Sapient Pen

India- A Cruel Paradox of Rising GDP and Low Social Development

2018-08-07T21:54:00.002+05:30

Attribution-Public.Resource.Org

“Money is like manure. You have to spread it around or it smells”-J. Paul Getty

“We are still one of the poorest large countries in the world on a per capita basis, and have a long way to go before we reasonably address the concerns of each one of our citizens.”-Raghuram Rajan

The testosterone levels of the well-heeled in India goes on overdrive when there are reports from foreign sources extolling the virtues of India’s rising GDP. In a report titled “The World in 2050,” consulting firm PwC projects that “India’s GDP would exceed US GDP in purchasing power parity terms by 2040 (purchasing power parity accounts for the different prices levels across countries). This would make India the largest economy in the world after China.” This report also adds that India is set to overtake the US economy by 2040.

While such rosy predictions have the same credibility of astrological predictions found in Chinese fortune cookies, it seldom dampens the sharp spike of anabolic steroid of frenzied nationalism in the privileged members of our society. Shobhaa De, a writer, captures this feeling of hyper nationalism rather nicely,“All of us bleat away on how fantastic it feels to be an Indian today. How amazing it is that the world is finally recognizing our real worth and giving us ‘respect’. I feel depressed at the end of all the chest-thumping. And ask myself how much of this new strut is self-delusionary. Whom are we kidding? And, by trotting them out often enough, will we really start believing our own illusions about ourselves?”

For the more discerning observers of the Indian economy Shobhaa De’s angst at the irrational exuberance of nationalism riding on steroids is understandable. For beneath the unmeasured hyperbole of INDIA having arrived and sprinting to join the pantheon of Super Powers, lies a dark secret: its low social development index. While India has been racing ahead in terms of its GDP (achieving 7% growth rate during the last decade and projected to be in the range of 7.5% in the years to come) the social and economic conditions have worsened for the major sections of society. Nothing etches this fact more powerfully in our minds than the towering private residence Antilla belonging to India’s wealthiest Dollar Billionaire-Mukesh Ambani. Built at a cost of 1.8 billion dollars the opulent tower over looks massive slums of Mumbai. The view from the top of Antilla offers an embarrassing visual confirmation of what rising GDP means to the great masses of people. As one looks below one sees slums everywhere teeming with people in various stages of decay, defecating in the open and washing themselves from fetid pools of water in nearby ditches.

For the more cerebral who are suspicious of anecdotal details, the census data offers a stark reality of the systemic poverty and social degradation of the many. As Pankaj Mishra observes: “The 2011 census revealed that half of all Indian households have to practice open defecation. Nearly half of all Indian children are underweight (compared to 25 percent in sub-Saharan Africa), and as Amartya Sen and Jean Drèze point out, despite a rise in literacy rates, “a large proportion” of them “learn very little at school.” Almost all Indians buy health services from private providers, exposing themselves to crippling debt as well as quackery. Inequalities have widened between classes, regions, and rural and urban areas. More worryingly, they seem unbridgeable owing to the lack of adequate education and public health. Not surprisingly, poverty declines very slowly in India, slower than in Nepal and Bangladesh, and unevenly. Calorie and protein intake among the poor has actually dropped.”

If such social indicators are bad enough there is another road block to trip our country’s dash to breast the winning tape. That road block simply put is income inequality.In a report prepared by French economists Thomas Piketty and Lucas Chancel titled‘Indian income inequality, 1922-2014: From British Raj to Billionaire Raj ‘explodes the myth that the rising GDP and the economic growth rates which the benign forces of economic liberalization unleashed by both the Congress government of Manmohan Singh and the NDA government of Modi did not empower the great majority of the people. The great wave of rising GDP did not lift as many small boats as claimed by the neoliberal gurus Jagdish Bhagwati and Arvind Panagriya. In fact economic liberalization benefitted 10% of the population especially the top 1% of the income earners.

Slum in Ahmedabad,Gujarat

Attribution-Emmanuel Dyan

Photo Copyright-Emmanuel Dyan

As the authors of the report point out: “Shining India” corresponds to the top 10 percent of the population (approximately 80 million adult individuals in 2014) rather than the middle 40 percent. Relatively speaking, the shining decades for the middle 40percent group corresponded to the 1951-1980 period, when this group captured a much higher share of total growth (49 percent) than it did over the past forty years. It is also important to stress that, since the early 1980s, growth has been highly unevenly distributed within the top 10 percent group.” [Emphasis added]. A recent Rupe India article quoting the Vanneman and Dubey study based on the NCAER-University of Maryland survey confirms this finding. Moreover, as Kaushik Basu, the Cornell economist says-““The bulk of India’s aggregate growth is occurring through a disproportionate rise in the incomes at the upper end of the income ladder.” By 2010 close to hundred people had 300 billion which works to around a quarter of the country’s GDP.

But these dry statistical details do not convey the full spectrum horror of deprivation and suffering of the toiling masses who have not benefitted from the rising GDP growth. As Amartya Sen and Jean Dreze point out in their book ‘An Uncertain Glory: India and its Contradictions ‘that the pervasive inequality in India is made worse by the fact that the low incomes of the largely poor makes basic necessities of life unaffordable. Pervasive inequality also exacerbates the already outrageous gulf between the well-heeled and the poor which the low social indicators do not fully capture. To add to the agony of the poor and the destitute, basic public services in the spheres of education, health care and social care are negligible or practically absent making poverty and social deprivation in India specially terrible even when it is compared to countries like China where such wide disparities of income exist but softened by the presence of basic public services.

One of the main reasons why there is inadequate funding for pro poor welfare schemes is the revenue foregone for the benefit of corporate houses which simply translates into free lunches for the corporate entities. P Sainath, a senior journalist, says for the period 2005-06 to 2013-14 alone ( period of nine years) the corporate free lunch amounted to Rs 36.5 trillion which could have funded the Mahatma Gandhi National Rural Employment Guarantee Scheme for around 105 years, and fund the Public Distribution System for 31 years. The frenzy of lending by Public Sector banks to top industrial houses which becomes bad debts in the books of the banks offers a sleazy side to liberalization process initiated by the Congress government in 1991 and continuing at a brisk pace under the NDA- Modi government.

The corporate bailouts running into trillions of rupees offers an obscene contrast to the niggardly social spending on the poor. According to Jean Dreze, India spends just 4.4% of its gross domestic product on health and education, compared to 7% in sub-Saharan Africa and 6.3% in the least-developed countries of the world.

Under the Modi government things have gone steadily downhill by cutting off rural employment schemes from central funding and leaving the burden of funding to the respective states. To make matters worse the Public Distribution System is hampered by the Aadhaar identification which excludes the poor who are unable to prove their identity by their fingerprints as they are worn off by hard manual labour. The problem of Aadhaar is further compounded by poor internet connectivity in the poorest states. Thus the Aadhaar identification system has been a winnowing machine in denying poor people access to subsidized food grains.

India’s success story as the fastest growing economy of the world coexists with’ an insular, selfish, and antidemocratic elite in an unequal society, where “predatory forms of capitalism”, supported and promoted by the State prevail driving the poor to the wall. Recent corruption scandals in the mining and the telecom sector only serves to highlight the fact that crony capitalism and rent seeking are the main drivers of the GDP growth not innovation or entrepreneurial dynamism.

The seedier aspect of India’s growth story which is that GDP growth has not resulted in tangible gains for the poor does not get sustained coverage or attention in the mainstream media. The reasons are not difficult to fathom: the mass media is itself big business which is itself controlled by business oligarchs either through ownership or through the appointment of directors on the boards of media representing big corporate interests. Moreover the profitability of the media does not depend on subscription revenue but on advertising revenue generated by Corporations. Hence, media in India are echo chambers of big business interests where social spending is condemned as a waste while free lunches for corporate are glowingly described as growth incentives. No wonder P Sainath, a journalist, calls the Indian media (with a few honourable exceptions) as a prisoner of profits.

The ruling elites and their wealthy hangers on are perched on the horns of a cruel dilemma: how to reconcile the heady nationalism of unstoppable incredible India with the teeming millions crying for social justice? An elegant solution to this dilemma presented itself to the audience at a book launch in a five star hotel in Bangalore some years ago. A tech billionaire who was the guest at the event famously said, “I don’t see poor people as I always stay in five star hotels.”

By denying the existence of poverty in India the billionaire club class can sip Earl Gray Tea served in bone china cups in utter tranquility. As the obsequious waiters fussed around them they would perhaps glimpse through the spotless glass window of their five star hotels a sea of angry people in ragged clothes descending upon them with pitchforks in their hands. From a distance one heard the breaking of crockery and saw frightened people in their fancy clothes jump out of the windows.

And then …..pandemonium broke loose…..

C R Sridhar

The Mauritius Connection: Big Businesses,Governments & Illicit Finance

2018-02-16T22:35:00.001+05:30

“The difference between tax avoidance and tax evasion is the thickness of a prison wall.”

Denis Healey, former UK Chancellor of the Exchequer

Public perception of wealthy Indian Business Oligarchs as being notorious tax dodgers stashing their ill gotten money in tax havens gained ground with the sensational disclosures called the Swiss leaks. In a drama which unfolded with the nail biting suspense of a James Bond movie, a computer expert Hervé Falciani working with the HSBC bank leaked secret bank data accounts of 1000000 individuals and entities spanning 200 countries. Among the prominent Indian business tycoons included Mukesh Ambani, Anil Ambani, Anand Chand Burman, Rajan Nanda, Yashovardhan Birla, Chandru Lachhmandas Raheja, Dattaraj Salgaocar, Bhadrashyam Kothari and Shravan Gupta.

In their meticulously researched book ‘Thin Dividing Line’ Paranjoy Guha Thakurta and Shinzani Jain highlight the role that Mauritius plays in providing tax shelter for the ultra rich Indians and the illicit financial flows in the global context.

The authors point out-‘Tax havens, also known as low tax or no tax jurisdictions, enable wealthy individuals and corporate entities controlled by them to not pay taxes, legally and illegally.’

Central to the issue of tax evasion or tax avoidance is the so called Mauritius route. According to the authors what makes Mauritius an attractive destination for illicit global flows is the treaty for avoidance of double taxation and the secrecy laws that prevent exchange of information regarding the identity of persons or entities who own the illicit funds. There is also the added advantage of cultural affinity-two thirds of the population of Mauritius is of Indian origin.

For a fee mail box companies or shell companies (companies that have no real business) are created for the purpose for parking the tainted funds. Through Hawala (a shadowy and parallel banking system) handlers for a commission or fee deposit the illegal proceeds from bribes of politicians or earnings from drug running or arms smuggling into bank accounts of mail box companies located in Mauritius.

Now the stage is set for the ease of doing business in Mauritius. The authors reveal the astonishing fact that close to ’40 per cent of the total inflows of foreign money into India ( in the form of Foreign Direct Investments, as well as investments in stock, shares and other financial instruments) have been routed through this small clutch of islands in the Indian Ocean since the early 1990.’ Moreover, the extensive use of Participatory Notes (P-Notes) which is an opaque instrument to conceal the beneficial owners of the funds coming from Mauritius from the unwelcome scrutiny of tax and regulatory agencies.

In addition any capital gains tax arising from transfer of capital assets in India is tax free in India as well as in Mauritius which has no tax at all. Truly, a win win situation for the corrupt triad of politicians, businessmen and government officials who launder their illicit earnings and get a tax free income in the bargain!

The notorious Mauritius route attracted adverse publicity in the stock market scams which rocked the Bombay Stock Exchange (BSE) which was known as the Ketan Parekh Scandal. A joint parliamentary committee(JPC) found that Parekh borrowed 120 crores from Global Trust Bank and Madhavpura Mercantile Cooperative Bank which was used to rig share prices of certain companies. For this share rigging scam Ketan Parekh used the maze of 23 entities located in the tax haven Mauritius.Another high voltage scandal that rocked the country was the scam of the popular cricket tournament (IPL). IPL Chief Lalit Modi was accused of tax evasion and laundering money through Mauritius based entities.

Generally speaking, one of the compelling reasons for Multi- National Corporations to declare zero tax or pay low tax in countries where tax rates are more is the fact that more than 60% of world trade happens inside multinational corporations. Thus shell companies or mailbox companies are established for the purpose of aggressive tax evasion. In an elaborate charade called transfer pricing, corporations with their army of accountants and lawyers create a maze of shell companies (i.e. companies which have no real business activity) in Tax Havens which have secrecy laws concealing the ownership and the source of the funds. The tax strategy is fairly simple: book the profits in shell companies located in tax havens having low or nil rates of tax and show costs in countries which have higher rates of tax.

Take the case of Google- the giant tech company- which established a subsidiary in Ireland and with which the parent company entered into an agreement in 2003 giving the subsidiary the right to income arising out of search engines. From 2003 to 2009 the Irish subsidiary of Google earned $11 billion and the rate of tax in Ireland is 12.5%. Not content to pay taxes of 12.5% in Ireland, it siphoned off its earnings as royalty payments to another offshore entity in Bermuda at zero rate of tax. Needless to say if Google had booked its profits in USA it would have to pay (after available deductions) tax at 35%. The success of the strategy is borne out by the fact that Google pays around 2% as taxes on its overseas income. If the offshore tax havens were to be knocked off, then Google loses a quarter of its earnings and a cool $100 dollars could be knocked off per share.

Or take the case of Starbucks –the coffee company -which is in Seattle (US). If the trade mark of- let us say- Frappucinno vests with an entity registered in Netherlands which has 1-2% tax on intellectual property rights, then part of the income on its sales of the coffee drink is booked in Netherlands at low tax while lower earnings are booked in the higher taxed country like the US.

An important take away from the book ‘Thin Dividing Line’ is exploding the myth that unregulated and illicit capital flows emanating from tax havens is good for the economy. There are compelling reasons that such illicit flows are more of a curse than a blessing.

Firstly the unregulated financial flows from tax havens erodes the tax base of the host country where transaction occur but profits not shown but booked in low or zero tax havens. Falling tax revenues force the state to abandon welfare measures such as affordable education and health care for the needy and elderly. The case in point is India where a sizable proportion of the population is trapped in poverty. Spending towards public health is an abysmal 1.2% of the GDP.

Secondly offshore global finance aids and abets in the investment of earnings from serious criminal activities and thus offer incentives for the global spread of such activities.

And lastly, tax havens, as the authors starkly observe ‘have been used by the rich and the powerful to benefit themselves at the expense of the poor and the underprivileged, thereby widening inequalities within countries and on occasion, across nation states as well.’ The astounding figures from OxfamInequality Report tells its own story: In India 57 billionaires possess as much wealth as the poorest 70% of the population.

In the high decibel election campaign of 2014, Narendra Modi of the BJP skillfully exploited the helplessness of the Congress government in bringing back black money stashed abroad and promised the people of India that not only would he get the black money back but also put 15,00,000 ( fifteen lakhs) in every account of the common people. While the BJP stormed to power exploiting the anger of the people against the Congress, it has yet to get any black money from abroad. The campaign promise of depositing Rs fifteen lakhs in every Indian family account proved to be mere jumla (empty election promise).

In April 2016 there was another bombshell in the shape of the Panama Papers which revealed that 500 Indian nationals formed offshore companies which in reality were shell or mail box companies formed by the Panama head quartered Law firm Mossack Fonseca for the sole purpose of secreting the illicit hoard away from the prying eyes of the Indian Tax authorities.The prominent casualty of the Panama expose was Nawaz Sharif- the Prime of Pakistan who was barred from holding public office for a decade by the Supreme Court. The other heads that rolled were that of the prime minister of Iceland Sigmundur David Gunnlaugsson and the Spanish Industry Minister Jose Manuel Soria. The relatives and associates of Putin the Russian President and China’s President Xi Jinping also cropped up. The Indians who figured in the Panama Papers were Amitabh Bacchan, Aisharya Rai , Vinod Adani among others.

In India nothing happened and it was business as usual for the Modi government. At the end of 2016 the demonetization blitzkrieg which was ostensibly executed for the purpose of flushing out black money only served to send the most poor and deprived members of the society to greater destitution as the money was sucked out of the banking system. The victims of illicit flows namely wage earners in the informal sector and small traders who did not have either credit nor debit cards were starved of cash and pummeled to ruin.

The tide is turning against the Modi Government and he is facing anger for his unfulfilled promises of getting the black money stashed in tax havens. With his eye on the coming election in 2019, policy measures have been tweaked to make the Mauritius route a less lucrative one. Now a new provision has been added which gives India the right to tax capital gains arising from the transfer of shares in Indian companies after 1 April 2017. By specifying a transition period the Indian Government did want panic among the investors and scare them away. For short term capital gains (shares within one year) will have to pay only 50% of the tax applicable between the period April 2017 and March 2019.There after the regular rate at 15% would be applicable. This new rule would be applicable to those who invest at least Rs 27,00,000 in a year. Further the tax on interest income earned by Mauritian companies would be limited to 7.5%.

But global finance like water finds weak spots and flows through. Now reports suggest that the illicit finance would flow through Netherlands which has no tax on short term capital gains. Moreover, derivatives which account for about 90% of equity trading in India are also exempt from capital gains tax.

The global push back against Tax havens by Automatic Information Exchange which reduces secrecy and curbs the evasion of tax is an important measure to reign in rogue capital. So is the General Anti-Avoidance Rules. But the battle is a tough one.

On one side we have the Goliath of global finance and on the other David-ordinary citizens of the globe facing austerity measures on account of Profit shifting and Tax erosion. The battle appears daunting and hopeless.

But engage we must in the battle against Goliath capital. Failure to do so would mean that the rest of us would slide permanently into inequality while a tiny few would have their boots washed in champagne.

The price of indifference is an onerous one.

C R Sridhar

@sapientpen

Delusions of the Dwindling Indian Middle Class

2018-01-28T23:31:00.000+05:30

We of the sinking middle class may sink without further struggles into the working class where we belong, and probably when we get there it will not be so dreadful as we feared, for, after all, we have nothing to lose-George Orwell

Writing in the Globe and Mail the Delhi based journalist Amrit Dhillon paints a despairingly gloomypicture of the Indian middle class. To quote “ That class is a strange creature. It has always been different from its counterpart in other countries. For a start, it is lowbrow. Middle-class Indians, in general, have little interest in classical music, literature, theatre or any cinema except Bollywood. Their hobbies are shopping and visiting relatives. Sit in the departure lounge of any airport in India or in the trains patronized by the affluent, and you will hardly ever see anyone with a book in their hands. Intellectual pursuits are shunned. Engaging with ideas is alien. They do not, as other middle classes do, set the agenda of public debate, or help to form public opinion and lead public discourse on issues of the day. That is left to India's minuscule elite of academics and intellectuals.”

This unflattering assessment of the middle class may anger many but it is unfortunately bang on in summing up the social behavior of the middle class. A bitter pill to swallow is the fact that the middle class role model has more negative aspects than positive ones. For instance the middle class is apathetic to its civic duties. This is seen during elections when long queues of the poor are seen in polling stations while fewer people from the urban middle class actually vote or participate meaningfully in the political process. Instead they wallow in self importance of having arrived in a competitive world by virtue of their hard work and education. The rural and urban poor, according to middle class opinion, have themselves to blame for their miserable condition of destitution and poverty.

Moreover a significant number of the middle class veer towards authoritarian power structures to keep the clamouring masses seeking social justice in check so that their path to infinite prosperity remains unimpeded. Being intellectually lazy and inactive in politics, large sections of the middle class need ‘strong leaders’ who will crack heads and keep the unruly mob in line. This perhaps explains their craven masochistic love for dictators.

The Indian middle class also adopted conspicuous consumption to buttress their sense of fragile status and privilege. As Jon P Dorschner acidly observes “In many cases this conspicuous consumption outstrips the legitimate income of the middle class consumer and in reality much of this consumption is funded by corruption. In a country where corruption is widespread, the Indian middle class fully participates in the consumerism/corruption nexus.”

In general the lack of empathy of the middle class towards the politics of redistribution of wealth by taxing the extremely rich was viewed negatively as Commie talk and wasting tax payer’s money on freeloaders and losers. This derisive contempt drove the middle class to enthusiastically support neo-liberal economic agenda of Indian Business family and Corporate elite interests.

The neo-liberal economic agenda- backed by the middle class- refers to slew of measures which included reduction or elimination of trade unions, reduction of trade barriers, reducing government role in the economy (cutting the red tape), reduction in welfare spending, privatization of the public sector, tax reduction, the creation of export zones, tax holidays, easing repatriation of profits earned by foreign companies and tax holidays for foreign investors.

Associated with economic neo-liberalism was the rather hare-brained notion that once the pie (ie the GDP) grew the benefits would trickle down to the economy by expansion leading to job creation and all round prosperity.In the media the miraculous success of the trickledown effect of neo-liberal economics was announced in unmeasured hyperbole. Media persons fell over each other in a swoon to announce that the sleeping beauty called the middle class had finally woken up- at least 250-300 million of them. Economists breathlessly hyperventilated that nearly 40% per cent of the population (283 million for the year1989-90) had broken through the shackles of poverty. Trade liberalization soon followed filling the shopping bags of middle class consumers with electronic gadgets and status enhancing imported goods.

The media spin about the rising middle class was a ploy to serve the ideological agenda of neo-liberalism that class polarization into the rich and poor had been averted as sizable portion moved from poverty to the status of becoming middle class. Those laggards who had been left behind, as the propaganda suggested, had themselves to blame for their apathy, lack of education and lack of drive. The welfare state with its expenditure on social sectors like health and education only bred a parasitic class perpetually begging and had to be gutted.The middle class having fallen hook line and sinker to the media spin tragically misaligned their interests to neo-liberal economics enforced in an authoritarian manner. In doing so have they been unwittingly complicit in signing their own death warrant?

For the past twenty years the neo-liberal economic package implemented by both the main political parties namely Congress and BJP under Modi only served the interests of the rich Business Oligarchs and Corporate interests. There were differences only in the mood music while implementing neo-liberalism. With the Congress neo-liberalism was thrust upon the populace with slogans such as inclusive growth. With the Modi Government it was dished out with dollops of militarism, communal violence, cow vigilantism and religious obscurantism. And of course the magical trickle down never happened to any significant extent.

Cutting through the hype that we are predominately middle class in India there is clinching evidence to the contrary. In a report prepared by French economists Thomas Piketty and Lucas Chancel titled Indian income inequality, 1922-2014: From British Raj to Billionaire Raj? debunk the cynical distortion in the stories about the rising middle class of India and show that economic liberalism has benefited 10% of the population especially the top 1% of the income earners. The authors of the report state- “This result should help us better characterize what has been termed as ‘the rise of India's middle class.’ From the perspective of our new income inequality dataset,“Shining India” corresponds to the top 10 percent of the population (approximately 80 million adult individuals in 2014) rather than the middle 40 percent. Relatively speaking, the shining decades for the middle 40 percent group corresponded to the 1951-1980 period, when this group captured a much higher share of total growth (49 percent) than it did over the past forty years. It is also important to stress that, since the early 1980s, growth has been highly unevenly distributed within the top 10 percent group.” [Emphasis added

There is also a reality check by looking at the material conditions in which people work. Here we find that the formal sector accounts for only 8% and rest lies in the informal sector which accounts for 92% where many toil in the twilight zone for a pittance. The relatively better paying jobs in the govt sector fell to 17.3 million by 2011. The Information Technology accounts for 2.8 million jobs constitute only 0.6 per cent of total employment. Finance, real estate and business services’ grew from 0.9 per cent of total employment in 1993-94 to 1.5 per cent in 2004-05 to 2.6 per cent in 2011-12.

The conclusion is clear “the data indicate that it falls well within the top 10 per cent of India’s workforce (i.e., the top 47 million workers). No doubt the absolute numbers involved are large. The top 5 per cent of India’s population (63 million) is larger than the population of most European countries, and the top 10 per cent (125 million) is larger than any European country. Hence the top 5-10 per cent are important to the marketing strategies of any international investor. But they cannot be the basis for a broader characterization of Indian society.”

Moreover, a phenomenon called the middle class squeeze is affecting the middle class in India. This is a situation where wages fail to keep pace with inflation leading to decline in real wages. Even the relatively better paid IT employees face job losses as the Tech companies face slowdown. Senior employees with better pay are sacked in favour of fresh recruits with lower salaries. The middle class income in metro cities face decline while goods and services are increasing .The gigantic suction pumps of housing, education and healthcare suck away the disposable income of the middle class. Moreover, the rising fuel prices on account of rising prices in international market has increased the misery of the middle class while earlier lower prices of fuel was not passed on to the public by the Modi government.

The escape hatch for the well educated middle class possessing engineering degrees and working in tech companies appears to be closing as the gusty winds of protectionism from USA seem to be blowing their way in the form of restriction of H1B work permits. The way to wealth through the Silicon Road is not going to be a smooth one. The lack of allure of engineering courses is one direct result of the depressed demand in the US for overseas IT workers.

At risk are also senior citizens who have invested in Bank deposits of PSU banks which are having bad loans on account of profligate borrowing by business bigwigs which may never be paid. The Modi Government is including a bail in provision to the act which would ensure that the middle class depositors would pay for the bad debts of Rich Business Oligarchs.

The election of Modi who was widely seen as a Messiah of Vikas by the admiring middle class failed to bring cheer. His election promises proved to be mere jumla (empty promises). His badly planned and executed measures of demonetization and GST pummeled middle class traders to ruin.

For those of the middle class who voted for Narendra Modi for jobs and development- would be dismayed to learn what he really thought about job prospects. When a reporter of a news channel asked him why there were no jobs- Modi replied with refreshing candour- There are jobs if you sell pakode.

Modi’s reply must have come as a damp squib to the Middle Class who’d been promised millions of jobs during Modi’s election rallies.Once it dawned upon the Middle Class that their Brave New World was one with a stagnant job market and that their only occupation would be the prospect of hauling hand carts and selling pakoda with mint chutney, a strong sense of betrayal and anger pervaded the Middle Class which erupted in angry messages being directed against the Messiah on social media.

Neo-liberal economics has come full circle.Now the Aspiring Middle Class has become the Perspiring Middle Class hauling carts and selling pakode. This bitter taste of entrepreneurship was never envisaged by even the most credulous members of the middle class.

Perhaps in a dystopian world of extreme inequality the fitting epitaph for the middle class would be given out of a sense of noblesse oblige by the 0.0001% left standing .This would be in the form of a tombstone inscribed with the words- Here lies the Great Indian Middle Class that became extinct - Selling Pakode.

C R Sridhar

ESOPs Fables: Infosys Share Buyback Bonanza

2018-01-09T20:28:00.001+05:30

“Our society has become so unequal. The wealthy need to be taxed more" -Rohini Nilekani

In an information saturated age such as ours corporate spin is sine qua non of business reporting where the narrative is controlled by the few to the detriment of the many. None is more evident than in the dominant narrative leading to the resignation of Vishal Sikka- the CEO of Infosys and the 13,000 crore (US $ 2 Billion)buyback share option of Infosys that soon followed.

The corporate spin of professing superior corporate values of governance by powerful promoter- shareholder clique is more often than not a cloak for concealing pecuniary motives of the few as the controversial circumstances surrounding the buyback share bonanza of Infosys reveal.

