“IMAGINING OTHER”

 

Corporate Social Responsibility in Context:

updates:

 

                                                                                                                                                                             Links: Imagining Other Index page

 

                                                                                                                                                                                    For further notes on economists and related political ideas, see:

                                                                                                                                                                                                John Locke,    

Adam Smith,

Marx (and related sections of notes on political philosophy),

                                                                                                                                                                                                Hayek and the New Right. 

 

* General:

 

New Statesman supplement, ‘Should Business play a role in addressing poverty in the UK?’ (23 – 29 Oct). Covers much of the ground introduced in my CSR notes.

 

 

* For Chapter 1: definitions:

 

The IEA has – along with the Adam Smith Institute – received money from the tobacco industry:

http://www.guardian.co.uk/society/2013/jun/01/thinktanks-big-tobacco-funds-smoking Observer June 2nd 2013.

 

* For Chapter 2: history (part 1):

 

How far have we come with CSR? Article reporting a round-table discussion February 2014:

http://www.theguardian.com/sustainable-business/new-calling-for-capitalism - seems to me to show we have made little headway. Criticised as obstructing more social awareness is the system of stocks and shares (“the drive for shareholder returns reflects a ‘systems-wide problem’”) [what’s new there?!]

Still, says one participant, capitalism is such an incredible system it can do things really quickly and engage incredible powers of innovation but “they’re just not really pointed in the right direction” [how is the system to get turned round to point in the right direction?]

Suggestions include making sure the education of professionals in the financial services should include what seems now to be called ESG – environmental, social and (corporate) governance issues [the first srb/csr courses in higher education started over 40 years ago – not much progress here, then]

We need to educate civil society said another participant... [without saying how – apart from discriminating purchase of ISAs etc – the public is going to affect the outlook of finance companies, pension funds etc: where is the leverage?]

And this means more transparency... [so more information is all we need?]

Fund managers have to lead, say some – UK pension funds have assets of £2 trillion... and Tony Greenham of New Economics Foundation makes the [time-worn] point that ‘It is easy to make a case that, over the long-run, profit and protecting long-term wellbeing will coincide’ [I used to follow the NEF, but this point only takes us round in a circle: the whole system is based on short-term profits/returns on shares]

The only concrete proposal appears to be Carbon Tracker, which shows that there is more coal and oil still to be extracted which we just cannot afford to use ‘if we are to stay within internationally agreed targets for reducing CO2 emissions’. So, if the true value of fossil resources were reflected in the value of the extracting companies... In other words, once pension fund managers and central bankers realise the risks they are running, they will realise the business case for investing in a greener economy.

This, it is claimed, is compatible with market economics and competition [but how are fund managers and bankers going to be persuaded of all this?? The crucial question remains unanswered it seems to me!]

 

 

* For Chapter 3: history (part 2):

Topics in alphabetical order:

#Chandler, Geoffrey

#ethical shares

#multinationals

#philanthropists

#privatisation

#worker-owned enterprises

 

Chandler, Sir Geoffrey: Obituary, April 10th 2011: http://www.guardian.co.uk/business/2011/apr/10/sir-geoffrey-chandler-obituary

reminded me of my earliest work on Corporate Social Responsibility: Corporate Social Responsibility - Contents Page. Peter Donaldson’s television programmes, based on his book Economics of the Real World, were a strong influence on me, (and I used recordings of them in my teaching) and if I remember rightly, Donaldson interviewed Chandler about the ‘social responsibility of business’ (as CSR was known then) – and I was struck by his strong, clear argument that business simply had to do good for society.

 

Of course, he was no revolutionary – not a socialist by any stretch of the imagination, but the presence in business of people like him probably convinced me that to stick narrowly to a radical and/or revolutionary line was not going to have much effect on the real world. Undoubtedly Chandler and his like have helped to make CSR an acceptable idea in business – and the opponents such as Milton Friedman are not to be heard these days!

