To Graça Machel and the Mandela family; to President Zuma and members of the government; to heads of state and government, past and present; distinguished guests – it is a singular honor to be with you today, to celebrate a life unlike any other. To the people of South Africa – people of every race and walk of life – the world thanks you for sharing Nelson Mandela with us. His struggle was your struggle. His triumph was your triumph. Your dignity and hope found expression in his life, and your freedom, your democracy is his cherished legacy.
It is hard to eulogise any man – to capture in words not just the facts and the dates that make a life, but the essential truth of a person – their private joys and sorrows; the quiet moments and unique qualities that illuminate someone’s soul. How much harder to do so for a giant of history, who moved a nation toward justice, and in the process moved billions around the world.
Born during World War I, far from the corridors of power, a boy raised herding cattle and tutored by elders of his Thembu tribe – Madiba would emerge as the last great liberator of the 20th century. Like Gandhi, he would lead a resistance movement – a movement that at its start held little prospect of success. Like King, he would give potent voice to the claims of the oppressed, and the moral necessity of racial justice. He would endure a brutal imprisonment that began in the time of Kennedy and Khrushchev, and reached the final days of the Cold War. Emerging from prison, without force of arms, he would – like Lincoln – hold his country together when it threatened to break apart. Like America's founding fathers, he would erect a constitutional order to preserve freedom for future generations - a commitment to democracy and rule of law ratified not only by his election, but by his willingness to step down from power.
Given the sweep of his life, and the adoration that he so rightly earned, it is tempting then to remember Nelson Mandela as an icon, smiling and serene, detached from the tawdry affairs of lesser men. But Madiba himself strongly resisted such a lifeless portrait. Instead, he insisted on sharing with us his doubts and fears; his miscalculations along with his victories. "I'm not a saint," he said, "unless you think of a saint as a sinner who keeps on trying."
It was precisely because he could admit to imperfection – because he could be so full of good humor, even mischief, despite the heavy burdens he carried - that we loved him so. He was not a bust made of marble; he was a man of flesh and blood – a son and husband, a father and a friend. That is why we learned so much from him; that is why we can learn from him still. For nothing he achieved was inevitable. In the arc of his life, we see a man who earned his place in history through struggle and shrewdness; persistence and faith. He tells us what’s possible not just in the pages of dusty history books, but in our own lives as well.
Mandela showed us the power of action; of taking risks on behalf of our ideals. Perhaps Madiba was right that he inherited, "a proud rebelliousness, a stubborn sense of fairness" from his father. Certainly he shared with millions of black and colored South Africans the anger born of, "a thousand slights, a thousand indignities, a thousand unremembered moments … a desire to fight the system that imprisoned my people."
But like other early giants of the ANC – the Sisulus and Tambos – Madiba disciplined his anger; and channelled his desire to fight into organisation, and platforms, and strategies for action, so men and women could stand-up for their dignity. Moreover, he accepted the consequences of his actions, knowing that standing up to powerful interests and injustice carries a price. "I have fought against white domination and I have fought against black domination," he said at his 1964 trial. "I’ve cherished the ideal of a democratic and free society in which all persons live together in harmony and with equal opportunities. It is an ideal which I hope to live for and to achieve. But if needs be, it is an ideal for which I am prepared to die."
Mandela taught us the power of action, but also ideas; the importance of reason and arguments; the need to study not only those you agree with, but those who you don’t. He understood that ideas cannot be contained by prison walls, or extinguished by a sniper’s bullet. He turned his trial into an indictment of apartheid because of his eloquence and passion, but also his training as an advocate. He used decades in prison to sharpen his arguments, but also to spread his thirst for knowledge to others in the movement. And he learned the language and customs of his oppressor so that one day he might better convey to them how their own freedom depended upon his.
Mandela demonstrated that action and ideas are not enough; no matter how right, they must be chiseled into laws and institutions. He was practical, testing his beliefs against the hard surface of circumstance and history. On core principles he was unyielding, which is why he could rebuff offers of conditional release, reminding the Apartheid regime that, "prisoners cannot enter into contracts." But as he showed in painstaking negotiations to transfer power and draft new laws, he was not afraid to compromise for the sake of a larger goal. And because he was not only a leader of a movement, but a skillful politician, the Constitution that emerged was worthy of this multiracial democracy; true to his vision of laws that protect minority as well as majority rights, and the precious freedoms of every South African.
Finally, Mandela understood the ties that bind the human spirit. There is a word in South Africa – Ubuntu – that describes his greatest gift: his recognition that we are all bound together in ways that can be invisible to the eye; that there is a oneness to humanity; that we achieve ourselves by sharing ourselves with others, and caring for those around us. We can never know how much of this was innate in him, or how much of it was shaped and burnished in a dark, solitary cell. But we remember the gestures, large and small – introducing his jailors as honoured guests at his inauguration; taking the pitch in a Springbok uniform; turning his family’s heartbreak into a call to confront HIV and Aids – that revealed the depth of his empathy and understanding. He not only embodied Ubuntu; he taught millions to find that truth within themselves. It took a man like Madiba to free not just the prisoner, but the jailor as well; to show that you must trust others so that they may trust you; to teach that reconciliation is not a matter of ignoring a cruel past, but a means of confronting it with inclusion, generosity and truth. He changed laws, but also hearts.
For the people of South Africa, for those he inspired around the globe – Madiba’s passing is rightly a time of mourning, and a time to celebrate his heroic life. But I believe it should also prompt in each of us a time for self-reflection. With honesty, regardless of our station or circumstance, we must ask: how well have I applied his lessons in my own life?
It is a question I ask myself – as a man and as a president. We know that like South Africa, the United States had to overcome centuries of racial subjugation. As was true here, it took the sacrifice of countless people – known and unknown – to see the dawn of a new day. Michelle and I are the beneficiaries of that struggle. But in America and South Africa, and countries around the globe, we cannot allow our progress to cloud the fact that our work is not done. The struggles that follow the victory of formal equality and universal franchise may not be as filled with drama and moral clarity as those that came before, but they are no less important. For around the world today, we still see children suffering from hunger, and disease; run-down schools, and few prospects for the future. Around the world today, men and women are still imprisoned for their political beliefs; and are still persecuted for what they look like, or how they worship, or who they love.
We, too, must act on behalf of justice. We, too, must act on behalf of peace. There are too many of us who happily embrace Madiba’s legacy of racial reconciliation, but passionately resist even modest reforms that would challenge chronic poverty and growing inequality. There are too many leaders who claim solidarity with Madiba’s struggle for freedom, but do not tolerate dissent from their own people. And there are too many of us who stand on the sidelines, comfortable in complacency or cynicism when our voices must be heard.
The questions we face today – how to promote equality and justice; to uphold freedom and human rights; to end conflict and sectarian war – do not have easy answers. But there were no easy answers in front of that child in Qunu. Nelson Mandela reminds us that it always seems impossible until it is done. South Africa shows us that is true. South Africa shows us we can change. We can choose to live in a world defined not by our differences, but by our common hopes. We can choose a world defined not by conflict, but by peace and justice and opportunity.
We will never see the likes of Nelson Mandela again. But let me say to the young people of Africa, and young people around the world – you can make his life’s work your own. Over thirty years ago, while still a student, I learned of Mandela and the struggles in this land. It stirred something in me. It woke me up to my responsibilities – to others, and to myself – and set me on an improbable journey that finds me here today. And while I will always fall short of Madiba’s example, he makes me want to be better. He speaks to what is best inside us. After this great liberator is laid to rest; when we have returned to our cities and villages, and rejoined our daily routines, let us search then for his strength – for his largeness of spirit – somewhere inside ourselves. And when the night grows dark, when injustice weighs heavy on our hearts, or our best laid plans seem beyond our reach – think of Madiba, and the words that brought him comfort within the four walls of a cell:
It matters not how strait the gate,
How charged with punishments the scroll,
I am the master of my fate:
I am the captain of my soul.
What a great soul it was. We will miss him deeply. May God bless the memory of Nelson Mandela. May God bless the people of South Africa.
Source: Mail & Guardian
Showing posts with label Equality. Show all posts
Showing posts with label Equality. Show all posts
Tuesday, December 10, 2013
Thursday, October 17, 2013
Marikana funding case hints at larger problems with gaining access to justice
Most South Africans do not have effective access to justice. Without adequate legal representation, which few people can afford, not many litigants or criminal defendants will truly savour the sweet taste of justice. While banks, other large corporations, the very wealthy and organs of state will have the funds to employ an army of lawyers to exploit every legal loophole and to pursue every legal argument to win their case, most ordinary persons of moderate means will not. Unless the legal system is substantially reformed or the state pumps billions of rands into the Legal Aid system, this will not change – despite the quixotic court victory of the survivors of the Marikana massacre to legal representation at state expense.
The Marikana massacre, in which the South African Police Service (SAPS) killed 34 striking mine workers, may well turn out to have been a watershed moment in South African politics. From where I sit, it looks suspiciously as if the ruling elite (ab)used its control of the SAPS (or its political access to those who control the SAPS) to teach miners taking part in a violent and unprotected strike a “lesson”, because these striking miners threatened its financial and class interests. As a result, 34 striking and protesting miners were killed by the SAPS and more than 78 people were injured.
The Farlam Commission of Inquiry into the massacre, and the events that led up to it, may not come to the same conclusion. Commissions of Inquiry – even Commissions that do a good job – are usually better at determining the small truths than at uncovering the larger political truths of a tragic event like this. It is also not yet clear to what extent the alleged SAPS cover-up of the event and the possible protection of political principals and mine company executives will succeed.
This does not mean that the work done by the Farlam Commission is not important. Like the Truth and Reconciliation Commission it might uncover at least part of the truth, creating a factual matrix within which, over time, we will come to understand the political significance of the events on 16 August 2012. For that reason it is essential that the Commission must be seen to be acting fairly: if its findings are not trusted by everyone, it will be difficult to rely on these findings as a springboard for more searching analysis of the political import of the Marikana massacre.
The Commission’s legitimacy was threatened by the withdrawal of the legal teams representing the families of the killed miners as well as of the injured and arrested miners because of a dispute about the funding of the lawyers of the injured and arrested miners (led by Adv. Dali Mpofu). It therefore came as a great relief when the North Gauteng High Court (in a legally daring judgment by Makgoka J) in the case of Magidiwana and Another v President of the Republic of South Africa and Others ordered Legal Aid SA to fund Adv. Mpofu and his team.
I am delighted that Legal Aid SA has now agreed to fund Adv. Mpofu’s team. However, Legal Aid SA may still appeal the judgment because of the potentially far-reaching consequences the judgment poses to the continued financial viability of Legal Aid SA and it will not at all be surprising if such an appeal succeeds.
The bulk of the judgment focuses on the right of surviving miners to be represented by legal representatives and does an admirable job of showing why section 34 of the Constitution – which states that everyone has the right to have any dispute that can be resolved by the application of law decided in a fair public hearing – entitles miners to such legal representation.
What the judgment fails to do convincingly, in my opinion, is to show that this right must translate into a right to have those lawyers funded at state expense through Legal Aid SA.
As Legal Aid SA eventually conceded, its CEO does have the general discretion to fund the lawyers of interested parties who appear before a Commission of Inquiry. In fact, Legal Aid SA funded the lawyers of families of the deceased miners in accordance with this general discretion. The question is whether its decision to fund the lawyers representing the families of deceased miners (but not the injured and arrested miners) could be declared unconstitutional on the basis that it was irrational to fund the former but not the latter.
The court found that the injured and arrested miners did have a right to state funded legal representation in general, given their substantial and direct interest in the outcome of the commission; their vulnerability and financial position; the complexity of the proceedings and the capacity of the applicants to represent themselves; the procedures adopted by the commission; the need for an “equality of arms” between the parties; and the potential consequences of the findings and recommendations of the commission for the injured and arrested miners.
In a wonderful passage that could easily apply to the vast majority of litigants and accused persons of modest means who need legal representation in South Africa, the court stated:
Moreover, the court pointed out that the SAPS legal team is said to comprise five advocates (three senior counsel and two senior-junior counsel). In addition, the SAPS also use the services of a private firm of attorneys in Rustenburg, instead of State Attorney. Furthermore, the Minister of Police, whose interests should ordinarily coincide with those of SAPS, for some reason maintains a separate legal team on a so-called “watching brief” at the Commission (a fact that raises its own set of questions about the possible political involvement in the events of 16 August 2012).
According to the court, the State parties’ legal representation costs approximately R2 million to R3 million per month.
The judgment therefore concludes that considerations of fairness and the need for “equality of arms” between the parties require the state to fund the legal representatives of the miners. The interests of justice and the rule of law would be undermined by a failure to fund their lawyers.
It would be difficult to argue with the court that it would be fundamentally unfair for one party to be represented by lawyers to the cost of up to R3 million a month while another party with a direct interest in the outcome of the Commission have no legal representation at all. After all, those involved in the killing and injuring of the miners are represented by an army of lawyers, ever alert to protect the interest of their clients, who would obviously like to pin the blame for the massacre on the miners themselves in order to absolve the SAPS and its political principal from any blame. It seems extremely unfair that the one side is so well protected while one of the other parties is not.
However, apart from the profound political importance of the case, this situation is not fundamentally different from that faced daily by many litigants or potential litigants who wish to go to court to enforce their legal rights or to challenge the abuse of power or the flouting of the law by big banks, other large corporations, wealthy individuals or the state. Legal Aid SA very seldom provides funding for such litigants due to an acute shortage of Legal Aid funds. It is mandated by its rules and by the Constitution to fund lawyers for indigent criminal defendants “if substantial injustice would otherwise result”, but the Constitution does not explicitly impose a duty on the state (and hence Legal Aid SA) to fund civil matters (nor matters relating to Commissions of Inquiry).
Because of a lack of funds to pay good lawyers capable of taking on the “big boys” (and the difficulty of securing the services of such lawyers, given the financial interests many lawyers have in representing the “big boys” instead), ordinary people – both poor people and middle class people – often face insurmountable hurdles in securing justice in court.
There are no quick fix solutions to secure better access to justice for most South Africans. It would help if the state pumped additional billions of rands into the legal aid system – but that is not going to happen. Funds are needed for other “important” state matters – like upgrading the private residence of the president.
Establishing a system in which recent law graduates do one year of community service – similar to medical graduates – to assist indigent litigants may also help to secure better access to justice, but that would require a gargantuan administrative effort from the Department of Justice. The Department currently probably does not have the financial and human resources to pull this off successfully.
Simplifying legal rules and moving away from the absurdly rigid application of these rules by some courts, will also help. Many procedural rules unnecessary complicate litigation and increase costs – often to the advantage of those litigants with the deepest pockets and hence the best lawyers. It goes without saying that litigants without lawyers are often unfairly disadvantaged by these rules or are precluded from benefiting from access to the legal system at all because of their lack of knowledge of the rules.
But because of the formalistic legal culture – often inculcated and perpetuated by untransformed legal training provided at Law Schools – and because lawyers often benefit financially from the complicated and formalistic legal rules, there seems to be little appetite among elites in the legal profession to champion the streamlining and simplification of procedural rules.
It is judged against this background that the ultimate decision of the court in the Marikana case gets to look a bit shaky. This is so, not because it would have been fair to deny the injured and arrested miners legal representation at state expense, but because it is not clear that the decision of Legal Aid SA not to fund the lawyers can be said to have been irrational, given its many other commitments and the almost infinite demands on its limited funds.
Legal Aid SA provided three reasons for funding the legal team representing the families of the killed miners but not the legal team of the injured and arrested miners. First it claimed that the former group had a “substantial, proximate, and material interest in the outcome of the commission” to a degree that the latter did not. Second, it claimed that the latter group’s interests would be adequately protected by labour unions, NUM and AMCU. Third, it claimed that due to budgetary constraints it could not fund both parties.
The court (seemingly confusing or conflating the requirements for legality contained in section 1 of the Constitution and the test for a breach of section 9(1) of the Constitution) affirmed, correctly, that the exercise of public power by the executive and other functionaries should not be irrational. The court, more controversially, concluded that the refusal by Legal Aid SA to provide legal aid to the injured and arrested miners was not rationally related to the purpose of the Legal Aid Act, (as far as I can tell) because it found that this was not done to pursue a legitimate purpose.
The court did not really explain why this was the case. If the purpose of the decision was to manage Legal Aid SA’s funds properly, it is unclear why it would be irrational for Legal Aid SA to fund the one group but not the other. There is also clearly a difference in the position between the two groups: the loved ones of one group were killed, while the members of the other group are still alive.
Rationality review does not allow the court to set aside a decision of a public body because that body acted unwisely or because another decision would have resulted in a fairer outcome. It only allows the court to interfere if it can be shown that there was no rational reason for its decision: in other words, when the decision is arbitrary or capricious. In this case one can argue about the wisdom of the Legal Aid SA decision, but I am not sure one can say with confidence that it was irrational. To hold otherwise would have potentially catastrophic consequences for the financial viability of Legal Aid SA.
Despite the shaky legal argumentation, the judgment must be welcomed. Hopefully the clear injustice illustrated by the case may well spark a broader debate about the lack of access to justice and about what steps can be taken by the government and by the legal profession to provide ordinary people with a better chance to access the skills of competent lawyers.
