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The predators behind the Trans-Pacific Partnership

By Stephen Fitzgerald

Most of the problems we face, in Western society, are a result of the ravages of corporate greed. The Trans-Pacific Partnership (TPP) is another example of corporates expanding their power base to the detriment of the countries they overrun.

In the news today, you will hear the distant rumblings of the true intent, and the inevitable impact, of the Trans-Pacific Partnership. If we participate, the TPP will leave Australia exposed to unfettered corporate exploitation and abuse.

Misnomers that hide what the strong and rich control, and aspire to control, help promote our world’s numerous political and social ills. “Spreading democracy” in the Middle East and Africa has been used to excuse much slaughter, ruin and higher risks of wider war for purposes not remotely connected with democracy. It’s all about money, power and control driven by greed.

The designation “trade” used by politicians and the media when talking about the Trans-Pacific Partnership pact and the proposed Trans-Atlantic Trade and Investment Partnership agreement is another perfect example of a misnomer thanks to which a new shadow will be cast over the generally more fortunate parts of the world including Australia.

If signed and ratified, the trans-Pacific and trans-Atlantic agreements, which seek to organize business activity under one gigantic umbrella of new rules, are likely to change our living environment in ways very different from what elected officials have been misled to imagine.

They have been peddled as trade treaties, and hence as being wonderful for economic growth, job creation, social well-being and general happiness. But, the TPP agreement, which aims to tie a dozen pacific nations together is not in the first place about trade and may hardly be significant at all for stimulating genuine exchanges traditionally labelled that way.

The TPP accord is about power, not trade. More specifically, the agreements are about changed power relations between a collective of politically well-connected large corporations and the sovereign states in which these entities want to sink their roots. In particular, these treaties would allow huge corporations to engage in conduct unchecked by national rules of the participating countries. In eyes not fogged over through neo-liberal dogma, such a thing would be recognised as predation.

Corporate clout veiled in secrecy

The most striking aspect of TPP negotiations has been the utter secrecy. Only “cleared advisers” most of them linked with the businesses that stand to gain from the deal, have had access to the agreements, and critics among them have been sworn to remain silent about what they consider unacceptable.

We do know a little of what went on behind closed doors. For example, we have seen that negotiators have concentrated on controlling labour laws, environmental legislation and intellectual property rights. Since traditional tariffs hardly appear to be an obstacle to trade nowadays, what else could they do? But it does go to show that the TPP is primarily a political program.

It is political because it aims to change the power relations between transnational corporations and foreign governments. It is political because it will create patterns of colonial dependence through agricultural agreements. It is political because it seeks to place the governments of the participating countries under a kind of legal discipline that has nothing to do with the rights of citizens and everything to do with the ability of powerful corporations to become even stronger.

Many details of the TPP agreement have yet to be divulged, but what is clear is that participating governments can violate its intended rules only at their own great disadvantage. In effect, the legal stipulations tied to the TPP agreement will created a new element of corporate groups operating internationally beyond any kind of accountability. The TPP will not be about economic development but about wholesale power shifts.

Those who can still make a political difference in Australia ought to study the reason for and, the nature of such shifts. Numerous large, politically connected transnational corporations operate in colonizing mode in the context of recently evolved methods of profit-making in the current phase of late capitalism.

The political class of the participants of the TPP agreement and the Europeans, who watch from the sidelines with the companion TPIP treaty in the back of their minds, are still affected by the lines of seduction about unfettered trade always being good for everyone.

Hence corporate hopes are specifically vested on two areas opened up by the TPP deal in participating countries permitting rent seekers and financial firms to become the top predators. The TPP agreement will massively expand their hunting territory and give them fierce fangs in the bargain.

Power play by the corporates

A new category came into general use in the last decade of the 20th century named “intellectual property” for the purpose of maximising rent extraction and the creation of monopolies. The expected intellectual property stipulations of the TPP accord related to medicine have drawn much attention, as these will enlarge the oligopoly power of pharmaceutical companies.

Global public health is likely to suffer from this because, from what is already known, the new rules will lengthen the period before the use of generic drugs is permitted, and these are the only affordable medicine for patients in poorer countries. Nongovernmental organisation Doctors Without Borders has concluded in a July 2015 press release that “the TPP agreement is on track to become the most harmful trade pact ever”.

