Austerity Measures, Can They Be Justified?

Human-Rights-Greece1

In the aftermath of the 2008 banking crisis that incurred a massive economic destabilization on a global level, the neoliberal concept of ‘austerity measures’ have now reached the western hemisphere, with Greece and Spain as its more notable victims. In particular, the Greece bailout, which is allegedly a saving package, has imposed a myriad of conditions and restrictive measures on the Greece economy. The purpose of these structural restrictions is apparently to empower and stabilize the Greece economy, however, the opposite has happened, as has been documented in several high profile investigations.

The concept of austerity measures ranges back to the 17th century, and have more recently been adopted by the neoliberal economic doctrine as a way of dumping market failures on the state and indirectly, on the public. That austerity measures has the capacity of causing detrimental effects for the general public has been proven in Greece, and there is a history of failures with the so-called Structural Adjustment Programs imposed by the International Monetary Fund as part of their lending to developing countries, due to the conditions of austerity that these loans impose on the debtor.

Several independent sources indicate that austerity measures, such as cuts in public spending in the health, education, and other mechanisms of social security, creates human suffering on a widespread scale. With Greece, we have been given the opportunity to closely observe the social catastrophe that is created by austerity. The Truth Committee has noted that, unemployment has gone from 7.3% in 2008 to 27.9% in 2013. Youth unemployment reached a staggering 64.9% in may 2013. Due to cuts in public health expenditure more than 2.5 million persons, or one fourth of the total population of Greece, are without health insurance. Furthermore diseases such as tuberculosis, malaria and HIV have increased, and mental health problems have ballooned. Pensions have been reduced by 40 %, which have caused 45 % of Greece pensioners to fall below the poverty line. 500,000 people lives in conditions of homelessness, insecure or inadequate housing. To put it mildly, there is a humanitarian crisis in Greece.

What have been left out from the discussion on austerity measures are human rights, primarily the economic and social rights established by the International Covenant on Economic, Social and Cultural Rights. This convention is binding on the contracting states – and Greece together with the Eurozone countries has all ratified the convention. You would hence think, that in detailing the Memorandum of Understanding between Greece and the Troika, that contains the austerity conditions imposed on Greece, there must have been a discussion on the potential impacts on Human Rights that the austerity measures could create. However, there has not been such a discussion. Instead the EU member states, the EU commission, EU central bank and the International Monetary Fund have displayed a disregard for how the austerity policies would affect the Human Rights of the people of Greece. Court rulings by the highest Greece court that have ruled the pension cuts as unconstitutional and as a breach of Human Rights, have in the 2015 Memorandum of Understanding been referred to as ‘fiscal risks’. Such a use of vocabulary when referring to the Human Rights is nothing short of remarkable.

The United Nations Human Rights Council has adopted the Guiding principles on foreign debt and human rights in July 2012. According to paragraph 56 ‘Debt relief efforts must not compromise the provision of basic services. In particular, debt relief conditions that may adversely impact the realization of human rights or undermine development in the beneficiary State must be avoided’. The UN General assembly has in September 2015 adopted a resolution (A/69/L.84), which defines nine principles on how a debt restructuring process should be directed. Among these principles is the principle of sustainability, which implies that sovereign debt restructuring should lead to a stable debt situation in the debtor state, preserving creditors’ rights while promoting economic growth and sustainable development, reducing economic and social costs, ensuring the stability of the international financial system and respecting human rights.

Not surprisingly, these principles were adopted by vote and not by consensus, with the developed countries claiming that Human Rights should not be a consideration when it comes to debt and debt relief. However this position cannot be accepted as legitimate. Obviously Human Rights is and must be an important part of economical decisions, because the very foundation of economics is Human Beings. The consequence of separating economics from Human Rights is such perversities as slavery. Possibly, this is what the new era of austerity and debt has become, a more refined form of slavery, which is free from the moral constraints of its predecessors, because it is now justified with the slick vocabulary of neoliberalism and market economy. Though, when scrutinized, austerity measures are a soulless machine working for an anonymous creditor, fueled with the accepted belief that this is the way things must be. The debt must allegedly be paid back at all costs… because… well because, the market wants it that way.

