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China ‘Running Away’ With Strategically Important Advanced Industries: Think Tank

The report by the Information Technology & Innovation Foundation also said that while India’s advanced-industry output has been consistently outshined by China’s, it may emerge as an alternative to China if it “assure[s] investors of the basics”.

New Delhi: China has grown to be the leading producer in most advanced-technology industries of strategic importance, the US-based Information Technology & Innovation Foundation (ITIF) think tank says.

ITIF highlighted that China’s rise has come at the expense of the US and other OECD economies, and added that China’s decision to outperform in these key industries was followed by a decrease in manufacturing growth experienced by developing countries.

These findings are published in ITIF’s report titled The Hamilton Index, 2023: China is Running Away With Strategic Industries released on Wednesday (December 13).

The Hamilton Index ranks the performance of countries in terms of their output in ten advanced-technology industries, including IT services, computer and electronic products, transport equipment, machinery, pharmaceuticals and chemicals.

According to ITIF, China was the leading producer overall in these ten industries as of 2020 and individually in seven. The US led production in the ‘IT and information services’, pharmaceuticals and ‘other transportation’ industries.

China produced a quarter (25.3%) of the global output in these industries, the highest of any individual country, ITIF said, adding that its output had surpassed that of the rest of the world outside the top 10 producers for the first time.

Its share of the global output in these industries increased from 3% in 1995 to 25% in 2020, while in the same period, the share of OECD economies fell from 85% to 58%, ITIF said.

Also Read: From 1960 to 1990, India and China Were at Par. How Did It Then Overtake Us?

It also pointed out that the ten industries’ collective global output has represented a similar share of the world’s economy for the last 25 years, which it said “underscores the zero-sum competition between nations” – in other words, that when one country increased its share, others lost theirs.

The Asian giant’s strongest performance was in the ‘basic metals’, machine equipment, and computers and electronics industries.

When considering the Hamilton index industries other than ‘IT and information services’ between 2017 and 2020, Chinese output increased by $363 billion while that of the rest of the world fell by $107 billion, the think tank said.

Nominal change in advanced industry output from 2017 to 2020, China vs. the rest of the world. Chart: Information Technology and Innovation Foundation/Creative Commons.

This is because IT is one of the few industries identified by ITIF where China lags behind, as is the pharmaceuticals sector.

“But that [China’s outperformance in these sectors] might not last, as the Chinese government has targeted biopharmaceuticals and artificial intelligence as key industries for development,” the report’s authors said.

Within the OECD grouping, the ITIF said that the market share of the G7 countries in the Hamilton index industries dipped as well, decreasing by close to 28 percentage points between 1995 and 2020. On the other hand, China’s share went up by 21.9 percentage points.

As for the developing world, ITIF said although global production in all ten industries has shifted away from OECD countries in the 25 years in consideration, China’s growth made up the lion’s share of the non-OECD bloc.

Its gain has come “at the expense of most of the developing world”, the report added, pointing out that manufacturing growth in developing countries has slowed or stagnated since China’s rise.

Also Read: What Will a Continued Growth of China’s Middle Class Mean For the Rest of the World?

‘Can India get out of its own way?’

A section of ITIF’s report profiles India, which is one of the top ten producers in the Hamilton index industries.

The think tank noted that while India exceeded China’s workforce, its advanced industry output was only 13% of China’s; and that China has exceeded India’s advanced industry output due to long-standing development policies, which India has lacked.

But it said that while “virtually every nation in the world must fight and claw to gain global market share and momentum,” India might be the only country that “simply must get out of its own way”.

The report’s authors explained that India could emerge as an alternative to China and reap high foreign investment if it ‘assured the basics’ to investors.

“If India could assure investors of the basics (working infrastructure; a pro-business climate including reasonable taxes, regulations, and trade policy, and a modestly skilled workforce), then the advantages it enjoys as an alternative to China that is large and has low wages should lead to massive inward foreign investment,” they said.

India’s three strongest performing industries relative to the rest of the world were the basic metals, IT services and pharmaceuticals industries, where its share of the global output was higher than the global average share, ITIF said.

India’s relative performance in Hamilton Index industries (2020 LQ). A value of 1.1 means that India’s share of global output for that industry is 110% the expected level. Chart: Information Technology and Innovation Foundation/Creative Commons.

The weakest three out of the ten Hamilton industries were computers and electronics; fabricated metals; and machinery and equipment.

Chart: US, Australia, Canada Added 100,000 New Citizens From India in 2021

More than 11,000 Indians also received a passport of the United Kingdom in 2021.

Indians were the nationality most likely to acquire the citizenship of an OECD country in 2021, a new report from the organisation has shown. In the latest year available, more than 100,000 Indians became citizens of the US, Australia and Canada – the most popular destinations for people emigrating from the country. More than 11,000 Indians also received a passport of the United Kingdom.

While this made India the top origin country of new citizens for the four aforementioned nations, the rest of the list looks different. 2,700 new citizens originating from India made them the second-largest group of naturalised New Zealanders in 2021, while just under 2,000 newly minted Spanish citizens of Indian origin only amounted to rank 19. The Netherlands and Sweden accepted just as many new Indian citizens – around 1,700 and 1,600, respectively – ranks 5 and 12.

India remained the most common former nationality of new OECD citizens despite a drop of 15% compared with 2019 naturalisation numbers. As these data points have not returned to pre-pandemic levels across the board, Mexico remained in second spot with a similar drop and “virtually all” former Mexican nationals becoming US citizens, according to the OECD. With a rise of more than 150% opposite 2019, Syria was the third most common former nationality of new OECD citizens. After many Syrians left their home country in the mid-2010 due to the country’s civil war, they are now becoming citizens in their new countries of residence, for example Sweden, the Netherlands and Germany.

You will find more infographics at Statista, where this article was originally published.

With New ‘Industrial Relations’ Code, What Does the Future Look Like for India’s Trade Unions?

Amidst the pandemic, digital acceleration and related developments in the US and the UK, provisions in the Code address India’s absence of a central framework to recognise and regulate trade unions.

The roll-out of the Industrial Relations Code, 2020 and the draft Industrial Relations (Central) Recognition of Negotiating Union or Negotiating Council and Adjudication of Disputes of Trade Unions Rules, 2021 as part of India’s labour reforms initiative, is in the offing.

The specific recognition of “negotiating unions” under this is significant in light of the COVID-19 pandemic and fast-growing digitalisation, both of which have necessitated a rethink of the role of collective bargaining and trade unions.

Given recent regulatory developments on this topic in the United States and the United Kingdom, this development in India assumes importance.

The Code and negotiating unions

The erstwhile Trade Unions Act, 1926 (TU Act), by itself did not mandate trade union registration or recognition; it only provided a framework for registration and for registered trade unions to operate.

The lack of a recognition mandate in the TU Act culminated in the absence of a framework for recognising negotiating unions or councils under it. However, certain state laws (such as the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 and Kerala Recognition of Trade Unions Act, 2010) address this ‘recognition’ gap, albeit in an ad hoc manner.

The absence of a framework to statutorily recognise trade unions at the central level left a long-standing legal vacuum which has been filled by statutorily acknowledging “negotiating unions” and “negotiating councils”, under the Code and the Rules.

The Code mandates every industrial establishment to have a negotiating union or a negotiating council. Where there is one registered union, the Code designates that as the negotiating union; where there are multiple registered unions, the union supported by more than 51% of workers forms the negotiating union.

A negotiating council is formed where no union has clear majority. In that case, there is proportional representation on the negotiating council of all trade unions with 20% membership or more. The Rules indicate subjects on which a negotiating union may negotiate with employers, including worker classification, wages, working hours, shift timings, promotion and transfer policies.

Although the Code awaits implementation and the Rules are still under consideration, differing views have been expressed on the proposal to recognise negotiating unions, negotiating councils, and attendant procedures. While experts have questioned the efficacy of the proposals on whether workers could follow the same, others emphasise the potential of these proposals to boost investor confidence while also enabling workers to exert greater power.