Source: Constitutionally Speaking
The Marikana massacre, in which the South African Police Service (SAPS) killed 34 striking mine workers, may well turn out to have been a watershed moment in South African politics. From where I sit, it looks suspiciously as if the ruling elite (ab)used its control of the SAPS (or its political access to those who control the SAPS) to teach miners taking part in a violent and unprotected strike a “lesson”, because these striking miners threatened its financial and class interests. As a result, 34 striking and protesting miners were killed by the SAPS and more than 78 people were injured.
The Farlam Commission of Inquiry into the massacre, and the events that led up to it, may not come to the same conclusion. Commissions of Inquiry – even Commissions that do a good job – are usually better at determining the small truths than at uncovering the larger political truths of a tragic event like this. It is also not yet clear to what extent the alleged SAPS cover-up of the event and the possible protection of political principals and mine company executives will succeed.
This does not mean that the work done by the Farlam Commission is not important. Like the Truth and Reconciliation Commission it might uncover at least part of the truth, creating a factual matrix within which, over time, we will come to understand the political significance of the events on 16 August 2012. For that reason it is essential that the Commission must be seen to be acting fairly: if its findings are not trusted by everyone, it will be difficult to rely on these findings as a springboard for more searching analysis of the political import of the Marikana massacre.
The Commission’s legitimacy was threatened by the withdrawal of the legal teams representing the families of the killed miners as well as of the injured and arrested miners because of a dispute about the funding of the lawyers of the injured and arrested miners (led by Adv. Dali Mpofu). It therefore came as a great relief when the North Gauteng High Court (in a legally daring judgment by Makgoka J) in the case of Magidiwana and Another v President of the Republic of South Africa and Others ordered Legal Aid SA to fund Adv. Mpofu and his team.
I am delighted that Legal Aid SA has now agreed to fund Adv. Mpofu’s team. However, Legal Aid SA may still appeal the judgment because of the potentially far-reaching consequences the judgment poses to the continued financial viability of Legal Aid SA and it will not at all be surprising if such an appeal succeeds.
The bulk of the judgment focuses on the right of surviving miners to be represented by legal representatives and does an admirable job of showing why section 34 of the Constitution – which states that everyone has the right to have any dispute that can be resolved by the application of law decided in a fair public hearing – entitles miners to such legal representation.
What the judgment fails to do convincingly, in my opinion, is to show that this right must translate into a right to have those lawyers funded at state expense through Legal Aid SA.
As Legal Aid SA eventually conceded, its CEO does have the general discretion to fund the lawyers of interested parties who appear before a Commission of Inquiry. In fact, Legal Aid SA funded the lawyers of families of the deceased miners in accordance with this general discretion. The question is whether its decision to fund the lawyers representing the families of deceased miners (but not the injured and arrested miners) could be declared unconstitutional on the basis that it was irrational to fund the former but not the latter.
The court found that the injured and arrested miners did have a right to state funded legal representation in general, given their substantial and direct interest in the outcome of the commission; their vulnerability and financial position; the complexity of the proceedings and the capacity of the applicants to represent themselves; the procedures adopted by the commission; the need for an “equality of arms” between the parties; and the potential consequences of the findings and recommendations of the commission for the injured and arrested miners.
In a wonderful passage that could easily apply to the vast majority of litigants and accused persons of modest means who need legal representation in South Africa, the court stated:
The fact that they [the miners] are poor should never be a basis to summarily dismiss their potential substantial prejudice. It is unthinkable and deeply offensive to basic fairness and the rule of law in a democratic state that the poor and vulnerable be left to their own devices, in a manner that will deny them exercise of their constitutional right in terms of s. 34 of the Constitution.
Moreover, the court pointed out that the SAPS legal team is said to comprise five advocates (three senior counsel and two senior-junior counsel). In addition, the SAPS also use the services of a private firm of attorneys in Rustenburg, instead of State Attorney. Furthermore, the Minister of Police, whose interests should ordinarily coincide with those of SAPS, for some reason maintains a separate legal team on a so-called “watching brief” at the Commission (a fact that raises its own set of questions about the possible political involvement in the events of 16 August 2012).
According to the court, the State parties’ legal representation costs approximately R2 million to R3 million per month.
The judgment therefore concludes that considerations of fairness and the need for “equality of arms” between the parties require the state to fund the legal representatives of the miners. The interests of justice and the rule of law would be undermined by a failure to fund their lawyers.
It would be difficult to argue with the court that it would be fundamentally unfair for one party to be represented by lawyers to the cost of up to R3 million a month while another party with a direct interest in the outcome of the Commission have no legal representation at all. After all, those involved in the killing and injuring of the miners are represented by an army of lawyers, ever alert to protect the interest of their clients, who would obviously like to pin the blame for the massacre on the miners themselves in order to absolve the SAPS and its political principal from any blame. It seems extremely unfair that the one side is so well protected while one of the other parties is not.
However, apart from the profound political importance of the case, this situation is not fundamentally different from that faced daily by many litigants or potential litigants who wish to go to court to enforce their legal rights or to challenge the abuse of power or the flouting of the law by big banks, other large corporations, wealthy individuals or the state. Legal Aid SA very seldom provides funding for such litigants due to an acute shortage of Legal Aid funds. It is mandated by its rules and by the Constitution to fund lawyers for indigent criminal defendants “if substantial injustice would otherwise result”, but the Constitution does not explicitly impose a duty on the state (and hence Legal Aid SA) to fund civil matters (nor matters relating to Commissions of Inquiry).
Because of a lack of funds to pay good lawyers capable of taking on the “big boys” (and the difficulty of securing the services of such lawyers, given the financial interests many lawyers have in representing the “big boys” instead), ordinary people – both poor people and middle class people – often face insurmountable hurdles in securing justice in court.
There are no quick fix solutions to secure better access to justice for most South Africans. It would help if the state pumped additional billions of rands into the legal aid system – but that is not going to happen. Funds are needed for other “important” state matters – like upgrading the private residence of the president.
Establishing a system in which recent law graduates do one year of community service – similar to medical graduates – to assist indigent litigants may also help to secure better access to justice, but that would require a gargantuan administrative effort from the Department of Justice. The Department currently probably does not have the financial and human resources to pull this off successfully.
Simplifying legal rules and moving away from the absurdly rigid application of these rules by some courts, will also help. Many procedural rules unnecessary complicate litigation and increase costs – often to the advantage of those litigants with the deepest pockets and hence the best lawyers. It goes without saying that litigants without lawyers are often unfairly disadvantaged by these rules or are precluded from benefiting from access to the legal system at all because of their lack of knowledge of the rules.
But because of the formalistic legal culture – often inculcated and perpetuated by untransformed legal training provided at Law Schools – and because lawyers often benefit financially from the complicated and formalistic legal rules, there seems to be little appetite among elites in the legal profession to champion the streamlining and simplification of procedural rules.
It is judged against this background that the ultimate decision of the court in the Marikana case gets to look a bit shaky. This is so, not because it would have been fair to deny the injured and arrested miners legal representation at state expense, but because it is not clear that the decision of Legal Aid SA not to fund the lawyers can be said to have been irrational, given its many other commitments and the almost infinite demands on its limited funds.
Legal Aid SA provided three reasons for funding the legal team representing the families of the killed miners but not the legal team of the injured and arrested miners. First it claimed that the former group had a “substantial, proximate, and material interest in the outcome of the commission” to a degree that the latter did not. Second, it claimed that the latter group’s interests would be adequately protected by labour unions, NUM and AMCU. Third, it claimed that due to budgetary constraints it could not fund both parties.
The court (seemingly confusing or conflating the requirements for legality contained in section 1 of the Constitution and the test for a breach of section 9(1) of the Constitution) affirmed, correctly, that the exercise of public power by the executive and other functionaries should not be irrational. The court, more controversially, concluded that the refusal by Legal Aid SA to provide legal aid to the injured and arrested miners was not rationally related to the purpose of the Legal Aid Act, (as far as I can tell) because it found that this was not done to pursue a legitimate purpose.
The court did not really explain why this was the case. If the purpose of the decision was to manage Legal Aid SA’s funds properly, it is unclear why it would be irrational for Legal Aid SA to fund the one group but not the other. There is also clearly a difference in the position between the two groups: the loved ones of one group were killed, while the members of the other group are still alive.
Rationality review does not allow the court to set aside a decision of a public body because that body acted unwisely or because another decision would have resulted in a fairer outcome. It only allows the court to interfere if it can be shown that there was no rational reason for its decision: in other words, when the decision is arbitrary or capricious. In this case one can argue about the wisdom of the Legal Aid SA decision, but I am not sure one can say with confidence that it was irrational. To hold otherwise would have potentially catastrophic consequences for the financial viability of Legal Aid SA.
Despite the shaky legal argumentation, the judgment must be welcomed. Hopefully the clear injustice illustrated by the case may well spark a broader debate about the lack of access to justice and about what steps can be taken by the government and by the legal profession to provide ordinary people with a better chance to access the skills of competent lawyers.
Source: Constitutionally Speaking
Wednesday, October 10, 2012
SOUTH AFRICA TO RATIFY INTERNATIONAL SOCIO-ECONOMIC RIGHTS COVENANT
South African Human Rights Groups welcome Cabinet’s approval of South Africa’s ratification of the United Nations International Covenant on Economic, Social and Cultural Rights (ICESCR)
Almost eighteen years after the South African government signed the ICESCR, Cabinet has approved that South Africa will ratify the ICESCR. This important decision to ratify, which means that the ICESCR will be legally binding, was included in a statement issued yesterday on Cabinet’s ordinary meeting held in Pretoria on 10 October 2012. The Cabinet statement describes how the ICESCR is a “key international treaty which seeks to encourage State Parties to address challenges of inequality, unemployment and poverty, which are critical to the strategic goals of governments.”
The ICESCR, together with the International Covenant on Civil and Political Rights (ICCPR) and the Universal Declaration on Human Rights, constitutes the International Bill of Rights. The ICESCR has been ratifed by over 160 states since it was adopted in 1966, 48 of which are African states and 11 of which are member states of SADC. South Africa ratified the ICCPR in 1998, and its current ratification of the ICESCR will unambiguously signal its commitment to be legally bound by the full range of human rights recognised under international law. In its statement, Cabinet indicates that the recommendation to ratify the ICESCR will be tabled in Parliament for ratification in line with Section 231(2) of the South African Constitution.
Civil society organisations have been calling for many years for the South African government to ratify the ICESCR (and its Optional Protocol, which creates an individual complaints mechanism). The Community Law Centre (CLC), Socio-Economic Rights Institute of SA (SERI), Black Sash, People’s Health Movement South Africa, National Welfare Forum, Global Call to Action against Poverty South Africa (GCAP-SA) and the Studies in Poverty and Inequality Institute (SPII) see this as a great opportunity to ensure that South Africa’s jurisprudence on socio-economic rights develops in harmony with the normative standards set by the leading international treaty on these rights.
According to Jackie Dugard, executive director at the Socio-Economic Rights Institute of SA (SERI), “although this is a momentous and long-awaited decision, South Africa has for a while subscribed to the norms and standards contained in the ICESCR as it has ratified the African Charter on Human and People’s Rights of 1981, which echoes many of the socio-economic rights contained in the ICESCR. It has also included justiciable socio-economic rights in the Bill of Rights in the South African Constitution.
Prof Lilian Chenwi, associate professor at the Wits School of Law, states that “given the role played by the international community and international human rights law in the struggle against apartheid, ratification of the ICESCR will fulfil South Africa’s express desire ‘to take its rightful place as a sovereign state in the family of nations’, which is recognised in the Preamble to its Constitution.”
Rajesh Latchman, of the National Welfare Forum, states: “This move to ratify the ICESCR is an important step towards creating a harmonious roadmap for the realisation of socio-economic rights for all in SA, and it is about time too.”
While ratification of the ICESCR is significant, the ICESCR Ratification Campaign Driver Group encourages South Africa to also ratify the Optional Protocol to the ICESCR (OP-CESCR).
The Optional Protocol is an extra treaty that promotes a culture of accountability around the ICESCR, empowering vulnerable and marginalised groups to lodge individual complaints at the international level regarding violations of their socio-economic rights. The Optional Protocol is yet to come into force, as it requires 10 states to ratify it and, at present, only 8 states have done so.
It is hoped that the South African government will table the recommendation to ratify the ICESCR before Parliament and submit its accession instrument the United Nations without any further delay, and also ratify the Optional Protocol to concretise South Africa’s commitment to human rights and to bring this important international human rights instrument to life.
Issued by the ICESCR Ratification Campaign Driver Group which comprises:
Black Sash
Community Law Centre (CLC), University of the Western Cape
Global Call to Action against Poverty South Africa (GCAP-SA)
National Welfare Forum
People’s Health Movement South Africa
Socio-Economic Rights Institute of SA (SERI)
Studies in Poverty and Inequality Institute (SPII)
For additional information, contact:
Lilian Chenwi, associate professor, Wits School of Law: 072 172 6346 / lilian.chenwi@wits.ac.za
Jackie Dugard, executive director of SERI: 084 240 6187 / jackie@seri-sa.org
Rajesh Latchman, coordinator of the National Welfare Forum: 083 443 0227 / rajesh@nwf.org.za
Almost eighteen years after the South African government signed the ICESCR, Cabinet has approved that South Africa will ratify the ICESCR. This important decision to ratify, which means that the ICESCR will be legally binding, was included in a statement issued yesterday on Cabinet’s ordinary meeting held in Pretoria on 10 October 2012. The Cabinet statement describes how the ICESCR is a “key international treaty which seeks to encourage State Parties to address challenges of inequality, unemployment and poverty, which are critical to the strategic goals of governments.”
The ICESCR, together with the International Covenant on Civil and Political Rights (ICCPR) and the Universal Declaration on Human Rights, constitutes the International Bill of Rights. The ICESCR has been ratifed by over 160 states since it was adopted in 1966, 48 of which are African states and 11 of which are member states of SADC. South Africa ratified the ICCPR in 1998, and its current ratification of the ICESCR will unambiguously signal its commitment to be legally bound by the full range of human rights recognised under international law. In its statement, Cabinet indicates that the recommendation to ratify the ICESCR will be tabled in Parliament for ratification in line with Section 231(2) of the South African Constitution.
Civil society organisations have been calling for many years for the South African government to ratify the ICESCR (and its Optional Protocol, which creates an individual complaints mechanism). The Community Law Centre (CLC), Socio-Economic Rights Institute of SA (SERI), Black Sash, People’s Health Movement South Africa, National Welfare Forum, Global Call to Action against Poverty South Africa (GCAP-SA) and the Studies in Poverty and Inequality Institute (SPII) see this as a great opportunity to ensure that South Africa’s jurisprudence on socio-economic rights develops in harmony with the normative standards set by the leading international treaty on these rights.
According to Jackie Dugard, executive director at the Socio-Economic Rights Institute of SA (SERI), “although this is a momentous and long-awaited decision, South Africa has for a while subscribed to the norms and standards contained in the ICESCR as it has ratified the African Charter on Human and People’s Rights of 1981, which echoes many of the socio-economic rights contained in the ICESCR. It has also included justiciable socio-economic rights in the Bill of Rights in the South African Constitution.
Prof Lilian Chenwi, associate professor at the Wits School of Law, states that “given the role played by the international community and international human rights law in the struggle against apartheid, ratification of the ICESCR will fulfil South Africa’s express desire ‘to take its rightful place as a sovereign state in the family of nations’, which is recognised in the Preamble to its Constitution.”
Rajesh Latchman, of the National Welfare Forum, states: “This move to ratify the ICESCR is an important step towards creating a harmonious roadmap for the realisation of socio-economic rights for all in SA, and it is about time too.”
While ratification of the ICESCR is significant, the ICESCR Ratification Campaign Driver Group encourages South Africa to also ratify the Optional Protocol to the ICESCR (OP-CESCR).
The Optional Protocol is an extra treaty that promotes a culture of accountability around the ICESCR, empowering vulnerable and marginalised groups to lodge individual complaints at the international level regarding violations of their socio-economic rights. The Optional Protocol is yet to come into force, as it requires 10 states to ratify it and, at present, only 8 states have done so.
It is hoped that the South African government will table the recommendation to ratify the ICESCR before Parliament and submit its accession instrument the United Nations without any further delay, and also ratify the Optional Protocol to concretise South Africa’s commitment to human rights and to bring this important international human rights instrument to life.