Then there is an even bigger beneficiary in the shape of the 21st-century global casino of speculating banks, which make untold multiples of capital with their money while bypassing the complication of investing in production. For them, the TPP deal is a dream come true. From what we know, the TPP agreement would ban capital controls, prohibit any kind of future taxes on speculation and block any move to separate investment from retail banking.

It would also block efforts to ban toxic derivatives that created the credit crisis of 2008. As with the manufacturers of controversial products, the financial industry will be given the means to demand compensation for regulations and policies that in their assessment may undermine their expected future profits. They will sue the governments who legislate against them.

It is difficult to understand why the TPP participants have not guessed that consequences of what they will be signing will bring social misery upon themselves as the TPP agreement is part of a full-spectrum dominance campaign. This leaves us with the puzzle of why those same participants have been mouthing job creating nonsense around the TPP rhetoric and appear unable to tackle intellectually the dominant power aspects of the treaty.

Perhaps this is because the world in which they exist is politically sterilised and those incapables, have been brain washed into believing they should give corporates whatever they want without question or analysis.

Since the political dimension to economic arrangements remains hidden in most discourse because political and economic reality are routinely treated as separate realms of life, few notice that what is justified by reference to “market forces” is frequently the result of heavy lobbying, political negotiation, interference and favours to corporates.

Politically well-connected corporations, paying for the election expenses of the political parties who help create their business environment, need not fear market forces. If the banks responsible for the credit crisis of 2008 and the subsequent global recession, that is still with us, had not been lifted out of “the market” by the state, they would no longer exist. They were bailed out by cohort governments with money from tax payers they had already plundered.

Buyer beware

Powerful corporations have been allowed to swallow the state; they have, as economist James Galbraith explains, created a “predator state,” which they naturally exploit for their own expansion. There is no frame of reference with which we can more convincingly define the Trans-Pacific Partnership.

Politicians please read the small print and beware, if you sign up to the TPP you will be selling Australia down the river.


32 comments

  1. Adrianne Haddow

    Great article Stephen.
    Please post this to Bill Shorten’s office. Or his twitter feed.

    At the moment the only dissenters to this horrid conspiracy are the ‘loony ‘Greens.

    This insidious deal has been lurking in the dark for years, and the general public still don’t know, or seemingly care, much about the effects this will have on our economy, society and environment, or our sovereignty as a nation

    While we have idiots like Pauline Hanson taking up Parliamentary time forwarding motions about how it’s ok to be white, and being endorsed by the other f’wits in the coalition, the serious issues are being ignored or hidden beneath this bs.

    I am really fearful of the future foisted on us by these fools.

  2. New England Cocky

    Excellent article Stephen. Thank you.

  3. Stephen Fitzgerald

    Understanding how the world works is essential if the intention is to stand up for the best interest of every-day Australians. The ravages of corporate greed are the greatest threat to society and our democracy. The greatest threat to our government, the greatest threat to our environment and the greatest threat to a sustainable future with a fair go for everyone.

    Evidenced by the abuse of society exposed by the banking royal commission and the corporate influence on the LNP to back coal producers at the expense of the environment. Also corporates dictating our labour laws with corruption exposed in the federal Fair Work Commission.

    The Trans-Pacific Partnership pact (TPP) is the perfect opportunity to expose the true intention of large corporations and where we are headed if the electorate and our elected representatives don’t wake up. Corporates need to be regulated and controlled and if the LNP Government and Murdoch convince us otherwise, it will be at our own peril.

    Thanks Adrianne – Bill Shorten has been informed > Bill.Shorten.MP@aph.gov.au

  4. Jackie

    Terrible idea…I hope all Australians read and understand the detriment to all of us…evil consequences
    that will destroy our sovereign nation. Australia is already being financially abused by a mob of 3rd world
    countries bleeding our hard working tax paying citizens of multiple millions each year.

