TVNZ’s special programme on Tuesday (News Special: You, Me and the Economy; 25 November 2025) included (about two-thirds of the way into the programme) among a number of helpful and unhelpful suggestions, a call for New Zealanders to get onto the compound interest bandwagon, the magic formula of getting rich in the never-never through thrift. Jam tomorrow, never today; which seems to be our main narrative towards fixing the West’s economic woes.

The spokesperson for compound interest on the program sort-of acknowledged that ordinary compound interest (ie “conservative” compound interest) was hardly good enough; she pushed for an amplified “high growth” version of compound interest.

She was correct, if understated, on her point about conservative returns.

Ordinary Compound Interest

If we go back 100 years, to 1925, the equivalent of today’s minimum wage was $120 per year. If a person saved $120 then, and allowed it to compound (say in the form of a one-year bank term deposit) through to 2025, an average after-tax interest rate of 4.23 percent would have been required to make that ‘investment’ worth $7,540 today. $7,540 represents compounded CPI inflation over those 100 years. Thus, in principle, $120 (actually £60) would have had the same purchasing power as $7,540 today. In reality, the average term-deposit interest rate over the last century was well under 4.23 percent before tax, let alone after tax.

(We note that tax on interest is charged at a person’s marginal rate – commonly known as the secondary tax rate – and is nowadays withdrawn at source. For most of the last 100 years, tax on interest was more easily evaded, and it was paid separately, meaning that the compounding appeared to relate to before-tax interest income.)

In 1925, $120 per year supported, in many cases, low-income families. Imagine any family trying to live on an annual income of $7,540 today! The better way of evaluating past compound interest is to compare the compounded present value with today’s annual minimum wage, which is $48,800. For $120 in 1925 to compound to $48,800 in 2025, an average after-tax interest rate of 6.2% would have been required. That’s vastly in excess of what term deposit interest rates actually were, on average.

We should note that an average interest rate of seven percent would have compounded the $120 term-deposit to $104,000 today, and that an average interest rate of eight percent would have compounded the $120 term-deposit to $264,000 today. So, the magical exponential outcome of compound interest can occur, but only if the interest rate is sufficiently above inflation (ie above the compounded growth of prices); or, more pertinently, sufficiently above the compounded minimum-wage rate.

Other starting years

My calculations show that if the approximate minimum wage was invested in 1935, an after-tax average interest rate of 7.1% would have been required to achieve today’s minimum wage. (Wages were about twenty percent lower in 1935 than in 1925.)

In late 1970, I was earning seventy cents an hour milking cows every Sunday morning. That was about the minimum wage then. In 1980 I was in a well-paid IT job, earning $13,000 per year, which was more than double the before-tax minimum-wage-equivalent of the time. I have estimated annual minimum-wage equivalents for those years of $1,500 (for 1970) and $5,000 (for 1980).

For $1,500 in 1970 to compound to $48,800 in 2025, an average interest rate of 6.54% would have been required. For $5,000 in 1980 to compound to $48,800 in 2025, an average after-tax interest rate of 5.19% would have been required. (For the 1980 example, a before-tax annual average interest rate of about ten percent would have been required for such 1980 savers to have achieved three times today’s minimum wage.)

For a $30,000 term deposit in 2015 (again, set close to the minimum wage), an average after tax interest rate of five percent would have been required to compound that amount to today’s minimum wage.

Today’s one-year term deposit rate is 3.4% before tax, 2.4% after tax (applying a secondary tax rate of 30%). A $30,000 minimum-wage term deposit in 2015, compounded for ten years at today’s rate, would now be worth $38,000; well under today’s annual minimum wage (for a 40-hour per week job) which is nearly $49,000.

In the last 80 years, many people did make investment fortunes; but through property and other debt, not through saving.

Target Audience

We note that the target audience for this compound-interest narrative is young adults, because compound interest – like Mainland cheese – takes time. Most young adults in New Zealand today can only afford to save in this way if the money is taken from them ‘at source’ (eg through KiwiSaver), and then (if they are trying to live independent lives) they have to incur higher levels of debt than they otherwise would to be able to make those obligatory savings. Further, employer contributions to KiwiSaver are very much a part of the cost of labour, and are therefore factored in with employers offering lower wages than they otherwise would; after-tax employee remuneration is just a part – albeit a large part – of labour cost.

“High Growth” Compound Interest

The above simple mathematics show why the savings industry is trying to push products that simulate high-growth compound interest. In the years before 2008, and in the mid-2010s, these products rode the property bubble wave. Those ‘investments’ now appear rather naïve. But the industry of professional optimism always looks forward; it almost never looks back.

