Posts Tagged ‘Latin America’

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The extensive media coverage since Fidel Castro died has included many different voices—from those of journalists who interviewed him and wrote about him, especially in the early years, through Cold Warriors and Cuban émigrés who did battle with him to political figures whose comments have been crafted to align with contemporary constituencies and goals.* But the media have left out one important group: ordinary people who, over the years, found themselves inspired by and generally sympathetic with (even when critical of many features of) the Cuban Revolution.

I’m referring to people around the globe—students, workers, peasants, activists, and many others, throughout the Americas and across the world—who have understood the significance of the Revolution for Cuba and, as a historical example of anti-imperialism and human development, for their own attempts to enact radical political and economic change.

What we haven’t learned from recent coverage is that re-revolutionary Cuba was under the thumb of the U.S.-backed dictatorship of Fulgencio Batista, who governed a relatively wealthy but highly unequal country in which the majority of people had no voice and suffered from high unemployment, a low level of literacy, poor health, and inadequate housing. And they were exploited in an economy dominated by large landowners, U.S. corporations, and American organized crime. The 26th of July Movement (a name that originated in the failed attack led by Fidel on the Moncada Barracks in 1953) launched an insurrection in 1956, with the landing of small force that found its way to the Sierra Maestra Mountains, and, with the support of an army of volunteers in the countryside and “Civic Resistance” groups in the cities, succeeded in overthrowing Batista. A small revolutionary organization with widespread popular support managed to confront and ultimately defeat a typical authoritarian Washington-backed Latin American regime just 90 miles off the U.S. coast.

And while a great deal of attention has been paid to the growing tensions from early on between the new Cuban government and the United States, which sponsored a series of clandestine invasions and assassination attempts, mainstream accounts have overlooked the tremendously successful campaigns to do what had seemed impossible in Cuba and elsewhere—to eliminate illiteracy, promote health, and improve living and working conditions, especially in the countryside. In fact, one of the reasons Havana became and remained so shabby (as legions of foreign visitors who rarely venture outside the capital city never fail to describe) was the Cuban government’s focus on transforming conditions in rural areas so that, in contrast to many other countries, impoverished agricultural workers and their families would have no need to move en masse into the city.

That’s what I noticed when I traveled to Cuba in the late-1970s during the administration of Jimmy Carter, when U.S. travel restrictions were allowed to lapse. I didn’t see the urban ghettoes I drove through before boarding my flight in Montreal, and nowhere did I come across the poverty and inequality characteristic of rural areas across all the countries where I’d lived and worked in Latin America.

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Thanks to the Revolution, Cuba has achieved enormous progress—not only in comparison to the rest of Latin America and the Third World but even (at least in terms of indicators like infant mortality) the United States. That radical turnaround, and the ability to maintain it in the face of unrelenting U.S.-government opposition over decades, is the major reason Fidel and the Cuban Revolution have been admired around the world.

By the same token, the Cuban Revolution has not been romanticized or supported uncritically, especially as a model for left-wing movements elsewhere. For the most part, the economy has been organized around state ownership, not worker-run enterprises. And a small number of political leaders, including Fidel himself, and a single political party have managed to hold onto power, with little in the way of democratic decision-making beyond the local level—not to mention public antipathy towards and discrimination against LGBT people, the jailing of journalists and political dissidents, and so on. Economically and politically, Cuba is no paradise.

Still, for all its faults and mis-steps, the Cuban Revolution has long served as an example of the ability of people to struggle against the impossible and to win. Fidel was thus on the right side of history.

 

*Including the anti-socialist drivel offered by John McTernan, a former speech writer for Tony Blair.

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I know all about how corrupt a city can by. I live in Chicago, the “Capital of Corruption.”

And I hear all the time about all those other corrupt cities, most of them located in countries in Latin America, Africa, and Asia, which often fall low in the corruption perceptions indices like the one produced by Transparency International.

But for all the talk about transparency and the need to tackle corruption at the 2016 Anti-Corruption Summit in London, the host country itself may be the most corrupt in the world.

As Joel Benjamin [ht: ja] explains, the indices produced and disseminated by groups like Transparency International “only measure perceived corruption based upon the abuse of public office for private gain, i.e. the payment of bribes.” What they don’t account for is the fact that “While nepotism and subservience to finance capital is rife in Britain and its overseas dependencies, it is not illegal.”

At least Chicago’s corruption is transparent. Donate to the mayor’s campaign chest and you get a city contract or assistance with a development project. In the city of London (and other such financial centers in Britain, the United States, and Western Europe), corruption is based on money laundering and financial secrecy.

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And if we measure those forms of corruption, then (as with the Financial Secrecy Index developed by the Tax Justice Network) the tables (so to speak) are turned: Switzerland ends up at the top, the United States rises to number 3, and the United Kingdom rounds out the top 15.

If anything, the bribing of public officials in Chicago, Lagos, Bogotá, and Bangalore is quite transparent—and often involves the siphoning-off of some of the surplus from the initial appropriators to their friends in high places in order to keep doing business. The corruption in Geneva, London, and New York is something quite different and even more pernicious: it involves the laundering of the surplus captured from the entire world so that the economic and political elites who capture it get to keep it and accumulate even more wealth, for themselves and their friends in high places.