To create a heaven on earth, it is clear that all forms of commercial agreements, debt contracts accounted for, must be able to be declared null and void if they happen to breach Human Rights. This is how it should have always been, and we must ask ourselves, why this has not yet happened. The United Nations has been around for 60 years, yet still, flagrant violations of Human Rights are allowed with reference to commercial agreements. What is missing; motivation, drive, integrity or compassion? And how come we accept and allow the life of countless human beings to be reduced to numbers on a balance sheet?

Clearly, there is a rift between the reality of our world, and the principles conceptualized in our Human Rights instruments. The process of making these principles a living reality will without a doubt be a challenging venture, yet it will be through the respect for Humans on a global level, that we will be able to create a world that truly worth living in. And let us not forget that there are solutions to these problems. Even though the massive bureaucracy that is involved can make us as individuals feel as if we are small ants facing the enormous Goliath, the system is comprised of individual human beings, like you and me. By standing up, one by one, and supporting a new direction in politics and economics, we will have an impact. In democracy we each have one vote, and that is how we will be able to shift direction, through coming together and unanimously voting for a new world that is best for all.

Does a Contract That Violates Human Rights Have Any Legal Standing?

Poverty in Athens

The situation that has developed in Greece is a fascinating example of how commercial contracts, and within that MONEY, oftentimes (EVERY TIME?) takes precedence over Human Rights, even though international laws dictates that it should be the other way around. In this article I will expand on the possibilities that exist within international law to repudiate and cancel debt contracts when these makes it difficult for the debtor to fulfill its Human Rights obligations.

For starters, lets recap on the situation in Greece. What has happened is that the country, for various reasons, has accumulated a substantial amount of debt. Greece was close to defaulting on its outstanding debt and many private creditors were exposed to great risk. That is when the European Central Bank, the IMF and the European Union, otherwise known as the Troika, decided to step in. The Greece government apparently received bailout funds to handle their debts, however, these monies were only used to bailout the private creditors and transfer the risk of the debt to the Troika. As such, what happened was that the bonds switched owners – and much private debt was transformed into public debt; the winners being the private creditors, aka banks, and the losers being, the public.

For Greece to be eligible to the alleged ‘rescue packages’ it had to agree to implement structural adjustment programs, and within that enforce measures of austerity. In a less refined language, we would call that, forcibly living in dirt poor conditions to save up money, to pay of the pissed of creditor, otherwise he will hurt you. And these agreements were signed in 2010 and 2011 respectively, and in 2013, the Human Rights Council evaluated the conditions of Greece and how the adjustment programs had affected the people of Greece [1]. And then in 2015, we have a report submitted by the Truth Committee on Public Debt, a committee created by the Greece Hellenic Parliament with the purpose of investigating the debt of Greece [2]. Both these papers tell a similar story, that Greece is in the midst of a humanitarian crisis – and the reason – paying back debt. Does this make any sense?

It is no exaggeration to say that the situation in Greece has gotten completely out of hands, literally speaking, and that there has been substantial damages made to the economical and social fabric of the nation. Peoples access to housing, health, nutrition, education, freedom of expression and assembly, judicial services, and primarily WORK have diminished significantly. Greece’s GDP have lessened with 20%, and there is no bright future ahead, rather the GDP is expected to continue its downward spiral – because in trying to pay back the debt Greece have been forced to cut back on A LOT of public spending. 150 000 public sector jobs have been cut, pensions have been cut, wages have been cut, benefits have been cut, and as the economic freedom dwindles, so does the ability for the average Greece citizen to consume, which in turn affects the entrepreneurs negatively. In summary, Greece is going downhill, and with that, Greece’s ability to fulfill its international commitments on ensuring Human Rights for its citizens [3]. And here comes the interesting question: Can a contract, and more specifically a debt, be suspended or cancelled, because that very contract directly, or indirectly makes it impossible for the creditor to fulfill its obligations under international law to respect Human Rights?

According the International Law, Yes it is in-fact possible to suspend or cancel a debt with reference to Human Rights. The Independent Expert on the effects of foreign debt and other related international financial obligations of States on the full enjoyment of all human rights, particularly economic, social and cultural rights, Cephas Lumina, expressed himself this way:

It is increasingly accepted that non-State actors including international financial institutions, have obligations to ensure that their policies and activities respect international human rights standards. This obligation implies a duty to refrain from formulating, adopting, funding, promoting or implementing policies and programmes that directly or indirectly impede the enjoyment of Human Rights.

