Archive for June, 2006

>End of Cheap Oil,

>… The Global Energy Crisis and Climate Change

by Vandana Shiva

ZNet Commentary (June 26 2006)

The increase in oil prices has led to protests, which have moved to the center stage of Indian politics, displacing the protests against reservations in medical and engineering colleges.

Increase in oil prices translates into higher prices of all commodities. As Hindustan Times reported oil price hike turns cereal killer (Hindustan Times, Wednesday, June 14, 2006, page 2 table). Yet the increase in oil prices in world markets is inevitable because the resource is dwindling and supplies have peaked, peak oil means the end of cheap oil, and an end to economies organized around the increasing availability of cheap oil.

Oil is a non-renewable resource. We have always known that yet the world has been behaving as if oil is in endless supply. And we in India who have lived in a biodiversity and biomass energy economy are rushing into oil addiction precisely when the global oil supply is running low and prices are running high.

The Association for the Study of Peak Oil (ASPO), an umbrella organization of oil expects, mainly geologists who helped find oil fields are now warning us that there are only a trillion barrels or less of oil left, and the supply will peak within this decade. “Peak Oil”, or the topping point, is the highest amount that can ever be pumped. Beyond “peak oil”, there will be an overall decline in production and an increase in oil prices. Oil that costs $5 per barrel to extract could become $100 per barrel when confidence in supply erodes and demand increases, and there is recognition that we are in a world of shrinking oil supplies, not growing supplies.

Why are we as a country tying our future to a resource that must shrink and become more costly? As we build more superhighways and mega cities, destroying the decentralized fabric of our socio-economic organization, we need to ask how long will this last?

There is another reason to stop this frenzy of oil addiction, and that is climate change, or more accurately, climate chaos. Climate change is caused by fossil fuel emissions, and stabilizing carbon dioxide emissions is an ecological imperative. This is why the Kyoto Protocol to the climate change convention was signed. The insurance industry, which takes over $2 trillion in annual premiums, and is bigger than the oil industry, is now a major player in addressing climate change since they have to pay billions out in insurance as cities flood, cyclones such as Katrina uproot entire communities and heat waves kill.

The costs of climate change to the people of India are extremely high. The 1999 Orissa super cyclone and the Bombay floods of July 2006 are just two better-known extreme events linked to a changing climate.

This winter, we had no rains during the wheat season, and heavy downpours during the wheat harvest. Heavy rains before the monsoon in the catchments of the Ganga and Yamuna destroyed crops so that farmers did not even have seeds to sow. And in Sikkim, heavy rains led to land slides, which disrupted Gangtok’s water supply. I was in Sikkim during the crisis and we lived on one bucket a day.

The fossil fuel economy is based on two illusions – one, that we can keep up our oil addiction, and two, that substituting renewable energy with fossil fuel has only benefits, no costs. Climate change is very high cost of an economy based on oil. We are starting to eat oil and drink oil. Oil is at the heart of industrial food production and processing, and long distance food transport. The wheat, India is importing is not just bringing weeds, pests and pesticides. It is also carrying thousands of “food miles”. Imagine a Tsunami or cyclone if our food supplies become dependent on wheat from the US and Australia. And imagine the cost of wheat as oil prices rise, and wheat embodies more oil than nutrition.

We are also drinking oil, not water. When Coca Cola and Pepsi pump 1.5 to 2 million a day to fill their soft drink and water bottles, and transport them to the remotest part of India, water embodies oil both in its extraction and transport. It is increasingly impossible to find clean water in our wells and springs. But Aqua Fina and Kinley has reached every village, selling water which has become oil, packaged in a plastic bottle made from oil.

While the political parties protest against the hike in oil prices, society also needs to start taking a long-term view of the ecological, economic and social costs of our growing oil addition. We need to start addressing strategic issues of real and sustainable energy security in the context of peak oil, the end of cheap oil, and the climate chaos that the era of cheap oil has left as an environmental burden on the planet.

Bill Totten

Categories: Uncategorized

>Niall Ferguson’s Warp

>The article below illustrates the narrow mindset of many American and British “thinkers”. Note that the author defines success solely in terms of military conquest and material wealth accumulation. He never mentions (or even appears to consider) anything about people living healthy, happy, leisurely lives in harmony with their neighbors. See my comments at the places marked —> below. Bill

The Triumph of the East

It is a commonplace that the past hundred years saw the ascent of the west, even that it was the “American century”. This is a mistake. What really happened was the rise of Asia, and the start of a momentous global shift.

by Niall Ferguson

New Statesman Essay (June 26 2006)

In the aftermath of the First World War a retired German schoolteacher named Oswald Spengler published the first volume of one of the most influential books of the 20th century: Der Untergang des Abendlandes, known to us as The Decline of the West. These days Spengler is seldom read; his prose is too turgid, his debt to Nietzsche and Wagner too large, his influence on the Nazis too obvious. And no one takes seriously his theory that cultures, like the weather, pass through seasons. Yet Spengler expressed better than almost anyone the inter-war German revulsion against all that had been achieved by the west before 1900.

“The last century”, he wrote, “was the winter of the west, the victory of materialism and scepticism, of socialism, parliamentarianism and money. But in this century blood and instinct will regain their rights against the power of money and intellect. The era of individualism, liberalism and democracy, of humanitarianism and freedom, is nearing its end. The masses will accept with resignation the victory of the Caesars, the strong men, and will obey them.”

It was not a bad prediction of the direction German politics would soon take. In particular, Spengler grasped that the backlash would manifest itself partly as a war on cities, which he saw as the embodiment of a decadent civilisation. After “the powers of the blood” had been reawakened by the “new Caesars”, the result did leave scores of European cities in ruins.

Nevertheless, events since 1945 have tended to discredit Spengler’s idea of a western downfall. It has seemed much more persuasive to represent the history of the 20th century as part of a protracted occidental ascendancy. “Much of the last three centuries”, wrote the late J M Roberts in his Triumph of the West, published in 1985, “is the story of a triumph of the outright power of the west”. It was a triumph not only of western power but above all, he argued, of western civilisation.

Just four years later, the 20th century appeared to culminate in a comprehensive western victory, with the break-up of the Soviet empire in eastern Europe and the collapse of the Soviet Union itself. Famously, on the eve of those events, Francis Fukuyama proclaimed “the end of history” and the victory of the western model of liberal, democratic capitalism. The west, far from suffering its downfall in the 20th century as Spengler anticipated, appeared to attain its historic zenith.

Yet in many ways this represents a fundamental misreading of the past hundred years. The 20th century, far from being a time of western ascendancy, witnessed something more like a reorientation of the world and the decline of the west – not a decline in the cultural sense that Spengler envisaged, but relative economic decline, relative demographic decline and, above all, imperial decline.