 

Ethical shares – Money Gdn, 080809 questions investment in Tesco and other supermarkets. Jupiter Ecology doesn’t, but many others do (incl. F & C Stewardship Growth, the biggest of the ethical funds). But Tesco has sales of £1 bn a week, and an investor can put pressure on them to be more ethical – e.g. Co-operative Investments’ Sustainable Leaders Trust. See also Guardian’s book: Green Money: how to save and invest ethically by Sarah Pennells.  £7.99 

 

Multinationals: April 17th 2011, Observer: lists ‘invisible giants’ – i.e. business multinationals which try to keep a low profile: Glencore (trades in minerals and metals, grain and energy, plans biggest stock exchange flotation ever: $60 bn, creating 485 instant millionaires…); Saudi Aramco (controls ¼ of world’s oil reserves, 55,000 + employees, may have exaggerated amount of oil reserves); Cargill (US agribusiness – 80% owned by descendents of founder WW Cargill – including 7 billionaires); ISS (Danish outsourcing company, cleans RAF bases, provides security at hospitals etc – 250,000 employees); INEOS (UK/Swiss: chemicals – part-owner of Grangemouth refinery); Bridgewater Assocs (hedge fund, focuses on currency speculation, trading govt bonds, and fixed-income debt); Permira (UK private-equity, owns: Hugo Boss, Birds Eye, the AA, Saga, New Look – capital of  L18 bn); Noble Group (Hong Kong – trading company); Koch Industries (US 2nd largest private cy in the US, employs 70,000 and made $32 bn acquisitions since 2003); Sinopec (China – petrol group 7th in Fortune list of biggest companies, revenue $187 bn).

 

Philanthropists and business leaders, to support campaigns to preserve environment (etc). Article G 28.12.2011 – Juliette Jowit on how campaigns such as ending slavery involved a well-known figure e.g. from the world of business. With slavery was Charles Grant, chair of East India Company

Who declared his support for William Wilberforce.  British lawyer Polly Higgins wants ‘ecocide’ to be made illegal – by making it a fifth crime against peace in the international criminal court. Need to open an amendment to the 1968 Rome Statute that established the court and with two-thirds of the statute’s signatories in agreement it would become law. (Ecocide is illegal in war but not in peace-time!). Higgins believes she needs a prominent figure to back the campaign – e.g. Bill and Melinda Gates (have spent more than $26bn on their foundation, promoting development and health – but acknowledging that climate change is part of this). Or Warren Buffett who has also given away billions to good causes and opposes new coal-fired power stations. Even the chair of Nestle, Peter Brabeck-Letmathe, who has said charges for water ought to be increased (presumably only in the developed world!!!).

 

Privatisation (see on PFIs in CSR3). Polly Toynbee article Guardian 17.07.12:

http://www.guardian.co.uk/commentisfree/2012/jul/16/who-thinks-outsourcing-works?INTCMP=SRCH

Notes Cameron’s determination to privatize, but also the difficulty of comparing private with public/in service provision – though the latter is public and transparent...

 

Worker-owned enterprises: Letter Guardian from Andrew Gunn former Chair Employee Ownership Assn. says what a pity Cadbury didn’t follow John Lewis, Ove Arup, Tullis Russell, Scott Bader and Baxi Group into employee ownership.

 

 

* For Chapter 4: the workers and management:

 

Caulkin, Simon (notes from The Observer)

14.06.09: Simon Caulkin is losing his column because of cost-cutting… In his last piece he writes: whenever people were asked about their view of management, there was a totally different picture to what management itself claimed: “the talk was of empowerment, shared destiny, pulling together: the walk was increasing work intensity, tight performance management, risk offloaded to the individual” – the talk was flat organisations: the reality, centralization and a yawning divide between other ranks, required to minimise their demands for the greater good, and a remote officer class whose rewards had to soar to motivate them… Employees were the most valuable asset – until costs had to be cut.” The customer wasn’t king: hence all the mis-selling scandals.

 

Shamefully this story reached its climax under a Labour government (*) that not only encouraged ethics-free market-led management principles in the private sector but even imposed them on the public sector. The credit-crunch is a management failure (not a market failure). Labour also oversaw: Soviet-style targets and inspection regimes, and locked government into lucrative contracts for IT with private suppliers that have “made the public sector systemically less capable than it was 12 years ago”.

 

The management model that has run us for the past 30 years – along with the economic model (rational expectations, efficient markets) is “bust, dead, finished – a mortal danger to us and the planet.” But there have been saner voices “at the margins” – e.g. John Lewis; and there should be more academics engaging with big issues (at risk of losing their jobs!); “courageous public-sector managers who find ways of circumventing the draconian targets regime to do what they know to be right” should also get more support now the old model is dead.

 

Norms matter – because as Michael Sandel said in the 2009 Reith lectures – “they so easily become self-fulfilling”. We need to be debating the norms that go with a “post-financial form of management.”