If you look at the point, it is common sense, that in order for Human Rights to be realized, commercial agreements must be subservient to Human Rights. If commercial agreements, and within that, debt contracts, are allowed to take precedence, then we will end up with situations as the one in Greece, where fundamental Human Rights are violated in the name of money. To have your debt repaid is obviously NOT a human right, and one can in-fact argue, that the creditor should always stand the risk that the debtor cannot or refuse to repay the loan, as that way, credit will not be awarded carelessly and without thorough research on the potential debtor.

Looking at Greece’s current creditors, the European Union, and the European Central Bank, we can conclude that both of these non-State actors are bound the European Charter of Fundamental Rights. And in the charter we find the Right to Work, the Right to Fair and Just Working Conditions, a Right to Health Care, which involves a high level of human health protection and that shall be pursued in all the Unions policies and activities – and as was mentioned previously – all of these rights have been severely compromised through the austerity measures imposed on Greece. Hence, it is possible to argue that the European Union and the European Central bank in-fact are obligated under EU-law to forgive the debt, or at least, stop all imposed measures of austerity.

The Human Rights are clear, however, as per usual, the fault is not with the legal instruments, but rather with those that interpret and apply them. We can write a ton of Human Rights Laws, that sound super cool on paper, yet if we do not make an effort to live by and realize these words, they are useless. Thus, for Human Rights to become a reality, they must be actively considered in all political decisions, and not just looked at as an ideal to hopefully be realized sometime in the future. In-fact, Human Rights should be the very foundational elements of our political system, the principles that determine each action and each decision – because we ALL know – that when Human Rights are compromised – People will Suffer.

And this brings me to the last point, our responsibility as ordinary citizens. Because it is interesting to notice that surveys done on Germans, as to whether Germany should forgive Greece’s debt, indicates that the general opinion is that there should be no forgiveness of the debt [4]. Many Germans, which are part of the nation that have the highest amount of outstanding debt to Greece, and thus stand to loose the most if Greece’s debt would be forgiven, feel that they have a right to their money – and that the austerity measures are just because Greece deserve it. However, what is not understood is that Human suffering can NEVER be justified on the basis of commercial principles, regardless of the amount of outstanding debt. The fact of the matter is that the moment we accept and allow ourselves to stand for what is apparently fair, and just, we disregard what is BEST for all – which might not be that which is just or fair. Look at it like this, the children born in today’s Greece, do they bear any guilt in the debt of Greece? Is it just and fair, and is it BEST, that they grow up in horrendous living conditions, only to repay a debt connected to money they have never benefited from?

Forgiveness is the way forward – forgiveness and honoring our Human Rights. That way we can create a world that is safe, were we all can feel secure in facing and waking up to a new tomorrow, as we know that regardless of what might happen, our basic needs are respected.

[1] Human Rights Council, Report of the Independent Export on the effects of foreign debt and other related international financial obligations of States on the full enjoyment of all human rights, particularly economic, social and cultural rights, Cephas Lumina, 2014 (http://cadtm.org/IMG/pdf/A_HRC_25_50_Add1_AEV.pdf)

[2] Truth Committee on Public Debt, Preliminary report, 2015 (http://cadtm.org/IMG/pdf/Report.pdf)

[3] Politaki, Alex, The Guardian, Greece is facing a humanitarian crisis, 2013 (http://www.theguardian.com/commentisfree/2013/feb/11/greece-humanitarian-crisis-eu)

[4] McHugh, Jess, International Business Times, Greek Crisis: Young Germans React With Solidarity, Anger to Greece Debt Problem, 2015 (http://www.ibtimes.com/greek-crisis-young-germans-react-solidarity-anger-greece-debt-problem-2001511)

Corruption, Poverty and Capitalism

There is a clear correlation between the amount of corruption and the level of economic welfare that exists in a country. In countries that are rich, corruption is not as frequent as in countries that are poor. This shows us some fascinating points about human nature – and it also reveals solutions for how to deal with the tendency humans have to become corrupted, dishonest, and fraudulent when placed in positions of public power.

bribery-corruptionThere are a few things about human nature that are obvious: We all have an inner drive geared towards self-preservation. If we had to choose between us dying, and someone we do not know dying, most of us would have the other person die. And really, there is nothing strange about this. Self-preservation is an innate trait most forms of life on earth – each organism wants to survive and reproduce. Hence, when we are placed in a position of shortage, we will find ways to get out of it – and if it is required – do that at the expense of another.