Also read: Explained: Here’s Why Workers, Opposition Parties Are Protesting Against the 3 New Labour Laws

A brief history of trade unions in India

These developments indicate an important shift in industrial relations. Concepts like negotiating unions and negotiating councils, premised on a sole negotiating body in an establishment, are assuming centre-stage. In other words, newer forms of negotiation between workers and employers, premised on the individual rather than the collective, may be emerging, pointing towards the evolution of collective bargaining and trade unions.

It may be argued that this evolution has already been underway.

Trade unions are, essentially, predicated upon the ‘employer-employee’ relationship where a ‘mutuality’ exists between employers and employees. This traditional employment relationship (and the tripartite relationship among the government, employers and trade unions) has steadily eroded over the past decades, primarily due to newer forms of employment emerging which are characterised by contractual and casual work. Further, the pandemic has perpetuated informal work, aided and complemented by digital acceleration.

Tracing briefly the evolution of trade unions in India, the primary focus upon Indian independence was economic progress. Workers and trade unions were greatly valued for their role in ensuring the economy’s production targets.

In fact, several labour policies formulated at that time protected workers, including provisions of the Industrial Disputes Act, 1947, which required employers to seek government permission for lay-offs and retrenchments – a request often rejected due to the strong ties between trade unions and the government. In contrast, under the Code, permission for lay-offs and retrenchment may be sought only by establishments with over 300 workers, thereby allowing hiring flexibility.

The evolving role of trade unions

Liberalisation in the 1990s, characterised by the abandonment of import-substitution industrialisation and a move towards a free market, triggered a somewhat permanent adoption of outsourcing and atypical employment (contractual/casual work), even in the formal employment sector. The growing fragmentation of a collective workforce resulted in union memberships undergoing stark decline in several industries.

Employers, in order to survive in this highly competitive, globalised world, reduced manpower through voluntary retirements while increasing subcontracting. As per International Labour Organisation ILO estimates, the global union density rate halved from an estimated 36% in 1990, to 18% in 2016.

Further, experts have attributed the changing role of trade unions, globally, to growth in alternate forms of social action and protection provided by employers, states, intermediary agencies, NGOs or emerging social movements and the introduction of CSR initiatives in corporations for the workers’ benefit.

Moreover, human resources departments in many enterprises are observed as having adopted certain functions of trade unions.

The multiplicity of trade unions in a single establishment has also been observed as being counterproductive to collective bargaining, with recognised trade unions often failing to reach consensus (the Code, interestingly, also allows for the creating and maintaining of a sole negotiating union/negotiating council in establishments).

Workers demanding equal wages and social security benefits during a convention organised by the All India Central Council of Trade Unions (AICCTU) at Jantar Mantar in 2018. Credit: Akhil Kumar

Trade unions and digitalisation

One of the most enduring reasons for the changed role of collective bargaining and trade unions may, however, be digitalisation and the growth of the gig economy, especially since the pandemic. The status of trade unions in a heavily digitalised future, dominated by the gig economy, is crucial. This future, characterised by heterogeneity, individualism and technology, is seemingly not agreeable with the traditional tenets of collective bargaining; however, the interaction between the gig economy and trade unions is inevitable.

The thunderous arrival and perpetuation of gig and platform work globally is historic, having fundamentally altered traditional work formats which are characterised by permanence, homogeneity and predictability. The male, manual industrial worker whose 9-to-5 job was central to his existence is, therefore, a declining species.

The augmentation of this work-format has not only changed how people work, spend, and live in general, but has also impacted traditional industrial relations. Concepts of collective bargaining, trade unions and tripartite consultation, integral to industrial relations, are therefore in flux.

Also read: A Year Into the Pandemic, the Statistical Vacuum on Indian Labour Hasn’t Been Filled

Potential challenges for the trade unions of the future

The shifting ‘employment-type’ relationship in the gig economy and its heterogeneous structure have been observed as impacting trade unions, their role in providing a collective space and associated education and support for workers. Certain challenges trade unions are likely to face in a digitalised future are highlighted below:

(i) Geographical: Trade union activities depend on physical meetings and discussions; a format being challenged by technology. While app-based gig platform trade unions have seen some success in the past, the challenge lies in organising skilled gig workers (for example, consultants and freelancers) dispersed globally and working primarily from home.

(ii) Youth disinterest: An ILO report suggests that the unionisation gap between young entrants in the labour market and older, retiring workers, is larger than ever. This is unsurprising as the youth today prefer self-employment, transitioning through various jobs. Trade unions, so far, do not cater substantially to these workers. Additionally, trade unions are perceived as tired, archaic bureaucracies, largely irrelevant to the issues of the contemporary world.

(iii) Piecemeal work: Work today is disintegrated and dispersed, being divided into small tasks and paid for accordingly. This disintegration of work isolates individual workers (unlike earlier, when workers could collectivise), effectively altering the balance of power as well as employer-worker negotiations. Such workers lack access to trade union support, given the absence of a conducive framework.

(iv) Equity determined by algorithms: A gig worker’s performance is determined by one-off gigs performed and not by line-management responsibility (prevalent in traditional organisations). This minimises the role of trade union representation. Further, a gig may be performed by different workers each time. This necessitates temporary work relationships, reducing the utility of trade unions.

Are trade unions headed towards a challenging future?

The observations above, demonstrating the interplay between trade unions and a digitalised future, are indeed indicative of a challenging future. The pandemic, however, has thrown up interesting questions for this future.

Reports suggest that, across varying national approaches, opportunities for the revitalisation of collective bargaining and trade unions are being created. At the same time, multilateral organisations like the Organisation for Economic Co-operation and Development (OECD) and the ILO, recognising the pandemic’s impact and resultant economic upheaval, have recommended that social dialogue needs to partake in the post-pandemic “building back better” agenda. Thus, a revitalised future for collective bargaining and trade unions may be underway.

Parallel developments are underway in America and the UK, which are likely to impact the future of collective bargaining and trade unions. It is too early to conclusively state the exact implications of this, globally and for India, given that the Code awaits implementation. However, these developments undoubtedly indicate a resurgence of collective bargaining and trade union activity.

The United States

The proposed ‘American Jobs Plan’, announced under President Biden’s broader “Build Back Better” agenda, aims at long-term economic recovery with a renewed focus on creating jobs through promoting collective bargaining and ensuring that trade unions function as vibrant institutions. A key element of the Jobs Plan is the proposed Protecting the Right to Organise Act, 2021 (PRO Act), amending the foundational National Labour Relations Act (1935).

The PRO Act expands the right to organise and collectively bargain via multiple measures. While it is being described as a “sweeping bill”, its reception has been mixed. Some commentators have described the PRO Act as encouraging forced unionisation, adversely impacting flexibility and potentially affecting relationships with independent contractors. On the other hand, the PRO Act has been called a “game changer”, supportive of strengthened collective bargaining.

The United Kingdom

The decision of the UK Supreme Court in February, 2021, adjudicating whether drivers working on a prominent ride-hailing platform were independent contractors or workers, is shaping up to be extremely important. This decision saw the court unanimously hold that such drivers would be considered ‘workers’. Post judgement, there has been a status reclassification of such drivers which consequently makes them eligible for benefits such as minimum wages and pension plans. Commentators have pointed to this being made possible by the hybrid status of the “worker” under UK employment law.

Significantly, post-reclassification, the platform has recognised one of UK’s largest trade unions, the GMB, as representing more than 70,000 drivers on the platform. The recognition also extends to collaboration on important issues including earnings, representation, organising and pensions.

Thus, this adoption of a model blending gig work with trade union rights shows that newer possibilities are being imagined for the work of the past and of the future to co-exist and that newer ways of collaborative working, between trade unions and gig platforms, are underway.

Trade unions emerged as a response to the labour problem that emerged during the Industrial Revolution. Over time, collective bargaining and trade unions experienced several setbacks, with the advent of subsequent industrial revolutions. Currently, the Fourth Industrial Revolution, characterised by technological development, may have provided a fresh lease of life to collective bargaining and trade unions, despite indications of the contrary.

The world is currently witnessing a barrage of changes owing to the pandemic and the consequent digital acceleration; all while India undergoes significant labour law reforms. In this, introducing negotiating unions and negotiating councils via the Code addresses the absence of a regulatory framework to recognise trade unions at the central level.

At the same time, the developments in the US and the UK indicate the renewed resurgence of collective bargaining and trade union activity.

