www.bday.co.za

Socialists must find a way to reconcile their commitment to the poor with efficient methods of redistribution

AFTER a series of electoral losses around the world, the left is in crisis. To restore it to health, some on the left argue for a return to their parties' historical roots. Others argue that the old myths should be abandoned in favour of a bold move forward.

This debate is occurring not only in France after the defeat of the Socialists last April. It also characterises the political situation in the US after the defeat of the Democrats in last November's mid-term elections. Both parties face the same dilemma, and this is precisely my point: that the crisis confronting the left is a deep and fundamental one.

In the past, the left was equipped with its own ideology, its own economic theory. The fundamental economic mechanism that determined how the world worked was the struggle for rents between workers and capitalists. With this "us versus them" view of the world, it was not hard to rally voters, from the most disenfranchised all the way up to the salaried middle class more than enough for the left to secure electoral majorities.

But the world has changed, and the left's old view simply no longer applies. More intense competition, within and across countries, has decreased the available rents. Financial capital can cross borders far more easily, and physical capital can relocate almost as quickly. The limits on redistribution through the market are tighter: trying to appropriate the rents may lead firms to move to emerging countries, or else to go bankrupt.

This reality has taken a while to sink in, and a number of parties on the left still cannot bring themselves to acknowledge the constraints imposed by market forces. Some do, of course, none more explicitly than the UK's Labour Party, led by Tony Blair.

Others, typically old-line communist parties, have retained much of their traditional rhetoric, but this is largely for electoral consumption. They know all too well that the old nemesis, "capital", has become difficult or impossible to expropriate, yet they remain unready or unwilling to deliver the news to their constituency.

The same tension exists within parties themselves. Witness the muddled debate within the French Socialist party in the aftermath of its defeat, with the "left of the left" and the "right of the left" in a fight for control both of the party and the route by which it should eventually return to power.

And yet both available strategies doing nothing or attempting to modernise have obvious pitfalls. The old rhetoric, after all, still resonates powerfully with the most destitute parts of the electorate: minimum wage workers, the long-term unemployed and all those who feel that anything would be better than what they have now.

It also allows easier contact with fringe groups, such as antiglobalisation protesters and the most zealous greens. But while the old religion still mobilises the left, it makes it difficult to hold the centre. The middle class has lost its faith in the old rhetoric, and wherever the left comes to power, reality quickly sinks in.

Modernisation runs into the opposite problems. Public discussion of new ways to finance retirement pension plans, or of introducing a negative income tax, sounds sweet to economists of all stripes, but it does not exactly mobilise public opinion. The poor don't care. The extreme left becomes disenfranchised. The middle class likes the tone, but wonders how different the programme is from what they hear from the neoliberal right.

As the events of the French elections last spring demonstrated, when this dynamic prevails, the left loses the elections.

Shift everything I just said regarding this strategic dilemma to the right and you arrive at the problems of the US Democrats. The choice of a candidate for the next elections is about this choice, not about personalities.

Shift everything a bit to the left, and you arrive at the problems facing President Lula Ignacio da Silva in Brazil. Should he return to the old Lula rhetoric and watch capital flee the country, or try "modernity" and disappoint many of those who voted for him? With minor adjustments, the left in Germany, Italy, Spain, Portugal, and so on faces the same Hobson's choice.

So damned if you do, damned if you don't? No, or at least not quite. The feature that must distinguish the left and the right is not their respective views on the economy, but rather their stances regarding redistribution.

One of the first lessons of economics is that there is a trade-off between efficiency and redistribution. The right focuses on efficiency. The left emphasises redistribution.

A clear commitment to the poor, the sick, and the unfortunate must be the message of the left. And the means must be appropriate to realising this commitment: a combination of sustainable retirement systems, better designed unemployment benefit systems, negative income taxes, training programmes, and the like. Only by employing the rhetoric of commitment to mobilise the troops while devoting careful attention to the centre's concern with methods can the left hope to return to power.

Blanchard is chairman of the department of economics at MIT.