 

(*) See also Will Hutton in same issue – see pp17 socialism since Marx.htm #Labour in thrall to finance

 

07.06.09 the bankruptcy of General Motors: this company was the embodiment of ‘the visible hand’ (Alfred Chandler’s expression) i.e. management. Contrasting with Ford, GM had rational administrative co-ordination, a multidivisional structure, with separate divisions corresponding to each market segment (Chevrolet, Cadillac etc). This model was highly influential on other firms. Peter Drucker wrote The Concept of the Corporation after observing them in the 1950s.

 

However, Ford adopted GM’s management model and succeeded in producing so many cars so cheaply that it undercut GM (though it had to use more advertising and make cut-price offers to overcome consumer resistance…) – then the Japanese found how to produce cars cheaply but of better quality, and were more in tune with what customers wanted.

 

Since the 1980s GM has been in difficulty, outdone by Ford, and it tried changing brands, management, etc. to no avail.

 

The GM management model has not been discredited though, and is popular in the service sector: financial and communications companies have been developing global low-cost supply chains, and mass-produced services – the emphasis is on economies of scale and low transaction costs achieved through specialisation and standardization – result: white-collar factories (HM Revenue, DWP etc) which are inflexible, error-prone and customer unfriendly just like car assembly plants. But we can’t use he mass production approach in services – the ‘standardise-specialise-automate’ formula doesn’t work where there is a variety of service demand… Services need well-organised humans, not computers to produce effective (and cost-effective) results.

 

Services need to develop a post-industrial management model: more sensitive to customers (than mass production is), more responsible (than the financial sector is), and less wasteful – by dismantling the GM model.

 

31.05.09: 40 years ago, markets were restrained by checks and balances, whilst individuals were fairly free – now the reverse is true, markets are free and individuals hemmed in (*). In management also, in the 1960s there was a more paternal management (and less of it!), and it was reined in by collective bargaining, stronger trade unions, and convention – so that management, in reaction, demanded its ‘right to manage’, and there were complaints about ‘workers’ demands’ (which all seems strange today!).

 

Since then, ‘risk’ has been passed down to the workers e.g. in terms of pensions, and there is more control of the individual through appraisal, targets and inspection – whilst manager have more freedom.

 

The results of all this were very bad: free financial markets destroyed pension pots and savings. Globally the share of income going to capital has risen at the expense of labour. See the TUC report – Life in the Middle: www.tuc.org.uk/touchstone/lifeinthemiddle.pdf - which shows that middle Britain’s pay has gone down more than anyone else: median pay (£377 a week) has gone up by 60% whilst average pay has gone up by 78%. Britain is also more unequal than most other societies in Europe – whereas 30 years ago it was one of the most equal. See notes on inequality (link at top of page).

 

In The Puritan Gift by Will and Kenneth Hopper, it is argued that until the 1970s, management was based on Puritan values: the collective is more important than the individual (and idealism, skills, and the ability to organise behind a single aim were valued). But then ‘neo-Taylorism’ came into favour: quantitative techniques, ‘cult of the expert’, and consequently the worship of heroic CEOs and of business schools.  ‘Raging self-interest and the malign influence of shareholder value did the rest’.

 

However, the Hoppers suggest that now the most enlightened firms are looking to Japan to learn from the ‘human-centred tradition’ (introduced from America after the War, via Deming at el). To deal with our ‘sinking middle’ management should return to its ‘virtuous roots’. (TUC’s suggested remedy is a new tax and mobility agenda…).

 

(*) but of course individuals now have more ‘free choice’ in consumption of goods and leisure… though ‘you can fool some of the people all of the time, and all of the people some of the time…’ see notes on the consumer, Chapter 5 (link below).

 

The Luddites – article from Post-16 Educator 68, July - Sep 2012, by David King, former molecular biologist who has written on issues relating to genetics and society since 1990. He is involved with www.luddites200.org.uk (email luddites200@yahoo.co.uk): Nov 2011 – Jan 2013 is the 200th anniversary of the Luddite uprisings.

 

They opposed - not all technology but - technology ‘hurtful to Commonality’ (i.e. the common good). They only destroyed those machines that would destroy jobs. In Feb 2012 the government passed the Frame Breaking Act introducing the death penalty for machine breaking. They were also opposed by the owners of larger mills, magistrates and troops. Riots destroyed two mills in Lancashire. In Oct 2012 George Mellor, a key leader, was arrested – he and 16 others were hanged at York in Jan 2013. By the end of the uprising thousands of looms had been destroyed – although they are seen to have failed, many master hosiers did not bring in the new machines for some time, and wage levels were considerably restored – in the 1830s there were further riots, the Captain Swing riots. (Davis cites Kirkpatrick Sale: this was an uprising against The Machine, not against machines.

