Archive for September, 2008

Ask Why

September 29, 2008

If you never saw (or read) “Enron: The Smartest Guys in The Room”, you should check it out.
As of this writing it is posted on youtube — albeit lo-res, parsed into 11 segments and featuring Spanish subtitles (which I kind of enjoy…)

Since you may not have the time to watch the whole thing, I’ll go ahead and embed the last segment:

The energy firm’s spectacular failure, propped up as it had been by elaborate (and borderline hilarious) financial deception and boundless corporate greed, is looking pretty familiar these days. I bet the government reaction to the Enron crisis — essentially to frown but do nothing of consequence — will recur this time around. Why? Why do people invest in the first place?

Well inflation is pretty much always on the rise, so your money is always worth less than it was the last time you looked. So you must invest in something or you’ll be losing money. Since you have to invest, but you don’t necessarily want to be a captain of industry yourself, you might as well put your finger in corporate stocks, bonds, market indexes, funds, etc. This is because corporations, and the financial instruments that exist on their behalf, represent large amounts of capital by way of lots of different stockholders who are not liable to know or care where that money comes from. So you minimize risk *and* responsibility! You get easy money (or at least you beat inflation) and corporations get the equity they need. It’s win-win! Investors in and executives at Enron were just doing what the system was designed for them to do!

But why is inflation always on the rise? Why is the global economy always growing? Why is there no limit to its growth? Why does the drive for profit trump every other value? Why can’t we just industrialize the whole world, produce and sell more and more stuff? Why can’t we make money forever? Why can’t every generation be richer than the last, with an endless bounty of natural resources and happy, faceless laborers?


The Coal Economy

September 19, 2008

I’m probably going to be reading and writing about China, the environment, and energy policy for what remains of the semester…so I thought I might use this forum to offer periodically some speculations on various related things.

So In his latest “We Can Solve It” email, The Man Himself Al Gore sums up current US energy policy with aplomb (a quality notoriously absent from his 2000 presidential bid.) He says: “We’re borrowing money from China to buy oil from the Persian Gulf to burn it in ways that destroy the future of human civilization.” Word. But we don’t want oil stealing the limelight!

Of course US foreign policy has been driven by considerations of oil at least since World War I (before that it was cotton) but oil is not the source of most of the energy that you and I use. Coal is. Furthermore, the trade that we’ve built with China over the past few decades is also coal powered.

Now consider the fact that China now produces more greenhouse gases then any other country, having recently overtaken the US for that dubious distinction. While per-capita energy use in China is very low, this is because the majority of China’s outrageously large population are farmers who don’t use much energy. Most of the energy used in China comes from coal and goes towards the industrial sector. Coal has fueled Chinese development — it’s primarily used to power the extraction of steel and other minerals as well as the manufacture of consumer goods for US and European markets. These activities bring in enough revenue for the PRC to have billions laying around to lend the US. The other source of revenue is the 25% income tax on Foreign Direct Investment, mostly levied upon corporations who also want to produce things for export.

So when China lends us money, it’s because our consumption is the source of their revenue. They need us to stay afloat. American mass consumerism depends on electricity that is also primarily powered by coal. So, what we have is a vast system for extracting and burning coal — they extract it and burn it so as to make and sell stuff to us; we extract it and burn it so as to buy things from them. The very fact that I can type this post (on my Made-in-Taiwan laptop) and you can read it (presumably on yours) is predicated upon this relationship.

In light of this thought, check out this ad from “We Can Solve It”:

Like I said in my previous post, we’re all familiar with what happens when you elect representatives of the oil industry to high political office. It’s bad. So I’d be in favor of “breaking big oil’s lock on the government.” But if you agree with my above statement that the Chinese and US economy are linked inexorably through coal production and consumption, then in order to stop pumping carbon into the atmosphere we would have to stop (and retool) the whole machine. We would have to stop the global economy and change out its rusty old engine.

Besides the fact that this would be catastrophic to our daily lives, both here and in China, it’s also completely impossible for governments to undergo such an action.

I’m currently interning at an outfit whose goal is to use the market and a growing network of business/civil society folk around the world to try to fix the problem not by lobbying government per se but by promoting investment in renewable energy, which is a very dynamic industry right now. It’s exciting stuff. But I don’t believe this tactic will be very effective, simply because it’s grounded in the very market ideology that created the problem.

Be afraid

September 14, 2008

Yes, I think that public policy matters.

Hence, for me the only thing scarier than the fact that I ENJOYED watching Sarah Palin’s speech at the RNC is the idea that she might become president. Why do I care?

Well, if you take a gander at what the press is saying about Palin, you’ll see for the most part a bunch of nonsense about religion, “family values”, small-town-ism, etc. Regardless of how you feel on those issues, I invite you to indulge my belief that they tend to (as indeed they are designed to) distract the public from the real issues being debated among the actual representative base of both parties.
These issues are, and have always been, money and power. As in: how do we design a policy agenda assuring that our constituents can maintain their hold upon these things?