Feb 03 2003 12:00:00:000AM Olivier Blanchard Business Day 1st Edition Sunday 09 February 2003 BDFM Publishers (Pty) Ltd disclaims all liability for any loss, damage, injury or expense however caused, arising from the use of or reliance upon, in any manner, the information provided through this service and does not warrant the truth, accuracy or completeness of the information provided. BDFM Publishers 2002

www.globeandmail.com By DOUG SAUNDERS

Saturday, February 8, 2003 – Page F3

CAPE CANAVERAL, FLA. -- Most of the bulbs have long since burned out in the field of electric stars that covers the smoke-stained ceiling of the bar at Bernard's Surf. It has been about 40 years since Buzz Aldrin and company got tight in these red-vinyl banquettes, but it remains a popular, if seedy, hangout for the space cadets of NASA.

A week ago, this was a gloomy place, laid barren by the twin spectres of flaming wrecks and crashed economies in this company town. By Tuesday, though, moods were up and the Captain Morgan was pouring freely: George W. Bush had promised to spend $500-million more on the space agency each year, and there were signs that the local pipe dream, a nuclear-powered rocket to Jupiter costing $3-billion, would soon be approved.

The Space Coast is not the only place raising toasts to the miracle of government largesse. While Mr. Bush may speak loudly of his tax cuts, he has proved a very adept spender, emptying the public purse on all sorts of favourite friends and social crises.

This putatively free-market chief executive plans to boost government handouts to business at rates far exceeding the growth of the economy -- raising grants to farmers by 6.6 per cent annually, scientific research grants by 7.3 per cent, plus of course hundreds of billions extra to shipbuilders and other military contractors.

Government regulation, too, is back in fashion, in the post-Enron economy. Tariffs, on steel and softwood lumber, are happily defended on conservative grounds. Even the tax cuts are defended on the basis of recessionary "stimulus," a concept that sounds a lot like the interventionist ideas of John Maynard Keynes.

And this is only the United States. The hand of the state, heavy or light, has a prominent presence in the economy of every nation north of the equator. While politicians to the left and the right may argue about greater or lesser degrees of public involvement, there is no longer any talk of governments getting out of business.

This marks a dramatic change from the recent past. Mr. Bush may be on the distinct right, but his relationship to the economy is dramatically different from Ronald Reagan's or Newt Gingrich's, both of whom sought to get government utterly out of business. My initial response is to hope that Robert Nozick, who was buried almost exactly a year ago, was given a grave with plenty of rolling space.

It is almost 30 years since Mr. Nozick, a soft-spoken intellectual from Harvard, penned the words that made him the favourite philosopher of the world's most powerful governments. His life is a rare and surprising instance of an abstract academic argument bursting out of the campus to transform the world.

Mr. Nozick had been caught up in a dispute with political philosopher John Rawls, who in 1971 had transformed the world of ideas by arguing with deft and solid logic that it is possible to have a society based on radical individualism that also offers state-supported equality for everyone. This, and the school of thought it spurred, made liberalism a workable and humane alternative to socialism.

Mr. Nozick, a former leftist, applied considerable guile to the counterargument offered in his 1974 book Anarchy, State and Utopia.Only individuals, he began, can be sovereign. Governments cannot act on behalf of "society," since this does not exist except as an aggregate of individual purchasing decisions. "There is no social entity with a good that undergoes sacrifice for its own good," he wrote. "There are only individual people with their own individual lives. Using one of these for the benefit of others uses him and benefits the others."

As such, he concluded, the only morally allowable government is what he called the "night-watchman state," which provides rudimentary military protection and contract-settlement mechanisms but otherwise stays out of the way of economies and human behaviours.

It was only a few years until Mr. Nozick's reasoning exploded into the public sphere, becoming the guiding ideology of Ronald Reagan, Margaret Thatcher and a host of lesser imitators. Mrs. Thatcher, in one of her most famous interviews, managed to paraphrase Mr. Nozick quite precisely: "And you know, there's no such thing as society. There are individual men and women, there are families. And no government can do anything except through people, and people must look after themselves first."

At first, you might be inclined to think that Mr. Bush is a proponent of the night-watchman state. The government, he said on Monday, "must restrain the growth in any spending not directly associated with the physical security of the nation." But while his words may sound consistent with Mr. Nozick's ideals, his actions do not.