As the Code develops and emergent developments elsewhere mature, it would be interesting to see how the regulatory landscape for collective bargaining and trade unions in a post-pandemic world, shapes up.

Soumya Jha and Ulka Bhattacharyya are research fellows at Shardul Amarchand Mangaldas & Co, New Delhi, India.

China: In a First, Divorce Court Orders Husband To Compensate Wife for Housework

The ruling, however, has sparked intense debate about the value of domestic work, with some arguing that the compensation was too low.

New Delhi: A divorce court in Beijing has ordered a man to compensate his wife for the housework she did during their marriage, in a landmark ruling that also triggered a debate on the value of domestic work.

According to the BBC, the woman will receive 50,000 yuan ($7,700 or Rs 5.6 lakh) for unpaid labour during their five-year marriage. The ruling comes after China introduced a new civil code which allows spouses to seek compensation in a divorce if they bear more responsibility in “childraising, caring for elderly relatives and assisting partners in their work”, the BBC reported.

The man, identified by his surname Chen, had filed for divorce last year from his wife, surnamed Wang, after getting married in 2015. They had been living separately since 2018. Wang was initially unwilling to divorce but later sought financial compensation, arguing that her husband had not shouldered any housework or childcare responsibilities.

The Fangshan district court in Beijing ruled in her favour, ordering Wang to pay the one-off compensation of 50,000 yuan in addition to monthly alimony of 2,000 yuan.

News agency AFP reported that the amount was arrived at after factoring in “the length of time the couple were married plus ‘the effort Wang put into housework, Chen’s income and the local cost of living'”.

According to the BBC, the presiding judge told reporters on Monday that while the division of a couple’s property after marriage usually covers splitting only tangible property, “housework constitutes intangible property value.”

The case was hotly debated on Chinese social media, with AFP reporting that a hashtag related to the ruling was viewed more than 570 million times on Weibo, the country’s version of Twitter.

Also Read: Should There Be Wages for Housework?

Some users pointed out that the compensation was too little for five years’ work. “I’m a bit speechless, the work of a full-time housewife is being underestimated. In Beijing, hiring a nanny for a year costs more than 50,000 yuan,” said one commenter, according to the BBC.

The debate gained momentum after local media reported that Wang had appealed the ruling, since she had originally requested 160,000 yuan as compensation.

According to AFP, comments on social media read, “Women should never be stay-at-home wives… when you divorce, you are left with nothing whatsoever. 50,000 yuan in housework compensation is bullshit.”

“A full-time nanny could cost more than this for half a year, are women’s youth and feelings this cheap?” read another.

Users also pointed out that men should assume more household duties in the first place.

The Organisation for Economic Co-operation and Development (OECD) estimates that Chinese women spend nearly four hours a day on unpaid work, which is roughly 2.5 times higher than the average for men.

“It is higher than the average in OECD countries, where women spend twice the amount of time as men on unpaid work,” the BBC said.

Zhong Wen, a divorce lawyer based in China’s Sichuan province, told the South China Morning Post that under the new civil code, “The two parties should negotiate measures, and if negotiations fail, the court should rule.”

COVID-19: Developing Countries Have a Chance to Reset Political, Economic Agendas

Is this not the time to reset the political economy and to restructure these societies to become useful for the masses instead of the few?

With the global novel coronavirus pandemic affecting the entire world, most regions and countries are looking at the unfolding situation in terms of horrifying scenarios from the public health and economic perspectives. The alternate future scenarios oscillate between bad and worse, depending upon what you read or who you listen to. As the numbers of those infected and killed by the virus escalate, it is hard to imagine anything positive associated with this situation.

But I have been thinking about the political economies of third world countries such as Pakistan, as well as most of South Asia, the Middle East, most African states and developing countries in Central and Latin America. All these places suffer from fragile political systems with political and economic power firmly in the hands of a few.

In other words, each of these fragile systems is marked by some sort of elite capture, with most economies qualifying as rentier ones serving the interests of the powerful. In these countries, irrespective of the casualties inflicted by COVID-19, is this not the time to reset the political economy and to restructure these societies to become useful for the masses instead of the few?

Looked at like this, is there an opportunity and a silver lining for these countries? Does the situation present an opportunity for nations like ours to reset their political and economic agendas in the context of the current health and economic scenarios? If so, what would that look like?

Also read: The Economy Needs a Survival Strategy – and Not Just Stimulus – to Recover From COVID-19

The coronavirus has made two issues paramount for everyone: Public health and its economic impact. The international community gave these issues their due recognition well before the coronavirus. All countries agreed on the Millennium Development Goals (MDGs) at the start of the 21st century.

“The MDGs are interdependent”, as WHO has noted. All the MDGs influence health, and health influences them. “Better health enables children to learn and adults to earn. Gender equality is essential to the achievement of better health. Reducing poverty, hunger and environmental degradation positively influences, but also depends on, better health.”

The MDGs set explicit targets to tackle extreme poverty and promote human development. To this end much of the international development assistance to poor countries is directed towards the social sectors.

However, for people living in the third world, we see the lack of progress in most of the MDGs, and health remains a largely unmet need for the general public. This is certainly true for Pakistan, where despite some minuscule efforts in the public health domain, our real priorities have been different. This is most evident in how we allocate our meagre resources.

According to the World Bank, from 2000 to 2016, Pakistan spent less than 3% of its annual GDP on health, and about the same on education. Our neighbours in South Asia are hardly any different, with both India and Bangladesh spending on these sectors in the same range although the numbers vary in particular years. The average rate in sub-Saharan Africa is higher – almost 6%, driven by frequent prevalence of disease.

Pakistan’s Prime Minister Imran Khan. Photo: Reuters/Lim Huey Teng

In comparison, Organization for Economic Co-operation and Development (OECD) countries spend an average of 10% on health and over 5% on education. Their combined figures for the social sectors are consistently in double digits, to meet the needs of their populations. And even then, the COVID-19 pandemic has caused havoc to their health infrastructures.

For developing, economically struggling nations like ours, finding relatively unlimited resources to fight the novel coronavirus would be no small miracle. Imagine: Pakistan announces a $8 billion package to fight the health and economic woes brought about by this pandemic! Who will stop any government from doing this or much more? After all, this is war and wars require everything you can muster to be thrown at the enemy. I contend that we should fight this war in a sustained way and keep on going – forever!

Countries like Pakistan have for decades had an economic structure dominated by a few. The state has found it difficult to build a society capable of providing equal opportunities to all its citizens for success in any sphere of life. On the few rare occasions that someone has tried sincerely to level the playing field, they have come up against obstacles driven by the various inherent conflicts in our social fabric. Whichever way the conflict manifests, the end result is to stay with the status quo.

This is where the positive side of the current viral pandemic emerges. Who doesn’t want to fight it? Politicians, different ruling parties in all provinces, are in a race to outperform each other in coming up with the better response; the establishment knows this is a different war but one where their efforts must be visible so they can stay relevant; the religious lobby is accepting physical distancing (the preferred term now over social distancing) even to the detriment of Islam’s holiest rituals; and socially active liberals are confining themselves to their homes surviving with virtual get-togethers.

In this situation, if third world leaders say today that the only war we need to fight is public health and education, who can oppose them? Would we then be able to actually divert maximum public finance to increase spending on the social agenda, particularly health? Certainly, allocation of financial and human resources is not everything. But it is definitely a starting point, and a major starting point right now.

In Pakistan, the ruling Tehrik-e-Insaf led by Prime Minister Imran Khan has long been saying they want to build “Riyasat-e- Madina” – an ideal state providing justice and equality to all citizens. Will they ever have a better chance than this? To make good their promise, they need to change their current narrative, build a consensus with all institutions and political parties, and make a collective pledge via federal and state legislatures to continue this war indefinitely.

Also read: With the Lockdown Extension Coming, It’s Time to Turn Our Attention to the Economy

They will have to find resources from wherever they can; reallocate from whatever else Pakistan has been spending on for 70 years and reimagine the state with this enhanced allocation to the social sector. The upcoming federal and state budgets provide an ideal platform to launch the resetting agenda. There is likely to be some relief and softening of terms regarding international debt, which could be used to begin the change process.

