John Kenneth Galbraith is dead.

In the NYT obituary, which is generous (as it should be), there are two paragraphs on the matter of Galbraith’s isolation from the economic community which cast a broad light on why Galbraith is generally right, and the mass of economists, drudges of rightwing ideology, are generally living in outer space:

“Mr. Galbraith argued that technology mandated long-term contracts to diminish high-stakes uncertainty. He said companies used advertising to induce consumers to buy things they had never dreamed they needed.

Other economists, like Gary S. Becker and George J. Stigler, both Nobel Prize winners, countered with proofs showing that advertising is essentially informative rather than manipulative.”

Adorno and Horkheimer, in The Dialectic of the Enlightenment, said that De Sade’s vision of a world of universal prostitution is a dystopian version of capitalism. Gary S. Becker’s neo-classical analysis of the family unit as essentially a matter of efficient transaction costs cast the world as a matter of universal prostitution and pronounced it good, and in doing so founded the Law and Economics field that has swallowed the justice system. Galbraith never liked the idea that we should live in a world of universal prostitution. For this, he got rocks thrown at him by the economics professors.

Not all, however:

“Amartya Sen, a Nobel Prize-winning economist, maintains that Mr. Galbraith not only reached but also defined the summit of his field. In the 2000 commencement address at Harvard, Mr. Parker's book recounts, Mr. Sen said the influence of "The Affluent Society" was so pervasive that its many piercing insights were taken for granted.
"It's like reading 'Hamlet' and deciding it's full of quotations," he said.”
Well, LI searched for the proper poem to commemorate JKG. Here is Donald Davies’ Obiter Dicta,

Trying to understand myself, I fetch
My father's image to me. There he is, augmenting
The treasury of his prudence with a clutch
Of those cold eggs, Great Truths---his scrivener's hand
Confiding apopthegms to his pocket book.
Does mine do more than snap the elastic band
Of rhyme about them? In an age that teaches
How pearls of wisdom only look like eggs,
The tide, afflatus, still piles up on the beaches
Pearls that he prizes, stones that he retrieves
Misguidedly from poetry's undertow,
Deaf to the harsh retraction that achieves
Its scuttering backwash, ironies. And yet,
Recalling his garrulity, I see
There's method in it. Seeming to forget


The point at issue, the palmer tells his beads,
Strung by connections nonchalantly weak
Upon the thread of argument he needs
To bring them through his fingers, round and round,
Tasting of gristle, savoury; and he hears,
Like rubbing stones, their dry conclusive sound.

Himself an actor (He can play the clown),
He knows the poet's a man of parts; the sage
Is one of them, buffoonery like his own,
Means to an end. So, if he loves the page
That grows sententious with a terse distinction,
Yet lapidary moralists are dumb
About the precepts that he acts upon,
Brown with tobacco from his rule of thumb.

'Not bread but a stone!'---the deep-sea fishermen
Denounce our findings, father. Pebbles, beads,
Perspicuous dicta, gems from Emerson,
Whatever stands when all about it slides,
Whatever in the oceanic welter
Puts period to unpunctuated tides,
These, that we like, they hate. And after all, for you,
To take but with a pinch of salt to take
The maxims of the sages is the true
Great Truth of all. To keep, as you would say,
A sense of proportion, I should portion out
The archipelago across the bay,
One island to so much sea. Assorted
Poetic pleasures come in bundles then,
Strapped up by rhyme, not otherwise supported?

Turning about his various gems to take
Each other's lustre by a temperate rule,
He walks the graveyard where I have to make
Not centos but inscriptions, and a whole
That's moved from inward, dancing. Yet I trace
Among his shored-up epitaphs my own:
Art, as he hints, turns on a commonplace,
And Death is a tune to dance to, cut in stone.

the state is already lost...

Je suis le véritable père Duchesne, foutre !

“Not a lot of probity is required by a monarchic or despotic government in order for it to sustain and maintain itself. The force of the law in the one, the arm of the prince, forever lifted, in the other rules or contains everything. But in a popular government, we require another resource, which is virtue.

What I am saying is confirmed by the entire body of history, and is very conformable to the nature of things. For it is clear that in a monarchy, where he who has the laws executed judges himself above the law, one has need less of virtue than in a popular government, where he who has the laws executed feels he himself subject to them, so that he bears their burden.

