Reality Scalpel

Bush and Napoleon

2007-08-23T13:32:00.001-07:00

Published on Thursday, August 23, 2007 by TomDispatch.com
Pitching the Imperial Republic
Bonaparte and Bush on Deck
by Juan Cole

French Egypt and American Iraq can be considered bookends on the history of modern imperialism in the Middle East. The Bush administration’s already failed version of the conquest of Iraq is, of course, on everyone’s mind; while the French conquest of Egypt, now more than two centuries past, is all too little remembered, despite having been led by Napoleon Bonaparte, whose career has otherwise hardly languished in obscurity. There are many eerily familiar resonances between the two misadventures, not least among them that both began with supreme arrogance and ended as fiascoes. Above all, the leaders of both occupations employed the same basic political vocabulary and rhetorical flimflammery, invoking the spirit of liberty, security, and democracy while largely ignoring the substance of these concepts.

The French general and the American president do not much resemble one another — except perhaps in the way the prospect of conquest in the Middle East appears to have put fire in their veins and in their unappealing tendency to believe their own propaganda (or at least to keep repeating it long after it became completely implausible). Both leaders invaded and occupied a major Arabic-speaking Muslim country; both harbored dreams of a “Greater Middle East”; both were surprised to find themselves enmeshed in long, bitter, debilitating guerrilla wars. Neither genuinely cared about grassroots democracy, but both found its symbols easy to invoke for gullible domestic publics. Substantial numbers of their new subjects quickly saw, however, that they faced occupations, not liberations.

My own work on Bonaparte’s lost year in Egypt began in the mid-1990s, and I had completed about half of Napoleon’s Egypt: Invading the Middle East before September 11, 2001. I had no way of knowing then that a book on such a distant, scholarly subject would prove an allegory for Bush’s Iraq War. Nor did I guess that the United States would give old-style colonialism in the Middle East one last try, despite clear signs that the formerly colonized would no longer put up with such acts and had, in the years since World War II, gained the means to resist them.

The Republic Militant Goes to War

In June of 1798, as his enormous flotilla — 36,000 soldiers, thousands of sailors, and hundreds of scientists on 12 ships of the line — swept inexorably toward the Egyptian coast, the young General Napoleon Bonaparte issued a grandiose communiqué to the bewildered and seasick troops he was about to march into the desert without canteens or reasonable supplies of water. He declared, “Soldiers! You are about to undertake a conquest, the effects of which on civilization and commerce are incalculable.”

The prediction was as tragically inaccurate in its own way as the pronouncement George W. Bush issued some two centuries later, on May 1, 2003, also from the deck of a great ship of the line, the aircraft carrier the USS Abraham Lincoln. “Today,” he said, “we have the greater power to free a nation by breaking a dangerous and aggressive regime. With new tactics and precision weapons, we can achieve military objectives without directing violence against civilians.”

Both men were convinced that their invasions were announcing new epochs in human history. Of the military vassals of the Ottoman Empire who then ruled Egypt, Bonaparte predicted: “The Mameluke Beys who favor exclusively English commerce, whose extortions oppress our merchants, and who tyrannize over the unfortunate inhabitants of the Nile, a few days after our arrival will no longer exist.”

Bonaparte’s laundry list of grievances about them consisted of three charges. First, the beys were, in essence, enablers of France’s primary enemy at that time, the British monarchy which sought to strangle the young French republic in its cradle. Second, the rulers of Egypt were damaging France’s own commerce by extorting taxes and bribes from its merchants in Cairo and Alexandria. Third, the Mamluks ruled tyrannically, having never been elected, and oppressed their subjects whom Bonaparte intended to liberate.

This holy trinity of justifications for imperialism — that the targeted state is collaborating with an enemy of the republic, is endangering the positive interests of the nation, and lacks legitimacy because its rule is despotic — would all be trotted out over the subsequent two centuries by a succession of European and American leaders whenever they wanted to go on the attack. One implication of these familiar rhetorical turns of phrase has all along been that democracies have a license to invade any country they please, assuming it has the misfortune to have an authoritarian regime.

George W. Bush, of course, hit the same highlights in his “mission accomplished” speech, while announcing on the Abraham Lincoln that “major combat operations” in Iraq “had ended.” “The liberation of Iraq,” he proclaimed, “is a crucial advance in the campaign against terror. We’ve removed an ally of al Qaeda, and cut off a source of terrorist funding.” He put Saddam Hussein’s secular, Arab nationalist Baath regime and the radical Muslim terrorists of al-Qaeda under the sign of September 11th, insinuating that Iraq was allied with the primary enemy of the United States and so posed an urgent menace to its security. (In fact, captured Baath Party documents show that Saddam’s fretting security forces, on hearing that Abu Musab al-Zarqawi had entered Iraq, put out an all points bulletin on him, imagining — not entirely correctly — that he had al-Qaeda links.) Likewise, Bush promised that Iraq’s alleged “weapons of mass destruction” (which existed only in his own fevered imagination) would be tracked down, again implying that Iraq posed a threat to the interests and security of the U.S., just as Bonaparte had claimed that the Mamluks menaced France.

According to the president, Saddam’s overthrown government had lacked legitimacy, while the new Iraqi government, to be established by a foreign power, would truly represent the conquered population. “We’re helping to rebuild Iraq, where the dictator built palaces for himself, instead of hospitals and schools. And we will stand with the new leaders of Iraq,” Bush pledged, “as they establish a government of, by, and for the Iraqi people.” Bonaparte, too, established governing councils at the provincial and national level, staffing them primarily with Sunni clergymen, declaring them more representative of the Egyptian people than the beys and emirs of the slave soldiery who had formerly ruled that province of the Ottoman Empire.

Liberty as Tyranny

For a democracy to conduct a brutal military occupation against another country in the name of liberty seems, on the face of it, too contradictory to elicit more than hoots of derision at the hypocrisy of it all. Yet, the militant republic, ready to launch aggressive war in the name of “democracy,” is everywhere in modern history, despite the myth that democracies do not typically wage wars of aggression. Ironically, some absolutist regimes, like those of modern Iran, were remarkably peaceable, if left alone by their neighbors. In contrast, republican France invaded Belgium, Holland, Spain, Germany, Italy, and Egypt in its first decade (though it went on the offensive in part in response to Austrian and Prussian moves to invade France). The United States attacked Mexico, the Seminoles and other Native polities, Hawaii, the Spanish Empire, the Philippines, Haiti, and the Dominican Republic in just the seven-plus decades from 1845 to the eve of the U.S. entry into World War I.

Freedom and authoritarianism are nowadays taken to be stark antonyms, the provinces of heroes and monsters. Those closer to the birth of modern republics were comforted by no such moral clarity. In Danton’s Death, the young Romantic playwright Georg Büchner depicted the radical French revolutionary and proponent of executing enemies of the Republic, Maximilien Robespierre, whipping up a Parisian crowd with the phrase, “The revolutionary regime is the despotism of liberty against tyranny.” And nowhere has liberty proved more oppressive than when deployed against a dictatorship abroad; for, as Büchner also had that famed “incorruptible” devotee of state terror observe, “In a Republic only republicans are citizens; Royalists and foreigners are enemies.”

That sunlit May afternoon on the USS Abraham Lincoln, President Bush seconded Büchner’s Robespierre. “Because of you,” he exhorted the listening sailors of an aircraft carrier whose planes had just dropped 1.6 million pounds of ordnance on Iraq, “our nation is more secure. Because of you, the tyrant has fallen, and Iraq is free.”

Security for the republic had already proved ample justification to launch a war the previous March, even though Iraq was a poor, weak, ramshackle Third World country, debilitated by a decade of sanctions imposed by the United Nations and the United States, without so much as potable drinking water or an air force. Similarly, the Mamluks of Egypt — despite the sky-high taxes and bribes they demanded of some French merchants — hardly constituted a threat to French security.

The overthrow of a tyrannical regime and the liberation of an oppressed people were constant refrains in the shipboard addresses of both the general and the president, who felt that the liberated owed them a debt of gratitude. Bonaparte lamented that the beys “tyrannize over the unfortunate inhabitants of the Nile”; or, as one of his officers, Captain Horace Say, opined, “The people of Egypt were most wretched. How will they not cherish the liberty we are bringing them?” Similarly, Bush insisted, “Men and women in every culture need liberty like they need food and water and air. Everywhere that freedom arrives, humanity rejoices; and everywhere that freedom stirs, let tyrants fear.”

Not surprisingly, expectations that the newly conquered would exhibit gratitude to their foreign occupiers cropped up repeatedly in the dispatches and letters of men on the spot who advocated a colonial forward policy. President Bush put this dramatically in 2007, long after matters had not proceeded as expected: “We liberated that country from a tyrant. I think the Iraqi people owe the American people a huge debt of gratitude. That’s the problem here in America: They wonder whether or not there is a gratitude level that’s significant enough in Iraq.”

Liberty in this two-century old rhetorical tradition, moreover, was more than just a matter of rights and the rule of law. Proponents of various forms of liberal imperialism saw tyranny as a source of poverty, since arbitrary rulers could just usurp property at will and so make economic activity risky, as well as opening the public to crushing and arbitrary taxes that held back commerce. The French quartermaster Francois Bernoyer wrote of the Egyptian peasantry: “Their dwellings are adobe huts, which prosperity, the daughter of liberty, will now allow them to abandon.” Bush took up the same theme on the Abraham Lincoln: “Where freedom takes hold, hatred gives way to hope. When freedom takes hold, men and women turn to the peaceful pursuit of a better life.”

“Heads Must Roll”

In both eighteenth century Egypt and twenty-first century Iraq, the dreary reality on the ground stood as a reproach to, if not a wicked satire upon, these high-minded pronouncements. The French landed at the port of Alexandria on July 1, 1798. Two and a half weeks later, as the French army advanced along the Nile toward Cairo, a unit of Gen. Jean Reynier’s division met opposition from 1,800 villagers, many armed with muskets. Sgt. Charles Francois recalled a typical scene. After scaling the village walls and “firing into those crowds,” killing “about 900 men,” the French confiscated the villagers’ livestock — “camels, donkeys, horses, eggs, cows, sheep” — then “finished burning the rest of the houses, or rather the huts, so as to provide a terrible object lesson to these half-savage and barbarous people.”

On July 24, Bonaparte’s Army of the Orient entered Cairo and he began reorganizing his new subjects. He grandiosely established an Egyptian Institute for the advancement of science and gave thought to reforming police, courts, and law. But terror lurked behind everything he did. He wrote Gen. Jacques Menou, who commanded the garrison at the Mediterranean port of Rosetta, saying, “The Turks [Egyptians] can only be led by the greatest severity. Every day I cut off five or six heads in the streets of Cairo…. [T]o obey, for them, is to fear.” (Mounting severed heads on poles for viewing by terrified passers-by was another method the French used in Egypt…)

That August, the Delta city of Mansura rose up against a small French garrison of about 120 men, chasing them into the countryside, tracking the blue coats down, and methodically killing all but two of them. In early September, the Delta village of Sonbat, inhabited in part by Bedouin of the western Dirn tribe, also rose up against the Europeans. Bonaparte instructed one of his generals, “Burn that village! Make a terrifying example of it.” After the French army had indeed crushed the rebellious peasants and chased away the Bedouin, Gen. Jean-Antoine Verdier reported back to Bonaparte with regard to Sonbat, “You ordered me to destroy this lair. Very well, it no longer exists.”

The most dangerous uprisings confronting the French were, however, in Cairo. In October, much of the city mobilized to attack the more than 20,000 French troops occupying the capital. The revolt was especially fierce in the al-Husayn district, where the ancient al-Azhar madrassa (or seminary) trained 14,000 students, where the city’s most sacred mosque stood, and where wealth was concentrated in the merchants and guilds of the Khan al-Khalili bazaar. At the same time, the peasants and Bedouin of the countryside around Cairo rose in rebellion, attacking the small garrisons that had been deployed to pacify them.

Bonaparte put down this Egyptian “revolution” with the utmost brutality, subjecting urban crowds to artillery barrages. He may have had as many rebels executed in the aftermath as were killed in the fighting. In the countryside, his officers’ launched concerted campaigns to decimate insurgent villages. At one point, the French are said to have brought 900 heads of slain insurgents to Cairo in bags and ostentatiously dumped them out before a crowd in one of that city’s major squares to instill Cairenes with terror. (Two centuries later, the American public would come to associate decapitations by Muslim terrorists in Iraq with the ultimate in barbarism, but even then hundreds such beheadings were not carried out at once.)

The American deployment of terror against the Iraqi population has, of course, dwarfed anything the French accomplished in Egypt by orders of magnitude. After four mercenaries, one a South African, were killed in Falluja in March of 2004 and their bodies desecrated, President Bush is alleged to have said “heads must roll” in retribution.

An initial attack on the city faltered when much of the Iraqi government threatened to resign and it was clear major civilian casualties would result. The crushing of the city was, however, simply put off until after the American presidential election in November. When the assault, involving air power and artillery, came, it was devastating, damaging two-thirds of the city’s buildings and turning much of its population into refugees. (As a result, thousands of Fallujans still live in the desert in tent villages with no access to clean water.)

Bush must have been satisfied. Heads had rolled. More often, faced with opposition, the U.S. Air Force simply bombed already-occupied cities, a technology Bonaparte (mercifully) lacked. The strategy of ruling by terror and swift, draconian punishment for acts of resistance was, however, the same in both cases.

The British sank much of the French fleet on August 1, 1798, marooning Bonaparte and his troops in their newly conquered land. In the spring of 1799, the French army tried — and failed — to break out through Syria; after which Bonaparte himself chose the better part of valor. He slipped out of Egypt late that summer, returning to France. There, he would swiftly stage a coup and come to power as First Consul, giving him the opportunity to hone his practice of bringing freedom to other countries — this time in Europe. By 1801, joint British-Ottoman forces had defeated the French in Egypt, who were transported back to their country on British vessels. This first Western invasion of the Middle East in modern times had ended in serial disasters that Bonaparte would misrepresent to the French public as a series of glorious triumphs.

Ending the Era of Liberal Imperialism

Between 1801 and 2003 stretched endless decades in which colonialism proved a plausible strategy for European powers in the Middle East, including the French enterprise in Algeria (1830-1962) and the British veiled protectorate over Egypt (1882-1922). In these years, European militaries and their weaponry were so advanced, and the means of resistance to which Arab peasants had access so limited, that colonial governments could be imposed.

That imperial moment passed with celerity after World War II, in part because the masses of the Third World joined political parties, learned to read, and — with how-to-do-it examples all around them — began to mount political resistance to foreign occupations of every sort. While the twenty-first century American arsenal has many fancy, exceedingly destructive toys in it, nothing has changed with regard to the ability of colonized peoples to network socially and, sooner or later, push any foreign occupying force out.

Bonaparte and Bush failed because both launched their operations at moments when Western military and technological superiority was not assured. While Bonaparte’s army had better artillery and muskets, the Egyptians had a superb cavalry and their old muskets were serviceable enough for purposes of sniping at the enemy. They also had an ally with advanced weaponry and the desire to use it — the British Navy.

In 2007, the high-tech U.S. military — as had been true in Vietnam in the 1960s and 1970s, as was true for the Soviets in Afghanistan in the 1980s — is still vulnerable to guerrilla tactics and effective low-tech weapons of resistance such as roadside bombs. Even more effective has been the guerrillas’ social warfare, their success in making Iraq ungovernable through the promotion of clan and sectarian feuds, through targeted bombings and other attacks, and through sabotage of the Iraqi infrastructure.

From the time of Bonaparte to that of Bush, the use of the rhetoric of liberty versus tyranny, of uplift versus decadence, appears to have been a constant among imperialists from republics — and has remained domestically effective in rallying support for colonial wars. The despotism (but also the weakness) of the Mamluks and of Saddam Hussein proved sirens practically calling out for Western interventions. According to the rhetoric of liberal imperialism, tyrannical regimes are always at least potentially threats to the Republic, and so can always be fruitfully overthrown in favor of rule by a Western military. After all, that military is invariably imagined as closer to liberty since it serves an elected government. (Intervention is even easier to justify if the despots can be portrayed, however implausibly, as allied with an enemy of the republic.)

For both Bush and Bonaparte, the genteel diction of liberation, rights, and prosperity served to obscure or justify a major invasion and occupation of a Middle Eastern land, involving the unleashing of slaughter and terror against its people. Military action would leave towns destroyed, families displaced, and countless dead. Given the ongoing carnage in Iraq, President Bush’s boast that, with “new tactics and precision weapons, we can achieve military objectives without directing violence against civilians,” now seems not just hollow but macabre. The equation of a foreign military occupation with liberty and prosperity is, in the cold light of day, no less bizarre than the promise of war with virtually no civilian casualties.

It is no accident that many of the rhetorical strategies employed by George W. Bush originated with Napoleon Bonaparte, a notorious spinmeister and confidence man. At least Bonaparte looked to the future, seeing clearly the coming breakup of the Ottoman Empire and the likelihood that European Powers would be able to colonize its provinces. Bonaparte’s failure in Egypt did not forestall decades of French colonial success in Algeria and Indochina, even if that era of imperial triumph could not, in the end, be sustained in the face of the political and social awakening of the colonized. Bush’s neocolonialism, on the other hand, swam against the tide of history, and its failure is all the more criminal for having been so predictable.

Juan Cole teaches Middle Eastern and South Asian history at the University of Michigan. His most recent book Napoleon’s Egypt: Invading the Middle East (New York: Palgrave Macmillan, 2007) has just been published. He has appeared widely on television, radio and on op-ed pages as a commentator on Middle East affairs, and has a regular column at Salon.com. He has written, edited, or translated 14 books and has authored 60 journal articles. His weblog on the contemporary Middle East is Informed Comment.

Guerrilla Garden in Guantanamo

2007-08-23T01:12:00.000-07:00

Guantanamo Bay prisoners plant seeds of hope in secret garden
By Andrew Buncombe in Washington
The Independent
Published: 29 April 2006

With their bare hands and the most basic of tools, prisoners at Guantanamo Bay have fashioned a secret garden where they have grown plants from seeds recovered from their meals. For some of the detainees - held without charge for more than four years and who the US say are now cleared for release - the garden apparently offers a diversion from the monotony and injustice of their imprisonment.

Using water to soften soil baked hard by the Caribbean sun and then scratching away with plastic spoons, a handful of prisoners have reportedly produced sufficient earth to grow watermelon, peppers, garlic, cantaloupe and even a tiny lemon plant, no more than two inches high.

The revelation of the garden has now been seized on by campaigners, seeking to close the prison camp in Cuba, who have urged supporters around the world to send them seeds which they will in turn seek to send to the prisoners. They have termed their campaign "Seed of Hope".

The existence of the garden - apparently prohibited by the US military authorities - was revealed by the Boston-based lawyer Sabin Willett who was informed of it by one of his clients, Saddiq Ahmed Turkistani, held at Guantanamo Bay since 2002.

Mr Willett said that, last year, the US military deemed Mr Turkistani was no longer an "enemy combatant" but that he remained in legal limbo because no country was prepared to take him. Mr Willett said lawyers had regularly pressed the authorities of Joint Task Force Guantanamo [JTFGTMO] about establishing a garden but that they had refused.

Mr Willett told The Independent that he was explaining this to Mr Turkistani on a recent visit when he was told the prisoners already had a garden. " I could not believe it," he said. "I knew they had no tools. If you take in court papers you have to take the staples out. The look on his face as he told me how they had unscrewed the mop handles and used buckets of water [to build the garden] was something wonderful."

Mr Turkistani said he and other prisoners held in part of the prison known as Camp Iguana softened the ground with water overnight and then used the spoons to dig. Every day they managed to loosen more soil until they had enough for a bed for planting. "We have lots of time here," he said.

Gardening has long been associated with POW camps. At the Harperley POW Camp, in County Durham, built by the British for German and Italian prisoners during the Second World War, gardening was encouraged, along with educational classes and football.

Mr Willett said that, when he put the request to JTFGTMO, he was told gardening was not permitted. "These people have been put in such a hellish situation and yet, somehow, they have found a way to create life, literally," he said. "They have had to take the seeds from their meals and then scratch at the soil in order to get that going." Mr Willett, who first wrote about the garden in The Washington Post, said he had not personally seen the prisoners' garden but had been told of it by three different detainees.

Mr Turkistani's plight is especially pitiful. An ethnic Uighur who was living in Afghanistan, he had been jailed by the Taliban for three years and then freed by the Washington-backed Northern Alliance in late 2001 before being transferred to US custody. Last year, Mr Turkistani, who was born and raised in Saudi Arabia, was cleared for release from Guantanamo Bay. His lawyers say he is guilty of no crime and should never had been seized by the US. He was accused by the Taliban of being involved in a plot to kill Osama bin Laden - an allegation he denies.

But the future of Mr Turkistani and the eight other cleared prisoners - five Chinese Uighurs, a Russian, an Algerian and an Egyptian - who live in the less restrictive Camp Iguana, remains uncertain. He does not hold Saudi citizenship and the US does not want to send him to China because of the discrimination against Uighurs there.

The UK-based campaign group Reprieve has urged people to send seeds. They have established a PO Box, details of which can be found on the group's website www.reprieve.org.uk.

Reprieve's legal director, Clive Stafford Smith, said: "The massive might of the US military is intent on holding prisoners in an environment that is stripped of comfort, humanity, beauty and even law. Yet the prisoners held there have overcome this with a plastic spoon and a lemon seed. It is the beginning of the end of Guantanamo Bay."

Spurred by the fact that only a handful of detainees have been charged, there have been repeated calls for the closure of Guantanamo Bay, which was established for prisoners captured in the so-called "war on terror" . A UN Human Rights Commission report published in February called for its immediate closure.

JTFGTMO yesterday failed to respond to queries. Last year, a Pentagon spokesman said of Mr Turkistani's case: "The government is serious about finding a place for resettlement for the Uighurs and will continue diplomatic efforts to accomplish that goal."

The Pentagon said this week that around 140 of the 500 prisoners held at Guantanamo had been reclassified and were no longer considered enemy combatants.

With their bare hands and the most basic of tools, prisoners at Guantanamo Bay have fashioned a secret garden where they have grown plants from seeds recovered from their meals. For some of the detainees - held without charge for more than four years and who the US say are now cleared for release - the garden apparently offers a diversion from the monotony and injustice of their imprisonment.

Using water to soften soil baked hard by the Caribbean sun and then scratching away with plastic spoons, a handful of prisoners have reportedly produced sufficient earth to grow watermelon, peppers, garlic, cantaloupe and even a tiny lemon plant, no more than two inches high.

The revelation of the garden has now been seized on by campaigners, seeking to close the prison camp in Cuba, who have urged supporters around the world to send them seeds which they will in turn seek to send to the prisoners. They have termed their campaign "Seed of Hope".

The existence of the garden - apparently prohibited by the US military authorities - was revealed by the Boston-based lawyer Sabin Willett who was informed of it by one of his clients, Saddiq Ahmed Turkistani, held at Guantanamo Bay since 2002.

Mr Willett said that, last year, the US military deemed Mr Turkistani was no longer an "enemy combatant" but that he remained in legal limbo because no country was prepared to take him. Mr Willett said lawyers had regularly pressed the authorities of Joint Task Force Guantanamo [JTFGTMO] about establishing a garden but that they had refused.

Mr Willett told The Independent that he was explaining this to Mr Turkistani on a recent visit when he was told the prisoners already had a garden. " I could not believe it," he said. "I knew they had no tools. If you take in court papers you have to take the staples out. The look on his face as he told me how they had unscrewed the mop handles and used buckets of water [to build the garden] was something wonderful."

Mr Turkistani said he and other prisoners held in part of the prison known as Camp Iguana softened the ground with water overnight and then used the spoons to dig. Every day they managed to loosen more soil until they had enough for a bed for planting. "We have lots of time here," he said.

Gardening has long been associated with POW camps. At the Harperley POW Camp, in County Durham, built by the British for German and Italian prisoners during the Second World War, gardening was encouraged, along with educational classes and football.

Mr Willett said that, when he put the request to JTFGTMO, he was told gardening was not permitted. "These people have been put in such a hellish situation and yet, somehow, they have found a way to create life, literally," he said. "They have had to take the seeds from their meals and then scratch at the soil in order to get that going." Mr Willett, who first wrote about the garden in The Washington Post, said he had not personally seen the prisoners' garden but had been told of it by three different detainees.

Mr Turkistani's plight is especially pitiful. An ethnic Uighur who was living in Afghanistan, he had been jailed by the Taliban for three years and then freed by the Washington-backed Northern Alliance in late 2001 before being transferred to US custody. Last year, Mr Turkistani, who was born and raised in Saudi Arabia, was cleared for release from Guantanamo Bay. His lawyers say he is guilty of no crime and should never had been seized by the US. He was accused by the Taliban of being involved in a plot to kill Osama bin Laden - an allegation he denies.

But the future of Mr Turkistani and the eight other cleared prisoners - five Chinese Uighurs, a Russian, an Algerian and an Egyptian - who live in the less restrictive Camp Iguana, remains uncertain. He does not hold Saudi citizenship and the US does not want to send him to China because of the discrimination against Uighurs there.

The UK-based campaign group Reprieve has urged people to send seeds. They have established a PO Box, details of which can be found on the group's website www.reprieve.org.uk.

Reprieve's legal director, Clive Stafford Smith, said: "The massive might of the US military is intent on holding prisoners in an environment that is stripped of comfort, humanity, beauty and even law. Yet the prisoners held there have overcome this with a plastic spoon and a lemon seed. It is the beginning of the end of Guantanamo Bay."

Spurred by the fact that only a handful of detainees have been charged, there have been repeated calls for the closure of Guantanamo Bay, which was established for prisoners captured in the so-called "war on terror" . A UN Human Rights Commission report published in February called for its immediate closure.

JTFGTMO yesterday failed to respond to queries. Last year, a Pentagon spokesman said of Mr Turkistani's case: "The government is serious about finding a place for resettlement for the Uighurs and will continue diplomatic efforts to accomplish that goal."

The Pentagon said this week that around 140 of the 500 prisoners held at Guantanamo had been reclassified and were no longer considered enemy combatants.

Games and Virtual Disease Models

2007-08-23T01:03:00.000-07:00

Virtual game is a 'disease model' BBC News 8/23/07
Scientists believe the game error could offer a valuable insight
How it reflects reality

An outbreak of a deadly disease in a virtual world can offer insights into real life epidemics, scientists suggest.

The "corrupted blood" disease spread rapidly within the popular online World of Warcraft game, killing off thousands of players in an uncontrolled plague.

The infection raged, wreaking social chaos, despite quarantine measures.

The experience provides essential clues to how people behave in such crises, Lancet Infectious Diseases reports.

In the game, there was a real diversity of response from the players to the threat of infection, similar to those seen in real life.

The players seemed to really feel they were at risk and took the threat of infection seriously
Professor Nina Fefferman, from Tufts University School of Medicine

Some acted selflessly, rushing to the aid of other characters even though that meant they risked infection themselves.

Others fled infected cities in an attempt to save themselves.

And some who were sick made it their mission to deliberately infect others.

Researcher Professor Nina Fefferman, from Tufts University School of Medicine, said: "Human behaviour has a big impact on disease spread. And virtual worlds offer an excellent platform for studying human behaviour.

"The players seemed to really feel they were at risk and took the threat of infection seriously, even though it was only a game."

She acknowledged that a virtual setting might encourage riskier behaviour, but said this could be estimated and allowed for when drawing conclusions.

Constraint

She said a major constraint for epidemiologists studying disease dynamics at the moment was that they were limited to observational and retrospective studies.

For example, it would be unethical to release an infectious disease in real life in order to study what the consequences might be.

Computer models allow for experimentation on virtual populations without such limitations, but still rely on mathematical rules to approximate human behaviour.

A virtual world may be a way to bridge this gap, said Professor Fefferman.

Her team at Tufts are looking to use models such as the World of Warcraft to further study human behaviour, particularly in relation to disease outbreaks.

Dr Gary Smith, professor of Population Biology and Epidemiology at the University of Pennsylvania, has been working on modelling infectious diseases.

He said: "Very few mathematical models of disease transmission take host behaviour into account."

But he questioned how representative of real life a virtual model could be.

"Although the characteristics of the disease could be defined before hand, once released into the virtual world, the study is just as 'observational' as disease outbreak studies in the real world.

"Nevertheless, I suppose one could argue that the proposal describes an opportunity for study that we might not otherwise have."

On the Technicum

2007-08-20T08:51:00.001-07:00

THE TECHNIUM AND THE 7TH KINGDOM OF LIFE

[KEVIN KELLY:] The main question that I'm asking myself is, what is the meaning of technology in our lives? What place does technology have in the universe? What place does it have in the human condition? And what place should it play in my own personal life? Technology as a whole system, or what I call the technium, seems to be a dominant force in the culture. Indeed at times it seems to be the only force - the only lasting force - in culture. If that's so, then what can we expect from this force, what governs it? Sadly we don't even have a good theory about technology.

I'm trying to investigate ways to understand the long-term consequences of technology in the world and place it into some position along with other grand things like biological nature, big history, the physics of the cosmos, and the future. It's a very ambitious project and, surprisingly, there isn't really much thinking about technology in terms of its sphere of influence in a way that might be useful to thinking about how to evaluate what we make.

There's no predictive theory of technology either. I've been inculcated with the fundamentals of GBN-style scenarios to understand that all predictions are wrong by default. So, when I say predictive, I don't mean in the sense that we could actually predict, in detail, what technology will do. I mean predictive in the sense of a theory that would give us the tools to guide its direction at the large scale. A theory that would let us say that we know enough about technology's past that we can expect certain things about it in its future. Right now, we basically take technologies as they come up, and each novel technology, one by one, catches us caught off-guard. Though I don't think I'm capable of generating it, a useful theory of technology is what I would love to find.

There is a common sense that each novel technology brings us many new problems as well as new solutions — that it offers many things that we desire as well as many things that we want to eliminate. What we don't have is a good framework for responding to this ceaseless generation of novelty, or even a framework for understanding whether technology is something that we should, or even can, respond to. Or, for that matter, whether we should manage our technology by not creating it in the first place. And how we might possibly "not create."

One of the reflex responses to technology's problems is prohibition. That is, certain kinds of technology such as nuclear power, genetically modified foods, etc., technologies with obvious detrimental effects should be managed by prohibiting their use outside certain confines. Along the same lines is the axiom that there are certain ideas that we shouldn't even have — directions of research that we should prohibit outright and certain technologies that should never be unleashed outside of the lab, or even in the lab. A counter theory posits that prohibitions don't work and that we can't manage technology by forbidding its use. Instead, we have to manage technologies by replacement, displacement, fine tuning — by moving a technology into another role without eliminating it.

But even with all this, we still don't have a good sense of what technology is or how we should define it. Technology in its modern sense is a term that wasn't even invented until 1829. We had been making technology for centuries, but didn't have a word for it. I suggest we still don't know exactly what it is. Is it anything that we make from with our minds? Or only certain things?

Science and technology are intrinsically connected. We have a sense that science is a method of thinking that generates technology, but I've come to the conclusion that technology is a type of thinking that generates science.

The scientific method itself is not constant. It is evolving. What we call the scientific method has been changed by technology from the very beginning. The necessity of peer review, and repeatability of experiments, for example were types of thinking that had to be invented and required technologies like print to make possible. A scientist from 400 years ago would not recognize the scientific method as it is practiced today because a lot of the elements of research that we now consider essential to the scientific method weren't invented until very recently: for instance, placebos, statistical sampling, double blind experiments. All these things are new, some of them invented in just the last 50 years.

New technologies being invented today, such as social software, distributed instrumentation, and new ways of seeing will all transform the scientific method of the future. It is very likely the scientific method will change far more in the next 50 years than it has in its first 400 years of its existence.

Specific technologies are like individuals, or species, and the society or ecosystem of these individuals is the technium. I'm especially interested in how the technium works at the system level — how it operates as an ecology of technological species, as a complex web of interacting agents each with their own biases and tendencies.

The emergent system of the technium — what we often mean by "Technology" with a capital T — has its own inherent agenda and urges, as does any large complex system, indeed, as does life itself. That is, an individual technological organism has one kind of response, but in an ecology comprised of co-evolving species of technology we find an elevated entity — the technium — that behaves very differently from an individual species. The technium is a superorganism of technology. It has its own force that it exerts. That force is part cultural (influenced by and influencing of humans), but it's also partly non-human, partly indigenous to the physics of technology itself. That's the part that is scary and interesting.

I tend to think of the technium like a child of humanity. Our job will be to train the technium, to imbue it with certain principles because, at a certain level and at a certain age, it will basically become much more autonomous than it is now. It will leave us like a teenager who goes on to live alone: although he or she will continue to interact with us and will always be part of us, we have to let it go.

We can't raise a successful human by remaining in complete control as parents. We have to train our children well — bury within them a strong conscience with deep values that can guide them to do the right thing in situations we had not foreseen or even imagined. We need to do the same with the technium and our technologies. In the same sense we need to embed our values into the technological superorganism so that these heuristics become guiding factors. As more autonomy is given and won by the technium, it will then be able to do the right thing.

In order to do that there are a few of problems that need to be addressed.

One is knowing what we want. We need to have a deep sense of our values, what we stand for. In a deep irony, the more technology advances, the less sure we are of who we are and what we stand for as a species and as individuals. So this discovery of what is most important about us is a huge challenge.

Two, we have to become very smart and clever about how to embed subtle guidance in large systems. We know it can be done because of our children. Three, we have to be willing to risk surrendering autonomy to the technium in order to reap the maximum freedom and benefits for ourselves. Invest, let go, benefit. That's the tradeoff in control I explored extensively in Out of Control. There is no doubt this is a huge and scary step — ask any parent — but I believe that we humans can work up to it.

The most difficult of those three assignments is the first, which is to know what it is that we want. The problem is that we don't know who we are. We don't know any longer what it means to be a human. Almost every day there is some news from researchers that forces us to reevaluate a fundamental aspect of our existence. Are we different from animals? Are we even real? Is consciousness real, or special, or a mere commodity? Do we have limits, should we have limits?

Our identities are being pushed and nudged and twisted by the arrival of new technologies: robots, AI, genetic engineering, quantum weirdness, any kind of enhancement technology, discoveries about our bodies and our minds, discoveries in cosmology about our place in the multi-verses. All of it. Each of these discoveries and inventions challenges our notions of what it is to be alive, what it means to be human, what it is to be American — whatever. Nearly every signal broadcast by technology chips away at our identity.

So we are left with the difficult task of trying to figure out what technology means just as our own identify is shifting constantly — we're trying to find both at the same time. I believe we can't know what technology means (or what the technium wants) until we know what we mean. More importantly, I believe we'll answer both at once; that only by understanding what technology is will we understand who we are.

There's a tendency to believe that while the culture around may be becoming more technological, human nature remains intact. In fact, we have to admit that our own human natures are being reformed, redefined, and remade by technology. This is a scary too. In the extreme, if you look beyond the short now of the next ten years to the long horizon of a couple hundred years, the overwhelming question is, do we remain one species, or will we evolve ourselves into many species?

The prospect of genetic forking is probably the most divisive issue I could imagine for our species and would engender conflicts at a scale that will make some of today's inherently irresolvable issues — abortion, cloning, etc. — pale by comparison. There will be people who would not only declare that they want to remain untouched (the "Naturals") but would insist that no one has the right to remake themselves or their unnamed descendents.

Others will clearly side with humans remodeling themselves and the species in any direction possible. It's not so far away, either. The unanswerable questions are already beginning. Is a sprinter with two prosthetic carbon-fiber springs instead of legs, disabled or enhanced? If he wants to compete in the Olympics, are his springs a crutch, or a jet pack? What is a human anyway?

Hollywood and science fiction authors are the new theologians. They've been asking these essential existential questions way ahead of the rest of society. The rising popularity of maverick authors like Philip K Dick will move him (and others of his ilk) into the core mainstream, as the themes he explored become the central questions of the coming century.

What is the difference between fake and reality? Who are we? Are we many or one? Where do we begin and our minds end? These are old themes, but with new answers and alternative story lines, and it's not just the artists that are asking these questions.

We are reaching down deep into the culture so that everybody has to ask these very big questions. It's no longer the job of philosophers, nor avante guard artists — but ordinary citizens. With each new headline in USA Today, everyone is being asked, What is a human? A vernacular theology, in a certain sense, is one of unanticipated aspects of this technological culture.

This constant identity crisis can make people depressed and it may be one of the factors driving people toward religion, since religion, especially fundamentalist religion, believe it has definite answers to some of these questions. But religion, especially fundamentalist religion, has no real answers the specific questions of say whether enhancement is humane, whether AI is good, whether we should remain one species or many, and even what precisely it means to be human. Therefore this large scale technological identity crisis is going to be the recurring theme of this century.

I was just reading Paul Davies book, The Cosmic Jackpot, in which he wrestles with some of the biggest questions that cosmologists come up against — these big-scale questions about the origin of the universe, why this universe, why is there anything at all?

These "big" questions were often forbidden in classical scientific thinking as being not really answerable by science. Davies shows that, in fact, these are legitimate scientific questions and that we may be developing a better vocabulary, a better structure for trying to ask those questions and put them into a falsifiable condition. My interest in the semantics of the technium is also to ask a similarly broad and fundamental question. That is, in the grand sweep of the cosmic evolution from the Big Bang outwards, where does the technium or technology fit in? What powers the origin and expansion of the technium? Does it have a direction?

To ask the classic Stephen Jay Gould question, if you rewind the tape on different worlds and different civilizations and you play it back, does technology have a natural history? Is there anything you could say about it that would be true at the class level?

My answer so far is Yes. Technology is not merely a human-derived entity. The roots of technology go all the way back to the Big Bang. It's part of the same line that I call extropic systems that extend back through living systems, self-regulating planets, auto-coalescing star systems and so on. Extropic systems might also be called near-equilibrium sustainable systems. They run in the opposite direction from entropic systems. These are complex, sustainable systems that always teeter on the edge of falling over, but keep going. Over cosmic time, a type will gradually build up more complexity sustained on the edge of collapse. We see extropic systems in galaxy formation, planet formation, life formation, intelligence formation, and I believe, in technology formation.

In this way the technium shares many characteristics with biological life, mind, and other near-equilibrium self-sustaining extropic systems. Technology, therefore, can be understood in a cosmic scale as an outgrowth of the Big Bang. Because we have some clues about what it has in common with these relatives of life, we can begin to dissect and understand it through the lens of extropic systems. I believe when we view the technium in the context of life-like systems, we can make some guesses about its trajectory and how we can use it.

One way to think of the technium is as the 7th kingdom of life. There are roughly six kingdoms of life according to Lynn Margulis and others. As an extropic system that originated from animals, one of the six kingdoms, we can think of the technium as a 7th.

Obviously there are many distinctions between life systems and the technium. One of the differences is that, in general, technological species never go extinct. For instance one of the first technologies in history is manufactured arrow points. Well, there are five thousand flint knappers working in the U.S. today, making arrowheads exactly the same way they have always been made (pressing bone against flint), and these enthusiasts are probably making about a million points a year. You can buy a hand-made antler-handled chert blade knife on eBay, made with basically the same technology of 20,000 years ago, for 50 dollars.

I've been asking people to suggest technologies they thought were extinct and one historian of technology suggested steam-powered automobiles as an obvious dead end. Well actually they're not; people are making brand-new parts for Stanley steam-powered automobiles. You can buy a brand-new valve, or whatever else you need to keep your antique running. If you look globally, I can guarantee that somewhere in the world today, nearly every technology you can imagine is still being used, either as a tool in everyday life or in either a revival sense.

There are a couple of exceptions: we no longer know what one or two historical technologies were. Greek fire is one example of a technology that seems to be lost. But in general, technological species, unlike biological species, don't go extinct. Although that is one distinction, there are otherwise a lot of similarities between the technium and the natural world. We can show evolution through mutations in the technium, and major transitions of change in technological organization. We can see a large scale move, as in life, from the general to the specific. Technology also follows life in a cosmic scale migration towards greater complexity, diversity, and energy density. So we can think of the technium as a 7th kingdom of life. As such the technium tends to be in alignment with the rest of the 6 kingdoms of life. Technology is inherently at home with other life, rather than contrary to it.

One of the concerns about technology is that if you let it go where it wants to go, the technium will eat up the natural system. Out-of-control technology is popularly perceived as a natural adversary to the biological world. There's one level at which that is obviously true.

If we were to record all the ways in which gross technological negligence — clear-cutting of forests, pollution from factories, etc. – destroys the integrity of the biosphere its clear we need to keep the technium in check or we're in dire straits environmentally. But I don't think this destructive tendency is inherent in the technology. The technium wants many of the same things that we do. Clean water, for example. Most industrial processes require clean water. Some high-tech processes require water that's cleaner than drinking water. In this sense the technium doesn't want pollution; it wants the same kind of pristine environment that we want, especially with regards to higher technologies.

As technology has developed and become more sophisticated, it has become more and more closely aligned with environmental practices, just as humans have. In the ‘70s, Paul Ehrlich (The Population Bomb) and others were greatly concerned that as the technium grew, it would consume all the limited resources of the world. But that did not happen. It turned out the technium was capable of producing substitutes faster than the resources would be eliminated. So now, except perhaps for oil, you don't hear the concern about resource elimination because technology has either made resources more abundant or they have been substituted through the development of new technology. Pollution is the same — the solution to pollution in most cases is better technology. All the trajectories for the technium are towards recycling materials including pollutants, energy efficiency, scarcity substitutions, the replacement of mass with information — all of which we would call green technology.

I can imagine the technium and nature being in harmony over the long term with the exception of one area where these two forces don't seem to be in alignment: elimination of species habitat. The technium seems to be insensitive to species elimination. I think this a real problem, but it quickly became apparent that we didn't have a very good understanding of all the species on the earth.

The All Species Inventory, which I co-founded, was our attempt to address this ignorance. We don't know what species there are on earth, and we don't know very much about the ones we do know. We're in that really horrible position where we don't even know how much we don't know. We think we know about 1.7 million species, but even that's uncertain because there's no clean master list that has eliminated all the duplicate, synonyms, and erroneous species we think we have identified.

