What a scam.
This is what is all about: power and control.
The most potent threats to life on earth - global warming, health pandemics, poverty and armed conflict - could be ended by moves that would unlock $7 trillion - $7,000,000,000,000 (£3.9trn) - of previously untapped wealth, the United Nations claims today.Previously untapped wealth? Previously untapped wealth? This isn't about previously untapped wealth: this is about spending your money on what they think is the right thing to do, without you having any control over what the money is spent on.
The price? An admission that the nation-state is an old-fashioned concept that has no role to play in a modern globalised world where financial markets have to be harnessed rather than simply condemned.
Small price to pay, huh? Not the idea that the nation-state is old-fashioned, but rather the admission that it is: understand that the base postulate here is not something up for discussion, but rather a given fact. The idea is to harness financial markets: the reality is to create a parasitical body that lives off real commerce, taking profits from those who have earned them and, after skimming of an undisclosed portion, give them away.
But this is fundamental for the people behind this: the abandonment of the nation-state, of the abandonment of how humanity has been organized for the last 25 centuries or more, is not something that they are advocating, but rather they believe that this is the next necessary step: the withering away of the state.
In a groundbreaking move, the UN Development Programme (UNDP) has drawn up a visionary proposal that has been endorsed by a range of figures including Gordon Brown, the Chancellor of the Exchequer, and Joseph Stiglitz, the Nobel Laureate.
This is by far the best argument for the elimination of the UN, at least the UNDP. And has this really, really been endorsed by Gordon Brown and Stiglitz?
It says an unprecedented outbreak of co-operation between countries, applied through six specific financial tools, would slice through the Gordian knot of problems that have bedevilled the world for most of the last century.
No shit, Sherlock: if everyone were to cooperate and we take all the money from the rich, then we have utopia! Hallelujah!
If its recommendations are accepted - and the authors acknowledge this could take years or even decades - it could finally force countries to face up to the fact that their public finance and growth figures conceal the vast damage their economies do to the environment.
Now we see the method behind the madness: it's not a question of solving problems: it's a question of how environmentalists want to gain power over the economies of the world in order to implement their agendas.
At the heart of the proposal, unveiled at a gathering of world business leaders at the Swiss ski resort of Davos, is a push to get countries to account for the cost of failed policies, and use the money saved "up front" to avert crises before they hit. Top of the list is a challenge to the United States to join an international pollution permit trading system which, the UN claims, could deliver $3.64trn of global wealth.
To get countries to account for the cost of failed policies? Using money saved up front to avert crises before they hit? And the US joining Kyoto generates wealth?
This is their first mistake. They do not understand what wealth and wealth creation is: they think that having money means you are wealthy, which is deluded: it's not a question of having wealth, but rather more fundamentally how do economies generate wealth? This is fundamental: the problem in the developing world is that they are bad at creating wealth. But the notion of creating wealth is foreign to these folks: they're not interested in that, but rather in distributing what isn't theirs.
Inge Kaul, a special adviser at the UNDP, said: "The way we run our economies today is vastly expensive and inefficient because we don't manage risk well and we don't prevent crises." She downplayed concerns over up-front costs and interest payments for the new-fangled financial devices. "The gains in terms of development would outweigh those costs. Money is wasted because we dribble aid, and the costs of not solving the problems are much, much higher than what we would have to pay for getting the financial markets to lend the money."
First things first: who is Inge Kaul ? She's a Frankfurt School sociologist, meaning that she's basically a neo-marxist of the so-called critical school, which marked the beginning of a current of "Marxism" divorced from the organised working class and Communist Parties. It's an academic thing, dropping the pretense of actually caring about the working poor and gets its name not from being critical, but rather of daring to criticize orthodox Marxism. But we're off on a tangent: the danger here is that we are dealing here with those who have decided to take over the institution from within.
But look at what she is saying: the way we run our economies today...
Stop right there: the way we run our economies? Nobody runs an economy: the more people try, the worse things get. The economy is a living thing, and like all living things it really dislikes being controlled.
And its vastly expensive and inefficient? How? Because we don't manage risk well and don't prevent crises?
Like Ms. Kaul would be able to recognize a crisis when it came up and smacked her upside her head? The road to hell - or the faceless dictate of the technocrat, basically the same thing - is paved with good intentions: this is the personification of the technocrat, not merely implying that she can do it better, but actually insisting that it must be so. What follows is the usual drivel: the gains aren't, however, in termns of development, but the gains in powers for the technocrats easily outweigh the costs. After all, the technocrats aren't going to be risking anything.