Sarah Palin will pursue the agenda of the oil lobby. By now I feel that there’s no need to explain what happens when you elect an oil man/woman (oil individual?) to high public office. I will say that they tend to be of the opinion that the best route to money and power is to rape the earth, secure access to oil, and cut taxes for the people and corporate entities who consume the most of said oil.

There are other, slightly less cruel options out there — even among the rich and powerful.

Check out the eloquent Frank Rich and the ever insightful Eve Ensler for more nuanced commentary on the subject. They sum up the facts of the case pretty well.

Beyond Good and Evil: The Postmodern Batman

September 12, 2008

OK check it out:

Czech author Misha Glenny recently wrote a book concerning the globalization of organized crime entitled McMafia: A Journey Through the Global Criminal Underworld. She maintains that, “criminal corporations aspire to penetrate markets the world over, mirroring the global goals of legal entities such as McDonald’s.” Just how would they do that?

When the Kremlin fell Russia became, in Glenny’s words, “a chaotic scramble for riches and survival that saw virtually every citizen sucked into a vortex of violence.” Apparently crime became a very profitable enterprise for a new class of capitalists just coming into their own. The shadow market, in everything from narcotics and weapons to cigarettes and sex workers, saw tremendous growth. The resulting explosion of capital, “traveled well beyond the Soviet Union’s borders into all continents of the world as money poured out of the country, looking for safe havens, some legal but most decidedly dodgy. Throbbing at the heart of these extraordinary events was Moscow.”

Because of continuing financial liberalization, it was fairly easy for the international mafia to mix its profits with legitimate capital. Indeed, “according to figures culled from the IMF, the World Bank, and research institutes in Europe and North America,” Glenny says, the worldwide shadow economy — including tax dodges, black market trading and other criminal activity — “now accounts for between 15 and 20 percent of global turnover.”

Glenny admonishes: “If we fail to construct an adequate regulatory mechanism — that is, some form of global governance — then organized crime and corruption will combine with protectionism and chauvinism to engender a very unstable and very dangerous world.”

Ah ha! This is an excellent example of the dark side of globalization — an undesirable global phenomenon which eludes regulation under current law.  Glenny suggests that to combat this, we need some kind of global governance which represents the interests and cooperation of every country.  We all know this is a pipe dream.

But what if there was some kind of mysterious, totally independent actor with practically unlimited resources, not sponsored by or accountable to any organization? What if it acted only according to its own version of vigilante justice, unrestrained by “slave morality” or state-sponsored doctrine? Wouldn’t we all be better off?

I’m speaking, of course, about Batman.

If you haven’t seen The Dark Knight yet, I’m loathe to point out that there are spoilers ahead — I’d argue that at this late date, you should be expecting them. So this is what I mean: the mob in The Dark Knight can transfer capital across state borders effortlessly. Meanwhile, local law enforcement, restricted by the geographical limitations of state power, can do nothing. Bruce Wayne, the ultimate ad-venture capitalist, must sweep in to the rescue!

Batman Begins has Bruce Wayne return to Gotham City to discover his company in the hands of petty bureaucrats who, no doubt adapting to changes in global demand, are now using Wayne capital to manufacture and sell heavy weapons. (Iron Man Tony Stark’s revelation, that his company’s weapons have fallen into the hands of terrorists, is an interesting parallel here.) At the end of the movie, Wayne uses financial trickery to buy the company back on the open market and puts in his friend Fox as CEO — thus he has won back his control from the suits, who remained for the most part nameless and spineless throughout the film.

In Dark Knight, which picks up more or less where BB left off, we see Wayne using his new found corporate clout to case a corrupt Chinese company, in a way that government agencies would never be able to do. (Indeed, unless there was some kind of strategic or profitable reason to probe into the machinations of Chinese companies, the state wouldn’t *want* to do so) But Bruce Wayne and Batman both operate well outside of the traditional justice system — as well as the predictable motives of the self-interested corporate/state apparatus.

Unable to predict (and hence control) Batman, the mob establishment hires The Joker to murder him — unaware that Joker is also a totally independent actor and will not respect the unwritten code of mob activity.  What is this code? Enthusiasts will remember that Hermine Falcone, the mob boss from the first installment, reveals its essence: Power.  In his off-the-cuff retort to the naive Bruce Wayne, Falcone insists that the criminal underbelly thrives on “power that you can’t buy” i.e. the power of fear.

It’s worth noting that this sort of power is the estranged cousin of that which the state relies upon — the power of “moral legitimacy.” The Joker is immune to fear, hence he cannot be controlled by his mob cohorts. Batman does not accord moral legitimacy to anyone except himself, hence he cannot be controlled by his police cohorts.  Batman’s goal is justice; the Joker’s is anarchy — yet neither one of these goals can be fit completely within a prescribed category of “good” or “evil”.  The comparison to Neitszche’s ubermench is irresistible.