As far as how many species may be on this planet we don't even a have consensus of the nearest magnitude. Guesses range from 3 to 100 million. The astounding fact is that nowhere else in science is there the same magnitude of ignorance as in our meager knowledge about the organisms on this planet. Trying to guide the technium's interaction with the biosphere is hampered by our vast ignorance. We can't do biology knowing only 5% of the species. It's like trying to do chemistry without knowing all the elements; it's impossible. If we were to discover life on another planet, the first thing we would do is a systematic survey of all the life on that planet. But we've not done it with our home planet, which is a shame.

The idea of doing a planetary inventory of species was slow to catch on among taxonomists because it seemed so grandiose. Taxonomy is a poorly funded science where a $10,000 grant was an occasion to break out the champagne. $10,000 is amount most molecular biology labs budget for glassware. If science had only cataloged 1 million species in 200 years of taxonomy, how could anyone expect to do an additional 10 to 20 million in one or two generations? Done the way Darwin did it, which is how taxonomy was still being done, it was impossible. But done using DNA sequencing, it seems more likely every day. As the technium accumulates the vast genetic knowledge of all species on earth, and as genetic engineering technologies advance, it may be that this wealth of genetic information will become a reason for the technium to care about species survival.

A common criticism of technological progress is that each invention, each supposed technological solution, will produce as many problems as it solves. I actually agree. But I see in each of those "problems" an opportunity. In my ecological framework those problems are niches to be occupied, or to be resolved, by new technology.

The ill consequence is real, but also a new opportunity to invent. But if, in the end, technology is just generating as many problems as it eliminates, then in what sense can we call this progress? At best it's a wash. This is why many technologists call technology "neutral."

Here's where I disagree. I don't think technology is neutral or a wash of good and bad effects. To be sure it does produce both problems and solutions, but the chief effect of technology is that it produces more possibilities. More options. More freedom, essentially. That's really good. That is the reason why people move to cities — for more choices. They leave beautiful Greek islands and hamlets in Cambodia because cities have more choices. They don't move from the farms — where their communities and traditions are very supportive and comforting — because they hate it; they move because they want more choices. The reason we like choices is that they give us more chances to use all of our talents. We have a greater chance of matching our limited abilities with opportunities to maximize them. We put up with all the inevitable problems in new gadgets, soon to be obsolete, because we are eager to try out the possibilities, hoping that we will have a better chance for unleashing who we are.

These opportunities, these freedoms, are a very powerful force. Imagine a great artist like Mozart born before the possibility of a piano, or orchestra — what a loss that would have been. Or if Hitchcock had been born before the technology of film had been invented. Or Van Gogh before cheap oil paints. Undoubtedly those giants would have done their best with whatever they had — perhaps Beethoven on drums, Van Gogh with charcoal. But we honor them in part because in some unfathomable way they were able to realize their true genius by finding a perfect match with their tools — tools that are possibilities and choices manifested.

There are children born today whose technological possibilities have not yet come about. I would argue that, in a certain sense, we have a moral obligation to increase the technology of the world — of the universe — to insure that the genius of every person born will have some way to express its fullness. In the end, this is what the technium wants, too. What the other six kingdoms of life want. What we want. To increase choices. To open up new freedoms. To expand the possible.

The Most Important Op-Ed of the War

2007-08-20T08:04:00.001-07:00

The War As We Saw It
By Buddhika Jayamaha, Wesley D. Smith, Jeremy Roebuck, Omar Mora, Edward Sandmeier, Yance T. Gray and Jeremy A. Murphy
The New York Times

Sunday 19 August 2007

Viewed from Iraq at the tail end of a 15-month deployment, the political debate in Washington is indeed surreal. Counterinsurgency is, by definition, a competition between insurgents and counterinsurgents for the control and support of a population. To believe that Americans, with an occupying force that long ago outlived its reluctant welcome, can win over a recalcitrant local population and win this counterinsurgency is far-fetched. As responsible infantrymen and noncommissioned officers with the 82nd Airborne Division soon heading back home, we are skeptical of recent press coverage portraying the conflict as increasingly manageable and feel it has neglected the mounting civil, political and social unrest we see every day. (Obviously, these are our personal views and should not be seen as official within our chain of command.)

The claim that we are increasingly in control of the battlefields in Iraq is an assessment arrived at through a flawed, American-centered framework. Yes, we are militarily superior, but our successes are offset by failures elsewhere. What soldiers call the "battle space" remains the same, with changes only at the margins. It is crowded with actors who do not fit neatly into boxes: Sunni extremists, Al Qaeda terrorists, Shiite militiamen, criminals and armed tribes. This situation is made more complex by the questionable loyalties and Janus-faced role of the Iraqi police and Iraqi Army, which have been trained and armed at United States taxpayers' expense.

A few nights ago, for example, we witnessed the death of one American soldier and the critical wounding of two others when a lethal armor-piercing explosive was detonated between an Iraqi Army checkpoint and a police one. Local Iraqis readily testified to American investigators that Iraqi police and Army officers escorted the triggermen and helped plant the bomb. These civilians highlighted their own predicament: had they informed the Americans of the bomb before the incident, the Iraqi Army, the police or the local Shiite militia would have killed their families.

As many grunts will tell you, this is a near-routine event. Reports that a majority of Iraqi Army commanders are now reliable partners can be considered only misleading rhetoric. The truth is that battalion commanders, even if well meaning, have little to no influence over the thousands of obstinate men under them, in an incoherent chain of command, who are really loyal only to their militias.

Similarly, Sunnis, who have been underrepresented in the new Iraqi armed forces, now find themselves forming militias, sometimes with our tacit support. Sunnis recognize that the best guarantee they may have against Shiite militias and the Shiite-dominated government is to form their own armed bands. We arm them to aid in our fight against Al Qaeda.

However, while creating proxies is essential in winning a counterinsurgency, it requires that the proxies are loyal to the center that we claim to support. Armed Sunni tribes have indeed become effective surrogates, but the enduring question is where their loyalties would lie in our absence. The Iraqi government finds itself working at cross purposes with us on this issue because it is justifiably fearful that Sunni militias will turn on it should the Americans leave.

In short, we operate in a bewildering context of determined enemies and questionable allies, one where the balance of forces on the ground remains entirely unclear. (In the course of writing this article, this fact became all too clear: one of us, Staff Sergeant Murphy, an Army Ranger and reconnaissance team leader, was shot in the head during a "time-sensitive target acquisition mission" on Aug. 12; he is expected to survive and is being flown to a military hospital in the United States.) While we have the will and the resources to fight in this context, we are effectively hamstrung because realities on the ground require measures we will always refuse - namely, the widespread use of lethal and brutal force.

Given the situation, it is important not to assess security from an American-centered perspective. The ability of, say, American observers to safely walk down the streets of formerly violent towns is not a resounding indicator of security. What matters is the experience of the local citizenry and the future of our counterinsurgency. When we take this view, we see that a vast majority of Iraqis feel increasingly insecure and view us as an occupation force that has failed to produce normalcy after four years and is increasingly unlikely to do so as we continue to arm each warring side.

Coupling our military strategy to an insistence that the Iraqis meet political benchmarks for reconciliation is also unhelpful. The morass in the government has fueled impatience and confusion while providing no semblance of security to average Iraqis. Leaders are far from arriving at a lasting political settlement. This should not be surprising, since a lasting political solution will not be possible while the military situation remains in constant flux.

The Iraqi government is run by the main coalition partners of the Shiite-dominated United Iraqi Alliance, with Kurds as minority members. The Shiite clerical establishment formed the alliance to make sure its people did not succumb to the same mistake as in 1920: rebelling against the occupying Western force (then the British) and losing what they believed was their inherent right to rule Iraq as the majority. The qualified and reluctant welcome we received from the Shiites since the invasion has to be seen in that historical context. They saw in us something useful for the moment.

Now that moment is passing, as the Shiites have achieved what they believe is rightfully theirs. Their next task is to figure out how best to consolidate the gains, because reconciliation without consolidation risks losing it all. Washington's insistence that the Iraqis correct the three gravest mistakes we made - de-Baathification, the dismantling of the Iraqi Army and the creation of a loose federalist system of government - places us at cross purposes with the government we have committed to support.

Political reconciliation in Iraq will occur, but not at our insistence or in ways that meet our benchmarks. It will happen on Iraqi terms when the reality on the battlefield is congruent with that in the political sphere. There will be no magnanimous solutions that please every party the way we expect, and there will be winners and losers. The choice we have left is to decide which side we will take. Trying to please every party in the conflict - as we do now - will only ensure we are hated by all in the long run.

At the same time, the most important front in the counterinsurgency, improving basic social and economic conditions, is the one on which we have failed most miserably. Two million Iraqis are in refugee camps in bordering countries. Close to two million more are internally displaced and now fill many urban slums. Cities lack regular electricity, telephone services and sanitation. "Lucky" Iraqis live in gated communities barricaded with concrete blast walls that provide them with a sense of communal claustrophobia rather than any sense of security we would consider normal.

In a lawless environment where men with guns rule the streets, engaging in the banalities of life has become a death-defying act. Four years into our occupation, we have failed on every promise, while we have substituted Baath Party tyranny with a tyranny of Islamist, militia and criminal violence. When the primary preoccupation of average Iraqis is when and how they are likely to be killed, we can hardly feel smug as we hand out care packages. As an Iraqi man told us a few days ago with deep resignation, "We need security, not free food."

In the end, we need to recognize that our presence may have released Iraqis from the grip of a tyrant, but that it has also robbed them of their self-respect. They will soon realize that the best way to regain dignity is to call us what we are - an army of occupation - and force our withdrawal.

Until that happens, it would be prudent for us to increasingly let Iraqis take center stage in all matters, to come up with a nuanced policy in which we assist them from the margins but let them resolve their differences as they see fit. This suggestion is not meant to be defeatist, but rather to highlight our pursuit of incompatible policies to absurd ends without recognizing the incongruities.

We need not talk about our morale. As committed soldiers, we will see this mission through.

Buddhika Jayamaha is an Army specialist. Wesley D. Smith is a sergeant. Jeremy Roebuck is a sergeant. Omar Mora is a sergeant. Edward Sandmeier is a sergeant. Yance T. Gray is a staff sergeant. Jeremy A. Murphy is a staff sergeant.

Green Cities

2007-08-18T06:03:00.000-07:00

How to Build a Modern City: Think Green
Sophie Mongalvy, AFP (Discovery.com)

Aug. 17, 2007 — Rising sea levels, melting glaciers, floods and hurricanes: global warming means urban planners need to rethink how and where to build cities, water experts warned at a conference in Stockholm this week.

Almost 80 percent of the world's population lives less than 30 miles from a coastline, a jarring fact given that one of the effects of global warming is rising sea levels, according to the Stockholm International Water Institute (SIWI).

"Thermal expansion of the oceans and melting of glaciers and ice-sheets might endanger low-lying coastal cities if adaptation and mitigation measures are not taken now," SIWI said.

"We should really try to insist that national planning include the climate dimension. We should have vulnerability maps and develop action programs," Johan Kuylenstierna, the director of the World Water Week conference said.

Some 2,500 international experts are gathered in the Swedish capital to discuss water issues, with climate change as the main theme.

Correspondent James Williams asks, how can caves offer climate clues?
Get more Discovery News video here.

"Water management is one important tool to deal with climate change. If you manage water well, you also prepare well for climate change," Kuylenstierna said.

He said the world was facing the double-whammy of a rapidly growing population and global warming.

"For example, Bangladesh a hundred years ago had a quarter of its population today. So if you had floods then the effects were smaller ... Now climate change is added to this," he explained.

Flooding in India, Nepal and Bangladesh since June has affected millions of people and claimed 1,900 lives.

According to SIWI, "climate change combined with continuing population growth and expanding urban centres presents a recipe for disaster."

Kuylenstierna suggested one measure would be to "move people from low-lying areas who live close to the rivers, close to the seas."

"These are attractive areas but maybe we have to finally understand we cannot only work against nature," he added.

He welcomed recent announcements by insurance companies in the United States that they would no longer insure homes if they were built in zones considered to be at risk.

Getting people to change their ways is difficult but "money talks", he said.

According to Sunita Narain, the head of the Center for Science and Environment in India and a prominent expert at the Stockholm conference, India is in the midst of a major urbanisation process and is experiencing a construction boom in its cities.

She said urban planners needed to take advantage of the possible impact of climate change to reinvent "new models" for clean, sustainable cities.

"Climate change is going to mean more and more uncertain events, more and more floods. There is a need to plan for the water and where it will go," she said, noting that until now urban planning has focused primarily on buildings and not on water.

"We must make our cities more resilient to climate change," she said, stressing the need to implement ways of reducing carbon dioxide emissions to combat global warming, for example in the transportation sector.

Arendt in Caracas

2007-08-18T05:58:00.000-07:00

Reading Arendt in Caracas

by ELISABETH YOUNG-BRUEHL

[posted online on at TheNation.com August 17, 2007]

The year 2006 was the centenary of Hannah Arendt's birth. Conferences and colloquia marked it all around the Western world, from Berlin to Belgrade, from Paris to Prague. Radio and TV documentaries aired on every continent, and new editions and translations of Arendt's books poured into bookstores as her reputation globalized. Clearly, three decades after her death in 1975, Arendt's writings are as compelling as they were to student rebels in America and Western Europe in the late 1960s and to the velvet revolutionaries of Eastern Europe in the 1980s.

As Arendt's biographer, I received many invitations to speak and write about her. But an especially intriguing one came at the year's end, introducing a study group I had never heard of before: the Hannah Arendt Observatorio, based in Caracas, Venezuela. From the home of the Bolivarian Revolution, launched in 1998 by Hugo Chávez, came a plea: Will you come to Caracas for a week and talk with us about Hannah Arendt's theories of totalitarianism and revolution? Chávez was just then, in December 2006, winning his second term as president by a decisive majority--some 60 percent of the electorate.

On June 10 of this year, I set out for Caracas, having educated myself as best I could about the enormously complex political situation there. Everything contemporary that I (a Spanishless reader) found in NYU's library or on the Internet had a point of view, Chavista or anti-Chavista (although there was thoughtful political analysis from, for example, Moises Naim, the Venezuelan- born editor of Foreign Policy). The polarization is as intense in the American media as it is in the Venezuelan, with the New York Times consistently criticizing Chávez editorially-- even applauding the 2002 coup attempt against him--while many in the left blogsphere and on the news site venezuelanalysis.com hail him.

In Venezuela and in America, the war of words had ratcheted up the week before I left. Demonstrations had broken out in Caracas to protest Chávez's decision not to renew the license of an anti-Chavista TV station (RCTV) where, as at all private TV stations in Venezuela, in between the soap operas and the talk-show fare, the coup against him had been promoted and his downfall devoutly desired ever since. But for the first time, the protest marches were organized not by disaffected middle-class opposition party supporters but by students from a dozen public and private universities, including the three--Central University, Catholic University and Simon Bolivar University--where I had been asked to speak. After nearly a decade of little action by students, a movement is emerging.

There are some 200,000 university students in Caracas, including those, mostly pro-Chavista, who attend the eight universities Chávez has created (with plans for more than twenty more). The majority of the students at Central, Catholic and Simon Bolivar are middle class and white--like the American and European students whose 1960s and '80s histories they know--but both the private and public universities have been opening more and more (as the government guarantees financial support and calls for an "open admissions" policy, without qualifying exams). At universities outside Caracas, like the University of the Andes, student organizing in recent years, before the RCTV issue, centered on questions of university governance and how students could have a voice in their own education. I began to think, over the week of my visit, that this movement might have the possibility of reminding the warring elders that a country in which the huge gulf between rich and poor shrinks is in the interests of all its citizens. The question is how this social justice goal should be achieved, and that, as Hannah Arendt always argued, is a political question, a question for political actors--like the students themselves.

Because the war of words and images is so intense, it was obvious to me from the moment I arrived that I was going to have a very Venezuelan experience: I was going to be caught in many crossfires of opinions no matter which way I turned, and I was going to end up watching my every word get swept up in the vortex of a nationwide general anxiety disorder. Everyone I met wanted me to write something about my impressions, "for the outside world" they all said, sounding like asylum inmates appealing to a visiting psychiatrist.

I did want to write this piece, but I had to remind myself (and now you, my reader) where my short-term observation post was located--that is, in and around predominantly anti-Chavista groups. My Observatorio hosts were all anti-Chavista to one degree or another, ranging from disillusioned former Chavistas to academics with ties to European center-left groups like the British Euston Manifesto signers. My association with the Observatorio was complicated by the fact that they had accepted an offer from the US Embassy's speaker's program to fund my visit. Although no pressure was put on me, the Embassy, of course, would have been glad to hear the word "totalitarian" applied to Chávez. Some of the anti-Chavista Observatorio members would also have been glad for Chávez to be called totalitarian, but they would not have wanted to be thought pro- American or in the Embassy's embrace, even though they are critics of the blanket anti-Americanism that is key to Chávez's rhetoric.

The Hannah Arendt Observatorio was formed in 2005, triggered into existence when Chávez reached out to embrace the president of Iran, Mahmoud Ahmadinejad, as his revolutionary brother and then used the term "Christ-killers" in a speech. (As is usual in Venezuela, a debate followed the speech about whether Chávez had used the term for Jews or used it, ironically, for enemies among the oil-enriched Venezuelan elites who would like to kill him; and it should be noted that Chávez did not go on to imitate his revolutionary brother's habit of making undebatably anti-Semitic statements and indulging in Holocaust denial.) The Observatorio was led by Heinz Sonntag, an emeritus professor of sociology, German-born and educated, thus very sensitive to "the Jewish question." He had been teaching in Caracas since the late 1960s, when he had found the Venezuelan universities quite comfortably Marxist. In the 1950s, while Venezuela was stagnating under a military dictator, Gen. Marcos Perez Jimenez, the universities had become the seat of opposition, and they remained so even after Perez Jimenez was displaced in 1958 by a civilian democratic regime that inaugurated a forty-year period of relative stability and prosperity--for some. The public Central University, founded in 1721, where I gave my first talk, had opened its new campus as the welcome democracy began: an architecturally unified park studded with Henry Moore and Jean Arp sculptures, graced with a stained-glass mural made by Ferdinand Léger and an aula magna hung with acoustic panels from the atelier of Alexander Calder. Caracas was going to rival the postwar reconstructed European cities.

By the time the younger members of the Hannah Arendt Observatorio, now in their 40s, were students in the impressive autonomous universities like Central, the democratic regime was growing more and more rigid, unresponsive and oligarchic. It had come into being with a pact--called the Pacto de Punto Fijo--in which the three main democratic parties formed an alliance excluding the rest, among them the Communists who had also opposed Perez Jimenez. I noted in my lecture that they had made a grand coalition not unlike the one that had emerged in Germany during the 1960s, which Arendt had sharply labeled a "two-party dictatorship" and faulted for its tendency to rely on old friends of Hitler. Venezuela's Punto Fijo government eroded not just the political sphere, as the German one did, but the economic sphere as well. Rising oil prices brought a vast increase in petroleum wealth for the Venezuelan elites, with the corollary result that vast barrios sprang up precariously on the steep hillsides of Caracas, where millions of people had no running water, little in the way of healthcare and limited access to education. American corporations from the Eisenhower era forward bought billions in cheap oil from the Venezuelan plantation instead of developing America's own energy sources, and to this day, more than half of Venezuela's total exports go to the States (and about a third of its imports come from the States).

In the late 1960s, I told the students at Central, Arendt had identified coalition party oligarchies as the key problem of the Western European and American nation-states; political participation was stifled rather than erased, as it had been in the totalitarian regimes of Nazi Germany and the Soviet Union under Stalin, which turned their bureaucrats into organizers of mass murder. In America, she had lamented, the Democrats and Republicans had converged on the political center and made common cause to support the illegal Vietnam War (a pattern they repeated in 2003 with Iraq). Protest did finally arise from outside the party system, energized by the student movement, but Arendt had warned in Crises of the Republic that the sclerotic party system (and associated declining civil service) would be hard to reform, as it was reinforced by America's dedication to a "permanent war economy" and to a habit of mistaking violence for power--that is, of resorting to military force to solve political problems. She had been a consistent critic of the use of the American military and CIA to establish spheres of influence--including, crucially, in Latin America--during the cold war.

In Venezuela popular (not student) protest against the political sclerosis and economic injustice of Puntofijismo did not come until 1989, the year the Berlin wall toppled. The trigger was a decision made by then-President Carlos Andres Perez, who, having spent the regime into dangerous inflation, called for austerity measures that fell most heavily on the poor, who were a large portion of the fast- expanding population. The barrios of Caracas exploded. People who had almost nothing rejected, as it were, taxation without representation, particularly when it came from a government that had grown rich and corrupt on the nationalization of the major oil company (known by its initials, PDVSA).

In 1989 the rioting, called the Caracazo, left several hundred people dead and set the stage for new political actors to emerge. What Arendt called a "revolutionary space" had been opened, but at first little happened (and the campuses were quiet). Hugo Chávez, then a lieutenant colonel in the military, took the opportunity to prepare himself for future leadership by enrolling for a graduate degree in political science, choosing as his mentor a future member of the Hannah Arendt Observatorio, Friedrich Welsch, another emigre from Germany, who remembered the earnest young man's first day of class well: "He came in uniform, with his pistol, and I told him either the pistol is left outside the door or he will be outside himself, along with the pistol. He told me he is an officer and cannot be without his pistol. But then, when I did not give in, he left, gave the pistol to his aide-de-camp and returned. After that, he was very attentive, a good student, in the top tenth of his classes." He wanted to write a thesis on what political scientists call "transitology," taking as his case study Spain in its transition away from Franco's Fascist government. But when the moment seemed right to attempt a coup, the thesis was put aside. "I obviously did not get him converted to democratic socialism or even to democratic methods," Welsch told me with his characteristic ironic smile, "although he read a lot of democratic theorists--not, then, Hannah Arendt--and he was not, at the time, so interested in the Cuban model."

Under Chávez's leadership, a group of military officers made their coup attempt in February 1992, unsuccessfully. Another group, which some say was directed by Chávez from his prison cell, followed suit in November of that year, again unsuccessfully. The Punto Fijo government finally began to collapse from within when the Congress impeached Andres Perez on corruption charges--finally a triumph for democracy. Chávez returned to the scene as a presidential candidate and won handily in 1998. His calls for constitutional reform, for rooting out corruption and for empowerment of the people, reverberated through the barrios and brought many thousands into the streets to cheer him on. The Constitution his government adopted in 1999 proclaimed, in heady, hypertheoretical language, "participatory and protagonic democracy."

Some in the left-leaning universities voted for Chávez; many more were skeptical. Among the skeptics was Teodoro Petkoff, an economist and founder of the Movement Toward Socialism (MAS), to which most of the Hannah Arendt Observatorio members belonged in the 1990s. Petkoff had started off his political life under the Perez Jimenez military dictatorship, when he was a guerrilla fighter and did a few stints in prison. Those years made him permanently suspicious of military men in politics, even ones proclaiming participatory democracy, not state socialism. "They bring along their habit of hierarchy, of not listening, their love to give orders to followers who do not question," Petkoff told me when I met him after my Catholic University talk, which had taken place in a hall that bore a wonderful inscription above its door: "Use your ears here, that's why it's called an auditorium."

Listening to Petkoff's assessment, I kept remembering the handmade signs that the Catholic University students had put up all over their campus, a sampler of advice from luminaries as diverse as Gandhi and Nietzsche, Locke and Miguel de Unamuno. In the corridor outside the philosophy department, groups of students studied a series of exhibition panels telling the story of the White Rose, a student resistance group that had perished fighting the Nazis. This is a generation hungry for examples; its published statements about freedom of speech and participatory democracy quote the Port Huron Statement, the SDS manifesto of 1962.

"What you have said about Hannah Arendt's theory on how totalitarianism depends on the secret police and turns bureaucrats into murderers," Petkoff remarked as I questioned him about what the emergent student movement signals, "confirms me in my judgment that this regime is not, as you say, concentration camp totalitarianism of the twentieth-century sort, but I do think it is totalitarianism for the twenty-first century. I call it 'totalitarianism-lite.'" He went on to focus his concern on how the regime is taking over all areas of civil society, limiting dissent, sponsoring doctrinaire bureaucrats, many of them military officers, and now threatening the autonomy of the universities.

Petkoff was one of the few anti-Chavistas I met who was able to be witty about the man he kept calling Comandante, because Petkoff is one of the few who has publicly proclaimed a contrasting vision for Venezuelan "socialism in the twenty-first century." In the 2006 election campaign, he ran for president as a democratic socialist, someone whose policy preferences would make sense to people familiar with Poland's Solidarity, except he knows that Venezuela has a poverty problem far more extreme than anything even the Eastern European social democrats have to face and that Venezuela has a legacy of being in an imperialist orbit that did not come to a crashing end as the Warsaw Pact did.

The students I met at the next stop on my university tour--which was at the beautiful Simon Bolivar University, a botanical oasis in the urban sprawl that is Caracas--did not seem very aware of the programs favored by Petkoff or by the opposition candidate, Manuel Rosales, to whom Petkoff gave his support in order not to split the anti- Chávez vote in 2006. The vice-rector of Simon Bolivar, a chemical engineer, explained to me that Rosales had suggested, for example, issuing low-income Venezuelans a ration card--called a "blackie," after the color of unrefined oil--that they could use only for food, healthcare and education rather than making direct money grants to them, as Chávez does. The idea was to redistribute petro-wealth through a system more rational, more immune to corruption and more likely to support--in combination with a microcredit program--the poor working their way out of poverty. But this proposal, like the opposition candidate himself, a man unfortunately associated with the 2002 coup against Chávez, which had hardly been a great moment for democracy, lacked the charisma of El Presidente and his munificence with government funds. "The opposition," I had been told by one of the idealistic student leaders--a young woman who would have cheered the heart of Dorothy Day--"is like you have in America: not strong, not taking risks, having too much money. The opposition here is not understanding that the poor people are angry at the people with money, and Chávez speaks this anger for them." She has no trouble with Chávez's ends, only with his means, which she described to me as "sacrificing our democracy to his socialism." We had quite an intense conversation about why Hannah Arendt had distrusted revolutions that try to solve problems of social injustice without first achieving a stable, constitutional republic. "But you have to tell," she challenged me, "what is the guarantee that people in a constitutional republic will be responsible to the poor?"

This student's good question came from her experience as the first child in her family to get to a university. But my impression was that her concern for social justice and her critique of the anti- Chavista opposition parties were widely shared; she had no party affiliation, and neither did any of the other students I met. They do not speak for the opposition but against media control and against any threat to the autonomy of the universities.

While the anti-Chavista students I met are not identified with party goals, most of the anti-Chavista adults I talked with are, and they are informed by an experience of personal security during the Punto Fijo regime followed by fear of the barbarians at the gates. I was told time and again that Chávez has his shirts and suits-- many, many suits ("like Imelda Marcos's shoes")--tailored on Savile Row, that he collects expensive watches, that his family has enriched itself with money and thousands upon thousands of hectares of land, that he has a slush fund for patronage purposes, that he is nepotistic (his brother Adan is the minister of education, his father a state governor, two more bothers hold high-ranking government positions). In short, I was told, Chávez is no different from the standard Latin American caudillo. Many such ad hominem commentaries about Chávez were offered to me, but I was also assured that Venezuelans do not gossip in the American manner: "We do not care whether he has girlfriends or boyfriends or no friends, like you do when you make politicians into celebrities; but we care very much if he is a hypocrite or if he is crazy." These kinds of criticisms of American society--true as they may be--struck me as displacements, justifications for focusing on Chávez as a personality and not on the state of the state or the disorder of the opposition. None of the students I met go in for these kinds of struggles to control images of Chávez past or present or to write or rewrite history. Their focus is on right now, and the 2002 coup attempt against Chávez is something that happened when they were 15.

Some of the students did think Chávez is a bit crazy, however-- but like a fox. The students, of a generation ever alert to "performativity," see the enormous appeal of the story Chávez tells, a pull-yourself-up-by-the-bootstraps tale of being a child of poverty who was boarded out to his grandmother (the sainted Mama Rosinas) and then worked his way up through high school (playing an excellent game of baseball on the way) and into the military, suffering depressing setbacks along the way (like his failed coup and the coup attempt against him) but persevering while helping others, like himself, to rise. He is a mirror for the wretched of the earth, and they are joyous when he succeeds at being the vulnerable ideal he projects. This is not plain-old populist machismo; it is vulnerable, folksy, charming machismo. When Chávez returned to Venezuela after one of his many trips to Cuba--where he seems to go to consult his mentor, Fidel Castro, whenever he has suffered a setback, as he did when the students demonstrated so effectively against him--he portrayed Fidel, too, as both invincible and vulnerable. I read in the Daily Journal, a pro-Chávez English-language paper, that he had announced: "Fidel is recovering well--he could not go out on the diamond and throw his old fastball, but he is back in the game."

After his 1992 coup attempt failed, Chávez went on TV for a moment that became legendary among his followers--a moment of vulnerability and strength. He made a concession speech, but he inserted into it two words of defiance: "for now" the coup is finished, he said, before he went off to jail. Friedrich Welsch told me that Chávez had thought about trying to write his thesis in prison, but when that plan proved impossible he went on an eclectic reading program that added to his theoretical vocabulary a lot of words of wisdom from the classic socialist and Communist tracts and prison memoirs. To this day, fifteen years later, Chávez quotes a library of brother revolutionaries, from his number-one historical hero, Simon Bolivar, to his number-one contemporary hero, Fidel Castro, along with an odd assortment of American and European leftists. On the day of my arrival at Simon Bolivar University, El Presidente discoursed on TV for an interminable half-hour on Antonio Gramsci before turning to a mixture of grandiose self-reference and policy wonkese.

The hodgepodge of quotations that Chávez disseminates in his regular addresses (which all the networks are obliged by law to air) and his weekly television appearance--a call-in show known as Alo, Presidente!--is symptomatic of the hodgepodge of his policies. His is a type of revolution not anticipated in Hannah Arendt's 1963 book On Revolution, I suggested to my audience at the Simon Bolivar University, one of the most active outposts of the emergent student movement. (The campus has huge parking lots full of Minis with their back windows painted playfully "I am free speech!" and "I am the spirit of liberty!") When Chávez and his followers won the 1998 election, they produced a truly remarkable American-style Constitution based on checks and balances, which calls for five branches of government, one of which is dedicated to oversight of the government through an ombudsman and a general prosecutor. But the Constitution did not put as effective a check on executive power as it might have, and almost as soon as it was printed in little portable editions to be distributed free to millions of Venezuelans, who took to carrying it at all times and quoting it, Chávez began to obscure it with decrees and laws that are never challenged as unconstitutional by the Supreme Court, which was itself unconstitutionally expanded so that it could be packed with his appointees. Not satisfied to control the court, in 2000 Chávez got the unicameral Assembly to, in effect, erase its power by granting him a year of nonconsultative decision-making (in European history this kind of antidemocratic achievement is known as an enabling law, or Ermachtigungsgesetz). Chávez's political critics in the universities are alarmed that the Bolivarian Constitution is being ignored or undermined, and the constitutional lawyer who did most of the drafting has turned anti-Chavista.

This seems to be a type of revolution that progresses--or actually regresses--by two main means. First, the laws of the land change constantly, so that no one knows what the law is--you have to tune in to the president's briefings for news. The most serious changes are the decrees challenging the Constitution itself, which have altered the legislative, judiciary, executive and citizens-support branches, filling up the government with Chavistas. This is a process that could end in one-party dictatorship, because Chávez is now insisting that all the Chavista parties combine into one, a grand coalition like the ones Arendt warned about, which will be stifling even for his own followers--a potentially disastrous blocking of new life in the revolution itself. He has proposed a constitutional amendment that would allow him to run for election in 2012, bypassing a previously established term limit.

Along with this regression from the political ideal--the Constitution--goes the possibility that economic policies, formulated by the government, will circumscribe political action by the citizens, controlling them not with overt or covert violence, as happens in most revolutions that start rigidifying, but with money. This is not to say that the regime avoids violence--the first big student demonstration in May was met with tear gas and plastic bullets, very brutally. The vice-rector of Simon Bolivar University described to me in horrified detail how one of her students had been shot at close range: A policeman put his gun right to the downed student's hand and then to his leg so that both were shattered from within by plastic bullets designed to be used at a distance. Arms importation is booming, and there are huge numbers of small arms in militia hands (and, of course, this means that many weapons make their way into the growing criminal arena, where thefts and homicides are on the rise). But on a day-to-day basis, the danger is more that the Bolivarian Revolution will operate increasingly like a perverse bank; it is, like Iran's, what might be called a Resources Revolution, one keyed to the world-historical moment in which those who control natural resources can spend independently of the wealthy elites they have overthrown. Chávez, the petro-revolutionary, does not have to pay any attention to people who grew wealthy--or even just got technically and professionally educated--under the Punto Fijo regime.

Much of the money has gone into the creation of a kind of alternative society, and more controversy surrounds this development than any other, making it the hardest dimension of the revolution for an outsider to assess. The government directly funds hundreds of so- called misiones in communities. The missions do provide employment and bring food (delivered in military trucks), healthcare (aided by Cuban doctors) and education directly to the people, which is surely a good thing; but they are not like the revolutionary councils that have sprung up, Arendt noted, in all revolutions, constituting the people's forums for ongoing political participation (until they were, time and again, crushed by parties aspiring to total control). Despite a lot of rhetoric about participatory democracy, the missions are not political formations that could reform local, city and provincial governments, making them more responsive to the grassroots, and they have alienated rather than inspired the country's labor unions because they are run and firmly controlled from the center, often quite literally from Chávez's office. No totalitarian military and secret police bureaucracy has been built up in Venezuela, but a controlled service sector has, and a rerun of centralized state socialism will ensue unless the political problem is grasped by the Chavistas, by the anti- Chavistas or, more likely, by the students, who are grassroots political actors and not caught up in haggling about whether the missions have, in statistical terms, benefited the poor or not, at what cost and how efficiently or inefficiently.

Several university economists told me that oil production is now declining and the government is moving into a period of deficit spending--with the consequent inflation. PDVSA has continued to generate sufficient wealth for Chávez to hope to pay down Venezuela's debts, seeking to free it from the "neoliberal imperialism" of the United States and the World Bank and International Monetary Fund. He has the money to set up trade agreements with Latin American neighbors, without the Free Trade Area of the Americas. All of this is undoubtedly good (and appreciated by the neighbors who share the vision of a more independent Latin America), but it raises questions about whether and how the economic alliances are going to influence the political alliances among equals that will be needed if some form of Latin American Union is ever to be born.

The students with whom I talked about Arendt's praise in On Violence for the American and European student movements of the 1960s--and her staunch critique of the worship of economic solutions and of the violence that marred the movement--were very interested in her views on how a protest movement could become a movement for lasting change. I portrayed Arendt as an advocate of genuine power- creating participatory democracy, which she thought fostered a kind of immunity to violence and to the confusion of power and violence, and this struck a chord. The students go out to demonstrate in black T-shirts with white handprints front and back, and they paint their palms white so they can hold them up to the police and the military, signifying "don't attack us, we're not attacking you." (Chávez certainly gets this, as he has among his aides a professional semiologist!) I met a young woman, an art student making her political debut as a T-shirt designer, who told me, tearfully, that she is so "hurt in my heart" because Chávez says the students are spoiled rich white kids who are "puppets of imperialism." "What do I do? I do not want my parents to think I cannot act for myself! And we want the Chavistas to believe us, to unite with us--because we want to help them, too. We are all socialists."

Chávez does indeed want to discredit and control the students-- and their universities--lest they erode his popular base, for many of the nation's TV watchers agree with the students that the government should not control the media or make assaults on free speech. Many want a constructive revolution, not an opposition-bashing one or one designed to perpetuate class warfare. Some polls taken in recent weeks show Chávez's approval ratings declining slightly, reflecting the widespread appreciation of the student's protests. But El Presidente has responded by announcing on TV--Chávez does not disguise his intentions--that he is going to "neutralize" the three main sources of opposition to the Bolivarian Revolution in Venezuela: the media, the church and the schools and universities. Closing down RCTV was step one. Undoing longstanding programs in the very secular schools that allow a limited amount of religious education for those parents who want it for their children will be step two. And step three will be to continue asserting control over school curriculums (where military instruction is mandatory) and taking away the autonomy of the universities that still have it. As Teodoro Petkoff notes in his daily column for the newspaper Tal Cual, there is a general attack on independent social institutions, including (and this will be very unpopular) the sports federation sponsoring the Americas Cup soccer matches, where the students continued their protest in very low-key, nondisruptive forms.

I asked Dr. Benjamin Scharifker, the distinguished chemist who is now rector of Simon Bolivar University, a calm and judicious man, what he intended to do to protect the students and the autonomy of the universities. He told me that he sent university lawyers to help the students who were arrested in the early June demonstrations, that he protested the violence used against his students, that he met with the students to discuss their plans and support their nonviolent tactics. He is regularly convening with the other autonomous university rectors to make an alliance and issue statements. I asked him if he thought the students were being manipulated by any nonstudent groups, as charged by Chávez, who speaks of a "soft coup." Scharifker laughed: "It may be that the opposition parties in Venezuela are inefficient and disorganized, but our students--we train the future petroleum engineers as well as the future philosophers here--are completely practical. They want a country that runs well, for all the people, and that encourages all the people to participate; it is that simple."

His description accorded completely with my impression when, after my lecture at his university, a political science graduate student came up to me and said in slow, careful English what he had heard and what he thought of it: "You tell why Hannah Arendt admires the American Constitution in her book On Revolution, except she worries a lot about what happens between elections, when the people are letting their representatives look after things for them. Then you say later she came to worry even more about the executive branch becoming too powerful, not checked enough by those representatives. But I think that in Venezuela you have to worry even more stronger than she did because you have a president who wants to kill the Constitution that created him!" I assured him that many people in America were worrying even more stronger than Hannah Arendt did about the American President being an autocrat but that it was the task of students everywhere to speak and act freely, as they do naturally, because, in her words, "they are new beginnings."

The Tough Oil Era

2007-08-17T10:16:00.001-07:00

Entering the Tough Oil Era
By Michael T. Klare
TomDispatch.com

Thursday 16 August 2007

The new energy pessimism.

When "peak oil" theory was first widely publicized in such path breaking books as Kenneth Deffeyes' Hubbert's Peak (2001), Richard Heinberg's The Party's Over (2002), David Goodstein's Out of Gas (2004), and Paul Robert's The End of Oil (2004), energy industry officials and their government associates largely ridiculed the notion. An imminent peak - and subsequent decline - in global petroleum output was derided as crackpot science with little geological foundation. "Based on [our] analysis," the U.S. Department of Energy confidently asserted in 2004, "[we] would expect conventional oil to peak closer to the middle than to the beginning of the 21st century."

Recently, however, a spate of high-level government and industry reports have begun to suggest that the original peak-oil theorists were far closer to the grim reality of global-oil availability than industry analysts were willing to admit. Industry optimism regarding long-term energy-supply prospects, these official reports indicate, has now given way to a deep-seated pessimism, even in the biggest of Big Oil corporate headquarters.

The change in outlook is perhaps best suggested by a July 27 article in the Wall Street Journal headlined, "Oil Profits Show Sign of Aging." Although reporting staggering second-quarter profits for oil giants Exxon Mobil and Royal Dutch Shell - $10.3 billion for the former, $8.7 billion for the latter - the Journal sadly noted that investors are bracing for disappointing results in future quarters as the cost of new production rises and output at older fields declines. "All the oil companies are struggling to grow production," explained Peter Hitchens, an analyst at the Teather and Greenwood brokerage house. "[Yet] it's becoming more and more difficult to bring projects in on time and on budget."

To appreciate the nature of Big Oil's dilemma, peak-oil theory must be briefly revisited. As originally formulated by petroleum geologist M. King Hubbert in the 1950s, the concept holds that worldwide oil production will rise until approximately half of the world's original petroleum inheritance has been exhausted; once this point is reached, daily output will hit a peak and begin an irreversible decline. Hubbert's successors, including professor emeritus Kenneth Deffeyes of Princeton, contend that we have now consumed just about half the original supply and so are at, or very near, the peak-production moment predicted by Hubbert.

Since the concept burst into public consciousness several years ago, its proponents and critics have largely argued over whether or not we have reached maximum worldwide petroleum output. In a way, this is a moot argument, because the numbers involved in conventional oil output have increasingly been obscured by oil derived from "unconventional" sources - deep-offshore fields, tar sands, and natural-gas liquids, for example - that are being blended into petroleum feedstocks used to make gasoline and other fuels. In recent years, this has made the calculation of petroleum supplies ever more complicated. As a result, it may be years more before we can be certain of the exact timing of the global peak-oil moment.

On Tap: The Tough-Oil Era

There is, however, a second aspect to peak-oil theory, which is no less relevant when it comes to the global-supply picture - one that is far easier to detect and assess today. Peak-oil theorists have long contended that the first half of the world's oil to be extracted and consumed will be the easy half. They are referring, of course, to the oil that's found on shore or near to shore; oil close to the surface and concentrated in large reservoirs; oil produced in friendly, safe, and welcoming places.

The other half - what (if they are right) is left of the world's petroleum supply - is the tough oil. They mean oil that's buried far offshore or deep underground; oil scattered in small, hard-to-find reservoirs; oil that must be obtained from unfriendly, politically dangerous, or hazardous places. An oil investor's eye-view of our energy planet today quickly reveals that we already seem to be entering the tough-oil era. This explains the growing pessimism among industry analysts as well as certain changes in behavior in the energy marketplace.

In but one sign of the new reality, the price of benchmark U.S. light, sweet crude oil for next-month delivery soared to new highs on July 31, topping the previous record for intraday trading of $77.03 per barrel set in July 2006. Some observers are predicting that a price of $80 per barrel is just around the corner; while John Kildruff, a perfectly sober analyst at futures broker Man Financial, told Bloomberg.com, "We're only a headline of significance away from $100 oil." New disruptions in Nigerian or Iraqi supplies, or a U.S. military strike against Iran, he explained, could trigger such a price increase in the energy equivalent of a nano-second.

A signal of another sort was provided by the government of Kazakhstan in oil-rich Central Asia on August 7. It warned the private operators of the giant offshore Kashagan oil project - in the Kazakh sector of the Caspian Sea - to cut costs and speed the onset of production or face a possible government takeover. In an interview, Prime Minister Karim Masimov said threateningly: "We are very disappointed with the execution of this project. If the operator can't resolve these problems, then we don't exclude their possible replacement."