In 1900 the west really did rule the world. From the Bosphorus to the Bering Straits, from Siberia to Ceylon, nearly all of what was then known as “the Orient” was under some form of western rule. The British had long ruled India, the Dutch the East Indies, the French Indo-China; the Americans had just seized the Philippines; the Russians aspired to control Manchuria. All the imperial powers had parasitical outposts in China. The east, in short, had been subjugated.
—> Ferguson’s only criteria for “ruling the world” here is military conquest.

What made this possible was not so much scientific knowledge in its own right as its systematic application to both production and destruction. Economic historians disagree about the timing of what Kenneth Pomeranz has called “the great divergence” of the economies of the west and the Orient. In his seminal book of that name, Pomeranz argues that it was only after 1750 that western Europe leapt ahead, due mainly to the “windfalls” of New World colonies and conveniently located coal.

The economic historian Angus Maddison, however, places it earlier. In 1600, he estimates, China accounted for as much as 29 per cent of global output, but thereafter relative decline set in. By 1913 the figure had plummeted to nine per cent, even though China was still home to nearly a quarter of the world’s population. Western Europe alone accounted for a third of global output, but barely one in seven of the human race.
—> This appears not to be a measure of output but of output bought and sold; output traded in markets but not output produced for consumption by the producer’s family and neighbors. People who pay for junk food get counted in such statistics, but people who grow and consume their own organic food are not counted. Paying tuition for schools or fees for childcare gets counted while free education at temple schools or caring for your own children doesn’t.

Modernisation a la carte

Whenever it began, western ascendancy was due to more than sugar and coal. It was also due to the failure of the Asian empires to modernise, to say nothing of the relative stagnation of oriental intellectual life. Democracy, liberty, equality and, indeed, less benign ideals such as racial purity: all of these concepts originated in the west. So, too, did all the significant scientific breakthroughs of the modern era, from Newton to Einstein.
—> I challenge anyone to find any comparably large nation of people who lived as healthfully, peacefully, sustainably, and leisurely as the Japanese people of the Edo Era (1603-1867). Or whose people had attained more skill in the arts and crafts that serve the health and happiness of ordinary people (as opposed to those arts and skills that serve military conquest or accumulation of huge material fortunes). Walking doesn’t get counted but paying a gym to make up for a lack of walking does.

Historians influenced by Marx have very often made the mistake of assuming that the backwardness of eastern societies circa 1900 was the consequence of imperial “exploitation”. Rather, it was their backwardness that made European imperial domination possible.
—> People who think living healthfully, peacefully, sustainably, and leisurely is backward have queer values.

British rule over India was very far from a triumphant success from the point of view of economic development. Per capita income stagnated. The subcontinent continued to suffer from periodic famine. Yet it is hard to believe that, had the Mughals continued to rule through the 19th century, the life of the average Indian would have been much better. In fact, the experience of China suggests that it might have been worse. There, the continuation of Asian imperial rule was characterised by a succession of bloody rebellions, symptoms of the breakdown of the imperial structure.

The Taiping Rebellion (1851-64), a peasant revolt led by the self-proclaimed younger brother of Christ, claimed between twenty and forty million lives, according to contemporary western estimates. Also bloody were the Nien and Miao Rebellions, as were the Muslim rebellions in Yunnan and north-western China. In some cases the declines from one census to the next imply mortality rates ranging between forty and ninety per cent.

To blame these disasters on western commercial penetration is to get the causation the wrong way round. It was the crumbling of imperial rule that allowed European merchants to carve out privileged enclaves in China’s principal entrepots, European bankers to run China’s fledgling railways, and European officials to collect China’s customs revenue.

Nothing epitomised the subjugation of Asia better than the violation of Chinese sovereignty in 1900 by a multinational force (from Austria-Hungary, Britain, France, Germany, Italy, Japan, Russia and the US) sent to suppress the Boxer Rebellion, an inchoate, millenarian, anti-Christian movement that had arisen in the province of Shandong.

The Boxers’ faith in martial arts and magic availed them naught. Having raised the siege of the Beijing legations, the international force staged a “grand march” through the Forbidden City, pausing only to “acquire” some ancestral Manchu tablets as booty for the British Museum.

It is only when one appreciates the extent of western dominance in 1900 that the true narrative arc of the 20th century shows itself. This was not “the triumph of the west”, but rather the crisis of the European empires, the ultimate result of which was the inexorable revival of Asian power and the relative descent of the west.

What changed? The answer is that gradually, beginning in Japan, Asian societies modernised themselves, or were modernised. As this happened, the gap between European and Asian incomes began to narrow and the great divergence of the preceding centuries began to be reversed.
—> From the Meiji Era until now, Japan has “modernised” by abandoning the health, peace, leisure, and sustainability of its people and their community to pursue military conquest and material aggrandizement that benefit, at most, only a very small fraction of its people. The traitors who pursued these policies, and still pursue them today, have destroyed Japan’s sovereignty: the nation that could close its borders until 1867 because it could produce all the food, energy, and other goods needed by its people must now import seventy percent of its grain, sixty percent of its food calories, and nearly all of its energy; and it has made itself so hateful to (and hated by) its neighbors that it accepts colonial domination by the United States in exchange for the illusory hope of military protection by the United States.

If the Orient had simply “occidentalised” itself, of course, we might still salvage the idea of an ultimate western triumph. Yet no Asian country – not even Japan in the Meiji era, when government ministers adopted tailcoats and western dance steps – was able or wished to transform itself into a replica of a European nation state. On the contrary, most Asian nationalists insisted that their countries modernise a la carte, embracing only those aspects of the western model that suited their purposes.

Crucially, the reorientation of the world could not have been, and was not, achieved without conflict. The Japanese, in particular, understood from the outset that parity with the west meant war. That was why their victory over Russia in the Manchuria war in 1904-05 was such a turning point; it was the first meaningful victory won by an Asian power over a European empire in well over a century.
—> Correction: The Meiji traitors who used Perry’s “Black Ship” invasion to overthrow their own nation’s government in 1867 and establish a militarist oligarchy, understood from the outset that pursuing the western goals of military conquest and economic aggrandizement for the few – instead of health, happiness, harmony, leisure, and peace for the many – meant war.

Japan set a pattern. It began with a military challenge, but ultimately switched to economic competition. In the course of the 1930s Japan defied the western powers by extending her domain into Manchuria and all the way down China’s eastern seaboard. The Chinese, weakened by civil war, could not repel the invaders. Japan, however, was acutely vulnerable to western sanctions because of her dependence on imported oil, rubber and other militarily vital raw materials.

