Market reform and Obama

SHORTLY before George W. Bush’s unbelievable re-election in 2004 we encountered a wealthy American woman who settled in London to work on a Ph.D in social sciences.

Hailing from an ‘old money’ family, she could use her connections to open doors to high financial offices. So for her doctoral research she embarked on a fascinating anthropological inquiry into the lives of financiers, merchant bankers and stockbrokers — treating them as she would exotic secretive tribes in malarial regions of New Guinea or Africa. Why do they do what they do? What gives meaning to their lives? How do they picture the universe? Most ‘subjects’ gave guarded replies to her probing questions but, surprisingly, a good many did not. They took her for “one of us”. What she soon found was that the leading figures in the great brokerage houses and investment banks knew very well even then that the booming free market economy was nothing but a house of cards, a shockingly shaky edifice teetering to and fro, growing in asset value but derivatively based on pure hot air. Her nervous interviewees were sure that the glorious hypnotic property bubble would burst; they just could not say exactly when.

Some — far more than we imagined — were genuinely distressed because they profited from practising what amounted to legalised fraud upon the rest of the US and the planet. (All rules that would have averted a crisis in the first place were erased over the years through the canny endeavours of insider lobbyists.) Asked why he continued to toil at tasks he despised and knew were dangerous to the commonwealth, one guilt-ridden fellow replied that, well, he had a multimillion dollar mortgage to pay, children to put through private schools, and a wife who would leave him if he failed to get a grand new car each year. The investigator heard a batch of similar pleas.

So if anyone at the top of the financial food chain claims they didn’t anticipate the crash they are lying. The big lie they propagate is a sacred one in mainstream economics: markets are magic and will solve everything. Leaving large-scale markets to themselves — which usually means in the hands of a few tycoons — is a sure recipe for chaos. Some 70 years ago historian Karl Polanyi published The Great Transformation, which aptly portrayed mass economic change since the rise of capitalism as comprising two distinct movements, one wave following the other over and over again.

First came ruthless surges in unfettered, unregulated, unchecked ‘free’ markets — buccaneering periods when, as the South American poet Eduardo Galeano said, men are enslaved so that prices could be set free. Markets, and those who most benefit from their ‘imperfections’, have absolutely no concern for the stability of the communities in which they operate. So competing money-driven agents cannot help but tear social relations apart, with the weakest citizens suffering first and foremost. Yet no one hates market competition more than capitalists whose instinctive aim is to transform, or rig, everything into advantageous oligopolies, no matter what the cost to anyone else.

Eventually, Polanyi notes, the mounting damage (unemployment, turmoil, bursting bubbles) that market fanatics inflict upon society spurs the rise of a reformist ‘counter-movement’ to rein in markets and bend them again to the needs of the whole community. Large-scale markets only work when they are regulated — or are regulated again after an ensuing period of ‘freeing’ them, which is what is happening now.

One almost can’t blame interviewees for sitting tight despite knowing a meltdown was in the offing. They knew the state must step in, and, as is plain today, the rescue has worked beautifully for the villains as obliging politicians shell out trillions in taxpayer money without conditions or oversight to the very people who steered the economy onto the rocks.

A reformist counter-movement requires restored regulation of key economic entities, a redistribution of benefits to the excluded and more democratic oversight of policy at home and abroad. Incoming president Barack Obama may well be able to introduce measures approaching a second ‘New Deal’ in the US but only if sustained popular pressure pushes him. The key question in play today is, do the people exist only to serve the economy, or should the economy be arranged to serve the people? The latter answer was an unthinkable one until recently. Politics mostly boils down to one’s response to this question.

There is little doubt, for example, that the reluctance of conservatives to bail out a mismanaged auto industry was motivated by a desire to destroy the United Auto Workers, one of the few organisations who protect their members from the ‘market,’ as it is interpreted by merciless employers. The hostility that elites display towards ordinary people is made easier by the cultivated gullibility (through mass media propaganda) of so many working people themselves, who are befogged in religious zealotry or patriotic blather, so as to aid their own worst enemies.Still, market fundamentalism is passé, its smug ideas discredited by events, at least for a while. It is Obama’s turn now. The fact that he appointed advisors who are as implicated in fomenting the mess is not a good sign, but he is likely to be forced into a wide range of experiments to repair the massive damage. It is not all that audacious to hold out hope for progressive change. But, as Polanyi indicated, regulated markets, and their human masters, always strain to break free again, to counter the counter-movement. How long will the memories last that Republican policies pushed by themselves, and by conservative Democrats like Clinton were responsible for financial ruin?

Memories fade. The corporate and financial perpetrators of the crisis soon will pose as the saviours of America as they did after the Second World War. Some of us hope to stick around to remind people of what is happening today, and why.

Wargaming Cold Start

THE war of words between India and Pakistan continues to escalate. During the past two weeks, the advantage has shifted to New Delhi.

