news from green capitalism: recession is bad for recycling

November 17th, 2008

Here is one example of how green capitalism will not save the planet: recession is bad for recycling. Why?because demand for recycling products drops in a recession, hence much of what we diligently pile up in different boxes may end up in a land incinerator . . .read on from the sector’s paper food production daily NOW is the time to campaign for recycling! When it cost them money!

Waste reduction urged as demand for recyclables drops
By Jane Byrne , 17-Nov-2008

Related topics: Supply Chain, End-of-Line Packaging, Packaging Materials, Primary Packaging

A push for waste minimisation and the production of high quality marketable recyclables is being promoted by stakeholders as demand and prices for recycled materials the UK drop significantly.
The drop in prices has been attributed to reduced demand from China in particular for recycled materials, with manufacturers reducing their output due to current economic restraints.

The Department for the Environment, Food and Rural Affairs (DEFRA), the Waste Resources Action Programme (WRAP), the National Industrial Symbiosis Programme (NISP) and the Local Government Association (LGA), said they want to ensure that the recent slump does not undermine public confidence in the value of recycling, nor lead to unacceptable environmental consequences.

“Recycling remains a better, and cheaper, option than sending material to landfill so people should continue recycling,” claims the joint sector statement.

Consumer confidence

However, a spokesperson for the body representing the UK food and drink manufacturing sector, the Food and Drink Federation (FDF), told FoodProductionDaily.com that consumers want to be confident that their efforts to recycle bear fruit by saving valuable resources and the planet.

And the Confederation of Paper Industries (CPI) warns that as a result of the fall in demand, some material collected for recycling could, in the worst case scenario, go to incineration or landfill.

Steve Creed, Director of Business Growth at WRAP, said that the agency believes the current very low prices for recovered materials will be temporary but that there may be increased storage of some materials including plastics, paper, and metal products in the short term until the markets pick up again.

Quality

According to Creed, what has become clear is the importance of the quality of recovered materials, with high quality materials still in demand in the UK and overseas. “Dialogue between waste producers (including local authorities) collectors and waste processors is crucial, to ensure the right quality of material.”

He said that local authorities and their contactors need to ensure that they have a home for materials that are being stored in the short term, that the storage will not compromise the environment and does not lead to deterioration in the quality of the materials that will further reduce their recyclability or value.

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Recycling developments

Creed argues that, in terms of recycling levels, the UK has come a long way in the last seven years, before which, he added, there was a limited domestic market for the reprocessing of recovered materials.

He said that much of the increase in the UK’s recycling capacity is as a result of WRAP’s involvement and support, including a partnership with Shotton Paper Mill, providing funding for it to convert to using 100 per cent recycled fibre that has resulted in all newsprint produced in the UK now being made with 100 per cent recovered fibre.

“WRAP also helped fund Closed Loop London – which makes plastic milk bottles back into plastic milk bottles,” he added.

Waste reduction

Meanwhile, WRAP launched an initiative last month aiming at inviting proposals for projects to design, develop and trial innovative processes and approaches to reduce waste in the food supply chain.

The agency said that food companies can help reduce waste through such measures as the use of:

Divisible or flexible packaging to aid portioning of food/ingredients by customers such as side-by-side packs, or ‘eat me, freeze me’ packs
Resealable packaging to protect and maximise shelf-life and quality of food
Shelf-life extending packaging technologies such as breathable films, oxygen and ethylene scavengers
Customised, modified atmosphere packs or vacuum-sealed packs where appropriate
Smart labels that clearly communicate food conditions to customers and improve inventory control such as time and temperature indicators and radio frequency RFID technologies, and
Storage information
According to WRAP, an example of innovation in food manufacturing could be an increase in production efficiency and reduction in waste raw materials or products, reductions in product damage or enhanced freezability of the products.

