The most recent IDA Annual Report 2013 provides a number of valuable insights into the nature of FDI in Ireland. Where is it from, in what sectors is it, how much tax does these companies contribute, how much does the State subsidies each job, how much do the companies contribute to the national economy and much
The CSO’s latest figures show GDP is up 2.7% for the first quarter in 2014, compared to the last quarter of 2013, while GNP is up a mere 0.5%. GNP, the more accurate reflection of the Irish economy, shows the continued stagnation that reflects personal expenditure being down 0.1% and capital investment down a whopping 8.1%
In 1979 Margaret Thatcher was the first European prime minister to introduce the neo-liberal agenda. She was soon followed by Ronald Reagan in the United States, and the European Union formally adopted the neo-liberal ideology in the Maastricht Treaty in 1992. The agenda emphasised the free-market monetarist policies espoused by right-wing think-tanks such as the
Driving the getaway is a report by a number of NGO’s on Ireland, taxation and development. Below is an extract and the full report in pdf. Taxation is about far more than revenue-raising: it concerns power and impacts taxpayer behaviour. It is pivotal in enhancing accountability and participation in young states through the bargaining process
Excellent report by John Hillary on the recent US EU trade agreement which he argues is a charter to end democracy. The Transatlantic Trade and Investment Partnership (TTIP) is a comprehensive free trade and investment treaty currently being negotiated – in secret – between the European Union and the USA. The intention to launch
The most recent IDA Annual Report 2013 provides a number of valuable insights into the nature of FDI in Ireland. Where is it from, in what sectors is it, how much tax does these companies contribute, how much does the State subsidies each job, how much do the companies contribute to the national economy and much more. Some highlight stats below but the report is worth checking out.
The CSO’s latest figures show GDP is up 2.7% for the first quarter in 2014, compared to the last quarter of 2013, while GNP is up a mere 0.5%. GNP, the more accurate reflection of the Irish economy, shows the continued stagnation that reflects personal expenditure being down 0.1% and capital investment down a whopping 8.1% and Government expenditure down 2.1%.
But the bigger news is that the CSO from June on will include illegal black market activity, like drugs money, in GDP figures. This follows changes elsewhere in Europe as countries desperately seek to create the impression of a recovery and meet their EU imposed targets.
Is this really the recovery working people need? And do the State think they can con their way into meaningful growth? Of more importance, however, is that while GDO slowly picks up reflecting the profits of MNC’s and capital transfers in and out of the country, GNP remains poor.
In 1979 Margaret Thatcher was the first European prime minister to introduce the neo-liberal agenda. She was soon followed by Ronald Reagan in the United States, and the European Union formally adopted the neo-liberal ideology in the Maastricht Treaty in 1992.
The agenda emphasised the free-market monetarist policies espoused by right-wing think-tanks such as the Libertas in Ireland, the Cato Institute in America, the Adam Smith Institute in Britain, and the Copenhagen Institute in Denmark. These are all funded by millionaires to promote the interests of rich people. The Republican Party in the United States and the Tea Party (where the Taoiseach attended a fund-raising function during his visit for St Patrick’s Day) also support these policies.
Milton Friedman implemented these policies in Chile when the dictator Pinochet was in power, arguing that inflation is always linked with excessive monetary policies. To offset this he advocated cutting public expenditure and privatising public utilities.
These policies became known as the Washington Consensus in 1990, from the multilateral agencies based in Washington. Robert Gwynne, cited by Peadar Kirby in his book Introduction to Latin America(2003), described these objectives as follows:
|. . . trade liberalisation and easier foreign direct investment . . . Reduce direct government intervention in the economy through privatisation, introducing fiscal discipline, balanced budgets, and tax reform . . . Increase the significance of the market in the allocation of resources and make the private sector the main instrument of economic growth through deregulation, secure property rights and financial liberalisation.|
| The agenda advocates free trade, and the euro is an extension of free trade. But free trade, or the euro, gives access for transnationals from the larger states to the markets of the smaller states. For example, Lidl and Aldi are grabbing a growing share of the Irish grocery market, and they are doing the same throughout the euro area.
The underlying assumption of this economic ideology (an assertion that is more like a mantra than reality) is that the public sector is inefficient and the private sector (the market sector) is more efficient. It is argued by the proponents of these policies that the state sector should be reduced. Yet the state-controlled French railway system SNCF is far more efficient than the privatised British railway system.
