- Published on Tuesday, 02 September 2014 08:05
TPP, TTIP, TAFTA, TISA, ISDS? What does all this acronym soup of so-called "international trade agreements" mean for you and me? Nothing less, maintains our guest David Malone, than the Death of Democracy.
Warning us that these prosaically named and apparently benign "agreements" presage the effective takeover of nation states by global corporations, David Malone explains why he nevertheless believes there is still hope: if only we will leave behind the solutions of the past, and "fight the peace" together.
In a career spanning nearly twenty years, independent film-maker and author David Malone has produced and directed documentaries for both the BBC and Channel 4. His series Testing God was short-listed for the Royal Television Society best documentary series. In 2008, his production for the BBC, High Anxieties - The Mathematics of Chaos, was among the first documentaries to be made about the current financial crisis. He is is also author of the highly-regarded book The Debt Generation published in 2010, which critiqued the scandalous bailing out of the banks and the effete political system that allowed that to happen.
Julian Charles: Today is the 16th of July 2014, and I am delighted to welcome to the programme the independent film-maker David Malone, who, in a career spanning nearly twenty years, has variously produced, directed, written and presented documentaries both for the BBC and Channel 4. His Testing God series was short-listed for the Royal Television Society Best Documentary Series, and in 2008 his production for the BBC, High Anxieties : The Mathematics of Chaos, was among the first documentaries to be made about the current financial crisis. He’s also author of the highly-regarded book The Debt Generation published in 2010, which critiqued the scandalous bailing out of the banks, and the effete political system that allowed that to take place. David, thank you very much indeed for joining us on The Mind Renewed.
David Malone: Well, thank you for having me. It’s a pleasure.
JC: Now, we’re going to be talking today about international trade deals, which can sound extremely dull, but as you made clear in a presentation in Manchester a few weeks ago, this is actually a very important subject to us all. We are going to be looking at things like the TPP, TTIP (or TAFTA, as it’s also known), and TISA, and things like BITs and ISDSs, and all the acronym soup that members of the superclass might be hoping that we’ll perhaps find too unpalatable to swallow that we’ll just pass by without too much question.
DM: I think that’s their general idea, yes.
JC: I’m going to ask you in a minute to remind us about what these things are, but just let me say that the TPP is that very secretive proposed agreement, the Trans-Pacific Partnership, and the TTIP is also another secretive proposed Transatlantic Trade and Investment Partnership (otherwise known as the Transatlantic Free Trade Area) between the EU and the US. I’m going to leave all the rest of the decoding of acronyms to you for later on. Could I start by asking you to tell us something about your background? How is it that you, as a documentary film-maker for the BBC and Channel 4, got so concerned about this subject?
DM: Well, I work for the BBC Science Department, so what I was supposed to be doing was reporting on science and making science documentaries; and I always have. But in about 1995, I started to get very concerned about something, which very few people have heard of, called GATT, the General Agreement on Trade and Tariffs. That was the thing which eventually morphed into and created the World Trade Organisation. It was the first global organisation which said we now have the authority to enforce trade agreements upon nations and peoples. What bothered me was that, when we signed what was called The Uruguay Round of GATT, nobody heard about it. It was not reported anywhere. In fact, as far as I remember, it was passed in Parliament virtually on the nod. There was almost no discussion, and yet if you look at it, that agreement signed away huge chunks of our sovereignty. What bothered me most was that the very people who then and since have bleated on and on about how terrible the EU is, and how it’s a threat to our sovereignty, and we must regain the sovereignty back to Great Britain, were the same people who enthusiastically signed away far more of our sovereignty when they signed up to the GATT. So, basically, from that moment on I began to be very concerned about what I saw as a growing opposition between the aims of those who advocated global free market ideology, and democracy and the control of our destiny by us.
I asked if I could make a film at the time, and they said No. I made one anyway; I just disguised it as a science programme. From that point onwards I started to get very interested, but it was something that bubbled away. Then when the crisis started, like everybody else, I was just incensed. All I did then really was I decided that I would go and listen in on the conversations the day traders were having with each other. (There are various online sites where day traders talk to each other. Most of it is in trader gibberish where they’re talking about, you know, if you buy a forward contract at $1.25 with a stop-out at $0.75 and you . . .)
JC: It doesn’t mean anything to me.
DM: No, it doesn’t mean anything to anybody else. But what was interesting, Julian, is that in-between this fast and furious conversation about who should buy what at what price, what emerged was their commentary, their analysis of what was going on day-to-day in the markets. I quickly saw that what they were saying was going on was diverging rapidly at warp speed from the story we were being told on the television. Somebody had to be wrong. I realised they were sitting at their computer and betting their family’s house - their own money - on their analysis, so they had to be right. I found that what they were saying was sometimes quite at odds with their own quite self-evident ideology. These were generally Americans of the ‘red, white and blue, my country right or wrong, bomb them back to the stone age’ variety; so I didn’t have anything in common with them. But sometimes what they said surprised me, “Gosh that’s a strong thing for someone like that to say.” I realised they had to be honest with themselves: they couldn’t pretend to themselves for some ideological reason, because they were going to take their money and bet it on their analysis the next day. As the months went by, and I continued to read, most of what they said turned out to be true; most of what I heard on the news was utter tosh. Not only did that alarm me, it made me angry, because I realised that we were being fed a ‘story’ for some motive, which wasn’t clear at the time, but we weren’t being told the truth. And so from there I just started writing hundred and thousands of words of outrage and read as much as I could find. From there the blog and the book emerged.
I’ve just been self-educated. I always say that I have no letters after my name to do with economics; I don’t have an economics degree; I’m not from any Think Tank; I’m just a bloke who reads widely and tries to think clearly about what he has read. I never cease to be appalled at how far away from the self-evident reality of what’s going on in the markets is the story that we’re told. We’re just told something that just doesn’t match up; it’s just not true. They spent years telling us this was a ‘liquidity crisis’; the banks were fine, they just couldn’t find the tenner in the bottom of their pocket. [But] everybody in the markets knew. I talked to bankers (because after a while I became well known). Lots of people in finance would send emails or talk to me, and they were very clear: “No, we’re not just short of tenner - it’s not a liquidity crisis; we’re broke - this is a solvency crisis.” But you never heard that from the pundits or the politicians. It’s one thing to be robbed, which we were; it’s another thing to be lied to, and condescended to, by the same person who has got their hand in your pocket.
JC: I don’t think anybody listening to this Podcast will be at all surprised by what you’ve said there, because I think we’re being lied to in many different ways. The documentary that you were talking about - that you managed to slip through - was that High Anxieties : The Mathematics of Chaos?
DM: No, High Anxieties was the follow-up, ten years later or so. The first one I made was called Icon Earth. As far as I'm aware, it was the first ever film which looked critically at this whole idea of a globalised economy, global free trade and globalisation. It was 1996. I smuggled it through the Science Department by calling it Icon Earth, saying that I was going to look at that picture of the blue planet as a modern icon - a picture which concentrated a highly symbolic message - and in that I talked about that mantra of 'globalisation': the free flow of money, the free flow of people, and the free flow of goods. I had to defend my job after that film because various economists were furious and tried to have me fired.
JC: Wow, I say!
DM: Yes, that was quite serious. Yes, it was some economic-think-tank person who wrote to the Director General and said, “This man needs to be fired”.
JC: Was that partly because you had revealed what your intention was beforehand, so it was known what you were trying to do through the film?
DM: No, it was after it was transmitted. They were livid and furious, and the letter of complaint said, “It was a dangerous piece of anti-capitalist propaganda”. I was so pleased with that that I framed it.
JC: [Laughs] … Right.
DM: And then the High Anxieties... they never let me make a follow-up film to Icon Earth. I was told that they would never commission another film like that from me, ever. But the same thing happened. I convinced them to make a film about the mathematics of non-linearity, but in that film I just pointed out that that mathematics had told us a century ago that some systems are non-linear, and what that meant; and we knew that the economy and the environment were those systems; and yet for a century we’ve turned a blind eye to what we knew mathematically would be the case. And in 2008 it was the case; so all those people who said, “Oh, who could have known?” - well, actually, mathematicians since 1889 knew.