The Japanese decision to attack simultaneously the European empires in Asia – the British, the French and the Dutch – and the United States in the Pacific was a doomed gamble. Yet, though it was impossible for Japan to defeat the US, her victory over European imperialism inflicted irreparable damage. One by one, the Europeans’ attempts to resuscitate their Asian empires after 1945 foundered. Japan had permanently shattered the illusion of innate western supremacy, and her appeal to other Asians to throw off the European yoke resonated throughout the postwar period.

“Europe and America don’t want Asia to awaken”, wrote Okawa Shumei in his book The Establishment of Order in Greater East Asia (1943). “[But now] the dark night enveloping Asia has begun to break and the light of hope has shone from the east … Now Asia is on the verge of overturning European control everywhere and is about to destroy corrupt indigenous social traditions and to shed blood in building independent nations”.

Time to think with the blood

So it proved. Nationalists from the former Dutch colonies hailed Japan as “the Leader of Asia, the Protector of Asia and the Light of Asia”. Ba Maw, the Burmese nationalist whom the British had imprisoned in 1940, told delegates at the Tokyo conference of the Greater East Asiatic Nations in November 1943: “This is not the time to think with our minds, this is the time to think with our blood … ” The pre-war Filipino ministers Jose Laurel and Jorge Vargas declared that the Japanese victories “vindicated the prestige of all Asiatic nations”.

In this regard, the Second World War, far from marking the advent of the “American century”, was the decisive moment in the relative decline of the west, even if there was one western empire in Asia that endured into the 1980s (the Soviet Union).

Military defeat did amazingly little to dissipate Japanese energies, which were now directed wholeheartedly into economic imitation of, and competition with, the west. Between 1950 and 1973 no economy grew faster than Japan’s, which achieved an average annual growth rate of per capita GDP in excess of eight per cent, more than three times the rates achieved in the English-speaking world. At the start of that period, Japan’s economy was smaller than that of Italy. By the end, it was close to taking second place behind the US.

Why did other Asian countries – and particularly the most populous ones – take so long to replicate Japan’s growth rates? The answer lies once again in the death throes of the occidental empires. For one legacy of western imperialism was to discredit all those things for which the west had claimed to stand: the rule of law, private property rights, the free market, representative institutions.

“The time has gone for ever”, declared Peng Dehuai, the Chinese commander in the Korean war, “when the western powers were able to conquer a country in the east merely by mounting several cannons along the coast”. He was right. Neither in Korea nor in Vietnam was it possible for the US and its western allies to win decisive victories after 1945.

One tragedy of the second half of the 20th century, however, is that it took so long for Peng’s country to appreciate that the rejection of western political dominance did not necessitate the rejection of the market economy. Mao’s breakneck industrialisation, followed by his cultural revolution, cost tens of millions of lives and left the average Chinese citizen little better off. In 1950 per capita GDP in China was 21 per cent of the world average. By 1973 it was twenty per cent.
—> Per capita GDP counts only goods and services exchanged for money; it ignores the goods and services produced for sustaining family and neighbors but not exchanged for money. So it measures well-being solely by the criteria of people like Niall Ferguson, not by criteria that have and still do contribute to health, happiness, harmony, leisure, and peace for the many world’s people – and would contribute to the health, happiness, harmony, leisure, and peace for many more if they had not been conquered and plundered by pirates with values advocated by Niall Ferguson.

Nor was it only China that suffered stagnation. After the US withdrawal from South Vietnam, Indo-China did not rebound, and India, though democratic, was afflicted by a stifling combination of British bureaucracy, Soviet-style planning and agrarian populism. As recently as 1968 the US per capita income, measured in current dollars, was still 120 times higher than that of east Asian countries. The irony is that the ideology most responsible for this final phase of stagnation – Marxism – was yet another western import.

The days of Asian stagnation are gone. Today, after 25 years of double-digit Chinese growth, the average American is just thirty times richer than the average east Asian and earns an income, if one calculates their respective earnings on the basis of purchasing power parity, just eight times higher.

Again, what made this possible? The Soviet collapse of 1989-91 tended to distract western attention from far more profound changes already under way on the other side of the world: in China, another communist regime had worked out how to introduce economic reforms without making political concessions.

When Deng Xiaoping arrived in Washington on 28 January 1979, his trip was the consequence of a momentous internal upheaval in the Chinese Communist Party. The previous month, at the party’s 11th Congress, the decision had been taken to reorient China’s economy toward the market. Deng’s strategy was to break up communal control of agriculture and encourage the development of township and village enterprises. Within a few years, such rural businesses accounted for nearly a third of total industrial production.

The crucial thing about Deng’s US trip was that it ensured that, as China industrialised, its exports would have access to the vast US market. It also ensured that, when Deng created free-trading special economic zones along the Chinese coast, American companies would be first in line to invest directly there, bringing with them vital technological know-how.

US firms saw this as an opportunity to “outsource” production, and some analysts even predicted that the SEZs would become like American colonies in east Asia, while others quietly hoped that exposure to the free market would weaken the Communist Party. This would certainly have represented a triumph for the west, but things did not work out that way.

When a potentially revolutionary situation developed in 1989, the regime did what communist regimes had routinely done when confronted with internal dissent: it sent in the tanks. On 4 June 1989, the Democracy Wall movement was suppressed ruthlessly, unknown numbers of the students were arrested and leading dissidents were jailed. Political reform was choked off, but economic growth was not.

Like other Asian economic miracles, China’s has been propelled more by trade than by domestic consumption. More than eleven per cent of US imports today come from China – and the number is rising. Though American companies hoped to become beneficiaries of the Chinese export boom by investing in Chinese subsidiaries, barely a tenth of recent foreign direct investment in China has come from the US.

Indeed the roles have been reversed. As the US trade deficit has soared, it is the Chinese who have been lending to Washington. Meanwhile, more and more US manufacturers are coming under pressure from Chinese competition, because not only are wages in China a fraction of wages in America, the Chinese have also restrained the appreciation of their currency against the dollar. And it is no longer just cheap apparel and toys that they are exporting. Electrical machinery and power-generation equipment accounts for more than two-fifths of the US-China trade deficit.

America hoped that China would become a giant economic subsidiary, but it is now an economic rival. A forecast by Goldman Sachs has suggested that China’s GDP will overtake that of the US as early as 2041. Some strategists anticipate not only trade wars but conceivably also real wars over such questions as the status of Taiwan.

Thus the supposed “triumph of the west” in 1989 is exposed as an illusion. The revolution that Deng had launched ten years earlier turned out to have much further-reaching economic implications, and Deng’s ruthless suppression of opposition in 1989 was a more important event than Mikhail Gorbachev’s capitulation before it that same year.

Smart money

A hundred years ago, as we have seen, the west could justly claim to rule the world. After a century in which one western empire after another has fallen, that can no longer be claimed.