Pranab Mukherjee, India’s foreign minister, said that his government was keeping all options open. Vikram Sood, the former top spy, provided the translation. Sood called for tough action to prevent the Pakistani army from “Balkanising” India. In his view, the army’s quest dates back to 1971, when India dismembered Pakistan.

Arundhati Ghose, India’s former UN representative, opined undiplomatically, “If there is another attack, we should go in and bomb the daylights out of them.” Pradeep Kaushiva, a retired vice admiral, said that every Indian in uniform feels “that the country has been attacked and someone must pay for it.”

BJP parliamentarian Arun Shourie called for covert actions to be carried out in Balochistan, Gilgit and Baltistan. He declared, “Not an eye for an eye; but for an eye, both eyes.” This mantra is a far cry from Mahatma Gandhi’s who was even opposed to the Biblical injunction.

Should India attack? It can destroy a few camps and claim that it has ‘demolished’ the infrastructure of terror. But that claim would simply invite derision. The Israeli experience shows the futility of using military force against those seek martyrdom.

Furthermore, an IAF bombing run would sow the seeds of hatred among secular Pakistanis. The GHQ’s theory that India is an existential threat would take hold and they would enlist in large numbers to fight the invaders tooth and nail. The military’s position in Pakistan’s strategic culture will be strengthened irrevocably. In the end, India would lose both strategically and tactically.

A century earlier, Norman Angell wrote a tract, The Great Illusion. Angell, who later became a member of parliament, a Knight of the Realm and a Nobel laureate, argued that in an age of economic interdependence, war destroyed both the victor and the loser. His advice fell on deaf years. In less than five years, the European powers were engaged in The Great War, sparked by the assassination of the Austrian crown prince in Sarajevo.

The danger of war in the subcontinent hangs in the air as the hotheads in South Block consider putting their Cold Start doctrine to the test (For a description of the doctrine, see http://belfercenter.ksg.harvard.edu/files/IS3203_pp158-190.pdf). While the operational details are a closely guarded secret, it is possible to lay out four scenarios of how the attack may unfold.

First, the IAF carries out a ‘surgical’ strike on alleged camps located along the Line of Control (LoC). Second, the air strike is followed up with a helicopter-borne assault by Indian commandos. Third, an IAF strike takes place at several key locations in Pakistan. Fourth, a ground assault by the Indian rapid deployment force is mounted along the entire border to seize territory.

Should Pakistan respond? In a Newtonian world, every action elicits an equal and opposite reaction. In the South Asian world, laced as it is with the detritus of history and wrapped as it is in the magic of myth, every action elicits an opposite but greater reaction. Pakistan’s army chief, Gen Ashfaq Kayani, a patient and quiet man, has said that Pakistan would react “within minutes” of any Indian strike. He has the full support of the National Assembly with him. It has stated unanimously that the nation and its armed forces “shall together defend Pakistan’s security at all costs”.

What exactly would Pakistan target? Since there are no camps to take out in India, presumably the PAF would mount sorties against the IAF bases from which the intruders were launched.

This would up the ante and invite retaliatory Indian attacks against PAF bases. Pakistani formations, especially in Azad Kashmir, may be annihilated. The port at Karachi may be blockaded and clogged with sunken naval ships. At some point, economic facilities, such as power plants, dams and factories may be hit. Load-shedding would become even more unbearable.

If the Pakistani military begins to crumble under the weight of an Indian counter-response, and significant territory is lost, the generals in Rawalpindi may think of going ballistic. As they ponder whether the red line has been crossed, a brigadier in some isolated outpost may take the decision to weaponise the missiles in his battery.

What will happen next? In a recent column, Shuja Nawaz, author of Crossed Swords, cites a 2002 study by the Natural Defence Resources Council which found that a limited nuclear exchange would kill 2.8 million people and a more intense exchange would kill 22.1 million people. Ten times that many would be injured and possibly crippled for life. Eventually, the fallout from an Indo-Pakistani nuclear war would hit the population of neighbouring countries.

Is there a way to stop this rush to madness? The US, in concert with the EU, should apply strong diplomatic pressure on both countries to resolve the matter through negotiations. If India has solid evidence of Pakistani complicity in the Mumbai attacks, it should present this information immediately to Pakistan. If that does not result in a satisfactory response from Pakistan, India should move the UN Security Council to apply sanctions on Pakistan.

At the same time, Pakistan should go the extra mile and shut down all militant organisations and dismantle — once and for all — those toxic campgrounds where tolerance is snuffed out from the human DNA and replaced with hatred.

As Brookings’s Stephen Cohen noted recently, the ship of state in Pakistan, like the S.S. Titanic, is heading towards a giant iceberg. Unless it changes course, and soon, its fate is sealed.