Kashagan, it must be borne in mind, is not just any oil project: it is the largest field to be developed anywhere in the world since the discovery of Alaska's Prudhoe Bay some 40 years ago. With estimated oil reserves of 9-13 billion barrels, it is crucial to the hopes of its principal developers - Exxon, ConocoPhillips, Shell, Total (of France), and Eni (of Italy) - to increase their output in the years ahead. Consistent with the "tough oil" aspect of peak-oil theory, Kashagan is, however, proving dauntingly difficult to turn into a successful font of petroleum. The oil reservoir itself is buried beneath high-pressure strata of gas, making its extraction exceedingly tricky, and it contains abnormally high levels of deadly hydrogen sulfide; moreover, the entire field is located in a shallow area of the Caspian Sea that freezes over for five months of the year and is the breeding ground for rare seals and beluga sturgeon.

As a result of these and other problems, the Kashagan operating consortium has seen the price-tag for launching the project nearly double - from $10 billion to $19 billion - and has postponed the onset of initial production from 2005 to 2010, infuriating the Kazakh government, which had hoped to be earning billions of dollars in taxes and royalties by now.

A Demanding World

And then there are those reports from high-level agencies and organizations on the global energy picture, all coming to the same basic conclusion: Whether or not the peak in world oil output is at hand, the future of the global oil supply in a world of endlessly growing demand appears grim.

The first of these recent warnings, entitled the "Medium-Term Oil Market Report," was released on July 8 by the International Energy Agency (IEA), an arm of the Organization for Economic Cooperation and Development (OECD), the club of major industrial powers. Although filled with statistics and technical analyses, the report, assessing the global oil supply-and-demand equation through 2012, seemed to leak anxiety and came to a distinctly worrisome conclusion: Because world oil demand is likely to keep rising at a rapid tempo and the development of new oil fields is not expected to keep pace, significant shortfalls are likely to emerge within the next five years.

The IEA report predicts that world economic activity will grow by an average of 4.5% per year during this period - driven largely by unbridled growth in China, India, and other Asian dynamos. Global oil demand will rise, it predicts, by about 2.2% per year, pushing world oil consumption from an estimated 86.1 million barrels per day in 2007 to 95.8 million barrels by 2012. With luck and substantial new investment, the global oil industry may be able to increase output sufficiently to satisfy this higher level of demand - but, if so, just barely. Beyond 2012, the production outlook appears far grimmer. And keep in mind, this is the best-case scenario.

Underlying the report's conclusions are a number of specific fears. Despite rising fuel prices, neither the mature consumers of the OECD countries, nor newly affluent consumers in the developing world are likely to significantly curb their appetite for petroleum. "Demand is growing, and as people become accustomed to higher prices, they are starting to return to their previous trends of high consumption," was the way Lawrence Eagles, an oil expert at the IEA, summed the situation up. This is clearly evident in the United States, where record-high gasoline prices have not stopped drivers from filling up their tanks and driving record distances.

In addition, oil output in the United States and most other non-members of the Organization of Petroleum-Exporting Countries (OPEC) has peaked, or is about to do so, which means that the net contribution of non-OPEC suppliers will only diminish between now and 2012. That, in turn, means that the burden of providing the required additional oil will have to fall on the OPEC countries, most of which are located in unstable areas of the Middle East and Africa.

The numbers are actually staggering. Just to satisfy a demand for an extra 10 million or so barrels per day between now and 2012, two million barrels per day in new oil would have to be added to global stocks yearly. But even this calculation is misleading, as Eagles of the IEA made clear. In fact, the world would initially need "more than 3 million barrels per day of new oil each year [just] to offset the falling production in the mature fields outside of OPEC" - and that's before you even get near that additional two million barrels.

In other words, what's actually needed is five million barrels of new oil each year, a truly daunting challenge since almost all of this oil will have to be found in Iran, Iraq, Kuwait, Saudi Arabia, Algeria, Angola, Libya, Nigeria, Venezuela, and one or two other countries. These are not places that exactly inspire investor confidence of a sort that could attract the many billions of dollars needed to ramp up production enough to satisfy global requirements.

Read between the lines and one quickly perceives a worst-case scenario in which the necessary investment is not forthcoming; OPEC production does not grow by five million barrels per day year after year; ethanol and other substitute-fuel production, along with alternate fuels of various sorts, do not grow fast enough to fill the gap; and, in the not-too-distant future, a substantial shortage of oil leads to a global economic meltdown.

The Missing Trillions

A very similar prognosis emerges from a careful reading of "Facing the Hard Truths About Energy," the second major report to be released in July. Submitted to the U.S. Department of Energy by the National Petroleum Council (NPC), an oil-industrial association, this report encapsulated the view of both industry officials and academic analysts. It was widely praised for providing a "balanced" approach to the energy dilemma. It called for both increased fuel-efficiency standards for vehicles and increased oil and gas drilling on federal lands. Contributing to the buzz around its release was the identity of the report's principal sponsor, former Exxon CEO Lee Raymond. Having previously expressed skepticism about global warming, he now embraced the report's call for the taking of significant steps to curb carbon-dioxide emissions.

Like the IEA report, the NPC study does claim that - with the perfect mix of policies and an adequate level of investment - the energy industry would be capable of satisfying oil and gas demand for some years to come. "Fortunately, the world is not running out of energy resources," the report bravely asserts. Read deep into the report, though, and these optimistic words begin to dissolve as its emphasis switches to the growing difficulties (and costs) of extracting oil and gas from less-than-favorable locations and the geopolitical risks associated with a growing global reliance on potentially hostile, unstable suppliers.

Again, the numbers involved are staggering. According to the NPC, an estimated $20 trillion in new investment (that's trillion, not billion) will be needed between now and 2030 to ensure sufficient energy for anticipated demand. This works out to "$3,000 per person alive today" in a world in which a good half of humanity earns substantially less than that each year.

These funds, which can only come from those of us in the wealthier countries, will be needed, the council notes, in "building new, multi-billion-dollar oil platforms in water thousands of feet deep, laying pipelines in difficult terrain and across country borders, expanding refineries, constructing vessels and terminals to ship and store liquefied natural gas, building railroads to transport coal and biomass, and stringing new high-voltage transmission lines from remote wind farms." Adding to the magnitude of this challenge, "future projects are likely to be more complex and remote, resulting in higher costs per unit of energy produced." Again, think tough oil.

The report then notes the obvious: "A stable and attractive investment climate will be necessary to attract adequate capital for evolution and expansion of the energy infrastructure." And this is where any astute observer should begin to get truly alarmed; for, as the study itself notes, no such climate can be expected. As the center of gravity of world oil production shifts decisively to OPEC suppliers and to state-centric energy producers like Russia, geopolitical rather than market factors will come to dominate the energy industry and a whole new set of instabilities will characterize the oil trade.

"These shifts pose profound implications for U.S. interests, strategies, and policy-making," the report states. "Many of the expected changes could heighten risks to U.S. energy security in a world where U.S. influence is likely to decline as economic power shifts to other nations. In years to come, security threats to the world's main sources of oil and natural gas may worsen."

Read from this perspective, the recent reports from pillars of the Big- Oil/wealthy-nation establishment suggest that the basic logic of peak-oil theory is on the mark and hard times are ahead when it comes to global oil-and-gas sufficiency. Both reports claim that with just the right menu of corrective policies and an unrealistic streak of pure luck - as in no set of major Katrina-like hurricanes barreling into oil fields or refineries, no new wars in Middle Eastern oil producing areas, no political collapse in Nigeria - we can somehow stagger through to 2012 and maybe just beyond without a global economic meltdown. But in an era of tough oil, the odds tip toward tough luck as well. Buckle your seatbelt. Fill up that gas tank soon. The future is likely to be a bumpy ride toward cliff's edge.

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Michael T. Klare is a professor of peace and world security studies at Hampshire College in Amherst, Mass., and the author of Blood and Oil: The Dangers and Consequences of America's Growing Dependence on Imported Petroleum. His newest book, Rising Powers, Shrinking Planet: The New Geopolitics of Energy, will be published in the spring of 2008 by Metropolitan Books.

ThePolitics of Food Aid

2007-08-16T04:26:00.000-07:00

August 16, 2007 NYTimes.com
CARE Turns Down Federal Funds for Food Aid
By CELIA W. DUGGER

MALELA, Kenya — CARE, one of the world’s biggest charities, is walking away from some $45 million a year in federal financing, saying American food aid is not only plagued with inefficiencies, but also may hurt some of the very poor people it aims to help.

CARE’s decision is focused on the practice of selling tons of often heavily subsidized American farm products in African countries that in some cases, it says, compete with the crops of struggling local farmers.

The charity says it will phase out its use of the practice by 2009. But it has already deeply divided the world of food aid and has spurred growing criticism of the practice as Congress considers a new farm bill.

“If someone wants to help you, they shouldn’t do it by destroying the very thing that they’re trying to promote,” said George Odo, a CARE official who grew disillusioned with the practice while supervising the sale of American wheat and vegetable oil in Nairobi, Kenya’s capital.

Under the system, the United States government buys the goods from American agribusinesses, ships them overseas, mostly on American-flagged carriers, and then donates them to the aid groups as an indirect form of financing. The groups sell the products on the market in poor countries and use the money to finance their antipoverty programs. It amounts to about $180 million a year.

Neither the Bush administration nor members of Congress are looking to undo the practice, which has gone on for more than a decade. In fact, some of the nonprofit groups say it has worked well and are pressing for sharp increases in the amount of American food shipped for sale and distribution to support development programs.

The Christian charity World Vision and 14 other groups, which call themselves the Alliance for Food Aid, say that CARE is mistaken; they say the system works because it keeps hard currency in poor countries, can help prevent food price spikes in those countries and does not hurt their farmers. Not least, they argue, it also pays for their antipoverty programs.

But some people active in trying to help Africa’s farmers are critical of the practice. Former President Jimmy Carter, whose Atlanta-based Carter Center uses private money to help African farmers be more productive, said in an interview that it was a flawed system that had survived partly because the charities that received money from it defended it.

Agribusiness and shipping interest groups have tremendous political influence, but charitable groups are influential, too, Mr. Carter said, because “they speak from the standpoint of angels.”

Some charities that champion the system bristle at such suggestions. Their allies in Congress say that maritime and agribusiness interests are essential allies for programs to aid the hungry.

“Sure it’s self-interest if staying in business to help the hungry is self-interested,” said Avram E. Guroff, a senior official at ACDI/VOCA, which ranked sixth in such sales last year. “We’re not lining our pockets.”

But Peter J. Matlon, a Nairobi-based agricultural economist and a managing director of the Rockefeller Foundation, said in an interview that converting American commodities into cash for development was a case of “the tail wagging the dog,” with domestic farm policies in the United States shaping hunger-fighting methods abroad.

The nongovernmental organizations “have been ignoring this evidence for years that there’s a negative impact on the prices farmers receive,” Mr. Matlon said.. He is involved in an effort by the Rockefeller Foundation and the Bill and Melinda Gates Foundation, financed with an initial $150 million, to increase the productivity of Africa’s farmers.

The Government Accountability Office, the nonpartisan, investigative arm of Congress, also concluded this year that the system was “inherently inefficient.” CARE and Catholic Relief Services — who rank first and second in money raised through the current system — say they recover only 70 to 80 percent of what the United States paid for the commodities and shipping.

But while Catholic Relief Services and Save the Children, which ranked fifth last year in such sales, agree with CARE that the system is inefficient, they also say they will not stop converting American food into money unless Congress replaces the lost revenues with cash. They help poor people with the money, they say.

The experiences of Walter Otieno, a grizzled Kenyan farmer in mud-stained pants, illustrate the paradoxes of paying for rural development through sales of American farm goods.

Over the years, he had watched 4 of his 12 children die of measles, which is more often fatal for the malnourished. He has had difficulty growing enough to feed his family. “My children were skinny, and their skin was dull,” he said.

Then last year he began growing a small patch of sunflowers on a hill sloping down to Lake Victoria in the village of Malela, with help from a program that CARE finances through the sale of American farm goods here.

A CARE extension worker, Rosemary Ogala, taught him and dozens of farmers in his group where to buy sunflower seed, when to plant it, how to space the rows and when to harvest.

CARE has also connected them to a ready market: the Kenyan company Bidco Oil Refineries, whose managers say they could more than quintuple the amount of sunflower seed they buy from Kenyan farmers to process into vegetable oil.

The profit Mr. Otieno earned from the crop rescued his family from dire poverty. Now, with his new earnings, he is able to play with his sons and daughters, who are plump on eggs and milk, at the family’s general store, a tiny shack stocked with goods financed by the sunflower sales.

The question is whether small-scale sunflower farmers like Mr. Otieno would have done better if nonprofit groups had not sold tons of American crude soybean oil, a competing product, to the same Kenyan company that purchased Mr. Otieno’s meager crop. CARE and some other experts say the answer is a clear yes.

In 2003, Bidco bought almost 9,000 metric tons of crude soybean oil sold to the United States by Bunge, the agribusiness giant. Altogether that year, Bunge sold the United States 15,180 metric tons of oil for resale by the nonprofits in Kenya. A metric ton equals 1,000 kilograms, or 2,204.62 pounds.

American law requires aid groups to establish that such sales will not discourage production by local farmers, but some critics say it is a conflict of interest to ask the nonprofits to select experts to make this determination.

In this case, the nonprofits hired a consultant who advised them in 2003 that they could safely sell up to 38,000 metric tons of vegetable oil in Kenya, which mostly depends on imports. That amount, about 10 percent of the country’s consumption, was “negligible,” he said.

But Mr. Odo of CARE disagreed, saying in a memo that the importation from the United States “reduces the growth in the local market.”

Ultimately, CARE’s decision to phase out such sales evolved from a senior manager’s change of heart. Daniel G. Maxwell, a professor of nutrition at Tufts University, was a food security adviser for CARE in Nairobi who saw sales of American food as an imperfect, but useful way to raise money.

He knew firsthand, however, how risky it was to manage projects financed in fluctuating commodities markets. When prices sank, CARE had too little money and was sometimes forced to lay off workers. Mr. Maxwell said he also strongly suspected that buyers had offered too little for the farm goods, knowing they were dealing with aid workers who were novices in commodities trading.

As he and Christopher B. Barrett, an agricultural economist at Cornell University, researched a book, “Food Aid After Fifty Years,” his doubts deepened.

“Not only was it a pain the neck,” he said, but there were possible serious effects “that would be damaging to farmers and trade.”

In 2004, Mr. Maxwell and Mr. Barrett made the case against the practice at CARE headquarters in Atlanta. They recalled that the senior vice president, Patrick Carey, who has since died, cautioned them that leaving the system would be like “an act of partial suicide” for the nonprofits. Nonetheless, CARE committed to the shift the following year.

CARE says it will try to raise money to replace the lost revenues from philanthropies and other donors, and by making its own aid programs profitable.

One of those programs could be seen in action one recent afternoon in the Kenyan village of Poche. CARE has helped local women bypass local middlemen to sell pineapples at better prices in Nairobi’s big supermarkets, 10 hours away by road.

One woman, Doreen Amimo, a 52-year-old grandmother, has seen her weekly earnings rise to $18 from $11. She can now afford to feed and clothe an orphaned niece and nephew.

“And I never lack sugar in the house,” she said, “and we can have tea and milk every morning!”

These farmers are selling their fruit to a small company, Vegcare, that CARE and a Kenyan company started with an investment of $170,000 in 2005. Vegcare advises farmers on how to grow pineapples that meet supermarket standards, buys them and trucks them to a wholesaler in Nairobi that supplies Nakumatt, a Kenyan supermarket chain.

CARE’s idea is that a profitable business is more likely than a charitable venture to survive when foreign aid runs out.

“What’s happened to humanitarian organizations over the years is that a lot of us have become contractors on behalf of the government,” said Mr. Odo of CARE. “That’s sad but true. It compromised our ability to speak up when things went wrong.”

The US Treasury and the World Bank

2007-08-14T12:19:00.001-07:00

ROBERT WADE
SHOWDOWN AT THE WORLD BANK

In April 2000, as anti-globalization protesters prepared to descend on Washington, the World Bank’s former chief economist, Joseph Stiglitz, published an article in the New Republic which began:

Next week’s meeting of the International Monetary Fund will bring to Washington, DC many of the same demonstrators who trashed the World Trade Organization in Seattle last fall. They’ll say the IMF is arrogant. They’ll say the IMF is secretive and insulated from democratic accountability. They’ll say the IMF’s economic ‘remedies’ often make things worse—turning slowdowns into recessions and recessions into depressions. And they’ll have a point. I was chief economist at the World Bank from 1996 until last November, during the gravest global economic crisis in a half-century. I saw how the IMF, in tandem with the US Treasury Department, responded. And I was appalled. [1]

Stiglitz went on to detail his criticisms of the IMF’s handling of the 1997–98 East Asian crisis. He pointed out that the countries of the region had liberalized their financial and capital markets in the early 1990s not because they needed to attract more funds (savings rates were already 30 per cent or more) but under international pressure—particularly from the US Treasury. In Thailand, the flood of short-term capital—‘the kind that looks for the highest return in the next day, week or month, as opposed to long-term investment in things like factories’—helped fuel an unsustainable real-estate boom; in 1997, when the hot money flowed out again, the bubble burst. The baht collapsed, the stock-market plunged. Japanese banks and other investors pulled out, not just from Thailand but from other regional economies, too. In doing so, they precipitated a far worse crisis. The IMF’s response was to impose the same tight fiscalmonetarypolicies on Thailand as they had on Latin America in the 1980s, ‘delivering the same medicine to each ailing nation that showed up on its doorstep’.

As the World Bank’s chief economist, Stiglitz began lobbying for change. He argued that the East Asian countries were already running budgetary surpluses—actually starving the economy of much-needed investment in education and infrastructure (both essential to economic growth). The IMF’s austerity policies were only making the situation worse. High interest rates were devastating debt-laden local firms, leading to a rash of bankruptcies. Cuts in government expenditure were only shrinking the economy further. When he made these points at a Kuala Lumpur meeting of finance ministers and central bank governors in late 1997, the Fund’s Managing Director Michel Camdessus replied that East Asia simply had to grit it out. As unemployment increased tenfold and real wages plummeted, the Fund demanded that the Indonesian government cut food and fuel subsidies. Cynical political interests stoked the ensuing violence. The social fabric was unravelling anyway, but IMF policies made the disintegration worse.

Stiglitz had no doubts as to where these policies were coming from. Building free capital markets into the basic architecture of the world economy had long been, in the words of the US Treasury’s (then) Deputy Secretary Lawrence Summers, ‘our most crucial international priority’. [2] ‘To what extent’, Stiglitz asked, ‘did the IMF and the Treasury Department push policies that actually contributed to the increased global economic volatility?’ And ‘did America—and the IMF—push policies because we, or they, believed the policies would help East Asia, or because we believed they would benefit financial interests in the United States and the advanced industrialist world?’
Doctrine of enlargement

A central aim of US economic policy since the Second World War has been the worldwide acceptance of free-market ideology—the belief that the free flow of goods, services and capital is to the mutual benefit of all; that corporations should be managed for the maximization of shareholder-value; that stock-markets should be used for buying and selling corporate control; and that governments should intervene only in cases of obvious market failure. If the US can persuade powerful segments of national elites to embrace these goals for themselves, it can achieve its foreign economic policy objectives far more cheaply and effectively than through either negotiations or coercion. Once national elites accept the idea of the mutualbenefits of free trade and free capital movements, they can dismiss critics of the free market as defenders of special interests, at the expense of the general good. During the Cold War, the goal of opening the world’s markets had to be balanced against that of containing communism. Since 1991, in the words of US National Security Advisor Anthony Lake,

the successor to a doctrine of containment must be a strategy of enlargement, enlargement of the world’s free community of market democracies. During the Cold War, even children understood America’s security mission: as they looked at those maps on their schoolroom walls, they knew we were trying to contain the creeping expansion of that big, red blob. Today . . . we might visualize our security mission as promoting the enlargement of the ‘blue areas’ of market democracies. [3]

The multilateral economic organizations—above all, the IMF and World Bank—have been important vehicles for this strategy. But here the US faces a dilemma. On the one hand, it wants these organizations to be pushing hard for its free-market policy objectives, and so needs to ensure that appointment procedures yield people who will promote them. On the other hand, the Bretton Woods institutions need to appear to be acting in accordance with the wishes of the collectivity of member governments, rather than by Treasury dictate. Otherwise, they risk losing the legitimating force of multilateralism and may end up less effective in achieving US aims, in the long run.

The World Bank has been an especially useful instrument for projecting American influence in developing countries, and one over which the US maintains discreet but firm institutional control. The Bank’s president is effectively chosen by the United States (which has 17 per cent of votes cast, as compared to 6 per cent for Japan [at number two] and 4.7 per cent for Germany [number three]). It is also the only member state able to exercise a veto on various key constitutional issues. It makes the single biggest contribution to the International Development Agency—the Bank’s soft-loan affiliate, dedicated to lending to the poorest countries; and since the US Congress, alone among member legislatures, has to approve not only the tri-annual pledges to the Agency but also the annual release of pledged funds, there are unique opportunities for American legislators and their friends to impose conditions of their own. [4] In addition, it is American thinking about the roles of governments and markets that sets the conceptual centre of gravity for World Bank debates, rather than that of Europe, Japan or the developing countries. [5] The vast majority of Bank economists, whatever their nationalities, have a postgraduate qualification from a North American university (as is indeed true of large numbers of the world’s elite opinion leaders). And there are many subtle ways in which the Bank’s location—in the heart of Washington DC, just a few blocks from the White House, Treasury and Washington think-tanks—helps contribute to the way in which American premisses structure the very mindset of most Bank staff, who read American newspapers, watch American TV and use American English as their lingua franca.

‘Any signal of displeasure by the US executive director has an almost palpable impact on the Bank leadership and staff, whether the signal is an explicit complaint or simply the executive director’s request for information on a problem,’ one observer has noted. [6] Nevertheless, the US rarely resorts to proactive interventions, preferring to use negative power—to ensure, above all, that senior Bank people who do or say things contrary to Treasury wishes can be silenced or fired.

More than just a source of funds to be offered or withheld, the World Bank is a fount of Anglo-American ideas on how an economy—and, increasingly, a polity—should be run. The role of the World Bank’s chief economist is a critical one from this point of view. The Bank’s legitimacy rests on the claim that its development advice reflects the best possible technical research, a justification readily cited by borrowing governments when imposing Bank policies on their unwilling populations. The chief economist has much influence over what research is done and by whom: what evidence is accepted, what conclusions are drawn and how these are advertised; hence, much influence over what constitutes ‘the best technical research’. So when Joseph Stiglitz began criticizing the IMF/World Bank free-market policies in East Asia, and particularly their promulgation of unrestricted short-term capital flow—even advising the Ethiopian government on how to resist IMF demands that it open up its financial system—Treasury reacted strongly. Summers—now Treasury Secretary—asked World Bank President James Wolfensohn to rein him in.

Wolfensohn, however, was initially hesitant to do so, and not only because of Stiglitz’s prestige in the outside world—he was widely seen as a Nobel Prize-winner-in-waiting for his work on the economics of information. Wolfensohn—an ex-Wall Street Democrat with close ties to the White House—had his own criticisms of the neo-liberal ‘Washington Consensus’ and had drawn on some of Stiglitz’s ideas about partnership and participation in writing the new Comprehensive Development Framework which he proposed for the Bank. [7] Wolfensohn’s relationship with the Treasury, and with Summers in particular, had been stormy. The assertive Summers, himself a former chief economist of the Bank, made no secret that Wolfensohn was not his choice as president. From the beginning he had little compunction about telling him what to do. Staff around Wolfensohn (no less strong-minded) learned that a Summers telephone call was likely to plunge their boss into a foul mood—all the more so by 1999 as the decision time for Wolfensohn’s second term drew near, and he no longer felt able to tell Summers when to get lost.
Wolfensohn’s price

Wolfensohn badly wanted a second term, not least to consolidate his claim to the all-important Nobel Prize. Summers, by far the most powerful figure in the Clinton Cabinet, had the main voice in the decision. In essence, Summers made his support conditional on Stiglitz’s non-renewal. Wolfensohn agreed. He announced Stiglitz’s resignation as the Bank’s chief economist in November 1999—just before Seattle; but, he added, Stiglitz would stay on as his own ‘special advisor’. As Stiglitz would explain: ‘it became very clear to me that working from the inside was not leading to responses at the speed at which responses were needed. And when dealing with policies as misguided as I believe these policies were, you have to either speak out or resign . . . Rather than muzzle myself, or be muzzled, I decided to leave.’ [8]

Stiglitz had many opponents inside the Bank, and not only among those who—riding high before his arrival—shared the ideological disposition of the IMF and the Treasury and had not taken kindly to Stiglitz’s criticism. Even those—including some of his own managers and research staff—who agreed with Stiglitz’s views on the limitations of free markets could be heard to say that he was treating the Bank like a travel agency and neglecting his internal roles of mentoring staff, debating economic strategy and directing the research complex. He often forgot to thank those he left carrying the can. The staff reciprocated, awarding him bottom marks in the Staff Attitude Survey of 1999. Wolfensohn’s own tribute at Stiglitz’s farewell was somewhat barbed: he declared himself a great admirer of ‘someone I understand I have met in the past few years—when he wasn’t travelling’. [9]

It was scarcely two months after this, in January 2000, that one of Stiglitz’s own appointees, Ravi Kanbur, produced that year’s draft World Development Report on poverty. The WDR, published annually, is the World Bank’s flagship publication; its image of independence is carefully nurtured, since the message is meant to be based on empirical evidence and, of course, ‘the best’ technical research. The Reports are theme-based and run to between two and three hundred pages; recent titles have focused on The State in a Changing World (1997), Knowledge for Development (1998–99) and Entering the 21st Century (1999–2000). Core budgets range from $3.5 to $5 million, handsomely supplemented by contributions from trust funds and foundations. Each WDR has a print run of at least 50,000 in English (over 100,000 in some cases), and the Reports are translated into seven languages. [10]WDR directorships, then, are important positions for defining what ideas the Bank projects. Each director is chosen by the chief economist, with the approval of the president. The director and chief economist then pick a team of between five and ten full-time authors (most of them Bank staff members), plus consultants and administrators. They normally have about eighteen months to prepare the report. Drafts are circulated for internal discussion, and member governments also get to comment.

Ravi Kanbur, a distinguished professor of development economics, had been brought in by Stiglitz to direct the team writing the WDR 2000, Attacking Poverty. This was always going to be a sensitive subject: poverty reduction is the very core of the Bank’s mission and is the focus of the most passionate debates in the whole of development studies. Kanbur was chosen for several reasons. He had been a Bank insider (chief economist of the Africa region), but was now at Cornell—this, plus his identity as a British-educated developing-country national, helped secure the WDR’s reputation as independent. He was also known to be broadly sympathetic to the views about development sketched by Wolfensohn in the Comprehensive Development Framework and elaborated by Stiglitz and his advisors—a minority position among development economists in the Anglo-American tradition. Jagdish Bhagwati and T. N. Srinivasan, for example, had argued that Wolfensohn’s and Stiglitz’s views, if translated into Bank policy, would encourage countries to adopt measures which would slow growth—and, in turn, poverty reduction—as in India in the fifties, sixties and seventies.
The ‘business’ of empowerment

The January 2000 ‘red-cover’ draft Report contained much that was anathema to Treasury thinking. A long section on world capital markets allocated some blame for the East Asian crisis to the rapid opening up of markets to short-term capital flows, spoke favourably of Malaysian and Chilean capital controls and advocated such restrictions as normal instruments of economic management in developing countries. Although the Report began by recognizing the importance of economic growth—‘the engine of poverty reduction’—it also stressed ‘empowerment, security and opportunity’ as the key ingredients of its strategy, and discussed the three in that order, highlighting the first two over the more growth-oriented section on ‘opportunity’.

Highly controversial, in IMF/World Bank circles, was the section on empowering the impoverished: how to create or scale up organizations of the poor—networks, cooperatives, trade unions and the like—so as to articulate their interests in the political and market realms; and how to make state organizations more responsive to their citizens. [11] The Report drew extensively on the ‘Consultations with the Poor’ exercise that the Bank had been running since 1998, a combination of new and existing participatory studies involving some 60,000 people in sixty countries. Drafts were reviewed via an intensive, independently moderated electronic consultation involving 1,523 subscribers in eighty countries, a project on a far bigger scale than had been attempted for any other WDR. The Bank had, in fact, been widely praised for this, and some non-governmental organizations saw Kanbur’s approach as promising evidence of a growing openness to alternative perspectives on development issues. The Report’s attitude to security was also controversial, arguing that effective safety nets should be created before free-market reforms are pushed through. Without safety nets, the reforms will create losers with nothing to fall back on.

The ‘empowerment’ section attracted immediate criticism, ranging from ‘why is this stuff being given priority over growth?’ to ‘these chapters pander to noisy and nosy NGOs’—and, best of all, ‘the Bank should not be in the business of empowerment’. On the question of security, many critics argued that, while social safety nets were needed they had to be built simultaneously with market reforms, not made a precondition for them. From Yale, T. N. Srinivasan launched an attack on the report’s conceptual foundations. ‘Security, opportunity and empowerment could at best be termed as diagnostics and at worst as three symptoms of the disease or syndrome of poverty, but they certainly do not provide an analytical engine.’ He also argued that the report lacked causal analysis, taking cross-country regressions too literally as the basis for policy judgements. Angus Deaton sent in scathing remarks from Princeton. Some of the Bank’s own leading macroeconomists joined in the barrage, charging that the draft short-changed economic growth, despite its opening declaration. [12]

It was at this stage, with criticism building on Kanbur’s Report and protesters massing for the Spring Meetings of the IMF and World Bank, that Stiglitz’s New Republic article on the handling of the East Asian crisis appeared. Summers was reported as being close to apoplexy. He rang Wolfensohn and spoke to him in a way that Wolfensohn was spoken to by few others. He told him that all connexions between Stiglitz and the Bank had to be severed. Wolfensohn called Stiglitz to his office for a tense and testy meeting, told him he was no longer a special advisor and no longer welcome in the Bank. Stiglitz pointed out that the ‘optics’ would not be good if he were fired so soon after the New Republic piece. Wolfensohn threatened that if the story leaked he would call a press conference and denounce him. Stiglitz took this as blackmail. Meanwhile, Stanley Fischer, deputy managing director of the IMF and Summers’s ally, called a special staff meeting to discuss how the Fund was going to respond to Stiglitz’s article. He informed the gathering that Wolfensohn had agreed to fire Stiglitz, to the delight of all.

The US Treasury’s comments on Kanbur’s draft Report came in at about this time and read quite differently to those of other member governments—their tone stiffened, no doubt, by the anti-globalization demonstrations. [13] They especially stressed the need for emphasis on higher economic growth—and on freer markets, as the route to growth. The Treasury had seen Seattle, in particular, as a worryingly unequal alliance between well-organized, traditional forces of Western protectionism and naïve, pro-development NGOs. The apparent success of the alliance in obstructing the conference—and the fact that, with an election in prospect, President Clinton chose not to take on the forces of US protectionism in his address—raised the importance of stressing open markets, both in the Treasury and in parts of the Bank. In oral comments on the January draft, US officials made statements like ‘give them [NGOs, trade unionists and the like] an inch of nuance and they’ll take a mile of protection’. (At the same time, however, Treasury, alert to White House needs, also called for more emphasis on core labour standards, leading one WDR insider to characterize the Treasury message as ‘growth, growth, growth, plus labour standards’.)

Kanbur attended a review meeting with Wolfensohn and the Bank’s managing directors in May 2000, where he was surprised to hear the president expressing sympathy with the ‘growth first’ view. Kanbur had already conceded some ground to his critics, shifting the ‘opportunity’ section of the draft into first place and, in his ‘overview’ of the subsequent, green-cover draft, making substantive changes—which he later tried to pull back from—in the Treasury direction. A few days later he met with two of the Bank’s managing directors. One of them, closest of all to Wolfensohn, summarized the thrust of Treasury criticism, and urged Kanbur to redraft some more.

Kanbur concluded that the WDR was on a slippery slope. They were coming under insistent pressure from the Treasury and from powerful Bank economists. Stiglitz’s successor, Nicholas Stern, had only just been appointed; new and untested, he might not be in a strong position to protect them. They apparently had less support from Wolfensohn than they had counted on. The choice was to revise the WDR even further in the direction of the Washington Consensus, or to fight to protect their central argument and have the Bank dissociate itself from the Report and sweep it under the carpet. If Kanbur resigned, on the other hand, there might be a chance that the publicity would force the Bank to acknowledge Attacking Poverty as the work of an independent team of social scientists: ‘we don’t know why he resigned, we gave him complete independence and, to show our commitment to the process and our independence from the Treasury, we will keep the main themes the same, though we will of course improve the quality.’

Kanbur left the Bank immediately after the meeting with the two managing directors, returned the next day to collect a few belongings, and disappeared. After sending a brief email note to the team informing them of his intention, he resigned on May 25th. People—Wolfensohn included—tried to persuade him to withdraw his resignation, to no avail. His deputy took over as Report director. The story broke a fortnight later. Kanbur refused all press interviews. He did not want to dissociate himself from the Bank or the WDR, fearing this might legitimize even broader revisions to the draft.

In the end, the Report was published with three substantive changes. First, a chapter was added on growth and poverty, even though, in the eyes of some, its Washington Consensus message was inconsistent with the rest of the argument. Second, the chapter on free-market reforms and unemployment, ‘Making markets work for the poor’, no longer emphasized the need for the prior establishment of social safety nets but called for them to be put in place ‘simultaneously’ with labour-shedding reforms—which might provide more excuse to delay them altogether. The original emphasis on other hazards of free-market reforms was also softened, and that on their benefits strengthened. Finally, the long section on the need for capital controls was cut to a fraction of the earlier draft’s, and mention of Malaysia’s experience was dropped altogether. The need for a ‘cautious approach’ to liberalizing financial markets was substantially watered down, with capital controls now appearing only as transitional measures en route to free capital markets. This last change was particularly dear to Treasury’s heart.
An alternative development Bank?

There is some substance to Treasury’s criticisms. There is a dangerous tendency in development thinking—seen in the thrust of the red-cover draft Report and in the Comprehensive Development Framework—to shift attention from growth towards non-income aspects of poverty and from hard-nosed technical subjects such as industrial technology policy and irrigation investment towards ‘soft-nosed’ issues—education, health, participation, legal reform and cultural projects. Developing countries have been experiencing a severe growth slowdown. Ever since 1960, average incomes in developing countries have grown more slowly than OECD incomes in most years, causing world income inequality to widen. The past two decades have seen the situation worsen: the median rate of growth in developing countries’ average incomes between 1980 and 1998 was 0 per cent. [14] The growth crisis is itself an important proximate cause of the rising numbers in poverty and should be right at the forefront of the development debate—as should be the steps that OECD countries take to moderate it, including lifting US union-sponsored protectionism. But the swelling phalanx of American-led—and mostly Western-based—NGOs which have succeeded in advancing the ‘governance, participation and environment’ agenda are not likely to place it there; these bodies have shown little serious interest in economics and economic growth.

These qualifications notwithstanding, the Bank would be a better development agency if the US—both the Federal government and American-based NGOs—had less control over it, and if people from other states, with knowledge of other forms of capitalism, had more influence over what the Bank says and does, in terms of sanctioning a wider range of institutional configurations. We know from Japan and from the countries of continental Europe that efficiency, catch-up, innovation and well-being can be promoted not only by competition but also by organizational loyalties. Free markets in labour can be constrained by the need to protect such loyalties; corporations can be managed in the interests of employees and other stakeholders, as well as shareholders; they need not be bought and sold on the stock-market; and the public sector can express the principle of mutual responsibility through the supervision of health care, education and collective social insurance. [15] Certainly, such alternatives are on the defensive at the start of the present century. They are under question from segments of their own national elites (part of the US’s return on generous scholarship funding for foreign students in American graduate schools), and under pressure from capital flows out of Europe. The US Treasury has declared that capital will continue to drain and the euro to fall ‘unless and until Europe shows more commitment to overhauling its restrictive labour market and generous welfare systems, which are seen as a barrier to growth’—in effect, setting free-market conditionalities on US cooperation in intervention on behalf of the euro. [16] But political economies with social-democratic characteristics clearly can be effective vehicles of late development. And the world economy would be less fragile if it contained a broader and more stable range of capitalist forms. [17]

One acid test of the World Bank’s independence from US Treasury views would be the appointment of a chief economist and associated staff who openly championed these arguments. In the end, perhaps, the only long-term way to moderate Americanhegemony over it is to shift the Bank’s headquarters out of the US. Constitutionally, the European states have the votes to do this. A World Bank with important staff and headquarter functions in, say, Berlin or Paris would be suffused by more diverse views of political economy. Short of that, the Europeans and the Japanese could organize themselves to steer the Bank a bit more. The Nordics have already been doing so for years now, putting up millions of dollars in trust funds for Bank work on the ‘social’ aspects of development—an area where the Treasury is happy to let them take the lead and pay the cost, being peripheral to the interests of the US state but central to the objectives of many American NGOs whom the Treasury likes to keep happy. The question is whether the Europeans and Japanese can exercise more leadership on the issues where the Treasury really does want the Bank as its instrument—such as opening up developing markets; and whether the representatives of developing countries on the board of the Bank will concert their actions for a change.

[1] Joseph Stiglitz, ‘What I Learned at the World Economic Crisis’, New Republic, 17 April 2000.

[2] Lawrence Summers, ‘America’s Role in Global Economic Integration’, Integrating National Economies: The Next Steps, Brookings Institution, Washington, DC, 9 January 1997. Well after the Asian crisis began, Treasury Secretary Rubin was reiterating that ‘global capital flows have been an enormous boon to growth in countries around the world, lifting millions of people out of poverty—this is especially true in the dynamic, rapidly industrializing countries of East Asia’, even urging ‘China would also benefit by opening itself more widely to foreign investment, allowing foreign firms to bring their expertise and capital to the Chinese market’. Robert Rubin, ‘Remarks to the National Center for APEC’, Seattle, WA, 18 September 1997.

[3] National Security Affairs Presidential Assistant Anthony Lake, speech of 21 September 1993; emphasis added.

[4] Catherine Gwin, ‘US relations with the World Bank’, in The World Bank: Its First Half Century, vol. 2, Perspectives, Brookings Institution, Washington, DC 1997, pp. 195–274.

[5] On the differences between such thinking, see Bruno Frey et al., ‘Consensus and Dissensus among Economists: An Empirical Enquiry’, American Economic Review, vol. 74, no. 5, 1984, pp. 986–94.

[6] William Ascher, ‘The World Bank and US Control’, in Margaret Karns and Karen Mingst, eds, The United States and Multilateral Institutions: Patterns of Changing Instrumentality and Influence, London 1992, p. 124.

[7] See the common themes in James Wolfensohn, ‘The Challenge of Inclusion’, World Bank, 23 September 1997; ‘The Other Crisis’, World Bank, 6 October 1998; ‘Coalitions for Change’, World Bank, 28 September 1999 and Joseph Stiglitz, ‘Towards a New Paradigm for Development: Strategies, Policies and Processes’, World Bank, 19 October 1998; ‘Participation and Development: Perspectives from the Comprehensive Development Paradigm’, World Bank, 27 February 1999.

[8] Louis Uchitelle, ‘World Bank economist felt he had to silence his criticism or quit’, New York Times, 2 December 1999.

[9] Financial Times, 27 June 2000.

[10] The Bank produces about 50,000 copies of the WDR summary across the seven languages (Chinese, German, French, Spanish, Japanese, Russian and Vietnamese). In comparison, UNCTAD’s annual Trade and Development Report—the only multilateral development report to provide serious economic challenges to heartland free-market views—has a print run of only about 12,000 in English, plus another 7,000–8,000 copies in the other five official languages of the UN (Chinese, Russian, French, Spanish, Arabic). It is produced on a shoestring budget of less than $700,000. UNDP’s Human Development Report has a print run of 100,000 in 12 languages, with a budget of roughly $1.5 million.

[11] This section was a particular challenge. Everyone on the team knew that the report had to endorse democracy and empowerment as good for development and poverty reduction: this was the message decided by the Bank. But how to prove it? They could use Amartya Sen’s Democracy as Freedom, arguing that democracy was both an instrumental good and an intrinsic value, part of the very concept of development; also Judith Tendler’s Good Government in the Tropics, on a single-state experiment in Brazil; the standard cases of Kerala and Sri Lanka; and voluminous cross-country regressions showing democracy as good for just about everything. Other evidence, however, would give democracy a more equivocal report. The cross-country regression results are open to question, and the cases of China, Singapore, pre-1987 Taiwan and South Korea are difficult to square with the gospel (as is democratic but developmentally unsuccessful India). The issue for the authors, then, was how to give a ringing endorsement to democracy and its apolitical cousin, empowerment, while acknowledging this ambiguity.

[12] See David Dollar and Aart Kraay, ‘Growth is good for the poor’, Development Research Group, The World Bank, March 2000 (written and discussed before the red-cover draft WDR was produced). Dollar and Kraay disassociated themselves from the popular portrayal of their paper as a manifesto for growth-is-everything: letter to the Economist, 24 June 2000.

[13] Other elements behind Treasury’s comments included the not always smooth relationship between Summers and Kanbur when Summers was chief economist at the Bank and Kanbur reported to him on Africa; Treasury’s anger at Stiglitz, which spilt over onto Stiglitz’s appointee; and Summer’s anger at the Bank—specifically, Stiglitz and Boris Pleskovic—having invited Jeffrey Sachs to be a keynote speaker at the Annual Bank Conference on Development Economics that month (April 2000). How, Summers wondered, could the Bank give a hostile critic a keynote address right after the anti-Bank demonstrations at the Spring Meetings? Summers had seen the posters advertising the forthcoming conference, with Sachs’s name prominently displayed. He had complained loudly, and the instruction went out from a senior manager to take them down.

[14] Median unweighted GDP per capita growth in 1960–79 was 3.4 percent for developed countries, 2.5 percent for developing countries; in 1980–98, 1.8 percent and 0 percent, respectively. The population-weighted average growth rate for developing countries in 1980–98 was 0.8 percent. The smaller fall of the weighted average reflects the faster growth of China and India. William Easterly, ‘The Lost Decades: Explaining Developing Countries’ Stagnation 1980–98’, typescript, World Bank, January 2000. Branko Milanovic, ‘True World Income Distribution, 1988 and 1993’, Policy Research Paper 2244, Development Research Group, World Bank, November 1999. While I agree that fast economic growth can do wonders for poverty reduction, especially when asset distribution is relatively equal, I question whether the liberal free-market recipe is generally good for growth.

