Day: June 11, 2024

By Rowan Parchi

An oft cited reason given for the need for the state is that it is the only means through which the poor can access sufficient welfare to relieve them from the harsh realities that can accompany their circumstances. Yet despite the promises made over many decades and the huge sums spent on state welfare programs, it is hardly clear that the needs of the poor have been sufficiently met, especially given the constant outcry for more resources and better programs. If it can be shown that in the absence of a state, purely voluntary or libertarian welfare options are just as good if not better in dealing with the problem of poverty, then this staple reason for people to assume the necessity of the state can fall away.

We already know that a large portion of the population is generally supportive of welfare. In our current state-dominated societies, large numbers of people show this when they vote for policies that redistribute wealth from some to others via state aggression. Also, in spite of the existence of such state redistribution, people even more convincingly show their belief in the need for welfare when they voluntarily donate their own wealth to the poor via private charity.

Using our current state-dominated societies as a starting point, let us see what we could expect to occur if the state and its redistributionist policies were removed from the scene and only personal freedom, voluntary association and exchange, and private charity were left as means with which to legitimately create and transfer wealth.

First, with the end of all taxation and other forms of wealth confiscation by the state, people would have more resources left at their disposal. It would then be possible for aggregate spending on charity to increase without taking away people’s;ability to continue with their other spending habits just as before.

Once the state’s;explicit or implicit claims to be the ultimate backstop for the poor are removed, people will likely be more motivated to give to charity as private charitable contributions would be seen as critical for those in need getting anything at all. A higher propensity to give to charity combined with a higher disposable income, due to the absence of taxation as pointed out above, supports the conclusion that the quantum of voluntary charity will be much greater as society transitions away from the state and toward a libertarian alternative.

As with anything that is subsidized by the state, we expect there to be more of it than would otherwise be the case. Therefore, without the state’s;subsidies for the poor we should expect to find fewer people reliant on welfare in the first place. Unlike a state’s;redistribution policies, private charity is not a guarantee or a right, and to the extent it exists it often comes with terms attached that aspiring recipients may not like, such as demonstrating a change in behavior. From this we can conclude that the level of demand for welfare will most likely be less than what would have been the case if the state’s;welfare policies had persisted.

With the state’s;various economic interventions being unwound, free-market prices and exchange would be able to predominate. As Ludwig von Mises and many other economists in the Austrian tradition have pointed out, state intervention either stops or alters free-market pricing, leading to islands of economic chaos and resources being unwittingly wasted. With unfettered free-market prices, economic calculation can take place, allowing production to be continuously optimized across the whole economy so as to achieve greater output values. This equates to more wealth being generated throughout society versus what would have been the case had the state continued its interventions. With more wealth there is more chance for the poorest to be less poor and not need as much welfare, and there is more chance for those that are not poor to have greater resources with which to give to the poor.

Once state interventions are removed, so too would the various state-imposed labor market rigidities such as minimum wages, mandated terms and conditions, unfair dismissal laws, antidiscrimination laws, and unions backed by state legislation. Without such encroachments on the free transacting of people’s;labor there would be no reason to expect that labor markets do not clear in the same way every other market clears: by prices (wages) adjusting until there is no unused capacity or involuntary unemployment among people who can offer labor that is economically valuable to others. The absence of unemployment caused by state-imposed labor market rigidities would result in less demand for welfare. Also, with the output from more employed people being greater than it would otherwise have been, the wealth of society will increase, with a portion of that increase being specifically among that section of the population that would otherwise have been unemployed and claiming welfare.

As the constant threat of state confiscation of wealth (particularly through taxation) is removed, the opportunity cost of deferring consumption for the purposes of saving will decline. A higher incentive to save will likely lead to a greater pool of funds being made available for investment, driving the accumulation of capital goods and further expanding the economy’sproductive capacity, enabling greater wealth generation. Also, with a higher saving rate people will accumulate more wealth across their lives and across generations, leaving them in a better position to look after themselves when they fall on hard times and enabling them to support others in their family and their community who need help. This will further reduce the number of people that need welfare versus what would have been the case had state wealth confiscation continued.

Under a state there is typically a category of people who end up as welfare recipients that need not have been had they not had a portion of their wealth confiscated by the state in the first place. This situation often afflicts middle class households in high tax jurisdictions who find themselves reliant on state handouts of one form or another in order to compensate for their loss of spending power due to the high taxation. Needless to say, this category of people would now be left alone and not end up needing welfare to the same extent, thus reducing the total demand for welfare once the state is removed.

While corruption and misallocation of funds can occur in private charity, the voluntary nature of its funding sources means that typically once such abuses are found they are either addressed or the charity’s;access to funding rapidly diminishes. A state redistribution system in contrast is funded by the forced confiscation of wealth, so despite abuses it can continue to exist for as long as the state remains in power. Once the state’s;redistribution system has been shut down, we could therefore expect the remaining private welfare spending to be more efficient at distributing resources to those in need.