Issued by the ICESCR Ratification Campaign Driver Group which comprises:
Black Sash
Community Law Centre (CLC), University of the Western Cape
Global Call to Action against Poverty South Africa (GCAP-SA)
National Welfare Forum
People’s Health Movement South Africa
Socio-Economic Rights Institute of SA (SERI)
Studies in Poverty and Inequality Institute (SPII)
For additional information, contact:
Lilian Chenwi, associate professor, Wits School of Law: 072 172 6346 / lilian.chenwi@wits.ac.za
Jackie Dugard, executive director of SERI: 084 240 6187 / jackie@seri-sa.org
Rajesh Latchman, coordinator of the National Welfare Forum: 083 443 0227 / rajesh@nwf.org.za
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Friday, August 31, 2012
What Land and Housing Rights Reveal About a Country’s Commitment to Open Society
Homeowners in Moscow’s Rechnik
district likely did not expect to wake up to bulldozers on the morning
of January 21, 2010. Thrown out of their homes by armed police, families
could only watch as their houses were demolished. Under the direction
of Moscow’s then-mayor, Yuri Luzhkov, famous—or infamous—for his embrace
of fast-paced, high-priced development, municipal authorities decided
to invalidate land permits issued during the Soviet era and reject
residents’ de facto titles to what has since become valuable land and to
the houses they had built on it. Had they built illegally? What is the
state’s responsibility to citizens in this process? What, if any, were
the underlying interests at stake in this demonstration of force? With
similar situations played out all over the globe, state actions to take
away people’s land or expel them from their homes tell us volumes about a
government’s commitment to transparency, democracy, and other elements
of good governance; they lay bare the true human rights record of a
place.
The Open Society Foundations’ Human Rights Data Initiative, a joint project of the Human Rights and Governance Program and the Information Program, has begun a year-long study of housing and property expropriations. The study will track how the issue is connected to a range of internationally recognized human rights, and explore how human rights and accountability organizations approach the problem of the abuse of states’ claim to eminent domain. Though states are empowered to use eminent domain for the public good, abuse of this authority is widespread. What we’ve found is that violations of the “positive right” to housing are only one part of the issue. The process of state infringement on land ownership illuminates a host of other problems, including the state’s failure to uphold the rule of law, provide equal protection to all citizens, tackle corruption, and engage in economic development that is respectful of ethnic minorities and the urban poor. Invariably we also find citizens shut out of decisions regarding their surroundings, the shape of their city, and preservation of its cultural heritage. Land and housing policy is a revelator that tells us about the reality and depth of commitment to open society values in a given country.
In a broad survey of the work of the Open Society Foundations, we’ve seen that the threat to where they live is many people’s first encounter with the potential harm of predatory state interests. Human rights and transparency organizations report incidences with alarming frequency: Azeri families living in central Baku find themselves stripped of their property and forced from their homes to make way for a glittering stadium for the Eurovision Song Contest. In Equatorial Guinea, where a small ruling clique of families reaps huge profits while over 60 percent survive on less than $1 per day, citizens were evicted with inadequate or nonexistent compensation in the name of an “urban renewal” and public utility development, that has given birth to hotels, offices and luxury housing that few will ever access. Similar dubious state claims to promoting “public good” were raised in the case of Roma settlements on municipal land in Bulgaria. Tolerated by the state for decades, communities found themselves threatened with eviction when the land was privatized without offer of alternative housing. That case was finally settled at the European Court of Human Rights in a decision that cited state responsibility to assess the necessity of the action, as well as the effects of interference an eviction will have on the right to private and family life as deciding factors against the government of Bulgaria. Activists in Brazil have documented the effect of evictions on an estimated thirty thousand people in the run-up to the “mega events” of the World Cup 2014 and 2016 Olympic Games in Rio—mass evictions carried out without sufficient compensation, forewarning, or community consultation. In many of these cases, when citizens raised their voices through the channels of protest open to them, they were answered by the state with resistance, violence, and restriction of their liberties.
If forcible removal is one end of the spectrum of violations, at the other, state bureaucratic policies can be less blatant but just as insidious. Though bureaucratic reform toward openness in land policy can be a good thing, when states institute open records and land-ownership reform to counteract corruption in legal titling of land, the process can be turned on its head. Take India, for example, where individuals began taking advantage of records opened in an effort to help the rural poor take out loans or apply for government benefits. Because they had better technical skills and access to information, wealthier residents could create what open data expert Michael Gurstein called “unequal contests around land titles,” exploiting mistakes and gaps to their own advantage. In Georgia, the buying and selling of land has been drastically simplified in the past several years, including through the establishment of electronic land records—a major step forward in limiting corruption—but curious exceptions to the speed and ease of that process have appeared when such slowdowns are in the state interest, and when dozens of citizens at a time “donate” their land in a valuable tourist zone to the state.
Land and housing rights excite communities in ways that many other rights issues do not. Housing procedures are often the most widely felt of the harms done by a chaotic or captured state, where high-level corrupt political and economic exchange between government and a small number of firms is pervasive. The combination of abusive practice and non-transparent procedures can create citizen outrage, and introduce them to their fundamental rights and the challenges and exhilaration of citizen action. As acts of state policy, evictions and eminent domain can affect large numbers of citizens from different classes and social strata, and all of them experience the lack of rule of law, and the need for information and the right to free expression to pull the levers of citizen governance.
The issue also marries disparate communities and inspires conversations about history and preservation, rights and due process, economic growth and the tangibles and intangibles of livability, livelihood, and public good. Expropriation of land and housing filters through many of the key issues of the Open Society Foundations—from corruption and poor governance, to lack of access to information, use and abuse of force, lack of independence of the judiciary, and intolerance of dissent. Open Society Foundations’ own work to mitigate the impacts of the national foreclosure crisis on low-income communities and communities of color in the U.S. highlights how the lack of transparent and accountable financial markets can lead to widespread displacement and wealth-stripping among vulnerable populations.
State policies on housing and the use of eminent domain not only energize individuals, but can also have a galvanizing effect on civil society organizations. NGOs focused on a key population are often motivated by housing and property dilemmas to develop full-context arguments on human rights, development, transparency, and citizen access to decision-making. In doing so, these organizations find new partners and new channels for activism, policy work and redress of abusive practices. At the same time, they face new challenges. Given the large amounts of money at stake, documenting procurement contracts and development deals can be very dangerous and difficult.
And finally, the expansion of access to information and technology enrich the potential for development to be conducted in ways that reflect open society values. As instruments of development, international financial institutions and technology can affect the direction of state policy on questions of housing and land. International financial institutions already exert a good deal of influence over the direction of development projects that they sponsor. Because of their leverage, IFI can either be a springboard for state abuse or a catalyst for a more transparent and equitable approach, negotiating rights-respecting plans and ensuring an open process. Technology can be used to increase efficiency and fairness by bringing game-changing data to light, or obscure processes and privilege those who already have access to knowledge and broadband.
As the Human Rights Data Initiative examines this theme, we are focusing on three key questions:
How can we do this better? We need more data: as the Lincoln Institute of Land Policy points out, governments do not produce systematic information on the use of eminent domain, and legal research does not tell us about other dimensions of this government practice. We need to help transparency and human rights organizations to work together to ensure that people’s civil and political rights are protected during the process of urban development, with particular attention to the rights essential to expression of dissent and participation in decision making processes. And we need to know from international lenders and experts what the key elements of development planning are that can preserve people’s human rights, and insist on their inclusion in negotiated agreements regarding sponsored economic development projects. It will be essential for lenders to share that information with civil society groups and bring such groups into the process as allies. States must seek to make honest transactions between public need, livelihood, and individual rights, and this transaction should be observed for the opportunity it represents to scratch the surface of commitments to civil and political liberties.
Source: Open Society Foundations
The Open Society Foundations’ Human Rights Data Initiative, a joint project of the Human Rights and Governance Program and the Information Program, has begun a year-long study of housing and property expropriations. The study will track how the issue is connected to a range of internationally recognized human rights, and explore how human rights and accountability organizations approach the problem of the abuse of states’ claim to eminent domain. Though states are empowered to use eminent domain for the public good, abuse of this authority is widespread. What we’ve found is that violations of the “positive right” to housing are only one part of the issue. The process of state infringement on land ownership illuminates a host of other problems, including the state’s failure to uphold the rule of law, provide equal protection to all citizens, tackle corruption, and engage in economic development that is respectful of ethnic minorities and the urban poor. Invariably we also find citizens shut out of decisions regarding their surroundings, the shape of their city, and preservation of its cultural heritage. Land and housing policy is a revelator that tells us about the reality and depth of commitment to open society values in a given country.
In a broad survey of the work of the Open Society Foundations, we’ve seen that the threat to where they live is many people’s first encounter with the potential harm of predatory state interests. Human rights and transparency organizations report incidences with alarming frequency: Azeri families living in central Baku find themselves stripped of their property and forced from their homes to make way for a glittering stadium for the Eurovision Song Contest. In Equatorial Guinea, where a small ruling clique of families reaps huge profits while over 60 percent survive on less than $1 per day, citizens were evicted with inadequate or nonexistent compensation in the name of an “urban renewal” and public utility development, that has given birth to hotels, offices and luxury housing that few will ever access. Similar dubious state claims to promoting “public good” were raised in the case of Roma settlements on municipal land in Bulgaria. Tolerated by the state for decades, communities found themselves threatened with eviction when the land was privatized without offer of alternative housing. That case was finally settled at the European Court of Human Rights in a decision that cited state responsibility to assess the necessity of the action, as well as the effects of interference an eviction will have on the right to private and family life as deciding factors against the government of Bulgaria. Activists in Brazil have documented the effect of evictions on an estimated thirty thousand people in the run-up to the “mega events” of the World Cup 2014 and 2016 Olympic Games in Rio—mass evictions carried out without sufficient compensation, forewarning, or community consultation. In many of these cases, when citizens raised their voices through the channels of protest open to them, they were answered by the state with resistance, violence, and restriction of their liberties.
If forcible removal is one end of the spectrum of violations, at the other, state bureaucratic policies can be less blatant but just as insidious. Though bureaucratic reform toward openness in land policy can be a good thing, when states institute open records and land-ownership reform to counteract corruption in legal titling of land, the process can be turned on its head. Take India, for example, where individuals began taking advantage of records opened in an effort to help the rural poor take out loans or apply for government benefits. Because they had better technical skills and access to information, wealthier residents could create what open data expert Michael Gurstein called “unequal contests around land titles,” exploiting mistakes and gaps to their own advantage. In Georgia, the buying and selling of land has been drastically simplified in the past several years, including through the establishment of electronic land records—a major step forward in limiting corruption—but curious exceptions to the speed and ease of that process have appeared when such slowdowns are in the state interest, and when dozens of citizens at a time “donate” their land in a valuable tourist zone to the state.
Land and housing rights excite communities in ways that many other rights issues do not. Housing procedures are often the most widely felt of the harms done by a chaotic or captured state, where high-level corrupt political and economic exchange between government and a small number of firms is pervasive. The combination of abusive practice and non-transparent procedures can create citizen outrage, and introduce them to their fundamental rights and the challenges and exhilaration of citizen action. As acts of state policy, evictions and eminent domain can affect large numbers of citizens from different classes and social strata, and all of them experience the lack of rule of law, and the need for information and the right to free expression to pull the levers of citizen governance.
The issue also marries disparate communities and inspires conversations about history and preservation, rights and due process, economic growth and the tangibles and intangibles of livability, livelihood, and public good. Expropriation of land and housing filters through many of the key issues of the Open Society Foundations—from corruption and poor governance, to lack of access to information, use and abuse of force, lack of independence of the judiciary, and intolerance of dissent. Open Society Foundations’ own work to mitigate the impacts of the national foreclosure crisis on low-income communities and communities of color in the U.S. highlights how the lack of transparent and accountable financial markets can lead to widespread displacement and wealth-stripping among vulnerable populations.
State policies on housing and the use of eminent domain not only energize individuals, but can also have a galvanizing effect on civil society organizations. NGOs focused on a key population are often motivated by housing and property dilemmas to develop full-context arguments on human rights, development, transparency, and citizen access to decision-making. In doing so, these organizations find new partners and new channels for activism, policy work and redress of abusive practices. At the same time, they face new challenges. Given the large amounts of money at stake, documenting procurement contracts and development deals can be very dangerous and difficult.
And finally, the expansion of access to information and technology enrich the potential for development to be conducted in ways that reflect open society values. As instruments of development, international financial institutions and technology can affect the direction of state policy on questions of housing and land. International financial institutions already exert a good deal of influence over the direction of development projects that they sponsor. Because of their leverage, IFI can either be a springboard for state abuse or a catalyst for a more transparent and equitable approach, negotiating rights-respecting plans and ensuring an open process. Technology can be used to increase efficiency and fairness by bringing game-changing data to light, or obscure processes and privilege those who already have access to knowledge and broadband.
As the Human Rights Data Initiative examines this theme, we are focusing on three key questions:
- What is the shape of the use and abuse of eminent domain and other tools of the state with respect to property? What is it used for, whom does it affect, and how?
- In projects where citizens, organizations, or other interests have successfully countered a demonstrably bad decision in this space, what has been the deciding factor: did access to more data tip the scales? Did evocative documentary photographs motivate new actors? Was it sharp statistical analysis, or targeted campaigning?
- How can campaigners leverage this issue to engage with citizens on open information and governance, and effect better policymaking around development?
How can we do this better? We need more data: as the Lincoln Institute of Land Policy points out, governments do not produce systematic information on the use of eminent domain, and legal research does not tell us about other dimensions of this government practice. We need to help transparency and human rights organizations to work together to ensure that people’s civil and political rights are protected during the process of urban development, with particular attention to the rights essential to expression of dissent and participation in decision making processes. And we need to know from international lenders and experts what the key elements of development planning are that can preserve people’s human rights, and insist on their inclusion in negotiated agreements regarding sponsored economic development projects. It will be essential for lenders to share that information with civil society groups and bring such groups into the process as allies. States must seek to make honest transactions between public need, livelihood, and individual rights, and this transaction should be observed for the opportunity it represents to scratch the surface of commitments to civil and political liberties.
Source: Open Society Foundations
Thursday, August 30, 2012
Poverty now a crisis in the first world: Motlanthe
The adverse impact of capitalism on social and economic growth requires a mind shift in socialism, Deputy President Kgalema Motlanthe said today.
"The global crisis of capitalism and imperialism, which is negatively affecting growth, widening social inequality, increasing levels of poverty and worsening [un]employment figures, needs a sharpened, radical shift in the approach the Socialist International takes," he said in Cape Town.
Speaking at the opening of the 24th Congress of the Socialist International (SI), he said debates had to focus on the reform of the organisation. Poverty was no longer just a problem for developing nations, but also now becoming a crisis in the first world. "Therefore this leaves us with no choice but to review, analyse and rethink the impact of the global economic crisis on society and the toiling masses of the world." He said there were various concerns sociality parties needed to confront. These included a need to strive for conflict resolution, while securing conditions of development.
Motlanthe's sentiments were echoed by the SI's president and former Greek prime minister George Papandreou. Innovative and alternative solutions were needed in a changing world, he said. "This human ingenuity needs to be accompanied by political and democratic will to make these changes... That will, my friends, has been lacking in Europe and around the world."
Papandreou defended the SI's existence, saying leftist parties were important to achieve, among others, peace, justice, good governance, equality, growth and employment for all. He warned against attributing blame for the global economic crisis. "We point fingers at each other rather than reach out our hands and lift each other up."
Papandreou lamented the fact that immigrants were being held responsible for the economic troubles in several countries. He said international co-ordination was needed now more than ever. "We've seen this spectacular rise in nationalism over the years, and at the same time we've noticed a terrifying rise in racism, prejudice."
Source: Times Live
"The global crisis of capitalism and imperialism, which is negatively affecting growth, widening social inequality, increasing levels of poverty and worsening [un]employment figures, needs a sharpened, radical shift in the approach the Socialist International takes," he said in Cape Town.
Speaking at the opening of the 24th Congress of the Socialist International (SI), he said debates had to focus on the reform of the organisation. Poverty was no longer just a problem for developing nations, but also now becoming a crisis in the first world. "Therefore this leaves us with no choice but to review, analyse and rethink the impact of the global economic crisis on society and the toiling masses of the world." He said there were various concerns sociality parties needed to confront. These included a need to strive for conflict resolution, while securing conditions of development.
Motlanthe's sentiments were echoed by the SI's president and former Greek prime minister George Papandreou. Innovative and alternative solutions were needed in a changing world, he said. "This human ingenuity needs to be accompanied by political and democratic will to make these changes... That will, my friends, has been lacking in Europe and around the world."
Papandreou defended the SI's existence, saying leftist parties were important to achieve, among others, peace, justice, good governance, equality, growth and employment for all. He warned against attributing blame for the global economic crisis. "We point fingers at each other rather than reach out our hands and lift each other up."
Papandreou lamented the fact that immigrants were being held responsible for the economic troubles in several countries. He said international co-ordination was needed now more than ever. "We've seen this spectacular rise in nationalism over the years, and at the same time we've noticed a terrifying rise in racism, prejudice."
Source: Times Live
Wednesday, July 25, 2012
World Bank warns on inequality threat to SA
INEQUALITY had become a "corrosive" reality threatening growth in South Africa, and without social grants, 40% of the population would have seen incomes decline in the first decade after apartheid, the World Bank said yesterday.
The Washington-based lender revised its growth forecast for South Africa this year down to 2,5% from a 3,1% estimate in November — well below the latest estimates from the Reserve Bank, which sees the economy expanding by 2,7% this year and 3,8% next year. The pace was expected to quicken to 3,2% next year and 3,5% in 2014, the World Bank said yesterday, but it warned that the economy would not be able to achieve a faster pace of growth unless it became more inclusive.