[15] I am indebted to Ronald Dore’s pithy Stockmarket Capitalism, Welfare Capitalism, Oxford 2000. It should be read in conjunction with Robert Lane, ‘The Road Not Taken: Friendship, Consumerism, and Happiness’, Critical Review, vol. 8, no. 4, pp. 521–54.

[16] International Herald Tribune, 20 September 2000.

[17] See the research of Geoffrey Garrett, summarized in ‘Shrinking States? Globalization and National Autonomy’, in Ngaire Woods, ed., The Political Economy of Globalization, London 2000.

Finance and the Fourth Dimension

2007-08-14T12:16:00.000-07:00

ROBIN BLACKBURN
FINANCE AND THE FOURTH DIMENSION (NLR 39)

Financialization now runs the gamut from corporate strategy to personal finance. It permeates everyday life, with more products that arise from the increasing commodification of the life course, such as student debt or personal pensions, as well as with the marketing of credit cards or the arrangement of mortgages. The individual is encouraged to think of himself or herself as a two-legged cost and profit centre, with financial concerns anxious to help them manage their income and outgoings, their debts and credit, by supplying their services and selling them their products. What is termed a financial product reflects not just what Slavoj Žižek, following Kojin Karatani, calls the ‘parallax view’, which considers demand as well as supply, the realization of surplus value as well as its extraction. [1] Finance also necessarily considers the temporal dimension. The entrepreneur who commits capital to a project is looking for a return tomorrow, and the market will not know whether they have achieved alpha, that is outperformance, until all the returns have been counted up. Exploitation is longitudinal. It takes time.

Financialization can most simply be defined as the growing and systemic power of finance and financial engineering. As such it is not an entirely novel phenomenon. But no account of contemporary capitalist development can ignore the scale of the financial sector’s recent expansion. As a percentage of total us corporate profits, financial-sector profits rose from 14 per cent in 1981 to 39 per cent in 2001. [2] As well as profits earned by banks, hedge funds, private equity concerns, fund managers and insurance houses, many large companies also organize finance divisions which make a large contribution to group profits. It is the growing exposure of all institutions and arrangements to the opportunities of financialization, as well as to the more familiar pressures of globalization, which has made the distribution of power within corporations and financial networks so fluctuating and unpredictable in recent decades. As Gérard Duménil and Dominique Lévy have analysed in these pages, financialized techniques have lent themselves to an extraordinary enrichment of financial intermediaries and of the corporate elite. The granting of stock options to top executives gave them a direct incentive to use loans to ramp up share price, by taking out bank loans and then using most of the proceeds to buy back shares. [3] Given their own remuneration levels, the finance houses were scarcely in a position to use their clout to rein in executive greed. The financial elite and the corporate elite need one another and financialized techniques have helped to cement the pact between them. [4]

In an important exchange, Giovanni Arrighi and Robert Pollin agreed that the most fundamental question concerning financial expansion is ‘where do the profits come from if not from the production and exchange of commodities?’ [5] The three possibilities they focused on were, firstly, where some capitalists were profiting at the expense of others; secondly, where capitalists as a whole are able to force a redistribution in their favour; and, thirdly, where transactions had allowed capitalists to shift their resources from less to more profitable fields. However, we should also take into account two dimensions internal to finance itself: firstly, the cost of generating finance functions and products; and secondly, efficiency gains in anticipating risk. The financial revolution of the last two decades has registered large potential gains in dealing with risk; but most of this gain has been swallowed by the rising costs of financial intermediation, made possible by monopoly and asymmetric information resources, and generated by escalating marketing and trading expenditures as well as extravagant remuneration.

In what follows I will examine aspects of financialization at the level of the corporation, and explore some of the fourth-dimensional operations of hedge funds, private equity, investment banks and pension funds, as well as some of the shadier aspects of financial practice, citing examples of profits which answer to one or another of the sources of financial gain and loss mentioned above. In some respects, these practices extend the realm of what I have called ‘grey capitalism’, in which relations of ownership and responsibility become weakened or blurred. We will also see that financialization creates a swathe of new services and ‘products’ for both corporations and individuals, which are bought because they allow the purchaser to make a future gain, stemming from outperformance, wise custodianship or superior risk abatement. Temporality is once again central here. The characteristic instruments of financialization are derivatives which are bound to wax or wane in exact relationship to an underlying asset or liability, futures contracts, or options (rights to buy or sell at some future date at a specified price). From the individual’s point of view the financial product—an annuity, a pension, a mortgage or an insurance contract—also ties current contributions to future benefits.

The expanding sphere and powers of the multi-tentacled investment banks—‘mind-boggling’ in their implications, according to the Economist—are well illustrated in the case of Goldman Sachs. As a recent survey pointed out, Goldman or an associated concern is involved in one third of all trades made in us equities. [6] The profits of investment banks arise not simply from their traditional underwriting and brokerage, from m&as (mergers and acquisitions) and ipos (initial public offerings), but increasingly from proprietary trading and risk arbitrage; namely, from positioning themselves and their clients in relationship to the wider impact of a merger or some other major event. The investment banks have great skill, a strategic location in information networks and massive computing power. They can adopt positions that enable them to gain from changes in relative prices whether or not a deal goes ahead. Once they know the lie of the land, they can devise a hedge for their client and also commit their own resources. As the Economist report pointedly enquires:

Would General Motors be better off if Goldman had merely sought out a buyer for the property arm of its financing operation, instead of itself joining the buyout group, as it recently did? The bank cites numerous times when it advised on a deal and then provided a hedge of some sort that immunized the buyer from risk. Goldman’s profit from the hedge (which is often the most lucrative part of the deal) is irrelevant, except that it means that Goldman as an adviser was not looking out only for the client. Is this bad? It is a matter of judgement. In terms of its investment banking Goldman now finds itself on so many sides of a deal simultaneously that the mind boggles.

The disposable corporation

Finance has a double impact on corporations: on the one hand constraining their investment strategies, on the other helping them to find customers and realize profits. They are not quite the free agents sometimes portrayed by their critics. The latter often focus on the exorbitant powers of corporations in relation to communities, regulators, consumers and their own workforce. Naomi Klein’s No Logo furnished a vivid and compelling account of the corporate ‘brand bullies’, while Joel Bakan’s often trenchant book (and film) The Corporation stressed the legal privileges and immunities of public limited companies. It is not difficult to see how giant retail chains shape patterns of production and consumption or how famous brands insinuate themselves into the texture of everyday life. Yet even the most powerful corporations need the financial world to assess their own progress, to plan for the future and, often, to reach new customers. It is not household names like Nike or Coca-Cola that are the capstones of contemporary capitalism, but finance houses, hedge funds and private equity concerns, many of which are unknown to the general public. In the end even the largest and most famous of corporations have only a precarious and provisional autonomy within the new world of business—ultimately they are playthings of the capital markets.

Corporate credit-worthiness is determined by banks and ratings agencies. In its turn this establishes the cost of corporations’ capital. They may be able to finance all the investments they wish to undertake from their own resources, but this will not mean that they are free from the pressures of financialization. In drawing up their investment plans, they will have to show that these will achieve the benchmark or ‘hurdle’ rates of return established by the financial sector. [7] Even the largest corporations have to submit to the inspections and interrogations of the ratings agencies—Standard and Poor’s, Moody’s and Fitch Ratings—if they wish to reassure investors and ensure cheap access to capital. Making a good profit is no longer enough; a triple A rating is also needed. [8] Theoretically, the value of a share has nothing to do with present or past profits, but exclusively relates to the prospects of future profit.

From the standpoint of the ‘pure’ investor, the corporation itself is an accidental bundle of liabilities and assets that is there to be rearranged to maximize shareholder value, which in turn reflects back the fickle enthusiasms of other investors. The corporation and its workforce are, in principle, disposable. The famous companies of the 1970s, let alone the 1950s, have, with a few exceptions, disappeared or become shadows of their former selves. [9] In the 1980s hundreds of thousands, if not millions, of employees discovered their expendability; in the ‘downsizing’ of the early 1990s swathes of middle and upper management found that they, too, were surplus to requirements. In the years 2001–03 about three million jobs were lost in the United States. By the turn of the century Enron’s managers had become famous for a regime in which each employee knew that one tenth of the staff, those who failed to reach trading targets, would be sacked each year, no matter how good or bad the overall performance. Many of the most powerful corporations today do their best to avoid having a workforce; instead they out-source and sub-contract.

One of the impulses to financialization is that companies which have difficulty selling goods find that it can be easier if they offer finance too, from the humblest consumer credit network to complex deals where a company sells its product to a subsidiary, which then leases it to the customer. Not infrequently the transaction passes through a tax haven or involves the shedding of a tax obligation (e.g. because interest payments are free of tax). ge Capital has long helped the company’s customers to acquire its aero-engines and other machinery using tax-efficient leaseback arrangements. ge Capital soon diversified into consumer credit because of the attractive returns this generated. By 2003, 42 per cent of the group’s profits were generated by ge Capital. In the same year gm and Ford registered nearly all their profit from consumer leasing arrangements, with sales revenue barely breaking even. When these two auto giants encountered real difficulties in 2005–06, they came under pressure to sell their profitable leasing divisions as a way of raising badly needed resources. In 2004 the General Motors Acceptance Corporation (gmac) division earned $2.9 billion, contributing about 80 per cent of gm total income. gm hoped that gmac would be valued at $11 billion or more, and that it could retain a major holding even while selling a 51 per cent stake. [10]

During the same period, it was striking to see the eagerness with which gigantic financial concerns like Citigroup and hsbc sought to acquire consumer finance operations and even ‘sub-prime’ lenders (loan sharks), which they would previously have regarded with disdain. Citigroup acquired Associates First Capital, and hsbc bought Household Finance, blazing a trail others were to follow. Finance houses have teamed up with retailers to shower so-called gold and platinum cards on all and sundry with the hope of ratcheting up consumer debt—running at 110 per cent of personal annual disposable incomes in the us in 2002, rising to nearly 130 per cent by the end of 2005—and subsequently charging an annual 18 or 20 per cent on money for which the banks were paying 3 or 4 per cent. It is the hot rates of return that attract the banks to seamy lending. They believe that they can repackage the debts in ways that allow them to slough off the risk while retaining most of the high return that was supposedly the risk premium. The lessons learnt from the repackaging of corporate bonds as cdos (collateralized debt obligations) are applied to personal debt.

With direct access to sub-prime mortgages, the banks and hedge funds could thus bundle together and divide up the debt into ten tranches, each of which represents a claim over the underlying securities but with the lowest tranche representing the first tenth to default, the next tranche the second poorest-paying, and so on up to the top tenth. Borrowers who can only negotiate a sub-prime mortgage have either poor collateral or poor income prospects, or both, and so are required to pay over the odds. Of course the bottom tranche—designated the equity—has very weak prospects but can still be sold cheaply to someone as a bargain. The top tranches, and even many of the medium ones, will be far more secure yet will pay a good return. (Here, in contradistinction to Arrighi and Pollin’s categories, we have an instance of financial profits generated by a function internal to finance itself.) As the chief executive of a mortgage broker explains: ‘Sub-prime mortgages are the ideal sector for the investment banks, as their wider margins provide a strong protected cash-flow, and the risk history has been favourable. If the investment bank packages the securities bonds for sale, including the deeply subordinated risk tranches, it can, in effect, lock in a guaranteed return with little or no capital exposure.’ [11] For such reasons Morgan Stanley purchased Advantage Home Loans, Merrill Lynch bought Mortgages plc and Lehman Brothers acquired Southern Pacific Mortgages and Preferred Mortgages. European banks’ like abm–Amro have developed an interest in micro-credit in Africa, which links them to the world of sub-prime lenders: financial techniques allow them to reap exceptional rates of return from repackaging the debts of the very poor. [12] While Western governments boast of forgiving African debt, Western banks get their hooks into loans to the poor.

Helped by the practices of financialization, the banks achieved remarkably good profits right through the post-bubble trough and well into the subsequent recovery. However, indebted consumers were not so good for non-financial corporations in the post-bubble era as demand was dampened. By 2003, 18 per cent of the disposable income of us consumers was required to service debt, and only a housing price boom and re-mortgaging maintained consumer purchasing power. (The us banks’ heavy stake in sub-prime lending, with its associated risks, was a material factor in delaying the Basle ii international banking agreement on appropriate reserve levels.)
Hedge fund boom

The unbridled spirit of financialization is most famously embodied in the hedge funds, which are nimble enough to outwit the large institutional investors. The last few years have witnessed a mushrooming of thousands of hedge funds—by mid 2006 the total was thought to be around 8,000, controlling nearly $1.5 trillion of assets (this compared with $7 trillion in us mutual funds of all types). The hedge funds started out as the preserve of the really wealthy investor, although eventually several pension funds gave them a small slither of their holdings. In the bear market of 2000–02 the hedge funds often made positive returns when most conventional funds, especially index funds, made heavy losses. The hedge funds practised ‘shorting’—borrowing a stock in the anticipation that its price would fall and then selling it. Institutional investors, who loaned stock that loomed large in their portfolios, were often on the wrong end of these trades. The conventional funds, whether actively managed or index-linked, were ‘long only’, which is to say that they bought and sold stocks but did not short them. The hedge funds also offer and employ ‘derivatives’, investment products like options that allow the purchaser to place a bet on the movement of sections of the market. Spotting price discrepancies, hedge funds made money by arbitrage, rapid trading and the use of credit derivatives, which would repackage corporate debt. Investment banks and the treasury departments of large corporations also engage in large-scale hedging of currency and interest rates, but hedge funds have the greatest latitude. [13]

Banks and mutual funds are lightly regulated, but the hedge funds do not have to reveal their holdings at all, and effectively escape all regulation. [14] They charge fees that are often 2 per cent of the money invested plus 20 per cent of the annual rise in capital value. Their charging structure usually allows them to make a lot of money when they do well but not to forfeit these gains if the returns then collapse. The hedge funds do have higher costs than other fund managers because of heavy trading, but claim that this will enable them to outperform the market and to generate positive returns during a downturn. Many have performed very well for particular clients, encouraging pension-fund managers to take a lively interest in them—an interest generally encouraged by regulators and consultants on both sides of the Atlantic.

While hedge funds may deliver the consistent, double-digit returns that justify their fees for special clients, can they pull off the same trick for the entire class of pension funds, given that the latter constitute such a large component of the market? A shorting operation can deliver excellent results to its practitioner, but it does not directly benefit all investors, unlike a rising market. [15] The pension funds that invest in hedge funds usually do so by purchasing a ‘fund of funds’ vehicle, yet in doing so lose the edge which the best hedge-fund managers will be able to offer. A diversified stake in the sector may offer a little more security but also lowers the return, since it will include poor performers and perhaps even those that go bust. Between 1998 and 2003, 1,800 hedge funds closed their doors—yet most statistics on the performance of the sector will display ‘survivor bias’, by failing to include their losses. [16]

Because of their modus operandi the hedge funds were to have a starring role in the mutual funds scandals, some of which I describe below. During the 1990s, the large finance houses that sponsor mutual funds—Bank of America, Putnam, Morgan Stanley and others—discovered that they could earn extra fees from hyperactive traders, on top of the good fees they were already earning from the mass of their investors. They granted hedge funds privileges not extended to other investors, including providing credit to enable them to take advantage of their clients’ funds: this way the finance house can charge interest as well as earning a transaction fee. Furthermore, trades do not have to be in already existing shares. If new issues are imminent, then hedge funds and other punters can purchase call and put options on the not-yet-existing shares in what is termed, appropriately enough, the ‘grey market’. Shorting shares in the grey market can lead to extraordinary complications and the embarrassment of ‘naked shorts’, where the short-seller is discovered to have no stock, whether borrowed or not. [17] Another problematic issue is where hedge funds use the voting power of borrowed stock to endorse take-over bids, especially where shareholders in the target stand to lose, but the hedge fund will gain because of other positions it has taken on the outcome of the bid.
Arbitrage

In the financialized world heart surgery is performed on capitalist property itself. A hedge fund that holds company stock in order to sell it short is looking to deflate shareholder value, not increase it. And a standard risk-arbitrage arrangement can be much more complicated than this. Daniel Buenza and David Stark write that:

Arbitrage hinges on the possibility of interpreting securities in multiple ways . . . In contrast to value investors who distil the bundled attributes of a company to a single number, arbitrageurs reject exposure to a whole company. But in contrast to corporate raiders, who buy companies for the purpose of breaking them up to sell as separate properties, the work of the arbitrage trader is yet more radically deconstructionist . . . For example they do not see Boeing Co. as a monolithic asset or property but as having several properties (traits, qualities) such as being a technology stock, a consumer-travel stock, an American stock, a stock that is included in a given index, and so on. Ever more abstractionist, they attempt to isolate such qualities as the volatility of a security, or its liquidity, its convertibility, its indexability and so on. Thus whereas corporate raiders break up parts of a company, modern arbitrageurs carve up abstract qualities of a security . . . Their strategy is to use the tools of financial engineering to shape a trade such that exposure is limited to those equivalency principles in which the trader has confidence. Derivatives, such as swaps, options and other financial instruments play an important role . . . Traders use them to slice and dice their exposure. [18]

It might be supposed that this virtual dissection of the corporation is a kinder and gentler process than that meted out by the corporate raiders of the 1980s, but this would be an error. In order to cash out their bets the arbitrageurs need ‘events’. A placid market with nothing happening and no volatility is bad for the hedge funds and for those on the ‘risk arb’ desks. But normally the traders need not worry since, as Hyman Minsky put it in a classic article, firstly ‘the internal workings of a capitalist economy generate financial relations that are conducive to instability’, and secondly, ‘the price and asset-value relations that will trigger a crisis in fragile financial structures are normally functioning events.’ [19] One of the reasons for this is precisely that the prospects of a given stock cannot be distilled in a single figure since the balance sheet of an enterprise will always comprise a complex of receipts and liabilities in which the past, present and future uneasily coexist. These days a common ‘event’ for a large company will be the re-valuation of its pension fund liabilities, which in turn will reflect what is happening to the shares of other companies, new legislation or the introduction of a new accounting standard. The de-regulation of financial markets has also increased their proneness to ‘events’. [20]

The techniques of the financial revolution—derivatives, swaps, hedging, spes, cdos, etc—can be used simply to insure a corporation against hazard. But several of these devices lend themselves to manipulating a firm’s basic numbers. The cult of shareholder value and financial engineering could seem to conjure an immediate gain out of any merger or acquisition. Companies that perfected the art of growth by acquisition—ge, Vodafone, aol, WorldCom and so forth—became the darlings of Wall Street. Sometimes this corresponded to real growth and a more logical business. But it could also betoken ‘aggressive accounting’ and herald future share-price tumbles. The willingness of the old-fashioned type of investor to accept the consequences of ownership vanishes in the hedge-fund world. As a recent survey notes:

The hedge funds’ case has not been helped by behaviour such as that of Perry Capital, which in 2004 bought shares in Mylan Laboratories only in order to vote in favour of its acquisition of King Pharmaceuticals, in which Perry was a big shareholder. Perry hedged its exposure to movements in Mylan’s share price and was thus able to exercise its voting rights without having any apparent exposure to the consequences. [21]

Hedge-fund managers use derivatives to unpack bundles of property rights or claims on flows of income, and to reassemble them in a supposedly more advantageous configuration. They may be guided by a hunch as to what will be the next big thing, but do not aim to take responsibility for running a business. On the face of it, ‘private equity’ concerns are quite different. They specialize in taking over under-capitalized and underperforming businesses, with the aim of reorganizing management and relaunching the business. This may take three or five years, during which distractions and loss-makers are spun off and the core business overhauled. Investors—including pension funds—are invited to back these operations. The private equity fund is really a sort of collective entrepreneur, and those with appropriate skills and judgement will deliver a good return to the patient and large-scale investor. Like hedge funds their charges are higher than those of ordinary fund managers, and normally comprise both a standard annual fee of 2 per cent of fund value together with a portion of the eventual pay-off, or ‘carried interest’, once the reorganization and refloat is complete. [22] The investor thus contributes not to the private equity organization as such but to a specific fund that it will launch. It will raise a given sum—from as little as £10 million to several billions—which will be used to make acquisitions in a given sector. [23] The private equity concern will have real costs, such as legal ‘due diligence’, insurance and staff; but as the size of funds grows the annual management fee will tend to become more interesting than the entrepreneurial profit, which itself will be spread over several years. Private equity ‘club deals’ enable different concerns to pool costs but increase their funds under management.

The combined effect of such trends is to bring private equity closer to a generalized fund management logic, where the real goal is to boost the size of the funds under management because this will boost the fees. [24] In the process the spur to entrepreneurial gains will be blunted, and opportunities for speculation may be hard to resist. Those engaged in a range of take-over and buy-out possibilities will tend to have advance knowledge of market events, with those whose bid fails being most likely to talk, or seek compensation, by acting on the information in their possession. In March 2006 London’s Financial Services Authority published a study of the previous six years’ trading patterns on the ftse 350 which found that ‘the level of insider trading is very high with over 30 per cent of significant announcements being preceded by informed price movements’. [25]
Pension funds

The immense sums raised by pension funds of all types have hugely increased the importance of institutional investment. In the 1940s and early 1950s nearly all pension money was invested in government bonds, on the grounds that their future value was guaranteed and that this was therefore the safe and prudent thing to do. But from the 1960s, pension-fund trustees were invited to consider adding private securities to the portfolio, and by the 1970s, the implications of a rising inflation rate were being factored into the argument: government bonds had proved to be a poor hedge against inflation; a fund with tangible assets, such as shares or property, would be able to keep abreast of rising prices. After about 1982, the cult of equity carried almost all before it, and even quite cautious fund managers would happily contemplate corporate securities comprising 80 per cent of fund assets. Finally, in the epoch of the new financialization, attention has focused not just on the right mix of assets but on financial products and treatments—swaptions and the like—which give one type of asset some of the characteristics of another. By the early 21st century, a fund manager or board of trustees worried about inflation or interest-rate risk can purchase a product that will hedge it. It has also become common for fund managers to earn a little more on their holdings by lending stock to hedge funds for short-selling operations, though the tiny sum made by repeated loans rarely amounts to as much as a return of one basis point (0.01 per cent) on the value of the stock.

It will readily be grasped that such procedures have the effect of complicating and weakening ownership rights. The trustees who permit or encourage the use of financialized techniques are more concerned at saving the sponsor money than they are with fortifying the pension promise. And even if they give primacy to their fiduciary duty, they often do not properly understand complex credit derivatives and the risks they pose if there is a sharp change in the business climate. [26]

However sophisticated fund management becomes, it remains the case that the nominal owners or beneficiaries of the assets in a pension fund have no say in how their savings are managed. There is thus a double accountability deficit, with fund managers not answerable to plan beneficiaries, and corporate management only sporadically answerable to shareholders. Indeed the now widely admitted crisis of corporate governance—several symptoms of which are to be considered below—has its roots in the failures of pension funds, and other institutional investors, properly to represent the interests and views of the ultimate owners, namely the plan participants. The evidence suggests that capitalism works better if its stewards are answerable to someone other than themselves.

From the 1980s, pension funds and other institutional money were made available to corporate raiders like James Goldsmith, and financial engineers like Michael Milken, who successfully sought to boost the importance of share value in corporate affairs. The financial professionals and takeover specialists organized a wave of mergers and acquisitions that boosted the share price of the target companies, but often brought little lasting benefit to the shareholders in the predator company. Looked at from the employee’s standpoint, the pain was felt by those who lost their jobs in the post-merger reorganization. Teresa Ghilarducci charged that pension funds aided and abetted the downsizing of the late eighties and early nineties: ‘the stewards of labour’s capital used pension funds in speculative investment activity, which closed plants and strangled communities’. [27] Fund managers can gang up to remove ceos who do not succeed in sustaining shareholder value. In the 1990s ceos at a string of underperforming giants were removed thanks, in part, to shareholder pressure; amongst others, such exits were seen at gm, ibm, Westinghouse, American Express, Xerox and Coca-Cola. [28] In other cases institutional shareholders pressed for corporate reorganizations that broke up historic companies like at&t and itt. Concern for shareholder value was the driving force in these dramatic developments. [29]

The fund managers are naturally attentive to the interests and viewpoint of the sponsoring board, which has nominated the trustees who will renew or drop their mandate to manage the fund. The fund managers are often themselves divisions of large financial concerns like Citigroup, State Street, Merrill Lynch and Morgan Stanley, which hope to make large fees from supplying other services to the corporations. This gives them a further reason to ingratiate themselves with the sponsoring ceos and boards of directors. When the money managers come to vote the shares they hold in trust at agms they will usually defer to the board, often disregarding poor governance. Sometimes the trustees themselves will mandate such a policy. Simple shareholder passivity is usually enough to allow the board a free hand. Over the 1990s the investment banks, in their eagerness for extra business, became the handmaidens of executive aggrandizement. Business leaders, increasingly free from public regulation, found their most cherished schemes for expansion and enrichment cheered on by finance houses that made huge fees from mergers and acquisitions, ipos and rights issues. This situation damaged the interests of policyholders and bred many of the business scandals and disasters of the last few years. [30] While Wall Street allowed ceos to garner exorbitant remuneration, they were also happy to escape responsibility themselves.

The services provided by the fund managers do not come cheap. Charges usually amount to at least 1.5 per cent of the fund each year, and if account is taken of hidden extras, such as soft dollars—business services furnished for free as a kickback by those who receive the trading business—the figure is often higher. Public-sector pension schemes often run on a fee as low as 0.3 per cent of the fund each year. The charges of the private fund managers often reduce the yield on a personal pension pot by as much as 40 per cent over a forty-year period. While profits are high, the other explanation for excessive charges is huge marketing costs. This extravagance is rational because beneficiaries tend to stay with their first manager and will pay a large stream of contributions for decades. [31]
Bezzling

It might be thought that during the share bubble, the fund managers would have seen the warning signals and tried to curb executive aggrandizement, or at least to dampen the speculative fever of the late 1990s. But they did not. They were playing with other people’s money and the incentives they were offered encouraged irresponsibility. Managers usually receive a bonus related to the performance of the funds they manage over the previous year. In a prescient 1993 article entitled ‘Churning Bubbles’, two financial economists, Franklin Allen and Gary Gorton, warned of the design flaw in fund-manager incentive schemes, encouraging them to join a speculative bandwagon even if they knew that it would eventually run into a ditch. As they explained:

The call option form of portfolio managers’ compensation schemes [exposing them to upside gains but not downside losses] means they can be willing to purchase a stock if there is some prospect of a capital gain even though they know with certainty that its price will fall below its current level at some point in the future. [32]

And beyond such calculations there was the fear of losing mandates, and even their jobs, if they carried out a rigorous assessment of company worth. In the late 1990s the analysts retained by the big banks joined the throng, with 97 per cent ‘buy’ or ‘hold’ recommendations on the stocks they tracked.

Another trial lying in store was that of dubious business practices that might help a company over a bad patch, but which could prove lethal if the bubble burst—as it inevitably would. J. K. Galbraith pointed out in The Great Crash, 1929 that there is always a bit of ‘bezzle’ around even when things are going well. [33] When the bad times arrive it can no longer be concealed, and the embezzlement is exposed to view. We were told that Enron and kindred organizations were companies of the future, with complex derivative products that could hedge everything from the price of oil to next year’s weather. Yet scrutiny of the malpractices at Enron and other collapsing giants reveals that most of these deceptions were variations of ancient ruses, dressed in the language of up-to-the-minute financial engineering. The bankers and professional advisers should have been highly suspicious of revenue boosted by hollow swaps and sham transactions, of the booking of current costs as capital assets, or the hiding of liabilities in Special Purpose Entities (spes). When Citibank and Morgan Stanley helped the energy company to devise spes, they would have gained enough knowledge to smell a rat. Merrill Lynch, in a sham transaction designed to boost Enron’s profits, became the temporary owner of three energy barges off the coast of Nigeria. The bank had a commitment from Enron that it would buy back the barges as soon as the new reporting period had arrived. Citibank and Morgan Stanley lent large sums to Enron, but they then constructed ‘credit derivatives’, chopping up the loan into many pieces, with each carrying a different level of default risk. These were then sold, in a game of pass the parcel, to pension funds and other institutional investors. When Enron went bust many fund managers had to pick up the bill on behalf of their clients.

The banks subsequently agreed with the sec and the attorney general of New York that they would pay $1.4 billion in fines and compensation, though insisting that they do not admit that they were in any way at fault. [34] In several cases the banks, so far from being duped by their corporate customers, had themselves devised and sold obfuscatory or even fraudulent devices to the delinquents. Many fund managers fell over themselves to acquire what were touted as glamorous new financial products. Despite the ‘deal’ between regulators and banks, and the latter’s protestations of future good behaviour, the accountability and regulatory deficits that allowed the scams to happen have not been remedied.

The Sarbanes–Oxley Act (2002) focused on corporate governance, not the role of the banks. While leading executives at WorldCom, Enron and dozens of other failed corporations were prosecuted and sentenced to between eight and twenty years in jail, the banks’ role in helping to construct opaque or fraudulent financial instruments was deemed less culpable. Whilst banks never admitted any guilt, the fund managers, institutions and individuals who had lost tens of billions of dollars pursued, and sometimes won, private suits alleging malpractice, neglect and absence of due diligence on the part of their financial advisers and brokers. Although the banks’ 2003 settlement with the regulators was just $1.4 billion, they paid out much larger sums in settlement of the private suits; by the end of 2005 they had paid $6.9 billion to settle Enron-related suits and $6 billion to settle WorldCom-related ones.

In each case the total losses stemming from the collapse were about ten times as great as the indemnity paid out. However inadequate, Wall Street seemed to accept that it owed some compensation. But their insurers discovered that even this expiation was not what it appeared. As a Wall Street Journal report explained:

The banks . . . are battling to recover a portion of the more than $13 billion they paid in fines for settlement and regulatory actions related to the frauds. They say insurance policies they bought during the 1990s should cover payments the banks made to settle class-action suits over their roles in advising Enron and WorldCom. The Swiss Reinsurance Co. and some other large insurance companies are balking.

One of the banks concerned, Bank of America, had taken out insurance to provide coverage up to $100 million for claims ‘arising out of any wrongful action committed by the insured’. [35] Insurance of this sort exacerbates representational problems by insulating the agent from the most likely sanction for malpractice, a fine.

The business scandals were partly explained by pressure to produce results, at a time of underlying deterioration in the profitability in the provision of non-financial goods and services in the major Western economies. [36] The wave of deregulation in the 1990s contributed further, with scandals proliferating in sectors where controls had been most thoroughly abandoned—finance, energy and communications. The Litigation Reform Act of 1995 shielded from legal challenge the claims and promises made by ceos and company promoters. [37] Repeal of the Glass–Steagall Act in 1999 meant that investment banks were no longer constrained from going into the brokerage or retail business, even though this would mean that their brokers would be trading, and their analysts assessing, stock their bank had itself underwritten. But the scope and nature of the scandals also pointed to underlying ‘agency problems’, namely the betrayal of policyholders by their own representatives: the hallmark of what I have called ‘grey capitalism’. Financial concerns were helping ceos out of a tight spot at the expense of millions of small savers. While the ceos were anxious to conceal poor results the banks were expecting and demanding double-digit annual returns. The fund managers were flattered to have their business solicited by swanky ‘bulge bracket’ investment banks, even though they struggled to understand the nature of the credit derivatives and ‘collateralized debt obligations’ that they purchased. Agents who were not responsible to plan members and pension policyholders were handling much of the money lost by this kind of speculation.

Two us anthropologists, William O’Barr and John Conley, in a pioneering study, have evoked the typical outlook of a corporate executive looking after a pension fund. They report the following exchange:

Do you have any contact with the beneficiaries of the fund? None whatsoever. It never happened? None whatsoever. What kind of reporting is done to the beneficiaries every year? The legal requirement under erisa. What does it look like on paper? I’m trying to remember. [38]

In contrast to this distant relationship, the pensions executive will be in close and daily contact with the Chief Financial Officer of the sponsoring company—indeed, in some cases, he will be the cfo.
Vulture capitalists

There is such latitude for make-believe in corporate pension funding that it is easy to come away with the idea that fund liabilities are infinitely fungible. But that is not the case. This is partly because employees do eventually retire and must be paid their pension. It is also because of the increasing nervousness of accountants, regulators and shareholders. Many older companies now have more retirees than they do current workers; if there is not enough in the fund then pensions become a charge on cash flow. [39] The conjuncture of 2001–03 echoed that of the early 1990s, when an orgy of downsizing—especially at defined-benefit sponsoring companies like the us steel corporations—put hundreds of thousands on the scrap heap with a reduced pension. Problems with defined-benefit pension commitments have been a significant factor in the debility of us and British manufacturing, since enterprises in this sector typically had mature db schemes and often found themselves starved of funds just when investment should have been boosted. In late 2004 gm floated a bond specifically designed to help pay pensions—it has around a million pensioners. The damage to the overall credit-worthiness of the auto giant led its bonds to be downgraded to junk status within months.

In 1974, the us Employee Retirement Income Security Act had established an insurance scheme, the Pension Benefit Guaranty Corporation, to which all corporations running db schemes had to belong. [40] American companies that enter Chapter 11 bankruptcy protection ask the court to pass over their pension liabilities to the pbgc, which becomes responsible for the future payment of benefits, albeit at a reduced rate—beneficiaries generally get about 75 per cent of their pension and none of their retiree healthcare benefit. The courts are likely to agree, if this is the only way to save the company as a going concern. Firms with large pension obligations have used the threat of receivership to obtain union agreement to benefit cuts, encouraging workers to agree to ‘give backs’ in order to save their jobs.

‘Pension-deficit disorder’ has produced a new breed of financier, the ‘vulture capitalist’, who specializes in extracting value from firms burdened by large pension and medical liabilities, largely by stripping employees of their entitlements. (In terms of Pollin and Arrighi’s classification, this would count as a clear case of forcing a redistribution in capital’s favour.) Filing for bankruptcy protection used to be a rigorous process, allowing the company an interval to get its affairs in order; it was meant to protect employees, among others, from a precipitate and perhaps unnecessary liquidation. But the specialists in ‘distressed assets’ use the pause for their own, very different, ends.

Robert ‘Steve’ Miller has appeared on the scene of a string of corporate wrecks. At Chrysler in the 1980s, Miller used threats from the company’s creditors and bankers to extract concessions from the unions and the pbgc. As ceo of Bethlehem Steel in 2001 he closed down the company’s pension plan, leaving $3.7 billion of unfunded liabilities to be inherited by the pbgc. Another financier, Wilbur Ross, stepped in to buy Bethlehem and four other dying steel companies, putting them into bankruptcy in order to wind up their pension plans, and then selling the newly viable concerns for a profit of $4.5 billion. The employees, by contrast, were left with shrunken benefits. [41] Miller went on to become chief executive of Federal Mogul, a car-parts maker with factories in the uk as well as the us. In July 2004, the uk subsidiary of this company went into receivership and successfully shed pension obligations for over 20,000 employees, with losses for a further 20,000 in an associated company. [42] The British government protested (and felt obliged to bring forward their own scheme for a Pension Protection Fund). However another ‘vulture’, Carl Icahn, bought up Federal Mogul paper at 20 cents on the dollar, in a bet that bankruptcy plus liability-shedding would succeed.
Stripping the barnacles

By the late summer of 2005 Steve Miller was ceo at Delphi, another company sinking under the weight of the pension and medical-insurance promises it had made to its employees. Delphi, previously a division of gm but spun off by it in 1999, was the world’s largest auto-part maker with 50,000 employees in the us and 180,000 worldwide. Miller’s sign-on fee was $3 million and an annual salary of $1 million (after an outcry he renounced the annual pay and kept the sign-on fee, but the value of any options package was not revealed). Miller also paid off twenty executives with comfortable retirement packages, while urging the great mass of employees to accept huge cuts—of 50 per cent or more—in their wages and healthcare and pension entitlements, saying that only this would save their jobs and help Delphi to avoid bankruptcy. He spoke of workers earning $65 an hour, though average wages were in fact $27 an hour, and proposed that instead they should be around $10–12 an hour. [43] On 8 October 2005, after Miller’s savage reductions were turned down by the uaw—as he must have known they would be—the company filed for bankruptcy protection under Chapter 11. Miller continued to urge huge cuts in benefits and the uaw continued to resist them. [44]

Because Delphi had been spun off from gm, the auto-maker still had residual responsibility—estimated to be at least $4 billion, perhaps much more—to honour commitments to its former employees. This allowed Miller to seek credit from gm in order to keep Delphi afloat—and at least nominally be responsible for the pension and healthcare plans. Wilbur Ross once again expressed interest in the ‘distressed asset’, and was already positioning himself to acquire it by buying up other auto-parts companies. As Miller himself remarked: ‘Wilbur likes to invest in industries that are out of favour, and auto-parts are certainly in that category . . . But he wants assets that have gone through bankruptcy, had the barnacles stripped off and liabilities resolved.’ [45] The barnacles, of course, represent past promises of a secure future for employees. Writing about parallel uk developments, Martin Wolf offers the following devastating verdict:

The implosion of private-sector defined-benefit pension schemes accelerates . . . Predictably, as the schemes disappear, the supply of self-serving, self-exculpation from managements and those who speak for them soars . . . What we are watching is the unwinding of what was—in effect, if not in intention—a confidence trick known as ‘bait and switch’: offer something attractive and then switch it for something else when the customer comes to collect. Pension provision provides attractive opportunities for such a game. The aim was to hold on to valuable staff, encourage them to acquire company-specific skills and pay them less than their market wage. A clever way to do this is to promise pay far in the future. That, after all, is all pensions are—deferred pay. Companies have played the bait and switch game: now comes the switch. [46]

The manoeuvres at Delphi are part of the softening-up process for what will happen elsewhere, including the auto companies themselves, led by gm with its million-strong army of retirees. Ten days after Delphi went into Chapter 11, the uaw accepted cuts in health benefits at gm worth $15 billion. [47]

The owners of the large airline companies have also played the Chapter 11 card, notwithstanding the fact that they are rather implausible victims of globalization—they can buy fuel virtually tax-free and on their major routes they do not face competitors paying Third World wages. Auto will be next, with telecom companies not far behind. Financiers have not been the only ones to benefit, however. In October 2005 Northwest Airlines, having availed itself of bankruptcy protection and asked the court to allow it to repudiate its pension obligations, hired the services of eight law firms and two bankruptcy consultancies in order to outgun its employees. Delta took the same path, hiring seven law firms and four financial advisory firms. The Wall Street Journal commented:

Bankruptcy has long been lucrative for lawyers, but the airline industry is providing an unusual bonanza. This week’s fourth annual forum on airline re-structuring in New York, sponsored by the American Conference Institute think tank, serves as a summit about how lawyers can make money out of the turmoil—or, as they put it, ‘partnering with your clients to capitalize on opportunities in the distressed airline industry’. [48]

Stud farms and coronets

The specialists in distressed assets like to operate through closed, private-investment vehicles that do not have to obey the standards of disclosure and reporting of the normal public company. But the closed company can also be a source of vulnerability for its owner, exposing him or her to the liabilities of entities in which they have a controlling stake. In 1992, the financier Carl Icahn had a controlling stake in Trans World Airlines when it filed for bankruptcy protection. The pbgc, aware that it was about to be stuck with the airline’s pension obligations, took out a claim against Icahn’s assets, including his favourite racehorse and ocean-front residence. Icahn eventually agreed to pay $30 million a year for eight years to help cover twa’s pension deficit.

This episode was recalled in February 2006, when the pbgc sought to attach the assets of another financier specializing in distressed assets. Ira Rennert’s holding company Renco is the owner of wci Steel, which had issued bonds worth $300 million, redeemable in 2004. wci’s 2,000 employees and retirees were alarmed to learn that the company was in bad shape and that, in case of bankruptcy, the pension fund would have a deficit of $189 million. The pbgc responded by taking a lien on Rennert’s other assets: in 1992, he had purchased am General—the manufacturer of the Humvee and the Hummer—for $133 million, selling a 70 per cent stake for $930 million in 2004. With the fruits of such investments Rennert had built a palatial estate, ‘Fair Field’, situated in the Hamptons. This beachfront estate comprises five buildings, with 29 bedrooms and 39 bathrooms. According to a report: ‘its inlaid floors, its frescoes and other splendours have an asset value of $185 million, uncannily close to the $189 million shortfall that the wci actuary found’. The pbgc claimed that Fair Field could be attached because Renco was its beneficial owner, owning over 80 per cent of Blue Turtles, the entity that directly owned the estate. [49]

In the past investors in distressed assets bought bonds, but there is now lively interest from hedge funds like Xerion, Appaloosa Management lp and Mellon hbvus in purchasing shares and helping to establish stockholder committees in such concerns as the Mirant Corporation, us Gypsum and Impath Inc. As the Wall Street Journal explains:

there are likely to be plenty more companies slipping into bankruptcy proceedings where the new breed of distressed investor may want to target equity. These include large ‘old economy’ companies with large liabilities such as underfunded pension plans or the costs of litigating environmental claims. Many of these companies will use bankruptcy proceedings to shed those liabilities. [50]

Britain has acquired its own ‘vulture capitalists’. In March 2006 the Financial Times carried the following report concerning a property group which had acquired a controlling stake in the Allders retail chain:

Minerva, which owned a 60 per cent stake in Allders when it went into administration in January last year, has always insisted the 3,500 pensioners in the group’s pension scheme were not its responsibility. But the circumstances surrounding the collapse of Allders, with a pension deficit of £68m, are still being examined by Kroll, the insolvency practitioners. Minerva paid £49m for Allders’ flagship Croydon store just months before the retailer’s collapse. It is expected that Allders will soon be put into liquidation, at which point the pension trustees can ask for help from the government’s Pension Protection Fund . . . Minerva has endured a turbulent 18 months, with . . . the Allders collapse and the replacement of chairman Sir David Garrard with Andrew Rosenfeld, former chief executive. It emerged last week that the two men had lent a total of £3.3m to the Labour Party. Mr Hasan [the chief executive] yesterday denied suggestions that Minerva may have won planning permission for its unbuilt Minerva Tower in the City as part of this loan. [51]

In a peculiarly British twist to the vulture-capitalist scenario, Downing Street had also nominated Garrard for a peerage. While in the us the party donors get to influence legislation, in the uk they can actually become legislators as well—although in this case, untoward exposé of the secret loans in the March 2006 ‘cash for ermine’ debacle was to upset the calculation.
Scams and scandals

Between 2001 and 2005, corporate scandals were eclipsed by the revelation that core financial institutions—the major investment banks, mutual funds and insurance houses—had colluded with corporate crime and were themselves awash with insider-dealing, kickbacks and techniques for skimming their own customers. The exposure of these abuses, after the bursting of the share-price bubble, led to settlements in which the financial sector paid out billions of dollars in fines to regulators and reimbursed some clients. In 1921 the Martin Act, adopted after hundreds of thousands had lost their savings in Charles Ponzi’s famous pyramid scheme, gave the Attorney General of New York State the right not only to bring criminal prosecutions against suspect financial bodies but also to search their premises without warning and impound their documents. [52] As we have seen, the 2002 Sarbanes–Oxley Act largely ignored the financial sector, but the current New York State attorney general, Eliot Spitzer, has put his powers to good use, seizing and publishing the internal records and emails of leading Wall Street concerns to reveal a string of abuses in the brokerage practices, investment advice and fund-management services offered to investors by the finance houses. Some of these abuses indicate Arrighi and Pollin’s first category of financial profits: groups of capitalists benefiting at the expense of other capitalists, in addition to the second category, where capitalists benefit as a whole.

