Sunday, December 25, 2011

Democracy and Re-Colonisation

Microsoft 'disappointed' with hold back on retail FDI - Headlines India, Dec 28 2011
What is capitalism?

Capitalism is an economic system where entities with capital (money, resources reputation etc.) rent these to labourers they employ. The labourers give a part of their production to the capitalists in exchange for using the means of productions (money, resources, reputation etc.). Thus a capitalist can procure labour and if he or she is skilled enough get more value out of it than what the capitalist initially put in. This means that given sufficient skill and money, it is possible to generate more money using money without getting directly engaged in the production.

Thus, the employee gets the means of production, increasing his or her overall productivity while the capitalist gets incentives to rent resources to employees and get a share in their production. This leads to an overall increase in production as workers get access to vast resources that enhance their means of production. For example, before the establishment of large mining agencies, coal mining used to be done by the process of ‘rat hole mining’. In this process individual miners got their minerals by going into small ‘rat holes’ to procure minerals. This was a slow and tiresome process. This changed with the coming of large companies, which could afford expensive mining equipments which greatly increased the productivity of a labourer and hence boosted the economy

Implications for democracy
At first sight it looks like a win-win situation for everybody as overall productivity has increased. However it is to be noted that we are creating very powerful entities in our midst. We have large corporations with turnovers exceeding GDP's of entire nations. For example, Tata Steel (a mere subsidiary of the Tata group) has an annual turnover of Rs. 1.03 trillion ^[1]. While India, which is the second largest country with more than 1/7th of the world population, has a GDP of Rs. 68.865 trillion (2009)^[2]. Now money is power, even if it is not used illegally. With money it is possible to buy and hence control labour, which is the basic measure of all value ^[3]. It is also possible to exert a greater influence on the market, for example, large corporations will find it easier to crush small competitors, as happened in the case of Thailand where 38% of the retail market was taken up by 3 big retailers within 13 years ^[4]. Power when illegal actions are taken into account is limitless...
Thus within our ideals of democracy we encourage the growth of very powerful entities who are not responsible to the people. We want them to be free, no matter what the implications are for the people. These corporations are ‘power without responsibility’, no different from pre-democratic tyrants, just that they are more numerous and probably more powerful.

Foreign Direct Investment
This employer – employee relationship can also exist between societies and nations. Consider an auto manufacturing company based out of country A. This company has invested in various countries P, Q and R. Initially, the investment was beneficial to countries P,Q and R as it generated employment and increased their GDP’s. It also supported various small parts suppliers from whom it bought various components for the manufacturing. But this is not the same as countries P, Q and R having ‘native’ companies, as the company is headquartered in country A. This means that it probably has its highest paid employees (managers, researchers etc.) in country A. It would also be paying taxes to country A’s government and would be listed in country A’s stock market. All these mean that country A has a higher money circulation, and GDP due to company A, partly contributed by P, Q and R’s labour and raw materials. Thus a sort of employee-employer relationship sets in with country A being the ‘employer’ and P, Q, R the ‘employees’.
This is harmful, as with time, the larger company will be able to outcompete any smaller competitors in countries P, Q and R. Also, as the employer-employee relationship gets deeper and deeper with more and more people being employed by MNC’s, country A starts getting money without doing any ‘real’ work. They only have to administer, ensuring that they get their profits. This will make country A richer and more powerful. Finally it may reach a stage where A is able to entirely control P, Q and R’s ‘wages’ to finally obtain political control over P, Q and R, resulting in a second colonisation. This time the coloniser’s foundations will be based on stronger economic basis and might not need much force to maintain control.
Thus, it is possible to conclude that while encouraging FDI may be beneficial in the short term, it can lead to long term disaster within the capitalist framework, which itself is flawed.