Among his most sizable spending boosts were in funding for education and wealth-redistributing welfare services. Vast sums are to be spent on highways, drug benefits, schools for the poor, and of course $15-billion toward AIDS in Africa.

What has happened to the night-watchman state? To find it these days, you have to look south of the equator. For true-blue libertarians, Ethiopia has to be just about a textbook case. Colombia and Venezuela are coming close, by murdering their people and their economies, respectively. It is no wonder that Mr. Nozick eventually refuted his own views, writing in support of aggressive inheritance taxes, for instance, and modest wealth-redistribution programs.

Still, he knew that his moment had passed. When Mr. Rawls died late last year, he was celebrated prominently in the media as a pioneer; his sparring partner's death, a few months earlier, was treated as the tragic passing of a brilliant but obsolete curiosity. dsaunders@globeandmail.ca

www.financialexpress.com Prachi Verma

New Delhi The contribution of Latin America, Africa and Middle East to the Indian IT exports is likely to grow by 40 per cent in the fiscal ending March 2004 to $1.16 billion from $800 million in this fiscal, according to National Association of Software and Services Companies (Nasscom).

Sunil Mehta The countries in Latin America, Middle East and Africa are showing keen interest in outsourcing their IT work to India.

“So far these countries have contributed 8 per cent of the total Indian IT exports (about $10 billion) and we expect that their contribution will rise to 15 per cent of total IT exports by 2006. Non-traditional outsourcers (besides US and UK) are clearly focusing more on India for fulfilling their IT outsourcing requirement,” Nasscom vice president Sunil Mehta told eFE.

Electronics and Computer Software Export Promotion Council (ESC), which is organising a three-day event Indiasoft 2003 in the Capital later this month, also confirmed this trend.

“There is an encouraging interest from the non-traditional countries, (that have not been outsourcing work to India so far) especially Latin America and Africa compared to previous years,” ESC director DK Sareen said.

According to him, African companies like My Computer Tanzana Ltd, Mega System Company Ltd and Matrix Consulting are looking at outsourcing their hardware and software requirement to India.

He said that countries like Chile, Brazil, Venezuela, Mexico, Singapore, Japan, Thailand, China are sending strong delegations for Indiasoft 2003.

There are over 150 foreign companies participating in Indiasoft conference starting from February 20.

Almost half of the participating companies are from Africa and Latin America, claimed Mr Sareen.

Nasscom expects Italy to contribute $50 million over the next three years to India’s IT industry.

“Indian IT companies should invest in the Italian customers and promote the concept of offshoring as there is a huge outsourcing potential for India,” Mr Mehta said.

The Italian companies are looking at an offshore development opportunity in India in areas like financial services, telecommunication, manufacturing and utilities.

“Malayasia is a good alternative location for the animation production centre as the country already has experience in this field. Indian companies could easily locate their animation production centres in this country,” Mr Mehta said.

Nasscom is expecting over 150 potential customers to participate in the Nasscom 2003 from the US, Europe, Malayasia and Asia.

“African and Middle East companies are keen on outsourcing their IT requirement in the banking sector to India,” Mr Mehta said.

santafenewmexican.com By JIMMY CARTER | Alternet 02/05/2003

Former U.S. President Jimmy Carter smiles as he visits with OAS Secretary General Cesar Gaviria, not seen, in Caracas, Venezuela, Monday, Jan. 20, 2003. - AP | Leslie Mazoch

Despite marshalling powerful armed forces in the Persian Gulf region and a virtual declaration of war in the State of the Union message, our government has not made a case for a preemptive military strike against Iraq, either at home or in Europe.