Sandeep Mahajan, the World Bank’s lead economist on South Africa, said the economy would have to grow faster than 3,5% in order to tackle the country’s unemployment rate of 25,2% — one of the highest in the world. "Growth has been mediocre … and it’s been inequitably distributed. In South Africa’s case, high growth can only come from inclusive growth," he said at the launch of the report, titled Focus on Inequality of Opportunity. "South Africa is a complete global outlier in terms of inequality … it has been persistent over time and that has been a very corrosive reality."
Global rating agencies have repeatedly highlighted the risks to social and political stability in South Africa posed by high unemployment, huge income disparities and widespread poverty. These issues have constrained its credit ratings, which determine a country’s cost of borrowing and investor appetite for local assets.
South Africa is one of the most unequal countries in the world, with the top 10% of the population accounting for 58% of its income and the bottom half less than 8%, the World Bank said in its report. Poverty reduction had been modest since the late 1990s and would have been "untenable" without the growing level of social grants, it noted.
The Treasury allocated R105bn this year to social grants for the elderly, disabled and poor children, which will reach more than 16-million people, up from 2,5-million in 1998. "Even after accounting for the equalising role of social assistance, income inequality remains extraordinarily high," the World Bank said in the report. "To reduce it to more reasonable levels over the long run, social assistance is clearly not enough and needs to be complemented by other initiatives."
Nomura economist Peter Attard Montalto said it was important to distinguish between equality and poverty. "There is plenty of evidence that South Africa has done a lot to meaningfully increase the standards of living of its poorest. But the development payoffs have been directed more towards the rich and a certain segment of the population," he said yesterday. "You need to have a larger amount of social stability for a proper investment climate."
The World Bank said nearly 70% of the poorest 20% of South Africans were jobless in 2008 — a warning bell for social cohesion. The causes of inequality in labour markets had changed over the past four years, with the contribution of education increasing and the effect of circumstances of gender and race falling slightly, the report said. "Where a person seeking employment lives, however, matters more now than it did four years ago," it noted.
Employment was "particularly challenging" for young workers and residents of townships, rural areas and informal settlements. This is not out of step with the global trend, as the jobless rates for young people in countries such as Greece and Spain are similar to the levels in South Africa — about 50%. But the World Bank said that age was an "unusually large" contributor to inequality in employment in South Africa compared with other middle-income countries, with the "odds extremely stacked" against the youngest workers.
In analysing the reasons for high inequality in South Africa, the World Bank said it would be useful to focus on equity — a reference to access to opportunities — rather than equality. Basic opportunities included access to education, health insurance, safe water, sanitation and electricity. "Except for electricity, where South Africa’s average annual progress has been exceptional, the progress on the other four dimensions puts it in the bottom half of international comparators," the bank said.
Location was particularly important, while the level of education of a household head contributed most to finishing primary school.
Source: Business Day
The Washington-based lender revised its growth forecast for South Africa this year down to 2,5% from a 3,1% estimate in November — well below the latest estimates from the Reserve Bank, which sees the economy expanding by 2,7% this year and 3,8% next year. The pace was expected to quicken to 3,2% next year and 3,5% in 2014, the World Bank said yesterday, but it warned that the economy would not be able to achieve a faster pace of growth unless it became more inclusive.
Sandeep Mahajan, the World Bank’s lead economist on South Africa, said the economy would have to grow faster than 3,5% in order to tackle the country’s unemployment rate of 25,2% — one of the highest in the world. "Growth has been mediocre … and it’s been inequitably distributed. In South Africa’s case, high growth can only come from inclusive growth," he said at the launch of the report, titled Focus on Inequality of Opportunity. "South Africa is a complete global outlier in terms of inequality … it has been persistent over time and that has been a very corrosive reality."
Global rating agencies have repeatedly highlighted the risks to social and political stability in South Africa posed by high unemployment, huge income disparities and widespread poverty. These issues have constrained its credit ratings, which determine a country’s cost of borrowing and investor appetite for local assets.
South Africa is one of the most unequal countries in the world, with the top 10% of the population accounting for 58% of its income and the bottom half less than 8%, the World Bank said in its report. Poverty reduction had been modest since the late 1990s and would have been "untenable" without the growing level of social grants, it noted.
The Treasury allocated R105bn this year to social grants for the elderly, disabled and poor children, which will reach more than 16-million people, up from 2,5-million in 1998. "Even after accounting for the equalising role of social assistance, income inequality remains extraordinarily high," the World Bank said in the report. "To reduce it to more reasonable levels over the long run, social assistance is clearly not enough and needs to be complemented by other initiatives."
Nomura economist Peter Attard Montalto said it was important to distinguish between equality and poverty. "There is plenty of evidence that South Africa has done a lot to meaningfully increase the standards of living of its poorest. But the development payoffs have been directed more towards the rich and a certain segment of the population," he said yesterday. "You need to have a larger amount of social stability for a proper investment climate."
The World Bank said nearly 70% of the poorest 20% of South Africans were jobless in 2008 — a warning bell for social cohesion. The causes of inequality in labour markets had changed over the past four years, with the contribution of education increasing and the effect of circumstances of gender and race falling slightly, the report said. "Where a person seeking employment lives, however, matters more now than it did four years ago," it noted.
Employment was "particularly challenging" for young workers and residents of townships, rural areas and informal settlements. This is not out of step with the global trend, as the jobless rates for young people in countries such as Greece and Spain are similar to the levels in South Africa — about 50%. But the World Bank said that age was an "unusually large" contributor to inequality in employment in South Africa compared with other middle-income countries, with the "odds extremely stacked" against the youngest workers.
In analysing the reasons for high inequality in South Africa, the World Bank said it would be useful to focus on equity — a reference to access to opportunities — rather than equality. Basic opportunities included access to education, health insurance, safe water, sanitation and electricity. "Except for electricity, where South Africa’s average annual progress has been exceptional, the progress on the other four dimensions puts it in the bottom half of international comparators," the bank said.
Location was particularly important, while the level of education of a household head contributed most to finishing primary school.
Source: Business Day
Friday, March 30, 2012
Hawks probe FNB
THE HAWKS have lodged an investigation into allegations of discrimination against black bondholders at FNB. But the bank has denied doing anything wrong.
It is alleged that when Saambou went bankrupt 10 years ago, thousands of clients were incorporated into FNB and some of them were bondholders. Saambou's system made black bondholders pay more than their white counterparts and this was allegedly not rectified when clients were incorporated into FNB.
Yesterday a docket was opened to investigate allegations of discrimination and fraud against the bank. Hawks spokesman McIntosh Polela said: "We received a complaint from a Mr Van Zyl who has been working with people who were incorporated from Saambou. We have opened a docket, but have not started investigating yet. "He alleges fraud and discrimination. We will speak to Van Zyl and take it from there. He alleges that there were tens of thousands of people who were incorporated from Saambou when it went bankrupt, but 6000 of those were black people who were charged more than the rest. As a result some of them have lost their houses," the spokesman said.
But Marius Marais, chief executive of FNB housing finance, said the allegations of racial bias and fraud against FNB are unsubstantiated and have no factual basis. "FNB's core value is one of equality and fairness both to our customers and employees. The bank strongly rejects any allegations of racism. FNB has long sought a judicial outcome to terminate the speculation and false allegations. Trial dates have been set and then postponed by the plaintiff," he said.
Marais said FNB had taken every step to rectify the errors inherited from Saambou. "The bank will welcome any investigation by the Hawks and will offer every cooperation to the investigators. We have not yet received any communication from the Hawks, but we are seeking an urgent meeting with them to address any issues they wish to investigate," Marais said.
According to FNB the bank recalculated the acquired Saambou accounts based on a set of carefully considered principles, and in June 2006 offered a R154-million refund to Saambou customers. "Notwithstanding the unprecedented steps that FNB took in respect of Saambou customers, some individuals with a vested interest continued to pursue allegations related to Saambou's method of interest calculation," Marais said. "FNB has publicly stated that it welcomes legal finality on these matters and actively pursued a trial date that was scheduled in the North Gauteng High Court in November 2011. "The case was delayed at the request of the plaintiff and eventually deferred to a later date. As a result the bank was awarded full costs associated with the delay," Marais said.
Source: The Sowetan
It is alleged that when Saambou went bankrupt 10 years ago, thousands of clients were incorporated into FNB and some of them were bondholders. Saambou's system made black bondholders pay more than their white counterparts and this was allegedly not rectified when clients were incorporated into FNB.
Yesterday a docket was opened to investigate allegations of discrimination and fraud against the bank. Hawks spokesman McIntosh Polela said: "We received a complaint from a Mr Van Zyl who has been working with people who were incorporated from Saambou. We have opened a docket, but have not started investigating yet. "He alleges fraud and discrimination. We will speak to Van Zyl and take it from there. He alleges that there were tens of thousands of people who were incorporated from Saambou when it went bankrupt, but 6000 of those were black people who were charged more than the rest. As a result some of them have lost their houses," the spokesman said.
But Marius Marais, chief executive of FNB housing finance, said the allegations of racial bias and fraud against FNB are unsubstantiated and have no factual basis. "FNB's core value is one of equality and fairness both to our customers and employees. The bank strongly rejects any allegations of racism. FNB has long sought a judicial outcome to terminate the speculation and false allegations. Trial dates have been set and then postponed by the plaintiff," he said.
Marais said FNB had taken every step to rectify the errors inherited from Saambou. "The bank will welcome any investigation by the Hawks and will offer every cooperation to the investigators. We have not yet received any communication from the Hawks, but we are seeking an urgent meeting with them to address any issues they wish to investigate," Marais said.
According to FNB the bank recalculated the acquired Saambou accounts based on a set of carefully considered principles, and in June 2006 offered a R154-million refund to Saambou customers. "Notwithstanding the unprecedented steps that FNB took in respect of Saambou customers, some individuals with a vested interest continued to pursue allegations related to Saambou's method of interest calculation," Marais said. "FNB has publicly stated that it welcomes legal finality on these matters and actively pursued a trial date that was scheduled in the North Gauteng High Court in November 2011. "The case was delayed at the request of the plaintiff and eventually deferred to a later date. As a result the bank was awarded full costs associated with the delay," Marais said.
Source: The Sowetan
Monday, March 19, 2012
A Fair Bit of Confusion: Treating Customers Fairly in South Africa
Last year, the Financial Services Board (FSB) announced that it would be implementing a Treating Customers Fairly (TCF) policy for the financial services industry in South Africa. The TCF policy is based on the UK version and is a consumer protection policy designed to address the problem of asymmetric information in the financial services industry where financials service providers possess certain information that the consumers do not. The TCF policy framework was followed by a pilot self-assessment project completed by 20 financial services companies with over 200 different FSB licenses. The results of this pilot project were recently published and they revealed that most of the financial services companies did not understand the concept of TCF nor did they have any idea of the impact of such a policy. The TCF policy is based on six defined outcomes:
These six outcomes are cut-and-pasted from the UK’s Financial Services Authority’s (FSA) own TCF policy. Although the UK’s TCF policy took 12 years to implement, the FSB’s projected timeline for full implementation of our TCF policy is by 2014. Therefore, it is crucial that financial services companies understand what TCF means and seek to align their current business practices with the policy as soon as possible.
The pilot self-assessment project revealed that the financial services companies’ understanding of TCF was that it involved consumer satisfaction and a consumer-centric approach but that they did not appreciate the full scope of TCF. In addition to the six outcomes described above, the UK’s FSA has explained TCF by focusing on two key principles, namely, ensuring that consumers understand the risks and benefits of the financial products they are investing in and that the sale of unsuitable products is minimised by maintaining ongoing TCF best practices.
The other major misconceptions revealed by the pilot self-assessment project was that the financial services companies assumed that their current practices generally conformed to the TCF policy and that implementation would be minimal requiring: (i) the adoption of a TCF policy document and (ii) including TCF as an additional function of compliance. The FSB has responded by stating that a TCF policy cannot be ring-fenced in compliance and must be incorporated throughout the company including the directors (and even the non-executive directors) so that everyone understands what TCF is and can apply it. Furthermore, the FSB has stated that the TCF policy is not limited to the company itself but the company is responsible for ensuring that the entire financial services supply chain, including financial product designers and distributors, apply the TCF best practices.
The TCF policy seeks to regulate financial product design, the marketing of financial products, the information provided to consumers, aspects of financial advice, the after-sale support of consumers and the complaint procedure. In addition, the TCF policy may place limits on the practice of bundling of financial products and on charging high switching fees. A TCF policy would also recommend certain corporate governance policies including the structuring of the incentives for employees so that achieving the TCF outcomes are part of the reward programme. The TCF policy will thus be enforced through self-assessment and compliance reporting by companies, on-site inspections and the imposition of penalties by the FSB and the potential establishment of a TCF ombudsman for consumer complaints.
To formally implement and enforce the TCF policy, the FSB will be required to make a number of regulatory amendments to legislation such as the Financial Advisory and Intermediary Services Act, 2002 (FAIS Act) that regulates the provision of financial services (advice and intermediary services) in South Africa. Although the FAIS Act currently has elements of TCF policy within its regulations, including financial product marketing guidelines and disclosure requirements to consumers, it is anticipated that the TCF requirements will be more extensive. The TCF policy will also be implemented across all of the financial sectors and therefore may require amendments to retirement fund, insurance and collective investment schemes legislation. The pilot self-assessment project indicated that the financial services companies were waiting until such regulations were introduced to perform a gap-analysis on their current business practices but the FSB has recommended that the TCF assessment is conducted at an earlier stage.
The first step for a company to adopt the TCF policy is the implementation of an awareness programme so that all employees are introduced to TCF on a big picture level and also undergo specific TCF training programmes whether in-house or externally. The level of TCF awareness in a company is recorded by the completion of training logs and may be assessed by the FSB at an on-site inspection where the employees are questioned to ascertain their understanding of TCF. The next step would be the production of a broad TCF policy document to ensure that there are formal policy and procedures in place for proper implementation of TCF. These steps can occur before any TCF regulations are introduced.
The TCF policy may have a more onerous impact on the financial services industry in South Africa, given our pool of consumers, than the TCF policy has in the UK. The FSB has referred to certain challenges in implementing a TCF policy in South Africa such as the fact that a number of consumers may be in rural areas and may not have access to adequate after-sale consumer services and support. Although we can refer to the FSA’s TCF approach for guidance, a financial services company in South Africa will have to consider the particular challenges facing South African consumers and design creative solutions in order to resolve these issues to the satisfaction of the FSB. Therefore the earlier that a financial services company understands TCF and seeks to adopt a TCF policy, the easier the transition period and ultimate compliance will be.
Written by Kerry Kopke
Source: Polity
- Consumers can be confident that they are dealing with firms where the fair treatment of customers is central to the corporate culture.
- Products and services marketed and sold in the retail market are designed to meet the needs of identified consumer groups and are targeted accordingly.
- Consumers are provided with clear information and are kept appropriately informed before, during and after the point of sale.
- Where consumers receive advice, the advice is suitable and takes account of their circumstances.
- Consumers are provided with products that perform as firms have led them to expect, and the associated service is both of an acceptable standard and what they have been led to expect.
- Consumers do not face unreasonable post-sale barriers to changing product, switching provider, submitting a claim or making a complaint.
These six outcomes are cut-and-pasted from the UK’s Financial Services Authority’s (FSA) own TCF policy. Although the UK’s TCF policy took 12 years to implement, the FSB’s projected timeline for full implementation of our TCF policy is by 2014. Therefore, it is crucial that financial services companies understand what TCF means and seek to align their current business practices with the policy as soon as possible.
The pilot self-assessment project revealed that the financial services companies’ understanding of TCF was that it involved consumer satisfaction and a consumer-centric approach but that they did not appreciate the full scope of TCF. In addition to the six outcomes described above, the UK’s FSA has explained TCF by focusing on two key principles, namely, ensuring that consumers understand the risks and benefits of the financial products they are investing in and that the sale of unsuitable products is minimised by maintaining ongoing TCF best practices.
The other major misconceptions revealed by the pilot self-assessment project was that the financial services companies assumed that their current practices generally conformed to the TCF policy and that implementation would be minimal requiring: (i) the adoption of a TCF policy document and (ii) including TCF as an additional function of compliance. The FSB has responded by stating that a TCF policy cannot be ring-fenced in compliance and must be incorporated throughout the company including the directors (and even the non-executive directors) so that everyone understands what TCF is and can apply it. Furthermore, the FSB has stated that the TCF policy is not limited to the company itself but the company is responsible for ensuring that the entire financial services supply chain, including financial product designers and distributors, apply the TCF best practices.
The TCF policy seeks to regulate financial product design, the marketing of financial products, the information provided to consumers, aspects of financial advice, the after-sale support of consumers and the complaint procedure. In addition, the TCF policy may place limits on the practice of bundling of financial products and on charging high switching fees. A TCF policy would also recommend certain corporate governance policies including the structuring of the incentives for employees so that achieving the TCF outcomes are part of the reward programme. The TCF policy will thus be enforced through self-assessment and compliance reporting by companies, on-site inspections and the imposition of penalties by the FSB and the potential establishment of a TCF ombudsman for consumer complaints.