JC: Indeed, I remember Peter Schiff complaining that people were saying, “Nobody predicted that this would happen”, but, as he said, “I did!”
JC: A number of other people did too, of course. There are voices now saying that there’s going to be yet a continuation of this, but the mainstream media continues with this lie that things are just going to get better and better.
DM: Well the mainstream media is “embedded”. That phrase was an interesting one that came out of the wars in Iraq. To get anywhere, and to be allowed to report, you had to be “embedded” with the army, and that meant you had to virtually agree to say certain things and not say others. Well, the financial journalists have been “embedded” like ticks for years. I mean, if you say something rude about Goldman Sachs as a financial journalist, do you really think they’ll invite you to the next time that they reveal (?)... it’s not going to happen ...so they toe the line.
JC: No, it’s sort of self-selecting. The kind of people who say the right sorts of things continue along the career path, and they remain there.
DM: Stephanie Flanders: she’s there to give us an even and balanced view of the financial crisis, and then we find that she moves to... was it JP Morgan?
JC: Yes, I think you’re right.
DM: OK! Well that was obviously fair and balanced. She had no ideological position.
JC: Pure coincidence, David.
DM: Pure coincidence, of course.
JC: I’m going to ask you to give us a brief recap on what the TPP and TTIP are. People will be familiar with them to some extent, but perhaps a bit rusty, so could you tell us something about their history and how those came into being?
DM: Yes. On the surface they’re trade agreements - just agreements between two nations, or a bunch of nations, about how they conduct trade. So, it doesn’t sound like anything new. But they are built like Russian dolls. On the outside, there's the thing you’re familiar with. It’s only when you open the first doll and look inside, you think, “Gosh, I didn’t know that was in there!” Then, if you’re really persistent and open that doll, you find things inside and think, “Crikey, you’ve got to be kidding me!”
Essentially, trade agreements have been going on for centuries. The problem with trade agreements is that they’re essentially diplomatic agreements between Heads of State. They’re large and unwieldy. As history tells us, it’s easy to sign up to something and then just ignore it. (I mean what are they going to do? Send the Navy?) This is the problem with trade agreements. This was the problem that the World Trade Organisation had: there was a great fanfare for a world headquarters that was going to be the framework to bind every nation; but every nation found ways of holding up compliance for years and years. So industry got very restive. They lost faith in the whole World Trade Organisation business. They wanted some other way that was quicker and faster, and in which they would have more of a say.
The breakthrough came with NAFTA, the North American Free Trade Agreement (between Canada, the US and Mexico). NAFTA is very different. (It is a trade agreement; it’s the first of the modern trade agreements.) But what they did was to build inside it a thing called a Bilateral Investment Treaty, which gives teeth that were never there before. With that, all the things that you would like your trade agreement to do, you can now enforce, because you’ve got this other mechanism inside. Generally, when NAFTA is in the news, you hear the phrase “Chapter 11”. Chapter 11 of NAFTA is just such a Bilateral Investment Treaty. It's inside the TTIP and the European Agreement, and all modern agreements, because it’s what gives them teeth. There are lots of things in the trade agreement between America and the European Union that industry on both sides of the Atlantic is very keen on. The Americans would like to ‘harmonise’ – that’s a lovely phrase - it’s like ‘efficiency’.
JC: Yes, it sounds wonderful.
DM: Yes, we’re going to make everything more ‘efficient’, so now we’re going to ‘harmonise’. They’ll be quick to tell you: “That doesn’t mean we’re lowering standards; we’re just ‘harmonising’ them”. Right, OK, we’re not going to gas you, you’re just going to have a shower.
JC: Well, are they right? Are they going to lower standards?
DM: Of course they will lower standards. The European Union has always annoyed the heck out of American industry. We’re talking here about one of the main lobby groups in America. The American Government has made it very clear that they want access to the huge European markets for their agricultural products. What’s bedevilled them here is that we operate on the precautionary principle. In other words, if you want to sell food here, or produce food in a certain way, you have to prove that it’s safe. In America that’s not the case. It’s assumed to be safe, and the Government has to prove harm. So, for instance, there was a case between Canada and an American company, and it was to do with an additive in petrol called MMT. (This was some years ago.) The Canadians banned it, because they looked at the data and said, “This is nasty stuff; we don’t want it.” The American company said, “You haven’t been using the right data and you can’t prove this”, so they just took this opposite view. The American industry said, “Well, you haven’t got the right proof, and the assumption is that it’s safe.” That’s how it does work on that side of the Atlantic. They want to 'harmonise' through this trade agreement, and what that essentially means is: “Let’s get rid of the precautionary principle, and harmonise it to our way of doing things.” That would mean, for instance, having growth hormones in beef. The professions involved here feel very dubious about these growth hormones, so we don’t allow them. The Americans will say: “You haven’t proved that they are harmful, so we should ‘harmonise’ them; they should be allowed.” It's the same with their ways of producing chickens. The animal welfare there is diabolical, but at the end of it you just douse your chicken in chlorine.
JC: Is it going to be the same with GMOs? At the moment we operate on that precautionary principle here, don’t we?
DM: Right, and they have said many times, and there was a recent one where they said in almost as many words: “Don’t start casting doubt on the safety, efficacy or anything else of GMOs.” But more that, they would like to get rid of country-of-origin labelling and whether something contains GMOs. We have that, which in my view is just consumer choice. Oh no! In this particular case the free market says, “No there shouldn’t be any; you shouldn’t get to know.” And in case there’s anyone out there thinking, “Hang on a second; of course we should have to prove it’s a danger”, that was the argument used by the tobacco companies. The line they took with the fact that people who smoked got cancer - which will be the line they’ll take over anything else – was: “Can you prove that that person’s cancer came from that cigarette?” Well, obviously you can’t. “Well, therefore you don’t have the proof.”
JC: No, so you could have a situation with GMOs where it could be generations before such links are established, and all that damage would be done.
DM: And even after the damage is self-evidently happening, they’ll say, ”But can you prove it was this?” That’s how the tobacco companies held up what was glaringly obvious for maybe two generations. Is that the route we want to go down? Well, it is the route that our leaders want us to go down, because they’re ready to sign.
JC: Do you also have concerns about wages, the environment, working standards and so forth with these agreements?
DM: Yes, in order to answer that you have to look at these things which are nested inside the trade agreements. So far we’ve talked about that outside doll - What They Will Do - and I think that’s worrying enough. But, of course, if it were just the doll on the outside, they wouldn’t be able to enforce it. Because, let’s say another government of a different stripe gets elected in the next election here, and they say, “Yes, well, I know we signed up to that, but we’re a sovereign nation, so we’re just not going to enforce that.” Well, what would anyone do? Answer: Nothing. They’d huff and they’d puff and, short of sending in the marines, there’s nothing they could do about it. So, that’s where the Bilateral Investment Treaty (the doll that’s nested inside) comes in. What that does is give you a means of enforcing, and it’s not left to your nation state. America doesn’t have to take Britain to court; a company, a foreign company, can take a sovereign nation to arbitration. That’s what the Bilateral Investment Treaty says. It has four things that are inside it: (1) No nationalisation or expropriation; (2) equal treatment to local companies; it must be (3) fair and equitable (whatever that means); and you have to accept (4) arbitration of disputes.
'No nationalisation or expropriation’ sounds fine on the surface. It sounds like: If you, as a foreign company, build a battery factory in the Congo and then there’s a revolution and they take your factory, well it does sound reasonable to say they should get some kind of compensation - some comeback. It’s those examples that the advocates of the Bilateral Investment Treaties always trot out. But the problem is with this word ‘expropriation’. Put a word like that in the hands of international lawyers and something interesting happens. ‘Expropriation’ to you and me means: They came and took your factory; they took your house off you. [But] now it means: Any action taken by a government which would reduce the expected profits. So that could mean bringing in a slightly more stringent regulation for that particular product, or insisting that packaging must be recyclable now, or that water being pumped out of a factory has to be a little bit cleaner. All that will eat into their profits; that’s now ‘expropriation’.