The closing date for proposals is Thursday 20 November, with shortlisted projects announced on 2 December.

news from the senior management team

November 17th, 2008

So, the G20, the apparently new executive board of global capital, has so far delivered this:

a) yes, you can use “fiscal stimulus” if you so desire (Gordon Brown yes, Silvio Berlusconi no). . .(at least for now . . .)

b) . . .but you cannot increase barrier to trade for a year, hence for example, maintain existing tariffs even if food or other commodities price escalate again . . .

c) we’ll regulate our banks through some bank club, and we’ll see what that means

next episode around April

not much novelty here

November 16th, 2008

the common ground of the new management board of global capital is clear:

“Our work will be guided by a shared belief that market principles, open trade and investment regimes, and effectively regulated financial markets foster the dynamism, innovation and entrepreneurship that are essential for economic growth, employment and poverty reduction.” g20 statement.

There it is, capital’s minimum common denominator among blacks and whites, men and women, rich and poor, center and periphery, “first world: and “third world”. And note, this is a belief.See report See text

uncoupling at the party

November 9th, 2008

I went partying last night in the dome, inside the castle mountain in Graz, where tunnels and bunkers have been carved out by the Nazis during the second Word War and now are used as dance floors and conference spaces. This is music that — given the sheer volume and the drum&base pumping — passes through you, or at least, it does so if “you let it”, as someone told me (ehm, shouted at me) on the dance floor. Now here is a thought. In the morning I had a workshop on my book as part of the Elevate festival, and among other things we discussed the idea that the capital relation, or the value struggle, passes through us. Mmhh, so, what happens when in the evening the music passes through you? It happens that it is banging the capitalist relation out of ourselves, at least momentarily, leading to the momentary uncoupling from the temporal dimension of capital, the one that requires schedules, deadlines, responsibilities that have no or little meaning as well as endless struggle against it. If you add the fact that in music, rhythm constitutes the commons (see this blog entry), then this is it! The dance/rave culture that lives its nights and morning floating from one dance-floor to another, is the contemporary manifestation of what in the 1970s was called “il bisogno di comunismo” (the need for Communism) . . or “commOnism” . . .

Tobin Tax

October 23rd, 2008

I was recently drawn back to some of my older writing on the Tobin Tax by a companera’s request to comment on it. So, I thought that since the Tobin Tax is and will be on the agenda of some sections of the movements, it has been raised in the Beijing declaration by Focus on Global South and TNI, and it has already attracted some critical comments in various lists, it would be important for us to give it a slightly more critical analytical consideration. In the following notes I will freely take from my old article “Capital Movements, Tobin Tax, and Permanent Fire Prevention: a Critical Note.” In Journal of Post Keynesian Economics, Vol. 22, No. 2, Winter 1999-2000.

First, for those who need an intro, the Tobin Tax is a tax levied on foreign exchange transactions and takes its name from James Tobin, who proposed it in 1974 in the midst of the then crisis back then. An element of that crisis was the rise of short term capital movements, which nevertheless were a fraction of what we have today.

There are three main rationales for the Tobin tax . . . . In the first place, this tax would be essentially a small transaction tax that would penalize short-term round-trip movements of speculative capital, thus helping to “put grains of sand in the wheels of international finance” (Eichengreen, Tobin, and Wyplosz 1995). In this way, the Tobin tax would reduce the profitability of short-term speculation and allow exchange rates to better reflect long-term factors in the real economy rather than short-term speculative flows. The second rationale is based on the greater autonomy this tax would give governments in pursuing economic policies, by being shielded from financial market discipline on domestic fiscal and monetary policy. Finally, the third rationale for such a tax is its revenue-raising potential. According to an older United Nations study, a Tobin tax of merely 0.05 % could raise $150 billion a year (United Nations 1994: 9) [this is of course a pittance in relation to current bailout regimes (a pittance which of course depends on the low tax rate, which — following the “grain of sand” logic — has to be low, otherwise capital movements would be brought completely to a halt, and this is something its proponents do not wish.]

There are three main interrelated criticism of the Tobin Tax. The first one comes from Paul Davidson, a post-keynesian economist, who argues that “the imposition of a Tobin tax per se will not significantly stifle even very short-run speculation if there is any whiff of a weak currency in the market. In fact, any Tobin tax significantly less than 100% of the expected capital gain (on a round trip) is unlikely to stop the sloshing around of hot money. (Davidson 1997: 678)” Thus, taking for example the case of the fall of the Mexican peso during the crisis of 1994-95, in which the peso fell by about 60%, a Tobin tax of about 23% would have been required to stop speculative run on the peso.