 

David King argues – as do I (in Chapter 4 and Chapter 6) – that technology is not neutral, but works within a system. Also that science grew up with capitalism and with a desire to dominate nature.

See also: the Frankfurt school, eco-feminists such as Carolyn Merchant, and Brian Easlea: Science (The Enlightenment) these notes to be added to...

 

‘The story of science is normally told as if it developed independently from society, yet in reality science could only happen in a society [with the same values]: pragmatism, empiricism, materialism etc. The liberal view that science follows its own internal dynamic, driven only by curiosity, is designed to mask the fundamental intertwining of science and capitalism... even in its purest form scientific discovery serves capitalism by creating a more and more accurate map of nature, creating opportunities for manipulation.

 

Marxists have tended to believe in the myth of progress through technology, and have abandoned their own method of examining the social context when thinking about science and technology.

 

Since the 17th century the ruling concept of Western society has been the smoothly functioning, efficient machine. This has underpinned the division of labour, and led to the obsession with ‘management’ of society etc. A recent paper for a conference on Earth System Governance said: ‘You cannot manage what you cannot measure.’ Taylorism, eugenics, Technocracy all follow. Taylor said: ‘In the past, the man was first: in the future, the system must be first.’

 

Above the 1933 Chicago World Fair proclaimed: ‘Science Discovers, Technology Executes, Man Conforms.’

 

Capitalist technologies empower the powerful and marginalize the weak.

 

The idea that science/technology can be used to manipulate the climate – is ‘entirely out of touch with reality... simply insane’!!

 

See also notes on the labour movement (social movements notes).

 

Lucas Aerospace lives! Anne Karpf wrote in Guardian: http://www.guardian.co.uk/commentisfree/2012/jan/31/jobs-growth-workers-vision?INTCMP=SRCH

                                                                                                                                                                                                                        (– see also Chapter 4, link above).

 

Daily Mail: 2 leading corporate governance consultancies have criticised Daily Mail & General Trust for its dual share structure which allows chairman Lord Rothermere to control the company, and recommended that shareholders reject its remuneration report in protest. Editor Paul Dacre has a £1.3m salary – while the Mail is always complaining about ‘fat cats’.

 

 

Management: study by The Work Foundation, published 160110 (see G) by Penny Tamkin, leaders who remain focused on numbers and targets - and tasks - need a paradigm shift, to focus on people…  Based on 250 in-depth interviews, six high-profile organisations. Separated good from outstanding leaders: latter always show best behaviour – no tantrums; use selves as facilitator of better performance from others; careful to be consistent (merely good leaders adopt ‘WYSIWYG’); see things holistically; don’t just delegate but stay in touch with staff afterwards asking how they got on, rewarding them etc. Institute of Leadership and Management found (‘Index of Leadership Trust’) similar in recent study – and that almost a third of employees have low or no trust in senior mgt teams, but trust is cornerstone of good leadership. Key is not expertise, knowing the answers, but ability to facilitate new solutions.

5 key skills: seeing the bigger picture, understanding that talk is work, giving time and space to others, encouraging growth learning and engagement, putting ‘we’ before ‘me’.

 

MBAs and CSR: Harvard Business School MBA graduates take an oath before their award ceremony to ‘serve the greater good’, ‘act with the utmost integrity’ and guard against ‘decisions and behaviour that advance my own narrow ambitions, but harm the enterprise and the societies it serves.’  Result of campaign by Max Anderson, and MBA student – got 400 signatures. Encouraged by a few faculty members only, e.g. Prof Rakesh Khurana. Part of larger effort to change management from a trade into a profession. This in opposition to the Friedmanite view that their aim/responsibility is to increase shareholder value. Campaign started at Thunderbird business school in Arizona, in 2004, under its president Angel Cabrera.

Limitations include fact that very few managers have MBAs, and it would prove very difficult to enforce a code for the whole ‘profession’.