To formally implement and enforce the TCF policy, the FSB will be required to make a number of regulatory amendments to legislation such as the Financial Advisory and Intermediary Services Act, 2002 (FAIS Act) that regulates the provision of financial services (advice and intermediary services) in South Africa. Although the FAIS Act currently has elements of TCF policy within its regulations, including financial product marketing guidelines and disclosure requirements to consumers, it is anticipated that the TCF requirements will be more extensive. The TCF policy will also be implemented across all of the financial sectors and therefore may require amendments to retirement fund, insurance and collective investment schemes legislation. The pilot self-assessment project indicated that the financial services companies were waiting until such regulations were introduced to perform a gap-analysis on their current business practices but the FSB has recommended that the TCF assessment is conducted at an earlier stage.
The first step for a company to adopt the TCF policy is the implementation of an awareness programme so that all employees are introduced to TCF on a big picture level and also undergo specific TCF training programmes whether in-house or externally. The level of TCF awareness in a company is recorded by the completion of training logs and may be assessed by the FSB at an on-site inspection where the employees are questioned to ascertain their understanding of TCF. The next step would be the production of a broad TCF policy document to ensure that there are formal policy and procedures in place for proper implementation of TCF. These steps can occur before any TCF regulations are introduced.
The TCF policy may have a more onerous impact on the financial services industry in South Africa, given our pool of consumers, than the TCF policy has in the UK. The FSB has referred to certain challenges in implementing a TCF policy in South Africa such as the fact that a number of consumers may be in rural areas and may not have access to adequate after-sale consumer services and support. Although we can refer to the FSA’s TCF approach for guidance, a financial services company in South Africa will have to consider the particular challenges facing South African consumers and design creative solutions in order to resolve these issues to the satisfaction of the FSB. Therefore the earlier that a financial services company understands TCF and seeks to adopt a TCF policy, the easier the transition period and ultimate compliance will be.
Written by Kerry Kopke
Source: Polity
Tuesday, November 22, 2011
The bifurcated legal profession, an archaic and elite based system not compatible with our new constitutional ethos
The Minister of Justice has announced a Legal Practice Bill to restructure the legal profession and ease restrictions on entry into the profession to make it more representative.
The Bill contains important provisions including mandating one governing body for the legal profession. Absent from the proposals is the need for institutional transformation, better legal education and access to legal education.
Institutional changes namely the dismantling of the quaint and antiquated split profession and the elitism that accompanies the Bar and its attendant system of silk are essential. The Bar provides advocates a degree of freedom such as not maintaining a trust account nor adhering to accounting practices which attorneys are required to adhere to. Its historical origins and the grave collateral damage from this system are too serious to ignore. If ever a death was desirable, it's time to pull the plug on the split profession coupled with the implementation of a better legal education model. The current system benefits a few, produces consequences and incubates a mindset, which are not tethered to our constitutional ethos.
Institutions are important in channeling human behavior in certain directions and achieving certain results. The advocate's profession historically was not anchored in moral bearings and played a supportive role in apartheid. If one chronicles its past, it produced many shallow leaders and a blighted history of acting against struggle lawyers, who were struck off the roll of advocates at the behest of the Bar. Black lawyers had difficulty-obtaining pupilage.
The Bar has not dealt with its demons nor adjusted to the realities of our new constitutional order. The addict cannot self-medicate nor is it going to self-heal. The attorney's profession is not without its demons and fusion ultimately needs to address transformation within the entire profession. The structural impediments at the Bar are more intractable. The idiosyncrasies and oddities of the Bar is a relic from the British system suited to perpetuating an elite and class based system. In England, it has been chronicled that entry into and success at the Bar largely depends upon social connections. The Bar in South Africa partakes largely of white and male elite. These elites have historically reaped great financial rewards. The Bar sets its own fee guidelines in an opaque way without any public consultation. The traditional albeit suspect justification for the split profession is an independent barrister/advocate provides the client a separate independent opinion. There is substantial evidence that this ends up costing clients more money, which was highlighted by Sir David Clementi in his review of the legal profession in England. In England, there is a trend of solicitors keeping litigation work in-house employing in-house counsel, which saves clients legal costs.
Even though the Bar is not a statutory body, the legal culture has created a de facto situation, produced over a century, which evaluates and validates trial lawyering skills through the established Bar. Those that practice at the alternate Bar/s are relegated to a second-class status. Professional associations like trade unions are prone to group advancement even if this is at the expense of the needs of the larger society. Our Constitution has discarded the British Westminster system. Our bill of rights has both horizontal and vertical application. Freedom of association or autonomy has no talismanic quality that allows for a system of subordination, particularly when it impacts on access to justice or the rights of others to practice their profession based on equality.
The Bar is not about the bright and savvy succeeding where others fail, and the less accomplished at the bottom of the food chain fighting over scraps. It is about those driven by self-interest who by virtue of dubious historical factors, who are invested in certain outcomes. They are able to control who enters the profession and who benefits in an optimal way, wanting to keep things the way they are. Vestiges of the past, even from private actors, which perpetuate subordination, need to be dismantled.
There is nothing wrong with a program for specialists, implemented rationally under uniform conditions as could be the case with the medical profession. Under the current system, a law graduate might be refused entry into the establishment Bar (which is the first level to practice as an advocate), given that the Bar controls the number of pupils and the placement of the pupils in any given year. This might be alright in the elite based British system but not in a constitutional state that values equality and the right to practice one's profession. The German Constitutional Court in the Pharmacy Case held that a limit on the number of practicing pharmacists was unconstitutional because this amounts to a limitation on the freedom to choose an occupation. In that case, qualified pharmacists were prevented from practicing their trade in order to control competition. The court held this also violates the principle of equality. The case of the Bar is more egregious because a private association, which has acquired a status because of dubious historical factors, is enforcing the validation and numerical limitations.
The Bar also controls who is recognized as a "super advocate" to merit being called a "senior counsel" which entitles them to charge higher fees. Our Constitution demands rationality. There is a great opaqueness, which surrounds the awarding of senior counsel status leading many to believe it is an old boy "buddy buddy" network.
After the appointment of the new Chief Justice, the General Council of the Bar asked the respective Bar Councils to scrutinize judicial nominees more closely. Elites from the Bar are not getting onto the bench in the numbers they were accustomed to. There has been an outcry from arguably the most untransformed Bar, the Cape Bar Council because several of their members were passed over for judicial appointments. It is at its core an incursion and attempt to influence the selection of judges from a special interest group. One cannot help but gawk at the spectacle of a group that collaborated and benefited from a repressive system and which remains largely untransformed, performing the role of the unapproving and self appointed head master, to vet and certify suitable judicial nominees.
At the JSC hearings, a lot of frustration has been vented on individual nominees that came out of the hierarchal system. Of late, the hearings have become demonstratively nastier. Those that came through and benefit from the opiate of the Bar are prone to defend their privileges and the mantra of the Bar's virtues in validating who are the "best and brightest" advocates. This mind set can infect white and the few people of colour within the Bar alike. We cannot afford to go through years of JSC hearings scapegoating individual nominees, usually white males. Progressives need to engage in deconstruction of the racial, gender and power tilt, which produces the hierarchies and the form of subordination and mind set that is incubated within the Bar. Ultimately, our democracy requires dismantling institutions, which do not capture and frame the deep paradigm and normative shift of our constitutional order.
The supreme irony is the Bar operates in the worse tradition of the British class and elite based system, and sanctions its members if they deal with the public directly. One cannot fathom the absurdity of this and how can this be in conformity with our new constitutional ethos? It is from this isolated group, which operates under a rarified existence, the Bar would want appointments to the bench to be made. Democracy involves a connection between institutions and people. The courts represent the third branch of government. Under most legal systems, lawyers are considered as officers of the court. Interaction between lawyers and the broader society has to produce a better understanding of people's struggles, emotions, euphoria, aspirations or hard luck. Even in England, the Public Access Scheme introduced in 2004 allows Barristers under certain circumstances to deal directly with the public. Ultimately, our struggle for social justice will benefit from a change in the institutions of the profession. A judge that comes from the ranks of a legal profession connected with the community and client they served is more likely to have the profile the new social contract mandates.
It is incongruous that we have kicked this can down the road for so long. The timidity and failure to deal with the elite based legal profession, which does not comport with the paradigm and normative values of our constitutional order, is no longer an option. The challenge is how to truly transform the universities and the legal profession into instruments of change, which serve the South African population as a whole. That is what a new Legal Practice Bill must address.
By Ziyad Motala, Professor of Law Howard Law School and Extraordinary Professor of Law University of Western Cape.
Source: Legalbrief
The Bill contains important provisions including mandating one governing body for the legal profession. Absent from the proposals is the need for institutional transformation, better legal education and access to legal education.
Institutional changes namely the dismantling of the quaint and antiquated split profession and the elitism that accompanies the Bar and its attendant system of silk are essential. The Bar provides advocates a degree of freedom such as not maintaining a trust account nor adhering to accounting practices which attorneys are required to adhere to. Its historical origins and the grave collateral damage from this system are too serious to ignore. If ever a death was desirable, it's time to pull the plug on the split profession coupled with the implementation of a better legal education model. The current system benefits a few, produces consequences and incubates a mindset, which are not tethered to our constitutional ethos.
Institutions are important in channeling human behavior in certain directions and achieving certain results. The advocate's profession historically was not anchored in moral bearings and played a supportive role in apartheid. If one chronicles its past, it produced many shallow leaders and a blighted history of acting against struggle lawyers, who were struck off the roll of advocates at the behest of the Bar. Black lawyers had difficulty-obtaining pupilage.
The Bar has not dealt with its demons nor adjusted to the realities of our new constitutional order. The addict cannot self-medicate nor is it going to self-heal. The attorney's profession is not without its demons and fusion ultimately needs to address transformation within the entire profession. The structural impediments at the Bar are more intractable. The idiosyncrasies and oddities of the Bar is a relic from the British system suited to perpetuating an elite and class based system. In England, it has been chronicled that entry into and success at the Bar largely depends upon social connections. The Bar in South Africa partakes largely of white and male elite. These elites have historically reaped great financial rewards. The Bar sets its own fee guidelines in an opaque way without any public consultation. The traditional albeit suspect justification for the split profession is an independent barrister/advocate provides the client a separate independent opinion. There is substantial evidence that this ends up costing clients more money, which was highlighted by Sir David Clementi in his review of the legal profession in England. In England, there is a trend of solicitors keeping litigation work in-house employing in-house counsel, which saves clients legal costs.
Even though the Bar is not a statutory body, the legal culture has created a de facto situation, produced over a century, which evaluates and validates trial lawyering skills through the established Bar. Those that practice at the alternate Bar/s are relegated to a second-class status. Professional associations like trade unions are prone to group advancement even if this is at the expense of the needs of the larger society. Our Constitution has discarded the British Westminster system. Our bill of rights has both horizontal and vertical application. Freedom of association or autonomy has no talismanic quality that allows for a system of subordination, particularly when it impacts on access to justice or the rights of others to practice their profession based on equality.
The Bar is not about the bright and savvy succeeding where others fail, and the less accomplished at the bottom of the food chain fighting over scraps. It is about those driven by self-interest who by virtue of dubious historical factors, who are invested in certain outcomes. They are able to control who enters the profession and who benefits in an optimal way, wanting to keep things the way they are. Vestiges of the past, even from private actors, which perpetuate subordination, need to be dismantled.
There is nothing wrong with a program for specialists, implemented rationally under uniform conditions as could be the case with the medical profession. Under the current system, a law graduate might be refused entry into the establishment Bar (which is the first level to practice as an advocate), given that the Bar controls the number of pupils and the placement of the pupils in any given year. This might be alright in the elite based British system but not in a constitutional state that values equality and the right to practice one's profession. The German Constitutional Court in the Pharmacy Case held that a limit on the number of practicing pharmacists was unconstitutional because this amounts to a limitation on the freedom to choose an occupation. In that case, qualified pharmacists were prevented from practicing their trade in order to control competition. The court held this also violates the principle of equality. The case of the Bar is more egregious because a private association, which has acquired a status because of dubious historical factors, is enforcing the validation and numerical limitations.
The Bar also controls who is recognized as a "super advocate" to merit being called a "senior counsel" which entitles them to charge higher fees. Our Constitution demands rationality. There is a great opaqueness, which surrounds the awarding of senior counsel status leading many to believe it is an old boy "buddy buddy" network.
After the appointment of the new Chief Justice, the General Council of the Bar asked the respective Bar Councils to scrutinize judicial nominees more closely. Elites from the Bar are not getting onto the bench in the numbers they were accustomed to. There has been an outcry from arguably the most untransformed Bar, the Cape Bar Council because several of their members were passed over for judicial appointments. It is at its core an incursion and attempt to influence the selection of judges from a special interest group. One cannot help but gawk at the spectacle of a group that collaborated and benefited from a repressive system and which remains largely untransformed, performing the role of the unapproving and self appointed head master, to vet and certify suitable judicial nominees.
At the JSC hearings, a lot of frustration has been vented on individual nominees that came out of the hierarchal system. Of late, the hearings have become demonstratively nastier. Those that came through and benefit from the opiate of the Bar are prone to defend their privileges and the mantra of the Bar's virtues in validating who are the "best and brightest" advocates. This mind set can infect white and the few people of colour within the Bar alike. We cannot afford to go through years of JSC hearings scapegoating individual nominees, usually white males. Progressives need to engage in deconstruction of the racial, gender and power tilt, which produces the hierarchies and the form of subordination and mind set that is incubated within the Bar. Ultimately, our democracy requires dismantling institutions, which do not capture and frame the deep paradigm and normative shift of our constitutional order.
The supreme irony is the Bar operates in the worse tradition of the British class and elite based system, and sanctions its members if they deal with the public directly. One cannot fathom the absurdity of this and how can this be in conformity with our new constitutional ethos? It is from this isolated group, which operates under a rarified existence, the Bar would want appointments to the bench to be made. Democracy involves a connection between institutions and people. The courts represent the third branch of government. Under most legal systems, lawyers are considered as officers of the court. Interaction between lawyers and the broader society has to produce a better understanding of people's struggles, emotions, euphoria, aspirations or hard luck. Even in England, the Public Access Scheme introduced in 2004 allows Barristers under certain circumstances to deal directly with the public. Ultimately, our struggle for social justice will benefit from a change in the institutions of the profession. A judge that comes from the ranks of a legal profession connected with the community and client they served is more likely to have the profile the new social contract mandates.
It is incongruous that we have kicked this can down the road for so long. The timidity and failure to deal with the elite based legal profession, which does not comport with the paradigm and normative values of our constitutional order, is no longer an option. The challenge is how to truly transform the universities and the legal profession into instruments of change, which serve the South African population as a whole. That is what a new Legal Practice Bill must address.
By Ziyad Motala, Professor of Law Howard Law School and Extraordinary Professor of Law University of Western Cape.
Source: Legalbrief
Thursday, October 1, 2009
Informed citizens are empowered to participate
Last year, information came to light that the Kenyan parliament, one of the few in Africa that has complete control over its own budget, paid its members the equivalent of about $10 000 (R74 300) a month, of which only about 20 percent was taxable.This previously unknown fact was a revelation that caused a public outcry.
Selective release and use of information is often the veil behind which governments operate without public scrutiny.
One of the mechanisms for improving the right of access to information and citizen agency could be the African Charter on Democracy, Elections and Governance.Adopted by the African Union in January 2007, the charter has been hailed as a milestone in Africa's bid to promote and develop its governance systems.States have nominally committed themselves to promoting and strengthening their governance structures through citizen participation, transparency, accountability, rule of law, gender equality, decentralisation, human development, eradication of poverty and credible elections.
The charter is unique in that it was formulated and negotiated by African states and adopted by the AU. As such, the charter is a strong statement of the goals and prevailing aspirations of Africa. It is a statement in support of the principles that underpin democracy.However, two years after its adoption, only two countries have signed and ratified it. Even countries such as South Africa, which took a leading role in the formulation and adoption stages, have yet to affix their signature to the charter, let alone ratify it. Until it is ratified in 15 countries, this endeavour remains a statement of intention rather than a plan of action.
While it is important to acknowledge the progress that has been made by African countries in terms of developing democratic institutions, there remain significant challenges in improving the responsiveness of African institutions and in promoting a culture of democracy - one with an informed and engaged electorate.
A culture of democracy, as set out in the charter, speaks more to the way in which decisions are made, who makes them and why they make them. It speaks to a more systematic inclusion of citizens whose role in the democratic process is not limited to elections.
Using a simple checklist, most countries in Africa meet the outward appearance of a democratic state.All have parliaments in one form or another, judicial systems, elections, and a collection of institutions that are meant to safeguard human rights, ensure the protection of vulnerable and minority groups, combat corruption, etc. All of these are founded on constitutions that - some more than others - also guarantee the full range of basic human rights. Some have included access to information as a fundamental human right.While enacting legislation to promote access to information is taking place in several countries, Angola, South Africa, Zimbabwe and Uganda are the only countries that have done so.
But a culture of democracy should go beyond legislation and into practice. One such example is the judicial process in Ghana, where there is the formalised involvement of traditional leaders and lay magistrates in dispute resolution.These locally based mechanisms have made the judicial system more accessible to the people. Indeed, perhaps one of the more exciting ideas in democracy-building is the potential to harness traditional cultures, values and processes to enhance the culture of democracy and representative systems of governance.