The UNDP is determined to ensure globalisation, which has generated vast wealth for multinational companies, benefits the poorest in society.
Earth to Kaul: those that benefit the most from globalization aren't the multis; they are consumers everywhere, who are getting increasingly better goods for less and less money. And that is benefitting the poorest in society more than anything the technocrats can ever do.
It urges politicians to embrace some groundbreaking schemes put in place in the past 12 months to tackle global warning, poverty and disease, based on working with the global markets to share out the risk.
Which of course translates from "working with" to "serve": the technocrats want global markets to carry the risk.
These include a pilot international finance facility (IFF) to "front load" $4bn of cash for vaccines by borrowing money against pledges of future government aid.
In other words, tie any sort of long-term government aid up right now, preventing government's abilities to change plans independently. They seriously want to have the money NOW to work on vaccinations: work that means that pharmaceutical companies won't have to work efficiently in order to recoup their costs. But more devestating is the fact that this means that these technocrats will, literally, hold the power of development funds for their favored clientle: I dare say that this means that when scientists say they don't have a cure for AIDS, this will only mean more money thrown at the problem, instead of aiming the money at prevention.
The scheme, which is backed by the UK, France, Italy, Spain, Sweden and the Bill and Melinda Gates Foundation, was born out of a proposal by Gordon Brown for a larger scheme to double the total aid budget to $100bn a year.
Nice name-dropping there: Bill and Melinda Gates now are elevated to the same status as countries. And the scheme isn't backed by the governments of these countries, but rather by technocrats in these countries.
In an endorsement of the report, Mr Brown said: "This shows how we can equip people and countries for a new global economy that combined greater prosperity and fairness both within and across nations."
Greater prosperity? Greater technocrat control is more bloody likely, with less fairness.
The UNDP says rich countries should build on this and go further. It proposes six schemes to harness the power of the markets:
* Reducing greenhouse gas emissions through pollution permit trading; net gain $3.64trn.
This is actually the only thing that makes sense. But, as usual, the devil is in the details...
* Cutting poor countries' borrowing costs by securing the debts against the income from stable parts of their economies; net gain $2.90trn.
Whoah, nelly: what does this mean? Securing debt against the income from stable parts of their economies? Securing debt against the income? In other words, the technocrats want to be able to take the income from "stable parts", whatever *that* means, of the economy. But stop right there.
You see, they are transferring sovereign risk to the commercial sector: they are taking the profits from the companies, local companies, who are actually out there making money - generating income - and use that income to ensure that any default on the government debt is born by the commercial sector of the economy. Hey, great deal if you can find any of those companies actually willing to sign up on this: sure, let's see... yep, I'll pledge my cash flow for the next ten years in order to allow the government to borrow money at reduced rates.
I don't think so. There is a reason why there is something called sovereign risk: we've seen too much government corruption and incompetence waste literally billions in aid in the developing world. This gives these governments carte blanche: they no longer carry the risk, since they're able to mortgage the future cash flows of any sector actually making money in order to transfer the risk. This, of course, reduces any incentive for these companies to actually show any cash flow whatsoever.
* Reducing government debt costs by linking payments to the country's economic output; net gain $600bn.
In other words, being able to weasel out of debt repayment by having a bad economy. That sounds really brilliant: sort of like a homeowner being able to say "sorry, lost my job, won't be able to pay the mortgage for the next couple of years". Again, there is a reason for soveregn risk: if you remove this, you also remove any incentive for countries to actually perform. And this sort of deal would only mean that governments would have massive incentives to avoid showing any economic output, since as long as growth remains below the threshhold for repayment, you don't have to repay.
* An enlarged version of the vaccine scheme; net gain (including benefits of lower mortality) $47bn.
Lower mortality? Sorry, we all have to die, mortality to date is always 100%. And that is, of course, assuming that the vaccines as per ut supra actually are developed at all....
* Using the vast flow of money from migrants back to their home country to guarantee; net gain $31bn.
Again we have the appropriation of private monies to guarantee government loans. Which you can safely translate as meaning the appropriation of private monies to guarantee government irresponsibility.
* Aid agencies underwriting loans to market investors to lower interest rates; net gain $22bn.