    While I’am venting my anger… Why do we allow these Stone Age barbaric mob ruling countries to take our money, we have never been asked!
    Why should Australian’s be forced to finance governments that openly kill their people over Christianity!
    Pakistan shockingly was granted $49.6 million in aid in the past year of whom are about to hang an innocent women.
    See page 6 of The Gold Coast Bulletin. Monday 15/10/18. An atrocious
    savage account of the sort of country we are making a beneficiary of our taxpayers funds!
    Islam significantly plays the main actor in all the exploits of Australians sovereign wealth.
    ‘A Forced redistribution of Our Sovereign Wealth To The Third World’.

  5. Craig Welch

    “Many details of the TPP agreement have yet to be divulged …”

    First reaction – Huh? The legally scrubbed version of the TPP text was published in full in early 2016.

    Second reaction – Haven’t I read this before? Checks. Indeed yes, this is an article you published in February 2016. If you’re going to re-publish old material, you should at least bring it up to date. And even then there was a full text published from November 2015.

  6. John Holmes

    I would suggest from the little that I have read about the TPP, that a close examination of the history of the East India Company’s activities and impacts on the Sub Continent and East Asia would be an indication as to the potential impact on Australia. Not as a ruler, but as a subjugate. We have been though the ‘decolonization’ period after WW2 and the West has forgotten all about the history of abuse prior to that.

    I also noted that some of the so called gains claimed by Howard after the free trade agreement with the USA have been some what tenuous if not totally adverse to us as well.

    One asks the question, who has been bribed to get these proposals put up?

  7. Craig Welch

    I make no allegations, of course, but this article about former Trade Minister Andrew Robb is most interesting in that context John.

  8. Stephen Fitzgerald

    Craig – Not all of us have a memory going back 3 years and there are some pressing national issues here. In the news today Bill Shorten is proposing to ratify the TPP. There are serious concerns.

    My source is a German political observer via a Japanese news paper and not the AIMN. Could I please have the reference to the full “legally scrubbed version of the TPP”- At your convenience.

  9. paul walter

    Articles of Surrender.

  10. Wam

    A great read, Stephen, I wonder how quickly the lnp TPP deal will become a TTP for Australia?
    Glad you informed the MP and hope you avoided the spam box.
    ps robb erred in haste to get signatures and got a $750k part-time job before the last election.

  11. Stephen Fitzgerald

    Craig – While I’m on it, if you had read the second part of my post you would have concluded that the objective was to use the TPP article to expose corporate intent and subsequently, the pressing need to legislate corporate regulations and controls. Hopefully Bill Shorten will get it.

  12. Craig Welch

    “Craig – Not all of us have a memory going back 3 years and there are some pressing national issues here. In the news today Bill Shorten is proposing to ratify the TPP. There are serious concerns”.

    I agree that there are serious concerns. My comment was because the article wasn’t completely accurate.

    “Could I please have the reference to the full “legally scrubbed version of the TPP”- At your convenience”.

    Certainly. The version currently available from DFAT is the legally scrubbed one. I still have the earlier one, and the differences are minor – but important. All the TPP and CPTPP text is here: https://dfat.gov.au/trade/agreements/not-yet-in-force/tpp-11/official-documents/Pages/official-documents.aspx

  13. Stephen Fitzgerald

    Craig – Thanks – I’ll go through it along with the 21 associated documents, 101 sub documents, 52 annexes and 31 other relevant bits of information and, if my head explodes it’s your fault. I note that the new side letters are dated 2018 and, there’s not much in there relevant to my point.

    Once again, the point being to expose corporate intent and prompt Bill Shorten to read the fine print before signing up to an agreement rejected by the U.S.

  14. Diannaart

    Not that I’d base any decisions based upon what the US does (in recent history).

    Nor do I have the training to wade through what is purported to be the “legally scrubbed” version of such corporate proposals.

    I try to KISS 😏 and source analysis that is understandable, more reliable and from more independent sources on the first read; besides life is too short.

    http://www.abc.net.au/news/2018-01-24/what-is-the-new-tpp-and-what-does-it-mean-for-australia/9357020

    The big criticism of the trade deal is that it takes power away from individual governments.

    The major controversy is about the investor-statement-dispute-settlement mechanism, which is generally known as the ISDS. It means companies could sue the Australian Government to argue they were being denied access to the Australian market.