JC: Even on a minimal level? Just a slight change to their profits?
DM: Yes, companies have taken nations to arbitration where they’ve had less than a million in investment, and been awarded hundreds of millions. They just have to say: “We expected to make this kind of profit, and now you’ve changed your mind, and that eats into our profit.” To give you a concrete example: once foreign companies... (and only foreign companies have access to the Bilateral Investment Treaty. A UK company can’t. Of course there are ways around that, and I’ll tell you about those in a minute). Let’s take the example of fracking. Once a foreign company like Elf or Total are allowed to take up those contracts and start, they will be able to get their economists to say: “We’ve been given the rights to frack in these three areas,” let’s say, “and we expect to make four hundred million.” Then we have a change of government, and the government says: “Well, actually, we don’t like fracking. We’ve looked at the data and we think this is dodgy, so we’re going to stop it.” Well, you won't be able to stop it, because they would be able to take the nation to arbitration, and say: “You expropriated from us our reasonable expectation of profits in the future. We have lost future profits.” Not even profits they’ve made yet, just future ones, and they will win. How can I say they’ll win? Because those kinds of cases have already been arbitrated, and the companies have won. Quebec tried to ban fracking. They were taken to court by a company... [unclear]... and they lost.
JC: That’s incredible. So the only way in which a nation would be able to stop a company from doing something like that would basically be by bankrupting the nation in order to pay off all the suing demands.
DM: Yes, Ecuador was taken to arbitration by Occidental. Occidental was awarded $1.7 billion. Do you reckon Ecuador has a back room where they keep $1.7 billion lying around? I don’t think so. But that’s just ‘expropriation’. And the fantastic thing is, if you read the lawyers – and it's just a small group of lawyers involved with arbitration - another one of the things they’re toying with now - and I’ve seen it written - is that tax rises above what is considered to be a reasonable internationally-recognised level of taxation could be considered ‘expropriation’. But who is it who decides what’s a reasonable expectation?
JC: Them, presumably.
DM: Exactly! Give that man a Crackerjack Pencil! Exactly, they decide. So they would be able to take a nation to arbitration on the basis that that nation should no longer be allowed to set its own tax laws. Now, if that isn’t a loss of sovereignty, I do not know what is. It's not [just] me saying this. Just go to the technical literature of the arbitrators; it's in black and white in their publication - it’s not mine. So that’s just the first one.
JC: Let me ask you about the Investor State Dispute Settlement Mechanism. Is that embedded within the Bilateral Investment Treaties that you’ve just been talking about?
Arbitration works as follows: three arbitrators will be chosen, one by the company that’s taking the nation to arbitration, the second one by the nation to defend it, and the third one will be agreed upon by the first two arbitrators. If they can’t agree, there’s a mechanism for someone just choosing the third arbitrator for you. Those three people are just private individuals, almost exclusively drawn from the top fifteen global law firms - companies like Freshfields, which are vast. They are a small group of international lawyers drawn from those companies. Those three people - mostly men, mostly European or American - meet behind closed doors; they don’t have to publish what evidence was adduced, who gave that evidence, what they said; they don’t have to justify their decision; and they don’t have to give you a written statement of why they decided in favour of the company or in favour of the nation. There is no appeals process, and you, as a member of a nation (and here I’m quoting from someone): “You have no rights within that process.” That’s a quote from a law professor who is an expert on arbitration – “No rights.”
JC: So you have no right to know what’s going on at all?
DM: No, and in some of those arbitrations there’s a small handful of private, limited companies which oversee the arbitration process. So it doesn’t happen in court; it doesn’t happen in the Hague, or the UN. There’s a small number of things like the London Court of International Arbitration (but that’s actually a private, limited company), or the International Chamber of Commerce (which is actually a business lobby group). They oversee the process. So, private, limited companies - nothing to do with the state or the UN, or anybody else - private, limited organisations, or business lobby groups, oversee the arbitration process. The arbitrators are chosen from a shortlist of about fifteen to twenty-five of the largest global law firms, and who do you think those law firms get most of their income from? Do you reckon they do pro bono work for Greenpeace or lobby on behalf of trade unions? No, most of their work comes from the global corporations, so they’re not going to bite the hand that feeds them.
JC: So, is it right then that Ministers of State get no access to any of this information either?
DM: God couldn’t get access. There is none. Because they’re private, limited companies they don’t have to. In fact the one in London, which is the most secretive, doesn't even publish when a nation has gone to arbitration. So, let’s say a big company takes the UK to arbitration and does it through the London Court - we wouldn’t know. They could be in arbitration now and we wouldn’t know: we wouldn’t know who said what; we wouldn’t know what the evidence was; we would have no access to the judgement; no appeal; we would just get served with a bill, which would be paid because it can be enforced.
DM: There’s a cooling off period beforehand, but if you’ve signed up to a Bilateral Investment Treaty... (this country has signed eighty or more, I think, such agreements with other countries, and if we sign up to the TTP that would be between us and Europe and America). Once you’ve signed them, you have signed up to those four principles that I mentioned, including going to arbitration. Countries have tried to thumb their nose at it. They've gone to arbitration and lost, and said, “Well, so what? We’re not paying.” Whenever I give a talk somebody always says: “Why don’t we just tell them to take a long walk off a short plank?” But the problem is there are, within international finance, ways of them taking your money the way a bailiff can come and take your car. They can do it.
JC: May I ask you how they can do that?
DM: Yes, and I can give you the example: this happened to Argentina. Argentina has had various bits of its national wealth taken. It happens like this: All nations have parts of their national wealth abroad; most nations have all of their gold stored in London. Second, and perhaps more important, because of the way the modern monetary system works, virtually all nations, barring a handful, raise money by selling debt. The Americans sell T-bills and we sell gilts, and those gilts have to be repaid. If you don’t repay them, that’s called a default, and then the free-marketeers will tell you the sky will fall in. It won’t necessarily, but that’s another story.
DM: Precisely, but never mind. Let’s assume that they’re right for the sake of argument. So, let’s say your company, Julian Inc., took Great Britain to arbitration, and you won, because we had expropriated something from you. Then Great Britain tried to thumb its nose at you. What you would do is this: you would go to the Southern District Court of Manhattan, which is Wall Street’s Court where the action happens, and instead of suing Great Britain directly you would sue the banks who handle the settlements of our debt. When we have to pay off our debts, we don’t do it directly; George Osborne isn’t sitting there writing cheques. Several of what’s called the largest custodial banks, which are almost all American – Citicorp, Mellon, JP Morgan Chase – settle our debts for us.
So you would go to the Southern District and sue them, appealing to a legal phrase called Pari Passu, which means 'to treat equally'. (This means that the bank must treat all its clients equally.) So: the bank does work for Great Britain. The bank is saying: “Right, Great Britain owes its bond holders. It’s got to pay up on some of its bonds. So, because we’re Great Britain’s bank, we’ll do that work on behalf of Great Britain and pay those clients.” But you turn up and you say: “But Great Britain owes me money, and you’re not helping me get my money out of Great Britain, so you’re treating me and your other customers differently. You, Mr. Bank, are breaking the law. If you continue to favour one set of people, to whom Great Britain owes money, over me - you allow Great Britain to settle up with them, but you don’t allow Great Britain to settle up with me - then you are breaking the law, and I’m going to sue you, the bank, for billions.” And the banks back down; they get on the phone to Great Britain and say: “Look, I’m really sorry mate, I’d love to help you, but I’m being sued by this fellow who is very angry that I’m not helping him, so I can’t any longer help you settle your international debts, which means you’re going to default.”
DM: That’s exactly what vulture funds do; that is how vulture funds work. It's the same bit of law, and we know it works because the vulture funds use it all the time. They have just used it successfully against Argentina. That is the threat lying at the centre of the Investor State Dispute Settlement. It works because they can seize your goods, and they can cause you to default on hundreds of billions of debt (in the UK's case), which would frighten the life out of George Osborne, so he will back down. So, when they’re taken to arbitration and they lose, they say: “Gosh, so we’ve got to pay a couple of billion. Well, it’s better than defaulting on our entire sovereign debt.” So they pay up. We know it works. This is not mere theory; this is how it works. This is how it has worked - past tense.