Subsidized interest rates: huh? Anyone look at what interest rates are lately? Interest rates are at historical low levels, not high levels. Oh, except for high-risk investments, of course. In other words, aid agencies are looking to underwrite projects that on a commercial basis are considered to be such high risk that investors have to be paid a lot to make it worth their while. Gee, aid agencies are such paragons of efficiency and such experts on risk analysis that I'm sure they will make really excellent decisions here. Not.
Professor Stiglitz, the former chief economist of the World Bank and a staunch critic of the way globalisation harms the poor, said: "Globalisation has meant the closer integration of countries, and that in turn has meant a greater need for collective action.
This is embarrasing for the economics profession: is Stiglitz really in on this? Collective action, of course, is a term tied closely to unions, implying that one of the goals would be increasing union importance, rather than the decline of union importance of the last several decades.
"One of the most important areas of failure is the environment. Without government intervention, firms and households have no incentive to limit their pollution." He said a global public finance system would force countries to acknowledge the external damage their policies had, "the most important being global climate change".
First: what they mean here is failure to listen to the technocrats. This is the naked attempt of the technocrats to take control of the means of production via the UN: this is the call for government intervention to control the economy.
Solving the environmental crisis tops the UN's $7trn wish-list. It calls for an international market to trade pollution permits that would encourage rich countries to cut pollution and hit their targets under the Kyoto protocol.
Ignoring of course the failure of Kyoto, which is a dead-end street. Kyoto doesn't help against global warming: it's about control.
But - and the UN admits it is a big "but" - the US would have to sign up to Kyoto and carbon trading to achieve the $3.64trn that it believes the system would deliver over time.
No shit Sherlock: the US isn't going to do this. There is a reason the US isn't part of Kyoto: the Senate of the US voted 99-0 to specifically reject the idea of giving faceless technocrats the power to funnel money to pet projects.
"We are dealing with a global problem as pollution can only be dealt with internationally," Ms Kaul said. Richard Sandor, the head of the Chicago Climate Exchange, added: "Many encouraging signs are emerging. When the business case is clear, private entrepreneurs step forward."
Translation: When the subsidies and other market-distorting mechanisms are apparent, then the profiteers arise to suck on the tit of government subsidies.
But, the proposal is unlikely to get support from some green groups who believe that action to curb consumption, rather than market incentives, are the way to reduce carbon emissions.
Ooooh, boogie man: some green groups aren't happy. But shucks, given the low growth rates that such policies would accord, carbon emissions would drop as the world enters a major depression, curbing consumption anyway...
Andrew Simms, director of the New Economics Foundation, said it left unanswered questions over how these markets would be managed and how the benefits and costs would be distributed. "We have nothing against markets so it would be missing the point to get into a pro- or anti-market stance. The point is how you distribute the benefits."
I'm surprised they left that one in: the technocrats don't care about where the money comes from, as long as they get to distribute the benefits. Naked grab for power: as long as they get to decide how to spend the profits, they don't care where the money comes from...
He said the Nineties, the zenith decade for globalisation, had seen just 60 cents out of every $100 worth of growth reach the poorest in society, compared with the $2.20 in the Eighties.
I'd really, really like to see a source for these numbers. But they well make the case: in the 80s, raw material prices were higher than they were in the 90s, reflecting relative poor efficiencies. In the 90s, raw material prices fell as demand fell in the face of increased materials productivity. Has nothing to do with globalization and everything to do with companies learning to be more efficient with raw materials.
He said a pollution trading regime had the potential to deliver "enormous" benefits to poor countries, but said the UN report failed to show a detailed plan.
I'll give them that: it gives poor countries enormous incentives not to invest, but rather keep their population unproductive, since if they start setting up factories, they'll have to use their pollution certificates instead of selling them. Making it more expensive to build up an industry, ensuring that the downtrodden of the third world stay where they are.
"Our view is that you have to cap pollution, allocate permits and then you can trade. But it depends on how it is set up. Because you are dealing with a global commons of the atmosphere, the danger is that you could be effectively dealing in stolen goods."
Capping pollution means capping not only industrial production, but more fundamentally life-style choices. I'm not talking SUVs here, but rather taking away the option to actually live in the suburbs and drive to work: it's off onto public transportation instead, for instance. And note the nice little boogieman of setting up anyone who pollutes as a thief, stealing from everyone else...
He said a system set up now to trade in pollution permits could end up permanently depriving poor countries that joined the system further down the road.