Finally, consideration should be given to the quality of the welfare under redistribution versus private charity. Given that charity comes ultimately at the discretion of individual’s;allocations of their own private resources and gets to those in need via decentralized charitable organizations, donors are able to direct their funds to organizations that they perceive to best serve those most in need versus state redistribution spending, which is typically more guided by political considerations and less accountable for substandard outcomes. This makes it more likely that funds directed through private charity are more effective in helping the poor.

The above exploration of the changes we could expect as the state is removed from the scene;gives us reasons to expect that more wealth will be generated, some of this increased wealth will end up in the hands of people who otherwise would have been welfare recipients, a greater propensity to give to private charity will exist, a greater incentive to avoid being in need of welfare will exist, welfare via private charity will involve less corruption and misallocation of funds, and welfare via private charity will likely be qualitatively superior to state redistribution as a means for helping the poor.

While we cannot conclude that all people in poverty in a libertarian society will be perfectly taken care of all the time, we note that this is certainly not delivered under our current state-backed redistribution systems. What we can conclude is that whether it is taking care of the young, the old, the sick, the hungry, the homeless, the uneducated, the criminally convicted, those with mental and physical disabilities, those who are unprotected from aggressors be they local or foreign invaders, and anything else that may cause people to be in need, there would be private charitable institutions firmly embedded, effective, and funded in a libertarian society to drive toward ever better outcomes for the poor. The need for welfare should not be seen as a reason to support the existence of the state.

• About the author: Rowan ParchiI has worked in financial markets since 2002. He is currently Executive Director and Chief Capital Officer of Coking Coal Pty Ltd, a US metallurgical coal production company located in Kentucky and Virginia. He also holds a number of board seats including Australian Digital Holdings and Clanz. In 2019 Rowan founded Praxis Path to deliver growth businesses a combination of investment, funding, and corporate services. 
• Source: This article was published by the Mises Institute

In recent weeks, the world has been focused mainly on Russian aggression in eastern Ukraine. Meanwhile, the Kremlin has signaled that its next military moves are likely to come in Europe’s north. Moscow has indicated that it feels entitled to unilaterally change internationally recognized borders in the Baltic Sea (see EDM, May 23).

Additionally, it has suggested that it is eying Norway’s Svalbard archipelago as Russia’s most likely next military target (see EDM, May 30). Now, the Kremlin is fixating on Bornholm, the Aaland archipelago, Gotland, and other smaller islands in the Baltic Sea that belong to Denmark, Finland, and Sweden as possible targets as well. This focus is intended to intimidate the West and indicates that Russian President Vladimir Putin is ready to take action in the Baltic Sea region. Were such a campaign to be successful, it would make Russia the paramount power in the north and undermine the Western alliance (Rossiyskaya Gazeta, May 22; Octagon.media; TASS, June 3; Tsargrad.tv, June 7;Fondsk.ru, June 9; Topcor.ru, June 11).  

Those observers tempted to dismiss Moscow’s words as simply a reflection of its continuing anger about Finland and Sweden joining the North Atlantic Treaty Organization and the Western alliance’s ongoing naval exercise in the Baltic Sea miss the point. Putin is now following the template he used to advance military moves against Georgia in 2008 and Ukraine since 2014—an indication of plans for aggression in the Baltic Sea region.

Now as then, Moscow has sought to lull the West and maintain a position of official deniability by having commentators rather than officials putting forward the most radical comments. They use quotations from Western officials as well as sympathetic Western politicians and analysts to justify the Kremlin’s position. These commentators offer a version of the historical record that suggests that the West’s actions resemble what Hitler did a century ago and that plays up Western actions rather than the Russian ones that generated them. They claim this ensures that Russians will believe the West is always to blame and that Moscow has “no choice” but to respond (Kp.ru, May 24, repeating Bloomberg, May 23;Inosmi.ru, May 24; 1prime.ru, May 30; Topcor.ru, June 10).  

Russia has long been interested in the islands of the Baltic Sea. Two centuries ago, Alexander I, a tsar who is one of Putin’s heroes, said that Gotland, the largest of these islands, is “the key to the region and thus to the West”—words that some in Moscow are now echoing (Octagon.media, June 3). The Kremlin’s concern with the islands rose dramatically two months ago when the Russian Foreign Ministry denounced Swedish plans to establish a military base in Gotland as provocative. Ministry officials declared such a move would transform the Baltic Sea into “an arena of geopolitical confrontation.” The ministry pointed out that “the Russian side has frequently warned about the risks arising in connection with the military expansion of the alliance on the territories of the new member countries in the North of Europe,” and talk in Stockholm and other Western capitals about “defending the island from Russia” could lead to a military clash (RIA Novosti, April 5). (For background on the complicated history of Gotland’s demilitarization during the Cold War and Sweden’s positioning forces there even before joining NATO, see;EDM, January 31, 2017.)