Then, we have this human characteristic called greed. If we look deeper at the nature of greed, we can see that greed in-fact consists of a deep-seated fear. Greed is the tendency we have to take more than we need, because we fear that we might need that more in the future, and we ‘just’ want to be on the safe side if something unexpected were to happen. Hence, greed is a form of self-preservation, though a more aggressive, and irrational variety – because where greed is involved – there is not an actual need to preserve self.

Moreover, we have a thing called competition. Most people drive themselves through life in a state of competition. They want to compete against neighbors, friends, acquaintances – they want a better car, house, family, etc. Competition thrives in areas/environments where there exists a lack of resources. For example, in an environment where there is little money, the competition for the money will be greater. And when there is a aggressive competition, there will be incentives to cheat, and incentives to preserve self at the cost of another.

We thus have these three ingredients: Self-preservation, greed, and competition – all of which can be said to be ‘natural’ parts of the human experience. And with natural I mean that most people have or develop such traits from an early age – though this does not imply that such traits are impossible to change and direct. No, all of these traits can be directed – and it is possible to change self to not anymore exist within and as self-interest. Though for this blog let us continue with corruption.

We have established that there are certain characteristics in the human nature that is typically part of the human experience. Now, what is clear is that these characteristics represent the foundation, the underlying reasons that will shape and form the decision of an individual to corrupt themselves. And what is fascinating is that these characteristics will become highlighted in a state where there is poverty, and lack of resources to go around. In such a scenario the average human being will start to think only about themselves, and how to make decisions that will benefit their life, and how they can get out of the precarious situation they find themselves in.

We can read the following in an article from Forbes magazine:

“The links between corruption and poverty affect both individuals and businesses, and they run in both directions: poverty invites corruption, while corruption deepens poverty. Corruption both causes and thrives upon weaknesses in key economic, political and social institutions. It is a form of self-serving influence akin to a heavily regressive tax, benefiting the haves at the expense of the have-nots. Trust–essential to financial markets and effective governments everywhere–is difficult to build in poor and corrupt societies.

Poor people and economically strapped businesses have few economic alternatives, and where serious corruption is the norm, they are even more vulnerable to exploitation. In that sense, there is no such thing as “petty” corruption: police shakedowns in a public market, or roadblocks in the countryside where farmers must pay up in order to transport produce to the city, may yield seemingly trivial sums of money, but they help keep poor people poor.

Low-level officials themselves may have trouble earning an honest living. In poor societies, they are often underpaid, when they are paid at all, and must provide a stream of payments to patrons at higher levels. In such settings, bribery, extortion and theft become matters of survival.” (Johnston 2009)

When survival becomes difficult, corruption flourish, hence corruption is a symptom not the actual illness. The real illness is poverty, and poverty is a structural effect of our current debt based money system – also called – capitalism.

”To reduce corruption from its current high levels requires something more than, and different from, additional laws, commissions, invocations of morality, regulations and so on. It requires basic, structural economic change. Earlier reforms achieved so little success because they ignored the very idea or possibility of such change. They left untouched capitalism’s basic incentive structure and capitalists’ power to use enterprise profits for corrupt purposes. Capitalists have continued to face all the benefits and gains that corrupted officials can yield (plus the risks and costs of failing to corrupt them). Capitalists have likewise continued to amass ever-larger profits and thus the funds with which to corrupt.” (Wolff 2014)

It is easy to blame human nature for being the cause of greed, yet at the same time, when we are able to map out and understand how the human functions, would it not then be easy to create a system where these characteristics are not allowed to fester? Is it not possible, that in a system where money is abundant, where opportunities are ripe, and there are no valid reasons to fear for your own survival, that self-preservation, greed and competition would cease to exist?

Maybe we can even stretch this even further, is it maybe so, that self-preservation, greed and competition are products of this current system, characteristics that are not supposed to be part of the human nature? In any case it is obvious, that if we were to restructure our money system and distribute resources equally, this would have massive positive effects on the human population. It has been shown that equality improves, among other things, physical health, mental health and education, and lessens drug abuse and obesity (Wilkinsson, Pickett & Reich 2011).

Corruption is an illness created by inequality and a unfair distribution of resources. We can change this be implementing a new system of distribution – capitalism is not and have never been the only way to structure and organize human labor, productivity and resource distribution. I suggest that we implement a Living Income Guaranteed – a Guaranteed monthly income that is sufficient to sustain a human being so that they can tend to their basic needs.