To be sure, the United States remains the world’s biggest economy and is still the predominant military power. Moreover, the financial crisis of 1997-98 in the so-called “tiger economies” provided a painful reminder that even economic miracles can suffer setbacks. Nevertheless, the smart money has to be on China’s leaders avoiding such pitfalls; and so, the process of global reorientation that began in the 20th century will continue and, indeed, accelerate.

We in the west would be foolish to hope for it to slacken, alarmed though we may sometimes feel. The descent of the west is not to be dreaded if it is primarily the corollary of the ascent of Asia out of poverty. At least we can hope to ensure that this next stage of the great east-west reconvergence is less marred by conflict than the first phase – the phase we know as the 20th century.

Niall Ferguson is Laurence A Tisch Professor of History at Harvard University. His new book, The War of the World: history’s age of hatred, has just been published by Allen Lane, the Penguin Press (GBP 25)

China by number

100 billions of US dollars saved by American consumers in the past 25 years by purchasing low-cost Chinese imports

61% year-on-year increase in bilateral trade between the EU and China, 2005

20% of the world’s population is fed by China

7% of the world’s arable land falls within Chinese borders

Research by Sohani Crockett

Copyright (c) New Statesman 1913 – 2006

Bill Totten

Categories: Uncategorized

>My Favorite Free Things

>by Charley Reese

King Features Syndicate (June 23 2006)

Have you ever stopped to think how many wonderful things in this life are free? The four seasons are one example. I love them all. Winter adds poignancy to spring and fall, but summer, for me, is the best of all.

The lush green of the forests, the magnolia and crape myrtle blooms, and the warm and hazy afternoons are pure blessings. Along the Gulf and Atlantic coasts there are magical sights of the seas and marshes. Something in the air tells you to relax and enjoy the sights, sounds and smells.

Another blessing is the weather. How dull it would be if the sun shone every day. I love the afternoon thunderstorms. In Florida we depend on these and, yes, on tropical storms and hurricanes to replenish the Florida aquifer from whence the state gets most of its water.

The damage to nature that hurricanes do is quickly repaired by nature. It’s the damage to man-made structures that is so difficult and expensive to repair. Well, that’s really not the hurricanes’ fault. Hurricanes just do what they have to do, and if people wish to build in their paths, then that’s their problem. It wouldn’t bother me if, after they have all been evacuated, a storm leveled every high-rise condominium on the coasts. They are monuments to greed and mar the view.

It’s a tragedy when people lose their homes and, even worse, their lives. But people who choose to live on the coasts are gamblers, and for most of them, it’s a good bet. Even with last year’s hurricane season, there were more places where hurricanes didn’t hit than there were where they did.

To add to the list of good things that are free are public parks, including national parks, and public libraries. Technically, they are not really free, since they are provided with tax dollars, but user fees at most parks are low, and libraries have none. I, by the way, am against user fees for any public facility.

Libraries have a special place in my heart because long before I could afford to buy anything more than a paperback, the library filled my need for books. If people would only use libraries, they could provide the equivalent of a graduate-level education. Thanks to libraries, I read most of the works of Charles Dickens, Ernest Thompson Seton, William Thackeray, the Bronte sisters, Dostoyevsky, Ernest Hemingway, F. Scott Fitzgerald, William Faulkner, Hendrik Van Loon and others while I was in high school.

If kids today substitute video and iPod downloads for reading, they will be cheating themselves. Great books are the only means available to travel in time and space. They also provide an invaluable insight into the human experience. No educated person should be shocked to discover sin, yet through the years I met college graduates who were surprised that government didn’t work the way they had been told it worked.

Among the blessings that are free are good friends. There is a reason why solitary confinement is used as a punishment. We are herd animals, and for most people solitude in more than small doses is dangerous. We need the companionship of people. Shared experiences are better than lone experiences. We are just made that way by nature.

And there are animals. I buy big jars of peanuts to feed the squirrels on my back patio. If I forget, they will come up to the sliding glass door and peer inside, and if I still do not respond, they will climb up on the screen. Squirrels remind me of children because they are so perky and playful. One day, a black snake slithered up to the sliding glass door and looked inside for a moment and then glided away.

Birds are also plentiful, and I keep water and a feeder to encourage them. There are doves, cardinals, mocking birds, blue jays and, at certain times of the year, purple grackles. I’m not a “birder”, because I’m colorblind, but I like to watch them, as well as lizards and other critters. Birdseed and peanuts are cheap compared with the pleasure I get from watching the animals.

As the song says, these are a few of my favorite things, and I’m sure you can add to it. It’s easy to forget the good things in life if we get caught up in the rat chase.

Copyright (c) 2006 by King Features Syndicate, Inc.

Bill Totten

Categories: Uncategorized

>New Statesman interview of Noam Chomsky

>The New York Times calls him “arguably the most important intellectual alive”, yet he has needed police guards on his own campus. Andrew Stephen discusses Iraq, Iran and Blair with a man who divides opinion like no other.

by Andrew Stephen

New Statesman (June 19 2006)

You might think the Massachusetts Institute of Technology would be well designed, but you would be wrong. I arrived to see the legendary Professor Noam Chomsky with five minutes to spare, but it then took 20 minutes of misdirections and meanderings before I finally reached MIT’s Department of Linguistics and Philosophy, where Chomsky has reigned supreme for 51 years.

I arrived hot and sweaty, because I had been told by some that he did not suffer fools gladly, though others had insisted he was unfailingly courteous. People tend to have widely divergent, passionate views of Chomsky: to many he is a revered beacon of academe and politics, while critics exult in dismissing him as (take your pick) a fraud, a Zionist, an anti-Semite (he is Jewish), an off-the-chart commie, an agent of the CIA, Mossad, the KGB, MI6 and so on. The world is so split between Chomskyites and anti-Chomskyites that there is even a book called The Anti-Chomsky Reader (Encounter Books, 2004).

My anxieties, though, turned out to be groundless. I was greeted by a softly spoken man in a speckled green pullover who could have been a decade younger than his 77 years, and who showed immediate empathy. “It’s a crazy building”, he said. “Can you imagine the point of having a faculty office with angled walls where you can’t even put a bookcase or blackboard?”