That declaration opened the floodgates for Russian commentaries on what Moscow views as the militarization not only of Gotland but also of other smaller Swedish islands, including Gotska Sanden, Finland’s Aaland Archipelago, and Denmark’s Bornholm and Christiansoe. By placing military units and equipment on these territories, Moscow commentators say, the Western alliance is positioning itself to blockade St. Petersburg and Kaliningrad and launch broader attacks on Russia. Some in Moscow insist this strategy represents a revival of Hitler’s plans for aggression against Russia coordinated by the United States (Russia News, May 30;;Fondsk.ru, June 9). Such references to the Nazi past and to American perfidy are part and parcel of the Kremlin’s ongoing attacks on Ukraine and its insistence that the alleged fight against Ukrainian Nazis is part of its battle with the United States.

Not surprisingly, Russian anger about NATO and the Baltic islands rose to a fever pitch at the end of May when Stockholm hosted the third Ukraine-Nordic Summit. The Nordic countries pledged increased military assistance to Kyiv at the event and discussed expanding NATO defenses in the Baltic region. Russian commentators used the occasion to highlight how developments in the Baltic region and developments in Ukraine are linked (Topcor.ru, June 11).; Russian anger increased still further on June 7 when NATO began the largest naval exercise in the Baltic Sea ever, an exercise scheduled to last until June 20 (Argumenti.ru, June 8). Such overheated Russian commentary provoked and has fed on remarks by Swedish and Finnish officials that openly suggested Putin “has his eye on Gotland” and that the Nordics must adopt a stronger forward defense strategy to counter moves against that island and the others. The Russian Foreign Intelligence Service has highlighted and denounced such comments (Rnd.de, May 22;;1prime.ru, May 30;;Topcor.ru, June 10).

Most of the Danish, Swedish, and Finnish islands in the Baltic Sea are small, and many have few people living on them. As a result, Moscow clearly hopes that some in the West, especially in the wake of Russia’s display in Ukraine of its willingness to use force, will respond as they did earlier when such people asked who would be ready to “die for Narva,” an Estonian city on the border with the Russian Federation. Moscow failed to block NATO membership for the three Baltic countries. Its actions in Ukraine, moreover, have led Finland and Sweden to become members as well. Now, the Kremlin is adopting “salami tactics,” hoping it can push the West to make concessions about the defense of portions of these countries now that they are NATO members.

For those intimidated by Putin’s aggression and talk about using nuclear weapons, that may seem a reasonable compromise. Such concessions, however, in Svalbard and the islands of the Baltic Sea would give Putin a victory that would likely lead to the unraveling of the Western alliance over time. Consequently, what is playing out now about the islands belonging to Scandinavian countries is a far bigger deal than many currently believe.

• This article was published at The Jamestown Foundation’s Eurasia Daily Monitor Volume: 21 Issue: 89

By Prateek Tripathi

The increase in the application of AI has been rampant as of late proving that the technology’s utility is seemingly endless. However, with increasing utility comes the inevitable responsibility of regulation. Governments and policymakers around the world have been scampering to put regulatory mechanisms and frameworks in place and given the disruptive and potentially dangerous nature of the technology, this increasing sense of urgency is certainly understandable. Before we can discuss regulation, however, a much more important question needs to be answered: How does AI work?

The “black box” problem 

While AI has been around for a long time, for the most part, it was lurking in the background. The technology took center-stage with the advent of generative AI models, ChatGPT, in particular, which is what really set things in motion. This further spawned Microsoft’s Bing Chat, Google’s Bard, and various other so-called “chatbots.” All these generative AI systems are based on;Large Learning Models (LLMs), which fall under the category of;Machine Learning (ML).;

Figure 1:Building, Training, and Deploying ML. Source: Wong et al (2021).

ML proceeds in three steps: First, we have an algorithm which lays out a set of procedures. Second, the algorithm learns to identify patterns after going through vast amounts of “training data.” Once the algorithm has sifted through sufficient data, we can finally deploy the ML model, like ChatGPT. If the process seems familiar, it is because deep learning was essentially;inspired by the theory of human intelligence. Similar to how a part of human intelligence relies on learning by example and subsequently extrapolating it to new experiences, AI learns in the same manner. But just as we cannot recall what exact instance inspired our understanding of a specific concept, AI cannot inform us of what particular piece of data or inputs resulted in a specific decision. Therefore, AI works essentially as a “black box,” implying we feed in the input and get a certain output but we cannot examine the system’s code or the logic that produced the output. As a result, in many cases the precise reasons why LLMs behave the way they do, as well as the mechanisms that underpin their behaviour, are not known,;even to their own creators.