According to article 3 of the Universal Declaration of Human Rights, all humans have the right to life, though it is obvious that this right cannot be realized unless we implement a system that gives all the money they require creating their lives. Hence, money is a human right and not something that should be subject to conditions and demands.

Investigate the Living Income Guaranteed.

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Michael Johnston (2009). Poverty and Corruption. Forbes Magazine. http://www.forbes.com/2009/01/22/corruption-poverty-development-biz-corruption09-cx_mj_0122johnston.html [2015-10-14]

Richard D. Wolff (2014). Political Corruption and Capitalism. Truthout. http://www.truth-out.org/opinion/item/21559-political-corruption-and-capitalis [2015-10-15]

Richard Wilkinsson, Kate Pickett, Robert B. Reich (2011). The Spirit Level: Why Greater Equality Makes Societies Stronger. Bloomsbury publishing

Freeze! Stop Squandering Resources For Money!

freezerMy freezer had been broken for some months when I yesterday took it upon myself to call my landlord to see whether they could fix it. The issue with my freezer is that one of the plastic strips on the door have cracked, which results in warm air entering the freezer when the door is closed, which consecutively creates heaps of ice = not very good.

An hour after I called the repairman entered into the picture, and he confidently approached the freezer, looked at it, measured it, and then announced that maybe they would have to replace the entire freezer with a new one. I was flabbergasted – “What! Replace it!” I exclaimed – he looked at me as if agreeing that this was the appropriate reaction. Then he said: “Yes, these models don’t have spare parts anymore, some time ago we had to buy an entire new freezer due to a similar problem” – upon which I replied: “That is unnecessary!” with which he agreed.

Clearly this shows how there is some serious lack of common sense in our current system. I mean, isn’t it obvious that replacing an ENTIRE freezer due to a issue with one plastic strip, will in time cause MASSIVE repercussions in our environment? God, it’s bizarre – the facts are already here, jungles are being flattened, animals are going extinct, nature is suffering and dying – yet still we’re not able to apply such basic common sense that repairing what is already built will obviously be more effective than completely replacing it.

Evidently there is something else going on here, because even though we’re quite stupid, we’re not THAT stupid, we do actually know the results of this type of blatant squandering. Though, there is one voice in our head that makes us look away from the simple fact – the voice of GREED – the voice of wanting MORE – the voice of DESIRE – the voice of COMPETITION. I mean, ask yourself, what is it that drives this kind of behavior? Qui bono? And you’ll see that it’s specific, and it’s done because replacing something will increase profits, while only replacing a spare part, that’s hardly worth the effort.

Thus, we human beings, we move ourselves in this world to make money, to make more money, and primarily, to save ourselves from the anguish of poverty, thus we move ourselves to make sure we survive, and to survive, we’ll do anything that is required, even disregard the most basic common sense, such as the realization that reparation, is clearly a much more environmentally friendly option than replacement.

But let’s look at it even deeper, why is it that we exist in this state of survival? Why is it that we strive to make money regardless of consequences? Is it because we’re inherently evil? Is it because we like to do stupid things? Is it because we just don’t know any better?

The answer lays in the STRUCTURE of our WORLD – the structure of our RELATIONSHIPS – the SYSTEM that governs our life. Because this system of money is currently precariously ineffective as it situates all of us human beings into a state of survival – wherein suddenly common sense doesn’t matter – what matters is money and money works in mysterious ways.

Take a self-honest look at the situation developing in the world, and ask yourself the basic question, where does it come from? Where is the motivation? Where is the drive? How did we get here?

You will see that the root cause of MOST if not ALL our problems is MONEY, the LACK of money – and that this is the primary source of the apparent human incapacity to be compassionate and considerate. Thus, we need to ensure that all human beings are taken care of and have access to their basic necessities such as food, water, homes, clothes, medical care and education, because only through doing this will human beings be able to stand up, and change their ways, to not anymore be driven by the fear of survival, that makes them agents of stupidity – agents of destruction and havoc.

Investigate the Living Income Guarantee – stand up and be a voice of common sense in a world infested with FEAR and it’s colleague STUPIDITY – we need the an Income for all that will Ensure LIFE – it’s only through this that we will be able to save ourselves from ourselves.

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