Actually, if I *really* want to indulge in quasi-academic metaphors, which appears to be one of the primary purposes of this blog anyway, then I’ll go ahead and say thatThe Dark Knight is the first superhero film that uses realpolitik to tell the story. That’s what cool about it.
The Batman Begins screenplay foresees this approach because the Nolan brothers successfully created an atmosphere of paranoia in that film — no one can be trusted. But there remained the implication that Batman, with his “good” violence, Bruce Wayne with his “good” capitalism, Rachel with her “good” maneuvering the justice system, and Gordon with his “good” law enforcement, could triumph over rampant crime and corruption. The Dark Knight poses a strong challenge to this idea (epitomized by the brutal transformation of Harvey Dent.)

My general point about the Batman Begins/The Dark Knight movies is that, going way beyond what any previous super hero franchise has done, it portrays a Good vs. Evil, Cold War-esque system that then becomes totally unstable with disastrous consequences. This situation makes one question what morality is in the first place — I think Alfred’s comment about burning down the jungle to catch a thief, certainly a veiled Vietnam reference, is very telling in this regard. Now in the first part of this post, I wanted to relate the movie to the apparent “globalization” of mob activity for several reasons: it’s a phenomenon which sprang up after the Cold War, it doesn’t get a lot of publicity, and it goes along with the film’s re-imagining of Batman’s traditional crime fighting purview. It appears also to require Bruce Wayne’s newer tools, drawn from the playbook of global capitalism, i.e. corporate espionage. Evidently Batman, and the role that he plays in the Gotham universe, has changed a lot.

Consider the fact, which Bill first pointed out to me, that The Dark Knight is the first truly “post 9/11” superhero movie. Not only does it deal with radical terrorism, forcing Batman to create an ingenious and very intrusive surveillance system in order to catch The Joker, but also it forces Batman to face the grim consequences of the “escalation” process that Gordon outlines at the end of BB. (“We buy kevlar, they buy armor piercing rounds…etc.”) The assumption on the part of the United States that they enjoyed unquestioned dominance of world affairs — hence could ignore the consequences of arming the mujahideen in Afghanistan, among other inflammatory and originally anti-Soviet measures in the Middle East, was smashed on 9/11. (Thus began what Benazir Bhutto calls “World War IV”.)

Yesterday was the seventh anniversary of the 9/11 attacks so I’m not saying anything lighthearted here. What I am saying is that The Dark Knight, in all of its extreme darkness, approximates the way the world is today. This is why, even beset as it is with clunky dialogue from time to time and the tragic lack of Katie Holmes throughout, it is a *great movie*.


A-maize-ingly bad commercial/pun

September 4, 2008

So I’ve been watching the US Open this week and I keep seeing this commerical. It is atrocious! (albeit somewhat less iiritating than the afore mentioned “Breakfast Club” JC Penny commerical…)

The corn syrup commercial obviously doesn’t mention that corn production is pesticide intensive, promotes erosion, depletes aquifers, etc. Hell, these aren’t new or sexy phenomena — they’re really just the mundane after-effects of gargantuan scale agriculture. Similarly, the insane rise of obesity and diabetes in the United States is happening because people eat too much sugar/corn syrup — “moderation” is not the issue. There’s nothing interesting there.

What’s interesting is that sugar (and the corn syrup designed to imitate it) is *not* a picnic-in-the-meadow, guitar-strumming “natural” category of food. While sucrose is a very common form of energy for plant cells, crystallized sugar and liquid corn syrup are *extremely* labor intensive. In his book “Sweetness and Power,” Food historian Stanley Mintz goes as far as to claim that the first activity to be organized in a way that we might today recognize as “industrial” was sugar production!

“When it is remembered that the plantation form probably first developed in the eastern Mediterranean, was perfected (mostly with enslaved labor) by the Crusaders after 1000, was transferred to (and, in part, perhaps reinvented on) the Atlantic islands by 1450, and was thereupon re-established in the New World colonies, the significance of their industrialism — at a time when industry itself was largely based on home labor, except for shipbuilding and some textiles in Europe irself — becomes more persuasive.”

Mintz goes on to describe the process by which French and British holdings in the Carribean islands were converted to sugar plantations — which in turn caused the slave trade to grow exponentially.
The slaves produced sugar for Europe’s growing class of city dwellers; the consumer’s subsquent shake-up over protectionist tarriffs contributed to the origin of the “free trade” system.

Mintz quotes Marx’s summary of how this happened:

“Freedom and slavery constitute an antagonism…We are not dealing with the indirect slavery, the slavery of the proletariat, but with direct slavery, the slavery of the black races in Surinam, in Brazil, in the Southern States of North America. Direct slavery is as much the pivor of our industrialism today as machinery, credit, etc. Without slavery, no cotton, without cotton, no modern industry. Slavery has given their value to the colonies; the colonies have created world trde; world trade is the necessary condition of large-scale machine-industry. Before the traffic in Negroes bega, the colonies only supplied the Old World with very few products and made no visible change in the face of the earth. Thus slavery is an economic category of the highest importance.”

Well, wage slavery has replaced slavery, corn syrup stands in for sugar…but the same dynamics made that shitty commerical. Except now consumers are supposed to use corn (and sugar cane) for our energy problems too…