It is widely acknowledged that democratic elections alone do not define a healthy democracy, nor do they guarantee that elected officials will be responsive to the needs of the people. As one member of parliament in Lesotho pointed out: "MPs want to go into politics because they are poor and hungry. And when they get into politics, they don't want to go back to their constituencies because the people there are poor and hungry."
One rather ominous omission from the charter is the lack of clarity with regard to whom government institutions should be accountable. Article 15.3 of the charter states that institutions should be "accountable to competent national organs". This essentially removes the core element of a democratic system, the citizen. That institutions are, in fact, accountable to the people should not be taken for granted, particularly where there may be several intermediaries between those institutions and the people they are intended to serve.
One attempt to bridge this gap between parliaments and citizens is the use of constituency offices. Various forms of these can be found on the continent. In many instances, however, these are linked to political parties rather than to parliament.This poses an obstacle to smaller parties, which may not have the financial means to sustain such offices in all constituencies.
In Zambia and Lesotho, the move is to link the offices directly to parliament, funded through the parliamentary budget, and to be used by the MPs representing that constituency, regardless of the party to which he or she belongs.That said, initiatives to improve engagement and access are all too rare, and the legal frameworks to promote public participation in decision-making is an area that needs further development.
Although many countries are making attempts to decentralise and promote the role of local government, this has yet to be fully realised.For instance, integrated development plans are used by South African municipalities for medium-term strategic planning and resource allocation, and are intended to be fully participatory. However, the public often lacks the information and thereby capacity to fully participate in the process of formulation.
A vital component of any healthy governance system is the right of access to information and being able to discuss this information in open and credible forums. This right enables citizens to claim other rights, like education and health. It allows them to monitor social programmes and expenditures, and enhances political discourse.
Culture being a way of life, a culture of democracy thrives among informed citizens. An informed citizenry will feel empowered not just about what the government can do for them, but also what they can do for themselves.
Coming back to the Kenyan story, in response to the public outcry over wages, the MPs decided to discuss the issue in a plenary session, behind closed doors.
Source: Polity
Selective release and use of information is often the veil behind which governments operate without public scrutiny.
One of the mechanisms for improving the right of access to information and citizen agency could be the African Charter on Democracy, Elections and Governance.Adopted by the African Union in January 2007, the charter has been hailed as a milestone in Africa's bid to promote and develop its governance systems.States have nominally committed themselves to promoting and strengthening their governance structures through citizen participation, transparency, accountability, rule of law, gender equality, decentralisation, human development, eradication of poverty and credible elections.
The charter is unique in that it was formulated and negotiated by African states and adopted by the AU. As such, the charter is a strong statement of the goals and prevailing aspirations of Africa. It is a statement in support of the principles that underpin democracy.However, two years after its adoption, only two countries have signed and ratified it. Even countries such as South Africa, which took a leading role in the formulation and adoption stages, have yet to affix their signature to the charter, let alone ratify it. Until it is ratified in 15 countries, this endeavour remains a statement of intention rather than a plan of action.
While it is important to acknowledge the progress that has been made by African countries in terms of developing democratic institutions, there remain significant challenges in improving the responsiveness of African institutions and in promoting a culture of democracy - one with an informed and engaged electorate.
A culture of democracy, as set out in the charter, speaks more to the way in which decisions are made, who makes them and why they make them. It speaks to a more systematic inclusion of citizens whose role in the democratic process is not limited to elections.
Using a simple checklist, most countries in Africa meet the outward appearance of a democratic state.All have parliaments in one form or another, judicial systems, elections, and a collection of institutions that are meant to safeguard human rights, ensure the protection of vulnerable and minority groups, combat corruption, etc. All of these are founded on constitutions that - some more than others - also guarantee the full range of basic human rights. Some have included access to information as a fundamental human right.While enacting legislation to promote access to information is taking place in several countries, Angola, South Africa, Zimbabwe and Uganda are the only countries that have done so.
But a culture of democracy should go beyond legislation and into practice. One such example is the judicial process in Ghana, where there is the formalised involvement of traditional leaders and lay magistrates in dispute resolution.These locally based mechanisms have made the judicial system more accessible to the people. Indeed, perhaps one of the more exciting ideas in democracy-building is the potential to harness traditional cultures, values and processes to enhance the culture of democracy and representative systems of governance.
It is widely acknowledged that democratic elections alone do not define a healthy democracy, nor do they guarantee that elected officials will be responsive to the needs of the people. As one member of parliament in Lesotho pointed out: "MPs want to go into politics because they are poor and hungry. And when they get into politics, they don't want to go back to their constituencies because the people there are poor and hungry."
One rather ominous omission from the charter is the lack of clarity with regard to whom government institutions should be accountable. Article 15.3 of the charter states that institutions should be "accountable to competent national organs". This essentially removes the core element of a democratic system, the citizen. That institutions are, in fact, accountable to the people should not be taken for granted, particularly where there may be several intermediaries between those institutions and the people they are intended to serve.
One attempt to bridge this gap between parliaments and citizens is the use of constituency offices. Various forms of these can be found on the continent. In many instances, however, these are linked to political parties rather than to parliament.This poses an obstacle to smaller parties, which may not have the financial means to sustain such offices in all constituencies.
In Zambia and Lesotho, the move is to link the offices directly to parliament, funded through the parliamentary budget, and to be used by the MPs representing that constituency, regardless of the party to which he or she belongs.That said, initiatives to improve engagement and access are all too rare, and the legal frameworks to promote public participation in decision-making is an area that needs further development.
Although many countries are making attempts to decentralise and promote the role of local government, this has yet to be fully realised.For instance, integrated development plans are used by South African municipalities for medium-term strategic planning and resource allocation, and are intended to be fully participatory. However, the public often lacks the information and thereby capacity to fully participate in the process of formulation.
A vital component of any healthy governance system is the right of access to information and being able to discuss this information in open and credible forums. This right enables citizens to claim other rights, like education and health. It allows them to monitor social programmes and expenditures, and enhances political discourse.
Culture being a way of life, a culture of democracy thrives among informed citizens. An informed citizenry will feel empowered not just about what the government can do for them, but also what they can do for themselves.
Coming back to the Kenyan story, in response to the public outcry over wages, the MPs decided to discuss the issue in a plenary session, behind closed doors.
Source: Polity
Wednesday, November 8, 2006
The crisis of US imperialism in historical perspective
The following is an edited version of a report delivered by Nick Beams to a meeting of the Socialist Equality Party (Australia) on the weekend of October 25-26. Beams is the SEP national secretary and a member of the International Editorial Board of the World Socialist Web Site. He has written and lectured extensively on Marxist political economy.
The 2006 American elections have a truly global significance. They are taking place in conditions where the Bush administration and the entire US ruling elite is embroiled in a deep-going political crisis, precipitated by the disastrous consequences of the invasion and occupation of Iraq. As numerous books, articles and comment pieces—many of them echoing positions articulated within the American military—have made clear, the invasion of Iraq has been a fiasco. The underlying position of the various critics from within ruling circles is that it has weakened both the immediate and the long-term strategic position of the United States.
How to resolve this crisis? A Financial Times columnist recently suggested that anyone who could do so, ought to be awarded the Nobel Prize. No one has an answer. A situation has developed where all the options are bad—that is to say, any proposal immediately throws up new problems and contradictions.
The Iraqi government, as has been widely reported, has been given about two months to move toward bringing the situation under control. Just what that means, however, is not clear. Having denounced the insurgents as terrorists and Baathist dead-enders, the Bush administration is insisting that there should be an amnesty and they should be brought into the political process. But to bring back the Baathists means a bloody crackdown on the Shia militias, and above all on the Sadrists. Such a military bloodbath is now being prepared.
The report of Iraq Study Group headed by James Baker III will be issued after the elections. Among the options being considered is the division of Iraq into three—a Kurdish region in the north, a Shia-dominated region in the south and a Sunni-dominated region in the centre. But this option appears to have been rejected, at least for the present, on the grounds that it would result in even bigger conflicts, coupled with large-scale ethnic cleansing. The present sectarian conflict is largely the result of dividing the polity along religious lines. What would happen if there were to be a geographical division of the country? A Kurdish state in the north would create problems for Turkey, and the Saudi regime could be weakened by a Shia regime in the south, while Iran would be strengthened.
One proposal, which seems likely to come from the Baker report, is discussions with Iran and Syria to try to stabilise the situation. But concessions would have to be made to both Iran and Syria to effect such an agreement—at least, some kind of normalisation of relations and a rejection of the perspective of “regime change”. In the case of Iran, this would involve the reversal of US policy going right back to the immediate aftermath of World War II. And any agreement with Iran and Syria would raise the issue of US relations with Israel.
Aside from these immediate questions, the Iraq debacle has provoked discussion in American foreign policy circles about the long-term position of the United States.
Former State Department official and now president of the Council on Foreign Relations, Richard Haas, wrote an article in the latest issue of Foreign Affairs entitled “The New Middle East” which reviews some of these issues. He begins as follows:
“Just over two centuries since Napoleon’s arrival in Egypt heralded the advent of the modern Middle East—some 80 years after the demise of the Ottoman Empire, 50 years after the end of colonialism, and less than 20 years after the end of the Cold War—the American era in the Middle East, the fourth in the region’s modern history, has ended. Visions of a new, Europe-like region—peaceful, prosperous, democratic—will not be realised. Much more likely is the emergence of a new Middle East that will cause great harm to itself, the United States, and the world.
“All the eras have been defined by the interplay of contending forces, both internal and external to the region. What has varied is the balance between these influences. The Middle East’s next era promises to be one in which outside actors have a relatively modest impact and local forces enjoy the upper hand—and in which the local actors gaining power are radicals committed to changing the status quo. Shaping the new Middle East from the outside will be exceedingly difficult, but it—along with managing a dynamic Asia—will be the primary challenge of U.S. foreign policy for decades to come.”
According to Haas, the end of the Cold War and the demise of the Soviet Union provided a situation that gave the United States unprecedented influence and freedom to act. However, this era is now over.
“What has brought this era to an end after less than two decades is a number of factors, some structural, some self-created. The most significant has been the Bush administration’s decision to attack Iraq in 2003 and its conduct of the operation and resulting occupation. One casualty of the war has been a Sunni-dominated Iraq, which was strong enough and motivated enough to balance Shiite Iran. Sunni-Shiite tensions, dormant for a while, have come to the surface in Iraq and throughout the region. Terrorists have gained a base in Iraq and developed there a new set of techniques to export. Throughout much of the region, democracy has become associated with the loss of public order and the end of Sunni primacy. Anti-American sentiment, already considerable, has been reinforced. And by tying down a huge portion of the US military, the war has reduced US leverage worldwide. It is one of history’s ironies that the first war in Iraq, a war of necessity, marked the beginning of the American era in the Middle East and the second Iraq war, a war of choice, has precipitated its end.”
In the future, he points out, the US will increasingly be challenged by the foreign policies of other outsiders in the Middle East. Haas can offer no way forward, warning that there are no quick and easy solutions for the problems the new era poses and that the Middle East will remain a troubled and troubling part of the world for decades to come—enough to make one nostalgic for the old Middle East.
The decline of the US
Michael Lind of the New America Foundation, a thinktank established in the recent period to promote alternatives to the Bush administration, points to the decline in the long-term strategic position of the US and the collapse of the perspectives developed in the post-Cold War period.
In a recent article entitled “The World After Bush”, he writes:
“On 20th January 2009, George W Bush, barring his death, resignation or impeachment, will be succeeded by the 44th US president. Whether Republican or Democrat, the next president will not only inherit a number of crises, but will be in a considerably weaker position to deal with them.
“Much of America’s weakness will be the result of self-inflicted wounds: the unnecessary invasion of Iraq, along with the Bush administration’s gratuitous insults to allies, its arrogant unilateralism and its hostility to international law. But as tempting as it may be to put all of the blame on the Bush administration, the truth is that most of the trends that will limit American power and influence in the next decade are long-term phenomena produced by economic, demographic and ideological developments beyond the power of the US or any government to influence. The rise of China, the shift in the centre of the world economy to Asia, the growth of neo-mercantilist petro-politics, the spread of Islamism in both militant and moderate forms—these trends are reshaping the world order in ways that neither the US nor any of its allies can do much to control.
“In retrospect, we can view the period in US and world history that has just ended as ‘the long 1990s’. Those years began in euphoria with the fall of the Berlin Wall in 1989 and expired in frustration in late 2003, when the swift victory of the US and its allies over Iraq’s armed forces was succeeded by an insurgency that exposed the limits of US power. But even if 9/11 and the Iraq invasion had never occurred, the conventional wisdom of the long 1990s would have crumbled at some point after colliding with reality.
“Take the central assumption that at the end of the cold war a bipolar world was replaced by a unipolar one. This was true only in the military dimension—and even there American power was exaggerated. The US has no peers when the task is breaking the conventional armed forces of second and third-tier states like Iraq and Serbia. But when it comes to asymmetric warfare, in the form of campaigns against insurgents like those in Iraq and Afghanistan, the US military, like all conventional militaries, finds itself in the position of a clumsy Goliath trying to quash a nimble and determined David. Stealth bombers and world-class fleets are no help in house-to-house fighting, and missile defences are no good against improvised explosive devices. As the wars in Vietnam and Iraq tragically demonstrate, the US military is not very good at ‘military operations other than war’—and America’s enemies know it.”
Turning to the underlying economic issues, he writes:
“The conventional wisdom of the long 1990s was correct that capitalism had defeated socialism, but mistaken to assume that the libertarian capitalism fashionable in the US in the late 20th century was the winner. The Japanese never adopted laissez-faire capitalism and China and Russia in recent years have devised their own mixes of state capitalism and free markets.
“The growth of China and India, which was supposed to herald a global free market, may instead inaugurate a new age of mercantilism, as Asian industrial powers like China, unwilling to rely on free markets for energy sources and commodities, engage in negotiations with supplier countries. Already bilateral contracts are displacing free markets in oil and gas, and regional trade pacts are proliferating even as global trade talks are stalled. The competition between the rising industrial nations of Asia and the older industrial democracies enhances the leverage of authoritarian and nationalist states endowed with critical resources, particularly oil-producing countries like Iran, Russia, Venezuela and Saudi Arabia. These countries view China not only as a customer but also as a counterweight to the US.”
Lind maintains that the “conventional wisdom of the long 1990s ... was mistaken in every respect. The world did not become unipolar in the 1990s; it has been effectively multipolar since the 1970s. Ethnic nationalism, not liberalism or democracy, is the most powerful force in the world today. And the competition of the industrial nations for sources of supply and markets is bolstering mercantilism and economic regionalism, incompatible with the laissez-faire utopia touted by panegyrists of globalisation in the long 1990s.
“All of these trends would constrain US foreign policy, even if Al Gore had been inaugurated in 2001 rather than George W Bush. It will now be additionally constrained by the legacy of the eight-year Bush administration. When the next president is inaugurated, the US will almost certainly still be in Iraq. Rather than have the world witness the inglorious departure of US forces from a chaotic Iraq in the final years of his presidency, Bush is likely to cede the problem to his successor.”
He concludes that the collapse of the neoconservative perspective in the Middle East and the world does not mean success for what he calls the neoliberal perspective of the Democratic Party. “Neoliberals agree with neoconservatives about the goal of US foreign policy—a global free market in a world policed by a benevolent, hegemonic US. Their differences are in the details. Although they are as opposed in practice to a multipolar world order as neoconservatives, neoliberals argue that the US should make its global hegemony more palatable to other countries by endorsing international law and working through international institutions like the UN and NATO.”
He notes that while some neoliberals call for a vast program of investment in developing countries, the Middle East in particular—a kind of new Marshall Plan—this will never be tested, because the money is not there in the first place.
While Lind does not go on to develop the argument, this fact does point to the underlying reason for the resort to militarism—the economic decline of the United States. His perspective is for what he calls a “concert of great powers, organised and led by the US” as the best hope for reconciling international peace with liberal order.
But what happens if those powers do not find it in their interest to be led and organised by the US? Such a concert is only possible provided the US is prepared to make concessions to its rivals and potential adversaries. Here, however, lies the fundamental problem. The US is not in a position to do that. As we have previously noted, the invasion of Iraq was directed not so much against Saddam Hussein, as against the European rivals of the US in the Middle East. The aim was to establish a puppet regime in Iraq and in that way reinforce the position of the US against its European and Asian rivals. The same is true of Iran.
The reason the US pursues such a belligerent policy is rooted in its long-term economic decline. In the immediate post-war period, the US financed the Marshall Plan and consciously rebuilt the other major capitalist powers—except Britain whose empire it was seeking to dismantle. Under today’s conditions, a “concert of great powers” can at best only be an unstable truce.
The historic context
The present situation has to be placed within its broad historical context—that is to say, examined on the basis of the historical development of the world capitalist system.
Following Leon Trotsky, we can delineate very definite phases or periods in what he called the curve of capitalist development, and a number of important features of the present situation clearly emerge.