In any case, from here on, public health is going to be the biggest talking point. It is not difficult to see that politics will revolve around this issue for some time – probably long after we emerge from the current crisis with whatever losses we sustain.

Can Pakistan government deliver all this? What about other countries in similar situations? I am not sure, but one thing is clear, this is the time to make states work and make them relevant to the people. When entire populations are on the same page, reform becomes easier. This is a once-in-a-lifetime opportunity. It is imperative that policy measures and public discussion throughout the third world continue along these lines.

In brief, we cannot let this opportunity go to waste and risk our economic structure limping back to its previous self, post COVID-19.

Victory, as the ancient Chinese strategist Sun Tzu said, comes from finding opportunities in problems.

Asif Saad is a strategy consultant based in Karachi who has worked at senior levels with various national and multinational corporations in Pakistan and the Middle East.

This article was first published in Pakistan Today. Read the original here.

Emmanuel Macron’s Presidency Is Still Doomed

Macron’s many loyal outriders are trying to paint a rosy picture. But rising labor disputes and challenges to his environmental record show that the French president is anything but popular.

As France returns from its long summer break, pundits seem to agree the country’s embattled president is on the rise – at home and abroad.

“Jupiter is back,” French politics blogger and translator Art Goldhammer declared at the end of August. “The turnaround is starting,” gushed Sophie Pedder, Paris bureau chief of the Economist. “He’s leading the West,” boomed Washington Post columnist Jennifer Rubin.

The optimism seems to flow from two sources: first, the fact that France managed to host a G7 summit without any embarrassing diplomatic incidents involving the participants – despite the heightened risk of putting Donald Trump and Boris Johnson in the same room as other world leaders; second, the fact that it was a largely quiet summer for Macron and his cabinet at home, as is usually the case for French governments.

These are low bars to judge the success of any presidency. But the talk of a “comeback” also glosses over the simple reality: Emmanuel Macron remains an extremely unpopular president whose upticks in support have been minimal at best. The most generous of recent polls, a Harris Interactive study published last Tuesday, found Macron with 43% approval, up three points from June. Another recent poll had him at just 34%. Yet another study, conducted for France’s public radio broadcaster, found that just 25% judge Macron’s record as “positive.”

Even taking the most forgiving of views, Macron is a president with approval ratings that are on par with Donald Trump’s. If that point doesn’t always come across in press coverage of Macron, it has largely to do with the class origins of his most fervent critics. The US president is loathed by many groups of people, but nearly universally so by well-educated liberals; the French president is most hated by the working class.

To be sure, Macron’s approval ratings may not be quite as bad as those of his Socialist predecessor François Hollande at a similar point in his presidency. But they are slightly lower than Nicolas Sarkozy’s ratings at the same juncture – and dramatically below those of Jacques Chirac and François Mitterrand. Either way, year three of the former banker’s presidency doesn’t look likely to change much of this. With retirement reform on the horizon, as well as renewed grumblings from striking nurses and climate activists ready to hit to the streets, Macron could face a rocky few months ahead.

Playing with fire

At the top of the government’s agenda is the ultrasensitive topic of retirement reform. Already pushed back several months after the gilets jaunes threw a wrench into the original calendar, it is the dossier that hangs over everything else in French politics today. While an actual piece of legislation is unlikely to emerge before municipal elections in March 2020, the government kicked off the newest phase of negotiations with unions earlier this month. Left-wingers fear a frontal attack on benefits.

All in all, France’s retirement system is relatively generous, popular, and effective. The country has the lowest share of seniors at risk of poverty in the European Union: at 7%, this rate is half the EU average. But the success is also expensive to maintain, and costs are rising due to an aeging population. Last year, the French government spent the equivalent of 14% of GDP on retirement benefits, well above the OECD average of 7.5%. For that reason, the pension system has been a prime target of Macron — and reform-minded presidents before him. For them, it’s yet another example of France’s overly generous and outdated welfare model.

Also read: France Incorporated – The Limits of the Ultra-Liberal State

Under existing rules, most people can retire as early as 62, though they receive reduced benefits if they haven’t contributed to the system for a certain amount of time. At 67, so-called “full benefits” kick in regardless. These basic rules are complemented by dozens of separate pension systems for a handful of professions, including railworkers, soldiers, and civil servants — though this may not be the case for long.

In July, the government’s high commissioner on retirement, Jean-Paul Delevoye, delivered a highly anticipated set of reform recommendations. He called for the elimination of the separate systems and the implementation of a single formula for calculating retiree benefits across the board. Naturally, this caused alarm among those who benefit from pension systems with relatively more generous formulas.

But Delevoye made another, far more controversial recommendation: an effective hike in the retirement age. Under his proposal, one could still in theory retire at sixty-two, but this would automatically come with reduced benefits. The earliest age at which one could expect to retire and collect a full pension would be increased to sixty-four.

Former president Nicolas Sarkozy was the face of the 21st-century Republican right. Credit: Parti populaire européen/Flickr, CC BY-NC

Raising the retirement age is risky business. The last time a French president tried to do so – Nicolas Sarkozy, in 2010 — it unleashed a wave of nationwide strikes and protests. Sarkozy eventually held out, and legislators approved an increase from sixty to sixty-two. But back in 1995, the government wasn’t so lucky. A proposal to cut benefits for civil servants and eliminate some of the separate pension systems sparked a series of strikes, and the government eventually backed down. It’s unclear whether Macron could weather such a storm today, though the mere fact that he put the reform on the back burner as the gilets jaunes marched on speaks to his fears.

As such, the president and his prime minister, Edouard Philippe, are taking a delicate approach this fall. They understand they need at least some trade union support to successfully overhaul the pension system—and, most important, the French Democratic Confederation of Labour (CFDT), the country’s largest labor confederation in the private sector, which is ideologically centrist and committed to negotiation over confrontation.

After the union sharply criticised Delevoye’s proposal to lift the retirement age to sixty-four, government officials backed away from the idea, insisting that it was just a proposal. Macron has since floated the idea of an agreement that instead covers the amount of time one contributes into the retirement system, quipping that “nothing has been decided.”

The head of the country’s other major union, the left-wing General Confederation of Labour (CGT), isn’t anticipating any gifts from the Élysée Palace. “I don’t think the government will announce a reduction in the number of [yearly quarters of income that are necessary to retire], but rather an increase, which will force people to retire later,” Philippe Martinez said in an interview with Libération. “It doesn’t change anything, it’s just PR.”

Grumbling on the street… But a disorganised opposition

In the meantime, a handful of movements aimed squarely at the national government roll on. Strikes and protests continue at emergency rooms across the country, where nurses and other staff have complained of overcrowding and a lack of funding. Work stoppages currently affect 233 emergency rooms, according to a workers’ coordinating committee. (The Health Ministry counts 195.)

Frustration also persists among some unions representing public school teachers. They’re demanding improved teacher-to-student ratios and pay hikes. And, of course, there are the gilets jaunes. While the movement largely faded last spring, a hardcore group continues to protest every Saturday. They’re unlikely to attract any new participants in their current form, but they remain a potent symbol of resistance to Macron. Many gilets jaunes are also ready to inject their energy into other struggles, both locally and nationally.

Over the next several weeks, they may get their chance. Protests are scheduled across France on September 20 as part of the Global Climate Strike. More climate justice marches are slated the following day – a Saturday – as part of a call to “converge struggles” backed by environmentalists, gilets jaunes, immigrant rights groups, anti-racist activists, and the left-wing union Solidaires. On September 24, the CGT confederation is leading its first national strike over retirement reform. These are all opportunities for different groups losing out from Macron’s policies to improve ties among one another and to work toward building a credible alternative.

Sadly, little initiative seems to be coming from the political parties of the Left, who are still licking their wounds after disappointing results in May’s European elections. That includes the left-populist La France Insoumise, which drew national attention in late August after a guest at its annual summer school for activists proclaimed that “one has the right to be Islamophobic.” The party then published a full video of the comments in context, in which writer-philosopher Henri Peña-Ruiz insisted he didn’t dislike Muslims per se, just the religion they practice. The fact that LFI leaders somehow considered this longer video to be an improvement of the clip that originally went viral only made things worse. It highlights an inexcusable blind spot on the French Left. Far too many continue to pretend that Islamophobia either doesn’t exist or has nothing to do with racism.