LLMs are inherently expensive endeavours, requiring processing of substantial amounts of data. This is essentially why;industry has overtaken academia;in creating machine learning models over the past decade. The difference is that while academia is much more open to releasing the source code for their models, this is not the case with corporate entities. The codes for applications like OpenAI’s ChatGPT are not public as of yet, and there is little chance that they will be in the future.;;

Any of the three components;of an ML system can be hidden, or in a black box. As is often the case, the algorithm is publicly known, which makes putting it in a black box less effective. So, to protect their intellectual property, AI developers often put the model in a black box. Another approach software developers take is to obscure the data used to train the model—in other words, put the training data in a black box.;;

Consequences of the black box approach 

Using the black box approach leads to a multitude of problems. Potential flaws in the datasets being used to train AI models are obscured. This further leads to a lack of accountability.;For example, consider an ML model determines that a person does not qualify for a bank loan. If the algorithm being used is inside a black box, there is no way for the person to find out the reasons why they were rejected and hence, they are essentially incapable of rectifying them.;;;;;;;

The black box approach also makes ML models inherently unpredictable, and difficult to fix when unwanted outcomes are obtained. This can have potentially lethal consequences, particularly when it comes to the military domain. There have already been instances where this has been the case. For example,;the US Air Force reportedly conducted a simulated test;in which an AI-powered drone was ordered to destroy an enemy’s air defence systems and ended up attacking anyone who interfered with that order.;

The fundamental problem with AI regulation 

Historically, the core issue with regulating emerging technologies, like the internet for example, has been their unpredictability, stemming from the fact that there was simply no way of knowing how society would utilise them. However, what we did have was a firm understanding of how they worked. The problem with AI is dual. Not only is there the aforementioned problem of uncertainty over how the technology will evolve, this is compounded by the lack of a fundamental understanding of how it works. When it comes to ChatGPT for instance, society has been essentially;following a black box approach, since we are oblivious to its internal workings.;

The quintessential requirement for any technology to be regulated is a good understanding of how it actually functions. When it comes to AI, and Generative-AI in particular, this is a fundamental problem. The;recent upheaval;at OpenAI amid ethical concerns over the rapid advancement of the technology further corroborates the point. Regulation cannot be effective if the object in question is not fully understood. The uncertainty and mystery surrounding AI stems in large part from a large-scale ignorance on its actual working, and this needs to be rectified as soon as possible for any future regulation to be effective.;

While the;EU AI Act;passed earlier this year does state the need for transparency and accountability, particularly in case of high-risk AI systems,;it is not clear regarding;who will be directly responsible for implementing these obligations and to what extent. It is also sufficiently;vague in its provisions relating to training data, which can be potentially exploited by Big Tech corporations like OpenAI.;;;;;;;;;;;;;;;;;;;

The pre-requisite for AI regulation: Opening the black box

Up until recently, ML models were used for low-stake applications like online advertising and web searches, and their inner workings were not of much consequence. With the recent boom of generative AI, however, they have pervaded into almost every aspect of our lives, making it vital to open the hood and look inside the black box.;

Interpretable models;offer a more transparent and possibly, a more ethical alternative to black box models. These are also known as “glass box” models. An AI glass box is a system whose algorithms, training data and model are all available for anyone to see. Furthermore, the field of “explainable AI” (XAI) is working to develop algorithms which though may not necessarily be glass box, but may at least be better understood by humans. XAI techniques like;LIME;(Local Interpretable Model-Agnostic Explanations) and SHAP (Shapley Additive Explanations) are some of the tools being used to enhance the interpretability of AI systems.;;;;

There is a;widespread belief;that the most accurate ML and deep learning models must be inherently unpredictable and complicated. This assumption has been proven to be false on several occasions, such as the;Explainable Machine Learning Challenge;held in 2018. Interpretable and glass box models have been;shown to be as effective;as black box models in several different cases. And while the EU AI Act is a step in the right direction, and the scrutiny of Big Tech companies by regulatory institutions;has been increasing, more effort is required in this direction. It is difficult and highly impractical for any AI regulation to be effective if the technology in question is hidden behind black boxes, be it training data or the algorithm itself. ;

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• About the author: Prateek Tripathi is a Research Assistant at the Observer Research Foundation.
• Source: This article was published by Observer Research Foundation

A few months before the coronavirus shut down the world, Chile exploded against neoliberalism. A World Bank economist, Sebastian Edwards, was on the ground to record the rebellion:

“On Oct 18, 2019, and to the surprise of most observers, massive protests erupted     throughout the country. Demonstrations were triggered by a small increase in metro fares—thirty pesos, or the equivalent of four cents of a dollar. But the rallies were about much more than the fare increase. Hundreds of thousands of people marched in several cities and demonstrated against the elites, corporate abuse, greed, for-profit schools, low pensions, and the neoliberal model. Demonstrators asked for debt forgiveness for students and free universal health services.“

Having done my dissertation on Chile over 40 years earlier and participated in the internationational solidarity against the dictator August Pinochet, who subjected the country to both neoliberal transformation and massive repression, I was elated. I even entertained the idea that the rebellion in Chile could be the spark for a global revolt against neoliberalism, much like the Bolsheviks thought their seizure of power in Russia would trigger the socialist revolution in Europe. But that fanciful thought was quickly shelved. Despite the international coverage of events there, Chile stood alone.

But not in vain: an anti-neoliberal president, Gabriel Boric was elected president in 2021 and neoliberal policies are now being rolled back in that country, though in the teeth of strong opposition from the local elite, technocrats, foreign investors, and the multilateral agencies.

So the obvious next question: why, despite its obvious failures, has neoliberalism not provoked similar rebellions in other parts of the global South?