Can this war of words be put to an end? One is reminded of how Gen Zia used cricket diplomacy to defuse a military standoff with India back in the 1980s. In that spirit, President Asif Zardari should find an excuse to fly over to New Delhi and confer with Prime Minister Singh and his cabinet. He should take generals Kayani and Pasha with him to convince the Indians he means business when it comes to fighting terror.

As the new year begins, the leaders of both countries have a chance to honour the conventions of international law. They should seize it. Let that be their new year’s gift to those who elected them.

The writer is an associate of the Pakistan Security Research Unit at the University of Bradford.

faruqui@pacbell.net

Terror politics

THAT terrorism is a political tool is obvious. Yet, engulfed by outrage at the terrorist’s inhumanity, it is easy to overlook the calculated use that is quite often made of terrorist acts by those at the receiving end.

Where terrorism is the recourse of the weak and dastardly it is also sometimes the pretext of the strong for aggression and appropriation in the now sadly familiar doctrine where attack is held the best form of anticipatory defence.

The global war on terror has had global repercussions, and the strongest impact is arguably on Muslims for its major war-theatres are Afghanistan and Iraq. But the Al Qaeda motif is not what first comes to mind in the context of the flourishing business of the Indo-Pak terrorist-trade threat. That has its own inglorious history.

The India-Pakistan semantic conflict when it comes to resistance/terrorism, freedom-fighters/insurgents, guerilla war/terrorist war, liberation/aggression is as old as the Kashmir dispute and as mature as Bangladesh. It has suited both countries to see the infrared hand of their secret services fanning unrest and facilitating saboteurs and subversion.

Traditionally the two states love to hate each other but recently they had begun to show signs of containing their congenital pique in mutual pragmatism about what actually serves self-interest. The commonalities that were being cited and eagerly romanticised are now showing up as less than skin-deep. Old antagonisms appear restored with a menacing vengeance post the terrorist strike at Mumbai’s Taj Hotel which India connects to Pakistan.

Will that irritant replace Kashmir which President Clinton saw as a flashpoint in a nuclear-armed region? And here anxious Pakistanis discern a sinister conjunction between the West’s war on terror and older Indo-Pak spats, skirmishes and short-lived wars.

Every Pakistani recognises that their country’s nuclear capacity riles and disturbs America; and India’s nuclear development has been nurtured as a reassuring democratic outpost. America has peremptorily, and Britain a trifle more courteously, endorsed India’s indictment of jihadist hothouses for terrorism in Pakistan that domestic authorities cannot or will not scotch. This dexterously shifts the terror-prism and accompanying modes of response from the internal and bilateral to the global — a perspective where, even though India has its fair share of restive citizens, it is, unlike Pakistan, exempt from western suspicion.

India’s religious intolerance and fanaticism escape the kind of censure Pakistan faces. India’s communal symptoms and treatment of minorities are excusable because its government is democratic and secular. Its administration and military not having had a background of CIA involvement with Mujahideen is squeaking clean. In any case RAW’s scrupulously independent current regional orientations would largely match with CIA. India’s mandarins are trusted as sacredly neutral.

As far as religious extremism and politics go Pakistan would be the first to cede the Sang Parivar sentiment is part of the Indian mainstream and not a clandestine hothouse bloom. But most Pakistanis feel the US and the UK should by now know through experience that there are no results-guaranteed instant formulae — whether methods employed are hard or soft — for eradicating the religious extremist turned violent be he underground jihadist-bred or a healthily manifest specimen such as the Rashtriya Swayamsevak Sangh yields.

India has or has had political and security problems with its Sikhs, Kashmiris, Tamils, Maoists, ULFA, and rails on about sundry infiltrators perceived as aided across the Bengal border (never mind that India was Bangladesh’s midwife and fairy godmother). Yet the terror motive for mayhem at Mumbai’s Taj is surveyed almost exclusively in the Al Qaeda perspective with a fierce insistence on retired or serving personnel in Pakistan’s ISI (and other departments possibly) gone rogue. If Pakistan’s present high command is not a party to such activities the unavoidable inference is that it is not in total control. Either way would not the world breathe easier with a denuclearised Pakistan?

That last is probably true. But how realistic and safe is it to denuclearise Pakistan on a track and timeframe separate from denuclearising India? Is there more legitimacy to India’s right to nuclear defence? Or is there just an assumption that India’s nuclear material is better secured than Pakistan’s?

Pakistan is much more conflicted and politically unsettled than India. Its people’s passionate sense of Muslim-self slots into any clash of civilisations thesis. The actuality of Nato strikes into Pakistan on suspect terrorist safe havens makes an explicit statement. But none of this signifies nuclear material in Pakistan is more liable to unsanctioned access or security breaches than in any other country. The issue of terrorism and Pakistan as terrorist-hospitable has to be separated from Pakistan’s nuclear standing. There would be much wisdom in the international community giving India and Pakistan nuclear parity. For then India and Pakistan can turn to addressing international terrorism as well as cross-border terrorism in its specifics with better mutuality.