Hardly a minute has passed in the last half-century, it seems, when Chomsky has not been pouring out ideas and passions. He has published more than 100 books, ranging from his seminal 1957 work on linguistics, Syntactic Structures (Walter De Gruyter: Reprint edition,1978), to this year’s Failed States: the abuse of power and the assault on democracy (Metropolitan Books, 2006), which deftly turns the Bush administration’s description of countries such as Afghanistan on the US itself. Linguistics is hardly my field, but I had tried in advance to get a feel for just how important his academic work is. I knew that his basic theory, put exceedingly simply, is that language is not something merely picked up by children in the course of growing up, but that we all come into the world with a linguistic framework embedded in our brains. My further research faltered, though, when the Routledge Encyclopedia of Philosophy told me his work had evolved so that the “grammaticality” of a sentence could be explained by the theorem: X-NP1-V-NP2-Y->(1)X-NP2-be+enV-by+NP1-Yx. Then a friend who has a doctorate in linguistics came to my rescue: “Chomsky redid linguistics the way Freud redid psychology”, she explained in an e-mail. That was enough for me to place the man’s academic standing in context.

And so, that settled, to politics. We spoke about Iraq and Afghanistan, about Blair’s Britain (“I guess if the country’s going to blindly follow US orders it’s going to inherit the threats that come with that”), about how Messrs Bush, Blair, Straw and others were war criminals and why America is a failed state. But we began with the story dominating the media that day: the killing of Abu Musab al-Zarqawi in Iraq. Chomsky was not joining in the triumphalism.

“He was certainly a leading gangster and I don’t think there’s many people outside of his village in Jordan that mourn him. He’s had a horrible role that was basically created by the Iraq invasion, which we can’t escape responsibility for. He had a loose connection with al-Qaeda, mostly symbolic, with each trying to exploit the other. But that whole system which we call al-Qaeda is not an organisation, it’s a network of networks, a lot of loosely interconnected people. What the effects [of killing al-Zarqawi] will be in the massive terrorist apparatus that’s been created by the Bush-Blair invasion, one can only guess. The invasion was an enormous stimulant for terrorism, as was anticipated.”

Mastery of detail

Chomsky’s unremitting clarity and his seeming mastery of detail somehow defy interruption or argument, but they are wondrous to behold. When we talk about Bush, Blair and co being hauled before the War Crimes Tribunal, I mention Milosevic and he switches subjects without pausing. The case against the Bush administration is stronger, he insists, than that against the late Serb president. “Remember, the Milosevic Tribunal began with Kosovo, right in the middle of the US-British bombing in late ’99 … Now if you take a look at that indictment, with a single exception, every charge was for crimes after the bombing.

“There’s a reason for that. The bombing was undertaken with the anticipation explicit [that] it was going to lead to large-scale atrocities in response. As it did. Now there were terrible atrocities, but they were after the bombings. In fact, if you look at the British parliamentary inquiry, they actually reached the astonishing conclusion that, until January 1999, most of the crimes committed in Kosovo were attributed to the KLA guerrillas.

“So later they added charges [against Milosevic] about the Balkans, but it wasn’t going to be an easy case to make. The worst crime was Srebrenica but, unfortunately for the International Tribunal, there was an intensive investigation by the Dutch government, which was primarily responsible – their troops were there – and what they concluded was that not only did Milosevic not order it, but he had no knowledge of it. And he was horrified when he heard about it. So it was going to be pretty hard to make that charge stick.”

And Saddam Hussein? “Saddam Hussein is, of course, a leading monster, but he is being charged right now with crimes he committed in 1982 – with having killed about 150 Shiites after an assassination attempt in 1982. Well, 1982 is a pretty important year in US-Iraqi relations. That’s the year in which Ronald Reagan removed Iraq from the list of states supporting terrorism, so that the US would be able to provide their friend Saddam with large-scale aid. Donald Rumsfeld had to [go to] Iraq to tie up the agreement. That included the means to develop weapons of mass destruction, chemical weapons, and so on.

“A large point of that was to punish Iran. The weapons that were provided by the United States and Britain and Germany and Russia and France and plenty of others were supporting Iraq’s aggression. The US and Britain and those others were supporting it, so why aren’t they in the dock next to Saddam Hussein?”

I mentioned the hanging by Iraq of my then colleague on the Observer, Farzad Bazoft – and my feelings when a deputation of US senators went to Baghdad soon afterwards to see Saddam, and one of them told him that his regime’s main problem with the west was media perception. Chomsky did not miss a beat. “That was April 1990, a few months before the invasion of Kuwait. It was a high-level senatorial commission led by Robert Dole, who was the next presidential candidate for the Republicans, to convey President Bush’s greetings and to assure him that the United States had their best wishes for him and that he should not pay attention to the carping in the media because we have this free-press thing here … They were grovelling, and that was a couple of months before the invasion [of Kuwait].”

It’s worse in Britain, he says. “Jack Straw, in 2002, was wailing about Saddam Hussein’s atrocities – and right before that he turned down an application for asylum from an Iraqi dissident who had escaped the torture chambers. And he turned it down with a letter saying that [the man] could be sure that if he went back to Iraq he would be treated properly by their justice system.” He likes the description of Blair’s Britain, he tells me, as pillion rider on the American motorcycle.

And Afghanistan? “I think Afghanistan, if we look at it, is one of the most grotesque acts of modern history. There’s a lot of reinvented fables about it. But the war was undertaken explicitly on 7 October [2001] with Bush’s announcement that unless the Taliban handed over to the United States people who the US suspected – not knew, but suspected – were involved in 9/11, then the US would bomb the people of Afghanistan.

“Admiral Boyce, I think it was, the British commander, then announced a change in the war aims after about three weeks of bombing. He said that the bombing of Afghanistan would continue – I wish I could remember the exact words, but it was something like ‘until the people of Afghanistan overthrow their government’. They bombed Afghanistan with the knowledge that there were about five million people, according to their estimates, who were at serious risk of starvation.”

So he believes that the attacks on Afghanistan were worse than those on Iraq? “Every crime is distinct. I mean, is it worse than invading South Vietnam in 1962? Is it worse than the Russian invasion of Afghanistan?”

Understand the crimes

Which brings us back to war-crimes trials. Did he seriously envisage Bush and Blair in handcuffs at The Hague? No: charging them would be symbolic. “What was important about the Nuremberg trials was not that they hung however many people it was, but that the German population were given the proper means to understand what the crimes were. I want their crimes to be fully understood, to be in elementary school textbooks, and ensure that those of our countries which tolerated these crimes should look themselves in the eye.”

Then we move on to Iran, and Chomsky’s methodical deconstruction of US and British policies there. In American eyes, he says, there’s only one event in US-Iranian history in the past half-century. “That’s 1979, when Iranians committed a crime: they threw out a tyrant installed by a US-British military coup, and they took hostages. And they had to be punished.

“Well, did anything else happen in the last half-century or so? Yes. The US and Britain overthrew the parliamentary government, installed a brutal tyrant, supported him right through the years of torture and violence. As soon as he was overthrown they turned to supporting Saddam Hussein’s invasion of Iran, which killed hundreds of thousands of Iranians – many with chemical weapons provided by the US and others. Right after that they imposed sanctions which have crushed the population.