JC: So, there’s just no way they can walk away from this. They simply have to accept what they signed up to. Whatever the consequences are, they have to accept it.
DM: Yes, and they know full well from looking at how these things have been used in the past what will happen. It's not as if they’re signing up to something, and then six weeks later George Osborne says, “Oh really! Gosh I’m sorry, I didn’t know. I shouldn’t really have signed that.” They know. They are signing you up so that will be the case. It sounds ridiculous, I know, and there’s a strong temptation to say, “This fellow on the end of the phone is just a lunatic.” I sincerely wish I was; I sincerely wish someone could say, “Look, you’ve just forgotten this.” But I haven’t; it is the case.
JC: There are some other principles that you mentioned: ‘equal treatment’ and ‘fair and equable treatment’. What do those phrases mean?
DM: Well, equal treatment sounds great, and on the surface it is great. It just says: “Look, you can’t treat one of your national companies better than you treat a foreign company.” You’ve got to have an even playing field. It sounds reasonable, until you consider that’s the basis of how the NHS works. We say: “We’ll give this work to the NHS, because we would like to have a thing called the NHS.” Under a Bilateral Investment Treaty the NHS is illegal, because it is unfair in that they get the work without having to bid for it against a company. We just say, “No, that’s the NHS.” The BBC would be another one. That’s completely unfair because it gets government support, like the NHS gets government support. They would say, “You can’t give taxes to the NHS.” So, it would be illegal. So part of the process that’s gone on, in trying to come up with a text which can be signed, has been to make a 'derogation' as they call it: just say, “Ok, this is the principle, but we’re going to exempt the NHS; we’ll exempt the BBC”. That makes you think, “Ah phew, that’s OK!” Yes, but the problem is the thin end of the wedge is already in; you’ve accepted the general principle. At some point it would be very simple for someone to say: “Well, we’ve signed this thing; we just now think that we will include part of the NHS, then a little bit more of the NHS, and then all of the NHS.” It would be easy to do because the wedge is already in. There’s no reason to think it wouldn’t happen, because certain political parties have been keen to get rid of the NHS for ages. This would be a really good way of doing it, because at every step of the way they could just say: “It’s not us; we just signed up to this. It’s the law.”
The problem with 'fair and equitable’ is: What does it actually mean? Some of the cases that have been settled under 'fair and equable' are absolutely ridiculous. It means that what’s ‘fair’, what’s ‘equable’ and what’s ‘equal treatment’ are handed to a small group of private individuals, who work for large law firms, and who decide in secret what those things mean. Do you think they’ll decide on behalf of us, or, more likely, on the side of large business? I don’t know.
JC: To what extent are these arbitrators interested in things like social justice, environmental pollution, labour laws and such like?
DM: Several of them have made it very clear - and it’s already in writing - that they feel those things have no place in arbitration. Arbitration, they will say, simply looks at whether the contract that was signed has been honoured, or in some way infringed upon. There’s no environmental principle in their world. You can’t say, “Oh, it’s OK, we broke that contract, but we did it in a principled way.” They'll say, “Principle? Did you break the contract, or didn’t you?” And if you did break the contract, you go to arbitration and lose.
I mean, after Fukushima, Germany said they’d close their nuclear reactors. Why? Well, there was a vast public move in favour of it. Now, as far as I’m concerned, a vast public move in favour of something is called democracy, at least it is in my world. It is in Scarborough, that’s how they look at it. We’re a funny old place, Scarborough. The Swedish company that ran those nuclear reactors, Vattenfall, has taken Germany to arbitration, and they’re suing for seven hundred million because they say, “You expropriated our future profits.”
There was another case where a company was horribly polluting – I can’t remember, I think it might have been El Salvador. The El Salvadorian Government, after a great deal of lobbying by the peoples that lived there, finally said, “OK, we’re going to refuse your permit for a waste-disposal site because we agree with the people and do feel this will massively pollute the waterways.” They were taken to arbitration and I think the company was awarded three hundred odd million.
JC: Presumably that was based on the idea that the government in question had just not assessed the situation properly in the first place.
DM: Yeah, but OK here’s one: there’s a company called Doe Run, which is part of the Renco Group; it’s a big group and they took Peru to arbitration. What happened was, the company took over a lead-smelting plant in a place called La Oroya, which is – as you will find with a Google search - one of the world’s most polluted places. I think it’s about number eight. (If you think of all the polluted places in the world, to be in the top ten - you wouldn’t want to have a picnic there.) They took over this lead-smelting plant. Now, the company - when they took it over, when they signed the contract – said, “As part of the agreement with Peru, we will do various kinds of clean-up.” They failed. They didn’t do those things, and when confronted with this fact, they said, “Ah well - economic difficulties - we couldn’t.” Then the company went bankrupt, and Peru said, “Well OK, then you can’t do lead smelting there.” You’d think that Peru would take Doe Run to arbitration, or to court, for failing to clean up. Actually it was the other way around: Doe Run took Peru to arbitration and sued them for eight hundred million.
JC: And succeeded?
DM: I can’t remember whether they succeeded or not, but just to go to arbitration costs eight million. Peru is not the kind of place that can throw around eight million, never mind eight hundred million. But the point is, the arbitrators are happy with that.
JC: It's extraordinary that they should actually try to sue on that basis.
DM: Yes, because the arbitrators will say, “Well, we don’t take cases that are flagrantly ridiculous.” OK, but you took that one. If that’s not flagrantly ridiculous, could you please define for me what you regard as flagrantly ridiculous? That’s at the far end of flagrant and ridiculous in my world.
JC: Yes, it is.
DM: Maybe I’ve led a sheltered life.
JC: That’s a very worrying precedent there. So, we could see those flaring up all over the place with such companies fleecing nation states left, right and centre.
DM: And they do; they have. This is the thing about this: it’s not hypothetical. I could bore you for hours just reading you one case after another, and many of the cases we don’t even know about.
JC: It’s not just the money that’s in view here: the power is the big question really, because presumably it’s going to stop nation states from making all sorts of decisions that they would otherwise make?
DM: You’re exactly right. The main effect of this is what's called a ‘chilling effect’ on legislation: nations will look at something, and say: “Ooh that … Ooh no. Actually we can’t do that.” So, when the Labour Party says, “We’ll put a big tax on something or other”, actually they won’t, because that would be expropriating future earnings, and they’d be taken to arbitration.
JC: They say they’re going to do it, and yet they know they can’t.
DM: Well, in the terms of the Labour Party, I’m not sure he does know. This is the astonishing thing. I’ve seen internal Labour Party briefing documents, and Humpty Dumpty could have written something clearer; they are just utterly confused. It’s very clear they don’t know what’s going on from their internal documents. It is quite an obscure part of international law. It has not been on the front pages (which raises many questions in my mind). I know for a fact that many members of Parliament don’t know, because I’ve talked to them and they don’t know. Whether the leaders of parties don’t know, I suspect the leadership of the Labour Party is not clear. The liberal Democrats don’t need to be clear because that’s not their job; they’re just fluffers.
JC: Careful now! You don’t know who is listening,
DM: Well, I’m hoping they are. So, it’s not just the public that don’t know. You see, these things aren’t signed by David Cameron; they’re written up and signed by people in the Foreign & Commonwealth Office. These things have happened very much under the radar of parliaments. I mean, we’ve signed eighty of these things already. I think there was a case where Australia tried to do something that a company didn’t like - I think it might have been an American company. It turned out Australia didn’t have a Bilateral Investment Treaty with America. So the company was stymied, right? They can’t use it? No! What they did was to re-incorporate part of themselves in Mauritius, and Mauritius does have a Bilateral Investment Treaty with Australia. So they sued them from Mauritius. A British company could sue Great Britain as long as they move their incorporation site to some little atoll in the Pacific with whom we do have a Bilateral Investment Treaty.
JC: Didn’t it matter that what they were worried about actually pre-dated their move to this different nation?
DM: No, and what they were worried about was Australia wanting to label cigarettes as not being terribly good for you.