Recent vituperative attacks on U.S. policy by famous and respected men like Nelson Mandela and John Le Carre, although excessive, are echoed in a Web site poll conducted by the European edition of Time magazine. The question was "Which country poses the greatest danger to world peace in 2003?" With several hundred thousand votes cast, the responses were: North Korea, 7 percent; Iraq, 8 percent; the United States, 84 percent. This is a gross distortion of our nation's character, and America is not inclined to let foreign voices answer the preeminent question that President Bush is presenting to the world, but it is sobering to realize how much doubt and consternation has been raised about our motives for war in the absence of convincing proof of a genuine threat from Iraq. The world will be awaiting Wednesday's presentation of specific evidence by Secretary of State Colin Powell concerning Iraq's possession of weapons of mass destruction. As an acknowledged voice of moderation, his message will carry enormous weight in shaping public opinion. But even if his effort is successful and lies and trickery by Saddam Hussein are exposed, this will not indicate any real or proximate threat by Iraq to the United States or to our allies. With overwhelming military strength now deployed against him and with intense monitoring from space surveillance and the U.N. inspection team on the ground, any belligerent move by Saddam against a neighbor would be suicidal. An effort to produce or deploy chemical or biological weapons or to make the slightest move toward a nuclear explosive would be inconceivable. If Iraq does possess such concealed weapons, as is quite likely, Saddam would use them only in the most extreme circumstances, in the face of an invasion of Iraq, when all hope of avoiding the destruction of his regime is lost. In Washington, there is no longer any mention of Osama bin Laden, and the concentration of public statements on his international terrorist network is mostly limited to still-unproven allegations about its connection with Iraq. The worldwide commitment and top priority of fighting terrorism that was generated after Sept. 11 has been attenuated as Iraq has become the preeminent obsession of political leaders and the general public. In addition to the need to re-invigorate the global team effort against international terrorism, there are other major problems being held in abeyance as our nation's foreign policy is concentrated on proving its case for a planned attack on Iraq. We have just postponed again the promulgation of the long-awaited "road map" that the U.S. and other international leaders have drafted for resolving the Israeli-Palestinian conflict. This is a festering cancer and the root cause of much of the anti-American sentiment that has evolved throughout the world. At the same time, satellite observations of North Korea have indicated that nuclear fuel rods, frozen under international surveillance since 1994, are now being moved from the Yongbyon site to an undisclosed destination, possibly for reprocessing into explosives. It is imperative that this threat to Asian stability be met with aggressive diplomacy. Since it is obvious that Saddam Hussein has the capability and desire to build an arsenal of prohibited weapons and probably has some of them hidden within his country, what can be done to prevent the development of a real Iraqi threat? The most obvious answer is a sustained and enlarged inspection team, deployed as a permanent entity until the United States and other members of the U.N. Security Council determine that its presence is no longer needed. For almost eight years following the Gulf War until it was withdrawn four years ago, UNSCOM proved to be very effective in locating and destroying Iraq's formidable arsenal, including more than 900 missiles and biological and chemical weapons left over from their previous war with Iran. Even if Iraq should come into full compliance now, such follow-up monitoring will be necessary. The cost of an on-site inspection team would be minuscule compared to war, Saddam would have no choice except to comply, the results would be certain, military and civilian casualties would be avoided, there would be almost unanimous worldwide support, and the United States could regain its leadership in combating the real threat of international terrorism.

Former U.S. President Jimmy Carter is chair of The Carter Center in Atlanta, Ga., a not-for-profit, nongovernmental organization that advances peace and health worldwide. For more information, contact The Carter Center Public Information, 404-420-5108.

www.insidevc.com February 5, 2003

SOUTH KOREA

Rumsfeld considers more forces in Korea SEOUL -- The top U.S. military commander in South Korea said Tuesday he has not requested reinforcements, despite a deepening crisis over North Korea's suspected nuclear weapons development.

Gen. Leon J. LaPorte made his statement after U.S. officials in Washington said Defense Secretary Donald H. Rumsfeld is considering sending an aircraft carrier to the waters off the Korean Peninsula and adding bombers in Guam.

The moves are intended to deter the North from provocations during any U.S. war with Iraq, the Pentagon officials said.

In Washington, Deputy Secretary of State Richard Armitage said he had no doubt the United States and North Korea will open a dialogue.

"Of course we're going to have direct talks with the North Koreans," Armitage told a Senate Foreign Relations Committee hearing on Tuesday.

RUSSIA

Russian cargo craft docks at space station

KOROLYOV -- A Russian cargo craft docked Tuesday at the international space station, carrying fuel, food and water in a supply mission made critical by the loss of the Columbia and the grounding of the remaining U.S. space shuttles.

Maneuvering on autopilot, the unmanned Progress M-47 linked to the station two days after lifting off atop a Soyuz-U rocket from the Baikonur Cosmodrome in Kazakhstan.

The 16-nation space station has depended on shuttles to deliver most supplies. With the other shuttles grounded pending the investigation into the Columbia disaster, Russian missions now remain the only link to the international outpost.

IVORY COAST

Ruling party doesn't want peace accord

ABIDJAN -- Ruling party lawmakers urged Ivory Coast's legislature on Tuesday to reject a peace accord, as rebels warned they would attack the country's main city rather than renegotiate the French-brokered deal.

The wrangling came as the army and rebels traded accusations of attacks -- the first since the French-brokered deal was signed Jan. 24. The claims of fighting could not immediately be verified.

Ivorian Patriotic Front representative Dalaba Zozore, reading a statement by ruling party members in the National Assembly, argued the accord "legitimizes" a 4-month-old uprising by rebels who have captured half the West African country.

ZIMBABWE

Witness says he was asked to arrange coup

HARARE -- A Canada-based political consultant testified Tuesday in the treason trial of opposition leader Morgan Tsvangirai that he was asked to help arrange a coup and the killing of President Robert Mugabe.

Ari Ben Menashe, who said he was a former Israeli intelligence agent who had once worked undercover in Zimbabwe with the approval of Mugabe's government, said he decided to set up a sting operation to record evidence against Tsvangirai.

Ben Menashe testified that the opposition Movement for Democratic Change told him it wanted to pay $10 million to the Zimbabwe Air Force commander, Air Marshal Perence Shiri, to lead a coup.

ISRAEL

Palestinian, Israeli wounded in shootings

JERUSALEM -- Palestinians seriously wounded a Jewish settler in a shooting attack in the Gaza Strip on Tuesday. Meanwhile, a Palestinian boy was critically wounded by army fire in a clash in the West Bank.

Israeli troops also demolished eight Palestinian-owned homes in the Gaza Strip, witnesses said.

The Islamic militant group Hamas claimed responsibility for the shooting at the settler in the Kfar Darom settlement. One or more attackers sneaked into the settlement early Tuesday and opened fire on an Israeli near greenhouses there, rescue and security officials said.

The attackers got away, and troops were searching the area, the army said.

VENEZUELA

President celebrates anniversary of coup

CARACAS -- President Hugo Chavez celebrated Tuesday's anniversary of a 1992 coup attempt that launched his political career while opposition leaders trying to oust him mourned those killed in the botched putsch.

Under international pressure to end Venezuela's political crisis, Chavez's government rejected an opposition proposal to shorten his presidential term and instead suggested a referendum on his rule -- though it would take place far later than the opposition wants.

About 20 Chavez supporters briefly attacked the offices of Caracas' opposition mayor with gunfire, rocks and slingshots after a ceremony marking the Feb. 4, 1992, coup bid against President Carlos Andres Perez.

PAKISTAN

At least 17 killed by exploding fireworks SIALKOT -- Shipping containers full of fireworks caught fire and exploded Tuesday, blowing in walls of a nearby school and raining fiery debris on surrounding buildings. At least 17 people were killed, including two children.

Dozens of others were injured in the blasts at a trucking depot near the town of Sialkot as the fireworks were being placed in two containers for shipment to Lahore, 60 miles to the southwest.

Officials said the fireworks had been falsely listed on shipping documents as children's toys but said they didn't yet know what sparked the explosions.

EGYPT

New trial starts for rights activist

CAIRO -- Egypt's highest court on Tuesday opened a new trial for an Egyptian-American human rights activist whose seven-year conviction for tarnishing his country's image has drawn widespread international criticism.

The trial is Saad Eddin Ibrahim's last chance to fight his conviction before seeking presidential clemency.

The 64-year-old sociology professor said any verdict that does not clear him of the charges "will simply mean that a great injustice has been done."