In our terms, therefore, the first argument against the Tobin Tax is that it is not a solution to capital movement and their disciplinary role of enforcing crises following profitability expectations.

The second argument is this: if we want the tobin tax because it transfers money from capital to labour, then it is legitimate to ask why the Tobin Tax and no other form of progressive taxation or wealth redistribution and reformulation of property right? This question is even more legitimate, assuming the validity of the first argument.

Third, and consequently, there is what Werner mentioned, that is the Tobin Tax “comprise well thought out ideas as to how to secure existing social relations”, i.e. capitalist relations. It is a mild form of capital control, that does nor prevent crises, it modest revenue raising powers gives the impression of addressing social justice, but it will be instrument for casting a new capitalist deal. With respect to this, for us the question will be to try to assess how — in today’s given context of crisis in its specificity — the tobin tax could in fact be used to secure existing social relations, as a part of a new deal.

But in general, let us hope that our marches and demos in the next months and years will see less of those awful banners with the “%” sign: I could never had thought that such a symbol of capitalist compound interest rationality could also become the symbol of part of a social movement.

The austerity to come: pensions

October 17th, 2008

In the US, the loss in the value of pensions (private and public) amount to $1 trillion. And they still dare to tell us to diversify investment portfolio in order to minimise risk. See the Statement by Peter R. Orszag, Director of the US Congressional Budget Office.

meltdown management

October 1st, 2008

there is a a lot going on definitively in the current financial crisis, and events are moving very fast. Hence, let me try to put some order to some untidy thoughts with the disclaimer that I am commenting on a fluid situation and hence I am not 100% committed to what I am saying

* neoliberlism as we know it, is obviously finished. But this was true also before the recent g8 in Japan. The current crisis/meltdown of finance raises the *urgency* of dealing with the impasse they have been facing for some time now. This moment of crisis we are living is where the different positions and strategic horizons are forced to distinguish themselves and/or find a common ground. This is a challenge for both the ruling classes and for the “commmoners”.

* For capital’s *in general* perspective (that is the perspective of the “system that any government must try to the save whatever means necessary” to paraphrase today’s interview to Tory leader Cameroon who had a sudden taste for bipartisanship in the midst of the Tory conference) the impasse must be solved in a way or in another. Whatever way, it must provide the material conditions to launch a new phase of accumulation. This is obvious, even if it may sound a platitude. But it is a platitude that does constitute the strategic horizons within which the current debates are plaid out.

* what way is of course important. We have at play two broad strategies within this horizon. One, which brings together the panicking US administration (Bush and Paulson) with “responsible” democrats who, pace some populism in their interventions that have realised some fine tuning to the robbery of the $700b, thought to go along with the bailout of Wall Street. I agree with Naomi Klein here. The shock is here delayed. The cost of this bailout (on top of skyrocketing military expenditures), would in the near future tie the hands of any US administration and be the basis of more typical neoliberal policies (cut in spending, re-privatisation of nationalised banks during the crisis, etc.) The infrastructure and energy investment promised by Obama will take place if he is elected, but in a context of populist austerity (in which the cuts necessary to fund these investment are distributed “fairly”). If instead McCain goes to the White House, austerity is already embedded in his agenda even without the $700b constraint. In either case, this bailout scenario is relying on the idea that the system could go on more or less as it did so far, a part for some buffering during this crisis. The difference between an Obama and a McCain administration here would be the difference of degree of governance: obama would manage the flow of domestic and international conflict in a more deal prone way and McCain would replay Bush’s script despite his annoying conciliatory tone he uses to dress the substance of his speech. Obviously, financial capital seem to want the bailout, as it save their skins and, potentially, at least part of their bonuses.