JC: That’s appalling. You say that politicians may not know much more than most people and what comes through the media. Is that true?
DM: Some of them certainly, because we’ve asked them. People I know have asked their local MP, and their local MP has sent them the ‘thing’ which was being sent out which says: “Aha! This is our position; this is what we understand.” And, like I said, you read it and you think, “Its just gibberish; it doesn’t make any sense.” It clearly shows they don’t understand what they’re talking about. They say things like, “Well, we like all of the benefits which these things will bring.” OK, problem number one: There have been four big studies I know of, the first one being by the World Bank in 2002 which said, “You know what, there’s no proven connection between having one of these treaties and getting lots of jobs; there’s no link.” That’s the World Bank saying that. And then politicians say, “We’d love all of these benefits (benefits that may not exist), but we just think that maybe we could do without the Investor State Dispute Settlement bit.” OK, can we please sit down here! Look at NAFTA, the granddaddy of all of these things (which is publicly available to look at). Look up the initial text that was written up by the Americans for the Free Trade Agreement. (I think it’s something like thirteen chapters, and remember: the Bilateral Investment Treaty, which contains the Investor State Dispute Settlement bit (the 'dolls'), is Chapter 11.) If you compare the text that was originally created with the one that was finally signed, all of the chapters were heavily changed, with brackets and bits crossed out; there was obviously a lot of discussion, and a lot of things were changed. Then you look at Chapter 11 (the Bilateral Investment bit). Not one word of that was changed. In other words, they’ll compromise on everything, but that bit, not one word. This notion that we’re going to get these Trade Agreements but it won’t have the Investor State Dispute and it won’t have Bilateral Investment Treaty - that’s just fantasy.
JC: It very much gives the impression that that really is the heart of the matter. You can tinker about with all the rest of it, but you have to leave that heart absolutely in place. That’s how it’s going to function.
DM: Yes, because that’s the bit that hands power form sovereign nations to companies - to the company, not to the nation in which it exists – to the company. An American company doesn’t have to go to Congress and say, “Please, could you do something about Great Britain?” The company just rolls up and says, “You know what matey, Great Britain, we’re taking you to arbitration. You don’t have a choice.”
JC: There’s hardly anything of this in the media, is there? I went to the BBC website and picked up an article at random, and it just goes on about how this is going to be great: that it will substantially reduce tariffs, eliminating them in some cases; that it will open up trade in goods and services; boost investment flows between countries; boost economic growth, etc. There wasn’t any mention of what you’ve just been talking about.
DM: No, and some of that is patently not true. There is no link between these bilateral investment treaties - the meaningful bit of these trade agreements - and investment. How do I know that? Well, the 2002 study from the World Bank would be a good place to start, and then you could look at practical examples. I think Brazil doesn’t have any, and yet Brazil has more foreign direct investment than any other country. They have to beat them off with sticks. So, if they were so necessary, how come everyone’s flocking to the door of a country that doesn’t have any of these agreements? Answer me that Mr. Genius Financial Person. They don’t have an answer.
JC: So, are you saying essentially this is a bunch of lies?
DM: Well, it’s one of those weavings together of small bits of truth with a large amount of lies. It’s like a counterfeit coin: as long as it’s shiny on the outside, who knows that it’s tin on the inside? So, will it reduce tariffs? Yes, certainly; so there won’t be a tariff which says, “We're going to stick a tariff on your dodgy meat.” That will go - fantastic. It will say: “We can’t protect a local manufacturer from a global corporation that wants to dump products below cost on our market”, which a large company can do, because it can take a loss leader. It can make a loss on that for as long as it takes to put the local company out of business, and then it can hike the prices up because it has no competitors. Has that happened before? Countless times. Would they lose any sleep over it? Wake up and smell the coffee - of course they won’t; that’s called business: “Nothing personal, mate.”
So, when they say there’ll be benefits, the question you need to ask is: For whom? When they say it will be wonderful for the economy: Whose economy? Your personal economy, or the economy that gets quoted on the Stock Exchange? Do you own any stocks? If you don’t, then it doesn’t matter how high the Stock Market goes, it’s not going to benefit you, is it? And we know that the top 5% of [people in] most countries own up to 80% of stocks and shares, so when the stock market goes up, you’re watching people who are wealthy getting wealthier than you. Well, congratulations, enjoy!
JC: So every time you read a word in one of these statements you have to ask yourself, “What’s the real meaning?” Every word seems to have a double meaning?
DM: They’re not complicated double meanings. I think people have either become lazy, anaesthetised, or just overwhelmed. And they never hear the other side of the debate. That’s what appalled me about the whole financial crisis: was there ever a debate about the nature of the crisis as to whether it was liquidity or solvency? Was there ever a debate about the various options and what could we do? Was there a debate about what could be done about levels of sovereign debt? Did you ever hear about the idea of a Debt Jubilee, or of Debt Cross Cancelling? Did you ever hear of such a thing?
JC: I did, but not through the mainstream.
DM: Exactly. Did you ever hear of the Calvo Doctrine? No one’s ever heard of it. It’s a piece of international law, and it says that there should be such things as vulture funds, and nation states should always settle disputes with it in its own court, which would be the opposite of arbitration. That piece of international law pre-dates trade agreements and bilateral investment treaties by probably three quarters of a century. International lawyers will pretend the Calvo Doctrine doesn’t exist. It does, look it up. You never hear these debates. I’m not saying, “Don’t believe them; just listen to me and march behind me in lock step.” No, I’m saying, “Look at what the alternatives are, and ask yourself why we were never told there were alternatives.”
That was the phrase in the financial crisis, ‘There is no alternative.’ That was the first, biggest, and most often-repeated lie. There were alternatives. And they’ve spent five years desperately slamming shut all doors that would lead to those other alternatives. That’s the real danger - that there is the danger - to close off all reasonable, civilized and democratic means of saying, “Actually, we’d like to change our minds and go in a different direction.” When you say, “Well, you can’t, because you’re tied by law”, what does that leave people with?
JC: Effectively a dictatorship.
JC: In a moment I want to ask you a little more about the effects on democracy. But first let me ask about intellectual property. What concerns do you have about that with these agreements? I’m thinking about the concerns that have been expressed by groups like Electronic Frontier Foundation. They’ve said that it’s going to have detrimental effects on the way the Internet works: perhaps a clamping down on free speech in many ways using copyright law. Do you have concerns like that?
DM: Yes. They are not my top concerns, but they are concerns because I think they would like to do away with people’s ability to use things like ‘fair comment’. On the Internet there has been a slight feeling of the Wild West: were we to use other people’s material in a book, the way we do on the Internet, no publisher would touch it. But, on the Internet, the feeling is: “Look, I’m not trying to sell you a book; I’m not trying to make a profit from this. Therefore, we should relax the grip of intellectual property. This is just on my website. I’ve quoted this thing, but I’m not trying to make any money.” That’s generally how people view it: “Are you trying to make money out of it?” - “Yes.” - “Then we’ll sue you.” Let's say Joe Bloggs wants to quote something, or have a picture up to illustrate something, the way you might do in a conversation in your own house, where you say, “Oh Let me show you this picture” and you open up a book and show the person a picture which clearly says under it, “Copyright, Getty Pictures”. People have imagined that the Internet works that way. But they want to say, “No, on the Internet, this is like publishing.” If you go down that route, then the people who own that will have to be paid, and since the average person won’t be able to pay them, that will not happen. That great flowering of communication will stop.
JC: And do you think it’s actually going to go as far as stopping ‘Fair Use’ as well. That’s fairly well defined: if you are commenting upon something in detail, and you’re just using a very small part of the work in order to demonstrate what you’re talking about - that’s been OK up until now. Do you think they’re going to clamp down on that too?
DM: No, I don’t think it will go that far, but I think they’ll make it much more difficult. It will be like ‘The Right to Strike’. They will never say there is no Right to Strike, but the level of the bar over which you have to jump will be raised and raised. I think the same thing will happen with copyright.
JC: It will be another ‘chilling effect’.