But self-regulation, openness and constant feedback are features of internet: eBay, Wikipedia, open source…  (Economist 060609)

 

McClelland, Grigor – Quaker businessman and academic – obituary, Guardian 15.11.13: (did I encounter his work when teaching SRB?)

http://www.theguardian.com/education/2013/nov/14/grigor-mcclelland

 

Work: the UK refuses to abandon its ‘opt-out’ of the European Working Time Directive, (to avoid maximum working hours for British workers). TUC has info on myths about work: www.tuc.org.uk/extras/workingtimemyths.pdf 

 

 

* For Chapter 5: the consumer by topic, in alphabetical order:

 

#adbusters

#advertising

#brands

#child labour

#coffee (and Starbucks)

#food

#greed 

#product placement

#smoking

#turbo-consumers (also Baudrillard…)

 

Adbusters: – were one of the sparks that lit the ‘Occupy’ movement (see pp18 updates).

 

Advertising:

Eliane Glaser has received flack for her book: Get Real – in Guardian Review 31.03.12 she replies especially to those who say that ‘people are not stupid’: we are all being manipulated and persuaded of things – and she still uses the concept ‘false consciousness’ (see Marxism...). Points out that Nudge idea was promoted in 2010 by Cameron in his ‘nudge unit’ it was to work with such as McDonalds and PepsiCo, and it was directed by David Halpern, former advisor to Blair, and author of: ‘Mindspace: Influencing Behaviour through Public Policy.’ Government, he says, should ‘shift the focus of attention away from facts and information ‘and towards ‘automatic processes [and] altering the context in which people act’. It should become a ‘surrogate willpower’. See:

http://www.guardian.co.uk/books/2012/mar/29/eliane-glaser-author-best-interests?INTCMP=SRCH

 

(Jessica Shepherd, G 151209):

Government (DCSF) inquiry, under Prof. David Buckingham, finds that children as young as five should be taught how to deal with the onslaught of advertising aimed at them… Companies now sponsor school awards, playgrounds (outside school), computers etc. Debatable whether the new products etc introduced are of benefit. Some online marketing techniques ask children to recommend products to their friends…

 

The Real Mad Men – about Madison Avenue – see csr books…

 

Brand names: in China Western brand names are being carefully translated: Nike = ‘Enduring and Persevering’ (pronounced Nai ke), BMW = ‘Precious Horse’ (pron: Bao ma), Coca-Cola = ‘Tasty Fun’ (pronounced Kekoukele), Heineken = ‘Happiness Power’, Tide = ‘gets rid of dirt’ (pron: Taizi), Reebok = ‘quick steps’ (Rui bu), Marriott = ‘10,000 wealthy elites’ (Wan hao) ... (Michael Wines, NY Times 27/11/11)... China’s market for consumer goods is growing by more than 13% annually, and luxury goods sales by 25%

 

Child labour: – and exploitation of third world workers: http://www.guardian.co.uk/world/2013/jul/28/india-sweated-labour

 

Coffee/Starbucks: (review NS 250208):

Book: Starbucked: a double tall tale of caffeine, commerce and culture – Taylor Clark, Sceptre, L12.99. Good account of the problems of coffee production, and promises to deal with ethical issues, but is weak on these: not good on unions, and ignores plight of coffee-producers (better conditions during Cold War, as US introduced guaranteed prices and quotas, because afraid of unrest in Latin America turning to pro-communist movement…

 

Food: (Gdn 25/10/07 Leo Hickman?)

Tim Lang (prof of food policy, City Univ) says “we ought to have a worker-sensitive, pro-public health, climate-friendly, ‘right-on’ food supply system. Instead the focus is always on the big three – price, convenience and hygiene…’ He also argues that Government and business together have to agree standards (it can’t be left to Tesco!). In 2006, the Sustainable Consumption Roundtable concluded (Looking Forward, Looking Back): “The evidence suggests that, historically, the green consumer has not been the tipping point in driving green innovation. Instead, choice-editing for quality and sustainability by government and business has been the critical driver in the majority of cases.” i.e. unsustainable etc goods need to be cut out before they get on the shelves!

 

If object to “choice-editing” (i.e. argument that should be left to consumer) problem is that “there are already people in these companies controlling how and when a bean is grown, what it is sprayed with, whether it is flown in etc. They are already choice-editing.” (Says Tim Lang)

 

Only question then is, do we trust government and business to do the choice-editing?

 

‘Greed culture’: Average American consumes more than his weight in products each day, according to annual report of Worldwatch Institute. The cult of consumption and greed could wipe out any gains made from action on the environment. Project director Erik Assadourian: environmental damage is driven by ‘unsustainable habits’. In the last decade, world consumption of goods and services rose by 28% (to £18.8 bn). These habits are not a natural result of growth but due to ‘deliberate efforts by business to win over consumers’.

Average western family spends more on their pet than is spent by a human in Bangladesh.