Also read: Trade Woes Take Centrestage as G7 Summit Gets Underway

Meanwhile, the party’s emblematic leader, Jean-Luc Mélenchon, has been out of the country, touring Latin America and meeting with figures like the imprisoned former president of Brazil Lula da Silva and former Argentine president Cristina Kirchner. Alongside President Andrés Manuel López Obrador, Mélenchon offered a sharp and well-justified condemnation of the United States’ vicious immigration policy. Still, one can’t help but wonder why the deputy from Marseille can’t speak in the same tones regarding France — where authorities are regularly deporting thousands of undocumented immigrants and barring others from entering the country.

Finally, while the Greens have been basking in the media spotlight following their better-than-expected result of 13% in the EU elections, its leaders have steered clear of making overtures to other parties — at least for the moment. Some in the party appear to believe they can succeed by remaining ideologically independent: by rallying disaffected socially conscious voters under the flag of environmental justice while avoiding taking a stance on major questions of political economy.

This restrained and deliberately vague approach more or less worked for winning seats to European Parliament – which is elected through a system of proportional representation – drawing in a mix of middle-class voters from the centre left and Macron-sympathisers looking to send a message. On the other hand, the Greens’ brand is unlikely to attract enough support in municipal elections for the party to be able to govern alone in any medium-to-large-size cities. Coalitions will be key.

Alliances could vary on the ground, and tensions are thus inevitable. For example, in Paris, the Greens, Macron’s La République en Marche (LREM) party, and a high-profile dissident from LREM all appear set to butt heads as they seek to dethrone incumbent Socialist mayor Anne Hidalgo. Races in other cities could be less messy. No matter what, the Greens will have to take a stand, and it will undoubtedly upset some of their voters from May. The party can keep flying solo, wed itself to the president’s party and all it represents, or return to its original allies on the Left.

Emmanuel Macron, for his part, hopes his government’s supposed commitment to environmentalism will be enough for LREM to win over the Greens’ less-than-stable electorate. He has a fine-tuned PR machine aiming to do just that, but his record speaks for itself. Macron has backed the European Union’s free-trade agreement with Canada (CETA), a deal that gives a boost to Canada’s carbon-intensive economy and expands the use of investment dispute settlement tribunals that discourage public-interest regulations.

He has also opposed an immediate domestic ban on glyphosate, the active ingredient in the herbicide Roundup, which the World Health Organization’s cancer agency has said is “probably carcinogenic to humans.” (The European Food Safety Authority maintains the substance is safe for human use.) No matter the opinions of his many cheerleaders from abroad, these are issues Macron cannot hide from in France. And they help explain why – beyond all the noise – he remains an unpopular president.

Cole Stangler is a Paris-based journalist writing about labor and politics. A former staff writer at International Business Times and In These Times, he has also published work in VICE, the Nation, and the Village Voice.

The article was published on Jacobin. Read the original here.

Davos: It’s the Twilight of Neoliberalism – and the Elites are Afraid of the Dark

If the perverse inequalities of the present are to be reversed, it will not be a result of the duplicitous concerns of those who have stood to benefit from neoliberal capitalism.

Last week, the global 1% converged, as they do every year, in Davos for the World Economic Forum, along with political leaders, media personalities, policy experts, and fading pop stars like Bono. At the Swiss ski resort, they discussed the state of the world – and one topic got a lot of attention, namely inequality.

There is, of course, good reason to talk about inequality. As Oxfam has revealed, in 2018, just 26 people owned the same amount of wealth as the 3.8 billion people who make up the poorest half of humanity. And we know, of course, that this is part of a trend that has been unfolding since the early 1980s. It goes without saying that this is one of the defining crises of our time and of our political and economic order.

But it is worth noting the tone in which inequality is being talked about in Davos. As Guardian columnist Aditya Chakraborty has pointed out, the elites at the World Economic Forum are gripped by inequality anxiety. The oligarchs are deeply worried about the political ramifications of inequality – and particularly the prospect of popular anger being directed against them and the economic system that they preside over and profit from.

Also read: Inequality, Not Poverty, is Behind the Global Rise of Identity Politics

Elite anxiety about the possible backlash against the neoliberal project that they have spearheaded for the past four decades is not new per se. Indeed, it has been writ large in reports, policy statements, and speeches for some time now. In 2014, for example, IMF Director Christine Lagarde cautioned against the “pernicious effects” of inequality, and the OECD called attention to the “urgency” of tackling inequalities as early as 2011. What this signifies is that a painful awareness has emerged among the rich and the powerful that they are no longer capable of reconciling accumulation and legitimacy.

They may still be able to profit from the current economic system – indeed, the numbers from Oxfam tell us very clearly that they do – but this system does not appear as fair and reasonable in the eyes of the people that find themselves at the losing end of morbidly skewed spectra of wealth and income distribution.

My colleague Laurence Cox and I have called this scenario the twilight of neoliberalism. Whereas the neoliberal order has not yet collapsed, we argue in our book We Make Our Own History, it is certainly unravelling – both from above and below. And the anxiety in Davos tells us that the elites are afraid of the dark.

It is important to be aware that this is not the first or only example of elite nyctophobia in the long history of capitalism. For example, Marcus Rediker and Peter Linebaugh have shown how, during the birth of capitalism, those who held power and wealth in society feared the wrath of the mass of people who had been uprooted and impoverished by waves of dispossession remarkably similar to those of the neoliberal era. Of course, their fears were well founded, as this mass – often referred to as a “many-headed Hydra” – rose time and again to challenge deprivation, unfreedom, and disenfranchisement.

Also read: Modi’s Three-Point Pitch at Davos Rests Strongly Only On One Leg

During the nineteenth century, these same anxieties gave rise to an elite concern with “the social question” – that is, with the need to address want, disease and illiteracy among the groups who languished in the underbelly of industrial capitalism. This, it was believed, was imperative in order to prevent the kind of anti-systemic uprisings that 1848 had shown to be a real possibility.

However, it was not elite anxiety that brought about greater degrees of equality – it was popular struggles. During the second half of the twentieth century, workers’ movements, anti-colonial movements, the women’s movement, and anti-racist movements forced through forms of redistribution and recognition that levelled, to some extent, the inequalities thrown up by capitalist accumulation.

In that fact resides a pivotal lesson for today – namely, that if the perverse inequalities of the present are to be reversed, this will not be a result of the duplicitous concerns of those who have stood to benefit from neoliberal capitalism. On the contrary, it will be a result of the collective action of those at the margins of this system – that is, of those that the elites in Davos are so very much afraid of.

Alf Gunvald Nilsen is Professor of Sociology at the University of Pretoria.

Sheryl Sandberg’s Trickle-Down Feminism Stands Exposed

Facebook’s Sheryl Sandberg has been exposed as a corporate thug. But that was implicit in her lean-in philosophy all along.

In Sheryl Sandberg’s business-manual-cum-self-help-book Lean In, she recounts an anecdote about a meeting in New York. Pitching a deal, a senior figure suggested a break for refreshments. Sandberg asked where the women’s bathroom was, and none of the all-male office occupants knew. The tale is designed to show how few women had reached her position — but is far more revealing than that: plenty of women would surely work in the office, providing the coffee and sweeping the floors. But in Sandberg’s anecdote, they remain entirely invisible.

Lean In was remarkably successful, with accessible prose and promises of greater success for readers if they acted on Sandberg’s advice. But this form of feminism is entirely individual, with no blame apportioned for workplace disputes or the attitudes of the entirely male executives Sandberg dealt with. The problem, apparently, is that women hold themselves back. Women have a tendency to mentally check out of their workplace in the late stages of pregnancy, Sandberg opines; but she fails to mention that the United States has some of the weakest maternity leave rights in the world: in the forty-two countries that comprise the Organization of Economic Cooperation and Development, women are given an average of eighteen weeks of maternity pay. The US offers none.