With the reduction in the role of the state, more of the economy would be controlled by monopoly capital. Nowadays most branches of the economy are controlled by a small number of firms (oligopolies), which make excess profits for their rich shareholders by charging high prices. These firms do not compete on price, because it would reduce their profits and consumers would be the winner: they use advertising and other non-price competition to gain a larger share of the market. They act, to all intents and purposes, as monopolies.
This ideology was written into the Maastricht Treaty in the form of the “fiscal rules”:
1. The excessive government deficit (excess of government spending over revenue) should not exceed 3 per cent of gross domestic product (GDP).
2. Government debt should not exceed 60 per cent of GDP.
These rules were reinforced by a change in the German constitution that made it compulsory to balance the state budget. Germany got the other countries that use the euro to adopt the Fiscal Stability Treaty. Under these new rules
(1) the deficit has to be reduced to 0.5 per cent of structural GDP (i.e., the budget must be balanced);
(2) if the ratio of debt to GDP exceeds 60 per cent it must be reduced to 60 per cent over twenty years.
These rules were set up to protect the interests of investors who buy government bonds. These people are shareholders in banks that hold bonds—very wealthy people and hedge funds that manage the funds of wealthy people. The last thing the neo-liberals want is for a government in the euro zone to default.
Mario Draghi, president of the European Central Bank, formerly worked as an economist for Goldman Sachs. This is a bank that looks after the interests of wealthy people. Draghi is independent of national governments but is not independent of the ideology of his former employer.
Over time, these rules will reduce taxes and the role of government. The rich pay less tax so they will be better off, while the less well off, who use government services, will be worse off. This will cause a transfer from the poor to the rich.
The fiscal deficits, 2009–15
Following the worldwide recession that occurred in 2008, caused by the failure of an American bank, Lehman Brothers, all twelve countries that we are analysing had a fiscal deficit in 2009.
Fiscal deficits, 2009 and 2015 (forecast)
In a recession such as the one that began in 2008, output falls; then spending, incomes and employment fall. As a consequence, unemployment increases, so government spending on the unemployed increases, and tax revenue decreases. This increases the fiscal deficit.
Table 1: Debtor-countries
|Fiscal deficit as percentage of GDP, 2009||Forecast fiscal deficit as percentage of GDP, 2015||Change as percentage of GDP|
|Average population weights, 2012||–9%||–3.8%||5.2%|
|*The EU Commission has given Spain an extension to 2016 to meet its deficit target.
†Programme (1) Includes interest (about €2.7 billion) on the €64 billion bank debt foisted on Ireland by the Troika.
| The EU Commission forced these governments to reduce their deficit towards 3 per cent of GDP (output) by 2015, causing austerity. Ireland, Portugal and Greece were put into “bail-out” schemes, and the Troika (ECB, EU Commission and IMF) took over their budgets and cut the deficit year by year to reach 3 per cent. The other countries operated under country-specific recommendations made by the EU Commission.
The achievement of the 3 per cent ratio took precedence over any services provided by governments. This forced them to increase taxes. Expenditure on health, education and social welfare was cut. This reduced spending in the economies, reduced growth, and increased unemployment.
In Ireland’s case, tax increases and cuts in expenditure of $31 billion were taken out of the economy in budget cuts between July 2008 and 2014. The cuts in expenditure hit low and middle-income earners most, and the increases in taxes were regressive, again hitting those on low and middle incomes. The rich got away unscathed.
Each of the countries had a massive increase in unemployment and a substantial fall in their standard of living. All this was to keep the “markets”—the seriously rich people—happy.
Table 2: France
|Deficit as percentage of GDP, 2009||Forecast deficit as percentage of GDP, 2015||Change as percentage of GDP|
|*Revised according to information from EU Commission, March 2014.|
| France will have reduced its deficit by 4½ per cent of GDP by 2015. It will have to reduce government spending or increase taxes. Its deficit will have fallen nearly as much as the debtor-countries: 4.5 per cent, compared with 5.2 per cent between 2009 and 2015. This has a major effect (reduction) on growth and on unemployment (increase) over the period.
Half the creditor-countries—the Netherlands, Belgium, and Austria—had a deficit of more than 3 per cent in 2009; the rest were at or below 3 per cent. (Germany was at 3.1 per cent.) Yet the governments in most of these countries introduced “austerity” under the neo-liberal agenda of the EU Commission. The average drop in the deficit would be 2.6 per cent of GDP if the forecasts are correct. These governments, especially Germany, either cut spending or increased taxes when there was no need to do so; and Germany went so far as to amend its constitution to make it compulsory that it balance the state budget.