References
1.    http://www.daytradingshares.com/diversified_section/2011/10_largest_companies_in_India.html
2.    http://devdata.worldbank.org/AAG/ind_aag.pdf (Exchange rate taken as Rs 50 = 1$)
3.    Wealth of Nations – Adam Smith
4.    Shekhar Swamy - The Pitfalls of FDI in Multi-Brand Retailing in India

Sunday, September 18, 2011

Toxic Industrial Waste Dumping

YOU are the Industrial Waste Basket

It is a fact, industries dump waste wherever it is convenient and cheap. They dump waste where there is least resistance against it. Thus, it is always the poor and powerless who have to live with toxic waste. The following case studies exemplify the point.

Industries Frequently Dump Toxic Waste in Economically Weaker Countries

Industries in developed countries, find it hard to dump their toxic wastes in their home countries due to strict environmental laws. Instead, they dump the industrial waste where it is easy, where there is instability in the government, or on ‘developing’ countries. For example:

A London based company, Refigure, used a ship to illegally refine low-grade naphtha with caustic soda, as the process is banned in every country. Currently it carries the toxins it generated during refining which it wants to dump somewhere. It has been looking for places to drop its waste. But fortunately it has been caught in the act on every attempt at dumping the toxins and has been turned away by the victim country each time it tried. Currently it is believed to be headed toward Alang in Gujarat, India, where ‘they’ plan to disassemble it (disassembling a ship is a dangerous, see http://alexiuss.deviantart.com/journal/17919112/? for exactly how hazardous it is). It can only be hoped that it does not manage to commit this hideous crime in a populated location. [1]
Two years ago a US ship, Platinum II carrying 400 tonnes of asbestos and other hazardous wastes was stopped from dumping its waste in Alang. [2]
Similarly, a french ship carrying toxic was prevented from dumping toxic waste in India[2] Who knows where the deadly toxins finally landed.
Somalia has been used as a dumping ground for highly hazardous waste including nuclear waste!! A UNEP spokesperson, Nick Nuttal said

“Somalia has been used as a dumping ground for hazardous waste starting in the early 1990s, and continuing through the civil war there...

European companies found it to be very cheap to get rid of the waste, costing as little as $2.50 a tonne, where waste disposal costs in Europe are something like $1000 a tonne...

And the waste is [of] many different kinds. There is uranium radioactive waste. There is lead, and heavy metals like cadmium and mercury. There is also industrial waste, and there are hospital wastes, chemical wastes – you name it.[3]

Setting-up of an Industry is Followed by The People’s Ruin

-despite what ‘they’ claim

What is the ideal waste dumping ground for a company? The immediate locality of course!
Industries are hailed as a great step for development, they bring employment, money, and prosperity. But let us take a look at what they do to the people near some of the industries. The people whom they ‘benefit’.

Tanneries - Tanneries are highly polluting and generate toxic wastes full of heavy metals.[6] The tanneries in the poor sections of the world openly flout environmental laws and dump toxic waste on the people.[4] They spread their stink for miles around, and cause skin diseases, gastroenteritis, asthma, fever and cough.[4] (the 4rth reference talks about tannery waste in Bangladesh, and the 6th one talks about tannery waste in Pakistan).
Chemical Industries - Chemical industries are probably the leading waste dumpers, and polluters. Industrial effluents from chemical industries can cause many dangerous diseases like cancer. This phenomenon is very prevalent in two of the most industrialised Indian states, Gujarat and Maharashtra. Untreated toxic waste being dumped into rivers, from which people drink water and eat fish, makes life miserable for the people nearby, mostly urban and rural poor. large numbers of dead fish are washed ashore each time a tanker dumps its load of toxic industrial waste.[7] (See the 7th reference for case studies on industrial pollution due to waste from chemical industries)

As you can see the very people who are supposed to be benefited by industries by getting employment are dying of cancer and suffering endless diseases because capitalists wanted to dump industrial toxic waste there to save money. While these can be avoided, capitalists do not have sufficient ‘incentives’ to do so. After all who cares about what happens to ‘somebody else’.[5]

It is seen that, under capitalism, there is always enough capital to transport raw material and finished goods, use high-tech manufacturing techniques and conduct research and development, but it always falls short when it comes to handling toxic industrial waste in a humane way. After all who cares what happens to ‘somebody else’, its money money that they are after.

References: