Failures – exposed, reflected upon, considered

August 2006. Although hostilities between Hezbollah and Israel had been raging for nearly a month, both sides waited for a green light from the Organization of the Islamic Conference (OIC) special session on 3 August in Malaysia before demanding an United Nations Human Rights Council (UNHRC) special session on Lebanon. There was no debate, elaboration or explanation. The special session represented a series of monologues and declamations in complete isolation from the outside world. The passed resolution condemned Israel unilaterally without the least reference to Hezbollah attacks on civilian targets in northern Israel. Only a paragraph added by Pakistan to the initial draft urged all the parties involved to respect the rules of international humanitarian law.

This was not the end of the story. The HRC session was held the same day that the Security Council (SC) was adopting the resolution 1701 calling for a cessation of hostilities (in a glaring breach of Article 12 of the UN Charter, which forbids the GA to make recommendations w.r.t. a dispute at hand while the SC is holding a session about that dispute).

Issues related to human rights have historically been (mis)interpreted and disregarded during the entire human history, but the WW2 was the last straw. The idea, shortly after the inception of the UN, to establish an international body, United Nations Commission on Human Rights (UNCHR), responsible for monitoring and reporting on human rights issues prompted all the nations assembled in 1948 for a GA session to sign a founding text, the Universal Declaration of Human Rights, arguably the Most Translated Document in the world. One of its main architects, the French jurist René Cassin, had to fight for the declaration to be “universal “and not just “international.” He thought that the suffering of victims is the same everywhere. The Declaration was drafted not only by European jurists but also a Lebanese diplomat, a Chilean, and a Chinese academic, Peng-chun Chang.

Ever since its creation, the Commission has seen a mounting criticism not only for its obtusely bureaucratic practices but also for the composition of its membership. In particular, several of its member countries (Sudan, Saudi Arabia, PRC, Pakistan, Vietnam) themselves had dubious human rights records, including states whose representatives have been elected to chair the commission (Lybia in 2003). Another criticism was that the Commission did not engage in constructive discussion of human rights issues, but was a forum for politically selective finger-pointing and criticism. The desire of states with problematic human rights records to be elected to the Commission was viewed largely as a way to defend themselves from such attacks.

In 2005, Kofi Annan admitted that the commission has “cast a shadow on the reputation of the UN system as a whole.”

There was also the problem of the exploitation and sexual abuse of refugees. It was bad enough that UN “peacekeepers” were notoriously unable to protect women in UN camps in western Sudan. It was even more deplorable that UN peacekeepers themselves were part of the problem. In 2004, Kofi Annan finally admitted that there were 150 allegations of abuse by UN peacekeepers and staff in the DR Congo, including UN military and civilian personnel from Nepal, Tunisia, South Africa, Pakistan, and France. The victims were defenseless refugees — many of them children — already brutalized by years of civil strife and war.

Finally, UN attitude toward some of the most important defenders of human rights – the charities and faith-based groups – might seem weird to the uninformed. Most of the UN’s favorite NGOs use international rulings to overturn democratic protections in their home countries. The UN vision of civil society, in other words, seems to be a penumbra of activist groups that simply endorse its agenda of centralized economies, large welfare states, and massive social engineering.  Many function simply as front groups for despotic and totalitarian governments such as Cuba and Saudi Arabia.  On the other hand, organizations that work to assist AIDS orphans, eradicate human trafficking, curb prostitution, or defend religious liberty don’t get much air time.

The UNHRC was established in 2006 to replace the discredited UNCHR. Despite minimal safeguards against capture of the HRC by human rights abusers, HRC supporters, including UN High Commissioner for Human Rights Louise Arbour, were quick to declare that the new body represented the “dawn of a new era” in promoting human rights in the UN. Noteworthy to mention that the US was one of only four countries that voted against the GA resolution that created the Council.

But the hopes placed in the UN’s new guard dog were quickly dashed. When the first council was elected in May 2006, its members included countries in which the death penalty, torture, impunity, arbitrary detention and denial of basic rights seem to be essential components of their societies. The UN put Algeria, Saudi Arabia, Azerbaijan, Bangladesh, China, Cuba, Nigeria and Russia in charge of defending the Universal Declaration of Human Rights. The machinery was still brand new but it was already beginning to squeak. Some of teh other inadequacies and short-sighted decisions concerning the creation, membership and structure of the Council included:

• The Council has no criteria for membership other than geographical representation.
• The Council has no criteria for membership other than geographical representation.
• The resolution set a higher bar to suspend a HRC member—a vote of two-thirds of the General Assembly—than the simple majority necessary to win a seat.
• The Council is only marginally smaller than the Commission, from 53 members to 47.
• While the Council is charged with conducting a universal periodic review, the conclusions of the review would not prevent those countries found complicit in human rights violations from participating in the Council.

In less than two years, the council has terminated the mandates of its independent experts – only UN officials who escape the dictates of a government – in charge of monitoring the situation in Cuba, Belarus and even DR Congo, where the recent years have witnessed mass killings and flood of refugees. The Council also refused to appoint an expert for Turkmenistan, one of the most oppressive regimes in the world.

In the meantime, China, Uzbekistan, Russia and others have been maneuvering behind the scenes and struck deals to ensure that their and their allies’ interests would be safeguarded. Votes are not cast according to the seriousness of the situation in a country but according to the possible advantages that the country or its allies can offer in return. China is the champion in this game. Using its enormous economic power, it ensures that it is systematically supported by countries on whom it lavishes loans, subsidies and other material and economic advantages.

Meant to defend the universality of values, the UNHRC has so far tackled human rights issues, even the most appalling of violations, in a little better than a condemnable manner.

In 1944 at UN currency and finance conference at Breton-Woods, which aimed to redress the shattered post-war world economy, the economists have agreed that any monetary unit in the world should be backed with gold. But this resurrected gold-standard system ended in 1973 (with hugely devalued dollar) and has declared special drawing rights (SDR) in International Monetary Fund (IMF) –  SDR as world money. SDR became an international accounting unit with US dollar kept as the important currency. No one then thought to come back to any gold backed currency again. Money re-established itself again as a commodity.

Ever since,  investors known as gold bugs snapped up the metal and socked it away, betting that a colossal economic crisis would one day slam financial markets and send gold prices through the roof.

For many investors, that grim scenario is in full swing, except for one thing. After briefly hitting $1,000 an ounce, gold has fallen into a rut and shows no sign of budging anytime soon. Gold’s failure to flourish despite broad financial carnage has disappointed many of its champions. Others say it’s simply in a lull and is ripe for another big surge. But most gold buyers agree that the metal’s lackluster performance lately has been surprising.

So what happened? As the financial crisis pummels financial markets around the globe, hedge funds and other large investors who drove gold to dizzying heights earlier this year are now racing to unwind those positions to raise cash and cover huge losses. The massive deleveraging has pounded other commodities from crude oil to corn to copper.

“Gold is being pulled down by indiscriminate selling of virtually every asset,” says Jeffrey Nichols, managing director of American Precious Metals Advisors. “You could call it collateral damage.”

Instead of gold, investors are pouring money into the newest safe-haven asset, cash, pushing the dollar to multiyear highs against the Euro and the pound, hurting demand for gold among investors who buy the metal as a safe haven against inflation. Economists now warn that a world economic slowdown could bring about massive deflation of the world’s main currencies, or a sustained period of falling prices, and it’s unclear how the metal will respond in long-term. However there is some evidence that gold prices reached a turning point, a threshold, which may turn around its recent decline.

“Gold hasn’t been tested in a true deflationary crisis, so we don’t know what will happen to prices,” says Jon Nadler, precious metals analyst with Kitco Bullion Dealers Montreal.

In paralell, since 1996, another milestone event twisted the “gold vs. money” story even further. With advent of the Internet in 1994, online communication, business and information sharing has been exponentially gaining ground. Year 1996 saw birth of E-gold. The idea was simple. People would eventually believe in electronic money and use it more willingly if the money was provided/backed with gold. The funds on account of E-gold system convert in this metal by default. The payment system also provides an opportunity to back money on the account by other precious metals, such as silver, platinum and a palladium.

The history of e-gold payment system development is only twelve years old, however the company has already passed a way from conceptual idea of payment system to world service governed by American company Gold and Silver Reserve, Inc. Its one day turnover around $1500000. Such popularity is caused by the fact that in case of becoming an e-gold system user, a physical or legal person has an opportunity to perform an effective financial operations and calculations, because after funds transfer a simple redistribution of the rights to precious metal occurs while its physical location does not change. According to Gold and Silver Reserve, Inc. the e-gold gold reserves are in Brink’s Global Services, Transguard Security Services and MAT Securitas Express AG storehouses. It’s interesting to note that e-gold system isn’t tied to any currency and works with eternally liquid metals. This allows anyone to open an account free of charge. This democratic approach attracts to e-gold about 2500 accounts every day. As of July 2008, e-gold claims to host more than 5 million accounts. However, e-gold not only proved to be a favorite target of hacker attacks, but in December 2005, the US government froze its bank accounts and assets (cancelling freezing measures due to absence of inculpatory evidence one month later) and in July 2008 its directors pled guilty to charges of “conspiracy to engage in money laundering” and the “operation of an unlicensed money transmitting business.”

Nonetheless, there are optimists who are “confident that a regulated e-gold rebuilt to a more systematic specification will be less hospitable to criminals, and more attractive to mainstream business use without being less accessible to those disregarded by legacy payment systems.“

Who is Slavoj Žižek? According to the following excellent article, he is the Magician of Ljubljana.

Intellectuals possess a special kind of power. Unlike politicians, generals, or corporate bosses, they lack both the authority and the ability to impose their will directly on others. They must therefore rely on “symbolic capital,” a term the historian Shlomo Zand of Tel Aviv University explains this way:

The power of their presence in the consciousness of their colleagues, or in wider public circles, is what establishes their status. As an offshoot, their power source is predominantly the symbolic prestige capital they accumulate. This capital, in many ways similar to financial capital, is obviously not a “thing,” but an attitude. To a certain extent it may be said that the thought patterns of consumers of intellectual output are the banks in which this precious capital is accumulated. This symbolic power can be measured in academic degrees, in prizes, in the extent of mentions and attributions, in the number of publications, and in many other practices routinely employed in the stock exchange of respect and acclamation.1

By these standards, it is safe to say that a sizable quantity of “symbolic capital” is today concentrated in the hands of Slavoj Žižek, philosopher, cultural commentator, and abounding wordsmith. Since the 1989 publication of his first book in English, Žižek, a senior researcher in the faculty of social sciences at Ljubljana University, has become the hot name of the Western intellectual scene. His books, translated into dozens of languages, have earned near-unanimous acclaim: The New Yorker crowned him an “international star” and credited him with putting his mother country, Slovenia, on the world map of ideas.2 Sarah Kay, professor of French literature at the University of Cambridge and author of a critical introduction to Žižek’s work, maintains that his enormous influence on the humanities and social sciences is reminiscent of the profound impression made by French thinker Michel Foucault on these academic disciplines during the seventies and eighties.3 And Glyn Daly, a senior lecturer in politics at University College, Northampton, who published a book of conversations with Žižek, describes him as “the philosophical equivalent of a virulent plague.”4 For its part, The Chronicle of Higher Education employed a slightly less ominous metaphor to describe the unique status of the Slovenian theoretician: “Žižek,” it writes, “is the Elvis of cultural theory.”5

What would be the kind of associations that spring into mind after reading this short para? Humanitarian, egalitarian,  democracy-loving, modern-minded?

His numerous books and articles, many of which are internationally acclaimed bestsellers, leave a different impression, but only to a very attentive and intellectual reader. Below are few excerpts from a shrewd analysis of his works. In the first instance, it is important to remember how he manipulates his “dialectical reversal” to free himself of self-contradiction and mould smoothly the disagreements between his thoughts and notions into the accepted modern discourse of humanism, democracy and capitalism.

It also provides a fine illustration of the sort of dialectical reversal that is Zizek’s favorite intellectual stratagem, and which gives his writing its disorienting, counterintuitive dazzle. Torture, which appears to be un-American, is pronounced to be the thing that is most American. It follows that the legalization of torture, far from barbarizing the United States, is actually a step toward humanizing it. According to the old Marxist logic, it heightens the contradictions, bringing us closer to the day when we realize, as Zizek writes, that “universal human rights” are an ideological sham, “effectively the rights of white male property owners to exchange freely on the market and exploit workers and women.”

Nor does Zizek simply condemn Al Qaeda’s violence as “horrifying.” Fundamentalist Islam may seem reactionary, but “in a curious inversion,” he characteristically observes, “religion is one of the possible places from which one can deploy critical doubts about today’s society. It has become one of the sites of resistance.” And the whole premise of Violence, as of Zizek’s recent work in general, is that resistance to the liberal-democratic order is so urgent that it justifies any degree of violence. “Everything is to be endorsed here,” he writes in Iraq: The Borrowed Kettle, “up to and including religious ‘fanaticism.’”

His numerous pronunciations on violence are more appalling than merely representing a “different perspective”:

The curious thing about the Zizek phenomenon is that the louder he applauds violence and terror–especially the terror of Lenin, Stalin, and Mao, whose “lost causes” Zizek takes up in another new book, In Defense of Lost Causes–the more indulgently he is received by the academic left, which has elevated him into a celebrity and the center of a cult. A glance at the blurbs on his books provides a vivid illustration of the power of repressive tolerance. In Iraq: The Borrowed Kettle, Zizek claims, “Better the worst Stalinist terror than the most liberal capitalist democracy”; but on the back cover of the book we are told that Zizek is “a stimulating writer” who “will entertain and offend, but never bore.” In The Fragile Absolute, he writes that “the way to fight ethnic hatred effectively is not through its immediate counterpart, ethnic tolerance; on the contrary, what we need is even more hatred, but proper political hatred”; but this is an example of his “typical brio and boldness.” And In Defense of Lost Causes, where Zizek remarks that “Heidegger is ‘great’ not in spite of, but because of his Nazi engagement,” and that “crazy, tasteless even, as it may sound, the problem with Hitler was that he was not violent enough, that his violence was not ‘essential’ enough”; but this book, its publisher informs us, is “a witty, adrenalinfueled manifesto for universal values.”

Among other feats, Žižek is renowned for his genuine mixture of philosophy and psychoanalysis from one side and pop-culture and consumerism from the other. One of his touchstone messages is based on the famous movie Matrix, where Neo is revealed the reality by the phrase “Welcome to the Desert of the Real,” the namesake of which has become a book by Žižek.

But Zizek is not an empiricist, or a liberal, and he has another answer. It is that capitalism is the Matrix, the illusion in which we are trapped.

This, of course, is merely a flamboyant sci-fi formulation of the old Marxist concept of false consciousness. “Our ‘freedoms,’” Zizek writes in Welcome to the Desert of the Real, “themselves serve to mask and sustain our deeper unfreedom.” This is the central instance in Zizek’s work of the kind of dialectical reversal, the clever anti-liberal inversion, that is the basic movement of his mind. It could hardly be otherwise, considering that his intellectual gods are Hegel and Lacan–masters of the dialectic, for whom reality never appears except in the form of the illusion or the symptom.
…
This sacerdotal notion of intellectual authority makes both thinkers essentially hostile to democracy, which holds that the truth is available in principle to everyone, and that every individual must be allowed to speak for himself. Zizek, too, sees the similarity–or, as he says, “the profound solidarity”–between his favorite philosophical traditions. “Their structure,” he acknowledges, “is inherently ‘authoritarian’….term “authoritarian” is not used here pejoratively.
…
But to know what is worth struggling for, you need theories about struggle. Only if you have already accepted the terms of the struggle–in Zizek’s case, the class struggle–can you move on to the struggling theory that teaches you how to fight. In this sense, Zizek the dialectician is at bottom entirely undialectical. That liberalism is evil and that communism is good is not his conclusion, it is his premise; and the contortions of his thought, especially in his most political books, result from the need to reconcile that premise with a reality that seems abundantly to indicate the opposite.

Hence the necessity of the Matrix, or something like it, for Zizek’s worldview. And hence his approval of anything that unplugs us from the Matrix and returns us to the desert of the real–for instance, the horrors of September 11.

What is then the essence of his message?

Zizek endorses one after another of the practices and the values of fascism, but he obstinately denies the label.

…

“To be clear and brutal to the end,” he sums up, “there is a lesson to be learned from Hermann Goering’s reply, in the early 1940s, to a fanatical Nazi who asked him why he protected a well-known Jew from deportation: ‘In this city, I decide who is a Jew!’… In this city, it is we who decide what is left, so we should simply ignore liberal accusations of inconsistency.”

And his views on Jews?

In Zizek’s telling, that relationship is sickeningly familiar. Invoking Freud’s Moses and Monotheism, Zizek asserts that Judaism harbors a “’stubborn attachment’ … to the unacknowledged violent founding gesture that haunts the public legal order as its spectral supplement.” Thanks to this Jewish stubbornness, he continues, “the Jews did not give up the ghost; they survived all their ordeals precisely because they refused to give up the ghost.” This vision of Judaism as an undead religion, surviving zombie-like long past the date of its “natural” death, is taken over from Hegel, who writes in the Phenomenology of Mind about the “fatal unholy void” of this “most reprobate and abandoned” religion. This philosophical anti-Judaism, which appears in many modern thinkers, including Kant, is a descendant of the Christian anti-Judaism that created the figure of the Wandering Jew, who also “refused to give up the ghost.”

…

“What makes Nazism repulsive,” he writes, “is not the rhetoric of a final solution as such, but the concrete twist it gives to it.” Perhaps there is supposed to be some reassurance for Jews in that sentence; but perhaps not. For in In Defense of Lost Causes, again paraphrasing Badiou, Zizek writes: “To put it succinctly, the only true solution to the ‘Jewish question’ is the ‘final solution’ (their annihilation), because Jews … are the ultimate obstacle to the ‘final solution’ of History itself, to the overcoming of divisions in all-encompassing unity and flexibility.”

What do we make of him? His views leave no room but to call him fascist. His witty, cultured, flirting and half-joking ways conceal his real message, not unlike the real message of Plato’s Republic and the way it was and is still understood: completely the opposite, as can be seen from an enlightening analysis of Karl Popper in his (properly named)  “Open Society and its Enemies: Spell of Plato“.

“Adam Smith, the father of modern economics”, pleaded for leaving all economic activities to be regulated by market forces without any restraint from state or any other organized group. He believed, “the invisible hand” would coordinate them and run them without any violent ups and downs.”

This paragraph or one along the same lines is leveled at those who question wisdom and efficiency of so-called free markets associated with the name of Adam Smith, father of modern economics, who originally propounded the idea in his Wealth of Nation. However, many proponents of the theory seem to have either very scarce idea of the original context and intended message of Smith’s work or a specific aim to befit it to an agenda fitting their narrow socio-political and economic aspirations. Below (with few additional links) is an elaboration on misconceptions arising from a paragraph above.