A Rebellion Overdue

One thing I can say is that it’s long overdue.

Take the case of the Philippines. After 45 years, we are an economic wasteland, except in the eyes of our elites and technocrats. The poverty rate stands at 25 percent of the population, despite efforts to doctor the statistics, whereas in China, it’s estimated by the World Bank at two percent. The Gini coefficient, which measures inequality, is at .50, one of the highest in the Global South. Owing to our economic managers’ push during the Fidel Ramos presidency to bring down tariffs on imports to 5 percent or less, our manufacturing is nearly gone. Elimination of quotas on agricultural imports, including rice, as demanded by the World Trade Organization, has led to nearly all our key agricultural lines being dominated by imports, mainly from the United States and the European Union. With manufacturing dead, agriculture dying, business processing operations (BPOs) and services unable to generate a significant number of new jobs domestically, our work force is left to scurrying abroad in search of decent, non-dead-end jobs. Without the $37 billion in remittances they send back annually, the economy would be dead in the water.

If it were just a case of objectively documenting the devastating impact of neoliberal policies, our side won the battle as early as the 2000s, with detailed studies like Focus on the Global South’s;The Anti-Development State: The Political Economy of Permanent Crisis in the Philippines. There was even a finance secretary who admitted that there’s “an uneven implementation of trade liberalization…which has killed so many local industries.” He was ignored. The list of industrial casualties included paper products, textiles, garments, ceramics, rubber products, furniture and fixtures, petrochemicals, wood, and petroleum oils. It did not matter.

Disregarding the facts, the neoliberal machine ground on. Under Rodrigo Duterte, the rice quota was eliminated in favor of “rice tariffication,” the foreign investment act was liberalized, and retail trade was further opened up to foreign investors. Under the Bongbong Marcos, Jr administration, there is again the perennial push by the neolibs to eliminate the nationalist provisions of the 1987 Constitution in order to make reversal of 45 years of neoliberal initiatives impossible.

Albert Einstein defined insanity as doing the same thing over and over and expecting different results. What better description is there of the psychosis that has our economic managers in its grip?

The Matrix

Neoliberalism seems impermeable to the facts. The theory is that markets are efficient, and privatization, deregulation, and liberalization will bring about the best of all possible worlds, so if the facts don’t fit the theory, so much the worse for the facts. The image that has haunted me is one from the movie;The Matrix, where human beings are plugged into a system that has them dreaming of a pleasant alternate reality while their bodies are being sucked dry of the nutrients and energy to feed alien beings.

Our Matrix is the neoliberalism that converts the country into an economic disaster zone while the people are distracted by the dream of a land of milk and honey that will be delivered by untrammeled market forces. Like the promise of resurrection in the Bible, this state of grace, we are told, will come to pass. We just need to have faith.

So if reason and the facts are on our side, why have we not been able to unplug Filipinos from the neoliberal dream? Why has neoliberalism become so “naturalized,” or seen as the natural order of things? I have long pondered this and come up with a number of explanations.

Explaining Neoliberal Hegemony

First, for a long time, corruption, especially in the form of crony capitalism under the dictator Ferdinand Marcos, Sr was seen as the main reason for the underdevelopment of the country, and, with its emphasis on the market instead of politics as the driver of the economy, neoliberalism was seen as an “antidote” to corruption. The government’s presence in the economy, especially its regulatory apparatus, was, in this view, the primordial source of corruption, with businesses seeking advantage, not through market competition, but via seeking special favors from officials in return for bribes.

Second, neoliberalism was not simply an external imposition. It was internalized by a whole generation of Filipino economists and technocrats who studied at U.S. universities or worked at the World Bank and International Monetary Fund at a time that Keynesianism had been displaced as the reigning economic paradigm, its credibility undermined by its failure to address the stagflation that hit Western economies in the 1970s. With its worship of the market, neoliberal ideology became synonymous with economics.

Third, the; country’s elites were unified in support of neoliberalism, with no “national bourgeoisie” around to break the consensus. The prominent role of World Bank and IMF-backed technocrats did not mean that the country’s economic elites did not play a role in promoting and institutionalizing neoliberalism. That there was wider ruling-class support for neoliberalism was evidenced by the support for it by representatives of the influential Makati Business Club, which brought together influential domestic corporate elites like the Zobels and foreign transnational corporate elites. Their support could be counted on so long as neoliberal policies did not include initiatives to demonopolize the sectors these elites dominated, such as land, real estate, and banking and finance. Neoliberal measures were mainly focused on tariff reform, weakening labor, deregulation, and privatization, so the oligarchy found them non-threatening. And, of course, those sectors of the economic elite dependent on foreign capital were all for more investment liberalization. When it came to taking a leading role in ideologically promoting neoliberalism, however, the corporate elite left that task largely to the technocrats and economists, though the Makati Business Club would occasionally weigh in at strategic junctures.

Fourth, there was, for a time, no credible alternative to neoliberalism as a paradigm after the fall of socialism and the discrediting of Keynesianism. It was only in the mid-1990s that the developmental state model, which attributed a central role to the state in the success of Japan, South Korea, and Taiwan, offered an powerful alternative paradigm. But being mainly advanced by political scientists, like Chalmers Johnson or Alice Amsden, it did not register in the line of vision of Filipino technocrats and economists in ideological thrall to the neoliberal orthodoxy.

These circumstances may help explain why even after its being discredited by the 2008-09 global financial crisis and its multiple failures to deliver on its promises locally, neoliberalism remained the default mode in economic policy-making. To be fair, there were ;Filipino economists who began to question the model privately. However, there was great reluctance to publicly break with it since that would endanger professional advancement.

But are these reasons enough to explain the failure of our critique to connect with the people? There seems to have been a bigger explanation, and that is, our side was debating on the basis of facts and rationality, whereas our antagonists were coming from a stance of faith and revelation, with their revealed truth being the Friedrich Hayek-Milton Friedman bible. It was the old Reason versus Revelation debate, but in a secular guise.

Seattle and the Primacy of Action

In thinking about how to break out of this conundrum, I remembered how the events in Seattle in December 1999 that broke the global elite consensus around globalization and neoliberalism might have some lessons for us.

In the decade prior to Seattle, there were a lot of studies, including UN reports, that questioned the claim that globalization and free market policies were leading to sustained growth and prosperity. Indeed, the data showed that;globalization and pro-market policies were promoting more inequality and more poverty;and consolidating economic stagnation, especially in the global South. However, these figures remained “factoids” rather than facts in the eyes of academics, the press, and policymakers, who dutifully repeated the neoliberal mantra that economic liberalization promoted growth and prosperity. The orthodox view, repeated;ad nauseam;in the classroom, the media, and policy circles, was that the critics of globalization were modern-day incarnations of Luddites, the people who smashed machines during the Industrial Revolution, or, as Thomas Friedman disdainfully branded us, believers in a flat earth.

Then came;Seattle. After those tumultuous days, the press began to talk about the “dark side of globalization,” about the inequalities and poverty being created by globalization. After that, we had the spectacular defections from the camp of neoliberal globalization, such as those of the financier George Soros, the Nobel laureate;Joseph Stiglitz, the star economist Jeffery Sachs, and many others.

True, neoliberalism continues to be the default discourse among most economists and technocrats globally, though many only pay it lip service. But a decade before the 2008 financial crisis, it had already lost much of its credibility and legitimacy. What made the difference? Not so much research or debate but action. It took the anti-globalization;actions of masses of people in the streets of Seattle—which interacted in synergistic fashion with the resistance of developing country representatives in the Sheraton Convention Center and a police riot, to bring about the spectacular collapse of a WTO ministerial meeting—to translate factoids into facts, into truth. ;Seattle had both real and ideological consequences.

Seattle was what the philosopher Hegel called a “world-historic event.” Its enduring lesson is that truth is not just out there, existing objectively and eternally. Truth is completed, made real, and ratified by action. In Seattle, ordinary women and men made truth real with collective action that smashed an intellectual paradigm that had served as the ideological warden of corporate control.

Facts Are Not Enough: The Challenge to Gen Z

Seattle’s impact in the Philippines was limited. Contrast that with its impact in Chile, which was not only the first country to be subjected to thoroughgoing neoliberalism, but where it had been imposed by massive repression, unlike in the Philippines where it was portrayed as “liberating” after the crony capitalism of the Marcos period. Moreover, while Seattle was inspiring, it was mass action that made the difference in weakening the hold of neoliberalism.

The 2019 Uprising had its roots in the massive protests against the ;privatization of the educational system in 2006, which saw the participation of hundreds of thousands of high school students. The Chilean millennials then took that spirit of rebellion to other areas, like transport, industry, the mines, and social security over the next 13 years. Political mobilization in disparate areas were brought together under the slogan of ending neoliberalism. It was an approach that demanded not merely the repeal of specific neoliberal policies, but the dismantling of the whole neoliberal paradigm governing the economy. By 2019, the situation was ripe for revolt, and one of the leaders of the mass uprising was a millennial, Gabriel Boric, who would be elected president in 2021, at the age of 36.

Our side has the arguments and the facts, which is why neoliberal economists and technocrats have consistently refused to engage us in debate. But facts are not enough. Facts need a mass movement to convert them into truth. That is the lesson of Seattle and Chile. Will Gen Z, which the events in Gaza have awakened, also assume the role of Neo, the hacker played by Keanu Reeves, and lead the effort to unplug our people from the neoliberal Matrix, in the Philippines and elsewhere?

• This article was published at FPIF

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1. Iran election: Hardliners dominate presidential candidates  BBC.com
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3. Iran’s elections could give rise to another military coup  The Hill

By John Lee and Lavina Lee

The United States, Australia, and other allies have spent decades downplaying the prospect of conflict with the People’s Republic of China (PRC), offering Beijing incentives and concessions to assuage its ambitions, and managing their differences with China by seeking to deescalate tensions when they arose. In more recent times, when there is an emerging consensus that the decades-long approach to China has failed, policymakers have elevated deterrence as the urgent priority.