The spin was dressed up as a Manichean struggle between Forces of Light-namely Promoter shareholders like Narayana Murthy and the Forces of Darkness -of the likes of Sikka who were allegedly involved in shady acquisitions and charging hefty salaries/severance packages to the detriment of the company’s interest.

Beneath the hyperbole of Good Versus Evil lay a bitter struggle between the ESOP wealthy class of promoter-shareholders who were interested in the company buying back shares to enrich themselves and Sikka the CEO of the company who was more interested in conserving the cash resources of the company to fund technological innovation like artificial intelligence and automation.

The truth of the matter is that some years before the spat between the promoters of Infosys and Sikka erupted,the Indian Tech giants like TCS,HCL Technologies,Wipro ,Infosys and many others were already in a downward spiral as their business model of tech service providers were taking a hit.

As a business report suggested the global headwinds confronting tech companies like Infosys having markets like the USA,were protectionism in form of erecting entry barriers for tech workers from India, price pressures on margins, political uncertainties arising from political uncertainties like BREXIT and currency fluctuations. The winnowing machine of automation, robotics and artificial intelligence made most of the low skilled jobs redundant adding to the decline of growth prospects of IT companies.

For Infosys to survive it became imperative to transform its business model of providing low tech services to moving to the next gen company of highly skilled employees in artificial intelligence and robotics. But taking a tech company from low grade software to the next gen high tech company with tech expertise branching out to artificial intelligence and robotics requires huge amounts cash. Upon his appointment Vishal Sikka emphasized-“We will focus heavily on growth, and for that we need the benefit of our cash reserves .My plan will not be to what happened with earlier generations of low-grade software, of just always cutting costs, which is just a downward spiral. This is about renewing ourselves into a next-generation service company.”

Radical transformation requires an environment of innovation and an enormous drive to resist the forces of inertia and aversion to risk. At this critical phase of radical transformation it did not require the distraction of the buyback of shares which would whittle down its strategic cash reserves to enrich primarily a handful of rich founder –shareholders.

It was in this context that the battle lines between Sikka who came from impeccable product software background of working with SAP and the old guard of promoter-shareholder class were drawn.The allure of buyback of shares by the company was too irresistible as the low hanging fruit of cash reserves was just waiting to be plucked.The promoter shareholders of Infosys were straining at the leash and were clamouring for a buyback of their own after TCS in February 2017,HCL in May 2017 and Wipro in July 2017 announced buybacks that enriched their promoter shareholders.

Events moved in quick succession. At first there was negative flak directed against Sikka namely, erosion of corporate governance, salary packages, high severance pay and costly acquisitions. On 18th August 2017 Sikka resigned as CEO of the company. On 19th August Infosys announced a buyback of 11.3 crore shares at Rs 1,150 each.The buyback stock coup was executed with military precision: unlike a military coup it was bloodless but like a military coup there were no prisoners taken. On 24th of August 2017 Board Chairman R Seshasayee resigned along with Co- Chairman Ravi Venkatesan and two Directors Jeffery Lehman and John Etcemandy also tendered their resignation.

What is often not reported in the mainstream press is that the big push for buyback of shares also comes with income tax concessions given to share buybacks under the Finance Act 2016. Under the recent changes in the Tax Law listed companies do not have to pay any income tax.Additionally if their shareholders have held the shares for a period of more than 12 months then also it is exempt from tax. In the case of shares sold short term (ie shares held for less than 12 months) there is income tax effectively at 17.77%. On the other hand dividend distribution attracts tax at 20.90% in the hands of the company and 11.85% if the dividend is in excess of Rs 10 lakhs in the hands of the shareholder. Thus the tax laws favour the buyback route compared to dividend distribution.

Thus the tax laws of the BJP government gave impetus to the value extraction game of share buyback to favour the rentier shareholder class to indulge in stock market rigging instead of plowing the resources for genuine expansion and job creation. The BJP slogan “Make in India” soon became “Rig in India”.

Morever the stock buybacks operates as a gigantic suction pump drawing the cash reserves and profits of the company to fund the powerfully entrenched shareholders to the detriment of labour compensation and salary.This enormous suction pump called the stock buybacks is the root cause of inequality .

The corporate strategy of allocating corporate profits for share buyback came in for critical study in the Harvard Business Review. In an article titled "Profits Without Prosperity" Professor William Lazonick points out that the stock market boom and rising profitability of corporations is not translating into widespread economic gain. As he points out “While the top 0.1% of income recipients—which include most of the highest-ranking corporate executives—reap almost all the income gains, good jobs keep disappearing, and new employment opportunities tend to be insecure and underpaid. Corporate profitability is not translating into widespread economic prosperity.” A huge part of the blame, the author points out, is on account of stock buyback of companies.

Stock buybacks in US is a big wave as 449 out of 500 companies listed in S&P 500 index have used 54% of the earnings to repurchase its own stocks while dividends absorbed 37% of the corporate earnings.Writing for Forbes ,Steve Denning points out the dangers of stock buybacks for the economy “First, it leads to neglect of long-term investment projects. Second, firms borrow too much to pay for their buy-back habit. Third, the artificially inflated share prices amount to a financial bubble and will eventually tumble. Harvard Business Review called the practice “in effect, stock price manipulation.”The harmful effect of stock buybacks was aptly described by the Economist as “sniffing corporate cocaine” which gives a short term high while sacrificing long-term prospects of the company.

Arne Alsin writing for Forbes says "...For most of the 20th century, stock buybacks were deemed illegal because they were thought to be a form of stock market manipulation...."...but on account of intense lobbying a safe harbour was provided to corporations indulging in stock buybacks by virtue of Rule 10b-18, which instead encourages corporations to manipulate stock prices .What was generally considered as dubious practices of rigging the stock market was whitewashed as standard business practice which does not invite the wrath of law.

In the ultimate analysis the fascination of stock buybacks lies in its simplicity of quickly enriching stock holding corporate elites while preserving the illusion of prosperity.Others describe it as a parasitic value extraction game and not a value creation one.Joe Nocera points out in Bloomberg “companies are going to be spending it on stock buybacks and increased dividends. To put it another way, they are going to use the influx of cash to reward capital instead of labor”…. “ They’re a form of financial engineering intended to artificially boost a company’s share price.”

And finally who benefitted most from the 13000 crore Buyback bonanza? And who lost? The Nandan Nilekani family group netted Rs 667 crores(US $ 104.75 million), the Murthy family got a whopping Rs 623.05 crores(US $97.85 million).Amongst the other top 10 beneficiaries were Sudha Gopalkrishnan- wife of Kris Gopalkrishnan- who got Rs 172.5 crore .It is greatly ironic to note that Mr Narayan Murthy whose family grew their wealth by 623 crores(US $ 104.75 million) piously advises employees of Infosys to be content with less salary .

The biggest loser was the company itself as the cash reserves were diverted for enriching the promoter –shareholder instead of transforming the company into a next gen IT power house. For the employees in the future there will be long periods of salary stagnation with the spectre of layoff. For them the reward for hard work would be more hard work. For the rebellious few there would be an Aadhar mandated surveillance state to keep them in line.

And what about Vishal Sikka?He was exonerated of any wrongdoing with respect to the acquisition of Panaya by independendent enquiries.Post buyback there’s a strange silence on this matter from the promoter shareholders. Sikka remains gagged and bound head to toe by a non disparagement clause and consigned to oblivion by the mainstream press. His side of the story may not see the light of the day.

At the time of Vishal Sikka’s appointment Narayana Murthy joked “Vishal Sikka” means "Lots of Money,Big Money" .By a grim twist of savage irony, while the promoter shareholders reaped hundreds of crores of tax free moolah, Mr Vishal Sikka whose name evokes “Lots of Gold Coins” was himself short changed in the end.

C R Sridhar

Modi’s War on Cash: The “Ice Nine” Solution

2016-12-11T02:05:00.000+05:30

Decoding Demonetization: War on black money or War on Savings?

“The majority of the developed world either already has, or is introducing, legislation to require depositor bail-ins in the event of bank failures, rather than taxpayer bailouts, in preparation for many more Cyprus-type events, but on a very much larger scale. People are waking up to the fact that a bank balance is not considered their money, but is actually an unsecured loan to the bank, which the bank may or may not repay, depending on its own circumstances.”

Nicole Foss- Closing the Escape Routes

“This war has been in full swing in Europe and the U.S. for a long time. Governments plan to use negative interest rates, confiscatory taxes and other techniques to rob savers of their wealth. In order to do this, they have to force savings into digital accounts at large government-controlled banks.As long as savers can hold cash, they can avoid many of these confiscation techniques. Therefore, governments must eliminate cash.” Jim Rickards- author of The Road to Ruin.

The frantic push for a cashless economy was served to the hapless public as a Manichean struggle between the forces of good and evil. The forces of good are those digitally baptized citizens who use plastic cards wafting to and fro from digital wallets and the forces of evil being those people who use cash and support black money and counterfeiting of notes. This simplistic Manichean struggle between the forces of good and evil rests on shaky assumptions.

Firstly, all black money is not held as hoarded cash. At best it constitutes 6% of the black money. Bulk of it is spirited away in Tax free havens like Switzerland and Panama from there it is invested through mail box corporations in equity, real estate and bullion all over the world. It is a matter of utmost irony that a number of the celebrities who endorsed the demonetization scheme figure in the list of names of people who used the illegal offshore accounts in places like Panama.

Moreover, elaborate tax frauds are committed by corporate giants in squeaky clean cashless financial environment. In an elaborate charade called transfer pricing, corporations with their army of accountants and lawyers create a maze of shell companies (i.e. companies which have no real business activity) in Tax Havens which have secrecy laws concealing the ownership and the source of the funds. The tax strategy is fairly simple: book the profits in shell companies located in tax havens having low or nil rates of tax and show reduced or better still zero earnings in countries which have higher rates of tax.

Then there is another game called capital round tripping played by big corporate businesses which bring back their black money through bogus companies which have no real business. These funds are invested in the economy as Foreign Direct Investment. There have been no efforts by the Government to clamp down on these activities. At the Mahesh Buch Memorial Lecture at Bhopal on October 5, 2016 former Reserve Bank of India governor Y.V. Reddy said “there is a subsisting interest in influential policy circles to keep a window for round tripping open.”[i]

The Indian stock market is also rigged through the route called the Participatory note where the black money from Indian origin is parked in Mauritius in a shell company from which there is flow back of black money as investment in the stock market causing inflated share prices. It is no secret that demonetization is a wrong policy instrument to handle such sophisticated chicaneries. It is like slicing a loaf of bread with a hammer.

Secondly, the engines of black money are left intact especially election campaign contributions are often accepted in cash and unaccounted for. The BJP which is now on a moral crusade of eradicating black money has been guilty of accepting large sums of unaccounted money as campaign contributions. Moreover, bribes of government officials and the political class would continue unabated even after demonetization. There are already reports that government officials are taking bribes in freshly printed notes!

And lastly, counterfeit notes circulating in the economy is estimated to be in the region of 400 crores out of a total of sixteen lakh crores. In percentage terms it amounts a mere 0.03% of the entire currency. A sensible policy practiced by most governments is to gradually phase out certain notes with certain serial numbers to lessen the dangers of counterfeiting instead of firebombing the currency.

If demonetization as a policy does not serve its stated aims of eradicating black money and counterfeiting of notes, the question arises- what are its real objective? Is it a dress rehearsal for something more ominous in the form of draconian capital controls preventing physical withdrawal of cash from banks? Is the lack of availability of currency on account of “poor planning” or a manufactured crisis for the Government to push its agenda for a war on cash?

It is unfortunate that the discussion of demonetization does not challenge the theoretical underpinnings of a cashless economy nor is there any scrutiny of the conditions which give rise to a policy push to go cashless. It is to this task we must address ourselves if we are to unravel the demonetization package of the Modi government.

The conditions that give rise to anti- cash rhetoric and policy measures to go cashless are (a) stagnating economy in a deflationary spiral and (b) bank crisis plagued with bad debts and liquidity crunch.

A snapshot of the Indian economy reveals that the growth is fueled by expansion of credit and not incomes from steady job growth which in a state of decline. The real estate sector of the economy is pumped up with bank loans, black money and credit expansion. The stimulus to the economy is through easy access to credit for consumer spending. Thus an illusion of prosperity is maintained on a mountain of credit.

The crisis point of the Indian economy is that credit induced asset bubbles are in imminent danger of imploding unless there is fresh induction of credit into the system. The Indian economy is in a danger of deflationary spiral and the credit ponzi scheme has to be maintained through the expansion of demand of new credit money. But limit to credit expansion is hitting the proverbial road block as there are few lenders and few takers of credit as business confidence is low and the much lauded animal spirits is in short supply. The household sector has also lost appetite for more borrowings as there is 40% drop in borrowing when compared to 2014-2015.

But the constraint to monetary expansion is the endangered tribe of savers and the hoards of cash lying dormant in lockers or under the proverbial mattresses. On them the war on cash must be declared to achieve the big push for credit expansion. There must be a moral crusade against physical cash which is hoarded and not available for the orgy of borrowing and spending. To prise open the cash hoard there must be the shock of demonetization and laws against physical withdrawal of cash which ensures that the physical cash is corralled and sequestered in banks for further credit expansion. The mirage of prosperity is maintained by kicking the can down the road.

Given the scenario of deflationary spiral and a lull in the credit off take, the access to interest free money (bank deposits with zero rate of interest) and worse with negative rates of interest (where the bank deducts a fee or bank charges from the deposits made with the bank) become imperative policy push for the coterie of financial elites and advisors in the government. However, to nail down the escape hatch for bank customers who may become uneasy with deposits not earning any interest or worse negative rate of interest and withdraw cash physically, it is necessary to put in place draconian capital controls which prevent withdrawals of cash.

More serious than a stagnating economy with the threat of deflationary spiral is the banking crisis. Beset by bad debts caused by profligate borrowing by the corporate elites the public sector banks are saddled with non performing asset (NPA). Conservative estimates place the NPA at Rs 6 trillion.[ii] Moreover, ‘gross non-performing assets (NPAs) rose to 9.5 per cent of total advances in 2015-16, up from five per cent the year before.’ [iii]The bad news keeps piling up ‘But as most banks didn’t adequately provide for these loans, it has put pressure on their solvency position. If PSBs were to currently provide for all their bad loans, it would erode 66 per cent of their total net worth.’[iv] The PSU banks have reported a loss of Rs 17,672 crore in 2015-16, down from a profit of Rs 36,350 crore in 2014-15.’[v] This has a ripple effect ‘their stock prices have tanked, eroding crores of rupees in market capitalisation. The Nifty PSU Bank Index declined from a high of 4,419.25 in January 2015 to 2,913 on July 20, 2016.’[vi]

Another nail in bank sector’s coffin appears to be severe erosion in the bank deposit base. As a business report states ‘Indian banks are staring at a deposit erosion of Rs 1.5-2 lakh crore between September and November as foreign currency non-resident deposits (FCNR) mobilized in 2013 mature around that time. This could result in an acute liquidity shortage and a possible de-growth of balance sheets.’ The savings from the household sector fell to 9.8% of GDP reaching the lowest level in 25 years.[vii]

Thus deposits being mobilized from the household sector of the economy appear grim. The problem of liquidity crunch and the accumulating corporate bad loans is made worse in a fractional reserve banking system where the mountain of credit rests on a sliver of liquidity base. In the event of financial panic involving banks, investors would take their deposit from banks in physical cash and bolt for safety.
There are basically two approaches to the problem. First is to make money readily available to satisfy the demand and hoping thereby to calm the panic and stop the bank run. This is a classic central bank function as the lender of last resort. The second approach is to say no and freeze the system. This approach is also called “Ice Nine”.[viii]

The term “Ice Nine” is from the novel ‘cat’s cradle’ written by Kurt Vonnegut. This substance which was discovered by Dr. Felix Hoenikker- a character in the novel- could freeze another molecule of water when it came into contact with it. “Ice Nine” had the awesome capacity to freeze rivers, lakes and oceans. In a financial panic, “Ice Nine” approach means taking draconian measures to prevent or severely restrict withdrawal of physical cash from bank accounts, shutting down ATM’s and ordering asset managers not to sell securities. In other words this means financial repression or lockdown.[ix]

“Ice Nine” was put to deadly effect in the Cyprus banking crisis in 2012 and the Greek sovereign crisis in 2015. The financial repression was brutally enforced: Banks were shut down and the ATM machines were taken out. The banks blocked the depositors from withdrawing physical cash from their accounts. A mad scramble for cash started. In Cyprus the Laiki Bank was shut down and the bank of Cyprus was restructured by the govt. Deposits above the insured amount of Euro 100,000 was transferred to a bad bank where the chance of recovering any sum was next to impossible. At the bank of Cyprus, the meat cleaver was applied with deadly effect: around 47.5% of the uninsured deposits over Euro 100000 were used to recapitalize the bank.[x] Financial commentators whose humour was on the dark side called it the Cyprus haircut. Some called it bail-in. Others called it simply officially sanctioned theft.

The ‘Cyprus haircut’ got policy status in the newly formed global organization by G20 called the Financial Stability Board (FSB). In an arcane technical report FSB made it clear that in the event of bank losses the depositors should absorb the losses. The bank deposits could be used to write down and convert into equity all or parts of the unsecured deposit lying with the bank.

The ‘Cyprus haircut’ was applied with deadly effect in the Greek crisis during 2015. The modus operandi was the same: the banks were shut down and the ATM machines stopped dispensing cash. Credit cards were declined by merchants and the people resorted to quasi barter system to keep trade and commerce going. Depositors realized that their bank deposit was not theirs and could be frozen any time. In other words they could get a Cyprus haircut.

The demonetization shock therapy administered by the corporate friendly neo-liberal government of Modi could in all probability be another bail-in for the Public sector banks plundered by the corporate elites. Ominously the key ingredient “Ice Nine” (freezing or restricting cash withdrawals) seems to be essential part of the package.

The government’s “Ice Nine” has grave implications for the household sector savings in bank accounts. This includes senior citizens having deposits in the banks who are struggling against medical and other costs and who are dependent on interest from fixed deposits. Will their sequestered cash lying frozen in bank accounts be used to wipe out the bad bank debts of the corporate elites? Will the sequestered bank deposits suffer negative rate of interest from which there is no escape?

At risk is also the informal sector of day workers, small businesses and farmers who would be locked in digital wallets and pummeled by transaction costs, bank fees and service tax. Gone are the days when one could withdraw cash freely and transact without burdensome charges or fees. It is standard operating procedure for governments wedded to neo-liberal policies to lessen corporate tax and income tax in favour of widening the base for regressive indirect taxes, levies, and charges falling on the wretched of the earth. For neo-liberal ideologues there is no greater pleasure than in extracting wealth from the bottom of the pyramid.

The road to cashless paradise would not be a smooth one. With “Ice Nine” in place for freezing cash in bank accounts or digital wallets, it is unlikely that the meek shall inherit a digital Eldorado. In a deadly run up to a cashless society it is more probable that they shall get a surgical haircut- Cyprus style.

C R Sridhar

[i] Former RBI Governor Y.V. Reddy on Black Money, Tax Evasion and Lawlessness in India

http://thewire.in/82333/yv-reddy-speech-black-money/

[ii] http://www.firstpost.com/business/rs-600000-crore-npas-over-90-with-psbs-is-the-bad-loan-story-turning-scary-2822560.html

[iii] http://www.business-standard.com/article/specials/statsguru-tackling-the-npa-problem-in-public-sector-banks-116072400718_1.html

[iv] ibid

[v] ibid

[vi] ibid

[vii] www.livemint.com /Money/PMP0KTB4R8qvV0S1hulj0K/Household-gross-financial-savings-as-percentage-of-

GDP-lowes.html

[viii] The Road to Ruin-James Rickards- chapter This is the end.

[ix] ibid

[x] www.rt.com /business/cyprus-crisis-bailout-deposit-631/

Demonetisation Shock Therapy: State Sponsored Financial Repression

2016-11-26T23:14:00.000+05:30

"If You Can't Dazzle Them With Brilliance, Baffle Them With Bull." WC Fields

“You never want a serious crisis to go to waste. And what I mean by that is an opportunity to do things you think you could not do before.”-Rahm Emanuel,Former White House Chief of Staff in the Obama administration.

Naomi Klein in her bestselling book ‘The Shock Doctrine: The Rise of Disaster Capitalism’ wryly observed “Extreme violence has a way of preventing us from seeing the interests it serves.” Perhaps the small coterie of advisors close to Prime Minister Modi, driven by the ideology of disaster capitalism, took Klein’s observation seriously.

On November 8 the shock to the financial system was administered by Mr. Modi by demonetising 500 and 1000 rupee notes. India is an overwhelmingly paper currency country: some 90% of the transactions are done with cash. India's cash-to-GDP ratio is 12% More than half of Indians still don't have a bank account and some 300 million have no government identification. The two scrapped denominations - 500 and 1,000 rupees - account for more than 86% of the value of cash in circulation. By this diktat the government effectively neutralized around 86 percent of the currency in India. The staggering implication for the informal sector in the Indian economy which employs close to 94% of the labour force was disastrous. The daily wage earners, farmers, small traders and small businessmen were left helpless clutching the dud 500 and 1000 rupee notes in their hands. Even the economist Lawrence Summers ,author of the of the infamous World Bank Memo was driven to write... “Most free societies would rather let several criminals go free than convict an innocent man. In the same way, for the government to expropriate from even a few innocent victims who, for one reason or another, do not manage to convert their money is highly problematic....”. [i]

The RBI had its own Marie Antionette moment a few days later in a press release of November 12, 2016.It said “public are encouraged to switch over to alternative modes of payment, such as pre-paid cards, RuPay/Credit/Debit cards, mobile banking, internet banking. All those for whom banking accounts under Jan Dhan Yojana are opened and cards are issued are urged to put them to use. Such usage will alleviate the pressure on the physical currency and also enhance the experience of living in the digital world ." Economist Jayati Ghosh was aghast and wrote .. “Statements like this make one wonder whether the RBI is living only in the digital world. Surely the worthies in that institution have some idea of the conditions under which banking and money exchange occur for most Indians? [ii] For some families for whom getting a square meal was a luxury the mocking advice of the Modi government was if you don’t have food eat plastic cards.

ATM machines became cashless and long queues formed outside banks to exchange the old notes for new ones. From this inane compliance ritual of standing in endless queues outside banks, heart wrenching stories emerged. A number of senior citizens died of exhaustion. Children and the elderly who were sick died as they were refused admission to hospitals as they could not pay with old notes. Farmers could not buy seeds for the sowing season as they did not have the new currency to pay for it. For the first time in post independent India the financial system went into a lockdown mode.

The collective punishment on India’s poor and the informal sector where millions eke out a miserable livelihood was severe as close to 50 percent of them do not have bank accounts and formal identification papers to open bank accounts. However this draconian measure was justified by the NDA government of Modi as a patriotic duty to eradicate the twin evils of black money and counterfeit currency used by terrorists.

True to form the mainstream TV channels- with the exception of NDTV (Hindi) News- which largely serve as PR agencies of corporate houses spewed patriotic drivel about pain, sacrifice and stoicism as national virtues. Tall and ludicrous claims were made by the BJP ministers that terrorism was dealt a death blow by the surgical strike of knocking out 86% of the Indian currency. Critics of demonetisation were shouted down as unpatriotic with the passionate fervor of McCarthyism. Donning the mantle of a messianic prophet PM Modi exhorted the poorest of the poor to move towards a cashless society.

Cutting beneath the masochistic hysteria of pain and national sacrifice whipped up by the propaganda machine of corporate media and the Modi government, one discerns fundamental flaws in the argument that demonetization eradicates black money and counterfeit currency. It is as absurd as arguing that to prevent bank robberies one has to completely shut down the banks.

Moreover, elaborate tax frauds are committed by corporate giants in squeaky clean cashless financial environment. As I explained in my article Inside the Spiders Web: Tax havens and Dirty Money “In an elaborate charade called transfer pricing, corporations with their army of accountants and lawyers create a maze of shell companies (i.e. companies which have no real business activity) in Tax Havens which have secrecy laws concealing the ownership and the source of the funds.[iii] The tax strategy is fairly simple: book the profits in shell companies located in tax havens having low or nil rates of tax and show reduced or better still zero earnings in countries which have higher rates of tax.”

Then there is another game called capital round tripping played by big corporate businesses which bring back their black money through bogus companies which have no real business. These funds are invested in the economy as Foreign Direct Investment. There have been no efforts by the Government to clamp down on these activities. At the Mahesh Buch Memorial Lecture at Bhopal on October 5, 2016 former Reserve Bank of India governor Y.V. Reddy said “there is a subsisting interest in influential policy circles to keep a window for round tripping open..”[iv]

There is no gainsaying that by rendering 86% of the currency as paper trash and carpet bombing the informal sector dependant on cash, the demonetizing of currency can best be described as a quixotic venture. Or is it a dress rehearsal for something more ominous in the form of draconian capital controls preventing physical withdrawal of cash from banks? Is the lack of availability of currency on account of “poor planning” or a manufactured crisis for the Government to push its agenda for a war on cash?

Before we discuss this issue we have to take a snapshot of the Indian economy. Beneath the rosy headlines of robust GDP growth rates the fact remains that the growth is fueled by expansion of credit and not incomes from steady job growth which in a state of decline. The top corporate elites have borrowed heavily from public sector banks without any hope of paying off the debt. The public sector banks are groaning under the weight of corporate loans which may never be paid. The real estate sector of the economy is primed up with bank loans and credit expansion. The stimulus to the economy is through easy access to credit for consumer spending. Thus an illusion of prosperity is maintained on a mountain of credit.

The crisis point in the Indian economy has reached as credit induced asset bubbles are in imminent danger of imploding unless there is fresh induction of credit into the system. The Indian economy is in a danger of deflationary spiral and the credit ponzi scheme has to be maintained through the expansion of demand of new credit money. But limit to credit expansion is hitting the proverbial road block as there are few lenders and few takers of credit as business confidence is low and the much lauded animal spirits is in short supply. As Nicole Foss observes “Natural limits for both borrowing and lending threaten the capacity to prolong the credit boom any further, meaning that even if central authorities are prepared to pay almost any price to do so, it ceases to be possible to kick the can further down the road. Negative interest rates and the war on cash are symptoms of such a limit being reached. As confidence evaporates, so does liquidity. This is where we find ourselves at the moment — on the cusp of phase two of the credit crunch, sliding into the same unavoidable constellation of conditions we saw in 2008, but on a much larger scale.”[v]

But the constraint to monetary expansion is the engendered tribe of savers and the hoards of cash lying dormant in lockers or under the proverbial mattresses. On them the war on cash must be declared to achieve the big push for credit expansion. There must be a moral crusade against physical cash which is hoarded and not available for the orgy of borrowing and spending. To prise open the cash hoard there must be the shock of demonetization and laws against physical withdrawal of cash which ensures that the physical cash is corralled and sequestered in the banks for further credit expansion. The mirage of prosperity is maintained by kicking the can down the road.

However, to nail down the escape hatch for bank customers who may become uneasy with deposits not earning any interest or worse negative rate of interest and withdraw cash physically, it is necessary to put in place draconian capital controls which prevent withdrawals of cash and also prevent the messy spectacle of bank runs. Once locked in the bank account the depositors can get a surgical scalping to take care of the messy NPA’s of banks caused by profligate lending to corporate elites. The entire class of savers such as senior citizens, deposit holders belonging to the lower middle class would be thrown under the bus.