It is, again, clear that the monarch who, by bad counsel or negligence, ceases to have the laws executied, can easily repair the injury: he has only to change the counsel, or correct his negligences. But when, in a popular government, the laws cease to be executed, like that there can only come the corruption of the republic – the state is already lost. “

Well said, Montesquieu. Bringing us to the intermittent series of Bush’s crimes, of which Jonathan Schwartz, at Tiny Revolution, is making an account. He noticed, as of course the whole of the opposition hasn’t (the willfully blind, still fretting about framing a national security policy bloody enough to garner a good percentage of the lyncher vote. Hilary C.’s proposal of a lottery bombing, in which average citizens can reach into a tub full of billets with the names of countries written on them, and we bomb that country for a day, has apparently received the endorsement of the New Republic crowd), LI, too, is compiling a small history of how a great republic crawled through a small time, and gave up the ghost. This would be a sad story, if one could tell it in Montesquieu’s language, a classical, hard tone deriving from a lifelong acquaintance with the Latin historians. However, LI can only tell it, has only been responding to it, in the vulgar tones of street worm made victim by some hit and run frat car, careening crazily down the street. We wave our empties at it, spit, zip down our zipper and piss in its general direction. More Père Duchêne than Montesquieu, I’m afraid.

Still, it is a spectacle, no? The usurpation of tyrannical power by an executive branch which, after failing completely to protect the citizenry, after allowing America to be attacked by a bunch of pikers, and after failing systematically even to punish the relative handful of people who made that happen, now uses the bloody results of that failure as the grounds for usurping ever more illegal power, which it concentrates in ever more incompetent and fraudulent hands.

Schwartz has been citing outrageous bits from Bush’s favorite constitutional theorist, John Yoo, the man who never saw a torture he didn’t like – that is, if the torturer is an American. Yoo, basically, holds that the executive branch can conduct wars with its – America’s – army as he sees fit, with the only brake upon this power being the Congressional power over the purse strings. There is a latin legal phrase for Yoo’s position. It translates, roughly, as: Í’m pulling this out of my ass. In Policy Review, which is as conservative a journal as you can get, Yoo’s reviewer, Eugene Kontorovich, couldn’t quite go the whole route of claiming that the president is a king:

When the Constitution was ratified, the federal army numbered fewer than 700 men; there was no naval establishment. The state militias accounted for the bulk of the nation's military capability.

The Constitution makes clear that Congress, rather than the president, controls the "calling forth of the militia." Thus, the commander in chief, at the time of the founding, had no means with which to start a war without prior action by Congress. It would be odd if the decision about whether to wage war were placed solely on the shoulders of an official so ill-suited to
ensuring its success. … In Yoo's model.Congress's decision to create a military ready to meet any contingency allows the president to do what he will with it.”

The Policy reviewer also points out another flaw in Yoo’s position: one that, actually, reaches to the heart of the monster created by the crossing of the corporate power and warmaking under the aegis of the Cold War:

“Today, a hard-pressed president might seek out contributions or, worse, loans from other nations. This is not so far-fetched — the Gulf War was financed in part with foreign contributions, and much of the Iran-contra scandal was about the White House's efforts to obtain alternative funding from foreign nations after Congress cut off support for the Latin American freedom fighters.

“Or the president could pay for the war from its own proceeds — for example, by selling assets of a defeated enemy (Iraqi oil, for example). Or perhaps he could sell U.S. military hardware to other nations — he is, after all, commander in chief of the armed forces.”

That these are actually imaginable courses of action tells us something about the structural madness of giving the President this kind of power. So: let’s take it away from him.

Strangle the military. Support your anti-recruiter. Be a patriot.

the treadmill of production

LI finds the shenanigans over oil recently extremely funny and sad. To question the oil-chemical complex in any way is to invite massive retaliation – remember, conservatism in this country has nothing to do with conservative ideas. It has everything to do with well financed expression of the industry’s interests. The G.O.P., and much of the Democratic party, simply exist to forward their interests. The parties are allowed to take up hobbies, in the spirit of Junior League – the Dems going out for reproductive choice and home decorating, for instance, and the G.O.P. taking up preserving the brain dead and biking. So, even when, for instance, a pundit like Michael Kinsley comes out for a windfall tax, he hedges himself about – for instance, by saying that taxes should never, ever be used as punishment. Heavens no. In the world of pundit economics, taxes can only be used as rewards – everybody must get prizes, you see. Why punish an industry for gorging on limited resources, spending progressively less on R and D (actually, this is one of the big effects of the Bush tax giveaways – why spend on R & D when it is now more profitable to distribute your profits via dividends? And especially when the tax regime for the upper management is so favorable that those ethically challenged parasites move heaven and earth to take as much of a bite as they can from the enterprises they run, now) because who ever heard of a Republic limiting the power of the most powerful? It has occurred to Tacitus, Montesquieu, John Locke, Tom Paine and the like – but that’s a bunch of losers, as we well know.