Table 3: Creditor-countries
|Deficit as percentage of GDP, 2009||Forecast deficit as percentage of GDP, 2015||Change|
|Average population weights, 2012||–3.6%||–1%||2.6%|
| The debtor-countries suffered twice as much austerity as the creditor-countries, because 5.2 per cent on average is being taken out of their economies, compared with 2.6 per cent in the creditor-countries. So Draghi intended that his medicine was mainly for the peripheral (debtor) countries; but it also affected the core (creditor) countries, because they had right-wing governments.
Growth in the euro area
The twelve countries of the euro area had two periods of recession between 2008 and 2013. The first was caused by the collapse of Lehman Brothers in 2008, when output in these countries fell by 4.4 per cent (Eurostat calculation).
The debtor-countries experienced a fall in output in most of the years between 2008 and 2013. Italy had a drop in output in four of the six years. Spain’s and Portugal’s experiences were similar.
Table 4: Annual change in output (GDP), debtor-countries
|Average population weights, 2012||0.6%||–4.4%||0.4%||–0.4%||–5.5%||–1.7%||–8.0%|
|Falls in GDP are highlighted.
*Growth in Ireland is measured in terms of gross domestic product (GDP), which includes the profits of transnational corporations. The size of GDP goes up and down as profits are moved into and through Ireland for tax purposes. This makes the GDP figures unreliable as a measure of Ireland’s output.
The French economy experienced only two years of falls in GDP and grew by 1.6 per cent over the period 2008–13. France’s experience was more like that of the creditor-countries, but there was slow growth in the years in which it had growth.
Table 5: Annual change in output (GDP), France
The creditor-countries only experienced on average a fall in GDP in one year,:2009. Germany and Austria had a fall only in 2009. Belgium and Luxembourg had a fall in two years: 2009 and 2012. The Netherlands and Finland had a fall in three years: 2009, 2012, and 2013.
Growth in output (percentage of GDP), creditor-countries
|Table 6: Annual change in output (GDP), creditor-countries|
|Average population weights, 2012||1.0%||–4.8%||3.3%||2.8%||0.3%||0.2%||2.7%|
|Average growth for debtor-countries||0.6%||–4.4%||0.4%||–0.4%||–5.5%||–1.7%||–8.0%|
Unemployment rate, debtor-countries
In table 7 the unemployment rates of the debtor-countries are shown. The average unemployment rate increased from 7.2 per cent to 18.9 per cent between 2007 and 2013.
Table 7: Unemployment rate, debtor-countries
|2007||2013||Youth unemployment rate,
fourth quarter 2012*
|Average rate population weights, 2012||7.2%||18.9%||44.9%|
Unemployment in France rose from 8.4 per cent in 2007 to 11 per cent in 2013, but youth unemployment in 2012 rose to 26.4 per cent in 2012. This increase in youth unemployment is a damning indictment of EU policies.
Table 8: unemployment rate, France
|2007||2013||Youth unemployment rate,
fourth quarter 2012
Average unemployment in the creditor-countries actually fell over the period. Average youth unemployment was 10 per cent; in Germany it was 7.9 per cent, and only Belgium, at 22 per cent, exceeded 20 per cent.
Table 9: Unemployment rate, creditor-countries
|Unemployment rate, 2007||Unemployment rate, 2013||Youth unemployment rate, fourth quarter 2012|
Table 10: Average rates of unemployment (using 2012 weights)
|Euro-area average weights (Eurostat)||7.6%||12.3%||27.2%|
Summary of unemployment data
Unemployment rates were around 7½ per cent in the twelve countries of the euro zone in 2007, but there was a massive divergence by 2012 and 2013. The average total unemployment rate in the debtor-countries was three times the rate in the creditor-countries in 2013, while youth unemployment in the debtor-countries was more than four times the rate in the creditor-countries. This is a scandal.
This article shows that ordinary people in the peripheral countries had to endure massive hardship in recent years. In Ireland there were cuts to government services, such as education, health, and social welfare, and increased taxes, such as the universal social charge, property tax, and water tax. Workers’ wages were cut throughout the periphery.
Driving the getaway is a report by a number of NGO’s on Ireland, taxation and development. Below is an extract and the full report in pdf.