Younger generation more aware, and school meals had improved (less wasteful, more nutritious). ‘Has to be a wholesale transformation of values and attitudes’ (Suzanne Goldenberg, G Jan 2010).

 

Product placement: 16th June 2008:

In America, product placement (products mentioned in TV programmes or films, as a form of advertising) is widespread: 117,976 individual placements across the top 11 TV channels in the first 3 months of this year (Nielsen Media Research, from MediaGuardian 160608). Reality TV has many companies involved – such as weight-loss products (a $60 bn market!) for the programme The Biggest Loser. American Idol contained more than 3,000 placements. AT&T is rumoured to have paid up to $50 m for a mix of PPs and ads.

Total yearly spend on PP in the US is between $7 bn and $10 bn – slightly more than the GDP of Paraguay!!!!

 

Smoking: (AlexanderChancellor, G 191208).

Kills 87,000 people a year in England alone.  The brand “Death” was such a success in the ‘90s that ‘the tobacco industry ganged up to suppress it’…

 

Supermarkets: there are just over 8,000 supermarkets in UK, they account for 97% of total grocery sales! Tesco, Sainsbury’s, Asda and Morrisons take 76% of that market. The share of non-food retailing has increased by 75% since 2003 (to 14%). In two years up to Nov 2010 planning permission was given for 480 new stores for the big four. One pound in seven in Britain goes to Tesco alone.  Article by John Harris, G magazine 6 Aug 2010.

 

Turbo-consumers:

Neal Lawson: All Consuming www.allconsuming.org.uk – G 030809: we are now turbo consumers – shopping is the predominant way in which we know ourselves and each other – consumer industrial complex of: designers, advertisers, psychologists and retail consultants… the point is to leave us unfulfilled so that we go back for more (nothing new there then! See Vance Packard and John Berger). Totalitarianism … now arrives with a smile on its face as it seduces us into yet another purchase… we are watched, recorded and ordered by our shopping desires. Millions refuse all this, either downsizing or doing ethical shopping – but they are leaderless.

 

See also Zoe Williams on the psychology of the August 2011 riots: http://www.guardian.co.uk/commentisfree/2011/aug/09/uk-riots-psychology-of-looting - links with Baudrillard: reference in Current Affairs and Issues notes. 

 

* For Chapter 6: the environment (general topics) go to (Social Movements Chapter 8) environmental movements updates

 

For Climate Change (and Global Warming) and the sceptics go to (Social Movements Chapter 8) climate change.

 

 

* For Chapter 7: the 'third world':

 

Topics in alphabetical order.

Aid

BAE

Bhopal

Britain and the developing world.

fair trade

Financial crisis

invisibility

multinational companies

poverty

slums

tax transfer

water

 

Aid: ‘Third world’ and aid: New International Devt Secretary, Andrew Mitchell, supports overseas aid (NS 020810). Mentions that 4,000 die from malaria each day, of whom 75% are children under five.  Govt has pledged £500 million a year on this. Overall health aid budget is less than £1 bn. Cites Paul Collier: The Bottom Billion. Argues that aid is effective: Britain educates 4.8 million primary school children in Britain, and 5 million around the developing world at a cost that is 2.5% of what is spent in Britain

See www.newstatesman.com/writers/james_macintyre 

 

Interesting and worrying piece by George Monbiot, on how Bono has fallen into the trap of becoming a lackey for western governments and business:

http://www.guardian.co.uk/commentisfree/2013/jun/17/bono-africans-stealing-voice-poor

 

BAE: (see CSR Ch 7, SM Ch 4, Section 4) now admits charges of false accounting and making misleading statements, in dealings with SFO in Britain and dept of justice in Washington. It will pay £300 million in penalties, £30 m. in UK and £257 m. in US. Some of the British money would go to Tanzania (who bought a useless air defence system from BAE, thanks to Tony Blair). Full story in Guardian 060210.

 

Bhopal:

 

Guardian: http://www.guardian.co.uk/environment/bhopal

 

Indra Sinha:

 

http://www.guardian.co.uk/commentisfree/2008/apr/09/abandonedtotheirfate?INTCMP=SRCH

 

 

http://www.guardian.co.uk/commentisfree/2012/mar/02/torch-bhopal-london-olympics-dow-chemical?INTCMP=SRCH

 

Britain and the Developing World: Useful piece by G Monbiot, G 090609:

 

Britain ‘outsourced’ unrest for 300 years – today it’s come home to roost.