The documents unearthed by Spitzer showed how analysts had boosted the shares of companies with which their bank did business. In a practice known as ‘spinning’, banks underwriting an ipo would allot a tranche at the offer price—usually set very low—to senior executives in companies whose business they wished to attract. [53] The $7 trillion mutual-fund industry was similarly riddled with malpractice. Nominally owned by the investors, mutual funds are in reality controlled by the sponsoring financial corporation: the finance house sets up the fund and selects its directors. Many funds had allowed favoured clients the privilege of ‘late trading’ at the expense of ‘stale prices’, whereby these customers, mainly hedge funds, would be allowed to trade mutual funds after the market had closed, at the closing price, thus being able to take advantage of breaking news on other stock exchanges. Another widespread practice was for mutual funds to allow ‘market timers’ to buy just after the close, with the aim of selling the next day. Spitzer was assisted in his prosecutions by the work of academic researchers who had been puzzled by the extent of poor returns in the mutual-fund industry. Eric Zitzewitz of Stanford subjected a huge mass of mutual-fund data to rigorous economic analysis, and concluded from the pattern of price movements and sales information that there had to be regular, large-scale trading taking place on the basis of ‘stale prices’. [54]

After investigating, the sec found that half of the 88 mutual-fund groups it had questioned—together responsible for 90 per cent of all mutual-fund business—allowed ‘market timing’, while one quarter of brokerage firms that sell mutual funds had allowed certain customers to make late trades. A Republican senator, Peter Fitzgerald of Illinois, described the industry as ‘the world’s largest skimming organization’. Spitzer’s conclusion, as explained to a congressional hearing, was that the root of the problem was the fake structure of the mutual funds, with their phoney boards of directors. [55] However, Spitzer has little power to extract structural transformation.

The attorney general’s next target was ‘bid rigging’ in the insurance industry and, once again, he went for the really big fish, not the minnows. In October 2004 he charged that ‘on numerous occasions’ officers of Marsh and McLennan, the world’s largest insurance broker, had encouraged counterparts at American Insurance Group (aig), the largest us commercial insurer, to submit a fake bid—pricing it so that it would appear that Marsh, in steering its clients towards a slightly cheaper bid, was vigorously forwarding their interests. It was, Spitzer argued, ‘a scheme to defraud’. His indictment focused on the pay-off Marsh and McLennan received from insurers who won their clients’ business: kickbacks paid by those who were allowed to win the fake bidding process. The enquiry also documented the practice of ‘finite insurance’, by which companies entered an agreement with an insurer to guarantee a top-up payment in case they proved unable to meet an earnings target. Not only would this make it hard for shareholders to assess company performance, it was also likely to be very expensive. Other insurance concerns under investigation included Ace and General Re, the insurance arm of Warren Buffet’s Berkshire Hathaway. [56] In 2004 the sec indicted aig for an ambitious campaign to market deceptive ‘loss mitigation’ products and off-balance-sheet ‘special purpose vehicles’, which could hide non-performing loans and other liabilities. [57]
A financialized future?

Any account of the new world of finance runs the risk of neo-Luddism—of treating finance itself as necessarily a domain of delusion and chicanery. The financial techniques employed by hedge funds or the finance departments of large corporations are not all designed for some dubious purpose. The use of derivatives to hedge currency or interest rate swings usually aims simply to reduce uncertainty. It may make sense to offset other, similar, risks to achieve a balanced portfolio. But hedge funds, finance houses and accountants invariably go far beyond such tame procedures. They do not limit themselves to a plain ‘vanilla swap’—say, to replace fluctuating with fixed interest rates—but will sell clients a leaseback within a sale within a swap, in order to thoroughly befuddle regulators, tax authorities and shareholders. While financial engineering can bring great rewards to its practitioners, many of its most characteristic devices have nothing to do with improved performance, but are all about gaming the taxman or the shareholders. Likewise hedge funds often use leverage (borrowed money or assets) to increase their profits on a transaction, but in so doing also increase the exposure of their clients. Those who buy an asset stand to lose what they have paid. Those who buy a derivative can be exposed to unlimited loss. The barely contained collapse of Long Term Capital Management in 1998—patronized by central banks and staffed by brilliant minds—illustrated several of these dangers. [58]

Financialization is defined by the use of sophisticated mathematical techniques to distribute and hedge risk, so it might be thought that these instruments are themselves a major part of the problem of ‘grey capitalism’. But this would be an error. The improvements in risk calculation are often genuine enough, but the problems arise from the ‘grey capitalist’ structure within which they are embedded. In today’s highly financialized world, a potentially systemic threat on the scale of ltcm could easily reappear, but it is more likely to be the result of poor institutional structures than of faulty calculations. After the collapse of Enron and WorldCom, the tangled mass of derivative contracts at stake unwound without much pain; the real disaster was for the pension funds and employees who had invested in the shares and financial instruments offered by these concerns. The fallout was similar after Refco, the largest us futures trader, was forced to declare bankruptcy in 2005 after revealing that an entity owned by one of its key executives had owed the company $300 million since 1998. The individual in question had, it is true, used a small hedge fund to help conceal this debt. But the financial manipulation he used was of breathtaking simplicity—the debt was simply rotated around three accounts with different reporting periods, one of the hoariest scams known to financial history. What allowed the fraud to succeed was the willingness of highly respected lawyers and accountants to prepare and endorse the rotating payments. The erring executive acquired his colleagues’ trust because of his access to funds held for an Austrian workers’ pension fund, bawag, which suffered a heavy loss. On the other hand, the counter-parties to Refco’s complex mass of derivative and futures contracts were able to settle them quite easily.

More generally, as Edward LiPuma and Benjamin Lee urge, the use of derivatives in contemporary financialization aims at short-term gains that short-circuit flows of production and trade, garnering an immediate profit at the expense of what might have been a long-term social surplus. [59] Hedging techniques permit advances in the efficiency of capital but the resulting gains are disproportionately reaped by financial intermediaries, especially those with access to huge computing power and privileged information networks. As we have seen, the financialized world has involved the dumping of pension promises and health entitlements, while the savings of many millions have been committed to credit derivatives or hedge funds which may deliver short-run returns but remain vulnerable to the business cycle in the longer term. In the speculative process, large-scale finance has the edge over the small saver and the cash-strapped corporation. In the past the large banks were able to grow at the expense of the savings of the ‘little man’, because they had larger reserves and better information. [60] Today the small savers’ holdings in pension, insurance and ‘mutual’ funds play the little man’s role. The mass of employees may own a significant slice of productive assets, but they do so in ways that render them vulnerable to hedge funds and other finance houses which are better informed and more nimble.

Because financialization is not embedded in a macro-policy or strategy it often plays a part in strangling growth. Booms lose their way if they are channelled into short-term speculation and arbitrage, rather than long-range investment. Sustained growth requires infrastructural and educational investments that may not pay off for decades. While arbitrage can help to spot and eliminate excess costs, if unregulated it will wipe out all long-range projects. Previous booms saw the construction of railroads or interstate highways, but the stock market thrills and spills of the 1980s and 1990s lacked the sort of commitment and foresight displayed by Henry Ford and other founders of industrialism, or John Maynard Keynes and other architects of the postwar boom. Indeed so feeble was the investment thrust of the 1990s boom that it did not even allow for completion of the broadband cable network. The managers of pension funds were part of the problem, since they wanted investments that yielded immediate returns and which could easily be turned into cash. This was, in part, the result of accounting methods which required that assets be ‘marked to market’ every year.

In the mid-1990s Giovanni Arrighi warned that financial expansion would have the further defect that—unlike advances in manufacturing, communications or trade—they tend to enrich only a small part of the population and do not create a broad basis for sustainable mass demand. Kevin Phillips confirmed that financialization fostered extreme inequalities, as gains were channelled to personal enrichment rather than productive investment. [61] Inward foreign investment can cover the resulting imbalances and the expansion of personal debt can prevent domestic demand from faltering in the short term; in 2000–05 consumer confidence was shored up by a house-price boom and by the Bush tax-cuts. But ballooning public and private debt, and a weak recovery, are storing up problems for the future and have created a difficult climate for manufacturers. [62]

Here is Rudolf Hilferding exploring the birth of finance capital nearly one hundred years ago:

The bank can use its great capital resources and its general overview of the market to engage in speculation on its own account with comparative safety. Its numerous connections extending over a wide range of futures markets, and its knowledge of the market, give it the opportunity to engage in safe arbitrage dealings, which bring considerable profits because of the large scale upon which they are conducted. [63]

The futures to which he was referring related to the commodities markets in wheat, pork bellies, oil and metals, and some of the scope of arbitrage was limited by the growth of cartels. The phenomena I have been discussing relate to a post-‘monopoly capitalism’ world and a new expression of the fundamental drives of capitalism—its ‘conatus’ as Frédéric Lordon puts it—but in a dimension that now includes not simply commodities but personal debt, mortgages of every type, currency contracts, corporate securities and variance swaps. [64]

The foregoing sketch suggests that financial profits over the last decade have mainly taken the form of the cancellation of promises made to employees—exploitation over time—the erosion of small capital holdings by large and unscrupulous money managers and the swallowing of shoals of tiny fish by a shark-like financial services industry. Few of the gains from the reallocation of capital through superior risk assessment have been channelled to production. Financial profits have instead prompted a surge in upscale real-estate prices and the turnover of the luxury goods sector. The mass of employees and consumers have sunk deeper into debt. Yawning domestic inequalities have been compounded by escalating international imbalances, with an inflow of foreign capital covering a deficit on the us current account. With a sagging dollar, an oil price shock and rising interest rates, American households—the consumers of first and last resort—are likely to find the strain of carrying the world on their shoulders ever more difficult. Financialization promotes such a skewed distribution of income that it ends by undermining its own credit-driven momentum.

[1] Kojin Karatani, Transcritique: On Kant and Marx, Cambridge, ma 2003; Slavoj Žižek, ‘The Parallax View’, nlr 25, Jan–Feb 2004. I would like to thank John Grahl and Tom Mertes for their comments on an earlier draft of this text.

[2] Robert Brenner, ‘New Boom or New Bubble?’, nlr 25, Jan–Feb 2004, p. 76. For a wide-ranging account see also Greta Krippner, ‘The Fictitious Economy’, PhD thesis, University of Wisconsin-Madison, 2003. See also Andrew Glyn, Capitalism Unleashed, Oxford 2006, pp. 5–76.

[3] Duménil and Lévy, ‘Neoliberal Income Trends’, nlr 30, Nov–Dec 2004. This and other aspects of financialization are more fully treated in my forthcoming book, Age Shock and Grey Capital, from which most of the examples that follow have been quarried.

[4] Kevin Phillips, Boiling Point, New York 1993, and Wealth and Democracy, New York 2002.

[5] Robert Pollin, ‘Contemporary Economic Stagnation in Historical Perspective’, nlr 1/219, Sept–Oct 1996, p. 115; Giovanni Arrighi, ‘Financial Expansions in Historical Perspective’, nlr1/224, July–Aug 1997, pp. 154–9.

[6] ‘Goldman Sachs and the Culture of Risk’, Economist, 29 April 2006.

[7] John Grahl, ‘Globalized Finance’, nlr 8, Mar–Apr 2001.

[8] See Timothy Sinclair, The New Masters of Capital, Ithaca, ny 2005.

[9] Comparing the us or uk stock-exchange stars of former decades with those of 2005, the overlap is small. The oil companies, banks and ge still loom large in the nyse but much else has changed. Microsoft, Wal-Mart, Intel, Google and eBay are quite new. ibm and Coca-Cola are still there but have shrunk in size. The ukftse 100 is likewise dominated by newcomers like Vodafone, while famous names like ici, Marconi and Unilever are greatly reduced.

[10] Dennis Berman, Henry Sender and Ian McDonald, ‘gm Auction Won’t Be Simple’, Wall Street Journal, 9 December 2005.

[11] Jane Croft, ‘Banks Pile into Sub-Prime Lending’, Financial Times, 21 December 2005.

[12] Banks still count in their own exorbitant salary costs in micro-financing. As a press report notes: ‘The biggest appeal to most investors, however, isn’t helping the poor. It’s the return they’re getting’. Tom Marshall, ‘Bond Issue Lets Investors Buy Into Microfinance’, Wall Street Journal, 27 April 2006.

[13] Edward LiPuma and Benjamin Lee, Financial Derivatives and the Globalization of Risk, Durham, nc 2004, pp. 90–2.

[14] In 2005 the cbi, the main uk business federation, complained that hedge funds, exempt from the disclosure requirements of banks, were unscrupulous predators, stalking their prey in secret and striking without warning.

[15] Shorting is not all bad. It can boost liquidity, or help to uncover inflated assets (as did the Ursus Fund in the case of Enron), but better regulated and more modest hedge funds could do this—or other institutions could fulfil these functions.

[16] John Bogle, The Battle for the Soul of Capitalism, New Haven, ct 2005, pp. 120–1. Bogle is the founder and former ceo of Vanguard, the third largest money manager in the United States.

[17] In the uk short-selling of ‘grey market’ shares in Room Service in November 2003 led to a situation where there were more trades than shares to fulfil them. The short-sellers were exposed as ‘naked’ because a promised rights issue stalled. When the authorities suspended trading, and cancelled some prior trades, this damaged many who had unknowingly been involved in the shorting operation. Elizabeth Rigby, ‘Room for Change on Short-Selling’, Financial Times, 29 November 2003.

[18] Daniel Buenza and David Stark, ‘Tools of the Trade: the socio-technology of arbitrage in a Wall Street trading room’, Industrial and Corporate Change, vol. 13, no. 2, 2004, pp. 369–400.

[19] Hyman Minsky, ‘The Financial Instability Hypothesis’, in Charles Kindleberger and Jean-Pierre Laffargue, eds, Financial Crises, Cambridge 1982, pp. 1–39. For a discussion of this text see Geoffrey Ingham, The Nature of Money, Oxford 2004, pp. 160–1.

[20] This is shown by Kenneth Carow and Edward Kane, ‘Event Study Evidence of the Value of Relaxing Longstanding Regulatory Restraints on Banks, 1970–2000’, National Bureau of Economic Research Working Paper 8594, November 2001.

[21] ‘Battling for Corporate America’, Economist, 11 March 2006.

[22] Richard Freeman, ‘Venture Capitalism and Modern Capitalism’, in Victor Nee and Richard Swedberg, eds, The Economic Sociology of Capitalism, Princeton and Oxford 2005, pp. 144–67.

[23] When the Texas Pacific Group announced a $15 billion fund in April 2006 this was a record, but the scale of private equity had grown over the previous decade, albeit with a dip in 2001.

[24] ‘Why Take Risks When You Can Take Fees’, Guardian, 4 April 2006. See also Matthew Bishop, ‘The New Kings of Capitalism’, Economist, 25 November 2004.

[25] Ben Dubow and Nuno Monteiro, ‘Measuring Market Cleanliness’, Financial Services Authority Occasional Paper No. 23, March 2006, p. 22.

[26] Michael Gibson, ‘Understanding the Risk of Synthetic cdos’, Federal Reserve Bank Working Paper no. 36, Washington, dc 2004.

[27] Teresa Ghilarducci, Labor’s Capital, Cambridge, ma 1992, p. 130.

[28] See Robert Reich, ‘Look Who Demands Profits Above All’, Los Angeles Times, 1 September 2000, and Robert Reich, Success, New York 2000.

[29] Michael Useem, Investor Capitalism, New York 1996, pp. 1–3, 108–9, 126–7. See also Bogle, Battle for the Soul of Capitalism, pp. 3–46.

[30] This is the conclusion of Abraham Gitlow, Corruption in Corporate America: Who is Responsible? Who Will Protect the Public Interest?, Lanham, md 2005. The author is a former Dean of the Stern Business School at New York University.

[31] I document high charges in Age Shock and Grey Capital, chapter 3.

[32] Franklin Allen and Gary Gorton, ‘Churning Bubbles’, Review of Economic Studies, vol. 60, no. 4, 1993, pp. 813–36.

[33] J. K. Galbraith, The Great Crash, 1929, Boston 1955, p. 138.

[34] Kurt Eichenwald, ‘Merrill Reaches Deal with us in Enron Affair’, New York Times, 18 September 2003.

[35] Charles Fleming and Carrick Mollenkamp, ‘Insurers Balk at Paying Wall Street’s Penalties’, Wall Street Journal, 23–26 December 2005.

[36] Robert Brenner, ‘Postscript’, The Boom and the Bubble, paperback edition, London and New York 2003.

[37] A point stressed in Nomi Prins, Other People’s Money, New York 2004.

[38] William O’Barr and John Conley, Fortune and Folly, Homewood, il 1992, p. 107. See also Robin Blackburn, Banking on Death or Investing in Life: the History and the Future of Pensions, London 2002, chapter 2.

[39] At many leading companies, such as Boeing, Ford, General Motors or Colgate/Palmolive in the us—or bt, gkn or Unilever in the uk—the company pension fund has grown to be worth several times the equity valuation of the company itself. Financial analysts began to describe gm as a hedge fund on wheels, and United Airlines as a pension fund with wings (of lead, as it turned out).

[40] In the uk a comparable scheme, the Pension Protection Fund, was established in 2004.

[41] Mary Williams Walsh, ‘Whoops! There Goes Another Pension Plan’, New York Times, 18 September 2005.

[42] Editorial, ‘Pension Crisis Comes to the Boil’, Financial Times, 26 July 2004.

[43] Paul Krugman, ‘The Big Squeeze’, New York Times, 17 October 2005.

[44] The hearing of the Delphi management’s case began on 9 May 2006 and should last about thirty days. During this period the union and management might reach a deal, but the uaw has requested authorization to call a strike. If there was a strike at Delphi it could easily spread to gm, since the latter’s fate is still intimately tied to its former parts division. See Barnard Simon, ‘Extent of Crisis Could Hinge on Court Decision’, Financial Times, 8 May 2006.

[45] Claudia Deutsch, ‘Got an Ailing Business?’, New York Times, 26 October 2005.

[46] Martin Wolf, ‘A Shameful Pensions Confidence Trick’, Financial Times, 1 July 2005.

[47] gm and Ford remain hugely important companies. Both have valuable plants, equipment, patents, research, brands and marketing networks. gm is heading for Chapter 11 for reasons that have everything to do with benefit shedding. It is worth underlining that the pension benefits that gm workers were due to receive, after at least thirty years of gruelling assembly-line work, averaged only $18,000 a year, or half of average earnings; if gm succeeds in offloading its obligation this would decline to about $13,000, and would be weakly, if at all, indexed. Analysts of quite different persuasions have agreed that the real problem at gm has been a board of directors that failed to invest in r&d, and bet the bank on unending demand for gas-guzzling suvs, while neglecting electric cars, hybrids and fuel economy. See, for example, Greg Easterbrook, ‘The gm Lesson’, New York Times, 12 June 2005 and John Schnapp, ‘gm Needs an Extreme Makeover’, Wall Street Journal, 24 October 2005.

[48] Susan Carey, ‘Bankruptcy Lawyers Flying High’, Wall Street Journal, 21 October 2005.

[49] Mary Williams Walsh, ‘Pension Battle May Entangle Mogul’s Home’, New York Times, 3 February 2006.

[50] Karen Richardson, ‘New Way to Play Distressed Firms: Acquire the Stock’, Wall Street Journal, 1 May 2006.

[51] Jim Pickard, ‘Pensions Regulator “Will Take No Action” Against Minerva’, Financial Times, 28 March 2006.

[52] Charles Mills, Fraudulent Practices in Respect to Securities and Commodities, with special reference to the Martin Act, Albany, ny 1925.

[53] During the bubble being allotted shares at the offer price was hugely lucrative: 309 ipos generated $50bn in first-day trading profits. Joseph Stiglitz, The Roaring Nineties, New York 2003, p. 347, n. 9.

[54] Eric Zitzewitz, ‘How Widespread is Late Trading in Mutual Funds?’, Stanford Graduate School of Business, Research Paper No. 1817, September 2003.

[55] John Plender, ‘Broken Trust’, Financial Times, 21 November 2003; David Wells and Adrian Michaels, ‘us Funds Face Abuse Fines’, Financial Times, 4 November 2003; Stephen Labaton, ‘Extensive Flaws at Mutual Funds Cited at Hearing’, New York Times, 4 November 2003; Joshua Chaffin, ‘Spitzer Blames Directors for Scandals’, Financial Times, 4 November 2003.

[56] General Re was said to have sold a product to aig that allowed it to overstate its reserves by $500m in 2000 and 2001. Ellen Kelleher and Andrea Felsted, ‘aig Probe Draws in Buffet’, Financial Times, 30 March 2005; Timothy O’Brien, ‘us Case on Insurers is Expected’, New York Times, 2 February 2006.

[57] Michael Schroeder, ‘aig May Pay Up to $90 million’, Wall Street Journal, 24 November 2004. The fine mentioned in this headline later appeared greatly to underestimate the damages for which the insurer was liable.

[58] Donald MacKenzie, ‘Long Term Capital Management and the Sociology of Arbitrage’, Economy and Society, vol. 32, no. 3, August 2003, pp. 349–80; and Brenner, Boom and Bubble, p. 171–2. For information on the use and abuse of derivatives see the reports by Randall Dodd, Derivatives Study Center, Financial Policy Forum, Washington, dc. See also Doug Henwood, Wall Street, London and New York 1997, pp. 28–41.

[59] LiPuma and Lee, Financial Derivatives, pp. 9–10, 125.

[60] The ways in which big capital battens on small capital is a theme of Rudolf Hilferding’s classic study, Finance Capital: a Study of the Latest Phase of Capitalist Development [1910], London 1981.

[61] Giovanni Arrighi, The Long Twentieth Century, London 1994, p. 314–5; Phillips, Boiling Point, p. 197.

[62] One of the few models we have of finance-led growth predicts uncertainty, even though this initial exercise deliberately excluded any foreign trade or capital account dimension. See Robert Boyer, ‘Is a finance-led growth regime a viable alternative to Fordism?’, Economy and Society, vol. 29, no. 1, February 2000, pp. 111–45. The intriguing diagram on p. 119 does not appear to accommodate the boom in capitalists’ consumption that is part of the financialized wealth effect: instead profits unproblematically feed into share price and productive investment.

[63] Hilferding, Finance Capital, p. 162.

[64] For the role of the latter in upsetting the uk securities market see Gillian Tett and Neil Hume, ‘Derivative Link to Sharp Falls in Equities’, Financial Times, 19 May 2006.

Josh Marshall Returns to Judis / Teixeira

2007-08-14T11:49:00.000-07:00

Back to The Emerging Democratic Majority
By Josh Marshall

Allow me to recommend a book: The Emerging Democratic Majority by John B. Judis and Ruy Teixeira. No question: it's the political book of the year. It's not a rah-rah book; there's no Bush-bashing; it's not written by a leggy, blonde whackjob. But it's the most penetrating and prescient look at American politics you're likely to read for some time. If you favor what Judis and Teixeira call the politics of the 'progressive center' the news is quite good. Conservatives may not agree with their findings. But the book will challenge their optimism about the political future.

(Judis and Teixeira published a synopsis of the book's argument in a recent article in The New Republic. Also, full disclosure: both these guys are friends of mine. But I don't make a habit of recommending friends' books. So, believe me, it's every bit as good as I say it is.)

The book's title is consciously modeled on Kevin Phillips 1969 classic The Emerging Republican Majority, which argued -- correctly -- that the fracturing of the New Deal consensus was laying the groundwork for a new conservative ascendancy. It's an apt analogy.

The basic argument here is straightforward: a handful of demographic, economic and cultural trends are combining to create a new Democratic majority. It's not the old New Deal coalition. It's more centrist, more like the early 20th century Progressives than the mid-20th century New Dealers. It's based on professionals, women and minorities. And its engine is the post-industrial economy. The factors creating these changes include the rise of what the authors call 'ideopolises' -- "areas where the production of ideas and services has either redefined or replaced assembly-line manufacturing"; the declining salience of race-tinged political appeals and other 'wedge issues'; and the Democratic party's slow move toward incrementalist reformism.

If you think of it in terms of the 2000 election map's Blue v. Red America, they argue, Blue America is growing. Red America's not. That doesn't mean necessarily that the Blue states are growing and the Red states are shrinking. In fact, in many cases, the opposite is happening -- at least in relative terms . What it does mean is that the kinds of demographic groups and regional economies that make the Blue states blueish are growing -- in many cases even within states that voted Red in 2000. Follow that? Good.

Republicans often push a contrary argument: that the fastest growing counties in the country, for instance, went overwhelmingly for Bush in 2000. But Judis and Teixeira show why this argument is based on a crude error of statistical analysis. (That, or a tendentious interpretation.) The fastest growing counties in percentage terms turn out - not surprisingly - to be quite small. In the counties with the highest growth in absolute terms, Gore won by a solid margin.

Some of this is obvious enough so long as you're not a political reporter with an earpiece receiving daily inspirational breifings from Karl Rove. (If your base is in rural and smalltown America, in the long-run, that's a problem.) But these guys get to the heart of just why it's happening, where, what the numbers are, the mix of economics and culture which is the wind of politics.

New Democrats and traditionalist, labor-liberal Democrats will each find things they'll like in this book (what struck me, from reading the book, is how stale many aspects of the New Dem/Old Dem debate have become). But the real excitement and value of this book comes in the way it traces these developments back at least thirty years and in many cases far further back than that. The authors do a fine job weaving together highly readable recent political history with a great mass of polling and demographic data and a nuanced understanding of how political coalitions work. It's that rare political book which is both rich in substantive and a good read. Pick up a copy. You'll be glad you did.

Socialism and Print Media

2007-08-14T11:02:00.000-07:00

RÉGIS DEBRAY
SOCIALISM: A LIFE-CYCLE (New Left Review, August 2007)

Impossible to grasp the nature of conscious collective life in any epoch without an understanding of the material forms and processes through which its ideas were transmitted—the communication networks that enable thought to have a social existence. Indeed, the successive stages of development of these means and relations of transmission—whose ensemble we might term the mediasphere—suggest a new periodization for the history of ideas. [1] First, what we may call the logosphere: that long period stretching from the invention of writing (and of clay tablets, papyrus, parchment scrolls) to the coming of the printing press. The age of the logos, but also that of theology, in which writing is, first and foremost, the inscription of the word of God, the ‘sacred carving’ of the hieroglyph. God dictates, man transcribes—in the Bible or the Koran—and dictates in his turn. Reading is done aloud, in company; man’s task is not to invent but to transmit received truths.

A second period, the graphosphere, runs from 1448 to around 1968: from the Gutenberg Revolution to the rise of tv. The age of reason and of the book, of the newspaper and political party. The poet or artist emerges as guarantor of truth, invention flourishes amid an abundance of written references; the image is subordinate to the text. The third, still expanding today, is the era of the videosphere: the age of the image, in which the book is knocked off its pedestal and the visible triumphs over the great invisibles—God, History, Progress—of the previous epochs.

This mediological periodization allows us to situate the life-cycle of socialism, that great fallen oak of political endeavour, within the last 150 years of the graphosphere; and to explore its ecosystem, so to speak, through its processes of propagation. Socialism will not be treated here in terms of the intrinsic value of any of its branches. Rather, the aim will be to grasp the common mediological basis that underlies all its doctrinal ramifications—from Fourier to Marx, Owen to Mao, Babeuf to Blum—by approaching it as an ensemble composed of men (militants, leaders, theoreticians), tools of transmission (books, schools, newspapers), and institutions (factions, parties, associations). The ecosystem takes the form of a particular sociotope, a milieu for the reproduction of certain kinds of life and thought. The professional typographer occupies a special niche within it, the key link between proletarian theory and the working-class condition; herein lay the best technical means of intellectualizing the proletariat and proletarianizing the intellectual, the double movement that constituted the workers’ parties. For a printer is quintessentially a ‘worker intellectual or an intellectual worker’, the very ideal of that human type who would become the pivot of socialism: ‘the conscious proletarian’.

The life-cycle of this ecosystem begins, in France at least, soon after the July Revolution. Organized Saint-Simonism was born one winter evening in 1831, when the carpenter Gauny met the bookseller Thierry in Paris. Propaganda work for the Saint-Simonian ‘family’ was planned for every arrondissement, and local directors were charged with the workers’ education. Hence a new series of encounters between hatters, drapers, cabinet-makers, tilers, and the clerks, printers, engravers and type-founders responsible for running their evening classes and, most importantly, producing their newspapers: Le Globe, then LaRuche populaire, L’Union, and more. The cycle comes to an end in the aftermath of May 1968, Year One of the videosphere. But the life-span of socialism may best be understood within a vaster arc of time: the age of the graphosphere. Dawning with the early-modern era—the ‘coming of the book’—the graphosphere itself comprises three successive chapters: reformation, republic, revolution.
Genetic helix

The inventor of the word ‘socialism’ was the genial typographer, encyclopaedist and 1848-er, Pierre Leroux. Born in 1797, a bartender’s son, Leroux attended the Ecole Polytechnique, then joined a printshop where he perfected a new process, the pianotype. He founded the Globe newspaper in 1824 and, with George Sand, the Revue Indépendante in 1841. Moving to Boussac, he set up his own publishing house and attracted a small community of disciples and readers. He was elected to the Constituent Assembly in 1848, and formally honoured by the Commune upon his death in 1871. The combination—book, newspaper, school—that would be the genetic helix of the workers’ movement is prefigured in Leroux. Socialism was born with a printers’ docket around its neck.

Book, newspaper, school: a reminder of the practical culture that preceded the political programmes. Socialism was a craft formation before it became a mentality. Its take-off came with a specific historical moment—1864, the First International founded in London; 1866, the Education League founded in Paris; 1867, the rotary press invented by Marinoni, permitting a tenfold rise in impressions—but also with a particular form of consciousness. ‘The 19th-century working class harbours three aspirations,’ wrote the foreman Pierre Bruno in his memoirs, published on the eve of the Commune. ‘The first is to combat ignorance, the second, to combat poverty, and the third, to help one another.’ [2] The first and most important was the fight against ignorance, rallying cry of the forces of reason. Working-class socialism, too, was a creature of reason—ruling spirit of the age of the graphosphere.

Typographers, intellectuals and teachers were the three supports of the socialist movement, each corresponding to one leg of the mediological tripod. What was on offer at any workers’ lodge or maison du peuple? A library, newspapers, evening classes and lectures. Today, there are still platforms, books and newspapers. But the central axis of transmission has moved elsewhere, taking with it the apparatus of celebration, prestige and values that formerly conferred such an aura upon the books, teachers or peripatetic lecturers at workers’ educational associations and universités populaires.

A powerful oral culture also played a large part in the workers’ movement, of course: harangues at rallies, congress speeches, conferences; Jaurès at Pré-Saint-Gervais, Lenin on Red Square, Blum at Tours or the Place de la Nation in 1936—all spoke without benefit of microphones, shouting themselves hoarse, to the brink of exhaustion, before tens of thousands of listeners. But if the spokesmen of socialism relied as much on their public pulpits as on their presses, their rhetoric was nevertheless stamped by a bookish culture and a long familiarity with the written word. Even their extemporizations have the feel of the reader or the scholar. Many were great parliamentarians, orators and tribunes in the classical republican tradition; but their addresses were formally founded upon the written word, the real basis of law both in their own eyes and in those of the rank and file.
Powers of the invisible

‘Since 1789, ideas alone have constituted the strength and salvation of the proletariat. It owes to them its every victory’, wrote Blanqui (one of those who passed the ideas of 1789 on to the Paris Commune). Abstract concepts were the abc of a militant’s apprenticeship. The notions of proletariat and bourgeoisie, like those of labour power, surplus value, relations of production, etc., that underlie them, are not apprehensible by the senses. Secondly, whether project or myth, the idea of the Revolution as ‘what should be’ is the denial and transcendence of the immediate, the overcoming of the present. Both as logical discourse and as moral undertaking, the socialist utopia demanded an inner break with the ‘stream of everyday life’, an act of faith that mobilized the powers of conceptual analysis to break the accepted social imagery down into elemental abstracts, like ‘exploitation’.

Writing collectivizes individual memory; reading individualizes collective memory. The back-and-forth between them fosters the sense for history by unearthing potentials within the present, creating backdrops and foregrounds; it is fundamental for the idea of socialism. When it is cold outside and the night is long, memory means that we are not alone. Alphabetical memory, as Hegel would put it. Contrasting ‘the inestimable educational value’ of learning to read and write with alphabetical characters, as opposed to hieroglyphics, he described how the very process of alphabetical writing helps to turn the mind’s attention from immediate ideas and sense impressions to ‘the more formal structure of the word and its abstract components’, in a way that ‘gives stability and independence to the interior realm of mental life’. [3]

All the revolutionary men of action I have met, from Che Guevara to Pham Van Dong by way of Castro (not the autocrat, but the one-time rebel), to say nothing of the walking encyclopaedias known as Trotskyists, were compulsive readers, as devoted to books as they were unreceptive to images. A Hegelian would explain this by saying that reading leads to critical detachment, and—given that there is ‘no science that is not hidden’, nor future without ‘rehearsal’ of the past—to utopian anticipation. Abstraction encourages action, as remembrance leads to innovation. The greatest modernizers inaugurate their career with a backward leap, and a renaissance proceeds through a return to the past, a recycling, and hence a revolution. Columbus discovered America in a library, through the perusal of arcane texts and cosmographies. The Ancien Régime in France was overthrown by admirers not of Montgolfier or Washington, but of Lycurgus and Cato. Chateaubriand and Hugo revolutionized literature by dint of Gothic ruins, Nietzsche vaulted over Jules Verne with the aid of the pre-Socratics, and Freud revisited Aeschylus.

The misfortune of revolutionaries is to have inherited a little more than most people. The written word is vital for these transmitters of collective memory, since their analytical tools are forged from its traditions. A legacy of ideas is not automatically transmissible; there are better or worse historical environments for conveying abstractions, just as there are better and worse conductors of electricity. The revolutionary act par excellence starts from a sense of nostalgia, the return to a forgotten text, a lost ideal. Behind the ‘re’ of reformation, republic or revolution—of rehearsing, recommencing, rereading—there is a hand flicking through the pages of a book, from the end back to the beginning. Whereas the finger that presses a button, fast-forwarding a tape or disc, will never pose a danger to the establishment.
Parchment batons

If news bulletins are the medium for history as spectacle, the archive is the medium for history as practice. The story of communism—as revolutionary utopia, not bureaucratic dictatorship—has been a tale of archivists and old papers. Communism was the bookish invention of Gracchus Babeuf, a specialist in feudal law, who extracted its central ideas from Rousseau, Mably and antique parchments. It flourished in the great storehouses of the written word. For Michelet: ‘My history of the French Revolution was born in the archives. I am writing it in this central depot’—the official records office. Men wove between texts, texts wove between men. Myths beget acts which beget myths, and the movement of narratives spurs the movement of peoples. Histories of Rome had their effects on the deputies of 1789, Lamartine’s History of the Girondins and Louis Blanc’s History of the French Revolution on the 1848-ers, Hugo’s Les Misérables on the Commune and his Ninety-Three on the birth of the Third Republic.

The baton was passed round the world, hand to hand: from the Society of Equals, founded by the medievalist Babeuf, to the Society of New Citizens, founded by the young librarian, Mao Zedong. Buonarroti (1761–1837), a year younger than Babeuf (1760–97), dodged the Directory’s police and survived his friend by forty years. In 1837 Buonarroti’s account of the history they had lived, Babeuf’s Conspiracy for Equality, was published in Brussels, where Marx would take refuge after his expulsion from Paris in 1845, and would find his first apostle in the young Philippe Gigot, paleographer and archivist. Exile in Brussels functioned as a turn-table after the 1815 Restoration. Here Buonarroti met up with the former Convention delegates, Barère and Vadier, who would organize the carbonari, seedbed for the secret societies that sprang up under the July Monarchy, and from which would emerge the League of the Just; which would in turn be refashioned into the Communist League in 1847 by Marx and Engels, along with delegates from Blanqui, ‘the head and the heart of the proletarian party in France’. Thirty-nine years in jail and four death sentences: it was via Blanqui (1805–81), ‘the prisoner’, that the passage was made from Jacobinism to socialism, from 1793 to the Paris Commune; Blanqui who handed the torch to Vaillant, who would pass it to Jaurès, whose byline on his column in La Dépêche de Toulouse was ‘The Reader’, and who was succeeded by Blum, literary critic for La Revue Blanche.

An Olympic marathon: the glow of a letter—more firefly than flame—passing from runner to runner, as if the revolutionary was a forwarding agent, and the heart of the message lay precisely in its transmission: a telegraph flashing from peak to peak, via such human semaphores. Not forgetting the whispering in the valleys, some two hundred years of stories handed down from grandmothers to toddlers. ‘My childhood was full of stories about the long march of the poor, across the ages’, recalls the old French Communist Gérard Belloin.

Tales prompted by a crust of bread on the floor, a drop of soup left in a bowl. They were told by the grandmothers, who had heard them told when they were young themselves. Like underground streams whose course cannot be mapped because their waters seem to disappear completely, then come up further on, the chronicle of peasant suffering knew little of its sources. But it too had run on underground, carried by anonymous voices, each generation confiding its trials to the next. At times it grew more insistent or seemed to fade, but it never went away. It constantly mixed up the past and the present, for isn’t speaking of the troubles of the past a way of drawing attention to those of today? Did that happen long ago? Oh yes, my child, a very long time ago. But how can you be sure? For a child, how far back is long ago? [4]

The workers’ press and the socialist library were crucibles for anarchists, Proudhonists, Leninists and reformists alike. Saint-Simon was a copyist, proof-corrector and bookseller; Proudhon, a typographer. So was Pablo Iglesias (1850–1925), founder of the Spanish Socialist Party. It was a Spanish journalist and typographer, José Mesa, who, exiled in Paris, passed on the heritage of the First International to Jules Guesde, recruiting sergeant of French socialism. Anarchists and socialists were the warring siblings of one family; pamphlets, articles, newpapers, literary supplements, filled their lives. Both followed Luther’s order, to spare neither hardship nor money to set up ‘good libraries and bookshops’ everywhere. The sons of Marx and of Bakunin shared the same gospel: to read and to get others reading. Everywhere they went, they left a library. Hobsbawm could measure the precise degree of socialism’s penetration in Europe between 1890 and 1905 by comparing the number of annual publications. [5]

The cult of the book had its preacherly moments. Hugo to the illiterate worker:

Have you forgotten that your liberator
Is the book? The book is there on the heights;
It gleams; because it shines and illuminates,
It destroys the scaffold, war and famine;
It speaks: No more slaves and no more pariahs. [6]

But it had its triumphal version too, gaily insurrectional in Jules Vallès’s bulletin to his editor, warning of ‘galleys within the fortnight, and “pass for press” in two months’. ‘I breathe deep, I swell out. “Pass for press”, it’s as good as the order to fire! On the barricades, it’s a gun-barrel poked out between the slats.’ And Hugo himself had written: ‘Nothing so much resembles the mouth of a cannon as an open bottle of ink.’ [7]
Eastern clandestinity

After 1945, this alphabetical heroism migrated to the Third World, equipped with hurricane lamp, exercise books and biros. Emancipation through literacy, the dark shadows of superstition gradually buried under millions of white pages—this Eluardesque symbolism of Europe’s 19th century found a haven, in the mid-20th, in the struggle against the ‘imperialist West’. The first action of any anti-colonial revolution was to launch a mass literacy campaign. [8] The Little Red Book was the talisman of Mao’s China.

The process was frozen in the post-war period in Eastern Europe’s huge conservatory of obsolete forms—a museum of the word, in which the living sources of the past lay fossilized. Yet, studious and scholarly, ‘actually existing socialism’ had a typographic soul. A glance at unesco indicators for number of books per head, quantity of public libraries, average household spending on books, etc., shows that during the Cold War, Communist countries—where the economy was struggling and audiovisual culture had barely arrived—held all the records for printed paper. To journey through those old-world provinces, where Western Europe’s 19th century still lived on, was to witness a universal cult of books and an idolization of writers—Soviet stars were more likely to be novelists or poets than actors or musicians. With the atrophy of the image came a hypertrophy of the text, its aura enhanced by censorship.

Party-States had such respect for the power of words that they kept them under perpetual surveillance, yet this repression made a live grenade of every samizdat, in line with the ‘best’ Tsarist traditions. Everything was repeated, but upside-down. Under the Stalinist state, the Russian intelligentsia resumed its time-honoured typographical combat, its old mole’s labours. For what else is told in the long history of the Russian underground, from Herzen’s Kolokol (1855) to Lenin’s Iskra (1900), but stories of clandestine presses, illicit news-sheets, books sewn into greatcoats? In Dostoevsky’s The Possessed, Verkhovensky lures Shatov into a trap by sending him to retrieve a printing press buried in a schoolyard.