In other words, join up now or shut up when we shaft you later for being such stubborn bastards...
International problems - and solutions
Millions of people across the developing world have died from malaria, tuberculosis and HIV/Aids, as well as from other pandemics. Vaccines needed to avert them require much-needed investment.
SOLUTION: An advance commitment by rich countries to buy $3bn (£1.7bn) worth of vaccines would be enough to encourage pharmaceutical giants to invest in finding medicines that would eliminate these pandemics.
Again, faith in the ability of pharmaceutical companies to produce results on government contract work instead of profit motive. Right. Buying a promise that if the vaccine is developed, say, for AIDS, that the government will buy it. Like that wouldn't happen already?
Further, any company successful in developing an AIDS vaccine, right now, is doing so in order to make a huge amount of money. They invest to do so, spending money of their own or borrowed in one way or another, based on whether any given approach is correct. Money has a price and this is the incentive to killing lines of research that are unlikely to lead to any results: this removes the incentive to do so.
ALTERNATIVE SOLUTION: Vaccines are needed but more should be done in the meantime. Extra aid is needed for simple tools such as mosquito nets that would curb spread of malaria.
The alternative is more like use the tools you have now to stop the transmission vector of diseases you can't cure. Use DDT to kill malarial mosquitos and use nets, fine: but if you want a real success story, look at the reduction in AIDS deaths in Africa in the cohort of young people that have decided that sexual abstinence is really more attractive than dying of AIDS. AIDS can be brought under control by removing the disease vectors: unprotected sex, sharing drug needles and the like. But that means infuriating special interest groups.
Big business and global money ignore countries where they see the risk of conflict outweighing their potential profit margins.
Bulllllshit. They don't ignore countries like this: they just don't want to do business there. And for damned good reasons: there is little chance that the loans would be repaid or that the investments would show a profit. So instead:
SOLUTION: Guarantees by international organisations such as the International Monetary Fund to lower the cost of borrowing for poor nations by underwriting investors' loans to conflict-torn states.
Meaning that hey, don't worry: if your govenrment is repressing you to the point of open rebellion and conflict, we'll use the money of taxpayers elsewhere to make sure that this is a no-brainer, so go ahead, drive the villagers out from their fields and do your ethnic cleansing, we will see to it that it doesn't cost ya a cent.
ALTERNATIVE SOLUTION: Sometimes large volumes of cash are needed and this is one. Live8 showed there was huge support among taxpayers for higher aid to countries in distress.
Neat trick: shifting from conflict-torn states to countries in distress. Only they're not necessarily the same thing.
Hitting a commitment made in the 1960s of 0.7 per cent of GDP would unlock $140bn a year.
And we see enough waste and fraud already, thank you: NGOs don't need $140bn in additional funds, since this will only increase waste and fraud.
Once great nations such as Brazil and Argentina were reduced to the status of beggars after poor economic policy combined with debts with national and international lenders.
SOLUTION: A system to enable countries to take loans linked to their average economic growth rate to ensure that they do not have to cut public spending to raise the money to borrow needed funds during the hard times.
Oh. My. God. Hey, brilliant! Remove the risk of making stupid mistakes: Brazil and Argentina are poor because they made the mistakes and didn't correct them, but rather allowed populists to squander what took generations to build up. Enabling countries to take out loans linked to average growth rates? Hmmmm.
Could this mean that when growth stops, the countries don't have to pay back? Haven't we been here before?
ALTERNATIVE SOLUTION: A system to allow countries to seek protection from their creditors in the same way that US companies can take so-called Chapter 11 bankruptcy.
Except that countries can't do this, any more than a city can garnish the profits of companies operating locally to pay for mistakes: the technocrats are mixing public and private monies again...
Poor countries suffer most from swings in investment tastes by the big global investors that means money can leave as soon as it arrives.
SOLUTION: Enable countries to buy "insurance policies" against big swings in growth that would ensure that they did not have to cut public spending every time. In 1997 it wreaked havoc across South-east Asia.
Um.... Buying insurance is quantifying risk, depreciating future cash flow alternatives to arrive at an affordable coverage. Interest rates are the cost of capital. And doesn't this really imply capital controls, preventing the fungability of cash? And this really isn't the problem: foreign direct investors, for instance, buy land, buy companies, build factories: this converts the cash into assets, locally. These assets can be sold, but their physical presence remains. What moves rapidly is cash: keeping cash means paying the cost of capital, interest rates...