All of it legal—and fundamentally corrupt.

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Special mention

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Neoclassical economists don’t have a lot to say about the value of art. Basically, they start from the proposition that a work of art, such as Picasso’s “Les femmes d’Alger (Version ‘O’),” is often considered to have two different values: an aesthetic or cultural value (its cultural worth or significance) and a price or exchange-value (the amount of money a work of art fetches on the market). They then demonstrate that, within free markets, individual choices ensure that the price of art generally captures or represents all of the various dimensions of value attributable to the work of art, rendering the need for a separate concept of aesthetic or cultural value redundant. Therefore, on their view, Picasso’s painting is “worth” the record auction price of $179.37 million.*

But the Wall Street Journal (gated) observes that yesterday’s sale of other paintings—including Mark Rothko’s “Untitled (Yellow and Blue)”—reveals something else:

Some paintings act like object lessons in tracking the global migration of wealth, bouncing from one owner to the next in timely turns. Such was the case Tuesday when Sotheby’s sold a $46.5 million Mark Rothko abstract that previously belonged to U.S. banker Paul Mellon and later to French luxury executive François Pinault.

All night long, Sotheby’s sale demonstrated the power that the younger, international set is wielding over the art market, pushing up brand-name artists and newcomers alike. Bidders from more than 40 countries raised their paddles at some point during Sotheby’s $379.7 million sale of contemporary art, and the house said bidding proved particularly strong from collectors in Asia and across Latin America.

Clearly, the ever-expanding bubble in high-end art is predicated on the extraordinary amount of surplus that is being captured by a tiny number of individuals at the very top of the world’s distribution of income and their willingness to spend a portion of it on “vanity capital.”

As Neil Irwin explains,

Let’s assume, for a minute, that no one would spend more than 1 percent of his total net worth on a single painting. By that reckoning, the buyer of Picasso’s 1955 “Les Femmes d’Alger (Version O)” would need to have at least $17.9 billion in total wealth. That would imply, based on the Forbes Billionaires list, that there are exactly 50 plausible buyers of the painting worldwide.

This is meant to be illustrative, not literal. Some people are willing to spend more than 1 percent of their wealth on a painting; the casino magnate Steve Wynn told Bloomberg he bid $125 million on the Picasso this week, which amounts to 3.7 percent of his estimated net worth. The Forbes list may also have inaccuracies or be missing ultra-wealthy families that have succeeded in keeping their holdings secret.

But this crude metric does show how much the pool of potential mega-wealthy art buyers has increased since, for example, the last time this particular Picasso was auctioned, in 1997.

After adjusting for inflation and using our 1 percent of net worth premise, a person would have needed $12.3 billion of wealth in 1997 dollars to afford the painting. Look to the Forbes list for that year, and only a dozen families worldwide cleared that bar.

In other words, the number of people who, by this metric, could easily afford to pay $179 million for a Picasso has increased more than fourfold since the painting was last on the market. That helps explain the actual price the painting sold for in 1997: a mere $31.9 million, which in inflation-adjusted terms is $46.7 million. There were, quite simply, fewer people in the stratosphere of wealth who could bid against one another to get the price up to its 2015 level.

More people with more money bidding on a more or less fixed supply of something can only drive the price upward. On Monday, the auction was for fine art. But the same dynamic applies for prime real estate in central London or overlooking Central Park, or for bottles of 1982 Bordeaux.

The pool of “potential mega-wealthy art buyers” has indeed expanded but it’s still a infinitesimal fraction of the world’s population. Still, it’s enough to set record prices in recent art auctions, which (along with real-estate and fine-wine markets) thereby serves as a window on the grotesque levels of economic inequality we are witnessing in the world today.

But there’s another aspect of the Wall Street Journal story (and of many other articles I’ve read about recent art auctions) that deserves attention: the worry that the highly unequal distribution of income and wealth is migrating out of the West—to the East (especially China) and the Global South (particularly Latin America). It’s a worry that the cultural patrimony of the West is being exported (or, if you prefer, re-exported, after centuries of plunder of the empire’s hinterland) as the surplus being generated within the world economy is increasingly being captured by individuals outside the West.

I wonder, then, if this worry (about the migration of wealth and art) will ultimately be reflected in Western neoclassical economists’ long-held celebration of free markets—and if will there be a new round of preoccupation about the differences between market and aesthetic values, as the demands of new buyers from outside the West succeed in determining ever-higher prices for the art (and utilizing the surplus) the West has long claimed as its own.

*For other mainstream economists, if art’s cultural value is not adequately represented by its exchange-value (because, for example, art has “positive externalities,” that is, benefits to society beyond what is captured in the market price), then there is room for public subvention of art and of artists. And that ends up determining the limits of debate within mainstream economics: the neoclassical view of free private art markets (when the two values are the same) versus the alternative view in favor of public support for the arts (if and when they are not).