“That means that for over fifty years the US and Britain have been torturing the people of Iran.” Yet they remain defiant, Chomsky says, and for that they have to be punished. “Starting in the summer of 2003, two interesting things happened. First, all of a sudden, the reason for invading Iraq was not weapons of mass destruction. It was to bring democracy to Iraq and the Middle East and the world … But the other thing that happened which has been little noticed is that there was already the beginning of building up a government media campaign about Iranian nuclear weapons.

“And as Bush’s popularity declined, the intensity of this campaign increased. Maybe it’s just coincidence, but I don’t think so. In fact, the Iranian alleged nuclear weapons are now providing a pretext which will be used for a permanent US presence in Iraq. They’re building the biggest embassy in the world in Baghdad which towers over everything, they’re building military bases. Is that because they intend to get out and leave Iraq to itself? No. If you’re staying in Iraq you have to have a reason. Well, the reason will be that you have to defend the world against Iran.”

Admiration and hatred

By now Chomsky’s assistant is knocking on the door and leaving it ajar, a signal that time is nearly up with the man the New York Times has called “arguably the most important intellectual alive today”. The leading monitor of academic journals says he is the most cited authority in the world today: yet that blend of admiration and hatred, of reverence and revulsion, runs as powerfully as ever through the US bloodstream when his name comes up.

Stanford’s Professor Paul Robinson wrote in the New York Review of Books that Chomsky has a “maddeningly simple-minded view of the world”, while Marxist-turned-neo-con pundit David Horowitz, co-editor of The Anti-Chomsky Reader, describes him as the “ayatollah of anti-Americanism”. Chomsky even figured on the list of targets of Theodore Kaczynski, the so-called Unabomber, and he is frequently given police protection, even on the MIT campus, though he insists he does not seek it.

He says, however, that when he takes his grandson to a baseball game he enjoys being part of mainstream America: “It’s my country”, he told me, with what I thought was just a hint of defensiveness. His latest book, though, defines his country as a failure. There are three main criteria for failed states, he says: unwillingness or inability to protect its citizens from violence, insistence that they are not answerable to international law or to any external consensus, and failure to implement true democracy.

The Bush administration, he believes, “has got no interest, or very little interest” in protecting American citizens from terrorism – containers coming into US ports, for example, are not inspected properly – “but the most serious threats are literal threats to survival, the threats of nuclear war and of environmental destruction”. And Bush is not protecting Americans against those either.

Showing scant respect for international law or external consensus, too, has a pedigree in the US going back over almost two centuries of expansionism. “There’s a lot of outrage about the Bush Doctrine, but what about the Clinton Doctrine? It said that the United States has the right to undertake unilateral use of force to protect key markets, resources and investments.”

The third crucial sign of America’s failure, he says, is that “there’s a huge gap between public opinion and public policy. Both political parties are well to the right of the population on a host of major issues, and the elections that are run are carefully designed so that issues do not arise.”

But Americans still voted overwhelmingly for either Bush or Kerry in 2004, didn’t they? “I don’t know if you watched the presidential debates. I didn’t but my wife [they have been married since 1949] did. She has a college PhD and taught for 25 years at Harvard and is presumably capable of following arguments. She literally couldn’t tell where the candidates stood on issues, and people didn’t because the elections are designed that way.” By whom? “The public relations industry, because they sell candidates the same way they sell toothpaste or lifestyle drugs”. Who are their masters? “Their masters are concentrations of private capital which invest in control of the state. That funds the elections, that designs the framework.”.

That was all very well. But if we could wave a magic wand what would be the first thing President Chomsky would do? “I would set up a War Crimes Tribunal for my own crimes, because if I take on that position [I would need] to deal with the institutional structure and the culture, the intellectual culture. The culture has to be cured.”

The clearly much-practised assistant has knocked three times now, but Chomsky moves on to the “Fissban” treaty, “which would place the production of fissile materials under some kind of international control, so that then anybody could get access to them for nuclear power but nobody could use them for nuclear weapons. Unless that treaty is passed, the species will almost certainly destroy itself.”

The US, he explains, is willing to have a treaty “as long as it’s not verifiable”. The matter came to a vote in a UN committee in November 2004 and the result was 147-1 in favour, with two abstentions, he says. “The one was, of course, the United States. The abstentions were Israel, which reflects that they have to vote for the US – and the other was Britain. So it’s more important [for the Blair government] to be a spear-carrier than to save the species from destruction.”

Pillion passenger

And so we had come full circle, back to Britain the pillion passenger. By the time the assistant knocked a fourth time, I was starting to leave. In the corridor outside I spotted a board crammed with squiggles and formulae every bit as impenetrable as that encyclopaedic explanation of Chomsky’s work. It was precisely because he can plumb such academic depths, I mused as I wended my way back across the Charles river to Boston, that nobody should blithely dismiss Chomsky’s political views as those of a crackpot.

In fact, a thought came to me that will probably not only seem heretical to many Chomskyites but will also outrage the White House enough to get me sent to Guantanamo: what struck me was that even though Chomsky was brought up in a thoroughly Jewish household, went to Hebrew schools and camps and had what he calls a “visceral fear” of Catholics in childhood, there was something profoundly Christian about the thrust of his message to me that morning.

He loathed violence and aggression, that was clear; yet he sought vengeance only in a symbolic sense. Though passionate, he did not seem bitter. Maybe I saw him on a good day. But if there’s one virtue of the US to which Chomsky repeatedly returns it is its unique tolerance for free speech. And what better example of that could there be than to listen to a Hebrew-speaking, self-proclaimed libertarian socialist preaching the virtues of Christian pacifism in Bush’s America of 2006?

Noam Chomsky: the CV

Born in Philadelphia in 1928, he studied at the University of Pennsylvania before moving to MIT and in 1957 publishing Syntactic Structures, which transformed linguistics. In 1965 he urged Americans not to pay taxes in protest at the Vietnam war and in 1967 published The Responsibility of Intellectuals, his critique of US foreign policy. He has been at the forefront of political debate ever since, particularly after 9/11. He married the linguist Carol Schatz in 1949; they have three children

Copyright (c) New Statesman 1913 – 2006

Bill Totten

Categories: Uncategorized

>Obesity Not A Government Problem

>by Charley Reese

King Features Syndicate (June 21 2006)

Anybody who doubts that many Americans have a problem with obesity need only visit an all-you-can-eat buffet restaurant. Most of the customers fill their chairs and then some.

Nevertheless, it is not a government problem. Freedom means you can have a lot to lose if you want to, and it’s nobody’s beeswax. Some people are genetically programmed to be hefty, some people have glandular disorders, and the rest of us just eat too much.