Taxation is about far more than revenue-raising: it concerns power and impacts taxpayer behaviour. It is pivotal in enhancing accountability and participation in young states through the bargaining process between a government and its citizens. Very significantly, it often has unexpected consequences, and the tax system of one country can easily have an impact on economic or social behaviour in another. Since business is now international, it is important that taxes are designed not only with a domestic agenda in mind, but with a view to their consequences internationally, particularly for vulnerable economies in the global South.
The ability to collect tax is particularly important for Southern countries, for which it represents a far more sustainable solution to poverty than international aid. But Southern countries face particular challenges in this area. On a domestic level, there is the problem of how to tax a vast informal economy with little financial infrastructure. Southern taxing authorities struggle to collect revenue in the face of post-colonial attitudes resulting in poor tax compliance, relative tax complexity and poor taxpayer education, major gaps in their capacity, shifting tax structures often driven by IMF or World Bank lending, trade liberalisation, corruption and a deficient rule of law.
On an international level, tax challenges for Southern countries include capital flight, a lack of relative power in negotiations around foreign direct investment (FDI), tax competition, transfer pricing abuse by multinational firms, secrecy in some tax haven jurisdictions, and isolation through a thin network of tax treaties.
Mozambique was chosen for particular examination in Section 5 of this report because it is an Irish Aid priority country. The country has been through IMF-led tax reform, and illustrates many of the classic problems encountered by the taxing authorities of Southern countries. Suggested solutions to some of Mozambique’s difficulties may be taken from the experience of other African countries.
Ireland may pose an inadvertent threat to the tax capacity of Southern countries if its tax system is used by multinational firms as part of capital flight, or international tax evasion schemes. Ireland has attracted considerable foreign direct investment (FDI) through tax competition using a low rate of corporation tax, a wide network of double tax treaties and incentives for intellectual property to encourage multinational firms to locate in the country. Although Ireland has recently introduced new rules to counter transfer pricing abuse, these have significant weaknesses. There is a clear risk that without closing these gaps, our tax system can become a vehicle for complex tax avoidance schemes used by multinational firms to reduce their global tax liability. This is neither in the interests of countries which lose revenue to these firms, or in the interest of Ireland as a legitimate destination for FDI.
Read the full report, Driving the getaway
Excellent report by John Hillary on the recent US EU trade agreement which he argues is a charter to end democracy.
The Transatlantic Trade and Investment Partnership (TTIP) is a comprehensive free trade and investment treaty currently being negotiated – in secret – between the European Union and the USA. The intention to launch TTIP negotiations was first announced by President Barack Obama in his State of the Union address in February 2013, and the first round of negotiations took place between European Commission and US officials in July of the same year. The aim is to rush through the talks as swiftly as possible with no details entering the public domain, in the hope that they can be concluded before the peoples of Europe and the USA find out the true scale of the TTIP threat. Read the full report below.
Professor Prem Sikka is professor of accounting and director of the Centre for Global Accountability at the University of Essex. His research on accountancy, auditing, tax avoidance, tax havens, corporate governance, money laundering, insolvency and business affairs has been published in books, international scholarly journals, newspapers and magazines. He has appeared on radio and television programmes to comment on business matters. Prem has advised and provided oral evidence to various parliamentary committees.
Six years after the 2008 banking crash, there have been some small tweaks, but little structural reform of the financial sector and nothing has been done to deal with the fundamental causes of the financial crisis. Organised gambling and anti-social practices by the banks undermined the stability of the entire economy, yet to all intents and purposes it remains business as usual for the financial elite. The state, most notably the US, has occasionally bitten back, but fines have just become another cost of doing business. Rear-guard action by financial elites to protect the selfish games of the banking sector has resulted in only paltry changes to regulation.
Neoliberalism, the dominant ideology since the 1970s, focuses on deregulation and the endless pursuit of private wealth. The corrosive effects of neoliberalist values have been most evident in the financial sector, where profits have been made from selling abusive financial products, money laundering, tax avoidance, sanction busting, speculation on commodities and land, takeovers and insider trading. There are no constraints on speculative activities and financiers routinely gamble ordinary people’s savings and pensions on an unprecedented scale. This reckless gambling produces little, if any, real additional wealth, but its destructive effects have had serious consequences for the average household and the wider economy.
