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Are We Entering a Post-Capitalist Era?

Emanuel L. Paparella, Ph.D.

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It was the worst of times, it was the best of times.” Thus begins A Tale of Two Cities. Perhaps we are now living in such times, when the vision of a new social system beyond capitalism can finally be entertained if not realized. The inevitable question arises: what exactly needs to be done?

The philosopher Alfred N. Whitehead’s stated once that theory without praxis is sterile and praxis without theory is blind, but even such an insightful statement remains pitifully inadequate to the challenge of that simple question. Let’s analyze briefly the current situation and then hazard some suggestions on what ordinary citizens can do hic and nunc without waiting for a Charismatic Politician (Nietzsche’s Uberman) to appear walking on water, for to expect miracles in political life is to be eventually sorely disappointed!

Few people doubt nowadays that the entire capitalist system is in crisis. The media and the politicians try to focus our attention on how to repair the system with some tinkering here and there, but a growing number of common citizens are having second thoughts on the idea of fixing a broken system. Some things are better left broken and need to get worse before they get better. They are beginning to entertain the more radical idea that we should instead be using this moment of crisis to fundamentally transform the realities that have historically shaped our lives, especially those of us who live in the democratic West.

This is indeed the silver lining of the whole crisis. The current moment allows us to move from being an object in someone else’s system, with the market as a sort of demiurge to be slavishly worshipped, to becoming the active subject of our own history and destiny. Suddenly we have new choices and we can envision and create realities that just a few years ago would have been ridiculed and caricaturized as naïve and utopian.

The crucial question at this point in time is this: can we get out of this crisis before it is too late and the whole elaborate capitalist scheme comes crashing down causing tremendous suffering to most ordinary people? Is our jubilation at having survived another global regression, which almost became a depression, in any way justified?

Not easy to answer such a question, but one thing remains clear: to embrace the possibilities of the moment means to stand outside the political frame developed by the media and the politicians. This puts progressives, those who are convinced that things always get better and better and there is no sliding back, in a rather difficult position. The present historical moment calls for something far more imaginative and radical than what administration on both sides of the Atlantic have managed to muster so far. And it is not a mere lack of civility and mutual respect, a failure at compromise and tolerance or worse, a matter of “political correctness” or ideological purity.

There is, however another take on this issue: that the ideology of anti-ideology is simply another face of global capitalism. The neoliberal policies that are now crumbling before our eyes were brilliant attempts to extend the basic underlying philosophy of capitalism-that the common good is best served when everyone pursues his or her own economic interests, the famous “laisse faire” economic model whose fruits are dubious at best: what we have seen over several decades is that the rich have gotten richer and tripled and quadrupled their wealth, with the rationale that their wealth would trickle down to the rest of society. What has happened indeed is that while the rich have gotten richer, the poor have gotten the crumbs and have become poorer. The divergence continues to expand. Those are mere market forces, we are told, not to be tampered by ideology.

Indeed, to be non-ideological in a world in which one out of every three people is living on less than $2 a day is to be a champion of inequality, even when one sheds crocodile tears over children starving as we speak, and throws a few miserable billion dollars toward “foreign aid.”

If the truth be told, however, we need to begin to acknowledge that the economic crisis of the West is symptomatic of another deeper malaise: spiritual impoverishment. So spiritual progressives must move beyond the struggles of the moment and provide a different paradigm. People have to be reminded that when the economic system was going full force not long ago, it was also on an immediate collision course with the environment, as Al Gore found out, to his surprise, only after he was out of office and could do nothing on a purely political level. Fortunately, he went into the field of education, environmental education, and we are all better off for it.

People indeed remain to be educated to the hard to swallow empirical evidence that the extremes of selfishness that has led so many of the “big wheels” in the economy to loot their own firms for the sake of personal advantage were not a product of individual pathology (many of those people still consider themselves virtuous and decent) but rather an inevitable working out of the essence of the capitalist ethos and its primary appeal: that if you focus on your own needs and maximize your own interests, without any regard to the well-being of others, you can “make it” and have a very comfortable life. Indeed, when the concept of the common good has all but disappeared, a society will inevitably find itself in a spiritual crisis.