The winners of the demonetization shock therapy would be the corporate elites who caused the debt crisis for the banks in the first place. For them the loans would be written off at the cost of bank customers. Following the dictum that every disaster offers a windfall they would appear once again as saviours after getting the licenses for starting digital banks or wallets.[vi] Here the shell shocked ordinary people would invest their capital without returns whatsoever for the joy of walking cashless in the digital space. It is de rigueur that animal spirits should be rewarded handsomely in the business friendly environment of NDA government.

The demonetization of the currency has also a shock and awe element to it: the shock of losing real money and the awe of being herded in digital pen. Cash carries a bad odour. Are you using cash because you are engaged in drug trafficking or are you a terrorist wanting to buy arms and explosives? Should you be flagged for suspicious activities for questioning by the national security state?

Apart from the searing stigma that cash is associated with criminality, there is immense pressure on the denizens of the informal sector to tread the virtuous path to digital- “you pay- we play” pens like Paytm. Also comfortingly called digital wallets they offer bleating sheep solace and comfort from the ordeal of cash transactions. Once secure in the pay pen the sheep can be burdened with transaction costs which swells the profits of the digital banks and also the ubiquitous service tax can be imposed by the government which swells the coffers of a state hostile to social spending.To sum up :

1. Every financial transaction can be taxed
2. Every financial transaction can be charged a fee
3. Bank runs are eliminated [vii]

In this digital pen we shall serve with docility and endure “the stifling hygiene of the digital panopticon being constructed to serve the needs of profit-maximising, cost-minimising, customer-monitoring, control-seeking, behaviour-predicting commercial bureaucrats” and tax officials.

Don Quijones at the website Raging Bullshit is more blunt when he says..” The reality is a whole lot darker. The war on cash is being waged for the exclusive benefit of those who already wield an inordinate amount of power and control over the economy and the people that are struggling in it. And they want more. By slowly, quietly killing cash, they seek to seize the last remaining thing that offers people a small semblance of privacy, anonymity, and personal freedom in their increasingly controlled and surveyed lives. And the way things are going, they’ll get it...”[viii]

Imprisoned within the narrow confines of this digital panopticon from which there is no exit, we will lose our freedom over our money. We will no longer have the choice of withdrawing cash from banks plagued with bad debts or withdrawing from irrational credit orgies as the risk of losing our money is too high.

Facing the signs of no cash and no exit we shall be agitated at the first signs of Financial Meltdown but we shall be pacified by the handlers of the pen. We will be reminded of our patriotic duty to the state to pay taxes. Ultimately calm will return.

After all the handlers imbued with the wisdom of Jean Baptiste Colbert the French finance minister to King Louis XIV know, "The art of taxation consists in so plucking the goose as to obtain the largest amount of feathers with the least possible amount of hissing."

C R Sridhar

[i] Corruption Will Continue, Says Former US Treasury Secretary Larry Summers on Demonetisation http://thewire.in/81659/larry-summers-on-demonetisation-india/

[ii] The Political Economy of Demonetising High Value Notes http://www.thehindu.com/news/resources/the-political-economy-of-demonetising-high-value-notes/article9348002.ece

[iii] C R Sridhar Inside the Spiders Web: Tax havens and Dirty Money http://www.opednews.com/articles/Inside-the-Spiders-Web-Ta-by-C-R-Sridhar-Corporations_Economy_Globalization_Money-Power-Psychopaths-141028-742.html

[iv] Former RBI Governor Y.V. Reddy on Black Money, Tax Evasion and Lawlessness in India

http://thewire.in/82333/yv-reddy-speech-black-money/

[v] Negative Interest Rates and the War on Cash part 1- Nicole Foss- Automatic Earth

[vi] RBI grants “in-principle” approval to 11 Applicants for Payments Banks https://rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=34754

[vii] The War On Cash: Officially Sanctioned Theft https://www.peakprosperity.com/blog/93050/war-cash-officially-sanctioned-theft

[viii] Who’s Powering the War on Cash? http://wolfstreet.com/2016/10/19/powers-on-forefront-of-war-on-cash/

The Planet of Arabs: Breaking the clichéd Western Narrative on Terror

2015-11-19T21:07:00.000+05:30

Kerry Davis's globe "Under the Wire" a barbed-wired and red paint-splattered planet

“With the communist bogey exhausted, we are told of an insidious peril in our midst: the fearful prospect of minarets and Sharia law marching across the European landscape, destroying civilization. But for fear to work in a tangible form, we must have the visible impact of terror all around us. That is where we are now.”-Richard Cottrell- British journalist.[i]

There is a chilling sense of déjà vu about the massacre in Paris which claimed 129 lives and left nearly 200 injured.

The terrorists reportedly fired on innocent civilians in a Cambodian restaurant, detonated explosives near the Stade de France where the French President Francois Hollande was watching a soccer match between France and Germany and fired randomly at the Bataclan concert hall, where terrorists held up to 100 hostages. When the police stormed the concert hall the terrorists set off the bombs in their suicide belts and killed the hostages. There were other incidents of senseless killings of passersby on Rue de Charonne, Louvre and Les Halles.

The Islamic State claimed responsibility for the terrorist attacks at the heart of Paris. After the initial confusion and panic among the Parisians, the French Government got into the act of showing the bewildered people that they were in charge. A long drawn worried face of Hollande appeared on French TV assuring the French people that swift and terrible retribution would follow and that France was at war with Islamic terrorism.

While the shootings and bomb detonation of the terrorists at the heart of Paris hogged world media attention, the burning of refugee camps in Calais was played down indicating perhaps the less worthy victim status of refugees mainly from Syria.

The media went along scripted lines by claiming that the French principles of pluralism, tolerance and broadmindedness was under attack by the planet of the Arabs.

Soon disconcerting facts emerged bearing uncanny resemblance to the Charlie Hebdo killings which took place in Paris in January this year. One of the most troubling facts to emerge was that the French Security police in charge of counter-terrorism had prior knowledge about the goings on of a terrorist who was put under surveillance. But they took no action.

Moreover, the gang of terrorists had sophisticated guns and explosives and conducted the series of attacks with military precision. Also, the attackers left identification papers like passport and other such documents which were found at the scene of carnage.

Add to that another pattern emerges- at least five attacks centered on the 11^th arrondissement part of Paris which has young people such as bohemian artists espousing leftist causes. As ironies go, the Islamic militants spared the power elites of Paris and instead mowed down the progressive young who stood against militarism and Islamophobia.

While these questions may never be answered and the sensitive information about the terrorist killings may remain as classified material of the French National Security State, there is an unvarying trend in the terror narrative, especially, in the Western world after 9/11: that the evil of terrorism is external and emanates from the planet of Arabs to destroy the openness and tolerance of western culture.

Any resistance to the dominant narrative of western terror discourse invites a swift reprimand in the form of verbal abuse - terrorist sympathizer or worse- fu*k**g liberal.

The Western terror narrative, describing the nature and causes of terrorism expounded by western media, politicians and terror experts of the military industrial complex, is essentially a propagandist narrative in which six elements are woven together to form an unified discourse of deception.

Firstly, The West stands for decency and is an innocent target and victim of terrorism. It follows from this proposition that the West does not engage in or support terrorism in any way, shape or form.

Secondly, The West only responds to other people’s use of force. The invasion of Iraq by US was justified on the specious plea of Saddam’ regime possessing weapons of mass destruction or harboring Islamic terrorists- both false accusations.

Thirdly, unlike in the West, terrorists do not adhere to civilized norms of conduct.

Fourthly, in those cases when the west supports insurgents who use force this is done in behalf of democracy against repressive regimes such as Libya and Syria. Furthermore, the insurgents supported by the west never kill innocent civilians.

Fifthly, Open societies and vibrant democracies such as in the west are vulnerable to terrorists whose ultimate object is to destroy moderate governments.

And lastly, the malevolent power to undermine democracies radiates from the Planet of Arabs such as Iraq, Iran, and Syria.

As summed up by Edward Herman and Gerry O’Sullivan in their essay ‘Terrorism as Ideology and Cultural industry’, “This is clearly a patriotic model, in which all virtues are ascribed to oneself and one’s friends and clients; all villainy is attached to the enemy.”[ii]

Excised from public memory and shoved down the black hole of manufactured amnesia is the role of US and the NATO axis in creating radicalized Islamic fighters for their geopolitical ends.

The US sponsorship of Jihad arises from ‘protection of strategic geography and defending sea and air access routes linked to defending the vast reservoirs of oil and natural gas in and around the Arabian Peninsula and the Persian Gulf, which the industrial world had begun exploiting and depended upon.[iii]

Post Second Word War, the rivalry between US and Russia led to the Cold War. During this phase the policy makers and think tanks associated with the US administration perceived Soviet Russia as a main threat to US geopolitical/ oil interests in the Middle East. The policy makers and political strategists decided that the chief enemy of Communism and Third World Progressive Nationalism (Arab Socialism of Nasser) would be best countered by the Religion of Islam.

As John. K.Cooley, the author of the book Unholy Wars, explains- ‘The tacit consensus was that the Muslim religion, fundamentally anti-Communist, if translated into politics, could be harnessed as a mighty force to oppose Moscow in the Cold War, in a world growingly polarized by that war.’[iv]

What started off as flirtation with Islamic extremism became a marriage of convenience during the Soviet Russian occupation of Afghanistan in 1979. The principal strategy of National Security Advisor Zybygniew Bryzenski was to draw Soviet troops into the Afghan trap. As Ahmed Rashid, an expert on Islamic extremism explains-“With the active encouragement of the CIA and Pakistan's ISI [Inter Services Intelligence], who wanted to turn the Afghan jihad into a global war waged by all Muslim states against the Soviet Union, some 35,000 Muslim radicals from 40 Islamic countries joined Afghanistan's fight between 1982 and 1992. Tens of thousands more came to study in Pakistani madrasahs. Eventually more than 100,000 foreign Muslim radicals were directly influenced by the Afghan jihad.”[v]

During the Presidency of Reagan -the Washington Post reported in 1992-“The new covert U.S. assistance began with a dramatic increase in arms supplies -- a steady rise to 65,000 tons annually by 1987, ... as well as a "ceaseless stream" of CIA and Pentagon specialists who traveled to the secret headquarters of Pakistan's ISI on the main road near Rawalpindi, Pakistan. There the CIA specialists met with Pakistani intelligence officers to help plan operations for the Afghan rebels.”

The CIA operated through the Pakistan’s Inter-Services Intelligence (ISI) in training the freedom fighters and the Saudi provided the finance. The jihad against the Russian troops in Afghanistan was also financed by a drug trade controlled by the CIA in Afghanistan which supplied 60% of the heroin demand in US market. Thus the drug trade provided the Islamic fighters billions of dollars in their fight against the Russians in Afghanistan.

The Russians were defeated in Afghanistan and withdrew their troops in 1989. But the price that was paid was high. Afghanistan was devastated in the war and lay in ruins. About 4 million people became refugees in Iran, Pakistan, and Central Asia. Another horrific consequence of the alliance of Saudi Arabia and Pakistan with US hatched the Taliban movement which imposed repressive rule in Afghanistan.

Even after the Soviet withdrawal, US continued its support for Jihad through ISI for covert operations in Central Asia, the Caucasus and the Balkans. The covert support was extended to the rebels in Chechnya. The geopolitical objectives were clear. The rebels were instrumental in disrupting the Russian oil pipeline which transits through Chechnya and Dagestan. “The indirect beneficiaries were the Anglo-American oil companies” says Michel Chossudovsky, ‘which are vying for control over oil resources and pipeline corridors out of the Caspian Sea basin.’[vi]

The contagion of Islamic extremism spread to Egypt where there was a terrorist attack against foreign tourists which left 58 killed. In Algeria during the 90’s the Islamic militants killed over 1,00,000 persons in the campaign of terror. In Kashmir, the ISI supplied arms to Kashmiri insurgents who wanted independence from India.

Thus, it could be seen that Islamic terrorism was not a spontaneous phenomena but actively sponsored by US foreign policy to stem the Russian influence in Afghanistan. The ultimate objective of US policy was to eradicate the influence of progressive nationalists and to actively promote an anti-Western fundamentalist regime consisting of a gaggle of hereditary monarchs, clerics, mullahs, imams and ayatollahs.

US backing of the Islamic State (ISIS) came in the context the invasion of Iraq in 2003 and the overthrow of Saddam Hussein. Thereafter a predominantly Shiite administration came to power. As the Sunnis in Iraq lost power after the fall of Saddam, conflicts grew between Shias and Sunni. From the Sunni discontent, Al Qaeda in Iraq was born.[vii] By 2013 it was called ISIS (Islamic State of Iraq and Syria) and extensively funded by Saudi Arabia and Qatar- both allies of US. It is a ragtag gang of Baathist elements, Sunni Arabs and hardened criminals released from Saudi prisons.

US had a new geopolitical and strategic crisis- the Shia alignment of Iraq and Iran with Syria as the ally of Iran. The US foreign policy makers saw the growing power of Iran in the region and thought it imperative to cut the Shia influence in the Middle East.

As Seymour Hersh wrote in an article in the New Yorker, “To undermine Iran, which is predominantly Shiite, the Bush Administration has decided, in effect, to reconfigure its priorities in the Middle East. In Lebanon, the Administration has cooperated with Saudi Arabia’s government, which is Sunni, in clandestine operations that are intended to weaken Hezbollah, the Shiite organization that is backed by Iran. The U.S. has also taken part in clandestine operations aimed at Iran and its ally Syria. A byproduct of these activities has been the bolstering of Sunni extremist groups that espouse a militant vision of Islam and are hostile to America and sympathetic to Al Qaeda.”[viii]

In 2011 the US-NATO alliance with support from France funded and supplied arms Islamic extremist forces to overthrow Ghadafi in Libya. The regime change resulted in 30,000 killed in the Libyan civil war.

Thereafter the US- NATO combine started to focus on their objective of cutting the Shia influence to size by creating strategies of tension by fomenting trouble for Syria which was ally of Iran. The target this time was Basher Assad.

A willful decision was taken by the Obama Administration to fund and arm extremist Islamic organization like the Salafists, Al Nusra and ISIS for the sole objective of overthrowing Assad. In a bloody civil that followed and still continuing, the Russians entered the fray to bolster the Assad regime by bombing the proxy US-NATO army- ISIS.

France as a partner of the NATO combine has also stoked the flames of radicalized Islam. Tony Cartalucci writing in Global Research says “France, as part of a NATO-led coalition, has been arming, funding, aiding, and otherwise perpetuating Al Qaeda terrorists for years, beginning, on record in Libya with the overthrow of Libyan leader Muammar Gaddafi and continuing until today with NATO’s arming, harboring, and backing of Al Qaeda terrorists including the so-called “Islamic State” (ISIS) within and along Syria’s borders.” [ix]

The thumb nail sketch of the dangerous games played by western powers through NATO military coalition destroys the stereotype narrative of western media that incidents of terror which occur on western soil are spontaneous acts of evil of radicalized Islam emanating from the planet of Arabs.

But the use of radicalized Islam- nurtured, financed and armed- by Western powers for their deadly geopolitical games is only part of the big picture but there is an important part missing in the picture, namely, an explanation of the bizarre phenomena of random acts of senseless violence occurring at the heart of metropolitan centers of power of the Western world.

In his excellently researched book ‘NATO’s Secret Armies-Operation Gladio and Terrorism in Western Europe’ Danielle Genser, a Swiss historian, points that NATO with the help of intelligence agencies of CIA (US) and MI6 (Britain) created a secret army of anti- communists code named Gladio (sword) which operated in Italy and other European countries whose sole object was to create a climate of fear by terrorist acts with the help of legally elected governments. The main purpose of the terrorist acts was to instill a feeling of revulsion and blame them on communist parties and movements.

With the fall of communism and the collapse of the Soviet Union, the raison d’etre of Gladio NATO which was essentially anti-communist in nature became outdated. The global threat of communism as a script had to be consigned to the dustbin of historical irrelevance and a new threat in the form of the “Green Tide of Islam” posing a threat to the Christian civilization had to be invented.

While it may be tempting to dismiss the theory that legally elected democracies of the western governments are capable of stage managing acts of terrorism to drive their people to support unpopular domestic policies as delusional fantasies of pot smoking conspiracy theorists, we do so at our peril.

If we look at our world it resembles a New World Disorder. Large parts of the Western world including the super power US have become corrupt oligarchies where a Obama or a Hollande are mere figureheads of a fragile barely functioning constitutional government. These governments are- in the words of Sheldon Wolin-“inverted totalitarianisms” in which they have merely the form of democracy while the substance is of fascism.

But real power resides- in the words of Richard Cottrell- in a corporate order composed of big business, financial elites and the ravenous military- industrial complex.[x] This cabal of criminal gangsters or elements of the Deep State play on escalating world tensions driven by global poverty, swelling populations and the finite limit of food, oil and minerals.[xi] Hysterical Islamophobia comes in handy to usher in a National Security State which declares perpetual emergency and endless wars.

The terrible spectacle of random and senseless violence which Paris experienced on the 13^th of this month was successful. A state of emergency has been declared with suspension of civil rights for three months and doubling of the military budget. The French people suffering from the awe and shock of the recent terrorist violence have meekly complied. Without conducting any investigation or enquiry France promptly went on a bombing campaign of Syria.

David Cameron- Prime Minister of Britain- a warmonger following the hallowed tradition of another war criminal and hired gun for the Kuwaiti Sheiks-Tony Blair, is all set to go on a quixotic adventure of bombing Syria to the Stone Age without getting any approval from the parliament. Putin of Russia who is recovering from the shock of the Russian plane with 224 passengers being blown off the skies by ISIS is also on a bombing spree of Syria.

Orwellian Big Brother has finally come to roost. If George Orwell, the author of 1984, were to be alive today he would be looking at the sea of bewildered herd cowering behind the barbed wire of the National Security State under the panoptic gaze of Big Brother who ensures their enslavement by endless wars to secure endless peace.

Perhaps, he would have shaken his head and muttered in utter disbelief-“I thought I was writing fiction.”

C R Sridhar

[i] Gladio- Richard Cottrell- author’s Preface-Progressive -2012 edition.

[ii] Western State Terrorism- edited by Alexander George- page 44.

[iii] Unholy Wars: Afghanistan, America and International terrorism- John.K.Cooley- page 14.

[iv] ibid

[v] Ahmed Rashid, The Taliban: Exporting Extremism, Foreign Affairs, November-December 1999(Quoted in who is Osama Bin Laden?-Michel Chossudovsky-http://www.globalresearch.ca/articles/CHO109C.html

[vi] ibid

[vii] http://www.globalresearch.ca/america-created-al-qaeda-and-the-isis-terror-group/5402881

[viii] http://www.newyorker.com/magazine/2007/03/05/the-redirection

[ix] http://www.globalresearch.ca/france-armed-terrorists-that-struck-paris/5423440

[x] Gladio- Richard Cottrell-Progressive 2012 edition –page 20.

[xi] ibid

Happy Hours

2015-11-01T07:46:00.000+05:30

“I’m going to drink all the booze. I’m going to turn on the propane. I’m going to pass out and that’ll be it,” she told herself. “And if I wake up, I’m going to light a cigarette and blow us all to hell.”-Sixty year old Linda May quoted in The End of Retirement.[i]

British poet Philip Larkin once quipped, ‘Work, paradoxically enough, is a comfort. One wakes up wanting to cut one’s throat; one goes to work and in 15 minutes one wants to cut someone else’s throat – complete cure!’Larkin’s sardonic humor about work unravels the strange paradox of work being therapeutic while at the same time evoking a profound sense of alienation, angst, and murderous fury among the working people raging against the empty ritual of work itself.

The phenomena of work related rage murders is explored in depth in a remarkably courageous book published in 2005 titled ‘Going Postal’. In his book which is cliché free, Martin Ames takes a hard unsentimental look at rage murders taking place in corporate workplaces. His study on rage murders is pure nitroglycerine.From a careful examination of rage murders taking place in postal offices (hence the term going postal) and other corporate workplaces in the period 1983 to 2004, there appears a familiar pattern.

Patrick Sherill-the man who gave the world the term "going postal."(Source-nydailynews)

According to the author “One reason the whole rage murder phenomenon may have started with post offices is that the eight-hundred-thousand-employee-strong service, the nation’s second-largest employer, was one of the earliest and largest agencies in the post–New Deal era to be subjected to what was essentially a semi-deregulation and semi-privatization plan, in what the neoconservative American Enterprise Institute calls “the most extensive reorganization of a federal agency.” [ii]Collective bargaining was weakened by banning strikes and profits were extracted by a stress- jammed work atmosphere squeezing the juice out the workers. This was called increasing worker productivity.

But it was the paradigm shift of the Reagan Revolution which transferred wealth from the bottom of the pyramid to the top 1% of corporate elites which could be the main culprit of rage murders. Reaganomics has become so deeply entrenched that it was carried under the Clinton administration when Wall Street was deregulated; downsizing continued unchecked and anti-employee pro shareholder culture became a way of life.

Corporations changed from providing stable jobs for working people to fear juiced stress engines. As Ames says-“New corporate heroes like General Electric’s Jack Welch spoke of “unlimited juice” to squeeze from his employees—and wring their rinds he did. While work became increasingly stressful and time consuming with fewer rewards for the majority, capital was sucked from the middle and lower classes of working America and deposited into the offshore accounts of the very highest layer of the executive and shareholder class.

As the Economic Policy Institute reported, “What income growth there was over the 1979–1989 period was driven primarily by more work at lower wages”[iii] The middle class in America is also imploding with more people going down the food chain while corporate CEO’s have seen their pay skyrocket 571% times between 1990 and 2000.

The so called boom of the nineties, Census Bureau data suggests, has left most of the middle class in US in the cold and it is continuing. This can only fuel rage in a society which is seen as increasingly unjust with “the rich robbing the middle-class to make the rich into the mega-rich.”

If eviscerating the working class and the middle class were not bad enough, the enduring legacy of the Reagan era saw the destruction of political solidarity among the American people. The post-Reagan era saw the futility of the two party system representing the same corporate interests. The voice of the people was seldom heard in the Congress which is dominated by lobbies for special interests. Grievances against corporate abuse against employees in workplaces such as unfair dismissals and harassment were met with indifference. The only mode of redress left for the employee is a violent one- with a shot gun.

Anger is also fuelled by a sterile corporate culture which lacks empathy with its employees. This is demonstrated in summary firing of employees from the work place. This cruel ritual involves the escorting of the dismissed employee out of the office by security guards with the personal effects of the employee dumped in a box.

In Amazon, the giant retailer corporation, a vicious dog eat dog atmosphere prevails where employees are encouraged to snitch on each other to further the profitability of the corporation. As the article on Amazon says “ Losers leave or are fired in annual cullings of the staff — “purposeful Darwinism,” one former Amazon human resources director said. Some workers who suffered from cancer, miscarriages and other personal crises said they had been evaluated unfairly or edged out rather than given time to recover.”[iv] The toxic labor practices are justified by the spin masters of Human Resources by using mellifluous words of corporate doublespeak: productivity, innovation, and competition.

Amazon.com’s rather ironic motto is displayed in its state-of-the-art West Phoenix fulfillment center

Historically, the broad assault on the working people came through an ideology of self regulating market which could be traced back to from the end of 18^th century, through the 19^th century and into the 20^th century. The impact on the working folks was a terrible one as Labor was ‘commodified’. Now labor was only a factor of production and what mattered was purely the return on investment. Shorn of human qualities the working people were a fair game for corporate abuse. They had no basic rights except as a factor of production to shore up bottom line profits. The commodification of labor meant that they were mere statistics in calculating wage costs against corporate profitability and spread sheet analysis.With the gloves off, market capitalism truly abandoned the employees and fed them to the wolves. Now they could be squeezed until their pips squeaked.

In a disturbing article which appeared in Harper’s magazine titled The End of Retirement, Jessica Bruder paints a bleak picture of older folks who have no houses, no medical cover and who live in trailer buses. They are the migrant gypsies who are the flotsam and jetsam of corporate capitalism and who keep their body and soul together by working in low paid jobs for corporations like Safeway, Home Depot and Amazon. As Jessica points out “Ageing isn’t what it used to be. In an era of disappearing pensions, wage stagnation, and widespread foreclosure, American’s are working longer and leaning more heavily than ever on social security.”[v] The migrant geriatrics are cannon fodder for corporate America who work hard, never take leave even if they are injured, docile and dependable trapped in the never ending loop of endless work with unsustainable pay checks. On the top of it they must appear cheerful and say “Gee, thanks for the job”.If working is a sort of dying Monday through Friday, why work at all? Why not turn on the propane and blow yourself up lighting a cigarette?

According to Peter Fleming, the author of the book, The Mythology of Work: How Capitalism Persists Despite Itself, the frenetic, masochistic need to overwork is done under the mistaken notion that such obsessive over work is necessary for ones biological survival. With the advent of technology, productivity has soared and leisure was promised for the working people. As Fleming acidly observes “ In a society like ours, we simply do not require this immense theatre of labor in order to live well. Indeed, I am constantly amazed by how reluctant even left-wing commentators, newspapers and intellectuals are about questioning the so-called sanctity of work.”[vi]

But the leisure did not come. Instead, the technology was perverted to usher in a planet of endless work. A useful labor saving invention like the email has extended the working hours of the working people. For instance, an average worker in London receives 9000 emails every year and an average worker spends 36 days a year writing email.[vii] At Amazon emails arrive past midnight, followed by text messages asking why they were not answered.[viii] The mobile phone which was promised as boon for communication was subverted to become an instrument to keep the worker waiting for his boss’s call even after office hours. Work never stops and never ends. You check in your office but you can’t check out.

The endless working (24x7) is encouraged and overwork is a badge of honor in the work place. But the punishing regime of work without sleep and keeping awake with high energy caffeine drinks leads to tragedy.The death of Moritz Erhardt, an intern working for Bank of America Merrill Lynch who died after putting in 72 straight hours without sleep caused a furor about the ethics of long hours at the work place. He was 21 when he died.[ix] Then there was another notorious case of employee worked to death which attracted media attention.

This was Sarvshrest Gupta, a young banker aged 22 years, who worked for Goldman Sachs Group. The cause of his death- hard, continuous work, no breaks, no sleep and no respite.[x] The specter of overwork again reaped its deadly harvest.

At the core of market capitalism lies the mystique of work which is slavishly adhered to and rarely challenged. The mystique of work lies in its beguiling deception: being busy is good and productivity is virtuous.Most work is a form of subsidy to the governing elites. Taxes paid out of working people’s income whether in the form of VAT or income taxes end up as subsidies for corporations. The high costs of rent pummels the working people but enriches the landlords or property owners. The high costs of education drastically reduce the purchasing power of the working people.

A report by BusinessInsider tells us the shocking story of a 23 year old employee of Google living in a truck parked in the company parking lot to avoid paying exorbitant rents which would eat up 90% of his income.. As the report states “When 23-year-old Brandon S. headed from Massachusetts to the Bay Area in mid-May to start work, he opted out of settling into an overpriced San Francisco apartment. Instead, he moved into a 128-square-foot truck.”[xi]

Privatization doesn’t make it easier for the working folks as it shrinks the role of the government in providing water, transport and electricity at affordable rates and hands over public utilities to private business. Now exorbitant charges are levied for substandard services paid out from worker’s pay. The working people are on a treadmill of never ending work chasing rising living costs with stagnating wages.