Read the full report below:
Taken from http://thenextrecession.wordpress.com/2014/06/08/the-jobless-recovery/
The US jobs data for May marked one milestone: employment in the US finally returned to the same level it had reached in January 2008. Jobs totalled 138,365,000 then. In the next two years, the labour market lost almost 10 million workers. In adding 217,000 jobs in May 2014—with the unemployment rate unchanged at 6.3%, employment has returned to that peak, 2,312 days later.
Each recovery from a slump or recession since 1945 has taken longer to restore employment to previous levels. From the mild 2001 recession, it took 4 years, from the deep 1980 recession, it took only two years. From the Great Recession of 2008, it has taken six and a half years!
Moreover, in those years, the working age population has also risen. As a result, employment is still way behind the trend that should have been maintained if the Great Recession had not happened. That means that over the last six or more years there are jobs that should have been created which have been lost forever, causing misery and poverty for those that might have had them. In that sense, this has been a jobless recovery.
And the share of people of working age who do have jobs continues to be at lows not seen since the 1970s, when the participation of women in the workforce was relatively low. The labor force participation rate was unchanged in May at 62.8%. And the employment-population ratio was also unchanged in May at 58.9% (black line).
Now part of that decline has been due to the ‘baby boomer’ generation born from 1946-64 starting to retire and some retiring early. But the bulk of the decline is still the product of the Great Recession. People have given up looking for a job, gone back to school, or sit at home with their parents, or do small jobs for ‘cash’ outside the radar of the taxman. Moreover, those who lost their jobs between 2008 and 2010 have stayed out of work much longer than in previous recession. The average weeks of unemployment remain stubbornly high. Americans who have lost their jobs are finding it much more difficult to get another.
If people do get work, it is mostly in sectors that pay less than their previous job: like retail or the health sector. Or they are working on ‘zero-hours’ contracts i..e paid only for each our worked and on call in the style of casual labour of the 19th century. Wage growth is rising at only 2% a year, hardly above inflation and tax. So disposable incomes are more or less stagnant for the majority. And if you do not have a college degree or professional qualification, it is increasingly hard to get a decent job. Employment for people with a bachelor’s degree or more has actually been growing since the crisis in 2008. It never stopped growing. But work for those with a high school degree or less has been shrinking and has only just begun to rebound. It has been a jobless recovery for the majority.
Still, the employment situation in the US is gradually improving as the unemployed are rehired at lower rates of pay or those new to the jobs market get ‘starter’ pay or ‘no-pay intern’ jobs. People are being ‘priced’ into jobs.
The monthly measures of business activity in May for all the major economies also came out last week. These are called the Purchasing Managers Indexes (PMIs). They are surveys of views by executives in companies on whether they have purchased more or less goods and services in the month. A balance of over 50 suggests expansion and below 50 suggests contraction. So it’s only a survey, but does offer a guide to activity. If the PMI is well above 50 and rising, that suggests an acceleration in growth.
I have compiled the various country PMIs into a world measure. In May, on the PMI measure, the world economy expanded as it has done since October 2012 and May’s figure suggests an acceleration after a partial slowdown over the last six months. That slowdown had been caused by weaker growth in the emerging economies (EE) of Brazil, India, China etc. But there was an uptick there in May as well as in the developed economies (DE).
So the recovery continues and there is no sign of a new slump. The real indicators for that are profits and investment – which I have discussed before in previous posts. In the US, profits fell in the first quarter of this year. If this decline becomes a trend, then history shows that investment will start to fall about one year or so later. And once investment starts to contract, a recession will follow. But it is too early to reach that conclusion.
Monday, June 2, 2014
BURLINGTON, Vt., June 2 – U.S. Sen. Bernie Sanders (I-Vt.) was joined this morning by representatives of Vermont-based, worker-owned businesses and an employee-ownership expert at a news conference to announce legislation to help workers who want to form their own businesses or worker-owned cooperatives.
Sanders said employee ownership increases employment, productivity, sales and wages. The federal government, however, has not done enough for employee ownership to realize its full potential.
“At a time when corporate America is outsourcing millions of decent-paying jobs overseas and with the economy continuing to struggle to create jobs that pay a livable wage, we need to expand economic models that help the middle-class,” Sanders said. “I strongly believe that employee ownership is one of those models.”
Under one bill in Sanders’ package, the U.S. Department of Labor would provide funding to states to establish and expand employee ownership centers. These centers would provide training and technical support for programs promoting employee ownership and participation throughout the country. This legislation is modeled on the success of the Vermont Employee Ownership Center which has done an excellent job in educating workers, retiring business owners, and others about the benefits of worker ownership.