In short, the system that our political leaders are presently trying to revive is already morally bankrupt and environmentally dangerous, but if they know it, they are not telling anybody, yet; often they deny such a reality. But plans to rev up the system so that it can return to those good old days are fundamentally irrational. Which is to say we need a new global economic system; a system under which institutions, corporations, public policies, laws, and even individual behaviors are perceived as “rational,” “productive,” or “efficient” not only to the extent that they produce power or money or new technologies for someone, but also to the extent that they enhance our capacities and our desire to be loving and caring, kind and generous, and ethically and ecologically sensitive.

We are in desperate need of an economy that transcends the narrow utilitarian or instrumental approach of classical liberalism; a novel system which allows us to develop our capacities for awe, wonder, and radical amazement at the grandeur of the universe and the dignity of other human beings. That is something that the ancient Stoics (who were no Christians) seemed to be fully conscious of, but we moderns seem to have all but forgotten, while we pay lip service to spiritual realities.

But to return to the question of what exactly needs to be done, we need a grassroots movement of people meeting together in their communities in “After-Capitalism” groups, discussing their own original ideas on how to create a better global economy. Spiritual progressives should play a central role in stimulating these discussions, not only in every church, synagogue, mosque, and ashram, but also on college campuses, in union halls, in professional organizations, and at town meetings, that is to say the “agora” from which the voice of religion should not be focibly suppressed.

Which is to say, that the activist Left perhaps needs to get out of the way and stop its bad habit of criticizing rather than to propose new options, especially when it comes to the spiritual sphere of human existence. The failure of communist and socialist ideals in the twentieth century has unfortunately led progressives to mere cynical criticism rather than envisioning a new social system. They seem too comfortable in merely criticizing what is or was rather than proposing and leading struggles for what might be. From being idealist they have become realists steeped in “real-politik” Machiavellian thinking. They don’t trust the politicians but they trust even less the idealism originating from a religious paradigm. Deprived of the moral compass of the socialist ideology provided in former times, they now seem at a loss. Some have moved from the Left to the Right. We have the incredible spectacle of a Vladimir Putin financing right wing political movements all over the EU in cynical attempt to divide and conquer.

What in fact needs to be overcome is a cynical pessimism in the West about the possibility of ever creating a society in which people routinely act in altruistic and generous ways toward others. We seem to be constitutionally unable nowadays to imagine ourselves into unselfish cooperative roles. The attempt on the part of conservatives of every stripe to diminish the huge levels of cooperation that made possible the New Deal and that characterized many of the movements of the 1960s and 1970s have been successful in part because of their control over the media, the educational system, and the government. The last twenty years have been especially devastating.

We should frankly acknowledge that the economy itself on both sides of the Atlantic fosters an ethos of selfishness wherein others are treated as instruments for one’s own satisfaction and needs. There is something missing and as hinted above it is the absence of a spiritual dimension to progressive politics without which it is hard to sustain commitment for any kind of long-term struggle. It has not escaped notice that organizations created on the Left by radical activists may champion the ideal of caring for the victims of capitalism but rarely provide active caring for the activists themselves. And without that kind of attention, people quickly burn out and leave their activism behind. They eventually settle for winning the lottery and escape the common misery. It is the blind praxis devoid of theory of which Whitehead spoke about.

Ultimately the real question facing us today is whether the seriousness of the contemporary crisis can lead people to transcend these negative dynamics enough to form a coherent movement that could address the need for a vision for after capitalism. In short, we need to replace selfishness and materialism with charity and magniminity. How would the world look like after capitalism? There is no lack of literature in this respect.