As Fleming sums up “We not only pay for the neoliberal oligarchy directly but also indirectly as the template of work spreads out across the social body. For example, as the neoliberal state cuts housing welfare, working families and loved ones pick up the bill instead. The social commons stands in to cushion the blow caused by the subsidization economy, which today often takes the form of a massive reservoir of personal debt. Indeed, debt is the ultimate instrument of horizontal subsidization, for it frees dominant groups from the direct social costs of their predatory activities.” [xii]

The plight of the working people saddled with mounting debts, stagnating incomes and long hours of work where the only object is teach the joys of obedience, compliance and servitude. They face the terrible existentialist nightmare of the myth of Sisyphus which condemns them to eternally roll a rock to the top of a mountain which rolls back again and again impressing upon them the futility and hopelessness of labor.

The curse of Sisyphus can be countered by collective action of the working people. The collective struggle should be for living wages, three day working week (made possible by technology) and to pierce the fog of market capitalism. We must see through the empty catchwords of market ideology: Jobs, growth and productivity.

It is only through the creative destruction of anger and resistance that we shall break the chains of servitude binding us to the planet of work where there is endless work with dwindling pay and where people are used and discarded like used condoms in a garbage dump of failed lives.

There is a glimmer of hope that people have seen through the charade of work and that things might change.In 2011 in London bright yellow posters popped up in the streets with the words: “Jobs are shit, growth is shit, and all I want is revenge.”[xiii]

C R Sridhar

[i] The End of Retirement-Jessica Bruder- Harper’s Magazine August 2014 page 28

[ii] Going postal 2005 edition– Mark Ames-pages 115-116

[iii] Ibid page137

[iv] http://www.nytimes.com/2015/08/16/technology/inside-amazon-wrestling-big-ideas-in-a-bruising-workplace.html?_r=0

[v] The End of Retirement-Jessica Bruder- Harper’s Magazine August 2014 page 29.

[vi] https://plutopress.wordpress.com/2015/05/21/the-mythology-of-work/

[vii] ibid

[viii] http://www.nytimes.com/2015/08/16/technology/inside-amazon-wrestling-big-ideas-in-a-bruising-workplace.html?_r=0

[ix] https://plutopress.wordpress.com/2015/05/21/the-mythology-of-work/

[x] http://www.businessinsider.in/A-fathers-heartbreaking-essay-about-the-untimely-death-of-his-22-year-old-Goldman-Sachs-analyst-son/articleshow/47518165.cms

[xi] http://www.businessinsider.in/A-23-year-old-Google-employee-lives-in-a-truck-in-the-companys-parking-lot-and-saves-90-of-his-income/articleshow/49473298.cms

[xii] The Mythology of Work- introduction -Peter Fleming-2015 edition .

[xiii] https://www.timeshighereducation.com/books/review-the-mythology-of-work-peter-fleming-pluto

A Jolly Good Empire

2015-10-02T10:22:00.001+05:30

Vultures feeding on corpses lying abandoned in alleyway after bloody rioting between Hindus and Muslims Calcutta (Kolkata) 1946.The British exploited fissures in Indian society in order to further their interests.

I know why the sun never sets on the British Empire; God would never trust an Englishman in the dark.
Duncan Spaeth

"The conquest of the earth, which means the taking away from those who have a different complexion and slightly flatter noses than ourselves, is not a pretty thing when you look at it too much."
Conrad- The Heart of Darkness

The dominant narrative of standard textbooks teaching British Imperial History to unsuspecting school children is the folklore of swashbuckling intrepid buccaneers who overcame spear wielding savages with awe inspiring courage to build an empire based on the rule of law, justice and fair play for the benefit of the natives who were to be civilized with a firm paternal hand. As George Monibot sums up nicely “The story of benign imperialism, whose overriding purpose was not to seize land, labour and commodities but to teach the natives English, table manners and double-entry book-keeping, is a myth that has been carefully propagated by the rightwing press. But it draws its power from a remarkable national ability to airbrush and disregard our past.”[i]

For the unfortunate natives who were the unwilling recipients of British imperial benevolence, it was a different story. For them British imperial rule was one of unrelenting cruelty, violence, racial bigotry and rapacious plunder of the subjugated colonies.

The narrative of airbrushed Pax Britannica imbued with benevolence and goodwill for the savage natives was reinforced by the imperial braying of Niall Ferguson who in his book Empire: How Britain Made The Modern World dwelt on the solemn duty of the imperial overlords to civilize the savages.

The fairy tale history of imperial benevolence received a rude jolt by the publication by such books as The Blood Never Dried: A People’s History of the British Empire written by John Newsinger. Painting a bleak picture of British colonial rule where benevolence was in short supply, Newsinger acidly observes “One problem with contemporary apologists for empire, however, is their reluctance to acknowledge the extent to which imperial rule rests on coercion, on the policeman torturing a suspect and the soldier blowing up houses and shooting prisoners.”[ii] The relationship between the imperial masters and the conquered peoples was best described by Orwell who wrote in his book Burmese Days that ‘imperialism consisted of the policeman and the soldier holding the “native” down, while the businessman went through his pockets’.[iii]

The imperial coercion was best exemplified in the sugar slave plantations of British Caribbean which relied on Black slaves who worked in appalling conditions brutality and violence. The punishments meted out to slaves by the British planters would have shamed the efforts of Gestapo/ SS thugs in Nazi Germany. The list of punishments was draconian and made ones flesh creep with horror.

“For rebellion, slaves were usually punished “by nailing them down to the ground…and then by applying fire by degrees from the feet and hands, burning them gradually up to the head, whereby their pains are extravagant”. For lesser crimes, castration or mutilation (“chopping off half the foot”) was the norm. And as for negligence, “they are usually whipt…after they are whipt till they are raw, some put on their skins pepper and salt to make them smart; at other times their masters will drip melted wax on their skins, and use very exquisite torture”[iv]

The Planter strategy behind such despicable methods was quite simple: “where slavery is established, and the population of slaves outnumbers their masters ten to one, terror must operate to keep them in subjection, and terror can only be produced by occasional examples of severity”.[v]

Britain’s involvement in the Atlantic Slave trade forms one of the most dreadful crimes against humanity. Called Maafa which means disaster in Swahili, it was operated as a triangular trade where British slave traders would exchange guns and brandy for slaves, then the slaves would be packed like sardines in slave ships and transported to West Indies and North America. In the last part of the transaction the slaves were exchanged for the cargo of rum and sugar to be sold in England for handsome profits. Conservative estimate suggests that 2.6 million slaves were transported by Britain.[vi] Millions of slaves died before they made it to the slave ships while one fifth of those who survived died in the course of the journey itself.

By the time slave trade was finally abolished in Britain in 1807, the 200 years of slave trade by Britain ruined the economy of Africa by constant wars and loss of able bodied men to work in the African economy. Africa fell back and began to be dogged with problems of underdevelopment. The profits from the slave trade were invested in the Industrial Revolution.[vii]

Priyamvada Gopal writing for the Newstatesman says.." But in truth, Britain gained rather more out of slavery than the retrospective joy of abolishing the trade in slaves, celebrations of which obscure the role rebellious slaves themselves played in their emancipation. The Industrial Revolution would have been impossible without the wealth generated by slave labour. Britain’s major ports, cities and canals were built on invested slave money. Several banks can trace their origins to the financing of the slave trade. Apart from the Barclays Brothers, who were slave traders, we also know of Barings and HSBC which can be traced back to Thomas Leyland’s banking house. The Bank of England also had close connections to the trade. Hundreds of Britain’s great houses were built with the wealth of slavery (pdf) and the Church of England also acknowledges its pecuniary gains from slavery. As an excellent project at University College London is showing, not only many contemporary millionaires and politicians but also perfectly ordinary middle-class people come from families which were compensated for the loss of slaves. The freed slaves, of course, never received such compensation and their families inherited, instead, the poverty and landlessness which blights them to this day. Capitalism itself, along with cheap beach holidays, would have been impossible without slavery..."

British pluck, courage and the buccaneering spirit paid off splendidly for prominent British families.According to an article by Sanchez Manning in the Independent.."Among those revealed to have benefited from slavery are ancestors of the Prime Minister, David Cameron, former minister Douglas Hogg, authors Graham Greene and George Orwell, poet Elizabeth Barrett Browning, and the new chairman of the Arts Council, Peter Bazalgette. Other prominent names which feature in the records include scions of one of the nation's oldest banking families, the Barings, and the second Earl of Harewood, Henry Lascelles, an ancestor of the Queen's cousin. Some families used the money to invest in the railways and other aspects of the industrial revolution; others bought or maintained their country houses, and some used the money for philanthropy. George Orwell's great-grandfather, Charles Blair, received £4,442, equal to £3m today, for the 218 slaves he owned."....and further on.."The British government paid out £20m to compensate some 3,000 families that owned slaves for the loss of their "property" when slave-ownership was abolished in Britain's colonies in 1833. This figure represented a staggering 40 per cent of the Treasury's annual spending budget and, in today's terms, calculated as wage values, equates to around £16.5bn..." The sad irony is that the slave owners obtained massive sums of compensation while the slaves themselves or their descendants received nothing.So much for the British sense of fair-play.

If the black slaves of Africa did not fare well under British Imperialism it did not end there, for now it was the turn of the Irish people who were virtually occupied by United Kingdom by the Act of Union of 1801. During the Famine in 1845, there was potato crop failure caused by blight which destroyed the crop by 40% causing widespread hunger and death especially among the rural poor of Ireland. The potato crop failure continued till 1850 which claimed a million lives. The Tory Government of Robert Peel took up relief measures to lessen the death toll. However, when the Whig Government of Lord Russell came to power in 1846, the tide turned against the Irish people.

Starving people clamour at the gates of a workhouse during the Irish famine,'One eighth of the population was killed – one could almost say murdered – by the British refusal [to set] policies that offended the holy doctrine of laissez-faire economics.' Photograph: Hulton

Lord Russell was an ardent supporter of laissez faire capitalism and did not prohibit the export of food from Ireland. The food subsidy and public relief measures were cut back in a mean spirited manner and the under secretary at the Treasury Charles Trevelyan with a singular lack of tact and empathy pompously said “the judgment of God sent the calamity to teach the Irish a lesson".[viii] Million Irish people were sacrificed on the altar of Laissez faire capitalism.

If bumping of a million Irish people and millions of black slaves from Africa was not enough to satisfy the blood lust of British Rule, British imperialism shifted its gaze to the Jewel of the Crown- namely India. In traditional narratives of British history it is said that India was governed by honorable men who gave an otherwise chaotic country the rule of law and good governance. There were minor hiccups along the way of course - such as the brutal quelling of the Great Sepoy Mutiny where the rioting sepoys were blown from the mouth of the cannon and the infamous massacre of Jallianwala Bagh (Amritsar) where the troops under Brigadier Reginald Dyer blocked the exits from the garden and opened fire on a peaceful demonstration of men women and children who were slaughtered in hundreds.

More villainous was the British official apathy to the Great Famines which stalked India during the late 18^th Century and the 19^th century.Owing to adverse climatic conditions (El Nino effect) shortfall in monsoon rains and drought resulted in famines at various parts of British India. During the pre-colonial times the drought conditions did not escalate to famine conditions as each rural household enough reserve of food grains to tide over the crisis.

But with the British coming to power this was soon changed by breaking the rural household and transferring the food grains to central depots from households. The grains were then exported to England. The network of railways facilitated this plunder. Moreover, the hoarding by grain merchants took place with the connivance of British officials leading to artificial scarcities .This in turn lead to exorbitant rates being charged for food grains plunging the poor rural peasantry and children to mass starvation and death. Even the extreme famine conditions prevailing in various parts of the country like Bengal- where the starved resorted to cannibalism- did not prevent the British from siphoning off the reserve food grains from rural households to be sold for huge profits in international markets.

The famine of 1876-78 rapidly spread from the Madras Presidency through Mysore, the Bombay Deccan and eventually into the North Western Provinces . The main villain who epitomizes the callous indifference of Imperial officialdom was Lord Lytton who was the Viceroy at that time.

When Indians were dying like flies, Lord Lytton whose head was muddled by opium abuse thought fit to organize a week long sumptuous banquet where choicest wines and delicacies were served to the sounds of bacchanalian revelry. The celebrations were attended by some 68,000 motley elements of landlords, princes and other parasites owing allegiance to the British Empire. The banquet was in honor of the investiture of Queen Victoria as Empress of India who – as macabre as it may sound- promised peace and prosperity to her subjects in her far flung Empire.[ix]

Lord Lytton had different notions of peace and prosperity, steeped as he was with the principles of Malthus and Social Darwinism which laid the iron law that famine, pestilence and wars eliminated the inferior in favor of a superior race. He then proceeded to coolly implement the principle of natural selection with deadly effect. At first, he refused to provide any famine relief. As pressure grew around him, he thought of a clever idea to help natural selection. The good lord issued instructions that food exports from India should continue unabated. Then he forbade any relief measures to famine stricken natives within a ten kilometer distance. This meant that Indians had to walk long distances to get relief. Many women and children died on the way. Few who survived were put to hard back breaking work such as breaking stones and digging trenches. The food rations which were given to the starving Indians was even less than the rations given to the inmates of Buchenwald- a Nazi concentration camp.[x] Lytton’s genocide cost 10 million Indian lives.

The ghoulish appetite for Darwinian winnowing of the inferior species did not wane among the British imperial elites. This was put to test in the Bengal famine of 1943. The chief culprit was none other than Winston Churchill who was a racial bigot and hated Indians as belonging to a beastly race. The modus operandi was disgustingly the same.

The food grain from India was looted by the British to feed the British army fighting the Second World War and to build the food stockpile for the British during the war effort. The fall in food grain production in Bengal made matters worse on account of hurricanes and fungal infection. Madhusree Mukerjee in her research on the Bengal famine documents the War British Cabinet’s role, especially Churchill’s role in worsening the food shortages and stonewalling attempts to send food from other countries to alleviate the ravages of famine. Churchill’s intransigence could be explained on the basis of two factors- first racial and the second economic. Churchill’s sinister views on race superiority were allied to that of Hitler and he viewed Indians as an inferior race that had to be culled to prevent them from breeding like rabbits. Churchill also calculated that the food stockpile built as a surplus by denying food to Indians would sky rocket in prices after the war which would be advantageous to Britain post war.

Churchill was a racist and a killer who dispatched 4 million Indians to their death during the famine. As a consummate hypocrite and a liar he covered up his role in the genocide in his one sided account History of the Second World War waxing lyrically about protecting the interests of India-“No great portion of the world population was so effectively protected from the horrors and perils of the World War as were the peoples of Hindustan… “They [India] were carried through the struggle on the shoulders of our small Island.”

What was conveniently forgotten was that India’s contribution to the war effort was a whopping 2 billion pounds in goods and services and was second to Britain in terms of war contribution. Indian soldiers about three and a half million who fought for Britain’s in the Second World War.

But for Indians it meant nothing except plunder and pillage. As Mike Davis puts it” If the history of British rule in India were to be condensed into a single fact, it is this: there was no increase in India’s per capita income from 1757 to 1947. Indeed, in the last half of the nineteenth century, income probably declined by more than 50 percent. There was no economic development at all in the usual sense of the term”[xi] Moreover, the forgotten holocausts of famine in British India caused the loss of lives in the range of 12 – 29 million.

A starving mother feeds her child first

If extracting huge income and wealth from slave trade and slave labor from plantations and plunder from India were major sources of revenue for the imperial enterprise of Britain, there was another source which was to enrich the imperial coffers of Britain even more: opium.

“The British Empire”, writes Newsinger, “was the largest drug pusher the world has ever seen.” He adds “By the 1830s the smuggling of opium into China was a source of huge profits and these profits played a crucial role in the financing of British rule in India and were the underpinnings of British trade and commerce throughout the East.” [xii]The criminal financing of British imperial empire is adroitly avoided or played down by British historians.

Opium was produced in India and came under British control towards the end of the 18^th century. In the later part of the 17^th century the infamous East India Company acquired monopoly rights over the production and also managed its sales to China. The opium export to China which started as early as 1760 expanded considerably after 1820 to 2500 tons of opium in 1838. The profits obtained was crucial to the expansion of the British Empire in the late 18^th and 19^th centuries.

However, the export of opium caused severe addiction among the Chinese and alarmed the Chinese rulers who took harsh measures to stamp out drug abuse. One was to imprison the British merchants and holding in hostage until they surrendered the opium. The British merchants promptly sought compensation from the British government on the basis of inflated figures.

Cartoon: French depicting English treatment of China

After the Chinese expelled the merchants from Canton, the merchants established their base in Hong Kong. Meanwhile the British government demanded compensation for the confiscated opium, opening up of more ports for trade and legalization of opium trade which the Chinese refused.

As the Chinese refused to be poisoned by opium, the opium wars between Britain and China ensued. The Chinese were massacred by the superior firepower of British warships and were forced to concede the territory of Hong Kong to the British. But the Chinese refused to legalize opium sales. In the second opium war that followed, the Chinese resistance to British bullying was pulverized by warships. The Anglo-French army savagely rooted out pockets of Chinese resistance in the Canton region by burning down whole blocks of residential homes.

The Treaty of Tietsin was signed in 1858 and the Chinese capitulated to British demands: one million pounds was given to the British as indemnity and the sale of opium was legalized by the Emperor.

In 1860 another punitive expedition was organized which led to plunder and slaughter of the Chinese. The summer Palace was sacked and burned. The robes and the thrones were brought to England for display in the Victoria and Albert museum as a stunning testimony to British benevolence. Drug running, imperial style has its rewards!

The Mau Mau people were often rounded up before being sent to the detention camps

Soldiers guard suspected Mau Mau fighters behind barbed wire in the Kikuyu reserve

Kenyans (left to right) Wambugu Wa Nyingi, Jane Muthoni Mara, Paulo Nzili and Ndiku Mutua, stand outside the Royal Courts of Justice, in central London

Kenyan citizens who are in London pursuing claims of torture against the British government heard a dramatic admission from British authorities. “The government does not dispute that each of the claimants suffered torture and other ill-treatments at the hands of the colonial administration,” a British official said in court.

A UK-funded memorial to Kenyans killed and tortured by British forces during the Mau Mau uprising in the 1950s unveiled in the Kenyan capital.The monument is part of a 2013 out of court setlement by the UK government when it agreed to pay £20m ($30m) in compensation to Mau Mau veterans.

With a kind of monotonous regularity that numbs the senses, British Colonial Policy in Kenya was pursued in the same brutal and cynical fashion bereft of any moral or ethical values. In 1952 Britain declared a state of emergency in Kenya to quell the Mau Mau uprising against the Colonial government.

The Mau Mau was largely drawn from the Kikuyu who constituted the largest ethnic group in Kenya. The racism and the exploitation at the hands of white settlers and the Colonial Government was the root cause of the hatred and the intense Anti-European sentiments. The Kenyans were paid low wages and they lived in appalling conditions. The revolt was against the British Colonial repression.

The Mau Mau uprising was not a communist plot to oust the British Colonial government but a nationalist movement to resist the British. As the colonial power could not find credible evidence for a communist plot, the Mau Mau revolt was represented as a sinister cult whose members indulged in sexual orgy, cannibalism, occult and black magic. The unrest grew as the British blocked the constitutional road to resolve the crisis.

Jomo Kenyatta, the leader of the Kenya African Union (KAU), organised a peaceful struggle against the British Government. The KAU in its declaration noted ' The chief characteristic of all labour- skilled or not is the low wages.....Due to this, ninety percent of our people live in the most deplorable conditions ever afforded to a human being .. Modern serfdom has come into being as cheap labour.'

The reaction of the British was to jail Kenyatta for seven years on flimsy trumped up charges. The official version was that the unrest had to put down with paternal firmness with the same sorrow as a father giving his errant son six of the best. The paternal firmness found expression in extreme brutality and gross abuse of human rights. The declassified documents show that the declaration of emergency was done with the intention of curbing the popular nationalist movement and to make land and the rich mineral resources safe for the Colonial Power.

In the brutal war between the Mau Mau and the government forces, both sides committed atrocities. The Colonial forces killed 10,000 Africans while the Mau Mau killed 32 Europeans. More white settlers were killed in road accidents in Nairobi than at the hands of Mau Mau.

The colonial counter insurgency forces were given a free hand to shoot anybody if they were black. The Colonial Police used the most extreme forms of torture on Mau Mau suspects such as slicing off ears, boring holes in eardrums, flogging until death, pouring paraffin over suspects who were set alight, and burning eardrums with lit cigarettes. Some suspects were castrated; others had their fingertips cut off.

Shortly after the emergency was declared, the Governor passed orders that it could detain whomsoever it wanted in nazi style concentration camps. A former officer in one of the detention camps in 1954-55 witnessed 'overwork, brutality, humiliating and disgusting treatment and flogging- all in violation of human rights.'

The savage repression and brutal force were instrumental in putting down the uprising and killing about 1,50,000 Kenyans. After she gained her independence in 1963, the British Government cleverly maneuvered for a moderate government friendly to British interests to come to power. Even Kenyatta abandoned the nationalistic policies and gave concessions to the British.

In the words of the political analysts Bethwell Ogot and Tiyambe Zeleza "Kenya (in 1978) was still a dependent export economy, heavily penetrated by foreign capital from all the major capitalist countries, so that she was more firmly and broadly integrated into the world capitalist system than at independence."[xiii] The fruits of post independent Kenya were shared between the Kenyan ruling class and foreign interests. The men in bowler hats had finally won.

In recent times, Britain's sordid record as a gross violator of human rights dates back to 1948 when she declared emergency in Malaya and began a particularly vicious war against the poor and marginalised Chinese labour force. A Colonial Office report in 1950 disclosed that Malaya's rubber and tin mining industries were the biggest earners for primarily British businesses.


The British burnt down an entire village during the Batang Kali Massacre

A London Court ruled that Britain was responsible for the 1948 killing of 24 unarmed Malayan civilians who were shot dead by British troops during a campaign against Communist insurgents

Communists placed in trenches by soldiers await their execution

As the conditions in the mines owned by British capital was appalling, the Chinese workers struck and demanded better wages and living conditions. The strikes caused financial losses to the British interests and brought about draconian measures being imposed on the trade unions. To counter the insurgency force of the Malay Chinese of around 3000-6000 Britain conducted 4500 airstrikes in the first five years of the war. Close to 709000 lb of bombs were dropped on the insurgent encampments. 500-lb fragmentation bombs (forerunner of the notorious cluster bomb) were also used in the unequal conflict between the British Military and the insurgents.

Defoliants supplied by the Chemical giant ICA were widely used to destroy crops. Systematic torture was used in interrogation procedures of the British forces to elicit information about the whereabouts of the insurgents. Decapitation of dead guerillas served as means of identification especially when the bodies were rotting in the jungles. Displaying dead bodies of the guerillas in public was another barbaric method to instill fear in the Chinese squatters. As the Scotsman newspaper quaintly observed it was good practice as ' simple-minded Chinese are told and come to believe that the communist leaders are invulernable.'

The insurgency was crushed but that did not prevent the notorious Sir Gerald Templer, the High Commissioner of Colonial Malaya, to fatuously observe ' the answer lies not in pouring more troops into the jungle, but in winning the hearts and minds of the people.'

The hearts and minds of the Malay Chinese were won by putting into effect the infamous Briggs Plan. This resettlement programme forcibly evicted the Chinese squatters from their villages and located in a new village surrounded by barbed wires with searchlights round the periphery to keep an eye on the movements of the squatters at night. The resettlement camp was nothing but a concentration camp. The resettlement camp was source of cheap labour for the rubber estates.

The brutal campaign ended on a self-congratulatory note for the British commercial interests. After all, the Chinese workers learnt the spiritual joy of hard work in rubber estates and their vagrant minds disciplined for their own good. However, the true nature of the repression surfaced when a lord blurted out 'What we should do without Malaya, and its earnings in tin and rubber, I do not know.'[xiv]

Lynch mob in Jakarta, Indonesia during ‘anti-communist’ purge under Suharto

Still from the documentary "The Act of Killing" -A demonstration of how to garrote a communist to death with wire

The British perfidy in giving carte blanche to the Indonesian generals to murder close to one million Indonesians is a closely guarded secret and this terrible secret is rarely mentioned in the media. On the basis of declassified documents available, the British policy in Indonesia is shown in its truest colours: rapacious, brutal and morally bankrupt.

In 1965 Britain and USA gave support to the Army to oust the Indonesian Leader Sukarno. General Suharto who carried out the coup was a corrupt and murderous thug. The real target of the coup was the Indonesian Communist Party (PKI). Both the British and American policy experts were worried that the economic resources in Indonesia would be primarily used for the benefit of the Indonesian people and not western interests.

The threat of independent development alarmed the British and American Planners. The army proceeded to hunt down the members of the PKI with the diabolical cruelty unparalleled in modern history. In the reign of terror that followed, the army would pick up any man or women suspected of being members of PKI and shoot them in cold blood. Even elderly persons were not spared. In one incident a village execution squad picked up a woman of 78 and executed her.

The Officials of the State Department (US) nodded approvingly when the slaughter went on and gave their blessings to the Generals by providing them with small arms. The British were not far behind and supported Suharto to the hilt. The British Intelligence (M16) ran a propaganda campaign to smear the reputation of Sukarno and the PKI. The operation was conducted from a base in Singapore known as Phoenix Park.

In an interesting letter addressed to the Foreign Office the British Ambassador to Indonesia Sir Andrew Gilchrist quaintly wrote, "I have never concealed from you my belief that a little shooting in Indonesia would be essential preliminary to effective change." [xv]By 1966 'the little shooting' led to the wholesale massacre of PKI and the "good generals" got a pat on their back for efficiently dispatching close to one million Indonesians to oblivion.

The corrupt military regime of Suharto plundered Indonesia for nearly thirty years with the active support of Britain and US and the grateful general showed his gratitude by creating favourable business climate for western companies to take their share of the loot. Suharto was ousted in 1998 but the damage was done to the concept of an equitable society by the concentration of economic and political power vesting in the hands of the few.

The sun did set on the British Empire. The Imperial edifice collapsed owing to the weight of anti-imperialist movements, imperial over stretch and the fatal erosion of its economic base after the Second World War. Even though Britain won the war against Germany, the British had overstrained themselves, “ running down their gold and dollar reserves, wearing out their domestic machinery” and becoming increasingly dependent on American support to stay in fighting the war.[xvi] The Empire steadily declined after 1945. By the late 1960’s most of British territories became independent countries.

The Empire collapsed and Britain's status in the world was greatly reduced to that of a second rate power. The political elite including the top echelons of the Foreign Office formulated the strategy of playing the second fiddle to US global interests.