So – since this is Chernobyl week, and since we’ve been thinking of the question of value posed during the recent Spivak to-do – we thought this would be a good post to talk about Allan Schnaiberg.

Schaiberg is an economist at Northwestern. In the early eighties, he published an influential book in the field of environmental economics. Not a field people have heard of, right? But it is an influential field. The big controversy in the field is about ecological modernization. Briefly: a German sociologist, Peter Huber, proposed that the offloading of costs onto the environment during the twentieth century was caused by the State. If we just took the state out of the equation, private enterprise would develop ways of being greener. The thought was – greener is more efficient.

Schaiberg’s thesis was different. He coined the phrase, the treadmill of production, to talk about the network effects of industrialization – whereever the ultimate control over industry lay. In a recent essay, The treadmill of production and the environmental state, he revisits his thesis. We are going to try to comment on the treadmill of production part, which articulates a thesis about the economy for which we have tons of sympathy. But the environmental state part is equally interesting.

“From a conceptual perspective, we might characterize an "environmental state" as encompassing the following feature: whenever it engaged in economic decision-making, considerations of ecological impacts would have equal weight with any considerations of private sector profits and state sector taxes. Put this way, most industrialized nation-states fall far short of this standard. Indeed, it is increasingly true that any environmental policy-making is subject to more intensive economic scrutiny, while economic policies are subject to less and less environmental assessment (Daynes 1999; Soden and Steel
1999).”

Schaiberg’s paper includes a case study of the recycling industry in Chicago. It is a study about the structural changes that came about in that industry as it was turned into a regular private sector industry, with the goal of making a profit. LI found this interesting as a case just because we remember the old recycling movement in the seventies and eighties. My brothers worked, at that time, heading up maintenance for some apartment complexes. They were both enthusiastic about recycling. They sponsored a cleanup of litter, for instance, along a highway leading into Stone Mountain Georgia. They got their complexes in touch with recycling services. For a couple of years, they devised a mass pick up of Christmas trees – the trees were, I think, going to be used by fish hatcheries or something. My brothers are enthusiasts, and they turned out the family, including my mother, my father, and me – in the Christmas tree deal – to do the various recycling projects.

However, as recycling became simply profit based, the air went out of volunteering. And as they became profit based, instead of applying the private sector efficiency in taking care of the whole spectrum of waste, the spectrum was cherry picked.

Schaiberg writes:

First, treadmill organizations [those in the treadmill of increasing consumer demand and cutting production cost by leveraging part of that cost onto the commons, or other people’s property] generally resist environmental regulation with all the substantial means at their disposal. For example, prior to the advent of recycling regulations and programs, container firms fought all forms of
"bottle bills", spending perhaps US$50 million opposing such bills, and succeeding in about 2/3 of the states. Yet even these bottle bills were only indirectly constraining firms. Legislation did not directly mandate a refillable container, but only the imposition of a deposit on all containers. Even in this limited regulation, the refunding mechanisms for the deposit put some cost burdens on non-refillable container manufacturers and/or users. Thus, in recent years in New York state, bottlers have refused to repurchase stockpiled
refunded containers. They have let these accumulate at brokers and large retailers, seeking thereby to mobilize opposition to the bottle bill system. For the remaining 2/3 of states, container manufacturers and bottlers have simply encouraged recycling, and have kept feedstock prices low, and avoided paying labor costs for refilling containers.

Second, where direct resistance against any environmental legislation becomes
infeasible, under pressures from environmental NGOs, firms first dilute the legislation to minimize its impacts on their operations. Then they wait for opportunities to further lighten their regulatory load, whenever the political climate shifts and/or NGOs are elsewhere engaged. In the recycling arena, this has been commonplace. Affected industries have continuously shifted their campaigns to avoid mandatory direct controls on their production and distribution activities. All U.S. government regulations have avoided mandating firms with a "life cycle" responsibility for their own generation of post-consumer wastes, as has
occurred in some European states. Instead, governments had introduced fairly weak mandates for firms, requiring higher "recycled content" of their production. Firms have responded by including post-production waste recycling (a standard economic practice for decades) as part of post-consumption recycling.”