DM: Yes, and that doesn't make a conspiracy theorist. I just look at what’s been happening and I look at which way the slope is going. Is it going up or down? The slope is continuously up, so that’s the way it will continue. I mean, most Big Business doesn’t really like ‘The Great Unwashed’ having a strong opinion; they use the libel laws to stop it.
JC: Presumably, this is why they’ve kept the negotiations for these agreements so secret, because they don’t want anybody to have an opinion and express an opinion about it.
DM: No, I mean, take the TISA Agreement (Trade in Services Agreement). That’s the one no one’s ever heard of, and that’s by far and away the most dangerous. The provisions are largely kept secret. All of the things which people and governments said they would do to make international finance safer - all of it would have the legs cut out from underneath it by the Trade and Services Agreement. It would just run an end game around all of the stuff that our flatulent politicians have wheezed on about. And it’s being conducted very much in secret.
JC: So this is going to be the same kind of financial insecurity in the system that we had prior to 2008, and we saw the fruit of that. Is that now going to be written large through these agreements?
DM: Yes, much larger. The mistakes that were made are being done again with a different set of acronyms. It’s what you said at the start; there’s such a mix of acronyms that you get lost in it. If you try to explain it to people, you can see them in mental pain just ….
JC: They just switch off.
DM: Yes, well, if you want to keep something secret, you don’t keep it secret by hiding it away. You keep it secret in plain sight by just making it seem technical. You dress it up in jargon; you give it lots of boring acronyms; you never explain it to people in simple terms; and if they try to understand it, you condescend to them and say, “Well, you don’t have a degree in economics, do you? No, I didn’t think so. Well, run along and leave it to us, leave it to the technocrats.” Well, do so at your peril.
JC: Yes, it's interesting that you bring up that word technocrat. Do you think this is essentially a technocratic approach to the world’s economy that is being set up here?
DM: Yes, I do. I think that the financial global class - that group of technocratic people - learned a lesson from the environmental movement of the '70s. I think they’ve said, “You know what, this is Spaceship Earth. Therefore, if you were on a nuclear sub sailing along at high speed in the canyons of the deep ocean, would you have votes on whether to turn left or right, or would you leave it to the Captain?” I think they've now come to the conclusion that there is a sort of technocratic financial version of that idea of Spaceship Earth. They’ve just said, “Look, there are lots of things about the workings of this little bubble we live in which are way too complicated for the Great Unwashed to be allowed to have any say about. So, what we need is the dress-up version of democracy: we can get to dress up in differently-coloured clothes and parade around once every four or five years; people can have fun voting for this colour or that colour; and this colour or that colour will decide whether the deckchairs should be in this arrangement - in squares, or in circles - but everything of importance should be left to the Technocrats, to the Captain and his crew.” That’s their vision. Again, does that sound sort of conspiracy theorist? Well it might do. But if it does, then you need to wake up because of what happened in Italy. Was that man elected? No, he was not elected. He was simply imposed. Who by? By the Troika - by unelected people whose names the Italian people didn’t know. He was given powers the Italian people never gave him. He just said, “Right, well this is what’s going to happen.”
JC: A taste of things to come. What amazed me, and my wife, when we first heard about that was that people just didn’t seem, on the whole, to be outraged by that.
DM: No, people weren’t outraged by that. If the generals decided that an elected government wasn’t doing the job, and they rolled up into the central square with tanks and said, “Right, you’re out - go home - we’re installing our man in charge”, we would recognise that for what it is – a putsch – because it’s done with tanks. But when it’s done with dollars, pounds and fountain pens, we don’t recognise it for what it is. When an elected government is removed, and someone who wasn’t elected is simply installed by a small group of powerful people on nothing more than their say-so and threats of dire things that will happen if they don’t do it, that is a putsch. But, because there were no tanks in the street, we didn’t realise it was. But what is a technocratic government other than an unelected government that’s simply put in power by people who want those things to happen, and therefore they put someone in charge who will make sure they do happen?
JC: They put an 'expert' in charge – their 'expert'.
DM: Yes, their ‘expert’, who just happens to share all of their views of the world. That’s what the generals always do; they have a view of how the country should run, and they put one of theirs in charge, and we all recognise it. Because it’s bankers, we somehow go, “Oh yes, well OK, let’s have an ‘expert’ in charge.” Well, golly gee wilikers, those experts really did a bang-up job in 2007/8, didn’t they? There were people saying from 2002 onwards at least - people who I know: insiders, traders, people who were well-known – who were writing memos saying: “This is hugely dangerous; this is going to explode; this is going to be a disaster in the making.” They were ignored for half a decade by those ‘experts’. And then those ‘experts’ say, “Only we can save you.”
JC: So, when you titled your address in Manchester Trade Deals and the Death of democracy, you did mean that quite literally. We’re looking at the death of democracy if these deals go through. Are you absolutely serious about that?
DM: Yes I am absolutely serious about that. These deals, in themselves, would wallop democracy - would deal it a really serious, perhaps mortal, blow. But it’s not just them; they are part and parcel of a whole series of measures and ways of doing things, which, when you put them together, are the end of democracy. As I said, the whole idea of vulture funds being able to buy up debt and hold a nation to ransom happens in exactly the same way as these Investor State Dispute Settlements. There’s a whole series of things which, when you add them up, seems to me it hollows out democracy. We have the dress-up version of it. We’re essentially saying these things should be decided outside of any democratic control, left to unelected experts. When we say the banks are Too Big to Fail, that also means that they are Too Big To Sue. You cannot; and this is just a fact. The US Justice Department said it in as many words: “You can’t take this list of too-big-to-fail institutions to court and take criminal proceedings against them, because a criminal proceeding would destroy the bank.” That’s precisely why the judgement against Wachovia and HSBC, although they did launder hundreds of billions, wasn’t a criminal one. So, in the final settlement, it didn’t say, “You are criminally guilty of having laundered money”; there is no such statement. And I’m not saying they did, because if I did, I’d be sued. I’m saying very clearly they didn’t criminally launder. What happened was, money was laundered in those banks. Confused? Sound a little hair-splitting? Yes, and that means those institutions are outside of democratic control; they’re above the law. We have to bail them out even when they flagrantly and repeatedly break our laws, and we can’t even take them to court for having broken them. That’s not me saying it; there were statements like that from the Justice Department. That’s just the case. You can’t even write an article which says a bank did launder money. I know because I wrote such an article and it was spiked, and I was threatened with losing my house by the bank, so I can’t even tell you about it. I know what the facts are, but there are ways of making the truth illegal.
JC: I said before the beginning of the interview that I wanted to ask you a rather obscure question, but I think it could be quite illuminating. It concerns the political philosopher Sheldon Wolin who speaks about what he calls “inverted totalitarianism”. So much of what we’ve been discussing has been pointing towards totalitarianism. Wolin describes the US since the middle of the Twentieth Century, and he identifies one of the characteristics of this “inverted totalitarianism” to be a kind of mirror image of what happened with the National Socialists in Germany. There, the state controlled business and industry – the state and industry being very much in bed together – but now, he says, business is dominating the state, so that government is effectively the servant of corporations. So, it’s still totalitarian; it’s just the other way around. Do you think that model is being imposed upon the whole globe now through these arrangements?
DM: Yes, I do. What else is the Investor State Dispute Settlement than that? It hands a greater power than sovereignty to corporations. A corporation can sue us for loss of earnings and take us to arbitration. We the nation - the people of this nation - cannot take a corporation to arbitration and sue them for the loss of our earnings. You might think what would that even be? The Bank of England’s own figures said that the financial crisis, caused by a small number of financial institutions, cost this country in direct cost and loss of earnings a minimum of 1.4 trillion, by the bank’s own estimate. Now, if I was a company, I would say,”You expropriated 1.4 trillion from me”, and I would take you to arbitration and win. But we can’t do that to them. Look at someone like Henry Paulson, who was the Secretary of the Treasury. He was the man who said, “Unless you pass the $800 billion dollar TARP (the bailout), there will be tanks on the street; everyone will lose their house; there’ll be anarchy.” So you would think, “OK, here’s a clear example of totalitarianism with the state in charge.” But, wait a minute, a few years earlier, he’d been CEO of Goldman Sachs. When he was CEO of Goldman Sachs, he had lobbied against parts of the laws that had restrained banks (which had been put in place after the Great Depression). He was the one who was lobbying for them to be got rid of. He was turned down. Then he becomes Secretary of the Treasury. Then, guess what? Those things were got rid of, and then a few years later the inevitable happens. And then he leaves - he’s no longer Secretary of the Treasury - and goes back to Wall Street. So, is he in his person an example of the totalitarianism of the state, or is he an example of the totalitarianism of the markets just putting their man in the state? Well, it becomes: Is the glass half empty, or is it half full? In a way, you don’t want to get caught up in those arguments. You just say, “Let me look at the people. Give me their names.” You’re looking at less than a hundred names globally. It doesn’t matter what their job description is at any one time. We’re talking about a small group of people who have a vision of how the world should be run, and work hard for that vision to be enshrined into law. Sometimes they do it from Wall Street and the City Mile, and sometimes they do it from the front benches, the back benches or Congress.
JC: I see what you mean, it becomes pointless to label them after a while.
DM: Some small groups have a vision which they are going to thrust upon us and our children. Whether you want to say they’re a totalitarian statists, which is what Libertarians always want to tell you, or whether they’re terrible capitalists, which is what the Marxists want to tell you, in the end it’s terrible people who have this job.
JC: But unfortunately it’s terrible, powerful people, and, as you say, there are not many of them, but they are super powerful. So, I’m bound to ask you this question: What do you think we can do about any of this?
DM: There are a couple of answers. We still have the remnants of a democracy, and we need to speak out now; we need to talk to people. That sounds so soft, but most people don’t know; most people are unaware. What I say to people is, you have to fight the peace; you have to stand up and be counted and say what you want to say before war is declared. Anyone can be a hero when war has been declared. It’s difficult to stand up in a room of people and start saying things which everyone just regards as a ‘bit over the top’.
JC: Well, you brought up the phrase ‘conspiracy theorist’ a couple of times, and that’s exactly where you will be called that.
DM: Of course, yes. Basically, there’s got to be a handy phrase: “Enemy of the State” if you were in Soviet Russia, or “Communist Agitator” if you were in America in the '50s. What will it be today? Today it will be, “Domestic Extremist”. That’s what I’ll be labelled; that’s probably what you’ll be labelled. The description will be: “Those people who hold extreme opinions, and they hold them not for any rational reason, but out of some kind of religious fervour, and they will stick to those opinions even if the mere voicing of those opinions harms other people.” So, for instance, talking down the economy. These things will be the traits talked about in the next two years as being the traits of domestic extremists.
You have to fight the peace. You have to fight the time before there are tanks on the street. You have to fight for what’s right, and point out what’s wrong when it seems a little bit ‘over the top’, and risk people thinking you’re a bit of a numpty - risk the embarrassment when people snigger at you and point at you. If you’re not even willing to take on being laughed at, then how do you expect to protect your children’s future? If you find that too much to ask - that someone might snigger at you? But the problem is that if you don’t fight the peace, you will, at some point, have to fight the war. Is it too much to ask that you should risk people sniggering at you if the reward is that you avoid the war? But if you keep your head down, at some point democracy will be rolled back and then what will you do? And it will end in violence, and I, as a Quaker, am not big on violence.
JC: Absolutely, nor am I, indeed. I suppose a lot of people seem to think that the state of democracy that we have at the moment is something that's normal. We know that it’s not always been there, but we live within it and think it’s normal. But actually it isn’t normal, is it, when you look back in history?
DM: No, it’s not. People seem to think that because most of us were born into it... I think we’ve been lulled into this feeling that it’s as natural as sunshine. It’s not, and it’s so easy for it to be taken away. It requires blood to get, yet it can be given away with a stroke of a Biro. And it is being given away by people who really don’t care, because they don’t need democracy to be wealthy. You do; democracy protects the non-powerful. It’s the only thing that protects.
JC: And how long do you think we’ve got? We’ve only got a bit of democracy as it is, but the little bit that we’ve got, how long have we got to hold on to that now?
DM: If I could give you a good answer to that, someone would have shot me. I don’t know. Wasn’t it Pitt the Younger who, when someone came rushing into his office saying, “My God the country is ruined”, said, “Well, actually, there’s a lot of ruin left in the country”? And, yes, that's true; I think the door is not shut yet. But you just have to look at the number of ways in which our ability to change things democratically is being given away. Each one of those doors that closes leaves us with fewer paths to tread where we can affect change through civilized, democratic and peaceful means. I don’t think we can measure the time we’ve got in decades. I do not think we can. As I say to my children who are thirteen and sixteen, “It will be decided in my lifetime, not in yours. In my lifetime it will all be decided, and therefore it’s on my watch.” And on yours, Julian. It’s on your watch and mine. People say, “Why do you write all this stuff? Why do you do these talks?” And I say: “Simple, I want to have an answer to the what-did-you-do-during-the-war-daddy question”. We are at war. There’s a war on our democracy. What are you doing about it? It’s now. It will happen on our watch.
JC: So, in a sense, it’s like a series of shutting doors before us. One of these doors is, of course, the signing of these agreements, which I understand they want to be agreed by the end of this year, or as soon as possible.
JC: I went to the OccupyLondon.org website, and they say that once these are agreed they are effectively permanent. Do you agree with that?
DM: Yes, they are. In other words, they say in the text this is an agreement made by a sovereign nation, and then there are other bits of international law that govern how nations can change their minds. The international lawyers will say: “If you arbitrarily change your mind, you’re breaking your own laws, and we might be able to sue you for that.” Of course, ultimately, we will have to have a radical party, and by radical I mean what that word means: ‘to pull up by the roots’.
JC: This actually prompts me to ask you about reformist politics. In your address you said that reformist politics is over - that there's no point in going that route any more.
DM: No, I don’t think there is. I do think the era of reformist politics is over - not in the process of being over, it’s over. This is why it’s dawned on people how futile it is to vote. They only have reformist parties to vote for. The political class and the pundits say, “You know, the public are so apathetic.” They blame the public, point their finger and say: “You know, those grubby people on the street corner, they’re apathetic, they’re stupid, they don’t vote.’ No, I don’t think so. I think the public has actually realised some time ago. “Wait a minute”, they will say, “What is the point of me voting for you and you, when neither of you have the power to deliver on any of the things you say you’re going to deliver on?” Whether people can articulate it as clearly as that, they know that.
JC: I think you’re absolutely right. Is this really about reformist politics, or party politics in general? Do you think there’s any point in voting for any party?
DM: The current parties? No. Why are we still using the main parties which date from the Victorian/Edwardian era. Are you driving a Victorian car? Do you have Edwardian clothes? Do you walk around in shoes from a hundred and fifty years ago? Why do we still imagine that a political system of political parties that's near on a hundred years old is fit for the job of the Twenty First Century? We have parties whose ideology blinkers them to the realities in which they themselves exist. So you have two parties: one party that enforces austerity with a gleeful rub of its hands, and another party that enforces austerity by shedding some crocodile tears and wringing their hands in fake sorrow. Well you know what? If you could save the world through hand wringing, the English would have saved the world centuries ago.
JC: The answer to your rhetorical question, I suppose, is that we’re indoctrinated to believe it.
JC: So, how do we get out of that? How do we have some sort of different approach to this?
DM: We will have to have radical politics. Where will they come from? Well, not from the political parties we have right now. We will have to say to ourselves now that it's worth voting for a party which is small. I’m a member of the Green Party. Do I think the Green Party would be that radical party? It could be. Will it be? I think, actually, the radical party we’re talking about will emerge out of the good people in many of the different parties, people within Labour, perhaps people within the Tories, (never mind about the Liberal Democrats), saying: “Yes, why am I in this particular division of the political world?” We have to have such a party. People always say voting for a small party would be a wasted vote, because they won’t get elected. But if you vote for a party that has already failed you five times in a row, surely that is the wasted vote, because you know that they’re going to fail. They’re going to do it on purpose.