    Critics argue that means governments can’t make policy without fear of facing a lengthy and costly legal case. The most famous case of this happening is when tobacco company Philip Morris sued the Australian Government for introducing plain packaging of cigarettes.

    This trade deal still includes that mechanism but it has been watered down

    The real problem is that these agreements don’t actually do enough to support freer trade. We’ve been studying trade agreements and the political foundations of industrial competitiveness in the United States, East Asia and beyond – for decades. We have witnessed how so-called “free trade deals” have become less and less about opening markets and more about entrenching monopolies. Australia, where we’re based, is also a member of the proposed TPP and, like America, stands to benefit from the deal’s abandonment.

    https://theconversation.com/why-trump-is-right-and-wrong-about-killing-off-the-tpp-69045

    Successive American administrations have further reinforced this extreme downsizing process by pushing trade agreements like the TPP that pay lip service to market access (free trade). In reality, these agreements entrench monopolies and tie the hands of governments that would otherwise take a more proactive approach to building new advanced industries and upgrading existing ones with new technology.

    The creation of the World Trade Organization in 1995 marked the first major shift in international trade deals away from those that prioritize freer market access and towards those that entrench monopolies through the award of generous intellectual property provisions – even at the expense of economic and social goals like encouraging innovation and protecting human health.

    And …

    http://aftinet.org.au/cms/tpp-ISDS-2016

    Public health campaigning has resulted in a specific TPP clause to exclude future tobacco regular on from ISDS cases. This is a victory and should prevent future cases like the Philip Morris case against our plain packaging law. But the need for the specific exclusion of tobacco regulation shows that the general “safeguards” for other public interest laws are weak and will not prevent corporations from bringing cases.

    Increasing numbers of ISDS cases against public interest legislation

    Recent ISDS cases against health, environment and other public interest legislation include:

    Public health: The Swiss pharmaceutical company Novartis sued the Colombian government over plans to reduce the price of a patented medicine to treat leukaemia

    Environment: the US Bilcon company won millions of dollars of compensation from Canada of because its application for a quarry development was refused by a local government for environmental reasons

    Workers wages: The French Veolia company is suing the Egyptian government over a contract dispute in which they are claiming compensation for a rise in the minimum wage.

    Indigenous land rights: An ISDS tribunal ordered the Peruvian government to pay $24 million to the Canadian Bear Creek mining company because it cancelled a mining license after the company failed to obtain informed consent from Indigenous land owners about the mine, leading to mass protests. ISDS rewarded the company for ignoring Indigenous land rights.

    Privatisation: Mexican transport company ADO has threatened Portugal with a €42 million ISDS case after it cancelled plans to privatise part of Lisbon’s public transport network.

    Philip Morris tobacco company vs Australia

    Even if a government wins the case, defending it can take years and cost tens of millions of dollars. For example, tobacco companies lost their claim for compensation for Australia’s 2011 plain packaging legislation in Australia’s High Court. The US-based Philip Morris company did not accept this decision under Australian law. The company could not sue under the US-Australia FTA because that agreement had no ISDS clause. The company found a Hong Kong-Australia investment agreement containing ISDS, shifted some assets to Hong Kong, claimed to be a Hong Kong company and sued the Australian Government, claiming billions in compensation. It took over four years and millions in legal fees for the tribunal to decide the threshold issue in December 2015 that Philip Morris was not a Hong Kong company.

    Although the tribunal in July 2017 eventually awarded a proportion of the legal and arbitration costs to Australia, the proportion and amount of the costs were blacked out in the tribunal’s cost decision. This is a failure of public accountability both by the tribunal and the Australian government, as taxpayers have a right to know the costs of defending ISDS cases. Community organisations called for the Australian government to reveal the costs. The government initially appealed an Australian Information Commissioner decision that it should reveal the costs, but finally revealed on July 2, 2018 that the legal costs were $39 million. The proportion of costs awarded to Australia has still not been revealed.

    Too much secrecy, too little protection for workers, the public, small business, health, environment …

  15. Stephen Fitzgerald

    Thanks Diannaart – Good coverage of the recent events – There is also this as of yesterday evening…

    Australian Associated Press – Monday October 15, 2018 – 7:20pm Matt Coughlan and Rebecca Gredley https://www.news.com.au/national/breaking-news/labor-seeks-changes-to-trade-deal-talks/news-story/8a46eff6e2fbe1581fd46704311d0e11

    Debated in the Senate on Monday. The federal opposition is backing Trans-Pacific Partnership legislation, despite concerns.

    The same day, Labour’s trade spokesman Jason Clare introduced a private bill to parliament’s lower house to put more safeguards in place for future trade agreements. Mr Clare said the move would prohibit clauses which allow foreign companies to sue the government and protect public services.

    Centre Alliance along with the Greens and One Nation are also opposed to the TPP. “It’s a bad deal because it hands over extraordinary power to corporations and takes it off sovereign governments”.

    AND lets continue…

    SMH – Fergus Hunter – 11 September 2018 — 4:45pm
    https://www.smh.com.au/politics/federal/labor-clears-way-for-trans-pacific-partnership-20180911-p5031q.html

    Australia will ratify the Trans-Pacific Partnership after Labour resolved to support the 11-country trade agreement despite internal resistance over fears about its impact on Australian workers and scepticism about its economic value. The government needed the opposition’s support after a majority of crossbench senators said they would oppose the legislation.

    “Labour has betrayed Australian workers, and our sovereignty, by paving the way to locking our nation to the dangerous TPP,” Senator Hanson-Young said. “It gives countries the ability to bring in temporary migrant workers with no need to first check if there are Australians ready, willing and able to do the job instead. This deal will result in Australia losing 39,000 jobs.

    “It’s a bad deal, devised in a backroom and designed for a boardroom. It is baffling that Labour would support this deal.”

    AND, at bit more background…

    THE TRANS-PACIFIC PARTNERSHIP IS BACK: EXPERTS RESPOND
    http://theconversation.com/the-trans-pacific-partnership-is-back-experts-respond-87432

    The latest incarnation of the Trans-Pacific Partnership (TPP) is said to have “fewer bad bits”. But as our experts point out below, there’s still a great deal wrong with, or missing from, the regional free trade agreement ever though 20 provisions from the original TPP have been suspended.

    Peter Robertson, Dean and Professor, University of Western Australia Business School:

    Trade deals such as the TPP11 that include some countries and exclude others are inherently flawed mechanisms for extracting the most benefit from trade. All trade deals are about “swings and roundabouts”. That is, a redistribution of income from producers to consumers and governments. For example, when we remove tariffs on automobiles, then consumers gain but producers and their employees lose. When we impose a tariff on agriculture, consumers lose by paying higher prices at the grocery store and producers gain.
    Under reasonable circumstances there is reason to believe that the sum of the gains exceeds the losses. But when you add up all the potential winners and losers from the TPP11, from an Australian perspective you end up with pretty much zero. Or, to be more precise, an 0.5% increase in GDP by 2030. From a global perspective the TPP11 could even have negative effects because it encourages us to buy from member countries, and not from outsider countries who may in fact have better and cheaper products.

    Pat Ranald, Research Associate, University of Sydney:

    Despite claimed “safeguards”, ISDS enables all other foreign investors to bypass national courts and sue governments for compensation in international tribunals if they can argue that changes in domestic laws or policies harm their investment. The cases are tried by tribunals composed of investment lawyers who can continue to represent clients. There is no independent judiciary, and no precedents or appeals to ensure consistency of decisions. Even if a government wins a case, defending it can take years and cost millions.

    Kimberlee Weatherall, Professor and Associate Dean (Research), The University of Sydney Law School:

    The TPP11 suspends the most controversial copyright provisions. But not everything controversial is out. There is still a cornucopia of enforcement procedures and remedies, and very broad criminal liability for infringing copyright – including liability for “aiding and abetting” others’ infringement. There are broad provisions that allow right holders to claim any equipment used to infringe copyright. Beyond copyright, the ministers haven’t suspended a controversial provision (a first of its kind internationally) on the theft of trade secrets, and they’ve retained some key provisions on geographical indications and trade-marks that are going to complicate efforts by countries in the region to use geographical indications like Manuka honey. So, while I’m happy to celebrate some realisation that the intellectual property chapter of the original TPP had serious problems, there is still quite a lot to dislike about what remains.