Also read: How Neoliberalism Colonised Feminism – and What You Can Do About It

Focusing on individual behaviour as the sole source of success and failure lets structural sexism in the business world entirely off the hook. An individualist looking to get ahead will always rely on class interests and links with other successful colleagues rather than solidarity with colleagues of the same gender. The Sandberg image is carefully calibrated to appear nonthreatening, hard-working, and friendly: her goal is to help people, and she just happens to be a crucial cog in the biggest social media company in the world. That image has taken a battering in the last few weeks, with Facebook increasingly attacked for playing fast and lose with users’ data, and for accusations that the site has unduly influenced democratic elections and inflamed racial tensions that have led in some cases to extreme violence.

Recently, Facebook admitted that Sandberg ordered senior Facebook staff to research George Soros’s finances and holdings, and ordered up opposition research from the Republican-linked Definers Public Affairs company, after the financier publicly criticised the company in a speech at the World Economic Forum. Sandberg and Mark Zuckerberg went on the attack, digging up dirt on critics and peddling conspiracy theories aggressively. None of these revelations are a surprise: the exponential growth of Facebook has been accompanied by a lackadaisical approach to the company’s social impact.

Also read: In Search of Spiritually-Enriched Feminism

Much of Lean In skewers individual women for failing themselves. Even as the Me Too movement proves sexual harassment is rife in workplaces — and that women who speak out generally find that doing so intensifies attacks on them, from colleagues, professional networks, and a cavalcade of horrific sexist abuse on Twitter and Facebook — the book contains no structural analysis of the roadblocks that stop women from succeeding. Yet addressing the gender imbalance in senior positions is impossible without genuine maternity and paternity rights, paid leave, and protected jobs for women who take time out. Sexism reproduces gender roles in the workplace, and bias is rife in hiring and firing, with little to no legal protection for people subject to such injustices.

The Facebook revelations may, at last, put the concepts of lean-in feminism to bed. Her individualistic and unthreatening feminism will not change the world since it refuses to challenge it in the first place. Trickle-down feminism is as much of a myth as trickle-down economics. The only things that have furthered feminist causes in living memory is collective action, unionism, and a refusal to pander to those in power.

Dawn Foster is a Jacobin staff writer, a contributing editor on housing for the Guardian, and the author of ‘Lean Out’.

This article was originally published on Jacobin. You can read the original article here.

In Defence of Air-Conditioning

A right to air-conditioning is both morally just and entirely attainable – we simply have to make sure we don’t exacerbate climate change, air pollution, and energy poverty as we deliver it.

The sweltering temperatures that have blanketed the world this summer haven’t just been uncomfortable – they’ve been downright deadly.

Last month, a heat wave in Québec took the lives of as many as 90 people. At least 53 people died in Montreal alone, the victim of temperatures that shot past 40 degrees Celsius. The city morgue reported being overwhelmed – the first time this has happened due to heat-related casualties.

The majority of those affected were from vulnerable communities, those who lived alone, and those suffering from chronic or mental illness. The poor, the sick, the elderly. Infants, whose internal temperature regulatory mechanisms remain underdeveloped. A lack of air-conditioning proved lethal.

All across the planet, blistering temperatures are sending people to their deathbeds. Some 44 people died last month in Tokyo, eleven on one Saturday alone. Kumagaya, near the capital, registered the hottest temperature on record for the country: 41.1 degrees C.

In May, Karachi, Pakistan suffered 65 deaths in three days when temperatures hit 44 degrees C. In the south of Iran, security forces have suppressed violent protests as temperatures soar past 50 degrees C.

We cannot attribute any individual extreme weather event to climate change – there is simply too much natural variability, and many types of disasters (including droughts, floods, and wildfires) have social and economic causes, not just meteorological ones. Take the recent wildfires in Greece. We shouldn’t downplay the role of European Union–imposed austerity in exacerbating conditions.

As Yiannis Baboulias recently reported in the London Review of Books: “Firefighters often work on seasonal contracts, and in some cases their budget is so stretched they have to buy their own boots.” Likewise, during British Columbia’s recent record-busting wildfires, the province was briefly home to the worst air quality in the world – the result, at least in part, of a decade and a half of conservative governments that slashed public spending and ignored warnings from forestry and fire service experts about the need to remove dangerous forest fuels. But even if we accept that individual extreme weather events and their impacts involve multiple factors, we can still say that the increased frequency, duration, and intensity of heat waves around the world are consistent with a warming planet. Worldwide, 17 of the last 18 years have been the hottest on record.

Disneyland is seen as wildfires rage in California, Anaheim, California, US, October 9, 2017. Credit: Reuters

In 2003, much of Western Europe suffered through the region’s hottest summer on record since 1540, causing some seventy thousand excess deaths across the continent. France was hit especially hard, with 14,802 heat-related deaths (most of them elderly people). Air-conditioning was at the time, and still to a great extent, unusual in the country.As the climate changes, we have to place as much emphasis on adapting to the warming that is already locked in as we do in mitigating its causes. And as part of this adaptation, we should view air-conditioning in most locations as a right.

The right to air-conditioning

What would it mean to have a right to air-conditioning? Precisely, the right should be to have free or cheap, reliable access to the thermal conditions optimal for human metabolism (air temperatures of between 18 degrees C and 24 degrees C, according to the World Health Organization). Neither too hot nor too cold. The right to Goldilocks’s porridge, if you will.

New buildings must come with A/C as part of any “Green New Deal”. The aim of any programme of publicly subsidised mass retrofitting of old buildings shouldn’t be just to fuel-switch away from gas heating and improve insulation, but also to install quiet, efficient air-conditioning systems. At the scale of the electricity grid, this demand must also include the requirement that A/C run on cheap, clean electricity.

Of all natural disasters, heat waves are the deadliest, killing more than floods, hurricanes, or earthquakes.

The primary goal would be to save more lives. Of all natural disasters, heat waves are the deadliest, killing more than floods, hurricanes, or earthquakes. Currently, about 30% of the world’s population confronts conditions beyond the threshold where air temperature and humidity are life-threatening for more than twenty days a year. Even under scenarios assuming radical reductions in greenhouse-gas emissions, researchers have concluded that by the end of the century, that percentage will climb to just under half. And if emissions keep growing as they have, it will increase to just shy of three-quarters.

It is no contrarian wheeze to demand air-conditioning for all.

But even outside of air-conditioning’s role as an essential, life-saving part of public health, for all of us, there is a pretty narrow range of temperature within which we are comfortable, most productive, cozy. This is no aesthetic preference or cultural artifact. It’s a product of that same biological requirement to maintain as close to optimal metabolic conditions as possible. Most healthy humans are not going to pop their clogs if they are immediately outside this range, but overheating can still badly affect them – causing fevers, headaches, nausea, heat rash, heart strain, dehydration, heatstroke, agitation, and confusion.

Air conditioning units dot the facade of a residential apartment block in Singapore April 6, 2017. Credit: Reuters/Edgar Su

Tens of millions of people suffer from non-life-threatening but nonetheless severe health impacts and disruption of livelihoods. We are much more lethargic, less productive, and experience substantially reduced cognitive capacity. In extreme cases, people become too weak too work.

We have the technology to ensure everyone can live a decent, dignified, flourishing life – at optimum, comfortable thermal conditions. When it comes to being too cold, the technologies we use to get closer to Goldilocks temperature are pretty old: clothing and fire (or, more latterly, heating). And when it comes to being too hot, the technology we use to get closer to Goldilocks temperature is much younger: air-conditioning. But apart from its relative novelty, A/C is morally no different from clothing and fire.

Ascetics against air-conditioning

Not everyone is sold on this idea. The summer always seems to provoke attacks on air-conditioning as a luxurious indulgence of the rich world, an example of overconsumption, an addiction.

“Air conditioning made Americans greedy and silly,” Karen Heller wrote in the Washington Post a couple summers ago. “Once the country got hooked on central air, strange things materialized: windows that don’t open, the office sweater in August, summer colds, Las Vegas, football in Phoenix.” She then humble-bragged about her family’s “greater tolerance, lower carbon footprint and puny electric bills, which are half the temperature outside.”

Granted, it is reasonable to ask whether football in Phoenix in mid-July is the most rational use of air-conditioning (although so long as the air-con is powered by clean electricity, why would it be any different from heating a hockey stadium in Montreal in the winter?). But putting that aside, how is this not just another form of judgmental conspicuous consumption, or rather conspicuous anti-consumption? Are the homeless of Denton, Texas “greedy and silly” for rushing to an air-conditioned shelter to escape the extreme heat? Should those in New Delhi just suck it up (even if they’re liable to faint from heat exhaustion)?