A second bill would create a U.S. Employee Ownership Bank to provide loans to help workers purchase businesses through an employee stock ownership plan or a worker-owned cooperative. Sen. Patrick Leahy is a cosponsor of Sanders’ legislative package.
Vermont is a national leader on employee ownership. Today, there are more than 30 ESOPs in Vermont and about a half dozen worker cooperatives. Nationally, there are more than 10,000 employee owned businesses throughout the country with about 10 million employees.
At the news conference in his Senate office, Sanders was joined by Mary Steiger, president and founder of Williston-based PT360; Jim Feinson, president of Burlington-based Gardener’s Supply; and Nicole LaBrecque, an employee owner and corporate director of business development at South Burlington-based PC Construction Co .
Joseph Blasi, a professor at the School of Management and Labor Relations at Rutgers University, also joined Sanders to speak about the merits of employee ownership. Blasi has written 13 books, including one titled “Employee Ownership.”
“By expanding employee ownership and participation, we can create stronger companies in Vermont and throughout this country, prevent job loss, and improve working conditions for struggling employees,” Sanders said.
“Simply put, when employees have an ownership stake in their company, they will not ship their own jobs to China to increase their profits,” Sanders said. “They will be more productive. And, they will earn a better living.”
By ALYSSA ROHRICHT
Ecological economist Herman Daly perhaps best emphasized the issue of unlimited economic growth acting within a limited environment. He called the idea of sustainable growth a “bad oxymoron” that is simply impossible.
“Impossibility statements are the very foundation of science. It is impossible to: travel faster than the speed of light; create or destroy matter-energy; build a perpetual motion machine, etc. By respecting impossibility theorems we avoid wasting resources on projects that are bound to fail. Therefore economists should be very interested in impossibility theorems, especially the one to be demonstrated here, namely that it is impossible for the world economy to grow its way out of poverty and environmental degradation. In other words, sustainable growth is impossible.”
Earth’s ecosystem is finite, yet our culture has developed a system whereby economic stability is gained only through unlimited growth. Within the capitalist market system, growth is essential, and the larger the growth, the healthier the economy. When growth slows, or worse, stops entirely, the system is in crisis.
Ecological health, on the other hand, is experiencing its own crisis as climate change threatens the stability of the entire planet. We’ve already exceeded the earth’s carrying capacity, and yet unfettered growth of the world’s population and greater resource consumption have continued. The Worldwatch Institute estimated that if the world consumed resources at the same rate per person as the average person in the United States, the Earth could support only 1.4 billion people. A world population of 6.2 billion (a number we’ve already far exceeded) could only support an average per capita income at about $5,100 per year. In the US, the average income per year is about $28,000.
Yet reducing our consumptive habits is antithetical to the capitalist enterprise, which functions only if the economy is growing. We have created a world system where economic health is directly opposed to environmental health. Capitalism necessitates ever increasing resource use, while the natural capacities of the environment require a severe cutback in consumption.
John Stuart Mill recognized this problem early on. He saw that capitalism’s focus on unlimited growth within a limited environment would logically lead to immense environmental destruction. Yet, instead of dismissing the system all together, Mill argued for a “stationary state”, or a state where economic growth ceases.
“If the earth must lose that great portion of its pleasantness which it owes to things that the unlimited increase of wealth and population would extirpate from it, for the mere purpose of enabling it to support a larger but not a better or a happier population, I sincerely hope, for the sake of posterity, that they will be content to be stationary, long before necessity compels them to it.”
Yet a stationary state would mean certain disaster for a capitalist economy. Growth is simply essential for its survival. Spurred on by competition, capitalism seeks to constantly re-invest surplus into more capital; a system of self-expansion seeking only greater accumulation. The concept of stationary capitalism is an oxymoron.