ALTERNATIVE SOLUTION: Curb speculative investment by imposing a tax on foreign exchange transactions aimed at destabilising a currency. It could directly raise funds for development while preventing the worst excesses of the markets.
And who gets to decide when this happens? Nice tool to control currency fluctuations, but currency fluctuations are THE major control mechanism in the world economy, allowing equilibriums to exist.
Scientists believe human activity has led to climate change and disappearing Arctic ice. The world's poor also have to live with lethal storms and floods.
UN SOLUTION: A system of international trading in permits to allow pollution that would encourage countries to cut their emission of greenhouse gases so they can sell their "right to pollute" to other states. UNDP says it is more effective than just setting targets.
Replace "Scientists" with "Some climate scientists" and I'd still disagree. Anyone living where storms and floods are have to live with the results. And there's a contradiction in terms here in the solution: a system of international trading in permits implies a target, whereas the UNDP says setting targets isn't effective. It's just hiding behind another name. The name of the game here is control.
ALTERNATIVE SOLUTION: An international approach is needed but one that prevents people from causing harm by setting pollution targets rather than trying to bribe them not to. Also agree global airline tax.
This says it all: these people see trading in pollution permits to be nothing less than bribery, rather than letting markets work. Further, it clearly states that setting targets isn't effective, but fails to actually offer an alternative.
Millions of skilled workers leave their home countries every year in search of a better life in the West. In some states nine out 10 professionals have left.
SOLUTION: Enable countries to borrow on the open markets against the money workers send home. The capital would be used to invest in the country to build infrastructure that would discourage people from leaving.
Again, we have here the expropriation of private funds for government purposes. The goal is further explained in the next point...
ALTERNATIVE SOLUTION: An international code of ethical guidelines overseen by bodies such as the World Health Organisation (for doctors and nurses) to monitor the harm that migration of professionals causes.
Ye pagan gods of Lovecraft.
Where to start?
Let's start with a quote from the first UNDP conference on this nonsense, back in 1999: again, here's Inge...
I wish to congratulate all of you, and in particular, the originators of the GDN 'idea' on this meeting. The past three days have been exciting and encouraging. First of all, they have been extremely well organized. But most importantly, they allowed us to glimpse the beauty of a more just and equitable world:
- A world of horizontal dialogue;
- A world of listening to each other; and
- A world that recognizes and tolerates differences - differences in circumstances and views.
The beauty of a more just and equitable world?????
Words fail me. The world that these people imagine is anything but just, anything but equitable.
Here's a radical concept: let people choose for themselves what they want to do .
And the only way that this really works is by letting markets work out supply, demand and prices. Anything else is a waste of time and money.
And that is the critical point.
These people understand nothing, but nothing about economics. Sure, they might be able to talk about GDP, about some bizarre development scheme, but they understand nothing.
They do not understand that economics has everything to do with how to get maximum utility from scarce resources . Nothing more, nothing less. This is fundamental: if you are not getting maximum utility from your inputs, you are being wasteful. Don't want waste? Then listen to the markets, as imperfect as they are, they will tell you, if you bother to learn how to look and understand, how resources are allocated via price mechanisms.
But this isn't something that the technocrats want to even hear. Markets are imperfect for them because they don't deliver the desired results.
That's because people don't want "the desired results".
People want to live their lives as they choose, not to live their lives under the completely despotic thumb of some PhD sociologist whose dreams of a just and equitable world would necessarily lead to policies that are unjust and inequitable.
Don't get me wrong: I care, too, about poverty in the Third World. I directly support a school in India and one in Nepal, as well as foster kids in El Salvador. But this isn't the solution, but rather would lead to the institutionalization of poverty, of managed economies that misallocate resources and destroy value, all in the name of a distant utopian goal. That of course will never be met.
Hasn't the world seen enough of the damage that communism and its idiot nephew socialism have inflicted, the millions and millions of dead, the wars and gulags, the misery and suffering?
This is nothing but a naked attempt of technocrats to gain absolute power over the entire world, a naked power grab of those who have marched through the institutions and want to change the world by decree.
The best thing that could happen to the UNDP is it to be drastically cut. The best thing to happen to the Third World is for markets to work to allocate resources optimally. The best thing that could happen to the people of the Third World is for them to learn how to create value, to create wealth, instead of squandering it as their governments have done over the last 50 years.
The war on poverty has been fought. Poverty won.