The essence of Special Relationship is for Britain to align itself politically as a junior partner in an orbit of power predominantly under American aegis as a way of preserving some great power status.[xvii]

Britain plays a secondary role in supporting brutal family regimes in the Gulf States which maintain the oil order to favour Western (US and British interests). In the United Nations, Britain serves US interests by voting for US in the Security Council resolutions. In Economic forums, Britain aggressively pursues economic liberalization to aid US and British businesses. Along with US, Britain took part in wars in Iraq, Libya, Afghanistan and Syria.

The British ruling elites including the New Labor seem to be basking in the romantic self delusion that the British Empire was a force of benevolence. They fail to see the heart of darkness of their imperialism: namely, racial hatred, obsession with color and their racial superiority.

For the many victims of British imperialism the sheer scale of violence inflicted on them was indeed puzzling. How could one human being be so brutal to another human being?The imperial answer was brutally simple: empathy and civilized restraint only existed between human beings. People with dark skins are not humans-Period.

C R Sridhar

[i] http://www.theguardian.com/commentisfree/2012/apr/23/british-empire-crimes-ignore-atrocities

[ii] The Blood never dried- introduction- John Newsinger.

[iii] ibid

[iv] The Blood never dried- the Jamaican and the overthrow of slavery.

[v] ibid

[vi] http://www.bbc.co.uk/bitesize/ks3/history/industrial_era/the_slave_trade/revision/7/

[vii] ibid

[viii] https://en.wikipedia.org/wiki/Great_Famine_%28Ireland%29#CITEREFWoodham-Smith1991

[ix] Late Victorian Holocausts- chapter The Great Drought-, 1876-78 Mike Davis

[x] ibid

[xi] Late Victorian Holocausts- India The modernization of poverty

[xii] The Blood never dried- opium wars

[xiii] Web of Deceit – Mark Curtis- page 332.

[xiv] Ibid page335.

[xv] Ibid page387.

[xvi] The Rise and fall of great powers-Paul Kennedy- page 367.

[xvii] Web of Deceit – Mark Curtis- Introduction.

The Toxic Legacy of Lee Kuan Yew

2015-03-26T18:05:00.002+05:30

He Conned You! - Laurence Harris, File Associated Press-http://singaporerebel.blogspot.in/2015/02/photos-lee-kuan-yews-analects-part-lll.html

“If you're not careful, the newspapers will have you hating the people who are being oppressed, and loving the people who are doing the oppressing.”

― Malcolm X-

When the strongman of Singapore, Lee Kuan Yew(LKY), died at the age of 91 at the Singapore General hospital, the flood gates of tear jerking, sycophantic tributes opened up to torrential proportions overwhelming critical scrutiny of the man and his achievements. Obama, the President of USA, described LKY as a ‘true giant of history’ which is perhaps a ridiculous endorsement given the fact that his campaign promise of “Hope” and “Change” soon dwindled, during his own unremarkable presidency, to no hope and no change for most of those who voted for him.

David Cameron, the prime minister of Britain- which is less of a democracy and more of a corrupt oligarchy noted without irony “Lady Thatcher once said that there was no Prime Minister she admired more than Mr. Lee for ‘the strength of his convictions, the clarity of his views, the directness of his speech and his vision of the way ahead”. His gift for black humor should not be underestimated as Maggie went on a wrecking spree by breaking the working class and entrenching the financial elites on the top of illegitimate wealth pyramid.

Other sobriquets tossed in the air like confetti by the world leaders were “legendary figure in Asia”(Ban Ki-Moon, Secretary General of the United Nations- a largely failed world body given to vacuous and long winded debates instead of stopping wars waged by its powerful member states),“great leader” (Japanese Prime Minister Shinzo Abe who presides over a zombie economy), “visionary statesman” (Ms Christine Lagarde, Managing Director, IMF under a cloud of financial scandal during her tenure as Finance Minister in former President Sarkozy’s cabinet).

The unmeasured hyperboles of the world’s worthies praising the Iron Man of Singapore should not blind us to the fact that Singapore under Lee was (and still is) a brutal one party dictatorship where any opposition to his regime meant exile (if you were lucky) or a permanent guest of the notorious Changi prison (if you weren’t).

But the spanner that was thrown at the nonsensical LKY hagiography was a hard hitting documentary film titled ‘One Nation under Lee’ which revealed LKY as a brutal despot addicted to power mongering and self aggrandizement. The film was directed by a courageous Singaporean Seelan Palay who came under the unwelcome attention of the Singapore Police who interrogated him for hours under duress. The private screening of the film was disrupted by the police and the officials of the Media Development Authority seized the video and prevented the screening.

The film charts the career of LKY who employed guile, cunning and ruthlessness to grab power. His exploits would have made a hardened political cynic like Machiavelli to blush with shame.When the People’s Action Party came to power in 1959, Lee Kuan Yew used the Internal Security Act to deadly effect. A colonial legacy from the British, Lee used ISA in 1960 to round up around 130 of his political opponents whom he could imprison indefinitely without trial. Some of the notable political opponents locked up under ISA were Lim Hock Siew (19 years), Said Zahari (17 years), and Chia ThyePoh (32 years) five years more than Nelson Mandela.

Freedom of speech and the freedom of press are actively denied by imposing fines and instituting politically motivated defamation action. Political opposition is subject to libel action for expressing any opinion against the interests of the ruling party (PAP). Some of them were also imprisoned under national security legislation. The right to lawful assembly is severely curtailed and freedom of expression in public without police permit exposes the citizen to the severe penalties of criminal action.

A human rights document titled ‘Singapore: Asia’s Gilded Cage, the Asia –Pacific Human Rights Network says, “Human rights violations in Singapore are rife: the country detains conscientious objectors to military service, has mandatory corporal and capital punishment for many offences, has some of the most draconian security legislation in the world (and uses it) and institutional discrimination against ethnic Malays results in their poverty and often imprisonment.”[1]

The combined onslaught on democratic rights and civil liberties of political parties opposed to PAP could be seen in the bleak political landscape of Singapore where an emasculated opposition was practically decimated paving way for the one party rule of Lee and his cohorts.

Very early in his political career Lee realized that to control the mind of the citizens he had to control the media. He took hosts of measures to close down independent press like UtusanMelayu, Nanyang Siang Pau, Singapore Monitor, Singapore Herald and the New Nation. By 1980 all the local presses came under the government controlled Singapore Press Holding. Lee also planted spies like Chua lee Hoong who was attached to the Home Ministry to be the eyes and ears of his internal security. The domination of the press was complete when The Straits Times was made a mouthpiece of the Ruling Party.

In his ruthless quest of power LKY left no stone unturned and quickly turned his attention to place pliant judges in judiciary who were docile and ready to serve the interests of the state under Lee. Explaining how seriously compromised the judges were during Lee’s dictatorship, Francis T Seow in his book ‘Beyond Suspicion- the Singapore Judiciary’ says that in politically sensitive cases which involved the interests of Lee and his ruling party, the Singapore judiciary has “repeatedly demonstrated a singular facility of bending over backwards to render decisions favorable to the Singapore Government and its leaders.” Their judicial contortions acquired such an international notoriety that Human rights organizations like Amnesty International have sent their Legal representatives to observe the trial proceedings at first hand to see if trials were fairly conducted.

If trampling on political freedom and clamping down on the freedom of expression were not bad enough, more shocking disclosures followed which dented the anti- corruption credentials of LKY’s Singapore. The Nation in its article titled ‘Singapore’s Blood Money-hanging drug couriers but investing with their suppliers’- disclosed the sordid details of the cozy relationship of LKY with Burmese drug lords-“The Nation has learned that the highest levels of the Singaporean government, using the New York-based Morgan Guaranty Trust Company, a subsidiary of J.P. Morgan, as a custodial operative, are engaging in joint business ventures with one of the world's most notorious drug lords and with the drug-backed military dictatorship of Burma (Myanmar). This has been confirmed by corporate, government and legal documents from four countries and was contended by high-ranking US narcotics and government officials in private interviews.”[2]

More shocking details emerged-“This dual-track policy is condoned and encouraged at top levels of the Singaporean regime, including by Lee Kuan Yew, the country's undisputed strongman. Lee, whose antidrug policies are among the strictest in the world, is participating in the country's deepening business relationships with renowned heroin trafficker Lo Hsing Han of Burma and his son and business partner, Steven Law.”[3]

The government of Singapore through GIC (The Government of Singapore Investment Corporation) controlled by the Lee Kuan Yew family is the core shareholder in the Myanmar Fund which is linked to the key business ventures of Lo Hsing Han a notorious drug lord. On 29th of August 1997- possibly fearing the exposure of the money trail- the Myanmar Fund was formally placed in Liquidation.

Seow, the former Solicitor General of Singapore, sums up nicely “The Singapore government knows it’s having dinner with the devil, and sharing a very short spoon. And it is a terrible double standard. Drug moneys are being laundered apparently by the same drug lords who supply the heroin for which small-time dealers are hanged. We are reaping profits as Burma’s biggest investor, but we’re being paid with blood money.” [4]

The inconvenient truth of Lee’s despotic regime with its murky deals with Burmese Drug dealers is rarely discussed in the mainstream corporate media which maintains the conspiracy of silence to prevent any embarrassment to Lee Kuan Yew’s carefully cultivated image of his regime being corruption free and honest. For the global corporate elites and their minions of the corporate media their silence is the quid pro quo deal for low tax rates and “ease of doing business” for multi-national corporations operating in Singapore.

For the global corporate elites who are strong supporters of the despotic Singapore model of a police state with free market capitalism, there is a card up their sleeve. And that card is the stupendous growth story of Singapore. In news channels, the corporate sponsored anchor persons go to great lengths to point out that Lee Kuan Yew transformed Singapore from a malarial ridden British outpost to a smart city state brimming with trade and commerce.

But this is a big lie as the British left Singapore with infrastructure intact including its ship building facility- unlike other colonies like India which were rapaciously plundered. Singapore with its strategic location and port was ideally suited for trade and export. The British did not strip Singapore of its assets as a back room deal was struck by Lee Kuan Yew that after its independence, his government would protect the interests of the British.

The claim that Singapore is the epitome of functional efficiency and capitalist success is rarely challenged in International forums. The relentless PR machine of the Singapore Government spews dubious statistics to create a myth that it has a cutting edge efficiency, global competitiveness, economic freedom and transparency. The myth of the Singapore Miracle is dinned into the heads of its citizens to serve as a means of social control. The message is a stark one: you can’t be politically free and be affluent. So shut up and obey.

While there have been studies and reports of the Amnesty International and other Human Rights groups critical of the authoritarian ways of the government and its appalling human rights abuses, rarely had the Singapore Miracle story been put to test until a prescient article titled The Myth of Asia’s Miracle written by the economist Paul Krugman appeared in the prestigious Council on Foreign Relations challenging the sustainability of the Singapore growth story.[5]

Krugman’s point was that the flaw in the Singapore growth was that mere increases in inputs, without an increase in the efficiency with which those inputs are used - investing in more machinery and infrastructure - must run into diminishing returns; input-driven growth is inevitably limited. As he observes in his article, ’Consider, in particular, the case of Singapore. Between 1966 and 1990, the Singaporean economy grew a remarkable 8.5 percent per annum, three times as fast as the United States; per capita income grew at a 6.6 percent rate, roughly doubling every decade. This achievement seems to be a kind of economic miracle. But the miracle turns out to have been based on perspiration rather than inspiration: Singapore grew through a mobilization of resources that would have done Stalin proud.’[6] But like the Soviet growth rates recording impressive growth at first, the dynamo of production soon spluttered in Singapore. The rich irony was that Lee Kuan Yew who had a pathological hatred for communism adopted the same flawed economic model of Soviet Russia namely- Input elephant/Output mouse.

In a book titled ‘The Singapore Miracle, Myth and Reality’ written by Rodney King an Australian journalist who worked in Singapore for many years which was published nine years ago there was a more comprehensive critique of the Singapore miracle. Rodney King rubbishes the assertions made the Singaporean Authorities that the city state is a financial dynamo. As King says in his book,” the rivers of dubious statistics the PAP state generates to back its questionable claims have often been uncritically accepted by journalists and Western neo-cons and the now discredited “Asia Rising” theorists”.

King says- if the myth and statistics used to promote the Singapore miracle is stripped away- one sees a dependent and underdeveloped economy, driven by MNC capital and expertise, with severe inequalities of wealth and income and an often poorly paid workforce. King argues that the workforce productivity is often mediocre and well below that of the West and Asian Economies such as Hong Kong.[7]

The country displays endemic inefficiencies at both micro and macro levels and the performance of construction, financial, and service sectors is second rate, while Singapore Airlines does not deserve the top ranking it receives. The Singapore miracle has many shortcomings and it means very little to the Singaporeans as very few have gained from it. Around 30% of the population still lives in poverty by Western standards. Around 86% of Singaporeans do not own houses but rent flats from the government run Housing Development Board on 99 year leases. The economy is plagued by low entrepreneurial and innovative capacities and an under-educated workforce.

The author also points out the local private sector have remained stunted because of predominance of the MNC and State Enterprises run by unimaginative public servants who do not understand business. Moreover, the local private sector is starved of venture capital funds to make it a seedbed of innovation. King sums up witheringly: “An MNC outpost serviced by underpaid locals and ruled by manipulative and overpaid political elite is not an inspiring development model.”

If Singapore is not as great as it seems- then why is there such breathless admiration for its economic model? The reason is not too far to seek- Paradoxically enough free market capitalism is inherently unstable and requires the services of an autocrat like Lee Kuan Yew to keep the hoi polloi at bay. The Singapore model works well for the corporate and financial 1% sitting on trillions of dollars of unearned income largely through the capital gains route. But for Joe the Plumber it is a raw deal- it means no jobs and stagnating wages even if he finds one. Joe is truly shafted with the lead pipe rudely shoved up a tender part of his anatomy.

Unregulated free market capitalism is at the end of its tether and unraveling in social protests and violence. And there is a palpable sense of unease when the plutocrats perched on their mounds of cash see that the ordinary folks down below are pretty riled up with a rigged system and out in the streets angrily protesting with their pitch forks. At that moment of global crisis a wave of profound relief sweeps over the global elite for that well ordered chewing gum free capitalist paradise of Lee Kuan Yew where there are low taxes for the corporations, no bargaining power for workers and where the trains run on time with the crack of a whippy cane.

C R Sridhar

[1]http://www.hrdc.net/sahrdc/hrfchr58/Issue4.htm#Singapore

[2]http://www.singapore-window.org/1020naus.htm

[3] ibid

[4] ibid

[5] http://www.foreignaffairs.com/articles/50550/paul-krugman/the-myth-of-asias-miracle

[6] ibid

[7] The Singapore Miracle: Myth and Reality- Rodney King-2006- Insight press

Is Arvind Kejriwal our Comrade Napoleon?

2015-03-07T17:28:00.000+05:30

“It had become usual to give Napoleon the credit for every successful achievement and every stroke of good fortune. You would often hear one hen remark to another, “Under the guidance of our leader, Comrade Napoleon, I have laid five eggs in six days” or two cows, enjoying a drink at the pool, would exclaim, “thanks to the leadership of Comrade Napoleon, how excellent this water tastes!”

― George Orwell, Animal Farm

Arvind Kejriwal- whose AAM Aadmi Party swept to power in the recent Delhi elections- showed his true color as a ruthless political opportunist when he engineered the political exit of the co founders of the AAP- Prashant Bhushan and Yogendra Yadav by removing them from the political affairs committee of the party.

The coup was planned with diabolical cunning by Kejriwal- who himself did not attend the committee meeting on health grounds- but had it remotely executed by his coterie of Kejri sycophants, namely, Sanjay Singh and his sidekick Manish Sisodia.

By this senseless act of culling, the party has damaged its credibility as a party with a difference imbued with transparency and inner party democracy to distinguish it from corrupt mainstream political parties like the BJP- Congress compromised by crony capitalism and thuggery.

It may be interesting to recall that it was Prashant Bhushan- a senior lawyer in the Supreme Court of India- who fought important court battles to expose the cozy nexus between the Congress UPA government and the powerful Indian business families in dubious telecom scams, land deals and mining scams which drained a poor country like India thousands of crores of rupees in revenue. The public interest litigation of Prashant Bhusan against crony capitalism buttressed the anti- corruption credentials of Kejriwal.

If Bhushan was a tireless crusader exposing corporate corruption in Indian electoral politics, the other face of AAP was that of Yogendra Yadav- an extremely erudite academic- who articulated the language of idealism in politics raising the bar of ethics to sublime heights. There is no gainsaying that Bhushan and the soft spoken ideologue Yogendra Yadav inspired thousands of selfless volunteers to come out their homes and offices and work in the task of nation building.

Both Bhusan and Yadav have been thorns in the flesh of AAP Supremo Kejriwal who was accused of selecting dubious candidates with criminal backgrounds, accepting campaign contributions from dubious sources and ignoring party candidates violating the code of conduct by the distribution of liquor and cash. The coterie around Kejriwal shrugged away the criticism by retorting that one can’t be too honest in politics. There were also serious charges of lack of inner democracy and dictatorial style in Kejriwal’s functioning.

Beneath the euphoria of the massive mandate of the Delhi election which humbled both the Congress and BJP, there was a ticking bomb waiting to explode. And that bomb was the underlying tension between the politics of pragmatism and the politics of left orientation. Some members like Kumar Vishwas close to Kejriwal have showered sycophantic admiration for Modi and openly expressed opposition to the centre left politics of Prashant Bhusan and Yogendra Yadav. Tongues were wagging in the corporate dominated media that Kejriwal is a much mellowed down man ready to bow down and serve oligarchic interests.

It is unfortunate but true that the democratic mask of the diminutive muffler man has slipped a wee bit and what we behold is the frightening spectacle of a megalomaniac consumed by Napoleonic delusions of glory. If he stood tall it was because he stood on the towering base of selfless volunteers who came from all walks of life. It was Arvind Kejriwal’s good fortune that if he could see further it was because he stood on the shoulders of others more worthy than he. And that lesson should not be lost on him.

But a deeper philosophical disquiet persists. Are Revolutions like that of the AAP destined to fail? Have we exchanged one set of thugs for another? Or as James Burnham- the political theorist and a Machiavellian cynic- argued that society is of its nature oligarchical, and the power of oligarchy always rests on fraud and force. Does it therefore follow that all talk of democracy, liberty, equality, fraternity, all revolutionary movements and dreams of utopia are humbug covering the naked ambition of some new class elbowing its way to power?[i]

If our sense of history extends to the distance of one’s nose, then it does appear that the way of all revolutions are nothing but a con job where the masses are led on by vague dreams of human brotherhood, and then, when the new ruling class is well established in power, they are thrust back into servitude.

But when revolutionaries don’t pack their bags and leave after an electoral victory but stay on and fight so that the gains of the revolution are not diluted- they give a bloody nose to the cynical Orwellian maxim – All animals are equal, but some animals are more equal than others.

C R Sridhar

[i] James Burnham And The Managerial Revolution- George Orwell.

A One Percent World

2015-02-01T09:46:00.004+05:30

Parody of Bill Watterson's cartoon charater Calvin

‘There’s been class warfare going on for the last 20 years and my class has won.’

Warren Buffet- fourth wealthiest person in the world.

The Fat Cats in the Snow- the global elite- came in their private jets last month to attend the winter session of World Economic Forum held in Davos - a mountain resort in the eastern Alps region of Switzerland. The forum brings together academics, policy makers and corporate elites to discuss issues ranging from investment to the environment, employment, technology and strangely enough- inequality.

But does the forum serve any useful purpose? Susan George of Transnational Institute says “The Davos class, despite its members’ nice manners and well-tailored clothes, is predatory. These people cannot be expected to act logically because they are not thinking about longer-term interests, usually not even their own, but about eating, right now. "[i]

Lew Rockwell- an economic journalist- agrees and puts it more bluntly “It is a meeting of the very rich and it’s a meeting of the politicians that they own…. I think it has always been about control for the US Empire, for the oligarchs associated with it. They may talk about wanting to solve problems, or make people’s lives better, [but] what they actually are doing is plotting even more wars, interventions, more economic controls, more ‘banksterism’, more benefits to the power elite versus the people.” [ii]

But this time, amidst the popping of champagne bottles and bacchanalian revelry for the select few-costing $20,000 per ticket- there was a palpable sense of unease at the fact that free market capitalism spawned global inequalities on an unprecedented scale.

Fueling the unease among the Davos class was a report of Oxfam Charity which disclosed the fact that the world’s richest 1 percent will own more of the global wealth than that of the other 99 percent of the global population by 2016, unless urgent steps are taken to address the inequality. The stark finding of the Oxfam report is chilling- to quote- “In 2014 the richest 1% of people in the world owned 48% of global wealth leaving just 52% to be shared between the other 99% of adults on the planet.”

The report further states -“If this trend continues of an increasing wealth share to the richest, the top1% will have more wealth than the remaining 99% of people in just two years…, with the wealth share of the top 1% exceeding 50% by 2016.”[iii] The report warns that wealthy elite of just 80 individuals have the same wealth owned by 3.5 billion- half of the globe’s population.

In India the wealth divide between the rich and the poor became greater even as the economy grew. But the benefits of growth accrued to the extremely wealthy pushing income inequality further. The reform process of the Congress government favored the corporate elites and worsened the plight of the common man. The net impact of the ‘deform process’ made the Congress to lose the General election which swept the BJP government of Modi to power. The same flawed economic policy of free market capitalism continues unabated by the Modi government with cuts in social spending in health and education affecting the many and firmly entrenching the powerful business family oligarchies in India.

Even in countries such as South Africa and Nigeria free market economics tells the same story of pervasive and wide spread poverty combined with widening gaps between the haves and have-nots.

The global drivers of inequality are unregulated capitalism and bribery and corruption of the government to shape policies to suit the interests of the one per cent. The enormous clout enjoyed by the one per cent is magnified by using lobby groups to influence the investment and tax policies of the government. For instance the one per cent in US lobbied for tax breaks and got spectacular benefits by Reagan and Bush. At the same time collective bargaining and trade unions were broken and minimum wages were pushed back. CEO salaries sky rocketed to obscene levels. The wage earners became the new underclass.

In UK under the Thatcher regime collective bargaining was pushed to the dark ages while the financial capitalists (City of London) became the one per cent. Manufacturing industries declined putting the 99% at a severe disadvantage. Truly a welfare state for the one per cent and the dreary discipline of low wages, stagnating income and job insecurity became a way of life for the 99% and continues till today.

During the crisis of 2008 the too big to fail banks got billions as bailouts when they went bust and promptly gave themselves huge bonuses at the expense of the tax payers, earned huge profits and paid zilch taxes. The 99% got the austerity axe in the form of cut backs in social spending and pushed them down the black hole of income and wealth inequality.

A one per cent crony capitalist economy with its trickle -down economics is unsustainable and illusory. Prosperity will not seep down gradually from top to bottom. The 99% should adopt strategy to counter the 1% by pressurizing their governments to levy inheritance and progressive taxes on the uber- wealthy and lighten the burden of taxes on the 99%.

Concentration of wealth at the present rates is pushing the global economy to the edge of a precipice. As Dr Ravi Batra, an economist, points out wealth in the hands of the few exposes the many to borrow from banks exposing them to risky loans. The rich with plenty of wealth is not averse to risk and tend to gamble away in risky schemes. The get rich quick mentality soon fuels a speculative frenzy and asset bubbles. Bank failures become inevitable.[iv] The role of the Federal Reserve (Central Bank) in pumping money to shore up assets of the wealthy like shares which the many don’t have, only helps to serve the interests of the super rich and shores up the casino economy with cheap money.

Already, the Euro zone which is bigger than US is in the throes of a depression. The economies of Portugal, Spain, Italy and France are in free fall with their banks-corporations stressed out with bad debts. Greece is bankrupt saddled with debts upto 175% of its GDP. The new left government in Greece is out to repudiate its debt. Collapse of the Euro zone is imminent and will have a cascading effect on other economies like Germany.

Sunset Parkerflix/Flickr

Meanwhile the western democracies and that of US are already assuming the form of a police state as political power is in the hands of wealthy oligarchs who have to enforce austerity measures against the interests of the 99%. Unrepresentative governments protecting the interests of the 1% have to abrogate civil liberties in order to quell the anger of the 99% who have been shafted. According to Nick Hanuer- US billionaire-“No society can sustain this kind of rising inequality. In fact, there is no example in human history where wealth accumulated like this and the pitchforks didn’t eventually come out.”[v]

But Big Brother in service of the 1% will employ subterfuge and the politics of scapegoating to divert the anger of the 99% spiling out in the streets. As standard operating procedures go, the immigrants are usually the first choice as they are marginalized and weak. If that fails, masked Islamic jihadists are the next best option.

Ideally, the hordes constituting the 99% should be trapped in Plato’s cave where they see shadows instead of reality. When the pitchforks of the riled up 99% are out chasing the immigrants or Islamic terrorists, the 1% of the Global elite would rob the other 50% of the world’s wealth – quietly and efficiently.

C R Sridhar

[i] http://www.tni.org/article/davos-class

[ii] http://rt.com/op-edge/224419-davos-switzerland-meeting-rich/

[iii] Wealth: Having it all and wanting more- Oxfam – page 2.

[iv] The Great Depression of 1990- Dr Ravi Batra- pages135-136.

[v] Even it up – Oxfam report- page 11.

Playing the Minaret Card:The French Connection

2015-01-14T08:10:00.001+05:30

French President Hollande expressing solidarity with Arab Leaders.Image credit-AFP PHOTO/KENZO TRIBOUILLARD

“The easiest way to gain control of a population is to carry out acts of terror. [The public] will clamor for such laws if their personal security is threatened”.
– Josef Stalin
“The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary.”
H. L. Mencken.

It was Wednesday 7 January, 11.30am local time when Parisians saw a terror spectacle unfold before their eyes. Two masked gunmen armed with automatic weapons stormed the office of the French satirist weekly Charlie Hebdo killing its editor and some of the cartoonists. After uttering Allah ho Akbar (God is Great) the killers calmly walked to their getaway car (a gleaming black Citroen) and made good their escape. As they drove north, they sprayed a police car with bullets and killed a policeman.

What followed was straight out of the pages of a Robert Ludlum thriller- convoluted carjacks, hostage takings and police cars in hot pursuit of terrorists. The terror spectacle had its moments of burlesque when one of the terrorists pointedly told one of the bewildered driver who was ejected from his car,” If the media ask you anything, tell them it’s al-Qaida in Yemen.” But their compulsive desire to be identified did not end there- they left their ID cards in the getaway car which they later abandoned.

Apparently, the gunman suddenly realized and rightly so that wearing balaclavas is not the best way of getting identified and that however heinous their crimes may be proper introductions have to be made in polite French society to get the necessary attention.
.
The sordid drama came to a satisfying conclusion when the heavily armed anti terrorist squad cut down the three gunmen (two involved in the Charlie Hebdo killing and the third gunman in the killing of a policewoman) with deadly firepower.

The slain gunmen were identified as brothers Chérif Kouachi and Said Kouachi who were on the terror watch list of the French security police. The third gunman was identified as Amedy Coulibaly- a criminal with a long history. Another suspect Hayat Boumeddiene- a femme fatale of sorts- is said to be at large and wanted by the French authorities for questioning.

As a fitting finale to the terror drama, the people of France numb with shock and awe of Jihadi terrorists, witnessed the polished appearance of their President Francois Hollande – a pseudo socialist with plummeting poll ratings and addicted to imperial French wars in Syria and Libya- giving a cadenced speech calling for unity “France is a great nation when under pressure. We are stronger than our enemies when we are together."