Not only does capitalism need to expand its resource production and consumption, it also must seek out new markets in which to establish itself. Population growth is basic to capitalism, which is always seeking to grow the labor force and increase production of goods and thus capital. Growth in population means demands increase for new housing, furniture, appliances, schools, roads, cars, agriculture, and so forth, creating a healthier capitalist economy at the great expense of the environment and all species that inhabit it. The more people there are to purchase a car and fill it with gasoline, the more money that floods the market. The more people we can get hooked on iPads, yearly cellphone upgrades, shoes, makeup,
Directly opposed to the constant need for growth are Earth’s natural systems and carrying capacity. Scientists at the Stockholm Resilience Centre analyzed several of earth’s systems and calculated the “planetary boundaries” for each that are vital to maintaining an environment livable for humans. Many of these boundaries have already been exceeded. In the case of carbon dioxide, the preindustrial value was 280 parts per million (ppm) concentrated in the atmosphere. The planetary boundary is estimated at 350 ppm. Currently, the earth is at 390 ppm.
The measurements for biodiversity loss read similarly dire. Some of the systems measured for the planetary boundary have not yet been surpassed, yet the data is hardly comforting: the phosphorus cycle (the quantity flowing into the oceans) had a preindustrial value of 1 million tons; the boundary is estimated at 11 million tons; and the current status is 8.5 to 9.5 million tons.
Ocean acidification, freshwater use, and land use are likewise teetering at the precipice of disaster. And yet, in the face of this potential catastrophe, capitalism would have us only grow more. Land use for agriculture and development are encouraged in order to grow the economy and increase capital, freshwater is being used at alarming rates for industrial production and industrial farming, rivers, lakes, and the oceans are being polluted with plastics, heavy metals, runoff from farmlands using pesticides and other chemicals, and as temperatures increase from the burning of fossil fuels, the temperature of the planet rises, further increasing ocean acidification and permafrost melt. This “healthy” economy is leading to a very unhealthy planet.
For the whole Stockholm International Peace Research Institute (SIPRI) report, go to <<www.sipri.org>>
· Global military expenditure was $1747 billion in 2013.
· Total spending fell by 1.9 per cent in real terms between 2012 · and 2013. This was the second consecutive year in which spending fell.
· Military spending fell in the West—North America, Western and Central Europe, and Oceania—while it increased in all other regions.
· The ﬁve biggest spenders in 2013 were the United States, China, Russia, Saudi Arabia and France.
· Military spending by the USA fell by 7.8 per cent, to $640 billion. A large part of the fall can be attributed to the reduction in spending on overseas military operations.
· China’s spending increased by 7.4 per cent, representing a long-term policy of rising military spending in line with economic growth.
· Russia’s military spending increased by 4.8 per cent, and for the ﬁrst time since 2003 it spent a bigger share of its GDP on the military than the USA.
· Saudi Arabia was the fourth biggest spender in 2013, having ranked seventh in 2012. The United Kingdom has now fallen to sixth place.
· A total of 23 countries doubled their military spending in real terms between 2004 and 2013. These countries are in all regions of the world apart from North America, Western and Central Europe, and Oceania.
SIPRI Fact Sheet, April 2014
Trends in World Militarty Expenditure
2013 Global military expenditure fell in 2013, by 1.9 per cent in real terms, to reach$1747 billion.
This was the second consecutive year in which spending fell, and the ra military expenditure was $1747 billion in 2013. Total spending fell by 1.9 per cent in real terms between 2012 and 2013.
The ﬁve biggest spenders in 2013 were the United States, China, Russia, Saudi Arabia and France.
Military spending by the USA fell by 7.8 per cent, to $640 billion. A large part of the fall can be attributed to the reduction in spending on overseas military operations.
China’s spending increased by 7.4 per cent, representing a long-term policy of rising military spending in line with economic growth.
Russia’s military spending increased by 4.8 per cent, and for the ﬁrst time since 2003 it spent a bigger share of its GDP on the military than the USA.
Saudi Arabia was the fourth biggest spender in 2013, having ranked seventh in 2012. The United Kingdom has now fallen to sixth place.
A total of 23 countries doubled their military spending in real terms between 2004 and 2013. These countries are in all regions of the world apart from North America, Western and Central Europe, and Oceania.
A pattern has been established in recent years whereby military spend ing has fallen in the West—that is, in North America, Western and Central Europe, and Oceania—while it has increased in other regions.
This tendency was even more pronounced in 2013, with military spending increasing in every region and subregion outside the West. In fact, the total for the world excluding just one country—the United States—increased by 1.8 per cent in 2013, despite falls in Europe and elsewhere.
From 14 April 2014 the SIPRI Military Expenditure Database includes newly released information on military expenditure in 2013.
This Fact Sheet describes the global, regional and national trends in military expenditure that are revealed by the new data, with a special focus on those countries that have more than doubled their military spending over the period 2004–13.