By eating “too much”, I mean taking in more calories than we burn. Arthur Jones, the inventor of the Nautilus exercise machines, said something years ago that I believe is true. He said the human body was designed for hard manual labor.

That makes sense when you think about how many thousands of years human beings had to perform hard manual labor. It’s really been only in the past few decades that those of us in the industrialized countries have been rendered sedentary by our jobs and by labor-saving devices. We go from house to car, from car to office, and then reverse the process at the end of the day. Most men no longer wear hats because they are indoors all day.

I keep waiting for the fedora to come back, but not even Indiana Jones could make it fashionable again. People who keep records know there has been a steady decline in the physical fitness of children. I was leafing through an old book published in the 1920s. There was a picture of about 300 Boy Scouts running down to a lake for a swim. There wasn’t a fat kid in the bunch. You’d be hard-pressed to find 300 boys with no flab on them today.

There is a paradox. All children are growing taller, and athletes tend to be more muscular even without steroids because of better nutrition and weight training. But a handful of student athletes does not a healthy student body make. Physical education, which has been dropped in many schools, ought to be reinstated, and all the vending machines taken out of schools. The vending machines were a dumb idea to begin with.

I interviewed a guy who was supposed to be one of the foremost geriatric scientists in the world. At the end of our conversation, I asked him if science knew anything that would prolong life. “Eat less”, he said, and then explained about tests with rats. Those whose caloric intake was reduced thirty percent lived longer and were healthier than the others.

That’s true, no doubt. Reducing caloric intake isn’t the whole story of healthy eating, but it’s an important part as far as keeping the flab off. Women, however, should be careful not to let Hollywood’s current fascination with slimness cause them to go on extreme diets. Nature designed women with thirty percent more fat than men, and there’s probably a good reason for it. Besides, “beauty” and “weight” are not synonymous.

Healthy living is always a personal decision, and government, though it itches to control every aspect of our lives, should stay out of it. For one thing, you can’t compel people to live healthy lives, nor should anyone desire to do so.

I’ve heard our current situation described as a “therapeutic” society. That’s a euphemism for busybody meddling, and optimistic to boot, since a great many therapies don’t accomplish anything but improving the income of the therapists.

There is a role for government, and it’s called public health. That means keeping the sewer systems running properly, pursuing bug and rat control, and providing vaccinations. A doctor once pointed out that sanitary engineers have saved far more lives than doctors by properly disposing of sewage and maintaining a clean water supply. That’s another truth to keep in mind.

The bottom line in a free society is that if people wish to pack on the pounds, that’s their choice. Fat or skinny, nobody lives forever, and if food is one of the great pleasures of your life, then enjoy. The Dutch and the Turks are reputed to be the world’s biggest eaters, and they seem to have the same life spans as everybody else

Copyright (c) 2006 by King Features Syndicate, Inc.

Bill Totten

Categories: Uncategorized

>Iran: The Calm before the Storm

>by Pham Binh

www.mrzine (June 13 2006)

The media is hailing the Bush administration’s call for talks with Iran and its endorsement of an incentives package which includes the construction of a light-water nuclear reactor as a diplomatic breakthrough. The threat of war seems to have receded over the horizon of the foreseeable future.

In fact, this is the calm before the storm. As Secretary of State Condoleeza Rice put it on June 2, “we can’t wait for months … They need to make a choice and the international community needs to know whether negotiation is a real option or not”. {1} The new-found willingness to negotiate on Bush’s part and the incentives proposals are an attempt by the ruling classes of the US, Germany, France, and Britain to isolate Iran from its closest allies on the UN Security Council, China and Russia, an attempt which has succeeded since they both support the current carrot-or-stick package.

From the Bush administration’s point of view, the US is now in a win-win situation. If Iran declines the offer, the US and its allies will refer Iran to the UN Security Council, leading to economic sanctions and a resolution that would declare Iran a threat to international peace and security, thereby creating the legal and diplomatic basis for US (or Israeli) air-strikes.

If Iran accepts the offer, the US can delay the construction of a light-water reactor while the Iranians will be prohibited from enriching uranium, allowing Uncle Sam to have his cake and eat it too. It would not be the first time the US failed to live up to its end of a nuclear bargain. In 1994, the US, along with Japan and South Korea, agreed to finance and build two light-water reactors for North Korea by 2003 in exchange for the North’s placement of its nuclear facilities under the supervision of the International Atomic Energy Agency (IAEA). The US and its allies never delivered on their end of the deal, triggering a crisis which eventually led to North Korea’s announcement that it possessed nuclear weapons in 2003. {2} Furthermore, the US can manipulate the IAEA which would be in charge of monitoring Iran’s nuclear facilities in the same way that it used UN weapons inspectors in Iraq in 1998, when weapons inspectors installed US surveillance equipment into key government buildings which provided intelligence for a bombing campaign later that year. {3}

In either case, Iran’s ruling class is in a lose-lose situation. Accepting the offer would prevent Iran from enriching uranium on its own and put the country at Washington’s mercy to follow through on the delivery and construction of the light-water reactors. This course of action would merely postpone the conflict between the US and Iran, since the US would be able to exploit Iran’s acceptance to pressure it for even more concessions. Rejecting the offer would lead to Iran’s referral to the UN Security Council, the possibility of sanctions, and the very real threat of war.

In all likelihood, Iran will try to split the US-created united front by accepting parts of the incentives package and rejecting others and calling for more time for negotiations. China and Russia will probably support prolonging negotiations, since they have no interest in yet another war in the Middle East to strengthen US hegemony, while the Bush administration and its European allies will claim that their offer was “reasonable” and that they have “no choice” but refer the matter to the UN Security Council, setting the stage for war.

The dispute over Iran’s nuclear program is not about nuclear weapons, despite what the Bush administration and their media megaphones claim. Iran currently has 164 centrifuges refining uranium, but it would take 16,000 centrifuges to produce enough weapons-grade uranium for nuclear weapons. {4} Furthermore, much of Iran’s uranium deposits are contaminated with the element molybdenum, which Iran does not have the technology to remove, rendering it unusable for nuclear power. In fact, President Ahmadinejad’s April announcement that Iran had joined the world’s nuclear club was highly misleading – it appears that the uranium used in the enrichment cycle was imported from China back in 1991 because of Iran’s difficulties in purifying its own uranium. {5} The enormous technical hurdles are why the US National Intelligence Estimate has projected that Iran is at least ten years away from being able to produce nuclear weapons. {6}

At the heart of the crisis is the irreconcilable conflict of interest between the ruling classes of the US and Iran over Iran’s growing power in the Middle East and Central Asia. Iran’s rulers have no choice but to develop a nuclear program to generate electricity because, if current consumption trends continue, Iran will become an oil importer within fifteen years {7}, thereby depriving the Iranian government of its major source of income: oil exports. For America’s rulers, curbing Iran’s growing power is crucial if the US is to retain unfettered dominance in the Middle East, which is the key to remaining top dog in the world’s imperialist pecking order in the 21st century.