Others in Heller’s camp insist that instead of air-conditioning, we should depend on ceiling fans and shade from foliage, or construct buildings that employ passive cooling systems used “for thousands of years” in tropical and desert areas. Still others beg us to set our thermostat in the summer to “the highest temperature you can stand” and only use air-conditioning when it has become “really unbearable.” (The latter ascetics also suggest switching to a homemade fridge made from clay pots, sand, and water.)

These A/C haters offer the summer equivalent of National Sweater Day, whose partisans exhort us to wear more sweaters in instead of turning up the heat.

Greenpeace Asia has protested air-conditioning in shopping malls and the eco-pontiff, Pope Francis, denounced air-con in his encyclical, Laudato Si, as an example of humanity’s culture of instant gratification:

People may well have a growing ecological sensitivity but it has not succeeded in changing their harmful habits of consumption which, rather than decreasing, appear to be growing all the more. A simple example is the increasing use and power of air-conditioning. The markets, which immediately benefit from sales, stimulate ever greater demand. An outsider looking at our world would be amazed at such behaviour, which at times appears self-destructive.

The Holy Father, who had perhaps forgotten that the Sistine Chapel had a new air-conditioning system installed in 2014 to protect the frescoes from the heat and sweaty breath of its six million gawping visitors, and that the Apostolic Palace’s four-hundred-year-old Secret Archive is likewise air-conned to preserve its thousands of historic documents, including Henry VIII’s appeal to annul his marriage to Catherine of Aragon and the proceedings of the heresy trial of Galileo.

Pope Francis clearly cares about how humans have disrupted the ecosystem services upon which civilization depends, from climate change to biodiversity loss. And that is to be saluted. He is the first head of the Catholic Church to put the environment at the heart of his ministry. But his response, like that of some in the environmental movement, is not a humane one. It is a morality play in which fallen man has once again committed the sins of gluttony and pride, and to be redeemed, he must learn humility before the laws of nature.

They’d be better off dropping the obsession with individual asceticism and instead promote measures that will actually reduce emissions and improve the lot of humanity: regulation to promote rapid tech-switching, generous funding to the developing world, and public sector expansion that delivers low-cost, reliable, clean energy for all.

Four hang-ups

It is true that a radical expansion of air-conditioning worldwide poses four significant problems. Already, air-conditioning accounts for around 10% of global electricity demand. And by 2050, A/C use is set to triple, according to a recent report from the International Energy Agency – primarily as a result of growing demand in emerging economies such as India and China.

The first problem is that hydrofluorocarbons (HFCs), the chemicals often used in air-conditioning units, are powerful greenhouse gases. Fortunately, under a 2016 amendment to the Montreal Protocol, HFCs are set to be phased out and replaced with alternatives. The deal offers a temporary reprieve to developing countries with very hot average temperatures – they get to delay their phase-out until later next decade. While developing countries are harder hit by elevated temperatures – because they already tend to be warmer – they worry that opting for pricier climate-friendly cooling systems will cause more near-term deaths if fewer people can afford them.

This gets to the heart of one of the insidious dynamics in climate policy. Developing countries would be more open to adopting stricter climate target for themselves if the rich world were more open to keeping their promises to fund the clean transition. Yet at UN climate summit after UN climate summit, OECD nations rail against greater flows of what is called in the diplomacy racket “climate finance” – funds to cover the often high cost of clean-energy technology. They concede a billion here or there, and then within a few years welch on the minimal promise they made. Stepping up the fight for adequate climate finance to poorer countries must be part of any climate-justice strategy.

The second problem is that if the almost-certain increase in A/C use is powered by electricity from fossil sources, we’ll be cooling ourselves down by heating ourselves up. And we’ll be doing it by using the most carbon-intensive options, since fossil fuels like coal are still the dominant source in emerging economies. The third, related, problem is the air pollution from those same sources. In July, researchers at the University of Wisconsin-Madison concluded that up to a thousand people die annually in the eastern US alone due to the elevated fine particulate matter from increased use of fossil fuels to cool buildings. By saving ourselves, we’ll be killing ourselves.

However considerable these two challenges may be, we are capable right now of overcoming them by rapidly decarbonising our electricity supply. We just can’t rely on private markets for the investment.

While it may seem fantastical in much of the US, north of the border, the provinces of Ontario, British Columbia, and Québec have grids that are almost entirely fossil-fuel free (91%, 95%, and 99% clean, respectively), primarily from hydroelectric or nuclear power. The cleanest states in the US (Vermont, Washington, Oregon, and Idaho) are also hydro and nuclear dependent. France, Sweden, Norway, and Finland all have high proportions of clean electricity as well, with the same sort of mix. And they show that the clean-energy switch can be carried out quickly. France decarbonised most of its electricity grid in about a decade by expanding its nuclear plants.

In almost all cases the build-out happened decades ago, before neoliberalism set it in and energy liberalisation side-lined the public sector. The key, both then and now, is state intervention. Hydro and nuclear may provide some of the cheapest – and most reliable – electricity in the world, but constructing dams and reactors is capital-intensive. Private businesses are reluctant to invest without significant public subsidies or price guarantees. In order move the needle on greenhouse gas, we’ll need the public sector to shepherd the process.

The final problem is that air-conditioning is an energy suck, which makes it eye-wateringly expensive. ConEdison, the New York electric company, warns customers that for every degree they lower their thermostat, their bill will shoot up by 6%. And as long as electricity remains carbon-intensive, introducing a straight carbon tax – a form of a flat tax that targets consumption rather than income or wealth – would further burden the poor, making it more difficult for them to pay for air-conditioning.

Whatever mechanism we choose to eliminate greenhouse-gas emissions, it must be egalitarian. We cannot make the poor foot the bill for a problem for which they are the least responsible. It happens to be the case, though, that places like BC, Quebec, and France have some of the cheapest electricity in the world. Given the huge amount of electricity required to massively expand provision of air-conditioning, nuclear appears to be one of the only ways this can happen while doing so in a way that is cheap.

The bottom line is this: a right to air-conditioning is both morally just and entirely attainable – we simply have to make sure we don’t exacerbate climate change, air pollution, and energy poverty as we deliver it.

Nothing’s too good for the working class

A worker assembles air conditioners at a Daikin factory in India, one of the company’s fastest-growing markets. Credit: Reuters

From Montreal to Karachi, so many of the people who have died in recent heat waves have been those who lived alone, were elderly, or struggled with mental or chronic health issues. They often lacked something as simple as having someone who loved them enough to busybody them into getting somewhere with air-conditioning: “Come on Charlie, let’s go watch a movie. I don’t care that you aren’t in the mood, you old grouch. It’ll be nice and cool in the cinema. C’mon, popcorn’s on me.”

Neoliberalism required for its success the decimation of mass organisations and a thoroughgoing atomisation of society. The destruction of eye-to-eye, tactile, rooted communities of solidarity – the world-historic and very strange new separation of each of us from our fellows – is surely one of the great under-recognised acts of capitalist vandalism. On some level, it’s not excess heat, but insufficient heart that is killing us.

Yet air-conditioning, while not sufficient, is absolutely necessary.

In fact, if you think about it, the abstemious green options – lifestyle changes, anti-consumption, the retreat from material demands – seem rather compatible with austerity and neoliberalism’s four-decade-long march. If the liberal good guys are all telling us we already have too much, isn’t it that much easier for the bosses to tell us the same thing?

Well, they’re wrong. Nothing’s too good for the working class, including a nice, cool, air-conned bedroom on a blazing summer’s eve. To the tumbrels with the fans of ceiling fans!

This article was republished with permission from Jacobin. Read the original here.

Leigh Phillips is a science writer and EU affairs journalist. He is the author of Austerity Ecology & the Collapse-Porn Addicts.

Data Shows Largest Firms Benefited Most From India’s Corporate Tax Cuts

Contrary to the expectations of small businesses, higher tax concessions are being availed by the largest companies.