When Marx and Engels wrote the Communist Manifesto in 1847, they pointed to the stupendous achievements of capitalist civilisation. But in many ways what they wrote was only a brilliant anticipation of what was to come. Over the next 25 years, there took place the great Victorian upswing of the mid-nineteenth century.
Following the revolutions of 1848, which cleared away the remaining feudal encumbrances and barriers, at least in Western Europe, came a mighty economic expansion. It was spearheaded by the railway industries and organised by British capital. This was the heyday of British commercial imperialism. British capital financed expansion in Western Europe and the United States. Britain with its empire and navy was the pre-eminent capitalist power, but it laid the basis for the expansion of the other capitalist powers.
The first great upswing in the curve of capitalist development came to an end with a series of financial crises in 1873. While the immediate crisis passed, it did not signal a return to the previous period. Rather, 1873 marked the beginning of what is known in economic history as the Great Depression of the nineteenth century. In contrast to the upswing of the previous quarter century, this was a period of enormous downward pressure on profits.
This pressure, in turn, was the driving force behind some of the great changes of that period. In America, and to some extent Germany, new forms of industrial organisation and industrial processes emerged—in steel-making, in chemicals, the beginnings of assembly line production in the food and meat industries, and the application of steam power to shipping, to name a few. This was the period of the rise of colonial empires, exemplified by the carve-up of Africa in just 20 years. But it was also, although not fully recognised at the time, the beginning of the decline of British hegemony. The very expansion of capitalism, financed by Britain in an earlier period, created the conditions for a weakening of its relative position.
The period of the Great Depression also brought great social changes. The development of new industrial processes saw the emergence of the industrial working class as a powerful social force. In the days of the Communist Manifesto, the working class, except in England, was not highly concentrated. Old artisan forms still remained and factories tended to be small scale. All that changed in the last quarter of the nineteenth century.
These objective processes found their expression in the development of the mass trade unions and the socialist and labour parties. The rise of Marxism as the theoretical and political guiding force of the socialist movement was expressed in the founding of the Second International. The First International had been wrecked by the anarchists and petty-bourgeois radical forces and by the impact of the defeat of the Paris Commune in 1871. But by 1889, Marxism had asserted its supremacy over these tendencies. Just 28 years after the founding of the Second International, the first successful socialist revolution was carried out in Russia in October 1917.
In the Communist Manifesto, Marx emphasised the global character of the capitalist system. But here, again, this was more a brilliant anticipation than an empirical description. In the last quarter of the nineteenth century, the capitalist system started, so to speak, to catch up to Marx and the process we now designate as globalisation went ahead in leaps and bounds. Far-flung regions of the world were drawn into the capitalist processes of production, united by new forms of transport and communications.
Minerals and raw materials, some of them new, such as rubber, as well as agricultural products, were transported in bulk to be processed in factories. Finance capital spread across the world as banks financed vast undertakings, in particular the development of infrastructure. The cheapening of raw materials and food, which these developments made possible, assumed vast importance for the development of industrial capitalism, in the same way that the drive to secure ever-cheaper forms of labour does today.
This “second industrial revolution” in the last quarter of the nineteenth century eventually brought an end to the Great Depression in prices and profits. A new capitalist upswing began from around 1895. But it was not a repeat of the earlier upward phase.
Beneath the prosperity, all manner of problems were emerging. One of the crucial differences with the earlier period was that rather than taking place under the aegis of a dominant power, whose economic might worked to ensure the expansion of the capitalist economy as a whole, the new upswing took place amid growing rivalries and antagonisms among the major powers.
The old economic power, Britain, was losing its position. At the turn of the century, it suffered a shock when the Boer War, which was expected to present few problems, turned into a bloody disaster. Britain’s weaknesses had been exposed and, over the course of the next seven years, she abandoned the previous policy of “splendid isolation” and entered into a series of alliances—with Japan, France and Russia—which were to play a significant role in propelling her into the Great War.
War and depression
The eruption of the war in 1914 marked the beginning of a new downswing in the curve of capitalist development. But, as Trotsky was to remark later, it was not so much that the war produced the downswing, rather that the downswing was the key factor in triggering the war. The fundamental economic shift that led to the eruption of the war can be seen in the fact that it was not until the latter 1920s that post-war production in Europe began to attain the levels reached in 1913—only to collapse again with the onset of the 1930s Great Depression.
From the standpoint of globalisation, the inter-war period can be designated as the period of the great reversal. By the beginning of the 1930s, the world market had, to all intents and purposes, ceased to exist. Trade had contracted by two-thirds, and international finance had come to a virtual standstill. The world was divided among competing empires and spheres of influence.
From the standpoint of the dominant capitalist power, the United States, the Second World War was not a struggle against fascism, so much as a war waged to end the empires of the rival capitalist powers, and to restore the world market and the free movement of capital and trade, upon which American capitalism, and the capitalist system as a whole, depended.
The defeat of Germany and Japan opened the way for the reconstruction of the world economy and made possible the adoption on a world scale of the new, more productive, techniques of the American production. This gave rise to a new upswing in the curve of capitalist development.
One is struck today by the parallels with the mid-nineteenth century upswing. Just as the 1848 revolutions removed constrictions on the expansion of capitalism, so the Allied victory in the war, led by the US, opened the way for the extension of the world market. Just as the mid-Victorian boom rested on the economic might of the dominant power, Great Britain, so the post-war economic boom took place under the aegis of the United States, whose vast economic power and superiority over its rivals enabled it to undertake the task of reconstructing the capitalist system as a whole. However, the very measures it undertook weakened its relative position.
The world economic crisis of the early 1970s, when the profit rate began to fall, signalled the onset of a new downswing in the curve of capitalist development. Over the next two decades, the fall in the rate of profit became the driving force for vast changes in the structure and functioning of capitalist production. These changes, bound up with the application of computer technologies to all aspects of communication and production, have resulted in a quantum leap in the globalisation of production.
Whereas in all previous epochs, surplus value was extracted from the working class within the confines of a given nation-state, this now takes place on a global scale. Capital exists in three forms: as money (the end of the capitalist production process with the sale of commodities and the start of a new round of production), as commodity capital (which emerges from the production process) and as productive capital (the means of production that are employed to extract surplus value from the working class in the course of the production process). Commodity capital and money capital became citizens of the world in an earlier period. Productive capital, however, still retained a certain national identity. But now the disaggregation of the production process beyond the framework of the nation-state means that productive capital has become truly global.
The globalisation of production since the mid-1970s has had vast social and political implications. If the downswing in the latter part of the nineteenth century was the trigger for the establishment of the mass organisations of the working class that held sway for the majority of the twentieth century, then the changes over the past three decades have brought about their disintegration and collapse. This was the significance of the demise of the Soviet Union in 1991.
Capital responded to the downturn in the rate of profit in the 1970s in the same way as it had in the past. It undertook a desperate struggle to revolutionise the process of production. The globalisation of production is the outcome.
The rate of profit
The question now arises: has this produced an upswing in the rate of profit? There is some evidence that it has. But whether this means a new period of capitalist stability is altogether another question. In fact, an examination of the way this profit upturn has been achieved reveals that it has the most explosive social and political consequences.
An article published in the Financial Times on October 14 notes the following: “In Britain, company profits were the highest last year since records began in 1965; yet median weekly earnings, adjusted for inflation, fell by 0.4 percent. It is the same story in all the rich countries of the west. In a recent research note on the US economy, Goldman Sachs, the US investment bank, said: ‘As a share of GDP, profits reached an all-time high in the first quarter of 2006. Several factors have contributed to the rise in profit margins. The most important is a decline in labour’s share of national income.’”
According to a New York Times article published on August 28, the current expansion in the US economy could become the first period of sustained economic growth since World War II that fails to offer an increase in real wages for most workers. The median hourly wage for American workers has declined by 2 percent since 2003 in real terms. This means that wages and salaries now make up the lowest share of GDP since the government started recording the data in 1947, while corporate profits have reached their highest levels since the 1960s.
In the first quarter of 2006, wages and salaries represented 45 percent of GDP, down from almost 50 percent in the first quarter of 2001 and a record 53.6 percent in the first quarter of 1970. Each percentage point now represents about $132 billion.
These aggregate figures tend to mask the real situation, because they include income paid to the highest earners. In 2004 the top 1 percent of income earners in the US, including many chief executives, received 11.2 percent of all wage income, compared to 8.7 percent a decade earlier and less than 6 percent three decades ago.
The increase in the rate of profit, the result of the increased profit share in GDP, is in part the outcome of the vast changes in the structure of the world economy resulting from the integration of China and the former Soviet Union into the world labour market. A recent study by Harvard labour economist Richard Freeman notes that a process he calls “The Great Doubling” has seen the global labour force available to capital increase from about 1.46 billion to around 2.93 billion. This has dramatically changed the balance between capital and labour in the global economy. According to Freeman, the ratio of capital to labour in 2000 was about 61 percent of what it would have been had China, India and the ex-Soviet bloc not been integrated into the world economy. Of course, these figures are only approximations, but they do give a sense of the historic dimension of the transformations taking place.
The process, which began with unskilled labour, has not stopped there. A whole series of jobs that were once considered relatively immobile can now be transferred. In effect, any process that can be digitised can be outsourced to anywhere in the world.
Capital has thus been able to bring about a certain restoration in the rate of profit. In other words, there has been a benefit to capital from the dissolution of the Soviet Union and the integration of China and India into the world market. Previously, capital boosted the profit rate by plundering raw materials and resources. Today it does so by plundering cheap labour. But it is far from establishing a new equilibrium. In fact, the situation is highly unstable. Capital accumulation, as measured by the rate of profit, depends more and more on the reduction of the share of national income going to labour in the major capitalist countries. And even where there is a tendency for wages to increase in China and India, the process of accumulation is also highly unstable. Already sections of Chinese labour are becoming too highly priced in relation to what can be obtained in Vietnam or Bangladesh.
There are distinct parallels with the period before 1914. Then, the upturn in capitalist profit was occasioned, at least in part, by the first phase of globalisation—the exploitation of cheap raw materials and agricultural products. Today, it is being fuelled by the increased supplies of cheaper labour. But this mode of accumulation is bound to bring social and political instability because it is dependent on ever-deepening social inequality, which can have far-reaching consequences in both the advanced capitalist countries and the new entrants into the global market.
Like the period before 1914, there is an intensifying conflict among the major powers. The relative economic decline of the US, like that of Britain before it, has extended over several decades. However, it has now become an explosive factor in world politics, as the US attempts to compensate for its loss of economic hegemony by military means. There are criticisms of the Bush doctrine of militarism from within American ruling circles, given the disaster that has unfolded in Iraq. But whenever one reads the alternative proposals—a concert of powers, a return to multilateralism—one is struck by the fact that they all involve some weakening of the position of the US. For three and a half decades, ever since it unilaterally removed the gold backing from the US dollar and ended the Bretton Woods monetary system because it was not able to honour its obligations, the US has been seeking to resolve its economic problems at the expense of its rivals. That process is not going to be reversed. In a sense, the turn to military means represents the intensification of a process that has been unfolding over the entire preceding period.
Timothy Garton Ash of the Guardian wrote last year: “If you want to know what London was like in 1905, come to Washington in 2005. Imperial gravitas and massive self-importance. That sense of being the centre of the world, and of needing to know what happens in every corner of the world because you might be called on—or feel called upon—to intervene there. Hyperpower. Top dog. And yet, gnawing away beneath the surface, the nagging fear that your global supremacy is not half so secure as you would wish. As Joseph Chamberlain, the British colonial secretary, put it in 1902: ‘The weary Titan under the too vast orb of his fate’ ... The United States is now that weary Titan’” (cited in Ismael Hossein-Zadeh, The Political Economy of American Militarism, p. 36).
Just as in the late nineteenth and early twentieth centuries, the previously dominant imperialist power, Great Britain, had to increasingly resort to military means in the face of rising challengers (Germany, rival European powers and the US) so today the US faces direct threats to its position. These are the underlying driving forces of the deepening political instability, growing great power rivalry and war that we are witnessing today.
Source: World Socialist Web Site
The 2006 American elections have a truly global significance. They are taking place in conditions where the Bush administration and the entire US ruling elite is embroiled in a deep-going political crisis, precipitated by the disastrous consequences of the invasion and occupation of Iraq. As numerous books, articles and comment pieces—many of them echoing positions articulated within the American military—have made clear, the invasion of Iraq has been a fiasco. The underlying position of the various critics from within ruling circles is that it has weakened both the immediate and the long-term strategic position of the United States.
How to resolve this crisis? A Financial Times columnist recently suggested that anyone who could do so, ought to be awarded the Nobel Prize. No one has an answer. A situation has developed where all the options are bad—that is to say, any proposal immediately throws up new problems and contradictions.
The Iraqi government, as has been widely reported, has been given about two months to move toward bringing the situation under control. Just what that means, however, is not clear. Having denounced the insurgents as terrorists and Baathist dead-enders, the Bush administration is insisting that there should be an amnesty and they should be brought into the political process. But to bring back the Baathists means a bloody crackdown on the Shia militias, and above all on the Sadrists. Such a military bloodbath is now being prepared.
The report of Iraq Study Group headed by James Baker III will be issued after the elections. Among the options being considered is the division of Iraq into three—a Kurdish region in the north, a Shia-dominated region in the south and a Sunni-dominated region in the centre. But this option appears to have been rejected, at least for the present, on the grounds that it would result in even bigger conflicts, coupled with large-scale ethnic cleansing. The present sectarian conflict is largely the result of dividing the polity along religious lines. What would happen if there were to be a geographical division of the country? A Kurdish state in the north would create problems for Turkey, and the Saudi regime could be weakened by a Shia regime in the south, while Iran would be strengthened.
One proposal, which seems likely to come from the Baker report, is discussions with Iran and Syria to try to stabilise the situation. But concessions would have to be made to both Iran and Syria to effect such an agreement—at least, some kind of normalisation of relations and a rejection of the perspective of “regime change”. In the case of Iran, this would involve the reversal of US policy going right back to the immediate aftermath of World War II. And any agreement with Iran and Syria would raise the issue of US relations with Israel.
Aside from these immediate questions, the Iraq debacle has provoked discussion in American foreign policy circles about the long-term position of the United States.
Former State Department official and now president of the Council on Foreign Relations, Richard Haas, wrote an article in the latest issue of Foreign Affairs entitled “The New Middle East” which reviews some of these issues. He begins as follows:
“Just over two centuries since Napoleon’s arrival in Egypt heralded the advent of the modern Middle East—some 80 years after the demise of the Ottoman Empire, 50 years after the end of colonialism, and less than 20 years after the end of the Cold War—the American era in the Middle East, the fourth in the region’s modern history, has ended. Visions of a new, Europe-like region—peaceful, prosperous, democratic—will not be realised. Much more likely is the emergence of a new Middle East that will cause great harm to itself, the United States, and the world.
“All the eras have been defined by the interplay of contending forces, both internal and external to the region. What has varied is the balance between these influences. The Middle East’s next era promises to be one in which outside actors have a relatively modest impact and local forces enjoy the upper hand—and in which the local actors gaining power are radicals committed to changing the status quo. Shaping the new Middle East from the outside will be exceedingly difficult, but it—along with managing a dynamic Asia—will be the primary challenge of U.S. foreign policy for decades to come.”
According to Haas, the end of the Cold War and the demise of the Soviet Union provided a situation that gave the United States unprecedented influence and freedom to act. However, this era is now over.
“What has brought this era to an end after less than two decades is a number of factors, some structural, some self-created. The most significant has been the Bush administration’s decision to attack Iraq in 2003 and its conduct of the operation and resulting occupation. One casualty of the war has been a Sunni-dominated Iraq, which was strong enough and motivated enough to balance Shiite Iran. Sunni-Shiite tensions, dormant for a while, have come to the surface in Iraq and throughout the region. Terrorists have gained a base in Iraq and developed there a new set of techniques to export. Throughout much of the region, democracy has become associated with the loss of public order and the end of Sunni primacy. Anti-American sentiment, already considerable, has been reinforced. And by tying down a huge portion of the US military, the war has reduced US leverage worldwide. It is one of history’s ironies that the first war in Iraq, a war of necessity, marked the beginning of the American era in the Middle East and the second Iraq war, a war of choice, has precipitated its end.”
In the future, he points out, the US will increasingly be challenged by the foreign policies of other outsiders in the Middle East. Haas can offer no way forward, warning that there are no quick and easy solutions for the problems the new era poses and that the Middle East will remain a troubled and troubling part of the world for decades to come—enough to make one nostalgic for the old Middle East.
The decline of the US
Michael Lind of the New America Foundation, a thinktank established in the recent period to promote alternatives to the Bush administration, points to the decline in the long-term strategic position of the US and the collapse of the perspectives developed in the post-Cold War period.
In a recent article entitled “The World After Bush”, he writes:
“On 20th January 2009, George W Bush, barring his death, resignation or impeachment, will be succeeded by the 44th US president. Whether Republican or Democrat, the next president will not only inherit a number of crises, but will be in a considerably weaker position to deal with them.