The treadmill aim of weakening the impetus for even voluntary environmental action seems odd, at first, until you take into account what the companies take into account – such behavior leads to an enlarged sense of the interaction between the economy and the environment. It is not just to make more money that the great energy monsters convened by Cheney in 2001 agreed to put the keebosh on conservation – it is because conservation countervails an insane consumerist ethos. If people are allowed, for a second, to fall in love with the planet to the extent of wanting to spare that tree or ice floe, the virus will spread. Questions about the justice of exhausting our resources will emerge. Fundamental questions about ownership and its limits. In fact, people will begin to think that politics doesn’t begin or end with what dumb party you vote for or the latest outrage that we must rush to have opinions on – should we sing the National Anthem in Spanish? Is the book by the guy who runs the Daily Kos doing better than the book written by the guy who runs instapundit? but we will think about why, if Americans (for instance) are so happy, they are so indebted, so unable to stop buying the stupidest things, so unwilling to look at, say, the environmental horrors being perpetrated, for the last five years, by coal mining companies in West Virginia.

When you have no control over your mind or attention span, you are fucking owned. And that is the resource they are extracting with every hot air soundbyte and fake crisis.

Elephant King - Go

LI’s future murderer, Seth Grossman, is showing his film, Elephant King, in the Tribeca Film Fest. There’s a showing at Sat 4/29, 3:00pm Regal Cinemas Battery Park 11, one Tue 5/02, 10:00pm AMC Loews 34th Street 14, and one Sun 5/07, 10:00am
AMC Loews Lincoln Sq 5. Seth’s totally offensive sense of humor , narcissism, and ability to entangle himself with weirdos should certainly make him a fave for anybody who reads this site! He’s up for various awards, which range from 5-8 months at Rikers to aftercare with a sex therapist for at least 2 years under the supervision of his parole officer (chemical treatment and plethysmograph to be administered on court order).

Here’s an interview with him, and of course, his site is listed on our blogroll.

So a big shout out to NYC – check it out.

Let’s break the department of war.

“…having a great time here in Iraq."
Why, it was the Iraq and roll show with our two fave liars, Condi Rice and Don “I fucked up Tora Bora and I’m fuckin’ proud of it” Rumsfeld, yesterday, and the zombies can beam. It turns out that Iraq is “a tremendous pillar of stability through the Middle East." Who knew? And volcanoes are very good ways to fertilize the soil. That’s why you should always try to farm active ones.

The two can’t stand each other – this happens in a court society in which each player depends upon a differing mix of servility and arrogance to maintain position. Since Rumsfeld’s place in the Bush pantheon seems to be fixed – he’s part of the mission, and the mission is to make America pretty much toxic and unliveable for the next fifty year – Rice has to deal with him like the senile parent that you can’t move out of the house. Rice’s tremendous success in getting the Dawa party to nominate a man with precisely the same positions as Jafari to be P.M. can only be described as a tremendous success leading to tremendous stability in the best of all possible Mesopotamias.

As for the causes of that instability – LI has a long post coming up about the civil war in Iraq. The civil war that was programmed into Iraq. The civil war that is the constitution of Iraq. The American advisors of which are notorious for wanting to split up Iraq way back from the beginning of the invasion. So a bunch of theoreticians and calculators, as Burke called them, descend on this country and not only facilitate its looting, but actively seek to destroy its unity, while taking down the army in order to make it a perpetual dependent of American power. In its long series of foreign policy crimes, Iraq has become a sort of center, an emblem of all of D.C.’s vice and viciousness. Seizing the volunteer army at the grass roots level by whatever means and destroying the power of the executive branch to ever again wield a mercenary force are the proper political responses in this country to this crew of freaks. Let’s break the department of war. Suggestions?

Last night, exhausted by another day of translating, LI went down to the corner store and bought a Lone Star (hey, we are on our downers at the moment). And we started talking with the clerk, first about the Simpsons and then about literature. The clerk is, I believe, Lebanese, and he has not watched a lot of Simpsons, so we told him that it is in the line of classic American literature, Twain and Melville and Hawthorne -- but he said, but I don't read. So he wanted to know what was in Twain and Melville, and we gave some extremely condensed plot summary. But one thing we said he could relate to -- the description of Ahab as exemplifying one overwhelming American trait: "I'd strike the sun if it insulted me," Our inadequate paraphrase of chapter 36. The clerk was most amused to see this customer hopping up and down with his Lone star, misquoting Moby Dick. But who knows, maybe he'll read it some day?

And if that trait makes us reach out and smite the nations -- we can turn it around as well, to strike at D.C. Shall we not strike the government if it insults us?

"All visible objects, man, are but as pasteboard masks. But in each event- in the living act, the undoubted deed- there, some unknown but still reasoning thing puts forth the mouldings of its features from behind the unreasoning mask. If man will strike, strike though the mask!"