It has to be said that there is schizophrenia in the American attitude towards Pakistan. It sees it as an ally but also as the only Muslim state with nuclear power. America’s doubts about Pakistan’s nuclear controls and safeguards or will and ability to control in the context of the global war on terror, are an unacceptable slur on Pakistan’s army’s professionalism, Pakistan’s government and Pakistan’s people.

Interpreting any official discomfort and popular outcry at the insolence and inhumanity of air-strikes in Fata as indicative of support for terrorist-friendly infrastructure is simply stupid. No Pakistani deems America stupid. That is why — without being paranoid conspiracy theorists — Pakistanis ask what America’s intention really is. When the western alliance appears in cahoots with India about the Mumbai atrocity and Al Qaeda and Pakistan, Pakistanis are justified in thinking how convenient it is to simplify and generalise on terrorism for powers with agendas for regional hegemony.

No lessons learnt

IN school, we first learn our lessons and then are required to take our exams. But generally in life it seems that examinations come first and we are required to learn our lessons after this. In fact, some of us, despite having to take many such exams, still don’t learn their lesson.

In Mumbai, more than 100 people died in terrorist attacks. The world was shaken by this event. But where is that same hue and cry for the thousands who die of tuberculosis each year in India?

Not only are these lost lives greater in number, they are just as precious. But somehow they don’t attract the same attention. Perhaps the greater tragedy is that tuberculosis is curable and its cure is affordable.

This situation applies to Pakistan as well. The bulk of our resources are supposedly going into fighting the ‘war on terror’ (although the results show that terrorism is on the rise with hundreds dying in terrorist attacks each year). In comparison, in the past year alone, more than 250,000 underprivileged children succumbed to the scourge of water-borne diseases.

On the one hand we are fighting an expensive war that seems to be going nowhere and on the other we have an even bigger killer that can be neutralised if only a minuscule fraction of the budget allocated for fighting terrorism is used towards this end. We just don’t seem to be learning our lessons.

All we see on our TV channels and newspapers are images of the war on terror. But there is hardly a whisper about the thousands of lives lost because of an abysmal healthcare system. The wealth of our country is concentrated in the hands of a few to whom the loss of lives among the impoverished is inconsequential as long as their vast wealth remains unaffected.

On the other hand, terrorism is a direct threat to their mode of life and earning capacity because it harms their businesses. Even the lives being lost to terrorism are not important. What is important is that we save the capitalist system even if our methods are nothing short of barbaric.

The way to combat terrorism is not war but through focusing on priorities including improving lives. Our resources should be uplifting the vast majority, bettering living standards and guiding people away from destructive influences.

At one level, we can reduce mortality rates by focusing on simple, preventive measures to bring down the incidence of curable diseases. At another level, education can help people adjust to social and cultural changes that are occurring in an increasingly globalised world and to participate intelligently in socio-cultural and political activities in the country — something that can have an ameliorating effect on mindsets vulnerable to unacceptable ideologies.

An important aspect of the picture is providing the people with strong forums for redress, one of these being the institution of the police. Unfortunately, motivation is lacking here for policemen generally have measly incomes and few resources for enforcing law and order.

In fact, sometimes we see the police driving on the wrong side of the road, claiming that this saves petrol. Obviously, the police are deliberately crippled to preserve the domain of certain stakeholders. If the police were to become efficient and effective, then those wielding power and influence would not be able to sustain their mafia and corruption.

Lacking insurance cover and a decent pay, they will continue to rely on bribery and corruption to make ends meet. And unless they are given proper vehicles they will continue to take lifts from one stop to the next. Even more importantly, the police needs to be free from all kinds of political influences — hardly possible in the present set-up — if their writ is to be maintained in curbing anti-social behaviour. Only then can a policeman pull over a Prado with tinted glass and a party flag and without a number plate to investigate its passengers.

To conclude, the story of a white Corolla has been doing the rounds in Karachi’s Defence area. According to many reports, among them some from victims personally known to the writer, the men driving in the vehicle are armed and have mugged numerous people.

There may be a handful of honest policeman trying to catch them but what can they do? If they ever do succeed in arresting the offenders, they would be inevitably given a call by a minister or high-up who orders them to release the wrongdoer. So then why should we expect the police to risk their lives and be honest when the entire leadership is corrupt?

In any case, for the time being, if you come across a white Toyota Corolla containing two menacing men you can call 15. But it would be best not to expect a response.

Instead, pray to God 15 times that these two criminals instantaneously become good citizens and drive right past you. Nothing else can be suggested because the handful of good police officers are ineffective in a system that is completely faulty.

The writer is a singer and president of the Zindagi Trust.

royzad@gmail.com