    Deborah Gleeson, Senior Lecturer in Public Health, La Trobe University,

    The list of 20 items ministers have agreed will be suspended in the re-branded TPP includes several of the intellectual property rules for pharmaceuticals that were demanded by the US but deeply unpopular amongst the other TPP countries. These rules would have made medicines less affordable in the Asia-Pacific region. There is no doubt that suspension of these rules is a positive development. But simply putting them on ice for later implementation if the US re-joins the accord could just mean delaying their effects until a later time.

  16. Stephen Fitzgerald

    In a nut shell, this is evidence of precisely what I outlined in the headline article – “The predators behind the Trans-Pacific Partnership”. As pointed out by Fergus Hunter “It’s a bad deal, devised in a backroom and designed for a boardroom”. You can’t trust corporates.

  17. Danz

    Thanks for your work on this topic Stephen.

    In 2017 the Joint Standing Committee on Treaties #165 – Inquiry into TPP Agreement delivered its report. Recommendation 2:
    “The Committee recommends that the Australian Government consider implementing a process in which independent modelling and analysis of a proposed trade agreement is undertaken by the Productivity Commission, or equivalent organisation, and provided to the Committee alongside the National Interest Assessment (NIA) to improve assessment of the agreement.

    Government response: The GOVERNMENT DOES NOT ACCEPT THIS RECOMMENDATION.

    It’s as if putting the national economy first is a foreign concept to both LNP and LABOR, an incomprehensible theory of no possible use. What a pack of ignorant leaders we have.

  18. Stephen Fitzgerald

    It confirms once again that we live in a world dominated by the rich and powerful to the detriment of what’s fundamental to democracy and the best interest of the majority. We need to devise a way to protect our elected representatives from such overwhelming influence. The first step, of course, is to be aware of it – Thanks Danz.

    I suppose we are all human and the difference between Right and Left is that the Liberals hand corporates whatever they want on a silver platter but, Labour puts up some degree of resistance. The corporates need to apply massive pleasure, in that direction, to get Labour to bend. I guess the consolation is that knowing how the world works, makes it easier to navigate.

    Fundamentally, I believe Labour is better for society and the majority of Australians. Once they are back in power we need to push hard for corporate regulation and the federal corruption watchdog promised by Shorten if he wins the next election. Keep in mind, it’s not our elected representatives that are the problem, it’s corporates collusion, corruption and power play, in the political arena, that needs to be contained.

  19. David Bruce

    If the TPP is ratified by Australia, it will not be possible to repeat the processes used to take on the Tobacco Industry in Australia. The packaging with the dire warnings about smoking will not be permitted and huge penalties for loss of income can be applied!

    Having worked most of my life in corporations, I know that many people in politics and public life have been compromised and are open to blackmail for videoed indiscretions. It is the way most multinational corporations function, using the carrot and the stick to get their way.

    I was wondering if the corporations will become the new masters in a return to a type of feudal system from olden times?

    (Feudalism describes a set of reciprocal legal and military obligations among the warrior nobility revolving around the three key concepts of lords, vassals and fief – Wikipedia)

  20. Stephen Fitzgerald

    Thanks David – Food for thought… I’m a big thinker and along with many scientists who view the universe, you can interpolate back to a starting point and there’s plenty of evidence to back that up. In a confined space, if we interpolate forward then black holes will progressively seek out and consume matter to grow larger and larger. Becoming more powerful and able to consume more matter and each other to grow even larger.

    In this confined space universe, the end result is a few super powerful black holes that have consumed everything else. Corporations are likely to be no different if natural forces are allowed to prevail unchecked and, I can’t see that being in the best interest of democracy or the rights of the individual. History gives us countless examples of empire building and in terms of corporates it appears, from my perspective, that the process is already well underway.

  21. Stephen Fitzgerald

    Anyone who embraces the continued use of fossil fuels, to the detriment of the global climate and our environment, are blindly doing that on behalf of huge corporations.

    From where I stand, the two greatest threats facing humanity today are (1) The rampant greed of corporations and the people they serve and (2) The rampant greed of huge corporations and the people they serve.

    There needs to be onging checks and balances, regulations and controls. Corporations, like any wild animal, need to be kept on a leash.