“Much of America’s weakness will be the result of self-inflicted wounds: the unnecessary invasion of Iraq, along with the Bush administration’s gratuitous insults to allies, its arrogant unilateralism and its hostility to international law. But as tempting as it may be to put all of the blame on the Bush administration, the truth is that most of the trends that will limit American power and influence in the next decade are long-term phenomena produced by economic, demographic and ideological developments beyond the power of the US or any government to influence. The rise of China, the shift in the centre of the world economy to Asia, the growth of neo-mercantilist petro-politics, the spread of Islamism in both militant and moderate forms—these trends are reshaping the world order in ways that neither the US nor any of its allies can do much to control.
“In retrospect, we can view the period in US and world history that has just ended as ‘the long 1990s’. Those years began in euphoria with the fall of the Berlin Wall in 1989 and expired in frustration in late 2003, when the swift victory of the US and its allies over Iraq’s armed forces was succeeded by an insurgency that exposed the limits of US power. But even if 9/11 and the Iraq invasion had never occurred, the conventional wisdom of the long 1990s would have crumbled at some point after colliding with reality.
“Take the central assumption that at the end of the cold war a bipolar world was replaced by a unipolar one. This was true only in the military dimension—and even there American power was exaggerated. The US has no peers when the task is breaking the conventional armed forces of second and third-tier states like Iraq and Serbia. But when it comes to asymmetric warfare, in the form of campaigns against insurgents like those in Iraq and Afghanistan, the US military, like all conventional militaries, finds itself in the position of a clumsy Goliath trying to quash a nimble and determined David. Stealth bombers and world-class fleets are no help in house-to-house fighting, and missile defences are no good against improvised explosive devices. As the wars in Vietnam and Iraq tragically demonstrate, the US military is not very good at ‘military operations other than war’—and America’s enemies know it.”
Turning to the underlying economic issues, he writes:
“The conventional wisdom of the long 1990s was correct that capitalism had defeated socialism, but mistaken to assume that the libertarian capitalism fashionable in the US in the late 20th century was the winner. The Japanese never adopted laissez-faire capitalism and China and Russia in recent years have devised their own mixes of state capitalism and free markets.
“The growth of China and India, which was supposed to herald a global free market, may instead inaugurate a new age of mercantilism, as Asian industrial powers like China, unwilling to rely on free markets for energy sources and commodities, engage in negotiations with supplier countries. Already bilateral contracts are displacing free markets in oil and gas, and regional trade pacts are proliferating even as global trade talks are stalled. The competition between the rising industrial nations of Asia and the older industrial democracies enhances the leverage of authoritarian and nationalist states endowed with critical resources, particularly oil-producing countries like Iran, Russia, Venezuela and Saudi Arabia. These countries view China not only as a customer but also as a counterweight to the US.”
Lind maintains that the “conventional wisdom of the long 1990s ... was mistaken in every respect. The world did not become unipolar in the 1990s; it has been effectively multipolar since the 1970s. Ethnic nationalism, not liberalism or democracy, is the most powerful force in the world today. And the competition of the industrial nations for sources of supply and markets is bolstering mercantilism and economic regionalism, incompatible with the laissez-faire utopia touted by panegyrists of globalisation in the long 1990s.
“All of these trends would constrain US foreign policy, even if Al Gore had been inaugurated in 2001 rather than George W Bush. It will now be additionally constrained by the legacy of the eight-year Bush administration. When the next president is inaugurated, the US will almost certainly still be in Iraq. Rather than have the world witness the inglorious departure of US forces from a chaotic Iraq in the final years of his presidency, Bush is likely to cede the problem to his successor.”
He concludes that the collapse of the neoconservative perspective in the Middle East and the world does not mean success for what he calls the neoliberal perspective of the Democratic Party. “Neoliberals agree with neoconservatives about the goal of US foreign policy—a global free market in a world policed by a benevolent, hegemonic US. Their differences are in the details. Although they are as opposed in practice to a multipolar world order as neoconservatives, neoliberals argue that the US should make its global hegemony more palatable to other countries by endorsing international law and working through international institutions like the UN and NATO.”
He notes that while some neoliberals call for a vast program of investment in developing countries, the Middle East in particular—a kind of new Marshall Plan—this will never be tested, because the money is not there in the first place.
While Lind does not go on to develop the argument, this fact does point to the underlying reason for the resort to militarism—the economic decline of the United States. His perspective is for what he calls a “concert of great powers, organised and led by the US” as the best hope for reconciling international peace with liberal order.
But what happens if those powers do not find it in their interest to be led and organised by the US? Such a concert is only possible provided the US is prepared to make concessions to its rivals and potential adversaries. Here, however, lies the fundamental problem. The US is not in a position to do that. As we have previously noted, the invasion of Iraq was directed not so much against Saddam Hussein, as against the European rivals of the US in the Middle East. The aim was to establish a puppet regime in Iraq and in that way reinforce the position of the US against its European and Asian rivals. The same is true of Iran.
The reason the US pursues such a belligerent policy is rooted in its long-term economic decline. In the immediate post-war period, the US financed the Marshall Plan and consciously rebuilt the other major capitalist powers—except Britain whose empire it was seeking to dismantle. Under today’s conditions, a “concert of great powers” can at best only be an unstable truce.
The historic context
The present situation has to be placed within its broad historical context—that is to say, examined on the basis of the historical development of the world capitalist system.
Following Leon Trotsky, we can delineate very definite phases or periods in what he called the curve of capitalist development, and a number of important features of the present situation clearly emerge.
When Marx and Engels wrote the Communist Manifesto in 1847, they pointed to the stupendous achievements of capitalist civilisation. But in many ways what they wrote was only a brilliant anticipation of what was to come. Over the next 25 years, there took place the great Victorian upswing of the mid-nineteenth century.
Following the revolutions of 1848, which cleared away the remaining feudal encumbrances and barriers, at least in Western Europe, came a mighty economic expansion. It was spearheaded by the railway industries and organised by British capital. This was the heyday of British commercial imperialism. British capital financed expansion in Western Europe and the United States. Britain with its empire and navy was the pre-eminent capitalist power, but it laid the basis for the expansion of the other capitalist powers.
The first great upswing in the curve of capitalist development came to an end with a series of financial crises in 1873. While the immediate crisis passed, it did not signal a return to the previous period. Rather, 1873 marked the beginning of what is known in economic history as the Great Depression of the nineteenth century. In contrast to the upswing of the previous quarter century, this was a period of enormous downward pressure on profits.
This pressure, in turn, was the driving force behind some of the great changes of that period. In America, and to some extent Germany, new forms of industrial organisation and industrial processes emerged—in steel-making, in chemicals, the beginnings of assembly line production in the food and meat industries, and the application of steam power to shipping, to name a few. This was the period of the rise of colonial empires, exemplified by the carve-up of Africa in just 20 years. But it was also, although not fully recognised at the time, the beginning of the decline of British hegemony. The very expansion of capitalism, financed by Britain in an earlier period, created the conditions for a weakening of its relative position.
The period of the Great Depression also brought great social changes. The development of new industrial processes saw the emergence of the industrial working class as a powerful social force. In the days of the Communist Manifesto, the working class, except in England, was not highly concentrated. Old artisan forms still remained and factories tended to be small scale. All that changed in the last quarter of the nineteenth century.
These objective processes found their expression in the development of the mass trade unions and the socialist and labour parties. The rise of Marxism as the theoretical and political guiding force of the socialist movement was expressed in the founding of the Second International. The First International had been wrecked by the anarchists and petty-bourgeois radical forces and by the impact of the defeat of the Paris Commune in 1871. But by 1889, Marxism had asserted its supremacy over these tendencies. Just 28 years after the founding of the Second International, the first successful socialist revolution was carried out in Russia in October 1917.
In the Communist Manifesto, Marx emphasised the global character of the capitalist system. But here, again, this was more a brilliant anticipation than an empirical description. In the last quarter of the nineteenth century, the capitalist system started, so to speak, to catch up to Marx and the process we now designate as globalisation went ahead in leaps and bounds. Far-flung regions of the world were drawn into the capitalist processes of production, united by new forms of transport and communications.
Minerals and raw materials, some of them new, such as rubber, as well as agricultural products, were transported in bulk to be processed in factories. Finance capital spread across the world as banks financed vast undertakings, in particular the development of infrastructure. The cheapening of raw materials and food, which these developments made possible, assumed vast importance for the development of industrial capitalism, in the same way that the drive to secure ever-cheaper forms of labour does today.
This “second industrial revolution” in the last quarter of the nineteenth century eventually brought an end to the Great Depression in prices and profits. A new capitalist upswing began from around 1895. But it was not a repeat of the earlier upward phase.
Beneath the prosperity, all manner of problems were emerging. One of the crucial differences with the earlier period was that rather than taking place under the aegis of a dominant power, whose economic might worked to ensure the expansion of the capitalist economy as a whole, the new upswing took place amid growing rivalries and antagonisms among the major powers.
The old economic power, Britain, was losing its position. At the turn of the century, it suffered a shock when the Boer War, which was expected to present few problems, turned into a bloody disaster. Britain’s weaknesses had been exposed and, over the course of the next seven years, she abandoned the previous policy of “splendid isolation” and entered into a series of alliances—with Japan, France and Russia—which were to play a significant role in propelling her into the Great War.
War and depression
The eruption of the war in 1914 marked the beginning of a new downswing in the curve of capitalist development. But, as Trotsky was to remark later, it was not so much that the war produced the downswing, rather that the downswing was the key factor in triggering the war. The fundamental economic shift that led to the eruption of the war can be seen in the fact that it was not until the latter 1920s that post-war production in Europe began to attain the levels reached in 1913—only to collapse again with the onset of the 1930s Great Depression.
From the standpoint of globalisation, the inter-war period can be designated as the period of the great reversal. By the beginning of the 1930s, the world market had, to all intents and purposes, ceased to exist. Trade had contracted by two-thirds, and international finance had come to a virtual standstill. The world was divided among competing empires and spheres of influence.
From the standpoint of the dominant capitalist power, the United States, the Second World War was not a struggle against fascism, so much as a war waged to end the empires of the rival capitalist powers, and to restore the world market and the free movement of capital and trade, upon which American capitalism, and the capitalist system as a whole, depended.
The defeat of Germany and Japan opened the way for the reconstruction of the world economy and made possible the adoption on a world scale of the new, more productive, techniques of the American production. This gave rise to a new upswing in the curve of capitalist development.
One is struck today by the parallels with the mid-nineteenth century upswing. Just as the 1848 revolutions removed constrictions on the expansion of capitalism, so the Allied victory in the war, led by the US, opened the way for the extension of the world market. Just as the mid-Victorian boom rested on the economic might of the dominant power, Great Britain, so the post-war economic boom took place under the aegis of the United States, whose vast economic power and superiority over its rivals enabled it to undertake the task of reconstructing the capitalist system as a whole. However, the very measures it undertook weakened its relative position.
The world economic crisis of the early 1970s, when the profit rate began to fall, signalled the onset of a new downswing in the curve of capitalist development. Over the next two decades, the fall in the rate of profit became the driving force for vast changes in the structure and functioning of capitalist production. These changes, bound up with the application of computer technologies to all aspects of communication and production, have resulted in a quantum leap in the globalisation of production.
Whereas in all previous epochs, surplus value was extracted from the working class within the confines of a given nation-state, this now takes place on a global scale. Capital exists in three forms: as money (the end of the capitalist production process with the sale of commodities and the start of a new round of production), as commodity capital (which emerges from the production process) and as productive capital (the means of production that are employed to extract surplus value from the working class in the course of the production process). Commodity capital and money capital became citizens of the world in an earlier period. Productive capital, however, still retained a certain national identity. But now the disaggregation of the production process beyond the framework of the nation-state means that productive capital has become truly global.
The globalisation of production since the mid-1970s has had vast social and political implications. If the downswing in the latter part of the nineteenth century was the trigger for the establishment of the mass organisations of the working class that held sway for the majority of the twentieth century, then the changes over the past three decades have brought about their disintegration and collapse. This was the significance of the demise of the Soviet Union in 1991.
Capital responded to the downturn in the rate of profit in the 1970s in the same way as it had in the past. It undertook a desperate struggle to revolutionise the process of production. The globalisation of production is the outcome.
The rate of profit
The question now arises: has this produced an upswing in the rate of profit? There is some evidence that it has. But whether this means a new period of capitalist stability is altogether another question. In fact, an examination of the way this profit upturn has been achieved reveals that it has the most explosive social and political consequences.
An article published in the Financial Times on October 14 notes the following: “In Britain, company profits were the highest last year since records began in 1965; yet median weekly earnings, adjusted for inflation, fell by 0.4 percent. It is the same story in all the rich countries of the west. In a recent research note on the US economy, Goldman Sachs, the US investment bank, said: ‘As a share of GDP, profits reached an all-time high in the first quarter of 2006. Several factors have contributed to the rise in profit margins. The most important is a decline in labour’s share of national income.’”
According to a New York Times article published on August 28, the current expansion in the US economy could become the first period of sustained economic growth since World War II that fails to offer an increase in real wages for most workers. The median hourly wage for American workers has declined by 2 percent since 2003 in real terms. This means that wages and salaries now make up the lowest share of GDP since the government started recording the data in 1947, while corporate profits have reached their highest levels since the 1960s.
In the first quarter of 2006, wages and salaries represented 45 percent of GDP, down from almost 50 percent in the first quarter of 2001 and a record 53.6 percent in the first quarter of 1970. Each percentage point now represents about $132 billion.
These aggregate figures tend to mask the real situation, because they include income paid to the highest earners. In 2004 the top 1 percent of income earners in the US, including many chief executives, received 11.2 percent of all wage income, compared to 8.7 percent a decade earlier and less than 6 percent three decades ago.
The increase in the rate of profit, the result of the increased profit share in GDP, is in part the outcome of the vast changes in the structure of the world economy resulting from the integration of China and the former Soviet Union into the world labour market. A recent study by Harvard labour economist Richard Freeman notes that a process he calls “The Great Doubling” has seen the global labour force available to capital increase from about 1.46 billion to around 2.93 billion. This has dramatically changed the balance between capital and labour in the global economy. According to Freeman, the ratio of capital to labour in 2000 was about 61 percent of what it would have been had China, India and the ex-Soviet bloc not been integrated into the world economy. Of course, these figures are only approximations, but they do give a sense of the historic dimension of the transformations taking place.
The process, which began with unskilled labour, has not stopped there. A whole series of jobs that were once considered relatively immobile can now be transferred. In effect, any process that can be digitised can be outsourced to anywhere in the world.
Capital has thus been able to bring about a certain restoration in the rate of profit. In other words, there has been a benefit to capital from the dissolution of the Soviet Union and the integration of China and India into the world market. Previously, capital boosted the profit rate by plundering raw materials and resources. Today it does so by plundering cheap labour. But it is far from establishing a new equilibrium. In fact, the situation is highly unstable. Capital accumulation, as measured by the rate of profit, depends more and more on the reduction of the share of national income going to labour in the major capitalist countries. And even where there is a tendency for wages to increase in China and India, the process of accumulation is also highly unstable. Already sections of Chinese labour are becoming too highly priced in relation to what can be obtained in Vietnam or Bangladesh.
There are distinct parallels with the period before 1914. Then, the upturn in capitalist profit was occasioned, at least in part, by the first phase of globalisation—the exploitation of cheap raw materials and agricultural products. Today, it is being fuelled by the increased supplies of cheaper labour. But this mode of accumulation is bound to bring social and political instability because it is dependent on ever-deepening social inequality, which can have far-reaching consequences in both the advanced capitalist countries and the new entrants into the global market.
Like the period before 1914, there is an intensifying conflict among the major powers. The relative economic decline of the US, like that of Britain before it, has extended over several decades. However, it has now become an explosive factor in world politics, as the US attempts to compensate for its loss of economic hegemony by military means. There are criticisms of the Bush doctrine of militarism from within American ruling circles, given the disaster that has unfolded in Iraq. But whenever one reads the alternative proposals—a concert of powers, a return to multilateralism—one is struck by the fact that they all involve some weakening of the position of the US. For three and a half decades, ever since it unilaterally removed the gold backing from the US dollar and ended the Bretton Woods monetary system because it was not able to honour its obligations, the US has been seeking to resolve its economic problems at the expense of its rivals. That process is not going to be reversed. In a sense, the turn to military means represents the intensification of a process that has been unfolding over the entire preceding period.
Timothy Garton Ash of the Guardian wrote last year: “If you want to know what London was like in 1905, come to Washington in 2005. Imperial gravitas and massive self-importance. That sense of being the centre of the world, and of needing to know what happens in every corner of the world because you might be called on—or feel called upon—to intervene there. Hyperpower. Top dog. And yet, gnawing away beneath the surface, the nagging fear that your global supremacy is not half so secure as you would wish. As Joseph Chamberlain, the British colonial secretary, put it in 1902: ‘The weary Titan under the too vast orb of his fate’ ... The United States is now that weary Titan’” (cited in Ismael Hossein-Zadeh, The Political Economy of American Militarism, p. 36).
Just as in the late nineteenth and early twentieth centuries, the previously dominant imperialist power, Great Britain, had to increasingly resort to military means in the face of rising challengers (Germany, rival European powers and the US) so today the US faces direct threats to its position. These are the underlying driving forces of the deepening political instability, growing great power rivalry and war that we are witnessing today.
Source: World Socialist Web Site
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