Between the various opposition groups, as between dissidents and the state, the battle-lines were drawn in print, above all through the journal. Russian populists (direct ancestors of Marxist study groups and parties) placed even greater emphasis on the importance of the press than did the secret societies and carbonari in the West. Lenin defined himself as a publicist, [9] in the mould of Chernyshevsky or Herzen, who moved to London for the sake of the cyrillic characters unavailable in Russia. In contrast to the Brezhnev era—better organized and hence less bloodthirsty than the Tsarist autocracy—written propaganda preceded, and alternated with, the propaganda of deeds. In 1880s Russia, the profession closest to ‘editor’ was ‘terrorist’. The Tsarist police’s litany was: ‘Where’s the printing press? The first link in the courier chain? The dispatch office?’ The mastermind of a conspiracy was inevitably a bookseller or a printer. The most vexing problem was always how to move things (subversive literature or bombs), deep in travellers’ bags. [10]

The fall of Communism in the East thus witnessed the extinction of the last literate societies in Europe—the triumph of showbiz extravagance over cheap editions and a dwindling readership for the classics, as the old European culture of printing segued into the ‘mass culture’ imported from America. The totalitarian hijacking of the Enlightenment, set against the new global imagery, could even make the defeat of Diderot at the hand of Disneyland look like emancipation. In a remarkable historical irony, the political victory of humanism spelled the cultural defeat of the humanities. Prosperous times for television and advertising in Eastern Europe; lean times for bookshops and publishers.
Alma mater

If the history of the school has always been charged with political significance, political history has in turn carried scholastic implications. The ‘battle for education’ always featured high on the left’s agenda; socialism, as the pedagogy of a world-view, knew that its own survival was at stake here. Any militant enrolling in a school of socialist thought must first have absorbed the habits of the schoolroom. The socialist’s code of honour was modelled on that of the good schoolboy: he who can put up with the boredom of the classroom will triumph over the class enemy.

The early workers’ movements arose before the advent of mass education; silk workers’ uprisings, weavers’ strikes and mutual insurance companies did not wait for universal schooling in order to exist. But trade unionism and ‘workers’ power’ are self-limiting in their ideas, and philanthropy alone would have spawned no more than adult-learning centres. It was the educational project of socialism that lifted its vision beyond that of unions and guilds. Its parties were created on the strength of the conviction that class is an instinct, but socialism is a raising of consciousness. The job of the school was thus not incubation but production. This accounts for the intensive focus on educational questions. ‘For every school that opens, a prison is closed’. The mystique of the emancipated and emancipatory school was a tribute rendered by the working-class parties to the bourgeois state.

Numerous teachers (Guesde and Jaurès among them) once hurried back and forth between blackboard and rostrum. The First International (1864) and the Workers’ Educational League (1867) pooled their staff, premises and periodicals. One of the first acts of the Paris Commune was to appoint a Commission of Education, headed by Edouard Vaillant. Louise Michel, deported to New Caledonia with the Commune’s suppression, immediately opened a school there for the Kanaks (had she enjoyed access to pulp and typeface, she would no doubt have launched the island’s first newspaper). From its inception in 1920, the French Communist Party recruited its star cadres from the ranks of schoolteachers and professors. The best-established branch of the International between the wars was the education workers’ section headed by Georges Cogniot, a practising Latinist.

Mill workers had provided a focus for the communist imaginary during the first industrial revolution; miners and steel workers took over that role during the second. But it is the primary schoolteacher, with his spartan or sententious modesty, who reveals the extent to which organized socialism’s roots lie in the pre-industrial culture of the Enlightenment. Former Communist Gérard Belloin, a child of the field and the page, a self-educated man enlightened by the Resistance, provides an arresting sample of militant ecology in his memoirs: ‘When in small groups we’d spent the night slipping tracts under doors or into letterboxes, we felt as uplifted on the way home as a schoolmaster at the end of the lesson.’ Belloin went forth, not to earn party points but out of pure devotion. In those days (we are in the 1950s, by the banks of the Loire):

one would not dream of casting aspersions on the teacher’s social standing, or doubting the degree of personal effort this had cost him. According to the commonly accepted scale of values that substituted for an explanation of social class, it was quite the opposite. Repositories of knowledge, they were just about the only people locally acknowledged as such, along with doctors, priests, tax inspectors, notaries and chemists . . . We were imbued with the hallowed popular respect for learning, books and intellectuals. [11]

The ritual nature of this respect informed both the best—Belloin and his ilk—and the worst, who were to encircle and then crush them. A germ of Stalinism lay in the frankness of encyclopaedism, stupidity inside intelligence. A fatal distinction prevailed between the leaders and the led. Intellectual authority became the grounds for political domination. Knowledge became nationalized, because doctrines, like temples or countries, need frontiers, and armed clerics to guard them. The most philistine despot found himself wreathed in the laurels of knowledge. Academism, museomania and the general smell of mothballs impregnating Soviet societies became endemic when the ‘tradition’-form was held up as the norm of the future: the archive’s posthumous revenge on invention. The didacticism, ponderousness and rigidity of Soviet discourse, its moralistic gloom, are what ensue when a school turns upon thinking, and subdues it with an iron fist. The handbook becomes the curriculum, and the result is crude simplification, stereotypes and cant.

Socialist culture is paradoxically attached to an elitist curriculum reflecting ‘bourgeois’, not to say ‘aristocratic’ values, whose decline considerably hastened that of socialism. Socialism was marked during the first half of the 20th century by an educational universe that despised technical knowledge, commerce, industry and even maths, but taught Latin and Greek as living languages. For today’s reader, to scour the archives of the French workers’ movement prior to its ‘Bolshevization’ by the Communists, and standardization by the Socialists, is like moving from Hello! magazine to the Metaphysics and Ethics Review. Jaurès and Blum possessed the same cultural baggage as Marx and Trotsky, as did their opponents Barrès and Maurras. There are deeper affinities between Jaurès and Barrès than between Jaurès and any current Socialist leader. This is because Jaurès’s holiday reading was De natura rerum in the original; Blum liked to relax with a translation of Lucretius; today’s socialist elephant will pick up a seasonal blockbuster and a newspaper written in franglais. If he chose Lucretius over the latest opinion polls, he would soon lose his leadership. The biotope makes the animal, rather than the other way around.
Holy morning paper

Book, school, newspaper: for the party militant, the greatest emphasis lay on the third. The first, short-lived, working-class publications in France appeared between 1830 and 1840. Indeed it was L’Atelier, Buchez’s paper, that in 1840 coined the expression ‘working class’. The intervening period was crucial, for it was then that ‘creating a school’ mutated into ‘creating a party’. For the Church, a daily paper is a plus; for the party, it is a must. L’Humanité was strategic for the pcf in a way La Croix would never be for the clergy. Churches came and went long before the invention of printing, but no workers’ parties existed before the appearance of popular broadsheets around 1860. Socialist ideology lasted for the duration of the form called party, and the party-form lasted as long as the party dailies—roughly a hundred years. Le Peuple, for example, the Belgian Socialists’ organ, expired with dignity in 1979, at the age of 94. It had fought for universal suffrage, the emancipation of women and human rights with Jaurès, Vandervelde and Huysmans. After that it merely survived, a different entity under the same name.

‘The paper is not only a collective propagandist and agitator, but also a collective organizer’ (Lenin). Its dissemination unites, creating a network of exchanges and liaisons. Jaurès, Trotsky and Lenin performed the same tasks (writing, typesetting, printing, posting) as Vallès did at Le Cri du peuple, Elisée Reclus at Le Révolté, Jean Grave at Temps nouveaux. Whether the reference was Marx, Bakunin or Fourier, printed words were sown in order to harvest activists. Lenin established his party with Iskra, Guesde with L’Egalité and Jaurès with La Petite République. Cabet propagated his Icarian dream with the tools and methods employed by Marx and Engels.

The political news-sheet carried serious implications, attesting to the active mediation of an idea of Man in the midst of men; the long-shot in the short term. Mainstream newspapers, product of a media conglomerate, are conceived as black boxes: events come in and information comes out. A class or party newspaper plays a different role: transforming a conception of the world into small change, a philosophical system into everyday slogans. Events are centralized by, and under, the idea; individual energies by the leadership. In contrast to the paper-as-mirror, the paper-as-guide fulfils the role assigned by Kant to the schema: intermediary and interpreter between the pure concept and the appearance of things. In the tradition of the socialist press, the author of the doctrine is his own intermediary; this is what distinguishes him from his contemporary, the belle-lettriste. ‘For “intellectuals”, the other profession that they should always practise alongside their own is surely that of printer,’ wrote Andler, in his Life of Lucien Herr. ‘A time will certainly come when writers and scientists know how to operate a linotype. If they wish to publish a book, they will be able to rent a rotary press, just as one hires a motor car to drive oneself.’ [12]

Herr himself was a pioneer in this regard. Librarian at the Ecole Normale, prompter to Jaurès and Blum, he was for several years the anonymous editor of the foreign news page at L’Humanité (a name he coined). Aragon, Nizan or D’Astier did as much in their way. Until very recently, a knowledge of print and management of a press were indispensable to the work of intellectuals who never delegated such chores to others, preferring to be their own leader-writers, copy-writers, proofreaders, designers and managers. Running the paper and running the party often overlapped; it was unthinkable for the leader to be illiterate. While the political journal served as the internal organ for the intellectuals’ power struggles, the newspaper was intended for laymen and amateurs. It formed a bridge between ‘the theory of the vanguard’ and the ‘spontaneous movement of the class’, in Lenin’s idiom, or between ‘metaphysics’ and ‘the world’, in Jaurès’s. It reunited the thinker and the worker, providing for socialism that day-to-day hyphen between the intellectual and the people that the school supplied for republicans.

So long as print remained the central meeting-ground for this type of interchange, the profession of politics and that of the intellectual—from the great writer to the typographer—had a common base. In its absence, the pen and the lathe have turned their backs on each other. The specialization of politicians—as vote-chasing technicians—has matched that of the printing sector, journalism and publishing. From the 17th century until the 20th, presses were meeting places, points of contact between people from different professions and classes, where cross-pollination was almost unavoidable. Writers and parliamentarians no longer share a common set of tools. A relationship that once was practical and professional has decayed into cocktail-party irrelevance.
The party

Much has been written on the decline of the political party, and thus of the socialist project. But one factor that has been largely ignored is the transition from the written (flexible, decentralized, affordable) to the audio-visual (industrial, expensive); the diminishing stature of print and the modification of printing techniques. Photocomposition destroyed the last cultural bases of the workers’ movement; both the bookmakers’ craft and its traditional caste of pundits and commentators were rendered technologically redundant. Print lost its lead, the critical intellectual his milieu, socialist politics its reference; all three were thrown into crisis. If ‘the first freedom of the press is that it is not an industry’, it should be added that, from 1881 to 1970, the press was also an industry. Now it is an industry first and foremost. It is hard to conceive that, in 1904, Herr, Blum and Lévy-Bruhl—a librarian, a lawyer and an academic—could have launched a daily paper such as L’Humanité, with a first edition of 138,000 copies, on a single subscription drive of 850,000 francs. Media companies have changed their nature along with their size. The concentration of titles, the determining weight of advertising budgets and the size of investment needed have pushed the price of a newspaper directorship well beyond the wallet and technical capacities of a handful of penniless intellectuals.

The separation of the print producer from his means of production in the journalistic sphere coincides with that of theory from practice in the political domain. Although there are electoral machines—still called ‘parties’, out of inertia—that issue internal bulletins to their indifferent representatives, the arc that once linked action and the future, parties and intellectuals, has been broken. The parties have ceased to be issuers of alternative ideas, while writers and thinkers must throw in their lot with the broadcasting networks that have acquired an industrial and commercial life of their own, as foreign to intellectual creation as to utopian ideology. The shift from graphosphere to videosphere has dissolved the connection between the party’s technical base and its doctrinal logic. The distinction between left and right in politics relied upon a means of dissidence production: a craft-based network of newspapers, reviews, research institutes, book clubs, conferences, societies and so on. No class struggle without social classes; but no factional struggle without a clash of opinions, no politics without polemics; and no battle of ideas, when money has become the only sinew in the war of airwaves. In its stead comes the struggle of images and personalities, the battles of the scoop and the soundbite. No need for parties here.

The proceedings of socialist congresses were formerly published in full, six months later—those of the 1879 Congress of Marseille, which united the French workers’ movement, took up 800 pages—in a volume that would become the Bible until the next sitting. The political world has never seen as many forums, conferences, conventions as there are today, but you would search the bookshops in vain for their bound record. Participants ‘talk’ ideas as one talks clothes. The (printed) motions are mere pretexts for tactical alliances between telegenic champions. In mediological terms, it would be only a slight exaggeration to say that because the debates are not published, there is no call for ideas; television—the new test of performance—has no need for them. Hence the new ‘anti-ideological’ ideology and the substitution of individual proposals for party programmes, personal positions for theoretical ones.

Quantitatively, of course, books, schools and newspapers are doing better than ever. There have never been so many volumes, students, authors and publishers. But mediaspheres are not a matter of statistics. Indeed, there may well be an inverse relation between the eclipse of form and the proliferation of content; between the scale of output and its status. Mass education first diluted, then obliterated, the symbolism of the university or school. Education is now a public service, like the subway or electricity provider, dealing with customers rather than disciples. There are many more public libraries under the videosphere than under the graphosphere, but what used to be ‘the workshop of the human spirit’ (Abbé Grégoire) is becoming a place of transit, of access to information. Never have so many books appeared—35,000 new titles a year in France—or in so many copies. But the readership is shrinking, and the aura of the book, or what remains of it, has been transferred to the face of the author, since that is what appears on tv. The printed word can still, exceptionally, kill. But can it still give birth to anything? And if so, to what?
Time, speed and environment

The first element of a reply: temporality. Metaphors for diffusion, whether of heat or liquids, tend to imply a fairly slow process. In 1850 or 1880, an idea that at first went unremarked was not lost forever. The chemistry had time to work. A message could survive on the shelf, awaiting a later encounter. The best example of this delayed-action mechanism is the propagation of Marx’s œuvre. It took twenty or thirty years for his published works to take effect, and the lag separating production from transmission proved crucial to the doctrine’s ultimate influence. The first French edition of Capital Volume I took twenty-five years to sell out. In the famous letter to ‘Citizen Maurice Lechâtre’ of 1872 that prefaces the book, Marx wrote: ‘I approve your idea of publishing the translation of Das Kapital by instalments. In that form, the work will be more accessible to the working class, and this consideration outweighs all others for me.’ It took some time for the said working class to gain ‘access’ to the knowledge of its own exploitation. Between 1872 and 1875, Lechâtre took delivery of 44 sections of 40 pages each. The first instalment was boldly brought out in 10,000 copies, and priced at ten centimes. Sales peaked the first day: 234 copies were sold. Then disaster struck. There was no money for advertising, nor support from any political organization. It was not until 25 years later, with help from Jules Guesde’s Parti Ouvrier, that the remaining booklets were sold. [13] In fact, it was not until 1890—seven years after Marx’s death—that Capital began to be taken seriously among a handful of militant and scientific groups. Until then, it had only been read in condensed form (Delville’s abridgement of 1883 numbered 253 pages), or presented in seminars such as Lafargue’s.

The Communist Manifesto, published in London in German, caused hardly a ripple. By the time of the Commune, in 1871, it was regarded as a ‘bibliographical curiosity’. Only in 1872 did it appear in French, 24 years after it was written, courtesy of Marx’s daughter Laura Lafargue; by 1885, it was just beginning to enjoy a modest success. The Poverty of Philosophy was self-published in Paris, in June 1847. Six months later, 96 copies had been bought. The publisher dispatched free samples to the author’s friends, asking only for the 15 sous it cost him for packing and postage: every one of them was returned to him. Alfred Sudre’s Histoire du Communisme (1848) had not a word on Marx or Engels in its 532 pages. The first edition of Capital merited two reviews in French, both in obscure high-brow magazines. One was by Maurice Bloch, in the Journal des Economistes; the other was by Roberty in Philosophie Positive, and reproached the author for ‘doing nothing but criticize, without offering concrete proposals for the future’. An article on his work in an English journal was still a rare enough event that in the winter of 1881 Marx would show it to his wife on her deathbed, ‘to illuminate her final moments’, as he wrote. Looking back from a world in which the life and status of the author sustain whole schools of theoretical research in the human sciences, the question is how a practically unknown writer of difficult books, none of which caused a stir, could subsequently have ‘informed’ the entire world for a hundred years.

A second element: the environment. Mammals were unable to spread across the planet during the 140 million years of the Mesozoic era; only the abrupt extinction of the dinosaurs at the end of the Cretaceous allowed them to venture out from their highly specialized niches and multiply over dry land. Until the geophysical upheaval of the continental masses provoked an auspicious climate change (and so of flora and fauna), competition with flying reptiles and 50-ton brachiosaurs was unthinkable, such was the disproportion of the means of survival between the species.

Cultural biotopes are no less delicately balanced, and in the jungle of social ideas the survival of the fittest presupposes a certain proportion in the means of struggle. Marx benefited from the unusually temperate conditions of the pre-industrial graphosphere: a smaller world population and restricted literacy in the West meant fewer books on the market and thus an easier battle for recognition, all weapons being more or less equal. In the days of Marx, Hugo or Michelet, the circulation of a ‘difficult’ book compared to a best-seller stood at an approximate ratio of one to ten, or more commonly one to five. Today, it is one to a thousand. Around 1848, the young Marx was publishing around a thousand copies of each pamphlet or periodical (800 copies of The Poverty of Philosophy; 1,000 of the Franco-German Yearbook, in which ‘On The Jewish Question’ and ‘Contribution to the Critique of Hegel’s Philosophy of Right’ appeared). But first-rank writers did not go beyond three or four thousand. Despite the huge growth of the reading public, that figure is still the average for works on political theory, economic history or sociology; the author of a piece of critical research that goes against the grain can feel blessed with two thousand readers. But the massive media launch-pads at the disposal of those who dominate the sales also serve to pulverize the small, scholarly productions, more complex and thus more vulnerable, and which have no time to carve a niche for themselves due to the drastic reduction in the average life-expectancy of books—three months for a successful publication; the rest might be in bookshop windows for three weeks. Publishers’ figures have been inflated, but the mortality rate has risen too.

The Marxist critique of capitalism would not have been able to spread, it seems, had industrial capitalism already annexed the sphere of symbolic goods. Marx profited from the backwardness of cultural circuits in relation to those of market production. A hundred years later, he would have missed his chance. All things being equal on other fronts, within the logic of image and markets (literary talkshows, weekly top-tens), Das Kapital would have remained what it was when it first appeared: a scholarly extravagance for book-lovers, not the source of a mass political current. Marx and Engels were writing at the juncture of two technological eras, that of the ‘mechanical machine’, alleviating muscular effort, and the ‘energetic machine’, harnessing natural forces. State socialism developed at a second juncture: the moving machine and the information machine, car and television. In the same way, the century of Communist waxing and waning also pivoted around two eras: two kinds of memory, literal and analogical. ‘Scientific socialism’ would not survive the shift from electro-mechanical transmission (rotary printing press, telegraph) to electronic broadcasting. The single party did not fit well with the telephone; it survived the wireless, but the transistor radio was the limit. The cathode tube and the silicon chip spelt wholesale crisis. Cross-border radio transmissions swept away the relics, and the live-broadcast satellite presided over the funeral.

A crisis of cultural reproduction such as socialism’s tends to cast the laws governing other cultures in a similar light. We should beware of emulating the American Trotskyist who, recording the extinction of Trotskyism in the United States in the post-war era, postulated the death of all ideologies on the planet. To confuse culture with one culture, the end of an era with the end of time, is the traditional mistake of the traditionalist. Every fall is the herald of a renaissance, and the gods who fled through the front door will come back, sooner or later, through the window.
Prison, exile, phone

An ecology of socialism must also take into account the extra-cultural, not to say anti-cultural factors that once ensured the community’s cohesion. Like a Muslim or a Christian, a militant is never really isolated; he is always a member of the collective. Political engagement proceeds through a transfer of the group’s image onto the individual, and the intensity of the militant’s sense of belonging is the measure of his capacities for initiative. Ethology has taught us that a society of primates is close-knit in proportion to the hostility of its environment; in this respect revolutionaries, like all believers, are a bit more primate than most. [14] They have a visceral need for banishment and prison. Such were the historical conditions for the creation of milieux of stubbornly refractory thinking. Promoted to officialdom, the ‘workers’ movement’ fell apart, for its brain ceased to function the moment it traded its enviable oppressed status for the fatal position of oppressor. Hence the immense spiritual superiority of the East European dissidents over the ruling bureaucrats, as the former regained all the resources of the old secessionist intelligentsia, prison and exile foremost among them. The lesson to be drawn from the century-long expansion and contraction of socialism: as long as there was repression, there was hope.

To explain: socialism was an attempt to establish a counter-medium of dissemination within a hostile milieu. Could the idea have become an ‘ideology’ if micro-circuits of solidarity had not established a mini-milieu for themselves, within this formless space? Cheap, sustainable information networks, alternative communities and counter-cultures that owed their capacity for resistance to the forces that besieged them from without. To jump the spark from written myth to social action, the electricians of workers’ emancipation had to disconnect the main cables and rig up makeshift wiring of their own. Methods of underground organizing served as a protective casing, to shield proletarian telegraphy from bourgeois jamming and interference. The romance of clandestinity was essentially a communicative pragmatism. Tracking the footpaths of the revolution over the past two centuries would take one by the sheltering walls and shadowy corners that Rabelais evoked as inevitable sites for ‘murmur and plot’.

But with all eyes and ears occupied every evening by the same news bulletin in four versions, the walls of the cell or sect are first perforated, then blown away by the airwaves. Hitherto, they had more or less succeeded in maintaining a difference of pressure or temperature from the outside world. The homogenization of symbolic flows tends to dissolve non-conformist nuclei into a common hegemonic gas. Television, now the principal interface of all social groups, erodes the boundaries between inside and out, and levels access to information. As a grass-roots militant, why should I bother to attend party meetings when the tv news will give me the essence of eight hours’ debate, and when my neighbour across the hall will find out as much as I could about my party, without wasting his time? As for the journalist, he knows as much and often more than the party leader, since he speaks to everyone and they to him. The ideological hold of television overrides the hold of the party, because its mode of organizing the populace engulfs and homogenizes all specialist groups.

By contrast, the two privileged evolutionary niches of the revolutionary socialist were prison and exile. Prison, to concentrate; exile, to campaign. Reading and writing are luxury pursuits by definition, since they imply leisure time. Where could one enjoy more time to oneself than in the police jails of the 19th century? Prison was the dissident’s second university, his seat of higher learning and greatest moral awareness. ‘When a man knows he is to be hanged in a fortnight,’ said Samuel Johnson, ‘it concentrates his mind wonderfully’. And Proudhon: ‘All that I am I owe to despair.’ Bureaucrat, beware the intellectuals that emerge from prison: they have matured and have muscles. Against capitalism in the West and communism in the East, the laboratories of social protest were the detention centres and prison camps of dictators. Right and left, revolutionaries and counter-revolutionaries (Joseph de Maistre or Solzhenitsyn, Dostoevsky or Maurras) have benefited in turn from these mediological privileges. The Orthodox religion emerged from the Soviet penal colonies in far better shape than it had entered them.

The honours list of European prisons from 1840 to 1930 provides a rollcall of Marxist laureates. It ends in the East with the Stalinist labour camp (and Victor Serge). In the West, the prisoners of capital form the links of an anti-capitalist chain, from Babeuf to Proudhon to Gramsci, Blanqui to Bebel to Guesde. It was deportation to Siberia that allowed Lenin to finish his first major work, The Development of Capitalism in Russia, begun in a St Petersburg prison. Liebknecht, Luxemburg, Trotsky, Blum (who wrote his greatest work in prison): nearly all who left their mark on socialist thought spent time behind bars. Exile brought us ‘Marx-and-Engels’ banished in their youth. For half a century, most of the Russian intelligentsia was forced into clandestinity—and so into organizing—by the Tsarist regime. French socialism was born in England; Italian, Chinese and Vietnamese communism were born in France. Chased out of everywhere, the old socialism grew adept at border-crossing and emerged as a pure product of European culture. The level of a civilization, said Lucien Herr, can be measured by its degree of cosmopolitanism. To be uprooted awakens reason by suggesting comparison—always a good start.

Stalin and Mao are absent from the roll-call of exile: Stalin rarely left Russia, or Mao China (except to go to Moscow, where he shut himself away to avoid seeing the outside world). The despots of social-feudalism had sedentary souls. As a rule, the great paranoiacs only speak their mother tongue. Riveted to their soil, they lack all curiosity about the other, all impulse to challenge it or fuse with it. Autocrats fear to travel, shrinking from disorientation and unsavoury encounters.

Yet the mediasphere seems to have stripped the diasporas of their former productivity. Dispersion used to favour intellectual creativity by stimulating written exchange. Bodies met less frequently but minds were in closer contact. Consider the debt owed by socialist writing to the epistolary art: Marx and Engels worked out half their theories in letters, and virtually all their political activity had to pass through a pillarbox; the First International was conceived by Marx as a central correspondence bureau of the working class. Nowadays the militants socialize more and know less of each other’s ideas. More conversation means less controversy. The telephone destroyed the art of correspondence, and in the process diminished the moral stature of attempts at rational systematization; email has not restored it. Rarely do we pick up the phone to impart a complex sequence of principles and themes: we use it to chat. The general discourse has become indexed to the trappings of intimacy and private life. The cellphone, internet, laptop and plane are good for internationalization, but they render solidarity less organic—lethal for internationalism. They enlarge the sphere of individual relations but privatize them at the same time; they particularize even as they globalize. The cellphone is a permanent one-to-one. It drives the universal from our heads.

The crisis for socialism, then, is that even if it can resume its founding principles it cannot return to its founding cultural logic, its circuits of thought-production and dissemination. The collapse of the graphosphere has forced it to pack up its weapons and join the videosphere, whose thought-networks are fatal for its culture. A practical example: to find out what is going on one has to watch tv, and so stay at home. A bourgeois house arrest, for beneath ‘a man’s home is his castle’ there always lurks, ‘every man for himself’. The demobilization of the citizen begins with the physical immobilization of the spectator.

What further implications for social thought might we draw from the ‘three estates’ of logosphere, graphosphere, videosphere—the word, the press, the screen? It would be possible to tabulate a series of norms and functions inherent in any social collectivity, and map out the particular modes and forms that have answered to them in each successive age (see opposite). Thus, the symbolic authority for the logosphere is the invisible; for the graphosphere, the printed word; for the videosphere, the visible. Status of the individual: subject; citizen; consumer. Maxim for personal authority: ‘God told me’; ‘I read it’; ‘I saw it on tv’.

Click here to open a larger version of this picture in a new window

Yet although these three regimes succeed each other in historical time, each asserting its own predominant forms and modes, it should go without saying that any one of us contains all the ages at once. Inside each of us there lies a calligraphic East, a printed Europe, a widescreen America; and the continents negotiate within us without losing their respective place. Each one of us is, simultaneously, God, Reason and Emotion; theocrat, ideocrat, videocrat; saint, hero and star. We dream of ourselves as standing outside time; we think about our century; we wonder what to do with our evening.

[1] See Cours de médiologie générale, Paris 1991; this essay is drawn from the ‘Neuvième leçon: Vie et mort d’un écosystème: le socialisme’.

[2] Cited in Georges Duveau, La pensée ouvrière sur l’éducation pendant la Seconde République et le Second Empire, Paris 1947.

[3] G. W. F. Hegel, Encyclopaedia, § 459. Passage analysed in Jacques Derrida, De la grammatologie, Paris 1967, pp. 36–45.

[4] Gérard Belloin, Nos rêves, camarades, Paris 1979.

[5] Eric Hobsbawm, ‘La diffusione del marxismo (1890–1905)’, Studi storici, vol. 15, no. 2 (1974), pp. 241–69.

[6] Victor Hugo, ‘A qui la faute?’, L’Année terrible (1872).

[7] Jules Vallès, L’Insurgé, Lausanne 1968, pp. 48–9; Victor Hugo, Œuvres complètes, Paris 1968, vol. vii, p. 678.

[8] To participate, in 1961, in the Cuban national campaign that brought a million illiterate peasants into contact with writing was like a physical encounter with the progressive imaginary of the book.

[9] ‘We theoreticians, or, as I would rather say, publicists of Social Democracy’: V. I. Lenin, ‘Two Tactics of Social Democracy in the Democratic Revolution’ (1905), Collected Works, Moscow 1965, vol. 9, pp. 15–140.

[10] Let us note in passing how foreign the manners of ‘actually existing socialism’ were to Pol Pot’s Cambodia, how remote the urban mystique of literacy and learning from that savage cult of rural ignorance. The Khmer Rouge decreed: no books, no schools. They ransacked the presses and libraries of Phnom Penh, closed the university, padlocked the high schools. The only medium allowed was the radio. A party without a paper! Pol Pot’s back-to-the-jungle system was consistent: slaughter of the educated, a term encompassing anyone who had got beyond primary school; wholesale xenophobia; rejection of urban civilization, and gerontophobia as a political axiom (no one over 23 could belong to the Organization).

[11] Belloin, Nos rêves, camarades.

[12] Charles Andler, La Vie de Lucien Herr, Paris 1977.

[13] See Maurice Dommanget, L’Introduction du marxisme en France, Lausanne 1969.

[14] Primate: placentary mammal with full dentition and prehensile hands.

US Robotic Infantry

2007-08-14T09:33:00.000-07:00

First Armed Robots on Patrol in Iraq (Updated)
By Noah Shachtman
August 02, 2007 | 5:56:00 PM
Categories: Drones

Swords Robots have been roaming the streets of Iraq, since shortly after the war began. Now, for the first time -- the first time in any warzone -- the machines are carrying guns.

After years of development, three "special weapons observation remote reconnaissance direct action system" (SWORDS) robots have deployed to Iraq, armed with M249 machine guns. The 'bots "haven't fired their weapons yet," Michael Zecca, the SWORDS program manager, tells DANGER ROOM. "But that'll be happening soon."

The SWORDS -- modified versions of bomb-disposal robots used throughout Iraq -- were first declared ready for duty back in 2004. But concerns about safety kept the robots from being sent over the the battlefield. The machines had a tendency to spin out of control from time to time. That was an annoyance during ordnance-handling missions; no one wanted to contemplate the consequences during a firefight.

So the radio-controlled robots were retooled, for greater safety. In the past, weak signals would keep the robots from getting orders for as much as eight seconds -- a significant lag during combat. Now, the SWORDS won't act on a command, unless it's received right away. A three-part arming process -- with both physical and electronic safeties -- is required before firing. Most importantly, the machines now come with kill switches, in case there's any odd behavior. "So now we can kill the unit if it goes crazy," Zecca says.

As initially reported in National Defense magazine, only three of the robots are currently in Iraq. Zecca says he's ready to send more, "but we don't have the money. It's not a priority for the Army, yet." He believes that'll change, once the robots begin getting into firefights.

Karl Rove Killed the GOP

2007-08-14T09:28:00.000-07:00

The collapse of Karl Rove

The Pygmalion strategist from Texas built up the Republican Party by exploiting the religious right -- and now his handiwork is crumbling.

By Lou Dubose

Aug. 14, 2007 | A month ago, a friend who has spent his entire career working for the Republican House leadership pulled up beside me at the intersection of Seventh and Pennsylvania in Washington. A House institutionalist, and a fiercely partisan secular Republican, he was oddly cheerful. "Call me next time you're in town," he said. "We'll talk about how George Bush destroyed the Republican Party."

It will be a long conversation.

But the president doesn't get all the credit. If Karl Rove was responsible for the remarkable ascent of the Republican Party since 2000, he is equally responsible for what is beginning to look like its vertical collapse. With the Christian right deeply disappointed at Bush and in search of a candidate for the 2008 election, economic conservatives alienated by the White House's failure to impose fiscal discipline on the Congress when the Republicans were in charge of both houses, and congressional Republicans caught in the undertow of a failing president's failed war, the party Rove predicted would become a permanent majority is no more. Rove could put the party together, but in the end he proved incapable of holding it together.

In Texas, we saw this modern iteration of the Republican Party come together in the summer or 1994, as Bush kicked off his first successful run for public office. (He had lost a congressional race in West Texas in 1978, in which Rove was only marginally involved.) Social conservatives had already joined together with economic conservatives when Ronald Reagan got into bed with the Rev. Jerry Falwell. But it was Rove who consecrated the union. A nominal Christian and Episcopalian, Rove had little regard for the evangelical extremists who have become essential to the success of the modern Republican Party, even cracking the occasional joke about his own lack of faith.

Then the Christian right showed up at the Republicans' state convention in Fort Worth, in 1994, with enough delegates to seize control of the party. The dominant Christian faction tossed George H.W. Bush's handpicked state chairman and longtime friend, Fred Meyer, out of office and replaced him with a charismatic Catholic lawyer from Dallas. It banned liquor from convention hotels and replaced hospitality-room bars with "ice cream sundae bars," where chefs prepared designer confections. It summoned delegates to Grand Old Prayer Sessions, required Christian fealty oaths of candidates for party leadership, and made opposition to abortion the brand by which Texas Republicans would be defined.

This political great awakening was not unique to Texas. But it occurred in a context in which a brilliant, Pygmalion political consultant saw in George W. Bush a malleable idol who could be fashioned into a governor and ultimately a president. And Bush was a candidate whose genuine evangelical faith was an asset rather than a liability. After initially fighting the dominant evangelical delegation at the state convention -- proposing Texas Rep. Joe Barton as a compromise candidate for state party chairman -- Rove joined them.

He found religion, even if he didn't find Jesus. And it was a foxhole conversion at best. Rove had been brought to Texas by the elder Bush in the early '80s and devoted his energies to building a Republican Party where there was none -- using direct mail, money and databases in ways that Texas Democrats never imagined. There was one statewide Republican elected official when Rove began his work, U.S. Sen. John Tower. Today, Republicans hold all 22 statewide offices. But the party Karl Rove built was based on the economic conservatism of Barry Goldwater, not the social conservatism of Jerry Falwell. Once Bush was elected governor, Rove marginalized the Christian right's party chairman, Tom Pauken, denying him access to party money, and when Pauken ran for state attorney general, Rove quietly assisted the campaign of his primary opponent, John Cornyn, who now represents Texas in the United States Senate. Yet despite the low regard in which he held evangelicals, Rove recognized the importance of keeping them in harness with economic conservatives.

The "guns, God, and gays" campaigns that defined Texas politics and the politics of the South became the model for Republican Party campaigns across the country. It was Rove who was responsible for the whispering campaign that characterized Democratic Gov. Ann Richards, Bush's opponent in the 1994 governor's race, as a closet lesbian, in a successful attempt to peel away conservative Christian votes in East Texas.

Perhaps the most recent example of a successful social-issues campaign was in Ohio during the 2004 election, which provided critical electoral votes to secure George Bush's second term. With Bush in peril of losing to John Kerry, the Republican National Committee looked to David Barton to go into Ohio and turn out the base. Barton is a former vice chairman of the Texas Republican Party and one of the founders of the WallBuilders, a Christian advocacy group working to restore God to His central position in American history, and in the history and social studies curricula of the nation's public schools.

Barton comes straight out of the social conservative wing of the Republican Party Rove put together and then left behind in Texas when he followed Bush to Washington in 2001. And Barton represents both the success and what now might be the failure of the Republican Party Rove cobbled together. U.S. District Judge John E. Jones III mentioned Barton by name, in his 2005 opinion that declared "intelligent design" (biblical creationism dressed up as science) unconstitutional to teach in the nation's public schools. Jones, a George W. Bush appointee to the federal bench, was particularly offended by the Dover, Penn., school board president's stated intention to move from Christian intelligent design in biology classes to Christian social studies in history classes. The judge cited both Barton and his book, "The Myth of Separation," as examples of a school board that was in open violation of the Constitution. (WallBuilders do not recognize the separation of church and state as defined by the First Amendment.)

In Pennsylvania, Judge Jones' angry repudiation of the Christian majority on the school board was both a portent and part of the dissolution of the union over which Rove presided in 1994 in Fort Worth. Jones, a Tom Ridge protégé, was unequivocal in asserting the primacy of the Separation Clause over the religious interests of local governing bodies. Like this moderate judge, the larger public -- and even the Republican Party, if the candidacy of Rudy Giuliani means anything -- has grown weary of the Christian right. It was a marriage as unlikely as the union between an evangelical George W. Bush and Episcopalian Karl Rove.

It appears that it's over. As Rove returns to the Hill Country home in Texas he and his wife, Darby, bought and refurbished, the party in which he invested his energy, if not his soul, is divided among social and economic conservatives. Even Texas Sen. John Cornyn, a one-time moderate who drank the Kool-Aid with the Christians in the Texas Republican Party, is in trouble with the state's voters. Cornyn, like Bush, was a creation of Karl Rove. Maybe Rove can save a Senate seat, if not his soul, by quietly throwing in with Cornyn's campaign, after he settles back down in the state where it all began.

Next Generation US Military Robots

2007-08-14T07:01:00.001-07:00

Top 3 Robots Coming Soon to the Battlefield: Live @ DARPATech

Blind walkers, backpack-able Navy UAVs, a serious Army hover machine: Just a couple standouts from military 'bot central for 2007. (More from DARPATech: a Breathalyzer that detects breast cancer, the first robotic surgeon at war and more!)
By Erik Sofge
Published on: August 8, 2007

ANAHEIM, Calif. — In theory, DARPATech 2007 is crawling with robots. Stanford University's Grand Challenge winner, Stanley, squats in the lobby of the Marriott Anaheim. The first thing you see upon walking into the exhibit hall is Big Dog, the four-legged robotic jogger from Boston Dynamics. There are videos of robotic surgeons and scale models of giant unmanned ground vehicles and a snake-like bot encased in glass. But for the most part, these robots are static props, the machine equivalent of stuffed Siberian tigers, frozen mid-leap, in a natural history museum.

Then again, tigers are cool, and so are robots, and this year's conference reflects the growing impact of robotics on the entire defense industry (and, you could argue, the world). This isn't a complete list by any means, but here are the most interesting robots that DARPA has to offer this year.

Little Dog

Little Dog will never be as famous as its sibling, Big Dog. Why? It can't recover from a kick, and whereas Big Dog hops along at a jaunty sprint, the toy-size Little Dog takes careful, measured steps. That's because it's practically blind. It has no onboard sensors, and relies on cameras set up around the lab to guide it. Data from these infrared and visible cameras is turned into a motion-capture file, which is beamed wirelessly to the robot. Reflective markers lining the track and dotting the robot help the cameras correlate its position in relation to its environment (similar to the motion-capture suits actors wear during videogame development or visual effects scenes).

It's hard to come up with an accurate comparison, but Little Dog is essentially blindfolded, but following external advice. Currently, it's allowed a gradual, "stop-and-start" approach to navigating uneven terrain, but by the time the Learning Locomotion program ends in January 2009, Little Dog will be practically scrambling. The research will likely be used to improve Big Dog specifically, and walking robots in general, since data related to Little Dog and its environment can be scaled up to larger obstacles and roughly human-size limbs. So as quaint as it looked poking its way down an eight-foot stretch, what we learn from Little Dog could help every robot with legs a little more sure-footed.

MAV: Micro Air Vehicle

Originally developed for the Army's Future Combat System (FCS) program, the backpack-portable, fully autonomous Micro Air Vehicle might end up seeing initial deployment with the Navy. The robot itself isn't news—it's been flight-tested by troops stationed in Hawaii, and has a starring role in the Army's action-packed, videogame-derivative promo videos. But a Navy order of 20 bots, for possible use by its Explosive Ordinance Disposal personnel, means this 16-pound UAV is closer to full deployment.

What's interesting about the MAV is that it takes off, lands and hovers like a chopper, but it's actually much simpler to operate. That's because its propelled by a single fixed-pitch ducted fan, and steers with radial vanes. "It's like a plane engine," says program manager Daniel Newman. "And when its hovering, its gust response is more benign, since it doesn't have a big rotary blade acting like a wing."

It takes zero piloting skills to operate the MAV—using a ground station (a hardened laptop), you give it up to 100 waypoints per mission, and it figures out how to proceed. It if loses link with the ground station as it rounds a mountain, it will continue on to its destination, or head to a preset location to try to reestablish contact. Operators can give it simple commands, such as ascending or descending, and it can be quickly swapped over to another ground station.

The point of the MAV is idiot-proof aerial reconnaissance. It takes off and lands without launch or recovery equipment, and can monitor a 10-km-radius area with infrared or visible cameras in "hover-and-stare" mode. It's also stable enough to hover as low as five feet above the surface, to scout out a possible improvised explosive device. And did we mention that it fits in a backpack? Not sure why, but that certainly sounds exciting.

OAV: Organic Air Vehicle

This pumped-up version of the MAV is designed to go further and longer, and to designate ground targets from the sky. Not quite death from above, but close—the 65-in.-tall Organic Air Vehicle (OAV) can hover for up to two hours, painting targets up to 15 km away with its laser designator. Initial flight tests have been successful, and a fully-loaded production model should be in the air by the end of the year.

Like the MAV, the 112-pound OAV is completely autonomous, with no launch or recovery gear, automatic collision-avoidance capabilities and a single ducted fan for propulsion. It has the creepy ability to land, scan its surrounding for hours and then take off again. And because its powered by a 42-hp heavy-fuel engine, it should be incredibly easy to refuel (most ground vehicles use the same JP8 fuel as the OAV).

Unlike the MAV, the OAV has wings, which are not quite fixed. They pivot back and forth, providing some lift during forward movement, but, as program manager Daniel Newman put it, "They get out of the way of gusts when its hovering." And along with peeking at suspicious roadside objects, it can designate them for destruction by another unit. As for that "Organic" part of its name, a slight disappointment: There's nothing biological or cybernetic about this UAV. But it can be quickly reassigned to another Army company's ground station, much like the MAV. Apparently that means it's organic. Oh well.

The World Without Us

2007-08-14T05:54:00.000-07:00

Design, Representation, Society
After Us…. Deep Time: Part 1

A thought-provoking article in Scientific American last month posed the question what would the world be like if the human race were to disappear? The article, based on a book by Alan Weisman “The World Without Us”, doesn’t look for a reason why humanity might vanish - one can propose any number of more or less likely eventualities that might produce that result. Instead it concentrates on the effects our presence and our subsequent departure would have in shaping the physical and biological fabric of the planet.