Current ‘expenses scandal’ has little to do with MPs’ expenses: it’s come about now because ‘our economic system can no longer extract wealth from other nations’. For 300 years Britain has avoided revolution – despite the misdeeds of its political leaders – because it has been able to bring in wealth from abroad. After decolonization, the banks still extracted money from our former colonies.

 

We had peace in Britain while we suppressed uprisings in: Ireland, India, China, the Caribbean, Egypt, South Africa, Malaya, Kenya, Iran etc (“it was the price of political peace in Britain” – not sure I follow the link he makes…).

 

See: Hamza Alavi: Capitalism and Colonial Production – the resource flow from India to Britain between 1793 and 1803: £2 million a year. We impoverished India, whilst using the wealth gained to drive our industrial revolution. Later we made India dependent on us for manufactures, thus boosting our employment and income again.

 

Ralph Davis: The Industrial Revolution and Overseas Trade: from the 1760s India’s wealth enabled us to buy back our national debt from Holland and others.

 

Hobsbawm: The Age of Revolution: in France the monarchy was brought down by its debts – half its national expenditure was used to service its debt, then the American war broke the back of the monarchy.

 

While the French overthrew their monarchy, our aristocracy was using enclosure to seize wealth from the poor, as well as taking remittances from India and the Caribbean.

 

John Newsinger: The Blood Never Dried: in 1748 Jamaica sent 17,400 tons of sugar to Britain – by 1815 this had risen to 73,800 tons – all from slave labour… And we took grain from Ireland during its famine, and food from India when they were starving:

 

Mike Davis: Late Victorian Holocaust: between 1876 and 1877 wheat exports from India to the UK doubled whilst several million Indians died of starvation. For a generation “the starving Indian and Chinese peasantries… braced the entire system of international settlements, allowing England’s continued financial supremacy to temporarily co-exist with its relative industrial decline.” Thus Britain became the world’s financial capital – and the banks played a crucial part in the exploitation of the colonies (e.g. Rothschild’s ‘fraudulent’ loan to Egypt which contributed to its bankruptcy and the British takeover in 1882 – Newsinger).

 

Joseph Stiglitz: Globalisation and its Discontents: northern traders gained hundreds of billions of dollars from Asian economies through the IMF’s enforced liberalization of capital – and this precipitated the Asian financial crisis of 1997-8.

 

Is the dominance of the City of London now over, though? (see John Lanchester in London Review of Books) – is the anger at the government because they cannot insulate us from this collapse?

 

Fair Trade: article in NYT/Obs Dec 11th 2011 about row developing within the movement: Fair Trade USA wants to break with the man body and make changes such as taking coffee from large plantations (otherwise banned) and to put seal on products with less than 10% fair trade ingredients (elsewhere is 20% minimum).

Sales of Fair Trade goods were $5.8 billion globally in 2010, and $1.3 bn in USA. US group also complains about high fees paid to FT Int ($1.5 million last year) and receiving little in return. US group accused of diluting standards. About 8% of Starbucks coffee came from fair trade farms in 2010. The ‘small farms’ (and co-ops) rule only applies to coffee and cocoa.

 

Financial Crisis: impact on poor in developing countries:

 

See G: http://www.guardian.co.uk/politics/2009/mar/27/global-crisis-impact-poor

 

 

Invisibility of the Developing world:

How appalling, that so little TV time is allocated to factual programmes about the ‘majority world’ – for example Phil Harding (G), reporting on Oxfam study:

www.oxfam.org.uk/globalswitchoff: ITV broadcast 5 hours of factual coverage of the developing world in 2007. Most of our programmes are about US and Europe, US largely crime, Europe: travel and property. Africa: small, mostly wildlife. South America: almost nothing. Report has 10 recommendations, esp: each main broadcaster ought to have an international strategy.

 

Kony 2012: – video about the Ugandan warlord Joseph Kony, made by Jason Russell. Observer 03.03.13 has piece on how it and his charity – Invisible Children -  was attacked. Kony had abducted 30,000 children and turned them into soldiers and sex slaves. The video ‘went viral’ (in six days it had 100 million hits). But when Jason had a breakdown, 10 days after the release of the video – probably suffering from post-traumatic stress – this too became a viral video and was then used to discredit his charity. And Google hits for Kony went from zero to 100 in a day, then went down to zero again. 

 

Jason feels his breakdown was because he got reactions that were polar opposites: Bono et al praising him, and others attacking him as a ‘white saviour’ sending money to corrupt places etc. The video was dismissed as ‘slick’ – even though it represented nearly 10 years of interviews etc in Uganda.