* if the rescue plan goes ahead (there is a vote on Wednesday, we will find in a situation in which public money has been used at a massive scale to buy assets above the value they would have had if the market were left to operate as in textbooks. This is not only something that enrages many people, it is also something that opens to a degree the socialisation of finance used, in this case, in order to save the system itself. Here the US “Middle Classes” are really caught in between a rock and a hard place. Bail them out, and swallow the anger that your money goes to save their neck and more sacrifices will be demanded from you tomorrow to pay for the bailout. Don’t bail them out, and face the prospect that your pensions, your access to credit, your job, your children college, your cars, your way of life is ultimately threaten by financial meltdown (see the amazing Bush’s speech) the other day). In this sense, the Middle Class as Middle Class will not get us out of this mess. The Middle Class must accept its end in order to aspire for a truly new beginning.

* now, the failure to pass the $700b plan (so far, don’t forget they are still trying to patch this up) is really interesting. There is obviously a lot of opposition to this bail out, bringing together hard core republicans and radical left types from the street. From a left-populist perspective, the argument has been made that instead of paying “greedy” Wall Street, money should be put towards funding home owners and the recovering of main street. Some versions of latter-day Keynesianism here are always at play. Saskia Sassen for example has made an argument along these lines in “open democracy”. (see also other examples cited in my blog post few days ago) Some of the arguments will be taken on board by McCain and, especially, Obama even if the $700b passes. But the real interesting perspective here is that this crisis is opening up an opportunity for true “market fundamentalists” to step in (even while they are riding as in the late 1970s a populist rhetoric): don’t bail out the suckers of Wall Street, let them face the risk they have incurred. This is the “moral hazard” argument, with which committed marketeers hammer in their sense of value and justice any time they are in front of a crisis. Crises, even big one, have a disciplinary role to play, to brig about needed restructuring. Let them play it. And since they are the true believer in the end of history (that is, really, that market capitalism is the bliss point of human evolution), they are confident that even a crisis of this proportion can be the basis of a new round of accumulation. Obviously, to the limit this stance could threaten the system itself, *if* the “commoners” had gone through a process of powerful enough political recomposition not only in the US, but across borders. Lacking this, lacking this “explosion of the middle class” and its recomposition into commoners and commoning predicated on new values, this stance offers also a great opportunity for truly massive and major restructuring of the economy and livelihoods at a planetary level in capital’s favour. This stance could even open to a period of the US state taking over of Wall Street devalued financial firms at a bargain, hence the creation of a US Sovereign Wealth Fund that would recapitalise in value in proportion to the global restructuring it is able to implement, and of the expectation of world growth it is able to elicit that would be reflected in the value of those nationalised financial firms. This of course could be in “partnership” with other sovereign wealth funds around the globe, a sort of “productivity deal” at governance level. Here we would have a situation in which the Middle Class would be tied to the neck to accumulation prospects (and its enclosures), around the planet not longer simply because of their pensions, but also for anything the state would provide for their reproduction. We can even imagine a situation in which in few years a Milton Fridman’s type of basic income is introduced together with a tax flat rate, grossly reducing tax revenue, but replaced by the revenue of the US people Sovereign Wealth Fund, capitalising itself in direct proportion to prospects of world accumulation (you can imagine the role of the US military then!!).

The main difference between this strategic course of action and the bailout will be in the intensity of the restructuring needed and its time frame. In either case, and whatever the scenarios ahead, it is certain that after the period of financialisation of society we are entering now the period of socialisation of finance. This has been recognised widely, even by mainstream press. The end of neoliberalism as we know it however, is not the end of capitalist enclosures, disciplinary and governance processes. It is the strategic reconfiguration of the social force we call capital on a new plane.

The question for us is how do we intervene in this new context. The question we should raise and problematise is “what socialised finance” — that is, in our terms, when we strip from money and finance its capitalist form and recognise its “rational kernel” as a conduit for the distribution and allocation of social powers — what decisions of social investments, for what priority, for what needs, through what mechanism of commoning, the fucked up commoning of capitalist enclosures and discipline, or others ones, which one?