  22. Craig Welch

    David Bruce: “If the TPP is ratified by Australia, it will not be possible to repeat the processes used to take on the Tobacco Industry in Australia. The packaging with the dire warnings about smoking will not be permitted and huge penalties for loss of income can be applied!”

    The TPP specifically disallows ISDS action related to tobacco products. The legislation will remain intact.

    Keep in mind that Government action that reduces an investor’s profit is not grounds for a dispute. It has to be demonstrated that the government breached the agreement in some way.

  23. Craig Welch

    Diannaart: “Workers wages: The French Veolia company is suing the Egyptian government over a contract dispute in which they are claiming compensation for a rise in the minimum wage.”

    I notice that your source is AFTINET. I appreciate the work that they do, but they often mis-characterise ISDS disputes to paint an entirely negative picture. This is one such.

    It’s not possible to raise an ISDS dispute simply because wages go up. If that were the case there would be hundreds of such disputes each year. In this particular case, Veolia had a contract with the city of Alexandria, specifying that if certain expenses costs relating to the project were to be increased, Veolia would be reimbursed. The minimum wage was increased, and Veolia made a claim according to their contract. Why would they not? This would be unremarkable if it was the cost of a raw material, for example. But because it was wages, it has been portrayed as “Veolia fights back at vulnerable workers” or similar. Nothing could be further from the truth. Veolia did not criticise the wage increase, or make any public statements about the increase. They just expected that a contract would be honoured. It was not.

    Veola did not get satisfaction in the Egyptian courts, so they raised an ISDS dispute. That makes sense to me.

    As it happens, they lost.

  24. Diannaart

    Craig

    I understand your argument that a contract had been broken. Would not the world of commerce be far less fraught if there was no difference between raw materials and workers?

    It’s the human factor that keeps throwing a metaphorical spanner in the works. Economic pragmatism overlooks so much in order to function on profit forever.

    Much has been invested in old methods of doing business and treating people as fodder has worked rather well for a tiny minority. This is why some governments are doing fcuk all about climate change, energy sources or a clear plan to reduce pollution; the tiny minority have spoken.

    We, the people, scientists, engineers, technicians and so on, have the solutions, technology and ability to change to an inclusive and flexible economic system. However, that means some vested interests will have less power, money and control.

    The powerful hate change.

  25. SteveFitz

    9 WAYS TO SKIN A CAT

    [1] Federal corruption watchdog
    [2] Legislate corporate controls
    [3] Power to corporate regulators
    [4] Criminal penalties for executives
    [5] Remove corporate lawyers
    [6] Outlaw political donations
    [7] Outlaw ex-politician lobiests
    [8] Abolish corporate welfare
    [9] Transparacny in government

  26. Martin Connolly

    Stephen – so pleased to see someone willing to engage with the commentors …

    I’d like to pick you up on one comment: “Understanding how the world works is essential …”
    In this respect many people are frustrated that they know Australia is a currency issuing nation, we can’t go broke in Aussie dollars.
    The upshot of this is that balancing the budget as the primary aim of government is a fools errand. Deficits are generally good for the economy. Surpluses are relly bad and can cause recessions or depressions.
    Guardian has already published articles along this line.

    Why can’t this knowledge break through?
    It’s not rocket science. It’s a description of how things actually work.
    It is called MMT and you have probably hard of it.
    But it can’t get airplay.

    Maybe because, if it did, it would change the entire economic and social debate in the country. for the better.
    Do you have any ideas? I would be happy to send links and contacts, even sit and talk.
    This single issue is probably more important than any other single political or economic issue at the moment, since it affects everything else

  27. Martin Connolly

    Stephen – I referred to Guardian in my last comment – I meant the aimn.com – oops!

  28. SteveFitz

    Martin – I was referring more to the coalition of LNP, corps & MSM on the one hand and, our lawyer driven legal system on the other.

    I always try to get back to the common denominator “supply and demand”. When there’s lots of money around the economy runs hot and with little money around we dive into depression. It needs to be regulated. You can’t do it with tomatoes but you can do it with money.