More pragmatically, the New Deal employed artists to paint, poets and writers to write, and took some tentative steps to build a culture of caring. A dramatically expanded program for the unemployed should and in fact could address the cultural and spiritual dimension of human needs aside from mere utilitarian pragmatic considerations. People have to be taught that “we” is more important that “me” and it simply means to take care of each other and that each of us is responsible for his/her own brother or sister’s welfare. Admittedly, this is an “outside the box” vision; one born within the worst of times in which to operate, but also within the best of times. A paradox, perhaps; or an opportunity to be seized. Any takers?

Professor Paparella has earned a Ph.D. in Italian Humanism, with a dissertation on the philosopher of history Giambattista Vico, from Yale University. He is a scholar interested in current relevant philosophical, political and cultural issues; the author of numerous essays and books on the EU cultural identity among which A New Europe in search of its Soul, and Europa: An Idea and a Journey. Presently he teaches philosophy and humanities at Barry University, Miami, Florida. He is a prolific writer and has written hundreds of essays for both traditional academic and on-line magazines among which Metanexus and Ovi. One of his current works in progress is a book dealing with the issue of cultural identity within the phenomenon of “the neo-immigrant” exhibited by an international global economy strong on positivism and utilitarianism and weak on humanism and ideals.

Economy

Modi’s India a flawed partner for post-Brexit Britain

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With just two weeks to go until Britain is scheduled to exit the European Union, Boris Johnson and his ministers are understandably focused on the last-minute dash to formulate a workable Brexit deal with the EU. Once this moment has passed, however, either Johnson or whoever replaces him as PM will come under intense pressure to deliver the trade deals Brexit side supporters have so talked up since 2016.

One such envisaged deal is with India. Seven decades after securing independence from Britain’s colonial empire, New Delhi has the world’s seventh-largest economy and one of its fastest growth rates. The prospect of deeper trade ties with Asia’s third-largest economy has been a major feature of the pitch for a “Global Britain” that extends the UK’s reach beyond the continent, and Johnson himself made a big thing of expanding economic ties with India while campaigning to become PM.

Unfortunately, any plans to kickstart trade agreements with India will run into problems, and not just over immigration and visa issues. India is on the verge of a serious economic downturn, hit by job losses and decreasing levels of foreign investment. With growth slowing down, Indian PM Narendra Modi has fallen back on his aggressive brand of Hindu nationalism to galvanise public support, a gambit that has most recently resulted in his government’s controversial move to strip automony from Kashmir.

Bad time for a UK-India trade deal

Whereas only a few years ago India was held up as one of the world’s fastest growing economies and an enticing prospect for global trade and investment, Moody’s new projection of a 5.8% growth rate represents a danger to Narendra Modi’s promise of a $5 trillion economy. Recently released figures show India’s GDP growth falling for the fifth successive quarter, to a six-year low of 5.2%.

India’s economic woes are reflected in patterns of foreign investment. Around $45 billion has been invested in India from abroad over the last 6 years. The downturn in the country’s economic fortunes has seen a record $4.5 billion of shares sold by foreign investors since June this year. These economic problems are linked to Modi’s failure to carry through on economic reforms promised when he came to power in 2014, when a number of structural problems were seen as inhibiting external trade relationships.

India currently has over 1,000 business regulations and more than 3,000 filing requirements, as well as differing standards for social, environmental and human rights. These have been sticking points in the moribund trade deal negotiations between India and the EU, and Brexit advocates have not explained how they plan to overcome these hurdles.

Hostility to foreign companies

Structural issues are only part of the problem. Another key concern is the Indian government’s adversarial attitude towards foreign investors. Despite Modi’s promises to make India an attractive place to do business, his government has continued protectionist policies that throttle the country’s ability to attract outside capital.

One issue is retrospective taxation. Under Modi’s predecessor, Manmohan Singh, several British and international firms were hit with sizeable, legally dubious tax bills by the Indian government. Modi came to power on a promise of ending retrospective tax bills being imposed on overseas companies, and yet British firms such as Vodafone and Cairn Energy still find themselves pursued through the courts for back-dated tax bills, despite the protections they should enjoy under the bilateral investment treaty between India and the UK.