The neatly scripted drama of deranged Islamic terrorists and the just retribution of the French state should not be taken on the basis of the narrative shaped by government officials and the official terror experts. Other narratives must be heard to glean the full extent of the tragedy and examine the possible culpability of the French Government itself.
To do that we must turn back the pages of history to a stage managed synthetic terror organized by the state itself.

Gladio Operation-The Bombing of the Bologna station-Image credit-Beppe Briguglio, Patrizia Pulga, Medardo Pedrini, Marco Vaccari

From the late 1960’s to early1980’s Italy experienced a wave of terrorist acts which were bloody and sensational. These years were called ‘Anni di piombo’ (years of lead). During this period there were assassinations of politicians (Aldo Moro- sympathetic to communists sharing power in his government), journalists like Carmine Pecorelli who saw something fishy about Aldo Moro kidnapping, random shooting of policemen, bombing of Bologna railway station and the bank Piazza Fontana. This was also the time of strikes and labour unrest for better wages and working conditions and the rising popularity of the Communist party.

In his excellently researched book ‘NATO’s Secret Armies-Operation Gladio and Terrorism in Western Europe’ Danielle Genzer, a Swiss historian, points that NATO with the help of intelligence agencies of CIA (US) and MI6 (Britain) created a secret army of anti- communists codenamed Gladio (sword) which operated in Italy and other European countries whose sole object was to create a climate of fear by terrorist acts with the help of legally elected governments. The main purpose of the terrorist acts was to instill a feeling of revulsion and blame them on communist parties and movements. The Gladio operation was described by the press as a 'story straight from the pages of a political thriller'.

False Flag- By Anthony Freda

As Genzer sums up in his own words: “The secret armies, as the secondary sources now available suggest, were involved in a whole series of terrorist operations and human rights violations that they wrongly blamed on the Communists in order to discredit the left at the polls. The operations always aimed at spreading maximum fear among the population and ranged from bomb massacres in trains and market squares (Italy), the use of systematic torture of opponents of the regime (Turkey), the support for right-wing coup d'etats (Greece and Turkey), to the smashing of opposition groups (Portugal and Spain). As the secret armies were discovered, NATO as well as the governments of the United States and Great Britain refused to take a stand on what by then was alleged by the press to be 'the best-kept, and most damaging, political-military secret since World War II ”[i]

Operation Gladio was spectacularly successful and broke the back of trade unions and the rising power of the communist parties in Europe.
With the fall of communism and the collapse of the Soviet Union, the raison d’etre of Gladio NATO which was essentially anti-communist in nature became outdated. The global threat of communism as a script had to be consigned to the dustbin of historical irrelevance and a new threat in the form of the “Green Tide of Islam” posing a threat to the Christian civilization had to be invented.

After 9/11, the opportunity for using the Planet of Arabs as being a global threat to Western civilization presented itself on a platter. This was milked by neo-con think tanks such as the Hudson Institute and the American Enterprise Institute which had connections with the Brussels NATO combine. The phobia of Eurabia spread to the European Union which as a centralized unit of 27 member countries including France managed to effectively use the so called terror Islam as rallying point for the war on terror.[ii] Now the Red Menace was replaced by the “Green Minaret”. The strategy of tension found a new home.

Powerful enemies are necessary for the bloated NATO military machine to offer justifications for its existence and playing the minaret card is the game plan. As Michael Hagos in his scholarly study “Enemy Images- How and Why the West Creates Enemy Images and the Social Consequences Thereof ” says “Governments are willing to do everything, and go to any length, to engender fear in the masses, by building up a chimerical monster, then campaign to have it crushed, thereby disingenuously keeping the bewildered herd from paying attention to what’s really going on around them (i.e., to what’s being done to them by their own leaders), keep them diverted and controlled, while all along fraudulently sustaining the interests of power: con artistry at its best, always under the deceitful guise of threats to national security.”[iii]

The endless parading of enemy images is meant to justify “the perpetual inflation of Western military budgets, so that the very narrow concentration of power and wealth can be further accelerated, under the guise of “national security.”[iv] The fears to national security are overblown to offer pretext for oligarchical interests within the state to ram through measures curbing freedom and enlarging the scope of arbitrary arrests and detention without trial. Then a fully fledged police state comes into being to clampdown on dissent against the very oligarchical interests that caused the strategy of tension in the first place.

France a member state of the NATO military axis –except for a brief hiccup during the time of President Charles De Gaulle when he kicked NATO out of France- has enthusiastically cooperated with the geopolitical objectives of NATO in its war on terror. Seldom mentioned in the media and airbrushed out of existence is the French role in the arming of Islamic terrorists to fight her proxy wars in Syria and Libya.

Tony Cartalucci writing in Global Research says “France, as part of a NATO-led coalition, has been arming, funding, aiding, and otherwise perpetuating Al Qaeda terrorists for years, beginning, on record in Libya with the overthrow of Libyan leader Muammar Gaddafi and continuing until today with NATO’s arming, harboring, and backing of Al Qaeda terrorists including the so-called “Islamic State” (ISIS) within and along Syria’s borders. [v]

In the same report quoting the Washinton Post article titled France sent arms to Libyan rebels says ‘while Hollande’s predecessor, former French President Nicolas Sarkozy would be the one to set foot in decimated Libya in the wake of NATO’s intervention there – which included in addition to French arms sent to terrorists, French planes providing these terrorists air cover as they carried out atrocities and genocide – Hollande would continue policies enacted under Sarkozy, both in Libya, and currently in Syria. French officials announced on Wednesday that they had armed rebels in Libya, marking the first time a NATO country has said it was providing direct military aid to opponents of the government in a conflict that has lasted longer than many policymakers expected.’[vi]

Thus it cannot be denied that whatever faction of the elusive Al Qaeda the masked gunmen involved in the massacre sprang from- the NATO alliance of which France is a part of deliberately created and used the terrorist network to further its own strategy of tension for domestic purposes and carrying out its bloody proxy wars for its geopolitical ends.
Operation Gladio and its strategy of tension appear to have cast its spell on Europe. The EU is in a downward spiral of deflation, rising unemployment, severe austerity cuts and social unrest. Greece which is bankrupt is all set to repudiate its debts and quit the EU if the communists come to power. France is especially in the vortex of social unrest on account of its austerity measures which mean cuts in social spending and job losses in its public sector. Public anger may intensify further and spill over in the streets in the months to come.

There are unmistakable signs that Anni di piombo (years of lead) is registering its presence in France. There is growing popularity of Marine Le Pen’s Front National a far right party with fascist leanings. There is growing xenophobia and anger against immigrants. In the wake of the massacre in Paris, there is clamor for tough anti- terror laws which would severely curtail democratic rights in France paving way for a police state with the trappings of liberal democracy.

There are also unity marches and candle vigils held in France to bring a healing touch to a dangerously polarized community. But is it enough?

There are other developments in the Charlie Hebdo killings that raise disturbing questions about a Gladio style operation underway. The mysterious suicide of Helric Fredou,the deputy director of the regional judicial police who was to submit a report on the Hebdo killings remains unexplained. Jarring the official narrative of spontaneous terror is the fact that when the brothers Chérif Kouachi and Said Kouachi were under active surveillance by the French Intelligence,why did they not foil the attempt? Did they deliberately let it happen?

The French deep state has unsheathed its sword. The gleaming sword of the state may appear comforting to the bewildered herd as a slayer of dragons and enemies of the state. But viewed from a different light by the more enlightened, a terrible truth awaits them.

The sword is aimed at the heart of its own people.

C R Sridhar

[i] NATO’s Secret Armies-Operation Gladio and Terrorism in Western Europe’- Danielle Genzer- page 15.
[ii] Gladio-NATO’s Dagger at the Heart of Europe- Richard Cottrell- page 403.
[iii] How and Why the West Creates Enemy Images and the Social Consequences Thereof- Michael Hagos- page 12
[iv] Ibid- page 8.
[v] http://www.globalresearch.ca/france-armed-terrorists-that-struck-paris/5423440
[vi] ibid

The Great Indian Bank Robbery

2014-12-17T18:01:00.000+05:30

Crumbling Bank-Source-Business Today

If I owe you a pound, I have a problem; but if I owe you a million, the problem is yours.”
-John Maynard Keynes

The daring bank robberies of Bonnie and Clyde during 1931 to 1934 captured the American public imagination and glamorized the image about outlaws. The legend of the duo was immortalized in a 1967 Hollywood film by Arthur Penn starring Faye Dunaway and Warren Beatty . The daring exploits of the cigar smoking and machine gun toting Bonnie and her partner in crime Clyde ended in gory violence when the pair was gunned to death in an ambush by law enforcement officers.

Bank Robber-Source-Shutterstock

But the bank heists of Bonnie and Clyde are measly pickings when compared to bank heists executed by corporate elites in India. The scale of bank heists beggars the imagination as the Indian corporations owe the public sector banks huge sums of money running into billions of Rupees. One estimate of the loans gone bad places the figure at Rs 2.06 trillion. Bank analysts warn only half would be recovered by the banks.[i] If Bonnie and Clyde were to be alive today their jaws would have dropped at the sheer magnitude of the corporate loot of public sector banks.

Addressing the media, the general secretary of the Bank Employees’ Federation of India Pradip Biswas pointed out that’ the big corporate houses, having appropriate political patronage are the major culprits. Bank employees’ movement and other Left and democratic forces have long been demanding publication of the list of defaulting corporate borrowers responsible for growing Non Performing assets (NPA); successive governments have stonewalled the demand’.[ii]

Striking a somber note on the health of the banking credit system Raghuram Rajan-the governor of the Reserve Bank of India- accused the large corporate borrowers of being freeloaders of riskless capitalism. He castigated the big corporate houses for making the bank credit system unstable and unhealthy. Deploring the practice of lionizing these corporate honchos as captains of Industry, he said these were really parasites that leeched on the blood of the hard working people of India.[iii]

One of the flamboyant examples of the freeloaders of riskless capitalism is the liquor baron Vijay Mallaya. His fondness for luxurious mansions, race horses and expensive cars earned him the sobriquet ‘the king of good times’ but for the consortium of mostly public sector banks from whom he borrowed close to one billion dollars for his ill fated Kingfisher Airlines which ran to the ground, it was a different story. He became a king of bad times as he left a pile of bad debts for the banks to swallow. Recent media reports suggest that the banks after months of inaction have taken measures to declare him a willful defaulter. In Reserve Bank of India parlance, a willful defaulter is a borrower that is able but unwilling to pay, has diverted loan proceeds for other than their initially stated use or has overstated profits to obtain a loan. In simple language, he scammed the public sector banks.[iv]

But to be fair to the king of good times, he is not alone in freeloading on public sector banks. There is a merry band of big corporate borrowers who do the same and contribute to the bulk of unpaid debts to the banks.

The alarm bells of the ticking debt bomb was sounded by a report published by Credit Suisse in the year 2012 and another report from the Reserve Bank of India Deputy Governor K.C. Chakrabarty highlighted the fact of debt overload among leading corporate groups. At the top of the chart of corporate borrowers are Adani, Essar, GMR, GVK, Jaypee, JSW, Lanco, Reliance ADA, Vedanta and Videocon. A significant bulk of these corporate borrowers are in Infrastructure /Power projects and have been ‘on a borrowing spree with their liabilities rising six-fold over the six years ending March 2013 to touch Rs. 6.31 trillion.’[v] Moreover, as the Credit Suisse in its report appropriately titled the House of Debt points out the aggregate debt of these 10 corporate groups constitute 13% of the bank loans and 98% of the banking system’s net worth.[vi]

More worrisome is the fact that these corporate borrowers which are heavily indebted to public sector banks have poor financials such as poor profitability outlook which jeopardizes their ability to pay interest to the banks. The plunging rupee would also have a crippling effect on these corporations ‘as many have loans that are 40% to 70% denominated in a foreign currency. Adani Enterprises, Jaiprakash Associates Ltd. (the group that that built India’s first Formula One track) and Reliance Communications, are amongst the worst hit as they have the largest percentage of borrowings through forex loans.’[vii] This means that the unpaid debts will snowball into restructured debts and the strain on the banks would be unendurable.

The recent controversy about $1 billion loan to Adani Group by State Bank of India has raised questions about the bona fides of the Modi BJP government to crack down on corporate freeloaders of public money. Gautam Adani -a personal friend of Modi and his financial backer in the recent elections- is in the eye of a perfect storm on account of the loan sanctioned by the leading public bank(SBI) to Adani’s coal venture in Australia. Critics of the loan point out that the Adani group has already exposed the public banks to debt overload and that a further sanction of a billion dollars to a risky coal venture would only make matters worse.[viii] The backlash of public opinion has made the State bank of India to keep the loan sanction on hold for the time being.

Banks in bad shape-Source-Ken Teegardin

The public sector banks saddled with bad debts have to be recapitalized to the extent of around USD 40 billion to regain balance sheet strength. And this is a tall ask. This could be achieved by nationalising the bad assets of the Indian banks and heap the burden on the taxpayer or by selling the government holding in these banks to less than 50% and passing control to the corporate class that caused the crisis in the first place.[ix]

The underpinning of the corporate debt crisis is the crony capitalist policies (make the rich richer and the poor poorer) initiated by the Manmohan Singh’s Congress government and pursued with vigour by the present BJP government under Modi. As corporate freeloaders are the main financiers of elections, they are a power unto themselves and call the shots in the political arena. There is very little that the BJP government can do except shift the burden on the public.

For the urban middle class who in large numbers voted for a messiah in Modi, there is a heavy price to be paid. This could come in additional indirect taxes, more expensive power tariffs and cooking gas costs. To an already burdened untermensch who come to cities from rural homes the cutting of social spending such as poverty alleviation and food security schemes would be an intolerable burden for them to bear.

The chickens have finally come to roost in Modi Land.

C R Sridhar

[i] http://www.rediff.com/business/slide-show/slide-show-1-special-indian-banks-with-highest-npas-sbi-tops/20130821.htm

[ii] http://www.thehindu.com/news/cities/kolkata/bad-debts-only-ailment-of-public-sector-banks/article6227954.ece

[iii] http://www.moneycontrol.com/news/economy/defaulting-large-borrowerslike-freeloaders-rajan_1237524.html

[iv] (http://in.reuters.com/article/2014/09/02/india-kingfisher-airl-banks-idINL3N0R33RY20140902)

[v] http://www.thehindubusinessline.com/opinion/columns/c-p-chandrasekhar/the-looming-banking-crisis/article5086242.ece

[vi] https://doc.research-and-analytics.csfb.com/docView?language=ENG&source=emfromsendlink&format=PDF&document_id=991849241&extdocid=991849241_1_eng_pdf&serialid=6D4Mc02hh

[vii] http://www.forbes.com/sites/meghabahree/2013/08/19/top-indian-companies-burdened-with-debt/

[viii] http://www.business-standard.com/article/companies/5-reasons-why-sbi-s-1bn-lifeline-to-adani-s-australia-project-needs-to-be-questioned-business-standard-news-114111800541_1.html

[ix] http://www.moneycontrol.com/news/politics/how-modis-macro-men-may-try-to-save-npa-hit-banking-sector_1046313.html?utm_source=ref_article

Interstellar: The hubris of Manifest Destiny and Technological Prowess in Outer Space

2014-11-24T13:01:00.000+05:30

Source-(http://www.imdb.com/media/rm1874904064/tt0816692?ref_=tt_ov_i)

"Humankind is either on its way to the stars or hurtling out of a high-rise window to the street and mumbling, “So far, so good.”(Why Things Bite Back-Edward Tenner.)

Christopher Nolan’s slickly directed sci-fi film ‘Interstellar’ opens with the grim scenario of the earth being ravaged by blight which makes it unsustainable to support human life causing the advanced human civilization to regress to a failing agrarian model of development. But help is at hand with alien Intelligence directing the super hero Cooper – a NASA pilot turned farmer- and his precocious daughter Murphy to a secret NASA installation run by the brilliant scientist Prof. Brand.

Prof Brand convinces the super hero Cooper – imbued with a refreshing can do optimism and a heroic desire to explore uncharted frontiers of the outer space- to find another hospitable planet. In this noble quest aboard the NASA spacecraft Endurance, Copper is joined by Brand’s daughter Amelia who is a biologist, physicist Romilly, geographer Doyle and two robots TARS and CASE in tow. The mission for this tech savvy team is to identify three promising planets orbiting the black hole Gargantua and locate the most hospitable planet with the right atmospheric conditions to sustain human life.

At one point it appears that Prof Brand could not solve the physics problem of evacuating the dying earthlings as he did not have an important input which lay buried in the black hole and that the best option available was to breed humans afresh on a new planet. But after a series of disasters and despair, arcane knowledge of space physics pays off.

Cooper and the surviving members of his crew obtain the critical input from the black hole which would enable the lifting of space station via gravity and convey the much needed information to Murphy who is now a NASA scientist. Murphy, much to the relief of the long suffering audience fed on adrenalin and popcorn, cracks the physics puzzle left unsolved by Prof Brand. The film ends on a happy note with the humans saved from extinction. Thanks to NASA and the daredevil Space Technology, ‘the end of the earth will not be the end of us.’ And while the vistas of limitless frontiers beckon us, there is a jubilant cry-–We screwed the earth but now- by God’s will -we have the whole fracking universe.

Source-http://upload.wikimedia.org/wikipedia/commons/1/12/American_progress.JPG

For much of the two odd hours of the film, the popcorn munching audiences seated in comfy cushioned sofas in the multiplex theaters get an exhilarating adventure of outer space. To the extent of providing escapism for the viewers trapped in humdrum lives, the film is a brilliant success. But as soon as the effects of junk snacks wear off and the critical faculties kick in – the banality of the film becomes obvious. The message that the film conveys is a vapid rethreading of manifest destiny with the progress of expanding frontiers made possible by technological power for unlimited growth.

In a deeply philosophical and reflective book ‘The Short History of Human Progress’ Ronald Wright says civilizations collapse as they remain trapped in the ‘assumption that a pattern of change exists in the history of mankind...that it consists of irreversible changes in one direction only, and that this direction is towards improvement.’ As he points out ‘Many of the great ruins that grace the deserts and jungles of the earth are monuments to progress traps, the headstones of civilizations which fell victim to their success. In the fates of such societies- once mighty, complex, and brilliant- lie the most instructive lessons….they are fallen airliners whose black boxes can tell us what went wrong.’[i]

And what do the black boxes tell us? Civilizations are invariably caught in progress traps which refers to the series of innovations whether in better hunting skills or better weaponry creating new problems for which society is either unwilling or unable to solve. In other cases the innovations may create conditions that are far worse than before the innovations were made.

Source-(http://www.l-i-n-k-e-d.com/wp-content/uploads/2011/12/progress-trap.jpg)

Moreover, civilizations starting from the age of agriculture 10,000 years ago have indicated that human societies will move towards greater size and complexity making greater demands on earth’s resources. Apart from the threat of resource depletion and hence unsustainability of civilizations, there is also problem of complex and technologically advanced societies becoming unstable and subject to rising costs and diminishing returns.[ii]

Modern technologically advanced civilization such as ours show signs of being failed civilization as it makes unreasonable demands on the natural environment to meet its obsessive high growth rates. To meet its energy requirements it relies on burning hydrocarbons and fossil fuels which increases climate instability.[iii]

We have not learnt the lesson that nature has its limits and those civilizations which live beyond the carrying capacity of their natural environment are doomed to fail. According to Neil Postman author of Technopoly, we live in a self justifying, self-perpetuating system wherein technology of every kind is cheerfully granted sovereignty over social institutions and national life which in itself is a progress trap from which there appears to be no escape.

In a sense Nolan’s sci-fi film Interstellar depicting earth as becoming unsustainable for human life is uncomfortably close to reality but the tech fix solution of having a getaway space ship (courtesy NASA) to evacuate six billion people is infantile fantasy bordering on the absurd.

Source-courtesy the George Washington University website(http://www.gwu.edu/~fwright/graphics/icarus.html)

Perhaps, intelligent aliens visiting the doomed planet earth once teeming with people and surveying the vast wreckage of a spacecraft which was to evacuate six billion to safety, would shake their heads and be amazed at the foolishness of earthlings. How could they forget, they would wonder, the tragedy of Icarus who with wings made of feather and wax flew close to the sun and fell to his doom?

C R Sridhar

[i] http://en.wikipedia.org/wiki/A_Short_History_of_Progress

[ii] https://www.sustainabilitytelevision.com/news/2417

[iii] ibid

Inside the Spiders Web: Tax havens and Dirty Money

2014-10-15T18:40:00.000+05:30

Source-actionaid.org.uk

‘My secretary is still paying higher tax rate than I am.”

Warren Buffet-Billionaire Investor.

Source-cbc.ca

Tax havens evoke images of sandy beaches, swaying palm trees, and voluptuous women gamboling in the swimming pools of luxury hotels. There is a less glamorous side to it as well- when one sees burly potbellied drug lords, mafia or tin pot African dictators getting themselves massaged by attractive masseuses near the poolside. There is also the breathtaking view of blue seas dotted with luxury yachts belonging to the uber- wealthy. No wonder the French call these places paradis fiscaux.

The popular stereotype of tax havens got a fresh lease of life in the movie ‘The Firm’- a film based on the novel written by John Grisham- which explores the sinister relationship between a prestigious law firm and mafia money which had to be laundered in one of the island tax havens. As Hollywood movies go there is plenty of excitement with partners of the firm getting murdered by menacing mafia criminals but says very little about the true dimension of Tax havens in today’s world.

Unfortunately, stereotype notions of paradis fiscaux conceal more than they reveal. As the authors of the book ‘Tax Havens- How Globalization Really Works’ point out that Tax havens are not exotic outposts that exist on the fringes of the global economy serving the interests of the criminally delinquent but function as main conduits for tax evasion for the so called squeaky clean multinational enterprises around the globe. Moreover, they exist not in opposition to major economies like US and UK but in accord with them.[i]

Prem Sikka, Professor of Accounting- Essex Business School, UK, in his hard hitting monogram ’The Pinstripe Mafia’ says that tax avoidance is a very lucrative global industry which is operated not by shady banks in island paradises but by largest private banks of the world as well as leading law firms and accounting firms. These players are located not in exotic island resorts but in First World capitals of the world such as London, New York, Geneva, Frankfurt and Singapore.


Source-Tax Justice Network

And there are no mafia enforcers employing kneecapping as a means of control to keep Tax Havens smoothly running. That responsibility is borne by respectable accountants in their business suits from the Big Four Accountancy firms (KPMG, Deloitte, Pricewater houseCoopers,and Ernst&Young) with fees of billion pounds each year who do the job of designing and implementing the tax evasion schemes for their corporate clients.

The Tax Justice Network has identified 80 offshore secret tax havens where at least $21 to $32 trillion (tax free) has been invested as on 2010. This is an estimate of financial assets alone. If non financial assets such as real estate, gold bars, luxury yachts owned by offshore entities (concealing the real owners) the figure shoots up considerably. [ii]

But what are Tax havens? What is their attraction for tax dodgers? While academics provide arcane definitions of Ta x havens, it is not necessary to wade through them. A simple rule of the thumb would be adequate to spot tax havens. Firstly, they offer secrecy which help tax dodgers to conceal their identity and source of their untaxed income or wealth. There is also the added attraction of Tax havens which are small sovereign states not cooperating with any tax inquires from other nations or exchange any information about tax evasion. The secrecy protection is fortified by criminal penalties such as imprisonment for employees who leak out secrets. In some Tax havens whistleblowers end up dead with their body stuffed in the boot of an abandoned car. Secondly, Tax havens offer very low or zero taxes for non-residents. This feature is especially attractive for the pinstripe mafia (the big four accountancy firms) to structure tax evasion schemes for their well heeled clients. And lastly, Tax havens have the financial sector disportionately bigger than their local economy. Using this yardstick the IMF fingered the City of London as one of the biggest centers of offshore money laundering.[iii]

The 80 odd secrecy jurisdictions or Tax havens have spheres of influence or control and they fall into 3 groups. The first and the biggest group is the UK based City of London which controls a satellite of tax havens located in Crown Dependencies (Jersey, Guerney and the Isle of Man) overseas territories (Cayman Island), Pacific atolls, Singapore and Hong Kong. The second group is European Tax Havens centered on Switzerland, Geneva, Liechtenstein, Monaco, Luxembourg and Netherlands. The third group is USA which controls Manhattan, Florida, Panama, smaller states of Wyoming, Delaware and Nevada, American Virgin Islands, and Marshall Islands to name a few.[iv]

Perhaps, the most apt metaphor to describe the secrecy jurisdictions that dot the global economy is that of a spider which produces sticky web of silk threads to trap flies for food. The tax havens like the spider’s web catch cross border flows of global dirty money. At the top of the chart is abusive and fraudulent transfer pricing techniques which account for 60-65% of illicit global money transfers which amounts to anywhere between $600 to $1 trillion annually. The illicit proceeds of criminal activity like drug trafficking, human trafficking, counterfeiting, contraband and terrorist funding amounts to 30-35% or $300 to$550 billion annually. The proceeds from bribery and theft by government officials account for a mere 3% of the illicit global flow into Tax Havens.[v]

The sad irony is that corruption of government officials which is peanuts in terms of percentage in global illicit flows has received the greatest media notice while the more significant scam of fraudulent transfer pricing has been pushed under the rug.

In a documentary film ‘We are not broke’ makes the shocking disclosure that giant corporations like GE even after earning $26 billion profit during the years 2005 to 2010 paid zero federal Income tax. Bank of America after posting a profit of $4.4 billion and receiving a bailout of $1 trillion paid zilch taxes. Oil giants EXXON and CHEVRON earning in the year 2009 profits of $19 billion and $10 billion respectively paid zero Federal income tax. One of the biggest banks in America Citigroup after posting a profit of $ 4 billion and receiving a bailout of $2.5 trillion paid nothing to the US treasury.

One of the compelling reasons for giant corporations to declare zero tax or pay low tax in countries where tax rates are more is the presence of offshore Tax Havens. Here shell companies or mailbox companies are established for the purpose of aggressive tax evasion. In an elaborate charade called transfer pricing, corporations with their army of accountants and lawyers create a maze of shell companies (i.e. companies which have no real business activity) in Tax Havens which have secrecy laws concealing the ownership and the source of the funds. The tax strategy is fairly simple: book the profits in shell companies located in tax havens having low or nil rates of tax and show reduced or better still zero earnings in countries which have higher rates of tax. The technique? Misinvoicing the trade transactions. In other words, under invoice the value of exports to the entity located in a tax haven which in turn exports at the full value. The difference is deposited in an offshore account. A variation to the theme would be to over invoice goods sold to the importer. The difference between inflated value of imports and the true value of imports is deposited in an offshore account for the importer. Keeping in mind that approximately 60% of global trade is conducted within multinational corporations (MNCs), between subsidiaries of a parent company, the transfer pricing route is the most popular vehicle for tax evasion for MNC’s.[vi]

Perhaps, a daring tax heist which shot to prominence was Vodafone (India) which was accused of transfer price tax fraud with respect to issuance of shares to its parent company located in Mauritius for around $138 per share. The Indian tax authorities determined the true value of the share price to be in the region of $876 and made a demand of $617 million on Vodafone. At the moment of writing this article Vodafone obtained a quashing of the order by the Bombay High Court.