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Uruguayan novelist, essayist, and journalist Eduardo Galeano is no longer with us.

I remember as if it were yesterday first reading, in the early-1970s, Galeano’s Open Veins of Latin America. It opened for me a continent that had been ripped open for the world by a long line of colonial conquerors and postcolonial swindlers (many of whom were themselves, of course, Latin Americans).

This is how the book [pdf] begins:

The division of labor among nations is that some specialize in winning and others in losing. Our part of the world, known today as Latin America, was precocious: it has specialized in losing ever since those remote times when Renaissance Europeans ventured across the ocean and buried their teeth in the throats of the Indian civilizations. Centuries passed, and Latin America perfected its role. We are no longer in the era of marvels when face surpassed fable and imagination was shamed by the trophies of conquest— the lodes of gold, the mountains of silver. But our region still works as a menial. It continues to exist at the service of others’ needs, as a source and reserve of oil and iron, of copper and meat, of fruit and coffee, the raw materials and foods destined for rich countries which profit more from consuming them than Latin America does from producing them. The taxes collected by the buyers are much higher than the prices received by the sellers; and after all, as Alliance for Progress coordinator Covey T. Oliver said in July 1968, to speak of fair prices is a “medieval” concept, for we are in the era of free trade.

The more freedom is extended to business, the more prisons have to be built for those who suffer from that business. Our inquisitor-hang-man systems function not only for the dominating external markets; they also provide gushers of profit from foreign loans and investments in the dominated internal markets.

And then, of course, there’s Galeano’s tribute to the dark tragedies and astonishing beauty of world football, Soccer in Sun and Shadow. Here’s a brief excerpt:

The ball turns, the world turns. People suspect the sun is a burning ball that works all day and spends the night bouncing around the heavens while the moon does its shift, though science is somewhat doubtful. There is absolutely no question, however, that the world turns around a spinning ball: the final of the ’94 World Cup was watched by more than two billion people, the largest crowd ever of the many that have assembled in this planet’s history. It is the passion most widely shared: many admirers of the ball play with her on fields and pastures, and many more have box seats in front of the TV and bite their nails as 22 men in shorts chase a ball and kick her to prove their love. . .

Professional soccer does everything to castrate that energy of happiness, but it survives in spite of all the spites. And maybe that’s why soccer never stops being astonishing. As my friend Ángel Ruocco says, that’s the best thing about it—its stubborn capacity for surprise. The more the technocrats program it down to the smallest detail, the more the powerful manipulate it, soccer continues to be the art of the unforeseeable. When you least expect it, the impossible occurs, the dwarf teaches the giant a lesson, and a runty, bowlegged black man makes an athlete sculpted in Greece look ridiculous.

Gabriel Garcia Marquez, the Colombian writer and political activist, in Mexico City in 1976.

During all those years I spent working in and on Latin America, reading the works of Colombian novelist Gabriel García Márquez (along with those of a few others, such as Mário de Andrade, José María Arguedas, and Carlos Fuentes) helped me understand what was going on—from the real effects of colonialism and the wielding of power by corrupt dictators to the magic contained in everyday life.

Now that we are beginning to understand that the United States is an oligarchy, not a democracy, where is our own García Márquez?

 

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I often explain to students that Gini coefficients should be used with more than a few grains of salt.

One reason, as Timothy Taylor explains, is that changes in the Gini coefficient don’t tell us where the changes come from.

because the Gini boils down the overall distribution of income to a single number, it also loses some detail. For example, if the Gini coefficient has risen, is this because the share going to the top 20% went up, or the top 10%, top 1%, or top 0.1%? You can see these kinds of differences on a Lorenz curve, if you know what you’re looking for, but the Gini alone doesn’t tell you which is true.

The other reason, which Taylor does not discuss, is that Gini coefficients should not be compared across countries. That’s because it’s blind to different economic and social structures. Thus, a coefficient of .52 in one country, where all goods and services are private commodities, means something quite different from the same number in a country in which many of those commodities (such as education, healthcare, and so on) are provided as public goods.

So, what is the Gini coefficient good for? There are two acceptable uses for that simple, convenient number.

One is to look at the degree of inequality before and after fiscal policy, as in the chart above (from the World Bank [pdf]. There, we can see that fiscal policy in Latin American countries does very little to alter the before-fiscal-policy, or market, distribution of income.

The other acceptable use is to look at the changes over time for the same country, as in the chart below from the same report.

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What we can see, once we resist the temptation to compare numbers across countries, is that there is a wide range of experiences across Latin America: while Honduras’s distribution of income became slightly more unequal (increasing by 2.1 percent between 2007 and 2011), Mexico’s became a bit more equal (falling 2.3 percent from 2008 to 2012) and Bolivia’s fell quite dramatically (by 15.9 percent from 2007 to 2012).

So, yes, go ahead and look at changes in Gini coefficients for individual countries—before and after fiscal policy, and over time—but, by all means, resist the temptation to compare the coefficients across countries. Such comparisons are, at best, meaningless and often can be quite misleading.