Weisman has travelled widely to study zones that humanity has already retreated from. These are few and far between, a fact that is indicative of the rapacious spread of our species across the planet. Examples include the Chernobyl area which after two decades provides perhaps the clearest example of short term changes on a post-human environment. The DMZ (Demilitarised Zone) between North and South Korea is another such example. A thin ribbon barely 2.5 miles wide and 150 miles long separates the two states, and this has become the most unlikely of wildlife sanctuaries. Even in Europe there remain pockets of the original proto-forest which human expansion reworked into agricultural land.

The effects Weisman records are fascinating. Those at the nearer end of the time-scale perhaps a little more so because here the rundown of technological civilisation, the unpinning of each of the interlocking elements that comprise our remarkable yet incredibly fragile and tenuous shield against an essentially inhospitable environment, is easily comprehensible. As Weisman says:

“I had a fascinating time talking to engineers and maintenance people in New York City about what it takes to hold off nature…The name ‘Manhattan’ comes from an Indian term referring to hills. It used to be a very hilly island. Of course, the region was eventually flattened to have a grid of streets imposed on it. Around those hills there used to flow about 40 different streams, and there were numerous springs all over Manhattan island. What happened to all that water? There’s still just as much rainfall as ever on Manhattan, but the water has now been suppressed. It’s underground. Some of it runs through the sewage system, but a sewage system is never as efficient as nature in wicking away water. So there is a lot of groundwater rushing around underneath, trying to get out. Even on a clear, sunny day, the people who keep the subway going have to pump 13 million gallons of water away. Otherwise the tunnels will start to flood.”

That it would take only 2 days for the subway to flood indicates how contemporary civilisation is a mutable and organic construct which must fend constantly to maintain itself.

Within 7 days nuclear power plants would be ablaze. Within 2 years roads would have cracked open and within 10 years buildings would be pitted and scarred from the elements. As soon as 20 years after the disappearance of humanity the buried waterways would reassert themselves overground and Manhatten would become many islands with rivers taking on the rectangular grid pattern of the city. At the end of a 100 years almost all roofs would have collapsed. Within 300 years suspension bridges would have collapses. WIthin 5,000 years nuclear weapons would have corroded releasing radioactive plutonium. Around 15,000 years from now the remains of our cities would be ground down by glaciation. By 100,000 years CO2 levels would finally return to preindustrial levels.

Some artifacts would survive into deep time… Even after 10 million years bronze sculptures would survive, largely intact. There is something remarkable about the thought that “…some ordinary items would resist decay for an extraordinarily long time. Stainless-steel pots, for example, could last for millennia, especially if they were buried in the weed-covered mounds that used to be our kitchens. And certain common plastics might remain intact for hundreds of thousands of years; they would not break down until microbes evolved the ability to consume them”.

These are the most ordinary of our artifacts, used in our general material culture. Yet they would outlast our buildings, our vehicles and any other of the ‘high’ achievements of our technology, becoming embedded within near-geological time spans. I have noted problematic aspects of the concept of ‘ephemera’ before in relation to material culture. In this context all is ephemeral.

The point is made that most of the more durable items are those that post-date the Second World War. A rich trove for any species that made the jump to sentience after us. And there would be a number of contenders. Primates have a head start above other species and some suggest that baboons might well fill the niche we left behind. Interesting, particularly since many of the resources humanity has benefited from would be close to exhaustion providing a perhaps insurmountable obstacle to any subsequent technological civilisation.

Ironically aspects of our visual culture would survive all other traces of our species, even the actual death of the Earth and the solar system, in the form of television broadcasts travelling through space. Fragile, yet enduring, patterns of light and sound would be our final legacy.

Weisman takes a philosophical view of all this…

“I raise the question, Wouldn’t it be a sad loss if humanity was extirpated from the planet? What about our greatest acts of art and expression? Our most beautiful sculpture? Our finest architecture? Will there be any signs of us at all that would indicate that we were here at one point? This is the second reaction that I always get from people. At first they think, This world would be beautiful without us. But then they think, Wouldn’t it be sad not to have us here? And I don’t think it’s necessary for us to all disappear for the earth to come back to a healthier state.”

But the thought struck me that in a way any future is utterly unknowable. We all of us are trapped within a very limited time frame. Our lives are miniscule in the context of historical and geological timeframes. Indeed it is striking how we act in the present as if there is a personal future for us that somehow extends beyond any plausible reality.

In a way this is a sort of shared delusion, and this book perhaps feeds into a shared sense of wonder about the nature of the world about us after we have gone. We won’t be there. But nonetheless we remain enormously curious about it. And it is remarkably similar to the process by which we attempt to map and read the past so that it is possible to place some order and meaning upon it. Yet this book attempts to map a possible future in order to better read the present.

I’d suggest that it might make a worthy point of reference for those of us interested in visual or material culture so that we can better appreciate just how fleeting those elements are that shape both our past and present.

Ciarán Swan

The Arctic as a Public Good

2007-08-14T05:14:00.001-07:00

The Arctic for Everyone
Le Monde | Editorial

Saturday 11 August 2007

The Arctic, or how global warming led to a chill in diplomatic relations.

For a long time, this frozen expanse was considered a Terra incognita. As much as the extreme climate, the Cold War between the Soviet Union and the United States made its waters impracticable and its resources unexploitable. With these two characteristics disappearing - the Canadian section could be free of summer ice within 30 years - the Arctic Ocean today is coveted by the five countries that surround it: Russia, Canada, the United States (through Alaska), Norway and Denmark (through Greenland).

One week after Russia stuck a flag in there at a depth of 4,200 meters, the Canadian Prime Minister, Stephen Harper, effected a three-day visit (from August 8-10) to the Far North to reassert Canadian sovereignty over part of that territory. The Prime Minister announced the creation of a deep-water port and a military installation in the Canadian Far North. One way of reminding Moscow, and also Washington, that Ottawa is no second-tier actor.

The Arctic presents at least three major strategic issues for the European Union specifically: military, economic, and environmental.

In the military domain, the North Pole undoubtedly shelters Russian and American submarines. Being present in the Arctic Ocean allows them to bring a nuclear threat to bear against all the big cities of the Northern hemisphere.

In the economic sphere, American and Norwegian experts deem that a quarter of not-yet-discovered oil and natural gas reserves are located beyond the Arctic Circle. The territory devolving to the Russians alone contains close to 700 billion tons of oil and immense quantities of natural gas. For Moscow, exploiting these reserves is essential. The European Union's energy supply security of tomorrow will depend on the Arctic.

That's not the only economic issue. The northern maritime route is the shortest between northern Europe and north-east Asia on the one hand, and the west coast of North America on the other. Consequently, the traffic conditions in these waters are crucial for Europeans.

Finally, the issue is environmental. If Greenland is the planet's biggest reserve of freshwater, the exploitation of Alaska as the coastal countries envisage it risks degrading the environment still more.

For all these reasons, the Arctic deserves collective consideration beyond that of its bordering countries only. The least that we can say about it is that that is not the direction the world is taking.

The Long Term Failure of Karl Rove

2007-08-14T05:11:00.000-07:00

What Karl Rove Didn't Build
The long-term cost of working the anger points

Tuesday, August 14, 2007; Page A12 Washington Post

AS A POLITICAL operative, Karl Rove, the White House guru who announced his resignation yesterday, has few equals in modern American history. Like his Republican role model from the late 19th century, Mark Hanna, Mr. Rove attached himself to an affable politician (Hanna's George W. Bush was William McKinley of Ohio) and rode along first to the governorship of a major state and then to the White House. Along the way, Mr. Rove helped convert Texas from a predominantly Democratic state into a Republican stronghold, helped the GOP win an unprecedented midterm election victory in 2002, and engineered Mr. Bush's remarkable reelection over John F. Kerry in 2004. Approve of them or not, these are not small accomplishments. Mr. Rove was very good at gathering, analyzing and exploiting information about the electorate. He cared about what actual voters actually thought -- yes, including their "anger points."

At this moment, though, it's more pertinent to contemplate the political might-have-beens of the Rove-engineered Bush presidency, which now appears set to limp along until January 2009. Mr. Bush won elections as governor and president because he positioned himself, under Mr. Rove's tutelage, as a "compassionate conservative" and a "uniter, not a divider." After Sept. 11, 2001, not just the whole country but most of the world was prepared to follow Mr. Bush on those terms.

But when polling data showed Mr. Rove that there was more to be gained, politically, by intensifying support among the conservative Republican base, Mr. Bush abandoned persuading the middle and focused on motivating the right. Thus were born a host of policies -- on Social Security, Guantanamo, stem cell research, same-sex marriage and so on -- that deepened the country's polarization and helped alienate even old friends around the globe. The quality of American political discourse was not enhanced by the (successful) Republican attack on disabled Vietnam veteran Max Cleland, a Democratic senator from Georgia, as soft on defense. And, over the long term, Mr. Bush's short-term exploitation of Rove-identified anger points left the president with less political capital than he might have had otherwise -- capital he badly needed when the major initiative of his presidency, the war in Iraq, turned sour. On immigration, Mr. Bush pursued a moderate course, based in part on Mr. Rove's perception that the Republicans could not afford to alienate the fast-growing Hispanic demographic. But, by then, the president had lost control even of his own party's Senate caucus.

Mr. Rove is a history buff, and we think that history's ultimate judgment will not depend much on his role in the scandals of the moment -- "Plamegate" and the firings of U.S. attorneys -- to which some attribute his resignation. Rather, he should be judged on his own terms: as the would-be architect of a long-lasting Republican majority, like the one Hanna forged more than a century ago. The GOP's wipeout in 2006 would suggest that Mr. Rove did not achieve this goal, notwithstanding his brave parting words about Republican victory in 2008. And if the manufactured polarization of the Bush-Rove years did not even serve its ostensible purpose, then what was the good of it?

Mugabe's Death Spiral in Zimbabwe

2007-08-14T04:44:00.000-07:00

Mugabe rejects criticism of Zimbabwe's economic policy

The Associated Press
Monday, August 13, 2007

HARARE, Zimbabwe: President Robert Mugabe rejected criticism of his economic policies and called for a revolutionary spirit of self sacrifice to be rekindled among Zimbabweans, but also said Monday that officials were reviewing price cuts blamed for making life even more difficult.

Mugabe said a government edict June 26 to slash the prices of all goods and services — which has left shelves bare of staple foods across the country — was intended to halt exploitation by businesses.

But last week the government raised the prices of some goods and doubled the price of beef to restore supplies. Retailers have complained they could not keep shelves stocked if they had to sell food for less than they paid for it.

"We are accused of bringing hunger to the people," Mugabe said Monday during the annual holiday honoring fallen independence fighters. "When we assert our sovereignty, they say we are out of touch with reality. The government is very clear about its programs. We run things our own way."

Mugabe said those who died fighting for independence from British colonial rule in 1980 had been unflinching in their belief in freedom from exploitation.

"We should pause and reflect on the supreme sacrifices made by our selfless fighters. We pray those acts and spirit of dedication be rekindled in us," Mugabe said.

Zimbabwe's official inflation is given as 4,500 percent, the highest in the world, although independent estimates put it closer to 9,000 percent. Meat and many other goods are sold on the illegal black market at up to five times the government's fixed price.

At least 7,000 executives, business managers, traders and bus drivers have been arrested in the price clampdown since June 26.

Corn meal, meat, bread, milk and other staples have disappeared from stores. Beer, cigarettes and newspapers were the latest items mostly unobtainable Monday.

Acute gasoline shortages have crippled transport services and stranded tens of thousands of travelers hoping to visit rural families across Zimbabwe over the Heroes and Defense Forces holidays.

Tuesday also celebrates the defense capability of the nation's military, which is commanded by many former guerrillas.

Mugabe described the holidays as one of the most revered occasions in the life and evolution of the nation and that they symbolized "not just the freedom of the men and women of Zimbabwe but also of our animals, our birds, our fish and everything that belongs to us."

"It is the wealth of Zimbabwe that we celebrate," he said in an address broadcast by state television from Heroes Acre, a cemetery outside Harare for former guerrillas and politicians.

Chinese-built fighter jets screamed above a military parade and Mugabe led a wreath-laying ceremony. Supporters waved banners, one saying: "Economic saboteurs do not have a place in Zimbabwe."

"Let us continue to defend Zimbabwe from internal and external forces seeking to reverse the gains we have so far registered. Let Zimbabwe be an impenetrable fortress inhabited by people determined to conquer current temporary challenges and look to the future with hope and optimism," Mugabe said.

Freeman Dyson's Biotech Speculations

2007-08-14T04:41:00.000-07:00

NYRB Volume 54, Number 12 · July 19, 2007

Our Biotech Future
By Freeman Dyson
1.

It has become part of the accepted wisdom to say that the twentieth century was the century of physics and the twenty-first century will be the century of biology. Two facts about the coming century are agreed on by almost everyone. Biology is now bigger than physics, as measured by the size of budgets, by the size of the workforce, or by the output of major discoveries; and biology is likely to remain the biggest part of science through the twenty-first century. Biology is also more important than physics, as measured by its economic consequences, by its ethical implications, or by its effects on human welfare.

These facts raise an interesting question. Will the domestication of high technology, which we have seen marching from triumph to triumph with the advent of personal computers and GPS receivers and digital cameras, soon be extended from physical technology to biotechnology? I believe that the answer to this question is yes. Here I am bold enough to make a definite prediction. I predict that the domestication of biotechnology will dominate our lives during the next fifty years at least as much as the domestication of computers has dominated our lives during the previous fifty years.

I see a close analogy between John von Neumann's blinkered vision of computers as large centralized facilities and the public perception of genetic engineering today as an activity of large pharmaceutical and agribusiness corporations such as Monsanto. The public distrusts Monsanto because Monsanto likes to put genes for poisonous pesticides into food crops, just as we distrusted von Neumann because he liked to use his computer for designing hydrogen bombs secretly at midnight. It is likely that genetic engineering will remain unpopular and controversial so long as it remains a centralized activity in the hands of large corporations.

I see a bright future for the biotechnology industry when it follows the path of the computer industry, the path that von Neumann failed to foresee, becoming small and domesticated rather than big and centralized. The first step in this direction was already taken recently, when genetically modified tropical fish with new and brilliant colors appeared in pet stores. For biotechnology to become domesticated, the next step is to become user-friendly. I recently spent a happy day at the Philadelphia Flower Show, the biggest indoor flower show in the world, where flower breeders from all over the world show off the results of their efforts. I have also visited the Reptile Show in San Diego, an equally impressive show displaying the work of another set of breeders. Philadelphia excels in orchids and roses, San Diego excels in lizards and snakes. The main problem for a grandparent visiting the reptile show with a grandchild is to get the grandchild out of the building without actually buying a snake.
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Every orchid or rose or lizard or snake is the work of a dedicated and skilled breeder. There are thousands of people, amateurs and professionals, who devote their lives to this business. Now imagine what will happen when the tools of genetic engineering become accessible to these people. There will be do-it-yourself kits for gardeners who will use genetic engineering to breed new varieties of roses and orchids. Also kits for lovers of pigeons and parrots and lizards and snakes to breed new varieties of pets. Breeders of dogs and cats will have their kits too.

Domesticated biotechnology, once it gets into the hands of housewives and children, will give us an explosion of diversity of new living creatures, rather than the monoculture crops that the big corporations prefer. New lineages will proliferate to replace those that monoculture farming and deforestation have destroyed. Designing genomes will be a personal thing, a new art form as creative as painting or sculpture.

Few of the new creations will be masterpieces, but a great many will bring joy to their creators and variety to our fauna and flora. The final step in the domestication of biotechnology will be biotech games, designed like computer games for children down to kindergarten age but played with real eggs and seeds rather than with images on a screen. Playing such games, kids will acquire an intimate feeling for the organisms that they are growing. The winner could be the kid whose seed grows the prickliest cactus, or the kid whose egg hatches the cutest dinosaur. These games will be messy and possibly dangerous. Rules and regulations will be needed to make sure that our kids do not endanger themselves and others. The dangers of biotechnology are real and serious.

If domestication of biotechnology is the wave of the future, five important questions need to be answered. First, can it be stopped? Second, ought it to be stopped? Third, if stopping it is either impossible or undesirable, what are the appropriate limits that our society must impose on it? Fourth, how should the limits be decided? Fifth, how should the limits be enforced, nationally and internationally? I do not attempt to answer these questions here. I leave it to our children and grandchildren to supply the answers.
2.

A New Biology for a New Century

Carl Woese is the world's greatest expert in the field of microbial taxonomy, the classification and understanding of microbes. He explored the ancestry of microbes by tracing the similarities and differences between their genomes. He discovered the large-scale structure of the tree of life, with all living creatures descended from three primordial branches. Before Woese, the tree of life had two main branches called prokaryotes and eukaryotes, the prokaryotes composed of cells without nuclei and the eukaryotes composed of cells with nuclei. All kinds of plants and animals, including humans, belonged to the eukaryote branch. The prokaryote branch contained only microbes. Woese discovered, by studying the anatomy of microbes in detail, that there are two fundamentally different kinds of prokaryotes, which he called bacteria and archea. So he constructed a new tree of life with three branches, bacteria, archea, and eukaryotes. Most of the well-known microbes are bacteria. The archea were at first supposed to be rare and confined to extreme environments such as hot springs, but they are now known to be abundant and widely distributed over the planet. Woese recently published two provocative and illuminating articles with the titles "A New Biology for a New Century" and (together with Nigel Goldenfeld) "Biology's Next Revolution."[*]

Woese's main theme is the obsolescence of reductionist biology as it has been practiced for the last hundred years, with its assumption that biological processes can be understood by studying genes and molecules. What is needed instead is a new synthetic biology based on emergent patterns of organization. Aside from his main theme, he raises another important question. When did Darwinian evolution begin? By Darwinian evolution he means evolution as Darwin understood it, based on the competition for survival of noninterbreeding species. He presents evidence that Darwinian evolution does not go back to the beginning of life. When we compare genomes of ancient lineages of living creatures, we find evidence of numerous transfers of genetic information from one lineage to another. In early times, horizontal gene transfer, the sharing of genes between unrelated species, was prevalent. It becomes more prevalent the further back you go in time.

Whatever Carl Woese writes, even in a speculative vein, needs to be taken seriously. In his "New Biology" article, he is postulating a golden age of pre-Darwinian life, when horizontal gene transfer was universal and separate species did not yet exist. Life was then a community of cells of various kinds, sharing their genetic information so that clever chemical tricks and catalytic processes invented by one creature could be inherited by all of them. Evolution was a communal affair, the whole community advancing in metabolic and reproductive efficiency as the genes of the most efficient cells were shared. Evolution could be rapid, as new chemical devices could be evolved simultaneously by cells of different kinds working in parallel and then reassembled in a single cell by horizontal gene transfer.

But then, one evil day, a cell resembling a primitive bacterium happened to find itself one jump ahead of its neighbors in efficiency. That cell, anticipating Bill Gates by three billion years, separated itself from the community and refused to share. Its offspring became the first species of bacteria—and the first species of any kind—reserving their intellectual property for their own private use. With their superior efficiency, the bacteria continued to prosper and to evolve separately, while the rest of the community continued its communal life. Some millions of years later, another cell separated itself from the community and became the ancestor of the archea. Some time after that, a third cell separated itself and became the ancestor of the eukaryotes. And so it went on, until nothing was left of the community and all life was divided into species. The Darwinian interlude had begun.

The Darwinian interlude has lasted for two or three billion years. It probably slowed down the pace of evolution considerably. The basic biochemical machinery of life had evolved rapidly during the few hundreds of millions of years of the pre-Darwinian era, and changed very little in the next two billion years of microbial evolution. Darwinian evolution is slow because individual species, once established, evolve very little. With rare exceptions, Darwinian evolution requires established species to become extinct so that new species can replace them.

Now, after three billion years, the Darwinian interlude is over. It was an interlude between two periods of horizontal gene transfer. The epoch of Darwinian evolution based on competition between species ended about ten thousand years ago, when a single species, Homo sapiens, began to dominate and reorganize the biosphere. Since that time, cultural evolution has replaced biological evolution as the main driving force of change. Cultural evolution is not Darwinian. Cultures spread by horizontal transfer of ideas more than by genetic inheritance. Cultural evolution is running a thousand times faster than Darwinian evolution, taking us into a new era of cultural interdependence which we call globalization. And now, as Homo sapiens domesticates the new biotechnology, we are reviving the ancient pre-Darwinian practice of horizontal gene transfer, moving genes easily from microbes to plants and animals, blurring the boundaries between species. We are moving rapidly into the post-Darwinian era, when species other than our own will no longer exist, and the rules of Open Source sharing will be extended from the exchange of software to the exchange of genes. Then the evolution of life will once again be communal, as it was in the good old days before separate species and intellectual property were invented.

I would like to borrow Carl Woese's vision of the future of biology and extend it to the whole of science. Here is his metaphor for the future of science:

Imagine a child playing in a woodland stream, poking a stick into an eddy in the flowing current, thereby disrupting it. But the eddy quickly reforms. The child disperses it again. Again it reforms, and the fascinating game goes on. There you have it! Organisms are resilient patterns in a turbulent flow—patterns in an energy flow.... It is becoming increasingly clear that to understand living systems in any deep sense, we must come to see them not materialistically, as machines, but as stable, complex, dynamic organization.

This picture of living creatures, as patterns of organization rather than collections of molecules, applies not only to bees and bacteria, butterflies and rain forests, but also to sand dunes and snowflakes, thunderstorms and hurricanes. The nonliving universe is as diverse and as dynamic as the living universe, and is also dominated by patterns of organization that are not yet understood. The reductionist physics and the reductionist molecular biology of the twentieth century will continue to be important in the twenty-first century, but they will not be dominant. The big problems, the evolution of the universe as a whole, the origin of life, the nature of human consciousness, and the evolution of the earth's climate, cannot be understood by reducing them to elementary particles and molecules. New ways of thinking and new ways of organizing large databases will be needed.
3.

Green Technology

The domestication of biotechnology in everyday life may also be helpful in solving practical economic and environmental problems. Once a new generation of children has grown up, as familiar with biotech games as our grandchildren are now with computer games, biotechnology will no longer seem weird and alien. In the era of Open Source biology, the magic of genes will be available to anyone with the skill and imagination to use it. The way will be open for biotechnology to move into the mainstream of economic development, to help us solve some of our urgent social problems and ameliorate the human condition all over the earth. Open Source biology could be a powerful tool, giving us access to cheap and abundant solar energy.

A plant is a creature that uses the energy of sunlight to convert water and carbon dioxide and other simple chemicals into roots and leaves and flowers. To live, it needs to collect sunlight. But it uses sunlight with low efficiency. The most efficient crop plants, such as sugarcane or maize, convert about 1 percent of the sunlight that falls onto them into chemical energy. Artificial solar collectors made of silicon can do much better. Silicon solar cells can convert sunlight into electrical energy with 15 percent efficiency, and electrical energy can be converted into chemical energy without much loss. We can imagine that in the future, when we have mastered the art of genetically engineering plants, we may breed new crop plants that have leaves made of silicon, converting sunlight into chemical energy with ten times the efficiency of natural plants. These artificial crop plants would reduce the area of land needed for biomass production by a factor of ten. They would allow solar energy to be used on a massive scale without taking up too much land. They would look like natural plants except that their leaves would be black, the color of silicon, instead of green, the color of chlorophyll. The question I am asking is, how long will it take us to grow plants with silicon leaves?

If the natural evolution of plants had been driven by the need for high efficiency of utilization of sunlight, then the leaves of all plants would have been black. Black leaves would absorb sunlight more efficiently than leaves of any other color. Obviously plant evolution was driven by other needs, and in particular by the need for protection against overheating. For a plant growing in a hot climate, it is advantageous to reflect as much as possible of the sunlight that is not used for growth. There is plenty of sunlight, and it is not important to use it with maximum efficiency. The plants have evolved with chlorophyll in their leaves to absorb the useful red and blue components of sunlight and to reflect the green. That is why it is reasonable for plants in tropical climates to be green. But this logic does not explain why plants in cold climates where sunlight is scarce are also green. We could imagine that in a place like Iceland, overheating would not be a problem, and plants with black leaves using sunlight more efficiently would have an evolutionary advantage. For some reason which we do not understand, natural plants with black leaves never appeared. Why not? Perhaps we shall not understand why nature did not travel this route until we have traveled it ourselves.

After we have explored this route to the end, when we have created new forests of black-leaved plants that can use sunlight ten times more efficiently than natural plants, we shall be confronted by a new set of environmental problems. Who shall be allowed to grow the black-leaved plants? Will black-leaved plants remain an artificially maintained cultivar, or will they invade and permanently change the natural ecology? What shall we do with the silicon trash that these plants leave behind them? Shall we be able to design a whole ecology of silicon-eating microbes and fungi and earthworms to keep the black-leaved plants in balance with the rest of nature and to recycle their silicon? The twenty-first century will bring us powerful new tools of genetic engineering with which to manipulate our farms and forests. With the new tools will come new questions and new responsibilities.

Rural poverty is one of the great evils of the modern world. The lack of jobs and economic opportunities in villages drives millions of people to migrate from villages into overcrowded cities. The continuing migration causes immense social and environmental problems in the major cities of poor countries. The effects of poverty are most visible in the cities, but the causes of poverty lie mostly in the villages. What the world needs is a technology that directly attacks the problem of rural poverty by creating wealth and jobs in the villages. A technology that creates industries and careers in villages would give the villagers a practical alternative to migration. It would give them a chance to survive and prosper without uprooting themselves.

The shifting balance of wealth and population between villages and cities is one of the main themes of human history over the last ten thousand years. The shift from villages to cities is strongly coupled with a shift from one kind of technology to another. I find it convenient to call the two kinds of technology green and gray. The adjective "green" has been appropriated and abused by various political movements, especially in Europe, so I need to explain clearly what I have in mind when I speak of green and gray. Green technology is based on biology, gray technology on physics and chemistry.

Roughly speaking, green technology is the technology that gave birth to village communities ten thousand years ago, starting from the domestication of plants and animals, the invention of agriculture, the breeding of goats and sheep and horses and cows and pigs, the manufacture of textiles and cheese and wine. Gray technology is the technology that gave birth to cities and empires five thousand years later, starting from the forging of bronze and iron, the invention of wheeled vehicles and paved roads, the building of ships and war chariots, the manufacture of swords and guns and bombs. Gray technology also produced the steel plows, tractors, reapers, and processing plants that made agriculture more productive and transferred much of the resulting wealth from village-based farmers to city-based corporations.

For the first five of the ten thousand years of human civilization, wealth and power belonged to villages with green technology, and for the second five thousand years wealth and power belonged to cities with gray technology. Beginning about five hundred years ago, gray technology became increasingly dominant, as we learned to build machines that used power from wind and water and steam and electricity. In the last hundred years, wealth and power were even more heavily concentrated in cities as gray technology raced ahead. As cities became richer, rural poverty deepened.

This sketch of the last ten thousand years of human history puts the problem of rural poverty into a new perspective. If rural poverty is a consequence of the unbalanced growth of gray technology, it is possible that a shift in the balance back from gray to green might cause rural poverty to disappear. That is my dream. During the last fifty years we have seen explosive progress in the scientific understanding of the basic processes of life, and in the last twenty years this new understanding has given rise to explosive growth of green technology. The new green technology allows us to breed new varieties of animals and plants as our ancestors did ten thousand years ago, but now a hundred times faster. It now takes us a decade instead of a millennium to create new crop plants, such as the herbicide-resistant varieties of maize and soybean that allow weeds to be controlled without plowing and greatly reduce the erosion of topsoil by wind and rain. Guided by a precise understanding of genes and genomes instead of by trial and error, we can within a few years modify plants so as to give them improved yield, improved nutritive value, and improved resistance to pests and diseases.

Within a few more decades, as the continued exploring of genomes gives us better knowledge of the architecture of living creatures, we shall be able to design new species of microbes and plants according to our needs. The way will then be open for green technology to do more cheaply and more cleanly many of the things that gray technology can do, and also to do many things that gray technology has failed to do. Green technology could replace most of our existing chemical industries and a large part of our mining and manufacturing industries. Genetically engineered earthworms could extract common metals such as aluminum and titanium from clay, and genetically engineered seaweed could extract magnesium or gold from seawater. Green technology could also achieve more extensive recycling of waste products and worn-out machines, with great benefit to the environment. An economic system based on green technology could come much closer to the goal of sustainability, using sunlight instead of fossil fuels as the primary source of energy. New species of termite could be engineered to chew up derelict automobiles instead of houses, and new species of tree could be engineered to convert carbon dioxide and sunlight into liquid fuels instead of cellulose.

Before genetically modified termites and trees can be allowed to help solve our economic and environmental problems, great arguments will rage over the possible damage they may do. Many of the people who call themselves green are passionately opposed to green technology. But in the end, if the technology is developed carefully and deployed with sensitivity to human feelings, it is likely to be accepted by most of the people who will be affected by it, just as the equally unnatural and unfamiliar green technologies of milking cows and plowing soils and fermenting grapes were accepted by our ancestors long ago. I am not saying that the political acceptance of green technology will be quick or easy. I say only that green technology has enormous promise for preserving the balance of nature on this planet as well as for relieving human misery. Future generations of people raised from childhood with biotech toys and games will probably accept it more easily than we do. Nobody can predict how long it may take to try out the new technology in a thousand different ways and measure its costs and benefits.

What has this dream of a resurgent green technology to do with the problem of rural poverty? In the past, green technology has always been rural, based in farms and villages rather than in cities. In the future it will pervade cities as well as countryside, factories as well as forests. It will not be entirely rural. But it will still have a large rural component. After all, the cloning of Dolly occurred in a rural animal-breeding station in Scotland, not in an urban laboratory in Silicon Valley. Green technology will use land and sunlight as its primary sources of raw materials and energy. Land and sunlight cannot be concentrated in cities but are spread more or less evenly over the planet. When industries and technologies are based on land and sunlight, they will bring employment and wealth to rural populations.

In a country like India with a large rural population, bringing wealth to the villages means bringing jobs other than farming. Most of the villagers must cease to be subsistance farmers and become shopkeepers or schoolteachers or bankers or engineers or poets. In the end the villages must become gentrified, as they are today in England, with the old farm workers' cottages converted into garages, and the few remaining farmers converted into highly skilled professionals. It is fortunate that sunlight is most abundant in tropical countries, where a large fraction of the world's people live and where rural poverty is most acute. Since sunlight is distributed more equitably than coal and oil, green technology can be a great equalizer, helping to narrow the gap between rich and poor countries.

My book The Sun, the Genome, and the Internet (1999) describes a vision of green technology enriching villages all over the world and halting the migration from villages to megacities. The three components of the vision are all essential: the sun to provide energy where it is needed, the genome to provide plants that can convert sunlight into chemical fuels cheaply and efficiently, the Internet to end the intellectual and economic isolation of rural populations. With all three components in place, every village in Africa could enjoy its fair share of the blessings of civilization. People who prefer to live in cities would still be free to move from villages to cities, but they would not be compelled to move by economic necessity.
Notes

[*] See Carl Woese, "A New Biology for a New Century," in Microbiology and Molecular Biology Reviews, June 2004 (http://dx.doi.org/10.1128/MMBR.68.2.173-186.2004); and Nigel Goldenfeld and Carl Woese, "Biology's Next Revolution," Nature, January 25, 2007. A slightly expanded version of the Nature article is available at http://arxiv.org/abs/q-bio/0702015v1.

UN-HABITAT Bellagio Summit on Slums

2007-08-14T04:39:00.001-07:00

Slum Dwellers of the World, Unite
by Neal Peirce
Published on Monday, August 13, 2007 by the Seattle Times

BELLAGIO, Italy — Un-Habitat suggests that within the next 30 years, one in every three inhabitants of our globe will live in the “slums” of the world’s exploding cities, most located in Africa, Asia and Latin America.

Already some 1 billion people live in urban poverty in such settlements as the vast “favelas” of Brazil, the huge Kibera slum in the heart of Nairobi, Kenya, or the Dharavi slum on the outskirts of Mumbai, India.

Life for the worst-off means existence in seemingly total squalor - tightly packed shacks, piles of litter and sewage running freely. Women routinely risk robbery and rape to bring a bucket of water from some central well or tap.

Are these slum dwellers a different species? Or are they more like us than we think?

Dreams abound even in these hard-pressed places. And youth have dreams easy to identify with. An Asian researcher at the Rockefeller Foundation’s just-concluded Global Urban Summit here told of interviewing young people from low-income families in Karachi, Pakistan:

“Every boy wants a motor bike, a cellphone and a girl sitting on the bike behind him. Every girl wants a job so she can be more independent, a cellphone, and a boy on whose motor bike she can ride.”

Most new urban slums are euphemistically called “informal settlements” - unrecognized by government, lacking basic services, and with no legal basis for land ownership. Yet they struggle upward. Take the favelas around São Paulo: From 1980 to 2000 those dwellings with piped water rose from 33 percent to 98 percent, public sewer connections 1 percent to 51 percent, electric power 65 percent to almost 100 percent.

Such advances, though, are far from automatic and especially tough to register in such deeply poor countries as those in sub-Saharan Africa and Southeast Asia. The challenge is all the tougher for slum residents living without any kind of land title or way to collateralize a loan for basic home improvements.

The best answer yet developed: collective action of slum dwellers to upgrade their own settlements and lobby the political system for neighborhood improvements. Slum Dwellers International, formed in India in 1996, has become a multination federation, active from Cambodia to South Africa. It leverages government contributions and works with grass-roots groups of residents - mainly women - who are ready to share their meager savings and strategize to gain tenure security and upgraded housing. More than 2 million slum dwellers, in 24 countries, have been mobilized.

Now it appears that the principle of micro-financing, first developed to introduce small amounts of outside capital to help individuals in poor nations start up home enterprises such as a weaving studio or a small bakery, is ready to spread dramatically to housing and such shared basic services as water and sewer connections.

Can the greater world help? The answer from the experts gathered at the Bellagio summit was a clear “yes” - that with collective grass-roots action of neighbors assuring each other’s loan paybacks, there are emerging opportunities to build a series of intermediary capital institutions that can provide links all the way up to mainstream international capital markets.

Globally, about $150 trillion in capital reportedly is available for investment. If there is sound, collective local credit capacity, why not find ways to tap it?

Such a system will take time to build - but its payoff could be immense. The big lesson is that it needs to be carried off with great care. The model not to follow is the way unprepared people were pushed into subprime loans in recent years in the U.S., with fiscal devastation at the end. The route for upgrading the world’s slums needs, by contrast, to be deliberate and paced to local self-help and collective action to assure true creditworthiness. It needs to be inventive to deal with financial markets’ transactional costs; it needs to start modestly, then grow with experience.

Globalization can be shaped to benefit the least and not just the richest among us. Conditions that breed human misery, disease and possible pandemics can be substantially reduced.

We Americans might in fact start to ask ourselves: If building personal equity has been an engine of the American Dream, couldn’t the same principle, developed indigenously in some of the world’s poorest neighborhoods, also help to build a global dream of clean and decent homes and the basic services people need? The slum dwellers of the developing world are more like us than we think.

Neal Peirce’s column appears alternate Mondays on editorial pages of The Times. His e-mail address is nrp@citistates.com

The Mafia, Iraq and the International Arms Trade

2007-08-14T03:32:00.001-07:00

Italian Gun Runners in Biz with Iraqi Ministry
By Spencer Ackerman - August 13, 2007, 12:38 PM

The Iraqi government of Nouri al-Maliki takes support where it can get it. Over 160,000 U.S. troops guarantee its existence. It's cultivating an ever-closer bond with its fellow Shiites in Iran. But Italian criminals have to rank as rather unexpected allies.

The Iraqi government, a very shady Iraqi company and a group of Italian arms smugglers found a potent business opportunity in Iraq's black market for weapons, according to Italian investigators cited by the Associated Press. And that's a thriving trade. Just last week, a Government Accountability Office report found that the U.S. military's training command in Iraq couldn't account for 190,000 pistols and AK-47s sent to the Iraqi army and police in 2004 and 2005. Those guns, in all likelihood, made their way from the Iraqi security forces to the thriving black market in weaponry, where they're sure to be joined by many more: Iraqi soldiers are set to receive 100,000 M-16s and M-4s from the U.S., making their old AK-47s a new source of quick cash.

Enter the Interior Ministry, by far the most powerful bureaucracy in Iraq, and one that exists as an instrument of Shiite power.

The Interior Ministry needs to supply affiliated death squads -- the Badr Corps, the Mahdi Army -- with the weaponry necessary to combat Sunni insurgents, terrorists and ordinary civilians. But the U.S. is hardly well-disposed to the ministry's sectarian agenda. And that apparently set officials at Interior on a shady course to get thousands of Chinese and Russian-made AK-47s and machine guns into the country:

Investigators say the prospect of an Iraq deal was raised last November, when an Iraqi-owned trading firm e-mailed Massimo Bettinotti, 39, owner of the Malta-based MIR Ltd., about whether MIR could supply 100,000 AK-47 assault rifles and 10,000 machine guns "to the Iraqi Interior Ministry," adding that "this deal is approved by America and Iraq."

The go-between -- the Al-Handal General Trading Co. in Dubai -- apparently had communicated with Bettinotti earlier about buying night visors and had been told MIR could also procure weapons.

Al-Handal has figured in questionable dealings before, having been identified by U.S. investigators three years ago as a "front company" in Iraq's Oil-for-Food scandal.

Ultimately, al-Handal was prepared to send nearly $40 million to Bettinotti in exchange for the guns, a deal that would have netted the Italians over $6 million in profit. And the deal would have gone through, had the Italians not arrested Bettinotti and his colleagues in February as part of an arms-smuggling case that stretches all the way to Libya. Most interestingly, the head of the al-Handal company, Waleed Noori al-Handal, claimed to the AP that U.S. authorities in Baghdad allow al-Handal's parent company "to do all kinds of business" in Iraq.

The Interior Ministry wouldn't comment on the record to the AP about the illicit weapons deal. But an official did acknowledge off the record that "it had sought the weapons through al-Handal," and that it didn't ask questions about how the guns got into the country. His claim that the guns were meant for police in Anbar Province doesn't match up with U.S. supply records that show more AK-47s in the province than there are policemen, at least according to official records.

There's a ton that isn't clear about this story. But the simplest explanation is that the Interior Ministry needed to hide weapons purchases from the U.S. in order to funnel guns to Shiite death squads and militiamen. As the U.S. has recently been supplying Sunni ex-insurgents in Anbar, perhaps the Shiite-dominated ministry felt compelled to balance the scales. It's hard to say at the moment. But the broader significance is that the Iraqi government that U.S. troops are dying to protect is shaping up as a rather large client of the illicit international arms trade.

Inside the CIA's Global Prison Network

2007-08-14T03:07:00.000-07:00

The Black Sites
A rare look inside the C.I.A.’s secret interrogation program.
by Jane Mayer August 13, 2007

In March, Mariane Pearl, the widow of the murdered Wall Street Journal reporter Daniel Pearl, received a phone call from Alberto Gonzales, the Attorney General. At the time, Gonzales’s role in the controversial dismissal of eight United States Attorneys had just been exposed, and the story was becoming a scandal in Washington. Gonzales informed Pearl that the Justice Department was about to announce some good news: a terrorist in U.S. custody—Khalid Sheikh Mohammed, the Al Qaeda leader who was the primary architect of the September 11th attacks—had confessed to killing her husband. (Pearl was abducted and beheaded five and a half years ago in Pakistan, by unidentified Islamic militants.) The Administration planned to release a transcript in which Mohammed boasted, “I decapitated with my blessed right hand the head of the American Jew Daniel Pearl in the city of Karachi, Pakistan. For those who would like to confirm, there are pictures of me on the Internet holding his head.”

Pearl was taken aback. In 2003, she had received a call from Condoleezza Rice, who was then President Bush’s national-security adviser, informing her of the same news. But Rice’s revelation had been secret. Gonzales’s announcement seemed like a publicity stunt. Pearl asked him if he had proof that Mohammed’s confession was truthful; Gonzales claimed to have corroborating evidence but wouldn’t share it. “It’s not enough for officials to call me and say they believe it,” Pearl said. “You need evidence.” (Gonzales did not respond to requests for comment.)

The circumstances surrounding the confession of Mohammed, whom law-enforcement officials refer to as K.S.M., were perplexing. He had no lawyer. After his capture in Pakistan, in March of 2003, the Central Intelligence Agency had detained him in undisclosed locations for more than two years; last fall, he was transferred to military custody in Guantánamo Bay, Cuba. There were no named witnesses to his initial confession, and no solid information about what form of interrogation might have prodded him to talk, although reports had been published, in the Times and elsewhere, suggesting that C.I.A. officers had tortured him. At a hearing held at Guantánamo, Mohammed said that his testimony was freely given, but he also indicated that he had been abused by the C.I.A. (The Pentagon had classified as “top secret” a statement he had written detailing the alleged mistreatment.) And although Mohammed said that there were photographs confirming his guilt, U.S. authorities had found none. Instead, they had a copy of the video that had been released on the Internet, which showed the killer’s arms but offered no other clues to his identity.

Further confusing matters, a Pakistani named Ahmed Omar Saeed Sheikh had already been convicted of the abduction and murder, in 2002. A British-educated terrorist who had a history of staging kidnappings, he had been sentenced to death in Pakistan for the crime. But the Pakistani government, not known for its leniency, had stayed his execution. Indeed, hearings on the matter had been delayed a remarkable number of times—at least thirty—possibly because of his reported ties to the Pakistani intelligence service, which may have helped free him after he was imprisoned for terrorist activities in India. Mohammed’s confession would delay the execution further, since, under Pakistani law, any new evidence is grounds for appeal.

A surprising number of people close to the case are dubious of Mohammed’s confession. A longtime friend of Pearl’s, the former Journal reporter Asra Nomani, said, “The release of the confession came right in the midst of the U.S. Attorney scandal. There was a drumbeat for Gonzales’s resignation. It seemed like a calculated strategy to change the subject. Why now? They’d had the confession for years.” Mariane and Daniel Pearl were staying in Nomani’s Karachi house at the time of his murder, and Nomani has followed the case meticulously; this fall, she plans to teach a course on the topic at Georgetown University. She said, “I don’t think this confession resolves the case. You can’t have justice from one person’s confession, especially under such unusual circumstances. To me, it’s not convincing.” She added, “I called all the investigators. They weren’t just skeptical—they didn’t believe it.”