This report makes the following key points. First, the case for urgency in the context of deterring Chinese force against Taiwan is clear.

Second, deterrence of China is necessarily a dynamic and constant activity rather than a static one. Proponents of the latter approach have largely based it on deterrence by denial, which seeks to convince China that it cannot achieve its military objectives by force. In contrast, a dynamic deterrence approach seeks to arrest and turn back China’s creeping assertiveness and coercion. Rather than metaphorically gathering the sum of one’s forces at the gates of the castle to persuade the adversary that the final battle is unwinnable, it is better to condition China to recalculate the strategic usefulness of its constant coercion and aggressive probing.

Third, if China keeps prevailing in the gray zone, always controlling the pace and nature of escalation, deterring Beijing from taking the final step over the red line becomes more difficult.;Gray zonerefers to Chinese moves to achieve its political objectives, including through confrontational or military means, without triggering a military response from its adversary. Just as China seeks to condition the US and its allies to accept and internalize Chinese aggression, they need to condition China to internalize the reality that it will bear increasing costs if it continues its coercion of Taiwan and will suffer unacceptable costs should it cross that red line.

In this sense, the authors believe that treating deterrence as a static rather than as a dynamic or constant activity weakens a deterrence-by-denial approach as the US and its allies lose ground tactically and psychologically. This denial approach also increases the chances that Beijing will conclude that the US and its allies lack the requisite resolve and stomach for a fight should China ever cross the red line of launching a direct military attack against Taiwan.

Fourth, given Xi Jinping’s centralization of power and decision-making when it comes to forming objectives and strategy in the Chinese system, efforts to deter China should focus on ways to specifically deter Xi, that is, to change his personal calculations. He has demonstrated that other leaders can put him under pressure and that he will change direction quickly and decisively when he feels sufficient pressure.

Fifth, the US and its allies need to impose costs on the PRC to change Chinese calculations when it comes to coercion and aggression in the gray zone and, more broadly, to condition Beijing to expect a cost when it engages in coercive or aggressive activities. These costs should be nonmilitary to avoid overly dangerous kinetic escalation.

Sixth, the US and its allies need to get to the point where China, and other regional countries, expect ongoing cost imposition retaliations from them. Just as China benefits from a situation in which other countries have normalized and internalized Chinese coercion and aggression, other countries need to accept US and allied cost imposition retaliation as a fait accompli and part of the strategic and tactical architecture in the region.

Finally, costs should maximize the political pressure on Xi to compel him to reassess and recalculate. Each tit-for-tat cost that the US and its allies impose on China should incrementally increase damage to Xi’s political and economic objectives and plans. At the same time, they should send clear signals to Xi that in the event of an invasion of Taiwan, the US and its allies will consider extreme measures that could lead to immense social and political instability for the Chinese Communist Party (CCP).

About the authors:

• John Lee is a Senior Fellow at the Hudson Institute
• Lavina Lee is a Senior lecturer in the Department of Security Studies and Criminology at Macquarie University, Council of the Australian Strategic Policy Institute 

Source: This article was published by the Hudson Institute

At least several hundred people are in prison in Tunisia solely for writing checks they were later unable to pay, Human Rights Watch said in a report published today. The practice amounts to imprisonment for debt, which violates international human rights law, and which destroys families and businesses.

In the 41-page report, “‘No Way Out’: Debt Imprisonment in Tunisia,” Human Rights Watch documents the consequences of Tunisia’s archaic legislation on checks with insufficient funds. The law, in addition to sending insolvent people to prison, or to live in hiding or exile, fuels a cycle of indebtedness and reduces entire households to lives of hardship. In the context of Tunisia’s current economic crisis, the authorities should urgently replace the legal provisions that allow for debt imprisonment with legislation that distinguishes between willful refusal and genuine inability to pay.

“Imprisonment for unpaid debt is an anachronism and is both cruel and counterproductive to ensuring that creditors recover their due,” said;Salsabil Chellali, Tunisia director at Human Rights Watch. “When debtors remain free, they have the possibility of earning income to gradually repay their debts, while supporting their own households.”

On May 22, the Prime Minister’s Office announced in a;statement;that the Council of Ministers had approved a bill to amend legal provisions on unpaid checks, which suggests reduced prison sentences and financial penalties, and provides for alternatives to prison, among other measures, the statement says. The;bill;has been submitted to the Assembly of People’s Representatives for debate.

Human Rights Watch documented the cases of 12 people prosecuted for unpaid checks, including people imprisoned and others living in hiding or in exile.

Although originally conceived as a means of payment, checks in Tunisia are in practice widely used as a means of obtaining credit, especially in the commercial sector where they enable entrepreneurs to secure commercial goods or services in exchange for a check they provide that is to be cashed later, at an agreed-upon date.

Given the difficulties faced by micro, small, and medium-sized businesses in accessing bank financing due to the lack of collateral or the bank’s financing conditions, many in the commercial sector rely on this practice, known as the “guarantee check.”