1 David Shelby, “Rice Gives Iran Weeks, Not Months, to Decide on Talks”, Washington File, June 2 2006.

2 See Pham Binh, “Background to the Crisis in North Korea” and “The North Korea Crisis: the Dragon Falters, the Eagle Steps In”, December 14 2005.

3 Sharon Smith, “Targeting Iraq: US Hypocrisy and Media Lies”, International Socialist Review 4, Spring 1998.

4 Eric Ruder, “The Nuclear Hypocrites: World’s Biggest Nuclear Power Demands Disarmament by Iran”, Socialist Worker, May 12 2006. For more on the technical difficulties that Iran’s nuclear program is facing, see Jeffrey Lewis, “Iran and the Bomb: How Close Is Iran?”, January 19 2006.

5 Jonathan Marcus, “Iran Enrichment: a Chinese Puzzle?” BBC News, May 18 2006.

6 Ruder, op cit.

7 Pham Binh, “The Coming War with Iran”, MRZine, April 22 2006.

Pham Binh is a 23-year-old recent graduate of Hunter College. He edits Traveling Soldier.

Bill Totten

Categories: Uncategorized

>Making Japan a Nation of Economic Disparities

>by Bill Totten

Nihonkai Shimbun and Osaka Nichinichi Shimbun (April 13 2006)

(I’ve written a weekly column for two Japanese newspapers for the past several years. Patrick Heaton prepared this English version from the Japanese original.)

Prime Minister Koizumi and his Liberal Democratic Party (LDP) have been promoting deregulation and privatization under the euphemistic label of “reform” to slowly erode the social base that was built over a long time with citizens’ taxes. Japan is becoming the kind of society that Koizumi has been hoping for, a society that enriches a few winners by exploiting the vast majority of citizens, making them losers.

Postal Savings to Flow Overseas

Previously, when I heard the word “reform”, I envisioned a process by which a small number of wealthy people with power transferred some of that wealth and power to the majority, who have neither. Since Koizumi became prime minister, however, it is clear his version of “reform” means something entirely different. To Koizumi, “reform” means the few who already have wealth and power should get more of both through privatization and deregulation.

Using data from the Bank of Japan I have shown previously how savings deposited by Japanese citizens in commercial banks have been flowing abroad ever since the beginning of the “Big Bang” financial deregulation several years ago. The postal savings and life insurance accounts that Koizumi now is privatizing and deregulating have, until now, been invested in government bonds and other instruments that benefit Japan and its citizens generally. As private investors gain control of those funds they, naturally, will use them to increase their own private profits. For example, by taking advantage of the differences in yields and interest rates between the US and Japan. Since Japan’s colonial administrators ensure those yields always favor their US masters, the postal savings funds of Japanese citizens will flow out mainly to the US as surely as have their savings deposited in private banks. Koizumi’s privatization and deregulation of Japan’s postal and insurance accounts will further drain Japan’s economy of funds to subsidize his, and his quisling Liberal Democratic Party’s, American masters.

In 2003, in their campaign to revise the securities tax system, the LDP used the slogan “from savings to investment”. The LDP greatly overhauled the ultra-low interest policy and tax structure, forcing private assets to be reduced as they were transferred from savings into investment in stocks. Because investing wisely is a personal responsibility, risk was also transferred to individuals. Of course some individuals have even gotten lucky in this new money game, like the trader who made 27 billion yen on a typing error by an employee of Mizuho Securities.

The Japan Postal Service for a time managed to escape privatization, but after the most recent election it is clear the postal system will be reorganized in preparation for privatization under the rubric “rationalization”. Those connected with the process are saying postal services will simply be consolidated and not reduced. But according to statistics put out by the Japan Postal Service, many post offices around the country are losing money. It is only a matter of time before a privatized postal service will be compelled to cut such unprofitable post offices, leaving many customers without any postal services at all.

Sudden Rise in Electric Power Prices

Electric power companies in the United States have also undergone privatization in recent years. We can look to their experience to see what happens when this occurs.

The electric power market in America was deregulated in the 1990s, and many policies were implemented to promote liberalization of the electric power business. Several electric power plants used natural gas, which was an inexpensive fuel in the latter half of the 1990s. The large-scale electric power shortages that occurred in California and other western states in 2000 and 2001 and in the eastern US in 2003 were a direct result of deregulation and privatization.

The retail price of electric power rates in states that did not deregulate remains cheaper than in those that did, or prices have not risen as dramatically. According to the Wall Street Journal, between November 2004 and November 2005, energy prices in the US rose an average of 28% across the country, and 80% in Texas alone. Even though the price of crude oil went up during this period, the cause of the jump in price of electrical energy cannot be attributed simply to the rise in the price of crude oil. About half of the electric power plants in the US use coal, which did not experience increases in price as much as those that use natural gas or crude oil. Further, charges for electric power in states that did not deregulate have not increased during this period more than a single digit.

Theoretically, deregulated private electric power companies should be able to provide ever cheaper power to consumers through free competition and more effective management. But the reality is that the process is unpredictable and power shortages and increases in the price of electric power continue to occur.

Of course private power companies made a great sum of money through price hikes because with deregulation, they were free to raise prices as much as they liked. Between 2002 and 2005 electric power company stocks increased in value twice as much as the average of all other US stocks. Electric power is a necessary commodity and people have no recourse but to use it even if prices rise dramatically. Consumers can greatly curtail spending in many areas but they cannot entirely eliminate their use of electric power.

Citizens Take the Brunt

Privatization of the Japan Postal System will affect a service that is as important to the citizens of Japan as electrical power is to Americans. Of course the real motivation of this privatization is to make available to investors a cache of 350 trillion yen in Japan’s postal and industrial insurance savings funds.

Prime Minister Koizumi Junichiro and Minister of State for Economic and Fiscal Policy Takenaka Heizo’s scheme of forcing the post office to compete with convenience stores to increase convenient postal services is nothing short of a scam. Minister Takenaka claims that the post office, which has until now never paid taxes, will finally be able to contribute to the nation’s finances. But if a privatized postal system becomes saddled with a large number of bad loans as a result of speculation permitted by deregulation, it is likely that publicly-funded bail outs – that is, citizens’ taxes – will have to be tapped anyway, as has occurred repeatedly since the Big Bang deregulation of commercial banks. Either way, one thing is certain: it will be the average citizen who is burdened with the brunt of this privatization scheme.

Bill Totten

Categories: Uncategorized