Special Agent Randall Bennett, the head of security for the U.S. consulate in Karachi when Pearl was killed—and whose lead role investigating the murder was featured in the recent film “A Mighty Heart”—said that he has interviewed all the convicted accomplices who are now in custody in Pakistan, and that none of them named Mohammed as playing a role. “K.S.M.’s name never came up,” he said. Robert Baer, a former C.I.A. officer, said, “My old colleagues say with one-hundred-per-cent certainty that it was not K.S.M. who killed Pearl.” A government official involved in the case said, “The fear is that K.S.M. is covering up for others, and that these people will be released.” And Judea Pearl, Daniel’s father, said, “Something is fishy. There are a lot of unanswered questions. K.S.M. can say he killed Jesus—he has nothing to lose.”

Mariane Pearl, who is relying on the Bush Administration to bring justice in her husband’s case, spoke carefully about the investigation. “You need a procedure that will get the truth,” she said. “An intelligence agency is not supposed to be above the law.”

Mohammed’s interrogation was part of a secret C.I.A. program, initiated after September 11th, in which terrorist suspects such as Mohammed were detained in “black sites”—secret prisons outside the United States—and subjected to unusually harsh treatment. The program was effectively suspended last fall, when President Bush announced that he was emptying the C.I.A.’s prisons and transferring the detainees to military custody in Guantánamo. This move followed a Supreme Court ruling, Hamdan v. Rumsfeld, which found that all detainees—including those held by the C.I.A.—had to be treated in a manner consistent with the Geneva Conventions. These treaties, adopted in 1949, bar cruel treatment, degradation, and torture. In late July, the White House issued an executive order promising that the C.I.A. would adjust its methods in order to meet the Geneva standards. At the same time, Bush’s order pointedly did not disavow the use of “enhanced interrogation techniques” that would likely be found illegal if used by officials inside the United States. The executive order means that the agency can once again hold foreign terror suspects indefinitely, and without charges, in black sites, without notifying their families or local authorities, or offering access to legal counsel.

The C.I.A.’s director, General Michael Hayden, has said that the program, which is designed to extract intelligence from suspects quickly, is an “irreplaceable” tool for combatting terrorism. And President Bush has said that “this program has given us information that has saved innocent lives, by helping us stop new attacks.” He claims that it has contributed to the disruption of at least ten serious Al Qaeda plots since September 11th, three of them inside the United States.

According to the Bush Administration, Mohammed divulged information of tremendous value during his detention. He is said to have helped point the way to the capture of Hambali, the Indonesian terrorist responsible for the 2002 bombings of night clubs in Bali. He also provided information on an Al Qaeda leader in England. Michael Sheehan, a former counterterrorism official at the State Department, said, “K.S.M. is the poster boy for using tough but legal tactics. He’s the reason these techniques exist. You can save lives with the kind of information he could give up.” Yet Mohammed’s confessions may also have muddled some key investigations. Perhaps under duress, he claimed involvement in thirty-one criminal plots—an improbable number, even for a high-level terrorist. Critics say that Mohammed’s case illustrates the cost of the C.I.A.’s desire for swift intelligence. Colonel Dwight Sullivan, the top defense lawyer at the Pentagon’s Office of Military Commissions, which is expected eventually to try Mohammed for war crimes, called his serial confessions “a textbook example of why we shouldn’t allow coercive methods.”

The Bush Administration has gone to great lengths to keep secret the treatment of the hundred or so “high-value detainees” whom the C.I.A. has confined, at one point or another, since September 11th. The program has been extraordinarily “compartmentalized,” in the nomenclature of the intelligence world. By design, there has been virtually no access for outsiders to the C.I.A.’s prisoners. The utter isolation of these detainees has been described as essential to America’s national security. The Justice Department argued this point explicitly last November, in the case of a Baltimore-area resident named Majid Khan, who was held for more than three years by the C.I.A. Khan, the government said, had to be prohibited from access to a lawyer specifically because he might describe the “alternative interrogation methods” that the agency had used when questioning him. These methods amounted to a state secret, the government argued, and disclosure of them could “reasonably be expected to cause extremely grave damage.” (The case has not yet been decided.)

Given this level of secrecy, the public and all but a few members of Congress who have been sworn to silence have had to take on faith President Bush’s assurances that the C.I.A.’s internment program has been humane and legal, and has yielded crucial intelligence. Representative Alcee Hastings, a Democratic member of the House Select Committee on Intelligence, said, “We talk to the authorities about these detainees, but, of course, they’re not going to come out and tell us that they beat the living daylights out of someone.” He recalled learning in 2003 that Mohammed had been captured. “It was good news,” he said. “So I tried to find out: Where is this guy? And how is he being treated?” For more than three years, Hastings said, “I could never pinpoint anything.” Finally, he received some classified briefings on the Mohammed interrogation. Hastings said that he “can’t go into details” about what he found out, but, speaking of Mohammed’s treatment, he said that even if it wasn’t torture, as the Administration claims, “it ain’t right, either. Something went wrong.”

Since the drafting of the Geneva Conventions, the International Committee of the Red Cross has played a special role in safeguarding the rights of prisoners of war. For decades, governments have allowed officials from the organization to report on the treatment of detainees, to insure that standards set by international treaties are being maintained. The Red Cross, however, was unable to get access to the C.I.A.’s prisoners for five years. Finally, last year, Red Cross officials were allowed to interview fifteen detainees, after they had been transferred to Guantánamo. One of the prisoners was Khalid Sheikh Mohammed. What the Red Cross learned has been kept from the public. The committee believes that its continued access to prisoners worldwide is contingent upon confidentiality, and therefore it addresses violations privately with the authorities directly responsible for prisoner treatment and detention. For this reason, Simon Schorno, a Red Cross spokesman in Washington, said, “The I.C.R.C. does not comment on its findings publicly. Its work is confidential.”

The public-affairs office at the C.I.A. and officials at the congressional intelligence-oversight committees would not even acknowledge the existence of the report. Among the few people who are believed to have seen it are Condoleezza Rice, now the Secretary of State; Stephen Hadley, the national-security adviser; John Bellinger III, the Secretary of State’s legal adviser; Hayden; and John Rizzo, the agency’s acting general counsel. Some members of the Senate and House intelligence-oversight committees are also believed to have had limited access to the report.

Confidentiality may be particularly stringent in this case. Congressional and other Washington sources familiar with the report said that it harshly criticized the C.I.A.’s practices. One of the sources said that the Red Cross described the agency’s detention and interrogation methods as tantamount to torture, and declared that American officials responsible for the abusive treatment could have committed serious crimes. The source said the report warned that these officials may have committed “grave breaches” of the Geneva Conventions, and may have violated the U.S. Torture Act, which Congress passed in 1994. The conclusions of the Red Cross, which is known for its credibility and caution, could have potentially devastating legal ramifications.

Concern about the legality of the C.I.A.’s program reached a previously unreported breaking point last week when Senator Ron Wyden, a Democrat on the intelligence committee, quietly put a “hold” on the confirmation of John Rizzo, who as acting general counsel was deeply involved in establishing the agency’s interrogation and detention policies. Wyden’s maneuver essentially stops the nomination from going forward. “I question if there’s been adequate legal oversight,” Wyden told me. He said that after studying a classified addendum to President Bush’s new executive order, which specifies permissible treatment of detainees, “I am not convinced that all of these techniques are either effective or legal. I don’t want to see well-intentioned C.I.A. officers breaking the law because of shaky legal guidance.”

A former C.I.A. officer, who supports the agency’s detention and interrogation policies, said he worried that, if the full story of the C.I.A. program ever surfaced, agency personnel could face criminal prosecution. Within the agency, he said, there is a “high level of anxiety about political retribution” for the interrogation program. If congressional hearings begin, he said, “several guys expect to be thrown under the bus.” He noted that a number of C.I.A. officers have taken out professional liability insurance, to help with potential legal fees.

Paul Gimigliano, a spokesman for the C.I.A., denied any legal impropriety, stressing that “the agency’s terrorist-detention program has been implemented lawfully. And torture is illegal under U.S. law. The people who have been part of this important effort are well-trained, seasoned professionals.” This spring, the Associated Press published an article quoting the chairman of the House intelligence committee, Silvestre Reyes, who said that Hayden, the C.I.A. director, “vehemently denied” the Red Cross’s conclusions. A U.S. official dismissed the Red Cross report as a mere compilation of allegations made by terrorists. And Robert Grenier, a former head of the C.I.A.’s Counterterrorism Center, said that “the C.I.A.’s interrogations were nothing like Abu Ghraib or Guantánamo. They were very, very regimented. Very meticulous.” He said, “The program is very careful. It’s completely legal.”

Accurately or not, Bush Administration officials have described the prisoner abuses at Abu Ghraib and Guantánamo as the unauthorized actions of ill-trained personnel, eleven of whom have been convicted of crimes. By contrast, the treatment of high-value detainees has been directly, and repeatedly, approved by President Bush. The program is monitored closely by C.I.A. lawyers, and supervised by the agency’s director and his subordinates at the Counterterrorism Center. While Mohammed was being held by the agency, detailed dossiers on the treatment of detainees were regularly available to the former C.I.A. director George Tenet, according to informed sources inside and outside the agency. Through a spokesperson, Tenet denied making day-to-day decisions about the treatment of individual detainees. But, according to a former agency official, “Every single plan is drawn up by interrogators, and then submitted for approval to the highest possible level—meaning the director of the C.I.A. Any change in the plan—even if an extra day of a certain treatment was added—was signed off by the C.I.A. director.”

On September 17, 2001, President Bush signed a secret Presidential finding authorizing the C.I.A. to create paramilitary teams to hunt, capture, detain, or kill designated terrorists almost anywhere in the world. Yet the C.I.A. had virtually no trained interrogators. A former C.I.A. officer involved in fighting terrorism said that, at first, the agency was crippled by its lack of expertise. “It began right away, in Afghanistan, on the fly,” he recalled. “They invented the program of interrogation with people who had no understanding of Al Qaeda or the Arab world.” The former officer said that the pressure from the White House, in particular from Vice-President Dick Cheney, was intense: “They were pushing us: ‘Get information! Do not let us get hit again!’ ” In the scramble, he said, he searched the C.I.A.’s archives, to see what interrogation techniques had worked in the past. He was particularly impressed with the Phoenix Program, from the Vietnam War. Critics, including military historians, have described it as a program of state-sanctioned torture and murder. A Pentagon-contract study found that, between 1970 and 1971, ninety-seven per cent of the Vietcong targeted by the Phoenix Program were of negligible importance. But, after September 11th, some C.I.A. officials viewed the program as a useful model. A. B. Krongard, who was the executive director of the C.I.A. from 2001 to 2004, said that the agency turned to “everyone we could, including our friends in Arab cultures,” for interrogation advice, among them those in Egypt, Jordan, and Saudi Arabia, all of which the State Department regularly criticizes for human-rights abuses.

The C.I.A. knew even less about running prisons than it did about hostile interrogations. Tyler Drumheller, a former chief of European operations at the C.I.A., and the author of a recent book, “On the Brink: How the White House Compromised U.S. Intelligence,” said, “The agency had no experience in detention. Never. But they insisted on arresting and detaining people in this program. It was a mistake, in my opinion. You can’t mix intelligence and police work. But the White House was really pushing. They wanted someone to do it. So the C.I.A. said, ‘We’ll try.’ George Tenet came out of politics, not intelligence. His whole modus operandi was to please the principal. We got stuck with all sorts of things. This is really the legacy of a director who never said no to anybody.”

Many officials inside the C.I.A. had misgivings. “A lot of us knew this would be a can of worms,” the former officer said. “We warned them, It’s going to become an atrocious mess.” The problem from the start, he said, was that no one had thought through what he called “the disposal plan.” He continued, “What are you going to do with these people? The utility of someone like K.S.M. is, at most, six months to a year. You exhaust them. Then what? It would have been better if we had executed them.”

The C.I.A. program’s first important detainee was Abu Zubaydah, a top Al Qaeda operative, who was captured by Pakistani forces in March of 2002. Lacking in-house specialists on interrogation, the agency hired a group of outside contractors, who implemented a regime of techniques that one well-informed former adviser to the American intelligence community described as “a ‘Clockwork Orange’ kind of approach.” The experts were retired military psychologists, and their backgrounds were in training Special Forces soldiers how to survive torture, should they ever be captured by enemy states. The program, known as SERE—an acronym for Survival, Evasion, Resistance, and Escape—was created at the end of the Korean War. It subjected trainees to simulated torture, including waterboarding (simulated drowning), sleep deprivation, isolation, exposure to temperature extremes, enclosure in tiny spaces, bombardment with agonizing sounds, and religious and sexual humiliation. The SERE program was designed strictly for defense against torture regimes, but the C.I.A.’s new team used its expertise to help interrogators inflict abuse. “They were very arrogant, and pro-torture,” a European official knowledgeable about the program said. “They sought to render the detainees vulnerable—to break down all of their senses. It takes a psychologist trained in this to understand these rupturing experiences.”

The use of psychologists was also considered a way for C.I.A. officials to skirt measures such as the Convention Against Torture. The former adviser to the intelligence community said, “Clearly, some senior people felt they needed a theory to justify what they were doing. You can’t just say, ‘We want to do what Egypt’s doing.’ When the lawyers asked what their basis was, they could say, ‘We have Ph.D.s who have these theories.’ ” He said that, inside the C.I.A., where a number of scientists work, there was strong internal opposition to the new techniques. “Behavioral scientists said, ‘Don’t even think about this!’ They thought officers could be prosecuted.”

Nevertheless, the SERE experts’ theories were apparently put into practice with Zubaydah’s interrogation. Zubaydah told the Red Cross that he was not only waterboarded, as has been previously reported; he was also kept for a prolonged period in a cage, known as a “dog box,” which was so small that he could not stand. According to an eyewitness, one psychologist advising on the treatment of Zubaydah, James Mitchell, argued that he needed to be reduced to a state of “learned helplessness.” (Mitchell disputes this characterization.)

Steve Kleinman, a reserve Air Force colonel and an experienced interrogator who has known Mitchell professionally for years, said that “learned helplessness was his whole paradigm.” Mitchell, he said, “draws a diagram showing what he says is the whole cycle. It starts with isolation. Then they eliminate the prisoners’ ability to forecast the future—when their next meal is, when they can go to the bathroom. It creates dread and dependency. It was the K.G.B. model. But the K.G.B. used it to get people who had turned against the state to confess falsely. The K.G.B. wasn’t after intelligence.”

As the C.I.A. captured and interrogated other Al Qaeda figures, it established a protocol of psychological coercion. The program tied together many strands of the agency’s secret history of Cold War-era experiments in behavioral science. (In June, the C.I.A. declassified long-held secret documents known as the Family Jewels, which shed light on C.I.A. drug experiments on rats and monkeys, and on the infamous case of Frank R. Olson, an agency employee who leaped to his death from a hotel window in 1953, nine days after he was unwittingly drugged with LSD.) The C.I.A.’s most useful research focussed on the surprisingly powerful effects of psychological manipulations, such as extreme sensory deprivation. According to Alfred McCoy, a history professor at the University of Wisconsin, in Madison, who has written a history of the C.I.A.’s experiments in coercing subjects, the agency learned that “if subjects are confined without light, odors, sound, or any fixed references of time and place, very deep breakdowns can be provoked.”

Agency scientists found that in just a few hours some subjects suspended in water tanks—or confined in isolated rooms wearing blacked-out goggles and earmuffs—regressed to semi-psychotic states. Moreover, McCoy said, detainees become so desperate for human interaction that “they bond with the interrogator like a father, or like a drowning man having a lifesaver thrown at him. If you deprive people of all their senses, they’ll turn to you like their daddy.” McCoy added that “after the Cold War we put away those tools. There was bipartisan reform. We backed away from those dark days. Then, under the pressure of the war on terror, they didn’t just bring back the old psychological techniques—they perfected them.”

The C.I.A.’s interrogation program is remarkable for its mechanistic aura. “It’s one of the most sophisticated, refined programs of torture ever,” an outside expert familiar with the protocol said. “At every stage, there was a rigid attention to detail. Procedure was adhered to almost to the letter. There was top-down quality control, and such a set routine that you get to the point where you know what each detainee is going to say, because you’ve heard it before. It was almost automated. People were utterly dehumanized. People fell apart. It was the intentional and systematic infliction of great suffering masquerading as a legal process. It is just chilling.”

The U.S. government first began tracking Khalid Sheikh Mohammed in 1993, shortly after his nephew Ramzi Yousef blew a gaping hole in the World Trade Center. Mohammed, officials learned, had transferred money to Yousef. Mohammed, born in either 1964 or 1965, was raised in a religious Sunni Muslim family in Kuwait, where his family had migrated from the Baluchistan region of Pakistan. In the mid-eighties, he was trained as a mechanical engineer in the U.S., attending two colleges in North Carolina.

As a teen-ager, Mohammed had been drawn to militant, and increasingly violent, Muslim causes. He joined the Muslim Brotherhood at the age of sixteen, and, after his graduation from North Carolina Agricultural and Technical State University, in Greensboro—where he was remembered as a class clown, but religious enough to forgo meat when eating at Burger King—he signed on with the anti-Soviet jihad in Afghanistan, receiving military training and establishing ties with Islamist terrorists. By all accounts, his animus toward the U.S. was rooted in a hatred of Israel.

In 1994, Mohammed, who was impressed by Yousef’s notoriety after the first World Trade Center bombing, joined him in scheming to blow up twelve U.S. jumbo jets over two days. The so-called Bojinka plot was disrupted in 1995, when Philippine police broke into an apartment that Yousef and other terrorists were sharing in Manila, which was filled with bomb-making materials. At the time of the raid, Mohammed was working in Doha, Qatar, at a government job. The following year, he narrowly escaped capture by F.B.I. officers and slipped into the global jihadist network, where he eventually joined forces with Osama bin Laden, in Afghanistan. Along the way, he married and had children.

Many journalistic accounts have presented Mohammed as a charismatic, swashbuckling figure: in the Philippines, he was said to have flown a helicopter close enough to a girlfriend’s office window so that she could see him; in Pakistan, he supposedly posed as an anonymous bystander and gave interviews to news reporters about his nephew’s arrest. Neither story is true. But Mohammed did seem to enjoy taunting authorities after the September 11th attacks, which, in his eventual confession, he claimed to have orchestrated “from A to Z.” In April, 2002, Mohammed arranged to be interviewed on Al Jazeera by its London bureau chief, Yosri Fouda, and took personal credit for the atrocities. “I am the head of the Al Qaeda military committee,” he said. “And yes, we did it.” Fouda, who conducted the interview at an Al Qaeda safe house in Karachi, said that he was astounded not only by Mohammed’s boasting but also by his seeming imperviousness to the danger of being caught. Mohammed permitted Al Jazeera to reveal that he was hiding out in the Karachi area. When Fouda left the apartment, Mohammed, apparently unarmed, walked him downstairs and out into the street.

In the early months of 2003, U.S. authorities reportedly paid a twenty-five-million-dollar reward for information that led to Mohammed’s arrest. U.S. officials closed in on him, at 4 A.M. on March 1st, waking him up in a borrowed apartment in Rawalpindi, Pakistan. The officials hung back as Pakistani authorities handcuffed and hooded him, and took him to a safe house. Reportedly, for the first two days, Mohammed robotically recited Koranic verses and refused to divulge much more than his name. A videotape obtained by “60 Minutes” shows Mohammed at the end of this episode, complaining of a head cold; an American voice can be heard in the background. This was the last image of Mohammed to be seen by the public. By March 4th, he was in C.I.A. custody.

Captured along with Mohammed, according to some accounts, was a letter from bin Laden, which may have led officials to think that he knew where the Al Qaeda founder was hiding. If Mohammed did have this crucial information, it was time sensitive—bin Laden never stayed in one place for long—and officials needed to extract it quickly. At the time, many American intelligence officials still feared a “second wave” of Al Qaeda attacks, ratcheting the pressure further.

According to George Tenet’s recent memoir, “At the Center of the Storm,” Mohammed told his captors that he wouldn’t talk until he was given a lawyer in New York, where he assumed he would be taken. (He had been indicted there in connection with the Bojinka plot.) Tenet writes, “Had that happened, I am confident that we would have obtained none of the information he had in his head about imminent threats against the American people.” Opponents of the C.I.A.’s approach, however, note that Ramzi Yousef gave a voluminous confession after being read his Miranda rights. “These guys are egomaniacs,” a former federal prosecutor said. “They love to talk!”

A complete picture of Mohammed’s time in secret detention remains elusive. But a partial narrative has emerged through interviews with European and American sources in intelligence, government, and legal circles, as well as with former detainees who have been released from C.I.A. custody. People familiar with Mohammed’s allegations about his interrogation, and interrogations of other high-value detainees, describe the accounts as remarkably consistent.

Soon after Mohammed’s arrest, sources say, his American captors told him, “We’re not going to kill you. But we’re going to take you to the very brink of your death and back.” He was first taken to a secret U.S.-run prison in Afghanistan. According to a Human Rights Watch report released two years ago, there was a C.I.A.-affiliated black site in Afghanistan by 2002: an underground prison near Kabul International Airport. Distinctive for its absolute lack of light, it was referred to by detainees as the Dark Prison. Another detention facility was reportedly a former brick factory, just north of Kabul, known as the Salt Pit. The latter became infamous for the 2002 death of a detainee, reportedly from hypothermia, after prison officials stripped him naked and chained him to the floor of his concrete cell, in freezing temperatures.

In all likelihood, Mohammed was transported from Pakistan to one of the Afghan sites by a team of black-masked commandos attached to the C.I.A.’s paramilitary Special Activities Division. According to a report adopted in June by the Parliamentary Assembly of the Council of Europe, titled “Secret Detentions and Illegal Transfers of Detainees,” detainees were “taken to their cells by strong people who wore black outfits, masks that covered their whole faces, and dark visors over their eyes.” (Some personnel reportedly wore black clothes made from specially woven synthetic fabric that couldn’t be ripped or torn.) A former member of a C.I.A. transport team has described the “takeout” of prisoners as a carefully choreographed twenty-minute routine, during which a suspect was hog-tied, stripped naked, photographed, hooded, sedated with anal suppositories, placed in diapers, and transported by plane to a secret location.

A person involved in the Council of Europe inquiry, referring to cavity searches and the frequent use of suppositories during the takeout of detainees, likened the treatment to “sodomy.” He said, “It was used to absolutely strip the detainee of any dignity. It breaks down someone’s sense of impenetrability. The interrogation became a process not just of getting information but of utterly subordinating the detainee through humiliation.” The former C.I.A. officer confirmed that the agency frequently photographed the prisoners naked, “because it’s demoralizing.” The person involved in the Council of Europe inquiry said that photos were also part of the C.I.A.’s quality-control process. They were passed back to case officers for review.

A secret government document, dated December 10, 2002, detailing “SERE Interrogation Standard Operating Procedure,” outlines the advantages of stripping detainees. “In addition to degradation of the detainee, stripping can be used to demonstrate the omnipotence of the captor or to debilitate the detainee.” The document advises interrogators to “tear clothing from detainees by firmly pulling downward against buttoned buttons and seams. Tearing motions shall be downward to prevent pulling the detainee off balance.” The memo also advocates the “Shoulder Slap,” “Stomach Slap,” “Hooding,” “Manhandling,” “Walling,” and a variety of “Stress Positions,” including one called “Worship the Gods.”

In the process of being transported, C.I.A. detainees such as Mohammed were screened by medical experts, who checked their vital signs, took blood samples, and marked a chart with a diagram of a human body, noting scars, wounds, and other imperfections. As the person involved in the Council of Europe inquiry put it, “It’s like when you hire a motor vehicle, circling where the scratches are on the rearview mirror. Each detainee was continually assessed, physically and psychologically.”

According to sources, Mohammed said that, while in C.I.A. custody, he was placed in his own cell, where he remained naked for several days. He was questioned by an unusual number of female handlers, perhaps as an additional humiliation. He has alleged that he was attached to a dog leash, and yanked in such a way that he was propelled into the walls of his cell. Sources say that he also claimed to have been suspended from the ceiling by his arms, his toes barely touching the ground. The pressure on his wrists evidently became exceedingly painful.

Ramzi Kassem, who teaches at Yale Law School, said that a Yemeni client of his, Sanad al-Kazimi, who is now in Guantánamo, alleged that he had received similar treatment in the Dark Prison, the facility near Kabul. Kazimi claimed to have been suspended by his arms for long periods, causing his legs to swell painfully. “It’s so traumatic, he can barely speak of it,” Kassem said. “He breaks down in tears.” Kazimi also claimed that, while hanging, he was beaten with electric cables.

According to sources familiar with interrogation techniques, the hanging position is designed, in part, to prevent detainees from being able to sleep. The former C.I.A. officer, who is knowledgeable about the interrogation program, explained that “sleep deprivation works. Your electrolyte balance changes. You lose all balance and ability to think rationally. Stuff comes out.” Sleep deprivation has been recognized as an effective form of coercion since the Middle Ages, when it was called tormentum insomniae. It was also recognized for decades in the United States as an illegal form of torture. An American Bar Association report, published in 1930, which was cited in a later U.S. Supreme Court decision, said, “It has been known since 1500 at least that deprivation of sleep is the most effective torture and certain to produce any confession desired.”

Under President Bush’s new executive order, C.I.A. detainees must receive the “basic necessities of life, including adequate food and water, shelter from the elements, necessary clothing, protection from extremes of heat and cold, and essential medical care.” Sleep, according to the order, is not among the basic necessities.

In addition to keeping a prisoner awake, the simple act of remaining upright can over time cause significant pain. McCoy, the historian, noted that “longtime standing” was a common K.G.B. interrogation technique. In his 2006 book, “A Question of Torture,” he writes that the Soviets found that making a victim stand for eighteen to twenty-four hours can produce “excruciating pain, as ankles double in size, skin becomes tense and intensely painful, blisters erupt oozing watery serum, heart rates soar, kidneys shut down, and delusions deepen.”

Mohammed is said to have described being chained naked to a metal ring in his cell wall for prolonged periods in a painful crouch. (Several other detainees who say that they were confined in the Dark Prison have described identical treatment.) He also claimed that he was kept alternately in suffocating heat and in a painfully cold room, where he was doused with ice water. The practice, which can cause hypothermia, violates the Geneva Conventions, and President Bush’s new executive order arguably bans it.

Some detainees held by the C.I.A. claimed that their cells were bombarded with deafening sound twenty-fours hours a day for weeks, and even months. One detainee, Binyam Mohamed, who is now in Guantánamo, told his lawyer, Clive Stafford Smith, that speakers blared music into his cell while he was handcuffed. Detainees recalled the sound as ranging from ghoulish laughter, “like the soundtrack from a horror film,” to ear-splitting rap anthems. Stafford Smith said that his client found the psychological torture more intolerable than the physical abuse that he said he had been previously subjected to in Morocco, where, he said, local intelligence agents had sliced him with a razor blade. “The C.I.A. worked people day and night for months,” Stafford Smith quoted Binyam Mohamed as saying. “Plenty lost their minds. I could hear people knocking their heads against the walls and doors, screaming their heads off.”

Professor Kassem said his Yemeni client, Kazimi, had told him that, during his incarceration in the Dark Prison, he attempted suicide three times, by ramming his head into the walls. “He did it until he lost consciousness,” Kassem said. “Then they stitched him back up. So he did it again. The next time, he woke up, he was chained, and they’d given him tranquillizers. He asked to go to the bathroom, and then he did it again.” This last time, Kazimi was given more tranquillizers, and chained in a more confining manner.

The case of Khaled el-Masri, another detainee, has received wide attention. He is the German car salesman whom the C.I.A. captured in 2003 and dispatched to Afghanistan, based on erroneous intelligence; he was released in 2004, and Condoleezza Rice reportedly conceded the mistake to the German chancellor. Masri is considered one of the more credible sources on the black-site program, because Germany has confirmed that he has no connections to terrorism. He has also described inmates bashing their heads against the walls. Much of his account appeared on the front page of the Times. But, during a visit to America last fall, he became tearful as he recalled the plight of a Tanzanian in a neighboring cell. The man seemed “psychologically at the end,” he said. “I could hear him ramming his head against the wall in despair. I tried to calm him down. I asked the doctor, ‘Will you take care of this human being?’ ” But the doctor, whom Masri described as American, refused to help. Masri also said that he was told that guards had “locked the Tanzanian in a suitcase for long periods of time—a foul-smelling suitcase that made him vomit.” (Masri did not witness such abuse.)

Masri described his prison in Afghanistan as a filthy hole, with walls scribbled on in Pashtun and Arabic. He was given no bed, only a coarse blanket on the floor. At night, it was too cold to sleep. He said, “The water was putrid. If you took a sip, you could taste it for hours. You could smell a foul smell from it three metres away.” The Salt Pit, he said, “was managed and run by the Americans. It was not a secret. They introduced themselves as Americans.” He added, “When anything came up, they said they couldn’t make a decision. They said, ‘We will have to pass it on to Washington.’ ” The interrogation room at the Salt Pit, he said, was overseen by a half-dozen English-speaking masked men, who shoved him and shouted at him, saying, “You’re in a country where there’s no rule of law. You might be buried here.”

According to two former C.I.A. officers, an interrogator of Mohammed told them that the Pakistani was kept in a cell over which a sign was placed: “The Proud Murderer of 3,000 Americans.” (Another source calls this apocryphal.) One of these former officers defends the C.I.A.’s program by noting that “there was absolutely nothing done to K.S.M. that wasn’t done to the interrogators themselves”—a reference to SERE-like training. Yet the Red Cross report emphasizes that it was the simultaneous use of several techniques for extended periods that made the treatment “especially abusive.” Senator Carl Levin, the chairman of the Senate Armed Services Committee, who has been a prominent critic of the Administration’s embrace of harsh interrogation techniques, said that, particularly with sensory deprivation, “there’s a point where it’s torture. You can put someone in a refrigerator and it’s torture. Everything is a matter of degree.”

One day, Mohammed was apparently transferred to a specially designated prison for high-value detainees in Poland. Such transfers were so secretive, according to the report by the Council of Europe, that the C.I.A. filed dummy flight plans, indicating that the planes were heading elsewhere. Once Polish air space was entered, the Polish aviation authority would secretly shepherd the flight, leaving no public documentation. The Council of Europe report notes that the Polish authorities would file a one-way flight plan out of the country, creating a false paper trail. (The Polish government has strongly denied that any black sites were established in the country.)

No more than a dozen high-value detainees were held at the Polish black site, and none have been released from government custody; accordingly, no first-hand accounts of conditions there have emerged. But, according to well-informed sources, it was a far more high-tech facility than the prisons in Afghanistan. The cells had hydraulic doors and air-conditioning. Multiple cameras in each cell provided video surveillance of the detainees. In some ways, the circumstances were better: the detainees were given bottled water. Without confirming the existence of any black sites, Robert Grenier, the former C.I.A. counterterrorism chief, said, “The agency’s techniques became less aggressive as they learned the art of interrogation,” which, he added, “is an art.”

Mohammed was kept in a prolonged state of sensory deprivation, during which every point of reference was erased. The Council on Europe’s report describes a four-month isolation regime as typical. The prisoners had no exposure to natural light, making it impossible for them to tell if it was night or day. They interacted only with masked, silent guards. (A detainee held at what was most likely an Eastern European black site, Mohammed al-Asad, told me that white noise was piped in constantly, although during electrical outages he could hear people crying.) According to a source familiar with the Red Cross report, Khalid Sheikh Mohammed claimed that he was shackled and kept naked, except for a pair of goggles and earmuffs. (Some prisoners were kept naked for as long as forty days.) He had no idea where he was, although, at one point, he apparently glimpsed Polish writing on a water bottle.

In the C.I.A.’s program, meals were delivered sporadically, to insure that the prisoners remained temporally disoriented. The food was largely tasteless, and barely enough to live on. Mohammed, who upon his capture in Rawalpindi was photographed looking flabby and unkempt, was now described as being slim. Experts on the C.I.A. program say that the administering of food is part of its psychological arsenal. Sometimes portions were smaller than the day before, for no apparent reason. “It was all part of the conditioning,” the person involved in the Council of Europe inquiry said. “It’s all calibrated to develop dependency.”

The inquiry source said that most of the Poland detainees were waterboarded, including Mohammed. According to the sources familiar with the Red Cross report, Mohammed claimed to have been waterboarded five times. Two former C.I.A. officers who are friends with one of Mohammed’s interrogators called this bravado, insisting that he was waterboarded only once. According to one of the officers, Mohammed needed only to be shown the drowning equipment again before he “broke.”

“Waterboarding works,” the former officer said. “Drowning is a baseline fear. So is falling. People dream about it. It’s human nature. Suffocation is a very scary thing. When you’re waterboarded, you’re inverted, so it exacerbates the fear. It’s not painful, but it scares the shit out of you.” (The former officer was waterboarded himself in a training course.) Mohammed, he claimed, “didn’t resist. He sang right away. He cracked real quick.” He said, “A lot of them want to talk. Their egos are unimaginable. K.S.M. was just a little doughboy. He couldn’t stand toe to toe and fight it out.”

The former officer said that the C.I.A. kept a doctor standing by during interrogations. He insisted that the method was safe and effective, but said that it could cause lasting psychic damage to the interrogators. During interrogations, the former agency official said, officers worked in teams, watching each other behind two-way mirrors. Even with this group support, the friend said, Mohammed’s interrogator “has horrible nightmares.” He went on, “When you cross over that line of darkness, it’s hard to come back. You lose your soul. You can do your best to justify it, but it’s well outside the norm. You can’t go to that dark a place without it changing you.” He said of his friend, “He’s a good guy. It really haunts him. You are inflicting something really evil and horrible on somebody.”

Among the few C.I.A. officials who knew the details of the detention and interrogation program, there was a tense debate about where to draw the line in terms of treatment. John Brennan, Tenet’s former chief of staff, said, “It all comes down to individual moral barometers.” Waterboarding, in particular, troubled many officials, from both a moral and a legal perspective. Until 2002, when Bush Administration lawyers asserted that waterboarding was a permissible interrogation technique for “enemy combatants,” it was classified as a form of torture, and treated as a serious criminal offense. American soldiers were court-martialled for waterboarding captives as recently as the Vietnam War.

A C.I.A. source said that Mohammed was subjected to waterboarding only after interrogators determined that he was hiding information from them. But Mohammed has apparently said that, even after he started coöperating, he was waterboarded. Footnotes to the 9/11 Commission report indicate that by April 17, 2003—a month and a half after he was captured—Mohammed had already started providing substantial information on Al Qaeda. Nonetheless, according to the person involved in the Council of Europe inquiry, he was kept in isolation for years. During this time, Mohammed supplied intelligence on the history of the September 11th plot, and on the structure and operations of Al Qaeda. He also described plots still in a preliminary phase of development, such as a plan to bomb targets on America’s West Coast.

Ultimately, however, Mohammed claimed responsibility for so many crimes that his testimony became to seem inherently dubious. In addition to confessing to the Pearl murder, he said that he had hatched plans to assassinate President Clinton, President Carter, and Pope John Paul II. Bruce Riedel, who was a C.I.A. analyst for twenty-nine years, and who now works at the Brookings Institution, said, “It’s difficult to give credence to any particular area of this large a charge sheet that he confessed to, considering the situation he found himself in. K.S.M. has no prospect of ever seeing freedom again, so his only gratification in life is to portray himself as the James Bond of jihadism.”

By 2004, there were growing calls within the C.I.A. to transfer to military custody the high-value detainees who had told interrogators what they knew, and to afford them some kind of due process. But Donald Rumsfeld, then the Defense Secretary, who had been heavily criticized for the abusive conditions at military prisons such as Abu Ghraib and Guantánamo, refused to take on the agency’s detainees, a former top C.I.A. official said. “Rumsfeld’s attitude was, You’ve got a real problem.” Rumsfeld, the official said, “was the third most powerful person in the U.S. government, but he only looked out for the interests of his department—not the whole Administration.” (A spokesperson for Rumsfeld said that he had no comment.)

C.I.A. officials were stymied until the Supreme Court’s Hamdan ruling, which prompted the Administration to send what it said were its last high-value detainees to Cuba. Robert Grenier, like many people in the C.I.A., was relieved. “There has to be some sense of due process,” he said. “We can’t just make people disappear.” Still, he added, “The most important source of intelligence we had after 9/11 came from the interrogations of high-value detainees.” And he said that Mohammed was “the most valuable of the high-value detainees, because he had operational knowledge.” He went on, “I can respect people who oppose aggressive interrogations, but they should admit that their principles may be putting American lives at risk.”

Yet Philip Zelikow, the executive director of the 9/11 Commission and later the State Department’s top counsellor, under Rice, is not convinced that eliciting information from detainees justifies “physical torment.” After leaving the government last year, he gave a speech in Houston, in which he said, “The question would not be, Did you get information that proved useful? Instead it would be, Did you get information that could have been usefully gained only from these methods?” He concluded, “My own view is that the cool, carefully considered, methodical, prolonged, and repeated subjection of captives to physical torment, and the accompanying psychological terror, is immoral.”

Without more transparency, the value of the C.I.A.’s interrogation and detention program is impossible to evaluate. Setting aside the moral, ethical, and legal issues, even supporters, such as John Brennan, acknowledge that much of the information that coercion produces is unreliable. As he put it, “All these methods produced useful information, but there was also a lot that was bogus.” When pressed, one former top agency official estimated that “ninety per cent of the information was unreliable.” Cables carrying Mohammed’s interrogation transcripts back to Washington reportedly were prefaced with the warning that “the detainee has been known to withhold information or deliberately mislead.” Mohammed, like virtually all the top Al Qaeda prisoners held by the C.I.A., has claimed that, while under coercion, he lied to please his captors.

In theory, a military commission could sort out which parts of Mohammed’s confession are true and which are lies, and obtain a conviction. Colonel Morris D. Davis, the chief prosecutor at the Office of Military Commissions, said that he expects to bring charges against Mohammed “in a number of months.” He added, “I’d be shocked if the defense didn’t try to make K.S.M.’s treatment a problem for me, but I don’t think it will be insurmountable.”

Critics of the Administration fear that the unorthodox nature of the C.I.A.’s interrogation and detention program will make it impossible to prosecute the entire top echelon of Al Qaeda leaders in captivity. Already, according to the Wall Street Journal, credible allegations of torture have caused a Marine Corps prosecutor reluctantly to decline to bring charges against Mohamedou Ould Slahi, an alleged Al Qaeda leader held in Guantánamo. Bruce Riedel, the former C.I.A. analyst, asked, “What are you going to do with K.S.M. in the long run? It’s a very good question. I don’t think anyone has an answer. If you took him to any real American court, I think any judge would say there is no admissible evidence. It would be thrown out.”

The problems with Mohammed’s coerced confessions are especially glaring in the Daniel Pearl case. It may be that Mohammed killed Pearl, but contradictory evidence and opinion continue to surface. Yosri Fouda, the Al Jazeera reporter who interviewed Mohammed in Karachi, said that although Mohammed handed him a package of propaganda items, including an unedited video of the Pearl murder, he never identified himself as playing a role in the killing, which occurred in the same city just two months earlier. And a federal official involved in Mohammed’s case said, “He has no history of killing with his own hands, although he’s proved happy to commit mass murder from afar.” Al Qaeda’s leadership had increasingly focussed on symbolic political targets. “For him, it’s not personal,” the official said. “It’s business.”

Ordinarily, the U.S. legal system is known for resolving such mysteries with painstaking care. But the C.I.A.’s secret interrogation program, Senator Levin said, has undermined the public’s trust in American justice, both here and abroad. “A guy as dangerous as K.S.M. is, and half the world wonders if they can believe him—is that what we want?” he asked. “Statements that can’t be believed, because people think they rely on torture?”

Asra Nomani, the Pearls’ friend, said of the Mohammed confession, “I’m not interested in unfair justice, even for bad people.” She went on, “Danny was such a person of conscience. I don’t think he would have wanted all of this dirty business. I don’t think he would have wanted someone being tortured. He would have been repulsed. This is the kind of story that Danny would have investigated. He really believed in American principles.” ♦

Biotech in Singapore

2007-08-14T02:59:00.000-07:00

Singapore Shows off Amazing Display Biotech at 'Biopolis'
By Aaron Rowe EmailAugust 13, 2007 | 7:35:45 PMCategories: Biotechnology

Biopolis Singapore has been betting big on biotechnology. This week, they are showing off the fruits of their labor at the 3rd International Conference on Bioengineering and Nanotechnology. The entire event is held at the aptly named Biopolis -- a research park with state-of-the-art equipment and ultramodern buildings that bear names like Proteos, Matrix, and Genome.

On the first day, I had the privilege of attending a series high-caliber presentations on topics ranging from tissue engineering to quantum dots. In the coming days, I'll describe the most exciting announcements and happenings.

In 2003, the Singaporean Agency for Science Technology and Research opened the Institute for Bioengineering and Nanotechnology. Since then, IBN has been recruiting partners from across the globe to create a sort of technology incubator. The institute hopes to generate patents, train young scientists, and spin off startup companies.

George Yeo, the Minister for Foreign Affairs, opened the conference by telling a story about the history of the Institute for Bioengineering and Nanotechnology. When the United States began the National Nanotechnology Initiative, it became clear to a number of small countries including Singapore, Taiwan, and Israel that it was time to invest heavily in similar frontier areas of science. With a level of decisiveness and determination comparable to the efforts of the United States after the launch of Sputnik, Singapore quickly became a global niche player in nanotechnology.

Jackie Ying, the director of IBN and a former MIT professor, gave Yeo an award for his role in creating the new institute. It was not just a trophy, but also a fuel cell made with nanomaterials. When any sugar containing liquid is added to the clear, plastic plaque, a small fuel cell drove two wheels on a miniature car.
Yeo

The presentation by Yeo set an intense tone for the rest of the day. Just after the Foreign Minister rushed out the door, Professors Moungi Bawendi of MIT and James Heath of Cal Tech gave paired keynote addresses about quantum dots for biological imaging and NanoSystems Biology for detecting cancer respectively. They almost blew my mind. Bawendi laid out all of the major hurdles facing the use of quantum dots for next-generation molecular imaging (for example, they could be used to follow the progression of a cancer tumor to determine whether a treatment is working). Heath described his next-generation molecular diagnostics concept called DEAL, DNA Encoded Antibody Libraries, which could be used in cancer pharmacogenetics. In other words, it could be used to predict which drugs will work on someone before they start chemotherapy