    I’m not an economist – Just an observer but, I suggest the MMT was devised by the financial industry to benefit the financial industry. Nutted out in a back-room for the board-room, as I like to say. Once we had the gold standard where the U.S. dollar was backed-up by the equivalent value of gold in Fort Knox and, redeemable in gold. Australian coins were once worth their weight in silver. MMT seemed to have worked with the U.S. printing hundreds of billions to bail out financial institutions during the GFC.

    What we have now is Intrinsically valueless plastic money used as money because of government decree. It’s about faith in the system – Our government guarantees our top four banks as TBF. As long as we believe $50 will buy us a tank of gas, it will. When we stop believing that, we will be walking. And that’s the world we live in. We can’t go back to a gold standard because there’s not enough gold.

    So the entire global financial system is based on trust and here’s the irony – If the banking royal commission is anything to go by, it’s run by criminals and, they expect us to trust them?

  29. Martin Connolly

    Stephen, apologies but I must respond, and correct some of your assertions.

    MMT was certainly not devised by the financial industry. It is merely a description of how government finances work, in most countries outside the EU. it is a specific body of economic work by a number of economists around the world, over the course of about 25 years – including descriptive analysis, economic behaviours and much more.

    The Quantitative Easing in the USA was NOTHING to do with MMT, and many people who understand MMT are appalled at this confusion. QE was a tactical response to a crisis situation. MMT is a cohesive body of economic work that has been put together over a time, by a large group of economists from a number of countries.

    The value of fiat money is that the government requires taxes to be paid in that currency. So that is where the intrinsic value lies – it has (thankfully, as you point out) nothing to do with the banking sector, and everything to do with the national government.

    There are many people far more versed in this than I:

    John Kelly, another AIMN contributor has written very good articles there about this including https://theaimn.com/?s=pay+for+it

    Professor Bill Mitchell of Newcastle University speaks around the world on the topic and has an active blog http://bilbo.economicoutlook.net/blog/

    Dr Steven Hail from Adelaide University is also heavily involved in teaching and speaking on the subject.
    One of hid videos: https://www.youtube.com/watch?v=qBpm5sVmGYc

    Overseas, one of the most active proponents is Dr Stephanie Kelton is an economist and Professor of Public Policy and Economics at Stony Brook University. She was formerly Professor of Economics at the University of Missouri–Kansas City,Chief Economist on the U.S. Senate Budget Committee an Economic Advisor to Bernie Sanders’ 2016 presidential campaign. https://stephaniekelton.com/
    She will be speaking in Sydney in November.
    https://rethink.futuretofightfor.org.au/

    Also check this article: https://www.smh.com.au/business/the-economy/radical-economic-ideas-grab-attention-amid-lowinflation-torpor-20160324-gnqhsr.html

    One of her peers in the USA is Pavlina Tcherneva, who has served as the associate director for economic analysis at the Center for Full Employment and Price Stability. Tcherneva’s work is on Macroeconomics issues, where she is conducting research in the field of fiscal policy, with a focus on full employment.

    I invite you to contact any or all of these people to learn more.

    MMT can be difficult to understand at first, as it jars with what we have heard from politicians over many decades.
    I am an engineer and so not an economist either and I came across MMT about four years ago, spent a long time thinking it can’t be true, them realised that is it, in fact, quite correct and completely consistent.

    I am happy to discuss this further, and to provide more information

  30. SteveFitz

    Thanks Martin – You have certainly opened my eyes and I’ll be looking to see what and who triggered MMT and the likely beneficiaries. There is an old school of thinking in both economics and law that leans towards money and power and, is “money flows up” oriented. It frustrates many students.

  31. Martin Connolly

    Steven – happy to keep in touch.

    Twitter @maconnolly888 might be a good place to start.

    I think some of the elements were discussed in Italy back in the days of the lira; maybe Randall Wray from the USA?
    I’ll check anyway

    Cheers

    Martin

  32. SteveFitz

    Thanks Martin – I love expanding horizons. You mentioned that the MMT was formulated by economists.

    Prominent economists are usually three things – Academics, economic advisers to government and economic advisers to world banks. One would think, that their prime objective is the economy. The way I think is, “an economy that favours who”?

    Clearly, it must favour economists but then who? The people of the land, the government of the day or financial institutions? As we have seen, a little bit of knowledge is a dangerous thing so, I’ll refrain from elaborating further.

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