A much favored Tax Haven for the Indian Corporate elites is Mauritius. For rich business families and wealthy corporations there is another game to be played called capital round tripping. The mechanics of the tax dodge is simple and elegant. First the untaxed/ illicit capital flows into a shell company established in Mauritius. The money comes back to Indian stock market from the shell company (Mauritius). The capital gain from sale of shares by the shell company (Mauritius) is tax free as per the tax treaty with India. The Indian business elites go laughing to the offshore banks to enjoy their tax free income which is doubly untaxed.

An egregious example of capital round tripping involves a Singapore based company Biometrix ( with paltry assets of $57,000!)which invested close to $1.05 billion in four companies belonging to Mukesh Ambani of Reliance. Mr. Prashant Bhushan, a lawyer and crusader against corporate corruption alleged that these were funds which were siphoned off from Reliance and appeared as FDI investment in four fully owned companies by Mukesh Ambani. There appears to be deafening silence on this issue by the Modi-BJP government which was elected to power on its election promise to root out money laundering.


Source-taxjustice.net

The under reporting of profits by Multinational enterprises and the transfer of illicit capital to tax havens has a tsunami like effect on the balance sheet of the developing world. One study by Christian Aid estimates that the loss of corporate taxes comes to $160 billion annually on account of tax frauds by mispricing and false invoices by multinational corporations. The other route is 10 year tax holidays given to MNC in Special Economic Zones (SEZ) set up by the local elites of developing nations which end up in loss of natural resources for the developing country without any gain in its public revenue.

Perhaps the more comprehensive picture is laid out by Henry James of the Tax justice Network who in his study of 139 of low middle income countries says that these countries contributed to capital flight of about $7.3 to $9.3 trillion in 2010 which ended up in Tax havens through the top private banks of the first world. These countries were saddled with an external debt of $4.8 trillion. But if one considers the total outflow of foreign exchange which had been invested in first world securities then the picture changes dramatically- these countries become net creditors from debtors to the tune of $10 to $13 trillion dollars as on 2010! [viii]

There are dire implications for even the developed economies of Europe, UK and US as well. In US the loss of taxes is estimated to in the region of $345 billion to $500 billion annually. In Europe it is estimated to be in the region of 1 trillion euro. UK is losing tax revenues to the tune of 35 to 150 billion pounds yearly.

Source-Khalil Bendib

All these countries are caught up with recession and austerity drives. This means the gutting of social spending on schools, health care, fire services and public libraries. In the UK there was a hike in Tuition fee which sparked student riots in the streets of London. There could be more social unrest as public utility services get degraded on account of an eroding tax base.

Leona Helmsley, a billionaire tax dodger, once said “we don’t pay taxes. Only the little people do.” And she is right. In the shadowy world of tax havens only the uber-wealthy and multinational businesses benefit. While the MNC’s and the rich tycoons reduce their tax bill, the little people are saddled with distributional shifts of tax on their shoulders in the form of consumer taxes (VAT) and social security contribution. This is evident by the fact that a New York janitor earning slightly more than $33,000 has an effective tax rate of 25% while GE with billions of dollars in revenue pays zero tax. The big losers are the salaried middle class who pay for the games the rich play in tax havens.

People like you and me.

C R Sridhar

[i] Tax Havens- How Globalization Really Works- Ronen Palan, Richard Murphy, Christian Chavagneux page 4-

[ii] The Price of Offshore Revisited (2012)TJN- James.S.Henry- page 5.

[iii] Treasure Islands- Nicholas Shaxson- page 9.

[iv] Ibid pages 14-21.

[v] Tax Havens- How Globalization Really Works- Ronen Palan, Richard Murphy, Christian Chavagneux page 174.

[vi] The links between Tax evasion and corruption- Global witness –Sept 2009.

[vii] We are not broke- Documentary Film.

[viii] The Price of Offshore Revisited (2012)TJN- James.S.Henry pages 5-6.

The Four Apocalyptic Horsemen of Crack Snacks: Sugar, Salt, Fat and Obesity.

2014-09-12T17:23:00.000+05:30

Source-Forbes

"He who does not know Food, how can he understand the diseases of man?"

-Hippocrates, the father of medicine (460--357 B.C.) [i]

Are Americans snacking their way to an early grave? Consider these flabbergasting facts: one of out of every three Americans is obese. In a study by The Centers of Disease Control and Prevention points out that 35.7% of American adults as obese, and 17% of American children.[ii] What is more frightening is that obesity is increasing among the two year old children.

Obesity causes diabetes, hypertension, strokes, heart attacks and hosts of other illnesses which are assuming epidemic proportions in US. Deaths related to diseases induced by sheer fat are 120,000 each year in United States. Equally staggering are medical costs associated with obesity. The figure is 190 million dollars of added medical costs to treat obesity related illness. There is 105% increase in the costs of prescription drugs to tackle obesity. The annual productivity loss is estimated to be $164 billion to the American economy. Medicare and Medicaid are groaning under the weight of $62 billion in costs incurred every year due to obesity.[iii]

Source-ncat.edu

Michael Moss, a Pulitzer winning author, in his book ‘Sugar, Salt, Fat: How the food giants hooked us’ places the blame on food processing corporations who load their snacks and drinks with sugar salt and fat to the detriment of public health. As he says, “Salt, sugar, and fat are the foundation of processed food, and the overriding question the companies have in determining the formulations of their products is how much they need of each to achieve the maximum allure.”[iv] And of course how much of the stomach share they can get.

Food giants know that our bodies are wired for sugar and that we crave for it. They also know that when sugar is added into foods such as cookies, breakfast cereals, soda drinks, sales increase and revenues grow. Food scientists and nutrition experts see the whole mouth as being sensitive for the seduction of sugar and not the tip of the tongue alone. Sweet receptors are linked to thousands of taste buds delivering signals to the pleasure zone in the brain. Food experts also know that children are especially vulnerable to the seduction of sugar and they are specially targeted by a barrage of ads to buy sweet candies and cookies which expose them to tooth decay and obesity.[v]

While cane and beets were main sources for sugar, sometime in the 70’s high fructose corn syrup became popular with soda giants like PepsiCo and Coco-Cola. As an ingredient it was cheap as corn was subsidized by the Federal government and it came in liquid form which made it easy for the soda makers to introduce it in drinks.[vi]

The consumption of sugar skyrocketed. An American now consumed on an average 22 teaspoons of sugar per day. The consumption of fructose sweetened soda drinks spurted to around 32 gallons a year per person. Not far behind were heavily sweetened breakfast cereals like Froot Loops which became popular with kids and made surging profits for cereal manufacturers like Kellogg.

Source Copyright-Metro

There was one dark secret not shared by the food giants with the consumers. That sugar was just like crack as it induced people to eat more than was good for them. Experiments with Lab rats showed that when fed with Froot Loops they displayed a voracious appetite with no signs of slowing down. Even administration of electric shocks did not slow the rats when it came to eating cheesecake. Such is the insidious power of sugar.

Perhaps the best expert on the subject of sugar is none other than Professor John Yudkin who in his book Pure, White and Deadly implicates excessive consumption of sugar for causing serious ailments as Diabetes, heart disease, and cancers of the intestine. As he ominously reminds us “If only a small fraction of what is already known about the effects of sugar were to be revealed in relation to any other material used as a food additive, that material would promptly be banned.”

Salt is another ingredient added by food manufacturers to make their snacks sell. For people crave salty food and salt adds a heavenly dimension to the pleasures of eating. But the bad news is that salt causes high blood pressure strokes and cardio vascular diseases. And the Americans are consuming twenty times the required amount from processed foods. As Michael Moss puts it,” The companies making these products weren’t just adding salt. They were dumping sack after sack of it into their boxed macaroni and cheese, their chicken à la king heat-and-serve meals, their canned spaghetti and meatballs, their salad dressings, tomato sauces, pizzas, and soups.”[vii] Moreover salt is also a taste fixer. What is a potato chip without salt or meat without it? Many foods such as cheese would not be appealing to the palate without salt.

Salt and other sodium based compounds are pumped into snack foods to prevent growth of bacteria and prolong the shelf life of food products in the grocery stores. There appears to be no escape from salt for the food industry as it drives consumption and keeps the cash registers ringing.

Fat is important to snack foods as it provides texture and feel to snacks. The crunchy Frito Lay is tasteless without fat, breads become silky smooth and cookies get firmer texture because of fat. Apart from driving sales for the food giants, fat improves the shelf life of the products and forms an indispensible pillar of the food industry. As Moss sums up the seductive appeal of fat in the following words, “If sugar is the methamphetamine of processed food ingredients, with its high-speed, blunt assault on our brains, then fat is the opiate, a smooth operator whose effects are less obvious but no less powerful.”[viii] While fat is good for junk food industry, it is bad news for consumers. Saturated fat which comes from the consumption of red meat, cheese and other dairy products clogs the arteries with gooey cholesterol causing heart attacks.

Junk foods captured the imagination of the American consumer as it was convenient and easy to prepare. As modern life became more hectic for moms who were forced to supplement household income by going to work, there was little time left for home cooking. Moreover, there were TV programs to watch and cooking at home was a real pain. Presto! Then came the precooked frozen TV dinners loaded with fat, salt, sugar and preservatives and the simple joys of home cooking became a thing of the past. Now food need not be cooked and eaten at meal times as junk food came precooked in convenient packaging. Snacking became a national pastime. Now Frito Lays, Mars bar or snickers could be consumed at any time and at any place. The epidemic of obesity was now a foregone conclusion.

Source-foodfacts.info/blog

Even though the problem of junk snacking is ubiquitous and alarming, a sure tested way to stop the galloping horsemen from reaping their bloody harvest is to eat sensibly. Pills and surgery are expensive and only buys us time. The medical fix is not an answer to obesity as it does not go to the root of the problem which is the food we eat. If we eat plant based food with fruits and vegetables and avoid animal based foods like meat and dairy products, we would have taken our first steps to regain our health.

But the allure of crack snacks will not go away easily. One part of the problem lies in the fact that junk foods are cheap while fresh fruits and vegetables are more expensive. It costs more to buy bottled water than a can of coke. People living on low wages or food stamps like Black Americans remain hostages to junk food as they are cheap.

The other part of the problem is our flawed perception of danger. Human beings tend to perceive threats in exotic forms. When the Homeland security would have us believe that there is clear and present danger from terrorist hijacking of planes, we adjust to the inconvenience of air travel by passing through the security checks and metal detectors beltless, shoeless and clueless about the actual dangers of air travel. But the fact remains that air travel is still safe for most of us compared to eating junk food. One of the sad ironies of risk perception is that the threat to life comes in the most banal or innocuous forms and often ignored: like your sugary soda, your breakfast cereal or your double cheeseburger.

C R Sridhar

[i] The China Study page 11.

[ii] Obesity in United States Wikipedia.

[iii] http://www.phitamerica.org/News_Archive/10_Flaggergasting_Costs.htm#sthash.8yJMtCir.dpuf

[iv] Sugar Salt Fat- Michael Moss- page 329.

[v] Ibid pages 26.

[vi] Ibid page 27.

[vii] Ibid page 268 .

[viii] Ibid pages 155- 156.

Fingered: Is the American Middle class the New Servant class?

2014-08-26T17:35:00.000+05:30

Source- barstools sports

From 1946 to 1972 the American middle class had it finger lickin’ good. Americans returned from the Second World War to a vibrant economy where there were plenty of jobs with decent wages. Worker productivity matched the regular wage increases which meant rising profits for corporations. The American housewives who were happy with their husbands as bread winners swished around in their crisp aprons in kitchens surrounded by gleaming kitchen appliances. All seemed wonderful with social mobility assured for Americans to climb up the social ladder to middle class respectability if they worked hard enough in the manufacturing industries. Kids could be sent to colleges and new cars could be bought. These were the golden years for the middle class.[i]

Source: Pat Bagley-Salt Lake Tribune

The Golden era turned to bronze for the middle class as the noose of stagnant and declining wages tightened around their necks. In the eighties under Reagan the abandoning of the middle class started in real earnest. The wages were squeezed; unions which negotiated better wages for their workers were destroyed. The low or stagnant wages gushed up as profits to line the pockets of the CEO’s of corporations and the top one percent of the income pyramid. The tax structure became corporate friendly with no respite for the middle class and small family businesses. Corporations outsourced jobs and the manufacturing jobs were shipped to China. Soon millions of jobs were lost for Americans from the secure auto manufacturing sector and they faced reduced earnings, chronic job insecurity and diminishing prospects of meaningful retirement with benefits.[ii]

The plight of the middle class families worsened as large section of the middle class was pummeled into the trap of an economy of low wages. Soon single earning middle class families had to pave way for families with two incomes to balance the household budget. When that did not help the middle class had to borrow money for their household spending and for buying homes. In the last thirty years of stagnating incomes, the middle class families piled up huge debts and were in the throes of debt peonage.

The toxic legacy of the Reagan era continued unabated even under the Democrats and the final nail was driven in the middle class coffin by the financial crisis in 2008 when Wall Street nearly crashed and had to be bailed out with trillions of dollars of tax payer’s money. Now it became de rigueur to talk of austerity and balancing the budget which meant reduced social security, slashed spending on education and public services. The middle class was culled amidst the drumbeat of the corporate media resonating with the sound bites of free market and creative destruction of competition.

Writing for the German Newspaper Der Spiegel Thomas Schulz says, “While America’s super-rich congratulate themselves on donating billions to charity, the rest of the country is worse off than ever…. Millions of Americans are struggling to survive. The gap between rich and poor is wider than ever and the middle class is disappearing.” [iii] Paul Mason in the UK newspaper Guardian injects more gloom about the viability of the middle class “wages don’t rise; you can’t get on the property ladder. Fiscal austerity eats into your disposable income. You are locked out of your firm’s pension scheme; you will wait until your late 60s for retirement…. This generation of young, educated people is unique—at least in the post-1945 period: a cohort who can expect to grow up poorer than their parents.” [iv]

Source-theglobalist.com

The future for the American middle class is rather bleak unless one is imbued with cockeyed optimism. The Bronze Age is already turning to Stone Age as there appears to be no political party which has the political courage to change the downward trajectory of lower wages for the middle class. As Jeff Faux, a distinguished economist, points out in his book ‘The Servant Economy’ that the middle class was sacrificed on the altar of political expediency in favor of two powerful centers of power, namely, the Corporate Military Industrial Complex and Wall Street.

As well paying jobs get outsourced to low wage countries, even college graduates would have their escape routes blocked and a college degree ain’t no- ticket- to-paradise. As the author observes “Everything else being equal, employers would rather have a college graduate waiting on tables, grooming and walking dogs, and mowing lawns. As a result, the demand for the majority of workers who are not college graduates will decline even further. Wage depression—and the mental depression that often follows—will deepen among the U.S. professional classes as well. The incomes of engineers, program designers, attorneys, accountants, graphic and video artists, audiovisual specialists, data analysts, and those in similar occupations will suffer in pitiless competition with people all over the world who are just as smart and trained as they are but willing to live and work for much less.”[v]

The only jobs that would be available would be in the low end of the spectrum: the servant jobs. As the economy becomes a two tier system, the extremely wealthy and the rest settling down at the bottom of the income pyramid, jobs would be created for the comfort of the plutocrats. As Jeff Faux wryly points out “ When the rich get richer, they tend to spend more on personal comforts: maids, nannies, governesses, tutors, companions for the elderly, gardeners, handymen, personal assistants, cooks, security guards, trainers, therapists, sports and fitness coaches, chauffeurs, and masseuses. As the higher-paying, more secure jobs connected to the global economy are outsourced, the supply of educated workers with personal skills who are willing to work for less will expand.”[vi]

While it is true that the middle class would be out gunned by both the Corporate Military Industrial Complex and Wall Street, and have policies rigged in their favor, the middle class could still regroup and fight for their survival. They could also exert their political will by applying pressure on their elected representatives by peaceful demonstrations, campaigns and protests.

In the penultimate chapter of his book Jeff Faux narrates an old story of a farmer who had the problem of big pigs hogging all the food in the trough and not allowing the little pigs to eat any food. The farmer asks his son- a conservative- for his advice. The son tells the father that survival of the fittest dictates that the bigger pigs should get all the food and the smaller pigs should die. Not happy with the answer he turns to the other son who is a college educated liberal and asks for his advice. His other son- a liberal- said “increase the feed so that some may trickle to the little pigs.” Not happy with his answer as the cost of the feed would go up, the farmer turned to his uneducated daughter for advice. The daughter shook her head and simply said, “Throw the big pigs out from the feeding trough”.[vii]

Maybe the middle class should just do that and throw out the big pigs from the political economy. After all, as the political elites have shown their rude middle finger, the middle class families have nothing to lose and everything to gain by their act of defiance.

C R Sridhar

[i] What went wrong- George Tyler- page 11.

[ii] Ibid pages 11-12

[iii] Ibid page 10

[iv] Ibid page 10.

[v] The Servant Economy- Jeff Faux- page 230.

[vi] Ibid page 232.

[vii] Ibid page 265.

GodMart

2014-08-19T17:09:00.001+05:30

The forces of globalization, internet technology and a quarter century of liberalization and privitisation have spawned a new class of consumers by opening up jobs in the new internet enabled global service industry across banking, insurance, hotels and tourism. By breaking national barriers by internet technology jobs could be outsourced from multinational corporations to tech parks in Bangalore (India).

The main beneficiaries of this revolution numbering anywhere between 60 million and 200 million became consumers of Western goods. But contrary to the expectations of the neo-liberal policy makers who ushered in a welfare state for crony capitalists, large sections of the populace still remain trapped in abject poverty. India that is Bharat is truly a banana republic whose income pyramid shows in the words of Amartya Sen and Jean Dreze-“islands of California in a sea of sub-Saharan Africa”.[i]

It is this class of elite consumers fueled by paychecks, credit cards and bank loans educated in Business schools and Engineering colleges that have taken to predatory consumerism. They are the avid shopaholics who stuff their bags with smart phones, iPods and kitsch Hinduism.

The last item namely Kitsch Hinduism is indeed a puzzle for scholars like Meera Nanda who wonder as to how educated Hindus in science and technology believe in supernatural powers supposedly embodied in idols, divine men and women, stars and planets, rivers, trees, and sacred animals.[ii]

Source-PTI

Surveys show that the prosperous Hindu classes embrace a more ritualistic and superstitious form of popular Hinduism centered on temples, pilgrimages, and popular saints or god-men /women. There is also a boom in the construction of temples and mega temples. Holy pilgrimages are also big business with the market expanding as the number of people undertaking such pilgrimages are expanding.[iii]

The increasing religiosity does not indicate any other worldliness in the followers. The religiosity though lofty in its metaphysics is mostly a means to harness divine support for self aggrandizement.[iv]

Source-indianexpress.com

The practice of Hinduism also finds expression in conspicuous consumption by spending enormous amounts of money on popular rituals like Ganapati homas and Lakshmi homas. Among the rich businessmen and politicians a ritual which is enormously popular is Kumbhabhisheka for temple renovations. Also popular is Navagraha homa recommended by astrologers to ward off evil Saturn to calm the anxiety of their clients.

The proliferation of God men and women is a matter of concern as magic and superstition have taken hold of the imagination of rich well heeled devotees. The God men are seen as avatars of god and are seen as miracle workers. These gurus spin magical tales about cures of incurable diseases and rescuing their devotees from misfortune.

The modern gurus are CEO’s of big spiritual enterprises and offer their gullible consumers myriad services. The services fall in three broad categories- providing miracles, expounding vedic wisdom and suggesting alternative cures to people stricken with chronic diseases. Among the God men / women

who have captured the minds of thousands of devotees are Satya Sai Baba, Mata Amritanandamayi (called the hugging guru) and Sri Sri Ravi Shankar who through his art of living has taught his admiring followers the art of rhythmic breathing earning tens of millions of dollars.

Prosperous Hindus by adopting a debased form of Hinduism full of black magic and ostentatious rituals have turned their backs on the more sublime, philosophical and secular humanistic version of Hinduism which was a part of its Neo-Vedanta renaissance that started in the 18^th century and continued well into the 20^th century.

If modernity is a world robbed of capricious vindictive gods, then our collective consciousness must erase such gods from our religious imagination and beliefs. Only then we shall have taken our first steps away from descending to a dark and uncertain future.

[i] Quoted in http://www.theguardian.com/books/2014/may/16/what-next-india-pankaj-mishra

[ii] The God Market- Neera Nanda- page 61.

[iii] Ibid pages 70 -71.

[iv] Ibid page 61 Pavan Verma quoted.

C R Sridhar

On a Dark Night in Denver

2012-07-24T00:00:00.001+05:30

Source-imagecelebs.blogspot.com

“My name is Frank. But that's not important. The important question is " Who are you? America has become a cruel and vicious place. We reward the shallowest, the dumbest, the meanest and the loudest. We no longer have any common sense or decency. No sense of shame. There is no right and wrong. The worst qualities in people are looked up to and celebrated. Lying and spreading fear are fine. As long as you make money doin' it. We've become a nation of slogan-saying, bile-spewing hate-mongers. We've lost our kindness. We've lost our soul.” (From the movie God Bless America)

At a midnight movie premiere of The Dark Knight Rises which was screened at a cinema theater in Aurora, a suburb in Denver, the moviegoers experienced something gruesome. Cinematic violence became real when a young gunman burst into the theatre lobbing tear gas canisters and spraying the moviegoers with real bullets fired from a semi automatic rifle. The shooting spree left 12 dead and 58 injured and shocked the nation into disbelief (“It can’t be happening to us”.)The gunman was later identified by the police as James Holmes, aged 24, who was a graduate with an honours degree in neuroscience from the University of California. Before he morphed into a mass killer he enrolled as a student for a PHd course at the University of Colorado. His doctoral study was, ironically enough, mental disorders. His background reveals that he was the most unlikely Joker in the pack. Born to educated parents and brought up in a pleasant neighborhood in San Diego, James-tall dark haired and a soccer player at school -was the stuff of the American dream. His friends and neighbors remember him as a nice studious guy. But the dream turned sour. Why?

A few evil men in paradise

Along scripted lines, the media spun stories about a loner who is a severely maladjusted sociopath destined to self destruct. The media also provided details that Holmes purchased a semi automatic rifle, a shotgun and a pistol from the local store along with 6000 rounds of ammunition over the internet. The media pundits predictably blamed the lax gun control laws for violence in America while others blamed violent video games and Hollywood movies for violence. Thom Hartman- the host of the show Big Picture- tentatively broached the subject of growing inequalities in US as contributing to violence but delicately side stepped the issue in favour of lax gun control as being the root of the problem.The fact that socioeconomic factors play an important role in commission of crimes was buried in media reports of lone delusional crackpot leaving paradise bullet marked. Obama, presiding over a sinking economy, described the shooting spree as an act of evil.

The phenomena of rage murders is explored in depth in a remarkably courageous book published in 2005 titled ‘Going postal: rage, murder and rebellion: from Reagan’s workplaces to Clinton’s Columbine and beyond’. In his book which is cliché free, Martin Ames takes a hard unsentimental look at rage murders taking place in corporate workplaces and schools. His study on rage murders is pure nitroglycerine.From a careful examination of rage murders taking place in postal offices (hence the term going postal) and other corporate workplaces in the period 1983 to 2004, there appears a familiar pattern. According to the author “One reason the whole rage murder phenomenon may have started with post offices is that the eight-hundred-thousand-employee-strong service, the nation’s second-largest employer, was one of the earliest and largest agencies in the post–New Deal era to be subjected to what was essentially a semi-deregulation and semi-privatization plan, in what the neoconservative American Enterprise Institute calls “the most extensive reorganization of a federal agency.” Collective bargaining was weakened by banning strikes and profits were extracted by a stress- jammed work atmosphere squeezing the juice out the workers. This was called increasing worker productivity.

But it was the paradigm shift of the Reagan Revolution which transferred wealth from the bottom of the pyramid to the top 1% of corporate elites which could be the main culprit of rage murders. Reaganomics has become so deeply entrenched that it was carried under the Clinton administration when Wall Street was deregulated; downsizing continued unchecked and anti-employee pro shareholder culture became a way of life.Corporations changed from providing stable jobs for working people to fear juiced stress engines. As Ames says-“New corporate heroes like General Electric’s Jack Welch spoke of “unlimited juice” to squeeze from his employees—and wring their rinds he did. While work became increasingly stressful and time consuming with fewer rewards for the majority, capital was sucked from the middle and lower classes of working America and deposited into the offshore accounts of the very highest layer of the executive and shareholder class. As the Economic Policy Institute reported, “What income growth there was over the 1979–1989 period was driven primarily by more work at lower wages” The middle class in America is also imploding with more people going down the food chain while corporate CEO’s have seen their pay skyrocket 571% times between 1990 and 2000.The so called boom of the nineties, Census Bureau data suggests, has left most of the middle class in US in the cold and it is continuing. This can only fuel rage in a society which is seen as increasingly unjust with “the rich robbing the middle-class to make the rich into the mega-rich.”

If eviscerating the working class and the middle class were not bad enough, the enduring legacy of the Regan era saw the destruction of political solidarity among the American people. The post Regan era saw the futility of the two party system representing the same corporate interests. The voice of the people was seldom heard in the Congress which is dominated by lobbies for special interests. Grievances against corporate abuse against employees in workplaces such as unfair dismissals and harassment were met with indifference. Anger is also fuelled by a sterile corporate culture which lacks empathy with fellow citizens. This is demonstrated in summary firing of employees from the work place. This cruel ritual involves the escorting of the dismissed employee out of the office by security guards with the personal effects of the employee dumped in a box. The only mode of redressal left for the employee is a violent one with a shot gun.

Popular films like Fight Club and God Bless America accurately capture the resentment of the people exposed to corporate abuse in work place and vacuous mass media entertainment. TV shows like American Idol, where people perform like seals before the panel of judges who weigh their performances like pieces of meat, and mindless reality shows of Kim Kardashian which revels in celebrity trivia. Jack a hero in the movie Fight Club destroys corporate buildings of credit card companies with explosives and carries his revolt to Middle America. In God Bless America, Frank who is jobless and thoroughly disenfranchised teams up with 16 year old Roxy to shoot the most repellant members of his society. The huge underground popularity of films like Fight Club and God Bless America lies in the paradoxical message that it is only the insane that can see and fight against oppression in society which sane people adapt to as normal.

Finger on the trigger

What made James Holmes pull the trigger in a fit of insane rage? The media reports provide the clue- he was struggling to get a job after his graduation. He could only find one in a low paying dead end job in McDonalds. A brilliant student, he saw his career prospects slip away from his grasp. The American dream exploded in his very face.James Holmes ‘went postal’ on 20th July Friday. He realized that America was a corporate wasteland with diminishing prospects for getting a meaningful job in his life. As he dyed his hair red to look like Joker, an implacable foe of Batman, he must have been consumed by a terrible loneliness that comes with the thought that without the context of rebellion against an unjust social order, life lacks meaning and becomes senseless. As he pressed the trigger of his semi automatic rifle, he saw that he could attain personal redemption only through blood, gore and mayhem. And by that act of madness on a dark night in Denver, he summed up the tragedy of the American dream.