the exitement of hope and fear: the naked emperor way

September 26th, 2008

video_button_white_dred.gifHere is Bush speech on Wednesday night (24 September) to get the $700 billion bail out in contrast with what he said on July 15 2008 when he said that everything was fine, that productivity was growing, that people are working (”not as good as we’d like but . . .”), etc. Two months ago he was exciting hope in the midst of panic. Now we have the excitement of fear in the midst of meltdown. Almost like at the time of September 11, we are hushed into accepting a massive cost in view of avoiding a greater one, the fall from middle class status (weather real or ideal). Here is the naked emperor: “the top economic experts warn that if not immediate action is taken” we’ll have “financial panic and distressing scenarios” . . .”more banks would fail including one in YOUR community. The sock market would drop even more, which would reduce the value of YOUR retirement account, the value of YOUR home could plummet, foreclosures would rise dramatically, and if you are a business or a farm YOU would find it harder and more expensive to get credit, more business would close their doors, and millions of americans could loose their jobs”

But you may think that this would not touch you, as you credit rating is fine . .ah ah, “even if you have good credit history it would be more difficult for YOU to get a loan you need to buy a car or send your children to college, and ultimately our country could experience a long and painful recession. Fellow citizens, WE must not let this happen.”

As a “long and painful recession” will happen anyway (many are predicting a min of 18 months recession which has already started) this call for action with the consequent bailing out of wall street with a blank check is obviously going to be defended in the future as “if we had not done that we would be experiencing a worst recession.” But the emperor IS naked in this moment of crisis. Part of the US ruling classes are stirring this towards creating a context for near future restructuring and cuts. The public purse will be burdened with debt over Iraq and the bailout and a furthering of privatisation of public services etc, will be on the agenda. And this agenda is fine with the democrats, who are ready to accept a deal with few cosmetic limits to executive pay. What is interesting is that it is the republicans, concerned that the bailout is a step towards “socialism”, that are dragging their feet (see this article in the International Herald Tribune). What’s stewing?


around $700 billion

September 25th, 2008

Paulson’s argument for keeping his $700b bailout programme a free gift to his old Wall Street mates is that it is designed to attract private partners who would be discouraged if too many caveats are put into place: see here

here is Paulson’s testimony

check also Naomi Klein’s interview on democracy now . . . .when it was run by Paulson, Goldman & Sacks increased debt exposure enormously, hence today’s bail out goes to safe his old colleagues ‘ass

check this: presidential debate suspended, general states called, bipartisan consensus seeked to frame $700b plan . . .we might be in the midst of a process to generate a new kind of consensus which will set the framework for policies for the next few decades.

also, from Naomi’s bulletin the news that Gingrich is holding an event this Saturday, September 27 that will be broadcast on satellite television to shore up public support for new controversial policies. . . .

here is the breakdown of different take and resistance around Paulson from RGE monitor site:

◦ In its original version, Treasury requests the right to buy anything from any institution (incl. hedge funds) at theoretically any price it deems right without oversight or legal recourse. Management of assets will be outsourced to the private sector. Authority expires Sep 2010. By order of magnitude, the entire shadow banking system incl. brokers and hedge funds is $10 trillion of which $5 trillion are buried in off-balance sheet vehicles.–> House Republicans warn Treasury Secretary Henry Paulson on Sep 24 that his $700 billion financial rescue plan wouldn’t pass and ask for more time to consider alternative ideas.
◦ Ben Bernanke proposes ‘hold-to-maturity’ purchase price instead of current market value described as ‘fire-sale’ price.
◦ Krugman: if taxpayers are to overpay for securities that other private market participants would not take at any price then an equity stake is a MUST; i.e. should be make-or-break issue in Congress.
◦ Democrats’ alternative plan includes measures on: restrictions on executive compensation, Equity stakes in return for bailout to recapitalize institutions and retain upside for taxpayers; Bankruptcy reform to lower debt value of purchased mortgages; Independent oversight of how $700bn are spent; Second stimulus package for Main Street next to bailout for Wall Street.
◦ Industry groups want to temporarily suspend mark-to-market accounting in order no to take a writedown on sold assets
◦ Tett: valuation and pricing issues prevented the first Super-SIV from working, the same might happen again. If bad asset purchase price is too low, writedowns might be too large to bear; if price is too high, taxpayer overpays and has limited upside eventually–> 
◦ Geithner (via MarketWatch): The ’shadow banking system’ that needs to be re-intermediated is a $10 trillion market without adequate capital provisions (=$2.2tr commercial paper conduits incl ABCP + $2.5tr repo/reverse repo market + $4tr combined brokerage assets + $1.8tr hedge funds = $10.5tr in 2007) that boomed outside traditional banking. In comparison: the traditional banking system is also $10trillion.
◦ In July, FASB has decided to “eliminate the concept of the Qualified Special Purpose Entity (QSPE)” in the revised financial-accounting standard, FAS 140, starting November 2009. This requires banks to consolidate off-balance sheet vehicles used to package assets into securities –> Up to $5 trillion of dollars worth of illiquid assets/derivatives are buried on banks’ Variable Interest Entities (VIEs) 
◦ BIS Joint Forum: CDO of ABS (i.e. structured finance CDOs), CDO^2 are not likely to survive the turmoil .  
◦ SIFMA: Global issuance of CDOs from 2004 - 4Q2007 totaled $1.47 trillion. CDO issuance by underlying collateral in 2007:
-$254.8bn structured finance CDOs (collateral pool consisting of RMBS, CMBS, CMOs, ABS, CDOs, CDS, and other securitized/structured products) 
-$148.3bn high-yield loans (rated below BBB-/Baaa3) CDOs
-$78bn investment-grade bonds CDOs