When people who have issued “guarantee” checks are unable to later pay them, they risk imprisonment, as an unpaid check is considered a criminal offense punishable by up to five years in prison under Tunisia’s;Commercial Code. While according to the;government, 496 people were imprisoned for unpaid checks as of May 2024, a business association that focuses on this issue, the National Association of Small and Medium-Sized Enterprises,estimated;that this number is closer to 7,200 people, and that the authorities are seeking thousands more for unpaid checks. Such prison sentences are cumulative.

Those imprisoned often face stigma, and the lack of income while they are in prison or trying to escape prosecution can affect the enjoyment of their human rights, including access to basic services such as health care, housing, or education.;Debt-induced economic woes may be compounded by the shortcomings of Tunisia’s;public services;and;social security;system.

By Jocelyn Chey

On 5 February 2024 Australian citizen Yang Hengjun was handed a suspended death sentence by a Chinese court for alleged espionage. The sentence was a setback for China–Australia relations, which have otherwise stabilised and even somewhat improved in 2024.

Commentators have speculated that the sentence was a deliberate affront to Australia, either by security agencies or by the central government. But death with reprieve is becoming more common in China following;international condemnation;of the high rate of death sentences. It is most likely that domestic politics and the Chinese legal system determined the outcome in Yang’s case. If it was intended as a rebuff to Canberra’s somewhat tentative stabilisation of diplomatic relations, it had the opposite effect, as it;greatly shocked;the Australian public.

The verdict of the Beijing No. 2 Intermediate People’s Court was issued in public and witnessed by representatives of the Australian Embassy, but little information on Yang’s alleged crime or the reasons for the court decision has been revealed. His 2021 trial was held behind closed doors since it allegedly involved security matters and Australian Ambassador Graham Fletcher was denied access to the proceedings.

Yang Hengjun had worked for more than 10 years for the Chinese Ministry of State Security, including in Hong Kong and Washington. He may well have been engaged in spying for China in some form, but he may also have exaggerated his role. It is not known whether he continued to work for China after moving to Australia or whether he was a spy for another country.

He did publish a series of Chinese-language novels concerning a double agent that might have drawn on his personal experience. Former foreign minister Marise Payne;stated in 2021;that Yang was not working for Australian intelligence, a rare public denial of such cases. The Chinese court that found him guilty of espionage apparently did not link him to Australian intelligence. Yang himself consistently pleaded not guilty.

Yang’s doctoral thesis at the University of Technology Sydney discussed what his supervisor, Feng Chongyi,;has called;‘the complicated information warfare between the internet and the CCP regime’. He later engaged in cross-border trade between China and the United States. Having moved to New York and become a widely followed pro-democracy blogger, he took up;daigou;exporting — a widespread practice that is sometimes illegal and sometimes exploits legal loopholes in the Chinese tariff regime.

All these activities may have led to Yang’s detention by Chinese authorities during a visit to China in 2019, but it was espionage that led to his trial and death sentence.

According to Amnesty International, China issues;thousands of death sentences;every year, more than the combined total for the rest of the world. Public opinion surveys in China confirm widespread support for the practice, while international human rights organisations and many foreign governments condemn it. Capital punishment applies in cases ranging from murder to corruption and drug trafficking. Most are serious violent and non-political offences, but political crimes such as endangerment of public security and espionage can also invoke the death penalty.

China’s 2023 revised Counter-Espionage Law reflects growing concern over national security in a period of growing international tension, competition and hostility. As talk grows of;decoupling between China and the United States, the activities of the China-based offices of US firms have come under suspicion.;Management consulting firm Bain, the Mintz Group and Capvision have all been raided and have had their staff detained.;The new law stresses the need for vigilance but is vague about the exact scope of risks.;At the street level, foreigners feel that they are often viewed with suspicion.

Weasel words about state secrets, foreign threats and national security are not exclusive to China but are more dangerous when trotted out by a government agency and not open to debate or reason by an outside arbiter.

This is the case with the Chinese legal system, since the judiciary is not independent of the government and police, judges and magistrates are;all employed by the state;in a one-party system.;The Chinese Communist Party’s Political and Legal Affairs Commission, in its national and subsidiary layers, ultimately controls the legal system and its personnel.;Defence lawyers exist but have limited roles compared with their counterparts in the West. Branches of the Communist Party ensure that government directives and national priorities are observed. This is particularly the case when national security is concerned.

The West is of course spying on China. At the same time, concerns are growing over Chinese espionage in Europe, the United States and even Australia. Revelations and press reports stoke mistrust on both sides which in turn affects life and death decisions for those caught up in this murky world.

Yang Hengjun’s sentence for espionage was suspended and may be commuted in the future. That moderation probably owes a good deal to hard work by Foreign Minister Penny Wong and departmental officials, and to the improvement in bilateral relations.

• About the author: Jocelyn Chey is Visiting Professor at the University of Sydney. She was formerly Australia’s Consul-General to Hong Kong.
• Source: This article was published by East Asia Forum

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