Vodafone’s case involved its 2007 acquisition of a stake in cellular carrier Hutchinson Essar. While the deal did not take place in India, New Delhi determined Vodafone still owed $5 billion in taxes on the overseas transaction. After the Indian Supreme Court dismissed the claim in 2012, India’s previous government introduced a new law to tax transactions of this nature that retroactively applied to cases going back to 1962. Modi attacked this “tax terrorism” at the time, but his government has continued its dogged pursuit of Vodafone in the courts.

Cairn Energy has faced an equally arduous struggle with the Indian Ministry of Finance, which in 2014 blocked the British firm from selling its 10% stake in Cairn India and subsequently demanded $1.6 billion in taxes. Indian officials used the 2012 law to justify their actions, violating the bilateral investment treaty and breaking one of Modi’s own campaign promises in the process.

Immigration laws a further sticking point

This recent history should already give British businesses pause, but the most obvious obstacle in any trade negotiations between UK and India will be the issue of immigration. The Centre For European Reform has argued post-Brexit trade will be closely linked to opening up UK borders to workers from partner countries, but a UK Commons Foreign Affairs Select Committee report in June highlighted how Britain’s immigration restrictions on Indian workers, students and tourists has already impacted bilateral trade relations. The report noted how the UK has slipped from being India’s 2nd largest trade partner in 1999 to 17th in 2019, adding that skilled workers, students and tourists are deterred from coming to the UK by the complicated, expensive and unwelcoming British migration system.

It is unlikely the Modi government will agree to any UK-India trade deal that doesn’t guarantee a relaxing of immigration rules that will allow a free flow of people as well as goods and capital between the two countries. The question is whether the British government, which has veered ever more closely towards a Brexit-fuelled populism at odds with relaxed border controls, will be flexible enough to sign up to this.

Given these issues, are Britain’s hopes for a post-Brexit dividend in Indian trade dead on arrival? Unless Modi’s government starts living up to international standards and honouring his country’s investment agreements with British companies, “Global Britain” may not get much further with India than it has with the US.

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A more effective labour market approach to fighting poverty

Cynthia Samuel-Olonjuwon

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Gainful employment is still the most reliable way of escaping poverty. However, access to both jobs and decent working conditions remains a challenge. Sixty-six per cent of employed people in developing economies and 22 per cent in emerging economies are in either extreme or moderate working poverty, and the problem becomes even more striking when the dependents of these “working poor” are considered.

Thus, it is not just unemployment or inactivity that traps people in poverty, they are also held back by a lack of decent work opportunities, including underemployment or informal employment.

Appropriate labour market policies can play an important role in the fight to eradicate poverty, by increasing access to job opportunities and improving the quality of working conditions. In particular, labour market policies that combine income support for jobless people with active labour market policies (ALMPs).

The new ILO report What works: Promoting pathways to decent work  shows that combining income support with active labour market support allows countries to tackle multiple barriers to decent work. These barriers can be structural, (e.g. lack of education and skills, presence of inequalities) or temporary (e.g. climate-related shocks, economic crises). This policy combination is particularly relevant today, at a time when the world of work is being reshaped by global forces such as international trade, technological progress, demographic shifts and environmental transformations.

Policies that combine income support with ALMPs can help people to adjust to the changes these forces create in the labour market. Income support ensures that people do not fall into poverty during joblessness and that they are not forced to accept any work, irrespective of its quality. At the same time, ALMPs endow people with the skills they need to find quality employment, improving their employability over the medium- to long-term.

New evidence gathered for this report shows that this combination of income support and active support is indeed effective in improving labour market conditions: impact evaluations of selected policies indicate how people who have benefited from this type of integrated approach have higher employment chances and better working conditions.

One example of how this combined approach can produce results is the innovative unemployment benefit scheme unrolled in Mauritius, the “Workfare Programme”. This provides workers with access to income support and three different types of activation measures; training (discontinued in 2016), job placement and start-up support. The programme was also open to those unemployed people who were previously working in an informal job. By extending coverage to the most vulnerable workers, the scheme has helped reduce inequalities and unlock the informality trap.