Naomi was rebuked by Andrew Sullivan remarks that the problem is not shock, but there is not enough “capitalism”, where people take responsibility, taxes are on a level playing field etc. . . .it is actually quite interesting here the fact that this is the major impasse between the two, on other themes much agreements it seems.

Here 5 economists interviewd by Al Jazzeera, incluing James Galbraith . . .ranging here from keynesian growth policy to calls against moral hazard

The article above was asking: is this the end of capitalism? A specular question was asked during BBC Newsnight by Jeremy Paxman to Naomi Kleim: what is the alternative to capitalism? There is always an impasse to this question, precisely because the question requires an “ism” for an answer, and we are quite sceptical about providing these (and this is good, it means we are sensible to the fact that the “ism” comes out of our own interaction, and is not a magic formula you and I can campaign on. So, we should say: I do not know what is the alternative to capitalism, but I know what is the alternative to capital, and that is that people start to run their own affairs in common, giving values to other things than profit. For example, the alternative is that instead of giving $700 billion as a blank check to the financial capital of wall street, we let them bankrupt, buy their assets at a bargain, and start use finance as a conduit for socially and environmentally sustainable investment, predicated on social justice. Who decide what is just? well, since these financial powerhouse will be in public hand, we have to open a debate what do we mean by democracy . . .

Here is the Austrian economist position. Here the author claims the bailout will be $5 trillion. The argument is that “More formally, there is a gap between the nominal and real value of debt instruments that across the entire credit spectrum easily exceeds $5 trillion, the risk of which the federal government has assumed.” Through the bailout the federal government is providing a floor to the assets prices above the “real value” of assets (i.e. very low in these conditions). To paraphrase Marx, as soon as wall street and government put their heads together, the sacred laws of supply and demand are repealed.

Three options are given here by the Austrian economist author Don A Rich:

“First, the federal government raises taxes to pay off the difference. That clearly isn’t good news for Wall Street or the wealth-creation process.

Second, the Federal Reserve System prints enough money to prop up debt-security prices at nominal values over time, thereby bringing about equilibrium by raising the prices of everything else. A borderline hyperinflation isn’t good news for Wall Street.
Third, perhaps in some instances the federal government seizes the assets of the financial industry at fire-sale prices, and therefore inflicts the loss on shareholders and private creditors in a bizarre form of monetary-policy-induced, catastrophe-driven socialism or fascism.”

Well perhaps not, perhaps the seizure of financial assets could in principle open to a different and far more democratic use and function of finance as mentioned above.

Here Saskia Sassen’s “New new Deal”: let us spend $700 billion but in different ways (infrastructure, social services etc.). No mention about the link between fed expenditure and gov control on wall street.

Value struggle on the river front

June 19th, 2008

video_button_white_dred.gifHere is a Al Jazeera report on the impacts of the Belo Monte Dam in Altamira, Brazil and on the Xingu Encounter 2008. For more on the latter, see the site of International Rivers