JC: Yes, but what you’re suggesting seems to be something that will have to take a great deal of time - for people to become aware, really aware, and feel what’s going on, and then think to themselves, “I really must do something about this.” By that time, won’t it be too late?
DM: If that’s how it worked, Yes. But that’s not how moments of real change…Let’s look at something that's rather small on the scale we’re talking about: the Civil Rights Movement in America. That's small beer. The rest of the world had already moved on, but the Americans were half a century behind. Did it require the whole of America to sit down, have a long think, put the beer to one side, and mull it over? No, it didn’t. It required a very small number of people to say, “This is not right,” and to organise themselves, and to galvanise themselves and become visible. Their visibility attracted people like candles attract a moth. Then a much larger group joined, who hadn’t really sat down and thought it all through; they just heard the much more distilled arguments and said: “Yeah, Ok!” They hadn’t thought it all through, but they could see that this was happening and they joined. So, actually, those moments of change happened very quickly. That’s what a tipping point is; you get to a critical point and suddenly a massive change happens very quickly. So, I think what it requires is a very much smaller number of people to think these things through, and make contact with each other. This is what I find on the blog: people join its community. My blog is like one of many. People join and they say, “I’ve got no one to talk to. No-one here believes what I believe.” But then they find a community and suddenly they’re empowered. They think, “Crikey, I’m not the only person.” That’s how radical change happens. It happens fast when it gets to that critical point.
JC: You mentioned in the Q&A of that address something called depositor unions to create a more direct way of effecting change. Obviously, this applies to the banks, but could that kind of principle be applied to corporations in general?
DM: Yes, all I was doing was saying: Before unions came along, if you didn’t like the conditions under which you worked, what could you do about it on your own?So people said, “Why don’t we club together?” And, hey presto, a kind of power was born which people didn’t have before. All I said was, “Well, that’s great when you’re in work, but how does that work when you’re, say, in money and financial systems?” I’m plucking numbers out of the air, but let’s say HSBC has a hundred thousand depositors in this country, (it has many more than that obviously). If you made contact with each other and formed just an online club, a union of the depositors, then (for instance) you could say: “We’ve heard that you’re laundering drug money. We, the Depositors’ Union, don’t like this. If you carry on doing this, we, the Depositors’ Union, will move our deposits from your bank to some other bank.” Now that’s perfectly legal; it’s not actually very hard to do. In fact there are laws coming in forcing the banks to make it easier for you. That would give you a fantastic amount of power, because no bank can afford for any significant proportion, like 7% of their deposit base, to just up sticks and move in a week.
JC: Is this because of fractional reserve lending?
DM: Yes, it’s called a run on the bank. Even the threat of that would stop them in their tracks, because there is no law and there is no other power on earth that could save them from a run on the bank by the depositors leaving. So, I simply said: “Imagine that you created a Depositors’ Union.”
I’ve actually talked to the Unions and said, “Look, you are using a Victorian kind of power, a power for workers in the Twenty First Century. By all means carry on, but you already have two million members. Why don’t you contact them and say: 'Why don’t we, in addition to your union membership, create a Depositors’ Union? Those of you who are with NatWest or Barclays would now be on an online list of people - a group of their depositors.' You would then have more power over that bank than the Bank of England, than the financial regulator, or their bond holders. You would have total power over that bank if you wrote to them as the Depositors’ Union saying, 'You stop this or we’ll move'. They would have no choice.”
There are forms of power which we can have for ourselves if we just stop being so lazy, only employing the forms of power that our great-grandparents came up with. They came up with these things, and we’re so lazy that we’re still using them.
JC: Can you envisage any way in which that kind of power could be used more generally with corporations, because we’re not just talking about banks, are we?
DM: Well, more generally, you’re talking about a Shareholders’ Union. But the problem is most shares are not held by ordinary people. Even when they’re held in 'your pension', the people in charge of that pension are the very same people who are the global over-class we’re talking about, so they’re hardly going to do it on your behalf, are they?
JC: No, so what are we talking about? Direct purchasing power?
DM: I think you start with the banks. The banks are fantastically powerful. Never mind trying to convince our politicians to bring them under control. If we simply did it ourselves - and it doesn’t require anything more than making contact with the other depositors in the bank - we would control those banks. And if you control those banks, you control the rest of the financial operation. It’s actually there for the taking. If I can come up with that - and I’ve talked to a couple of other people, and there are refinements on that which would work even better - then there are other kinds of powers. It’s just that we haven’t bothered to even think about them. Our great-grandparents did, and we just stopped and said, “Well, I don’t need to think about these things anymore, because I’ve just got TV dinners and cheese that comes in a squirty bottle. I’m fine.”
JC: Absolutely, yes indeed. We need to remind ourselves that we don’t live in the world that we think we live in, and realise that there’s a great deal of responsibility upon our shoulders, and that we can actually change things if we have a mind to, and, as you say, work together. I wanted to ask you finally if there is any thought that you want to leave us with. You said that we do have some power, if we can grasp this moment. Is there any one thing that would make a huge amount of difference to us?
DM: Yes, but it’s not a single, practical thing. If there was one single, practical thing that you could grasp hold of and do, then we wouldn’t be in the kind of pickle we’re in. What I would say is this: Go back and you look at the English Revolution in the 1600s, which we were not even taught about in school. We were taught about the Civil War, and it was the first fashion war according to what we were taught in school. It was a war between people who wore frilly shirts and others who had bad haircuts. It wasn’t; it was a revolution. All of the great ideas, the ideas which have made Europe great, the ideas about which we are so proud and we like to tell the rest of the world: freedom of the press, freedom of expression, freedom of religious belief, freedom of the press, universal suffrage - all those ideas came out of Englishmen a couple of decades before the English Revolution in the early 1600s. They were, in fact, all printed within three or four hundred yards of St. Paul's. We still have those pamphlets; they were saved by a visionary man, and they formed the centre of the collection of the British Museum. And what I would say to people is: If you look at who wrote them they were ordinary people. Winstanley, the man who started the diggers, was a failed businessman from Bolton; he was 'nobody'. And yet he, and others like him, had the ideas which made Europe what it is. They created the ideas about which we are so proud. Yet those people were 'nobodies'; they were no better than you and me. We’ve got to remember: If they can do it, why do we think we cannot? We’re all waiting around saying, “We must have leadership! We must have a leader who is going to arise!” - as if there were some mysterious town somewhere hidden in the British Isles which was breeding leaders, and when they step off the No. 19 bus there’ll be the bright white of ‘leadership’ shining out of them, and we’ll all know: “My God! The leaders have arrived! Follow them!” There’s no such place. There’s you and there’s me, and we are no worse than the people who started the English revolution with those brilliant ideas and who dislodged the entire medieval power structure. It simply requires doing what they did, which was to put their first foot on that path of questioning the things that their 'betters' told them couldn’t be questioned. They did it, and we have unfinished business. We can do it. People just simply have to speak up. They have to go to a crowded pub, they have to invite people to their houses, and they have to speak up. If they put their foot upon that path, it will lead them to one day giving a talk in Manchester or being interviewed, and they will be telling other people to do the same. And if a small number of people do that, then I truly believe the rest of the people in this country will rise like lions.
JC: And, I guess, one of the first steps that could be made is to visit websites like your blog. There you have a very poignant article called The Disloyal which I recommend everybody to read. Could you indicate how people can get to your website?
DM: Sure. The blog goes under the name of GolemXIV. If you put that into a search engine, two things come up: the short story that I took the name from and my website. It’s a community of people, which has grown, and they’re ordinary people who have decided they are going to set their feet upon that path.
JC: Well thank you ever so much for speaking with us. It’s obviously very concerning, and it’s depressing in many ways, of course. But I think that you’ve also given us reason to hope in what you’ve said in the last few minutes; you've given us a very definite sense that there are things we really can do if we raise awareness about this. So I’m very grateful to you for coming on the programme. Thanks very much David, for coming on.
DM: Well, thank you for having me. I appreciate it.
Disclaimer: The views expressed by David Malone in this interview are his responsibility alone; they do not necessarily reflect those of The Mind Renewed.