Another success came through a public works scheme implemented in Uruguay as part of a larger conditional cash transfer programme, the National Social Emergency Plan (PANES). The programme was implemented during a deep economic recession and carefully targeted the poorest and most vulnerable.

Beneficiaries of PANES were given the opportunity to take part in public works. In exchange for full-time work for up to five months, they received a higher level of income support as well as additional job placement help. This approach reached a large share of the population at risk of extreme poverty and who lacked social protection. The report indicates that providing both measures together was critical to the project’s success.

The effects of these policies on poverty eradication cannot be overestimated. By tackling unemployment, underemployment and informality, policies combining income support with ALMPs can directly affect some of the roots of poverty, while enhancing the working conditions and labour market opportunities for millions of women and men in emerging and developing countries.

ILO

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Economy

CPEC vs IMF in Pakistan

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International Monetary Fund (IMF) was created just after World War II (WWII) in 1945. The IMF is an organization of 189 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.

Pakistan has been knocking doors of IMF since 1958, and it has been 21 agreements with IMF. Generally, the IMF provides loans at very low-interest rates and provides programs of better governance and monitoring too. But for the last 6 decades, Pakistan has suffered a lot, in terms of good governance. Especially last 2 decades, corruption, nepotism, poor planning, bribery, weakening of institution, de-moralization of society, etc were witnessed. We may not blame the IMF for all such evils but must complain that the IMF failed to deliver, what was expected. Of course, it is our country, we are responsible for all evils, and wrongdoings happened to us. We have to act smartly and should have made the right decision and at right times.

IMF also dictates its terms and condition or programs like: devaluation of local currencies, which causes inflation and hike in prices, cut or draw-back of subsidies on basic utilities like fuel, gas, electricity, food, agriculture etc, which causes cost of life rather higher for local people, cut on development expenditures like education, health, infrastructure, and social development etc, which pushes the country even more backward. IMF focusses only on reducing expenditures and collection of taxes to make a country to meet the deadlines of payments. IMF does not care about the development of a country, but emphasizes tax collections and payment of installments on time, to rescue a country from being a default.

While CPEC is an initiative where projects are launched in Power Generation, Infrastructure development under the early harvest program. Pakistan was an energy trust country and facing a severe shortage of Electricity. But after completion of several power projects under CPEC, the shortfall of electricity has been reduced to a great extent. One can witness no load shedding today, while, just a few years back the load shedding was visible throughout the country for several hours a day. Several motorways and highways have been completed. Gwadar port has been operational partially. Infrastructure developments are basic of economic activities.

Projects under CPEC has generated jobs up to 80,000. CPEC was the catalyst to improve GDP by around two percent during 2015-2018. CPEC has lifted the standard and quality of life of the common man in Pakistan. CPEC was instrumental to move the economic activities and circulation of wealth in society. Under CPEC, early harvest projects, 22 projects have been completed at the cost of approximately 19 billion US dollars.

It is understood that early harvest projects were heavy investment and rather slow on returns. But, these projects have provided a strong foundation for the second phase, where Agriculture, Industrialization and Social Sector will be focused. Return on Agriculture and Industrial produce is quick and also generates more jobs. The second phase will contribute toward the social development of Pakistan as well as generate wealth for the nation.  Pakistan’s agriculture sector has huge potential as cultivatable land is huge, workforce is strong and climate is favorable.  Regarding Industrialization, Pakistan is blessed with an abundance of mines and minerals. The raw material is cheap and the labor cost is competitive. Pakistan has 70% of its population under the age of 40 years, which means an abundance of the work force. Pakistan’s domestic market is 220 million and the traditional export market is the whole of the middle-east and the Muslim world.

The major difference between the CPEC and IMF is that CPEC generates wealth, while IMF focuses on tax collection and reducing the developments and growth. China is the latest model of developments in the modern days, China is willing to replicate its experience with Pakistan for its rapid development.

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