 

Lessons: the power of the internet (where you can find statements that Kony is dead... Says Jason: ‘This is a generation raised on Instagram and a tweet That’s your

news. That’s your actual news... a multiverse of stories – the truth never has a chance’), hostility to aid, suspicion of mental illness... And the difficulty of ‘getting’ people like Kony...

 

Article at: http://www.guardian.co.uk/world/2013/mar/03/jason-russell-kony-2012-interview

 

Multinationals: from NYT/Obs Dec 11th 2011: US MNCs are cutting jobs at home and creating more abroad: in 1999 – 2009, added 683,000 in China (a 172% increase) 392,000 in India (542% increase), Latin America 477,500 – across world: 2.9 mln added in same decade, while lost 864,000 at home. They also gain from lower taxes and cheaper loans. Corporate profits in America were up 35% during the third quarter of 2011, while workers wages only rose 1.8%.

 

In France leading MNCs have been recording record profits while unemployment has been rising, and in Britain there has been the row over bonuses and pay. All this translates as a serious long-term problem for Western societies. (So what’s new?!)

 

Record corporate profits as proportion of US economy were reached recently (i.e. 10%) – last time such a peak was reached was in 1929 (at 8.98%).

 

Poverty: Bono claims – at TED conference on global poverty (Feb 2013) that proportion of the world’s population living in extreme poverty ($1.25, i.e. 80p, a day or less) has declined from 43% in 1990 to 21% in 2010. If this rate continues, extreme poverty would hit zero% in 2030.

 

Slums: G Weekend 190708: on slums: more than 1 billion people live in slums. This is one third of urban dwellers. And since 2008, more people now live in cities than in rural areas.

 

Examples: Dharavi, slum in Mumbai – approx. 1 million residents (two-thirds of popn of M live in slums, M is richest city in India). 1 toilet per 1,440 people.  But slum is ‘prosperous’ with economic output of  $1bn .p.a. – thousands of single-room factories, sweatshops, recycling centres etc.

 

Kibera houses ¼ of Nairobi’s popn.

 

50% of Caracas popn. Live in barrios – 100 homicides a week… Jonas Bendiksen: The Places We Live (Aperture, £22) has photographs.

 

Tax transfer:

 

G 270110: tax lost to developing countries through corporations’ tax avoidance is between 30 and 180 bn each year – compare Britain’s aid budget of 6.3 bn last year!!! Stephen Timms, Treasury minister, wants OECD to take action. Christian Aid has lobbied the International Accounting Standards Board (IASB), but there are investors represented on it who don’t want to rock the boat, and it’s funded by banks, investor bodies etc. Investigation is needed because of the secrecy involved. Some argue that most corporations pay tax, and the problem lies with hedge funds etc.

 

From Guardian, 06 and 07.11.07:  companies in the banana trade are paying less than half the tax expected, by locating subsidiaries in low-tax havens (transfer pricing).

 

Tax paid by UK-quoted companies in 2000 was 26.6%, and in 2004: 22.1% (would expect 30%). They say they are cutting costs to the benefit of shareholders, but tax is not a cost, but a distribution out of profits. Tax is a return to the society in which a company operates, and pays for use of infrastructure (physical and e.g. legal), education of workers that the state has provided etc.

 

A company is a legal entity, and this gives it a licence to operate, which in turn carries an obligation to pay tax on profits – and that tax should be paid where it operates, since here it finds staff, customers and infrastructure.

 

Transnationals pay tax where their “brand” or “purchasing network” or “distribution network” are located. They are assisted by lawyers and accountants, e.g. Pricewaterhouse Cooper is alleged to have been involved in setting up a tax haven in Jamaica.

 

This is not only avoiding their social responsibility, but leads to public paying higher taxes (e.g. in Britain ordinary people’s tax rates have risen as companies’ have fallen) and encourages people to think the way ahead is to opt out of society.

 

By Richard Murphy, director of Tax Research LLP, see www.taxresearch.org.uk/blog

 

Water: August 2008:  Five thousand children die every day around the globe from preventable water-related diseases. (Water Aid Journal: Oasis)

 

The lack of sanitation is the biggest killer of children under five in the developing world. Hopes of eradicating poverty and hunger depend on sorting out safe sanitation, more than on any other intervention.  www.wateraid.org

 

* For Chapter 8: Inequality, go to: Chapter 8: Inequality Updates.