In his Budget speech in February this year, finance minister Arun Jaitley talked about his promise from 2015 to reduce the corporate income tax (CIT) of companies with a turnover of more than Rs 10 crore and less than Rs 50 crore to 25%. “This benefitted 96% of the total companies filing tax returns in 2016-17,” he said.

He proposed to extend the reduced rate to companies with a turnover of up to Rs 250 crore for the next year: “This will benefit the entire class of micro, small and medium enterprises (MSMEs) which accounts for almost 99% of companies filing their tax returns,” he said.

“The estimate of revenue forgone due to this measure,” he had said, “is Rs 7,000 crore during the financial year 2018-19. After this, out of about seven lakh companies filing returns, 7,000 companies … whose turnover is above Rs 250 crore will remain in the 30% slab.”

“The lower corporate income tax rate for 99% of the companies will leave them with higher investible surplus which in turn will create more jobs,” he had predicted.

The receipts budget, however, provides a more accurate picture: Just more than half of all companies – i.e. 54.32% or 3,30,730 in absolute numbers – reported Rs 14,76,399 crore turnover and a total income of Rs 10,10,993 crore; 2,60,194 companies (42.74% of the sample) reported Rs 6,34,283.38 crore as losses and 17,912 companies (2.942%) reported no profits.

The same document notes that Rs 85,026.11 crore were waived in tax breaks for all corporates who had filed returns by November 2017 – a sample of 6,08,836 tax files. Jaitley’s projected figure for revenue forgone for MSMEs in the speech was Rs 7,000 crore.

But if the effective tax rate (ETR) for companies – or the actual, lower rates after the long list of deductions, exemptions and credits available to businesses from the government – are accounted for, the tax bills look very different depending on size.

For businesses whose revenue was Rs 100 crore to 500 crore, the ETR was about 29%, close to the statutory rates. But companies that paid an ETR of between 25-30% – 78,022 in number – had a share of 11.27% in total corporate profits, a 12.77% share in total income and an 11.95% share in total tax liability.

As such, India’s headline CIT is 34%, among the highest in the world. (table below). But the freebies given to large corporates have only risen.

For instance, in 2012, companies with revenues greater than Rs 500 crore contributed 58% of the country’s share in profit before tax (PBT), while their part in total corporate income tax was about 54% at the ETR of 22.59%, and about 26% for businesses whose revenue was less than 10 crores.

In FY 2016-17, undertakings with PBTs exceeding Rs 500 crore accounted for a total of 61.17% of the total corporate PBT – the largest share of the country’s corporate revenue – but only 54.45% of its corporate income tax liability. And, only 335 companies reported such revenues from the sample, and paid an ETR of only 23.94%.

Further, the overall ETR fell to 26.89% in 2016-17 from 28.24% the previous year (FY 2015-16), and the biggest discounts went to the biggest businesses.

Missing profits

While firms which reported PBT of Rs 500 crore and above paid an ETR of 23.94% in FY 2016-17, it was 29.43% for companies with PBT up to Rs one crore, closer to their statutory rates, the result of the phasing out of profit-linked deductions and the levy of minimum alternate tax (MAT) for them.

In sum, overall ETRs fell to 26.89% from 28.24% in the previous financial year 2015-16 but benefited the largest companies the most.

By another matrix, 3,45,566 companies, about half of the total sample, with average ETRs of up to 20% accounted for a quarter – or 24.17% – of total PBT, 9.39% of total taxable income and 10.14% of total taxes. In other words, a large number of companies contributed disproportionately lower taxes in relation to their profits.

In addition, 39,121 companies accounting for 6.44% of the total profits and 16.10% of the total taxes, had an ETR approximately equal to the average ETR of 34.38%. This shows that the tax liability across enterprises was unevenly distributed, “primarily due to the various tax preferences in the tax statute,” the receipts budget, said.

This too indicates higher tax concessions are being availed by the larger companies.

Big discounts for big business

The receipts budget confirmed the statutory rate was 30.9% for revenues of up to a crore; rising to 33.06% for those who made taxable sums of up to Rs 10 crore, and 34.61% for companies whose income exceeded Rs 10 crore.

The ETR in 2016-17 of the entire sample was 29.69% (including dividend distribution tax) in the current receipts budget, as against the 28.24% reported in the financial year 2015-16.

While the statutory tax rate was 30.9% in case of companies having incomes of up to Rs one crore, it was 33.06% for those with incomes up to Rs 10 crore and 34.61% for companies with revenue exceeding Rs 10 crore, resulting in an average statutory rate of 34.38%.

Tax policy distortions

The report on forgone revenue, presented as a separate document, was placed with the Union Budget until 2007-08. Earlier called ‘Statement of Revenue Foregone’, it was renamed ‘Statement of Revenue Impact of Tax Incentives under the Central Tax System’ in 2014, then merged in the Receipts Budget in 2016-17, usually published mid-year.

But presenting the statement of tax revenue forgone was postponed because, the budget document explained, corporate tax exemptions will be phased out gradually; tax exemptions on imports are not reclaimable because they are related to India’s Free Trade Agreements that cannot be repudiated, while some tax exemptions were expected to be replaced by GST.

“Moreover, it is possible that some of the current indirect tax exemptions benefit the poor,” the report said.

Public vs private rates

The report also compares the ETRs of public sector companies (PSUs) with that of private companies. While the rate is lower than the statutory rate for both categories, the private sector companies pay a slightly larger proportion of their profits as tax than the public sector companies.

While the headline rates for both private and public sector companies are lower than the headline 34%, the private sector pays a larger proportion of its profits as taxes than the public sector.

Even the manufacturing and service sectors had ETRs well below the 34% statutory mark, at 24.75% and 28.73%, respectively.

But labour-intensive sectors such as hotels and restaurants, retail and wholesale trade, faced relatively high effective rates, which runs counter to the objective of promoting job creation.

Sector-wise spikes and lows

There was much diversity of effective rates across and within sectors for the FY 2016-17. The cement (20.7%), sugar (18.04%), steel (17.87%), are in the lower ranges in the manufacturing sector; leasing companies in the financial services sector (21.47%); and film distributors (21.52%) in the entertainment sector.

Among the highest taxpayers was the print and publishing sector at 34%, but mining contractors paid an ETR of 44%; Chartered accountants who help corporates lower their tax bills–more sinned against than sinning–themselves paid a relatively higher ETR at 33%.

Accounting manoeuvers

An OECD study said tax concessions introduce economic distortions across firms of different sizes, as large companies – “that can more easily afford specialist tax advice – are better able to exploit tax concessions.”

For instance, accelerated depreciation which allows greater deductions on assets expected to be more productive in their early years costed the Indian exchequer Rs 370 billion – 8.2% of CIT revenue forgone – or 0.3% of GDP in FY 2014-15. It is the single most expensive subsidy given to companies to minimise taxable income. Large companies favour accelerated depreciation even if it impacts the bottom line adversely as the cash saved can be reinvested or paid to shareholders.

Tax benefits to different sectors vary greatly. The healthcare industry, for instance, benefits from relatively high depreciation for medical equipment, it has income tax exemptions for five years for rural hospitals, receives customs duty exemptions for imported equipment that are lifesaving and an income tax exemption for health insurance.

The actual ETR is higher for small, labour intensive and private companies. Hotels and restaurants pay the most, as per OECD statisticians.

Area-based exemptions such as for SEZs and tax relief for infrastructure firms (telecom, oil, electricity, and distribution and network firms) account for the rest of the forgone revenue.

The future

Rahul Bhasin, managing partner at Baring Private Equity, a funds advisor managing $1.1 billion across 53 investments who recommends giving the highest taxpayers red battis for their cars, also favours per capita-linked tax rates at 5% to 35%, Aadhaar-linked tax declaration and takes a sense of pride in being a taxpayer.

He says corporate tax rates should be set at 15% giving no exemptions: “Remove dividend distribution taxes. Set fines for all misdemeanors and financial penalties with no exemptions and a 3x fine on under-declaration.”

But inconsistencies caused by “large favours for large corporates may be seen as subsidies to preferred tax payers.” Critics of this approach say a “tax policy should not only be efficient but also transparent.”

The government had committed to a “base broadening-rate reducing reform where CIT will be lowered to 25% over a five-year period and most tax concessions will be eliminated”.

Divya Guha is an independent Kolkata-based journalist