Errors:

1 “Adam Smith, the father of modern economics” – a cliché of lazy economists who have not read Smith’s works and confuse quotations attributed to him with modern economics – a sub-branch of applied mathematics – that ignores people and reduces complex behaviours to only one (so-called self interest), it being easier to manipulate mathematical functions, and erects an entirely false image of Smith (the ‘Chicago’ Smith) in contrast to the real Smith (the ‘Kirkcaldy’ Smith). Smith’s legacy, with few exceptions, is at variance with what is said in his name.

2 “…pleaded for leaving all economic activities to be regulated by market forces without any restraint from state or any other organized group.”

It was not in Smith’s style to ‘plead’ for or against any particular policy. The Wealth of Nations was a report of his 12-year ‘inquiry in the nature and causes of the wealth of nations’. It was not a manifesto in support of a change in the way society was run. He pointed out the consequences of running it the way governments tended to legislate.

He was not an anarchist or libertarian, as any number of modern libertarians will tell you (see Murray Rothbard for a particularly bad tempered denunciation of Adam Smith for his manifest failings to descend to the temper of a fanatic about how society works). He accepted certain stabilising aspects of ‘modern’ 18th century society. He did not believe it was practical to change everything before you could change anything. He dealt with the world as it was by contrasting it with the way it could be; change the causes and you changed the consequences, but nothing would change if everything had to change simultaneously. The fanatic – ‘the man of system’, he called him – was ‘very wise in his own conceit’, which describes Rothbard’s polemical style accurately.

Smith was not against state intervention. Justice was administered by the judiciary, an arm of the state, and was essential to individual freedom. Defence was the ‘first duty of government’. Markets were a preferred choice where they worked; he was not against state-funded activities and he left the decision on whether they were administered by state commissioners or private contractors to a pragmatic test: which worked most efficiently, not to an ideological test for or against the decision.

Smith was not a laissez-faire philosopher; he never used the word, yet was familiar with its concepts and with its exponents among the Physiocrats. He did not believe that ‘merchants and manufacturers’ could be free of ‘all restraints’ on their behaviours – most rapidly turned into ‘monopolists’ when left alone. That did not mean he favoured state intervention, unrestrained by laws of justice.

4 “He believed, “the invisible hand” would coordinate them [‘market forces’] and run them without any violent ups and downs.”

…The so-called invisible hand was a lone metaphor he used once in Wealth of Nations (and once in Moral Sentiments), and in neither case was he talking about markets. That is a conflation from Chicago trained economists. He was talking of the unintended consequences of individual motivations. He also wrote of many counter examples where the outcomes of individual actions had malign, not benign, consequences.

The power of Smithian markets is not based on something outside them (visible or invisible) ‘co-ordinating’ them. That is precisely his point about the relationship between ‘natural’ and ‘market’ prices – markets are self-regulating and their workings are well understood. Nobody designed markets, nor ordered them into existence, nor foresaw their utility. They evolved socially over many millennia from the ‘necessary consequence of the faculties of reason and speech’ (long before markets took monetary forms). What Mishra means by ‘violent ups and downs’ is not clear, but markets can move ‘violently’ on occasion dues to external events – Smith’s example is of the dramatic rise in the price of black cloth when there is a general mourning in the UK (presumably white cloth in some countries).

Furtheron, Paul Volcker, the former Fed chairman, recently admitted that while re-reading the “Wealth of Nations” he “had just come across a curious section in the text. Smith was discussing the threat that large Scottish banks posed to the public; given how intertwined they were with the rest of the economy, the shock waves from the failure of any large bank would be devastating. His solution? Have a lot of smaller banks, so one bank’s failure could never bring down the entire economy.” He contrasted this idea with the ongoing policy in America whereby smaller banks (including Wall Street ones) are/were bought by bigger ones (Merrill Lynch acquired by Bank of America, for example) in order to to secure their survival, sustain financial markets and restore confidence in the banking sector.

One has to wonder whether the long-term benefits of having few big banks instead of numerous middle and small will not have a reverse course as predicted by Adam Smith and as witnessed during the recent financial crisis.