C R Sridhar

Manufacturing Content

2012-07-06T00:00:00.000+05:30

Source-moneylife.in

The media in India constantly bombard the urban class with stories of corruption. From the political scandals of Adarsh Housing Society to 2G spectrum rip offs, the anchorpersons of TV news channels like Times Now upbraid the politicians and the conniving bureaucrats for skimming the national till. Comfortably ensconced in their sofas munching salty snacks (courtesy PepsiCo), the TV viewers experience adrenaline pumping righteous anger and send furious text messages from their mobiles to TV stations to excoriate the political villain of the year. There is a smug air about it with a subliminal message slipped in- that though the political establishment is mendacious and corrupt, the media as a watchdog of Democracy is alive, mean and snarling.

But appearance can be very deceptive. In a report titled ‘Paid News: How corruption in Indian Media undermines democracy’ circulated among the members of the press council of India, the authors of the report point out that the corruption in Indian media is deep, pervasive and institutionalised.In a searing indictment of the fourth estate the report says, “ In recent years, corruption in the Indian media has gone way beyond the corruption of individual journalists and specific media organizations to… a more institutionalized and organized forms of corruption wherein newspapers and television receive funds for publishing or broadcasting information in favour of particular individuals, corporate entities, representatives of political parties and candidates contesting elections, that is, sought to be disguised as ‘news.’ ”

The media racket called paid news witnessed a widespread participation of political parties hand in glove with media houses in presenting political advertisements as political news. According to P. Sainath, a respected journalist and Rural Affairs Editor of The Hindu, the general election of 2009 was unique in the sense that there was integration of media, money and the political mafia.
Paid news is virtually an industry -media-money election complex-with a market size estimated to be in the region of 53 to 178 million USD. It is corporate controlled and works in close collaboration with PR and Advertising agencies to create favourable images about candidates standing for elections. The citizens are duped into believing that the paid ads are in fact unbiased, reliable news which can be depended upon in voting for various candidates in elections. It also affects unbiased news gathering in the sense that reporters are sidelined and PR agencies plant stories to suit the requirements of candidates.

The report points out that the deception or fraud operates at three distinct levels. By blurring the distinction between paid news and independent news, the reader or the viewer is deceived into believing that the news is reliable as an input for decision making. The candidates bypass the restriction on expenditure contained in Conduct of Election Rules, 1961, and enforced by the Election Commission under the Representation Act, 1951. It encourages the infusion of black money by candidates in the election process without oversight and encourages under reporting of the money received by media conglomerates by not accounting for such sums in the balance sheet or in the corporate returns filed for income tax purposes.

There was no respite from the shocking news about media corruption as more sensational disclosures followed. The regulatory agency, namely, the Securities and Exchange Board of India (SEBI) conveyed to the Press Council of India that there was collusion between media owners and corporate entities in the form of financial relationship including shareholding by media with the corporate advertisers. These ‘private treaties’ ensured that only favourable news about these corporate advertisers was disseminated but not news unfavourable to them. Thus, the investors did not get reliable and true financial position of the corporate advertisers to guide their investment decisions.

One of the egregious violators of the trust reposed in them by the readers/viewers was the Bennett, Coleman Company Limited (BCCL), publishers of the Times of India which started a paid content service called Medianet. For a price the journalists would cover product launches and personality related events. In its pursuit of naked profits BCCL in 2005 acquired equity shares in companies like Videocon India, Kinetic Motors and in return provided favourable publicity to these companies. By 2008 BCCL acquired significant stake in the equity market by holding investments in 140 companies spanning aviation, media, and retail among other sectors. It had between 175 to 200 private treaties valued at 2,600 crore and 4,000 crore. The financial crisis of 2008 acted as a dampener and depressed the stock market. The fall back option, namely, the paid news route is paying rich dividends to the media groups.

There is no gainsaying that for a vibrant democracy to survive there must be a free and independent media. Without accurate, unbiased and reliable information the electorate cannot make informed decisions and this vitiates the democratic process. When the media is sold out to politicians and corporate advertisers the main function of the media as a watchdog of democracy is severely compromised. For a watchdog with a juicy bone in its mouth seldom barks.

C R Sridhar

Corporate Propaganda Versus Democracy

2012-03-20T00:00:00.000+05:30

Source-amazon.com

One of the recurrent themes in history has been the struggle between the privileged few and the hoi polloi. In totalitarian societies the rabble were taught the joys of obedience by the not-so gentle application of the truncheon. In Western democracies such US, Australia, and UK the use of brute force was always problematic. Hence the’ engineering of consent’ had to be obtained by the skillful use of propaganda.

Taking the Risk out of Democracy written by Alex Carey offers rare insights into propaganda-managed democracy where the highly class-conscious business community sought to protect its interests with the dedicated support of intellectual culture.According to Carey, “The twentieth Century has been characterized by three developments of great importance: the growth of democracy, the growth of corporate power, and the growth of corporate propaganda as a means of protecting corporate power against democracy.”

Carey observes, “The extension of popular franchise (right to vote) and the growth of the union movement meant that there were threats to corporate power. The American Corporations met this threat by learning to use propaganda, both inside and outside the corporation, as an effective weapon for managing public opinion.”

The risk to democracy has been constructed out of a perceived risk to business interests and these interests are sold to the public as national interests. Business interests coalesce with national interests by employing emotive words such as freedom, free enterprise, and the free market. Covert propaganda messages by the media convey that the risk to democracy comes not only from Trade Unions but also from government initiatives as welfare and environmental policies which hampers the undiluted pursuit of corporate profits. “This simple regime of thought control,” adds Carey, “should prove to have been so triumphant, with so little public resistance, must be put down to persistent, repetitive orchestration.”

What makes the American society so susceptible to propaganda? Carey answers this in his interesting chapter titled ‘The Origins of American Propaganda.’ According to Carey, the members of the American Society adopt or accept a dualistic world- view. “This world-view is dominated by the powerful symbols of the satanic and the sacred. A society or culture which is disposed to view the world in Manichean terms will be more vulnerable to propaganda.” Thus, the extravagant idealization of the spirit of America, its quasi-religious belief in manifest destiny, and the American way of life has deep emotional appeal for most of the Americans. On the other hand negative symbols representing evil such as communism/ trade union/socialism are viewed as evil and inimical to the American dream. The skillful exploitation of the symbols (sacred/ profane) by propagandists ensured the defeat of welfare (negatively identified with ‘commies’) and the dominance of free enterprise values representing narrow corporate interests.

In the long battle between corporate power and democratic societies, in the words of the author, civil liberties were left prostate, the labour movement was badly mangled, and the position of capital was greatly enhanced.

We live in an age where uncritical worship of free market combined with privatization has led to job losses and worker alienation. Carey’s demystification of corporate propaganda masquerading as public good must have a resonant appeal to those who value freedom and liberty.

C.R.Sridhar

What Ails the Fourth Estate?

2012-03-08T00:00:00.000+05:30

Source-cagle.com

Source-http://cbmilne33.angelfire.com/blog/

What ails the Fourth Estate? (You have the freedom of press only if you own one)

Source-amazon.com

For the disillusioned few who believe that there is more to life than whitening teeth with Dentine, deodorizing armpits with deofresh or scrubbing toilets with Harpic, the book “Global Media” is a gift from heaven.

The authors, Edward.S.Herman and Robert.W.McChesney, argue that the global media pecking order is based on commercialism and a decline in the importance of public broadcasting and public standards.The Fourth Estate (media) plays a central role in the functioning of democracy. They are the preeminent vehicles of communication through which the public participates in the political process. The threat to the public sphere could be from government control and censorship, amply documented by media scholars.

However, more insidious and covert threats emanate from private systems of control. Media that is dependent on advertising revenue is called upon to serve the interests of corporate advertisers and not the general public. Thus the media is more concerned in providing a congenial media for advertising and marketing of goods and consequently more eager to serve narrow corporate interests than the public sphere.

Case in point: Procter and Gamble once the biggest corporate advertiser in the world prohibited television programs which would present the corporate world as cold, ruthless, and lacking public purpose. ‘This results ,’ the authors argue, ‘in a preference for entertainment over controversy, serious political debate, discussions and documentaries that dig deeply, inform and challenge conventional opinion.’ Media outputs are commodified and designed to serve market needs not public needs.

The authors also point out that the global media is dominated by three or four large transnational entities with fewer than ten mostly US based media conglomerates towering over the global market.The case of media monopoly is strengthened by a look at the ownership, especially those which account for reaching bulk of the world’s population.Time Warner (US$25 billion) followed by Disney ($24 billion), Bertelsmann ($15 billion), Viacom ($13 billion) and News Corporation ($10 billion, with Rupert Murdoch controlling 30% of its stock.). Also on the list are big corporations like Polygram, Seagram, Sony and General Electric. They operate in oligopolistic markets with substantial entry barriers.[i]

The media scene in India also points to similar development with big business houses owning media TV channels and newspapers such as Times Now, Times of India, Economic Times to name a few is owned by the largest news conglomerate Bennett, Coleman and Co. Ltd/ Sahu Jain family having turnover in excess of USD 1 billion. The other big business family namely Mukesh/ Anil Ambani through its corporations invest in major news outlets/ newspapers such as Hindustan Times, Mint, IBN-18 which owns and operates CNN IBN/ IBN7, and Network 18. This signifies growing concentration of ownership in an oligopolistic market that could lead to loss of media heterogeneity and plurality.[ii]

The interlocking of corporate funding in media organizations has made the media a mouth piece to reflect corporate interests and that is why the media rarely criticize or expose corporate crimes. In US or even Europe articles exposing the frauds and crimes of the banks and financial organizations are rarely published in mainstream media. Such articles find their way in the Internet which offers a window of opportunity to alternative views.

In the short term the corporate media appears firmly entrenched but there is a nascent global struggle for democratic communication. The growth of the alternative media such as Global Research, Corp Watch, Fairness & Accuracy in Reporting (FAIR), La Monde Diplomatique, and The Real News Network offer countervailing force to corporate media. While the internet with access to diverse viewpoints has challenged mainstream corporate media, its freedom is under threat from such acts as ACTA and SOPA which media watchers fear would impose censorship and stifle the freedom of the Net. Thousands of young protesters throughout Europe and US have protested against these measures and stalled the implementation of these acts.

The free market utopia sponsored by corporate media has brought social and economic upheavals both in Europe and US. Movements such as Occupy Wall Street have targeted corporate media for serving the interests of 1 percent and ignoring the other 99 percent. The battle for democratized media has begun.

C.R. Sridhar

[i] Figures in 1998 edition of the book ‘The Global Media’

[ii] Corporatisation of the Media-Paranjoy Guha Thakurta/Subi Chaturvedi-EPW

White Violence in Colonial India

2011-10-21T00:00:00.000+05:30

Book Review: Colonial Justice in British India- White Violence and the Rule of Law-by Elizabeth Kolsky (Cambridge University Press) 2010, pp252.

"The goddess of British Justice, though blind, is able to distinguish unmistakably black from white"

Bal Gangadhar Tilak.[i]

As Britain’s imperial enterprise expanded in India, there was a powerful need to justify or legitimate her rule over the far-flung empire. How could Britain with her ideals of justice and fair play reconcile with the rapacious conquest and subjugation of people in distant and densely populated lands? Imperial leaders like Lord Curzon saw the justification in sheer moral terms, namely, principles of justice and the rule of law.

Woven in the intricate tapestry of Imperial ideology was the static view of India as being enslaved by oriental despotism and that the British colonial rule freed the enslaved natives from such a debilitating condition. Imperial rulers from Britain saw their empire as an empire of Law and liberty. By providing Indians with impartial judicial system and equal protection of Law, the imperial rulers believed that the stability of the imperial government would be assured by the support of the people.

Ms. Kolsky, an assistant professor of History at Villanova University, in her book Colonial Justice in British India argues that such a view of imperial justification was born of self deception. She points out that racial violence "was a constant and constituent element of British dominance"[ii] Physical violence was an integral part of imperial rule in India from the late eighteenth to the early twentieth centuries.

Violence by the wrong sorts

The author makes an interesting observation that while history books on British imperialism dwell on violent macro-events such as the Battle of Plassey, the Mutiny of 1857 or the Jallianwallah Bagh massacre, the true nature of colonial violence central to the working of the empire could be seen by the violent crimes committed by "a mostly forgotten cast of European characters- planters, paupers, soldiers and seamen"[iii] Although the archives overflow with incidents of Britons murdering, maiming and assaulting Indians and getting away with it, white violence remains a closely guarded secret of the British Empire.

While apologists of British Imperialism would dismiss such incidents as exceptions committed by few bad apples, the sheer scale of racial violence inflicted by Britons on Indians suggest otherwise. As the author says, " the unsettling picture that emerges from our investigation of white violence and its handling in the colonial courts should not be brushed off as a list of exceptions, an epiphenomenal sideshow to the main stage of Pax Britannica"[iv]

The notorious example of miscarriage of justice was the case of the indigo planter William Orb Hunter who was tried in the Calcutta Supreme Court for the torture of three female servants. The horrific abuse included mutilation of ears, nose and genitals and illegal confinement of the female servants in chains. Hunter was let off with a nominal fine and set free. This aroused the indignation of Indians who accused the British of rendering a racially biased verdict.

Cases such as Hunter who indulged in terrible abuse of domestic help are a tip of an iceberg. As the author points out " the innumerable other incidents of interracial violence that never made their way through official channels remain beyond the historian’s reach" [v] Moreover, the violence inflicted by these planters, soldiers and sailors or vagrants on Indians blurred the binary system of superior Englishmen ruling over the Indians who were deceitful, inferior and venal. Men like Hunter did not work for the British Imperialism in any official capacity but nevertheless functioned as torch bearers of British Imperialism and its economic interests. They constituted the ugly third face of colonialism.

The white planters who worked in Tea, coffee and indigo plantations offered the empire steady financial returns but at the same time embarrassed the colonial administration with alarming incidents of brutality, murder and rape of Indian workers at the plantations. Beneath the idyllic setting of Tea gardens and the polite ritual of tea drinking lay the exploited slave labour entrenched in penal contract system which gave the planters wide powers to arrest and punish workers at the plantations. Introduced by Governor General William Bentinck under Regulation 5 of 1830, the powers of the planters grew by later enactments in 1865 and 1882 by which the planters had the power of magistrates. By the enactment of these laws the tea workers of British plantations were reduced to slaves whose appalling condition could be compared to the black American slaves working in the cotton plantations. As the author sums up succinctly "Although colonial law was described by officials as a guarantor of Liberty and agent of civilizational progress, in letter and in practice the law of the tea plantations was designed to secure capitalist control over labour" [vi]

A remarkable document titled "European Misconduct in India",1766-1874 shows the widespread violence indulged by the motley elements composed of European migrants, vagabonds, planters, and absconding soldiers and seamen which unsettled the officials of the East India company. The murderous violence unleashed on punkawallahs, cooks, porters, and labourers working in plantations threatened the stability of the imperial enterprise and shattered the myth of Pax Britannica with justice and equality of Law at its core. As the author observes "the drunken and disorderly soldier, like the wandering and wayward seamen, was a symbolic affront to British prestige, a practical thorn in the side of local magistrates, a health hazard, and an unruly usurper of military discipline"[vii]

Even though the record of infamy is restricted to incidents in Bengal and not other parts of India an interesting pattern emerges: in the cases of white on white physical violence the punishment was severe including capital punishment. Although capital punishments would become rare in the second half of the eighteen century, in the earlier period many European soldiers were executed for the willful murder of their European comrades. In cases where the European soldiers and seamen attacked their Indian subordinates, the consequences were quite lenient.

A question of race

A paradox central to the administration of colonial justice was the question of race which assumed that the inherent characteristics of the British as superior and morally upright while the other, namely, the natives as morally decrepit and wallowing in superstition. The question which was topmost in the mind of colonial administrators was- How to administer equal justice to those who were legally and politically unequal?

The thrust towards codification of laws in India by Macaulay rested on the belief that it was the duty of the British to give good government to the people of India for whom a free government was not possible. One object of the codification was to remove the plurality of laws which was prevalent during the East India Company such as a mish- mash of labyrinthine Regulations, Acts of Parliament, Hindu and Islamic law, English common and statutory law, and the principles of justice, equity and good conscience. In place of this welter of confusion, codification was seen as promoting uniformity and certainty of law in the administration of justice. The other object of the codification was to rein in the unruly violence of the planter, seamen and soldiers and vagrants who were whites and bring both the British and the Indians under one rule of law.

Predictably, the planter lobby bitterly protested the codification as lowering the prestige of the whites by placing them on the same footing as the Indians and mounted a sustained attack on Macaulay. Moreover, the whites also protested that they were entitled to be tried in accordance with the laws of England and not by any other law. The white planters also resented any trial by Indian magistrates whom they viewed as barbarians.

Bowing down to the pressure of the white planters who were increasingly seen as providing profits to the empire, the colonial authorities subverted equality before law by entrenching racial differences. Thus, The Code of Criminal Procedure (1861) "institutionalized racial inequality by delineating race-based rights and privileges, including: juries with European majorities for Europeans but not for the Indians, Presidency trials for Europeans, but local trials for Indians; and a racially differentiated schedule of punishments"[viii]

Amendments to the code in the following decades widened the racial discrimination rendering racial equality as a dead letter in law. It was not until India gained her independence from British rule and enacted the Criminal Law (Removal of Racial Distinctions) Act of 1949 that the pernicious influence of racial discrimination ended.

Tipping the Scales of Justice

The racial prejudice of the British against the Indians as being deceptive and unreliable drove the colonial administrators to the elusive quest for truth in matters of evidence to try crimes in judicial proceedings. As the perception of native deceit was central to the understanding of the Indian society, the colonial administrators saw the need to replace oral testimony by something scientific and true. This led to the growth of medico-legal jurisprudence.

Out of this questionable body of medico- legal studies grew the fanciful theories of frail Indian bodies with diseased spleen that was to have a controversial impact on white crimes committed against Indians. In testimony after testimony European medical officials told the courts in murder trials that the diseased spleen of the Indian was the cause of the death and not the immediate consequence of the whips or blows inflicted by the White offender.

In cases such as the murder trial of Fuller who slapped his Indian servant on his face and ears causing him to fall and die, the testimony of the Colonial Doctor was that the victim died of a ruptured spleen caused by very slight violence. Fuller was convicted of a lesser charge of wounding and fined a sum of thirty rupees.

The Fuller case which caused a scandal is merely illustrative of many cases where Britons were let off lightly on murder charges.'In trials of Britons', notes the author," who killed Indians by striking them with sticks, bricks, whips, and kicks, medical evidence was often presented by colonial doctors to support the claim that Indians had weak insides and were therefore more susceptible to such blows" [ix]Thus, Indian medical jurisprudence and medical experts played a crucial role in mitigating European criminal culpability in cases involving serious violence and murder.

Unraveling Imperial myths

The underlying tensions within the British Empire between the officials of Imperial power and the unofficial- in between- like the planters, seamen and absconding soldiers was a class tension between high bred Englishmen and the so called lower class of mean whites. At the other level there was the threat that the empire would unravel by the horrific violence perpetrated on the natives. But the colonial laws designed to prevent the abuse of unofficial white violence conceded concessions to the violent Britons and destroyed the imperial promise of equality of law. Thus when these concessions combined with the racial practices of British judges, juries, and police who let off fellow Britons on lesser charges, the Indian subjects were exposed to the double jeopardy of political slavery and unchecked white violence.

The author’s book which is a culmination of ten years of research and writing offers a significant contribution to our understanding of racial violence and the rule of law in colonial territories. Moreover, as the author says there is very little secondary literature about the pervasive nature of white violence even though there is abundance of archival evidence to substantiate the same. Thus, the pervasive nature of racial violence in the day to day functioning of the British Empire has been consigned to the foot notes of history.

The author rescues scholarship from the airbrushed triumphalism of Pax Britannica by pointing out that all forms of imperial power have violence and nothing but violence at its core. This book should be a wakeup call for those who genuflect before the majesty of Imperial justice and the benefits of benign British imperialism.

C.R.Sridhar.

[i] Quoted in Colonial Justice in British India page 4

[ii] ibid- page 1

[iii] Ibid-page2

[iv] Ibid page4.

[v] Ibid page4.

[vi] Ibid page147

[vii] Ibid page 55

[viii] Ibid page 78.

[ix] Ibid page 136

Worm in The Apple

2011-10-14T00:00:00.000+05:30

Source-gocomics.com

In an age when financial fraudsters from Wall Street reign supreme, saints from business community are in short supply. The recent death of Steve Jobs, the co-founder of Apple Inc, who died of pancreatic cancer at the age of 56, gave the much needed boost to the dying art of corporate hagiography.

Randian super hero

The corporate media went on an overdrive describing Steve Jobs as a visionary, an out of box thinker, a rugged individualist and college dropout who changed the world with apple products. As his biography gushingly tells us-

‘As a boy, Jobs and his father would work on electronics in the family garage. Paul would show his son how to take apart and reconstruct electronics, a hobby which instilled confidence, tenacity, and mechanical prowess in young Jobs.’ [i]

His humble apprentice in the electronics garage, we are told, made him an inspired inventor. In collaboration with Steve Wozniak he founded Apple Computers which flooded geekdom with the iPod, iPhone and the iPad. Its profits surged to US$14 billion last year and it now ranks 35 on the list of the 500 biggest US companies.

The corporate pundits cleverly massaged into the obituary of Steve Jobs the dynamism of free market capitalism which throws up Randian super heroes like Jobs in refreshing contrast to the welfare wimps who throttle the economy by collecting food stamps.

What the media and corporate spin masters conceal from the public is that the success of Apple Inc is not entirely due to the visionary genius of Steve Jobs but access to cheap Chinese labor which is rarely acknowledged in Apple hagiography.

A sweat shop paradise

In her classic study of sweat shops ‘ No Logo’ Naomi Klein points out that corporations concentrated more on building brands, that is, on sponsorships, packaging, expansion and advertising than owning manufacturing units. According to this logic, corporations should not expend their finite resources on bricks and mortar like factories which produce things but on brand management. This meant closing the manufacturing/ production facilities in developed economies (high wage areas) and shifting to low wage economies such as China, India, and Bangladesh.[ii]

The smart electronic products of Apple are made in China. As Vincent Kolo says, ‘this business empire has been built not just on technological prowess and design skills, but also on ruthless exploitation of cheap and unorganized labor, albeit indirectly through its global system of suppliers.’[iii]

The huge profits of Apple made from exploitation of Chinese labor could be seen from the high retail price it charges for its products while paying a pittance to the assembly line workers. For instance, each iPhone4 is sold in the US market for US$600 but China based assembly companies get only US$6.54. The wages which trickle down to Chinese workers are nickel and dimes. No wonder a young Chinese worker wistfully said, ‘Though we produce for iPhone, I haven’t got a chance to use iPhone. I believe it is fascinating and has lots of function. However, I don’t think I can own one by myself.’

Though the payment of minimum wages is protected in US and in developed economies of Europe, the multi-national corporations circumvent the law by resorting to labour subcontracting in low wage economies. There is furious bid among subcontractors/ manufacturers to drive down the manufacturing costs for the corporations like Apple. Down the food chain are the poor workers who get a pittance in the form of wages. Commenting on the race to the bottom of the wages Naomi Klein says, ‘when the multinationals squeeze the subcontractors, the subcontractors squeeze the workers.’[iv] It is not surprising that multinationals regress to 19^th century levels of labour exploitation by the subterfuge of subcontracting.

Source-pavlovianobeisance.com

Apple’s main subcontractor is Foxconn in China where the Chinese labour is subject to inhuman working conditions. The iPod nano is made in a grim five storey factory that is guarded by police officers. Here mainly women are employed as they are regarded as pliable and more docile. The workers are kept in dormitories that house 100 workers who live in cramped conditions. In these virtual prisons workers toil for 15 hours a day to make Apple products. Visitors from the outside world are not allowed and an air of secrecy prevails in these facilities.[v]

Source-craveonline.com

Workers made around $100 per month with half of the salary being deducted towards accommodation and food. In 2009, Foxconn guards were videotaped beating employees. The harsh conditions at work forced workers manufacturing Apple products to commit suicide at the factory located in Shenzhen (China). In 2010 there were 16 incidents of workers attempting suicide.[vi]

Source-organizedrage.com

The rampant abuse of Chinese workers in sweat shops was exposed by labour activists on May 7, 2011.. As reported in the Telegraph, as late as February 2011, child labour has been employed in the manufacture of Apple products. In Hong Kong, there were street demonstrations highlighting the labour abuse by Foxconn the supplier to Apple Inc. The demonstrators waved angry placards with the message Rotten Apple, Bloody Apple and called for the end of labour exploitation.

Source-newint.org

The news of worker suicides coincided with the international launch of iPad raising embarrassing questions about Apple’s labour policy and the working condition in their manufacturing facilities in China. Apple’s representatives promised to take remedial measures to improve worker conditions but they remain empty promises.

Source-gizmodo.com.au

As the report prepared by Chinaworker.info says despairingly,’ The scandal of Foxconn – of China’s mega-sweatshops and their multinational partners – cannot be solved by some tweaking of corporate policies and “ethics”, but go to the very heart of the nature of capitalism, and its need to continually squeeze more profit out of the working class.’[vii]

Source-crazysmiley.deviantart.com

A spurious visionary

‘One is astonished,’ notes W.E.B.Du Bois with asperity, ‘in the study of history at the recurrence of the idea that evil must be forgotten, distorted, skimmed over.’[viii]

Ignoring the exploitative policies of Apple Inc and its co-founder Steve Jobs, the eulogy of the Great Inventor continues unabated. Thomas Friedman, a New York Times columnist, adds paeans of praise in his obituary on Steve Jobs. In a piece titled ‘Mourning the loss of a visionary leader’ Friedman exults that there are thousands of US inventors rearing to go is spite of impending recession. Like Steve Jobs they remain rugged individualists optimistic of the future and will tough it out in spite of the Yellow Peril.

What the vacuous obituaries on Steve Jobs will not tell you is that the American economy was shafted by corporate greed and by financial conmen from Wall Street. The financial casino economy with mortgage scams, commodity bubbles and ponzi schemes made no real investment in the real economy of inventors and Joe the plumber. The spin masters hoodwinked Joe into believing that he is one clogged toilet away from riches- if only he worked his ass off as Steve did.

If there is to be greening of America it does not lie in peddling Ayn Rand myths of super heroes but in blooding truly democratic movements like Occupy Wall Street which targets corporate crimes and fraudulent bailouts.

Only then Joe the plumber shall break the shackles of folklore and emerge as a free citizen of his country.

C.R.Sridhar

[i] http://www.biography.com/people/steve-jobs-9354805

[ii] No Logo- Naomi Klein- page 196.

[iii] http://chinaworker.info/en/content/news/1451/

[iv] No Logo- Naomi Klein- page 212.

[v] Inside Apple’s iPod factories- http://www.macworld.co.uk/mac/news/?newsid=14915

[vi] http://chinaworker.info/en/content/news/1451/

[vii] ibid

[viii] Quoted in Lies My Teacher Told Me- James W. Loewen- Simon & Schuster- page -18