Today, amplified compound interest is (allegedly) being achieved through riding the world’s stock markets, with an emphasis on military stocks and ‘tech’ stocks (especially those of the ‘AI’ companies), and on cryptocurrencies. The ‘tech’ stocks (which the New Zealand Super Fund is highly exposed to) are one modern-day equivalent of mining-company shares; shares which historically have been amongst the most volatile. And crypto-currency mining is the virtual – and equally unsustainable – equivalent today of gold-mining as in the days of the Klondike, Ballarat, and Tuapeka gold-rushes. (Re gold rushes, 2025 is a global gold-rush year, though the years of the individual undercapitalised goldminer-made-good are in the past.)

Speculations on AI, Bitcoin, or African gold are no more routes to financial security or future abundance than is prosaic money-losing compound interest.

What are they thinking?

Compound interest without compounding economic growth.

We have to think about the compound interest narrative in two contexts, that of a static economy, and that of a perpetually growing economy.

The basic idea of a static economy is that there is no inflation nor economic growth. To keep it simple, imagine no population growth as well. And no taxes.

The mathematics of compound interest in this case are real. If you were able to save a sum of money and to wait for it to compound at two percent per year, you would more than double your money after fifty years, and increase it tenfold in less than 120 years. These gains to you and your entitled grandchildren would be fully funded by some other people and their impoverished grandchildren; every dollar of interest received is paid by someone else. It would be a zero-sum game for society; for every winner there would be a loser.

To propose compound interest like this sounds ludicrous, and it is. But, the whole object of monetary policy in New Zealand and like countries is to create a world in which the rate of interest is about two percent higher than the rate of inflation. That is precisely what I have described here. To achieve that goal, monetary policy ends up creating a structural recession, a perpetual state of zero economic growth; ‘green shoots’ only appear when the rate of interest is allowed to fall to at or below the rate of inflation.

In reality, compound interest has always been for the few, not the many. It’s an accounting trick that depends on the majority of the beneficiaries of compound interest never realising their apparent gains; never spending their paper bonanzas. Paper wealth can be converted to real wealth by just a few. Paper wealth – financial claims – can be inflated, infinitely, so long as it remains just that; paper wealth or its digital equivalent.

Compound interest with compounding economic growth.

The advocates of compound interest will respond by saying that compound interest depends additionally on economic growth, real economic growth.

In this story, there are two versions: either compound interest parasitically exploits economic growth, or it enables economic growth. Either way, the supposition is infinite exponential growth.

The simplest scenario here is of an economy with zero inflation, zero population growth, two-percent annual interest, and two-percent annual growth of real GDP. So, in this case, the two-percent compound interest simply represents the fruits of that economic growth; the only debtors would be firms, not households. In principle everyone could be doing it; the interest payable to every household would be paid by business growth.

There are two obvious problems. One is that real exponential growth cannot go on forever. If average real incomes today had been growing by two-percent per year since the early days of the Roman Empire, today we would on average have living standards 16 million trillion times greater than those of Jesus Christ and his Disciples.

The illusion (really delusion) of long-term sustained economic growth has been made possible by early-modern humans’ learning to extract energy in the form of fossil fuels, and to dump waste products into the environmental commons. Late-modern humans could have invested – financially and intellectually – in systems to maintain high living standards beyond the fossil fuel age; but haven’t. Our home planet, though forgiving in many respects, is finite.

The other obvious problem is that if too many households are saving rather than spending much of their incomes, then there would be insufficient demand for final goods during the long period of saving. This kind of saving behaviour breeches Say’s Law, which is the basis of the belief-system of classical-liberal supply-side economics – manifest today as neoliberalism. Say’s Law supposes that policymakers do not and should not concern themselves with matters of ‘upside demand’ – aka ‘stimulus’. Nor should they concern themselves with ‘downside demand’ – aka ‘counter-stimulus’ – yet that’s exactly what we got with the openly touted manufactured recession created by the Reserve Bank of New Zealand from 2021. (Refer Adrian Orr admits Reserve Bank is ‘deliberately engineering recession’, Stuff, 24 November 2022.)

The required economic growth would not continue, because there would be insufficient demand for the extra output; demand is created by the creation of and spending of claims, the prerogative of sovereign governments and of banks.

Saving must be balanced by investment; too much saving disincentivises investment spending, sometimes dramatically so. We can see that, the reason for today’s weak investment climate; so we depend on the Deus ex machina (or cargo cult) of exogenous foreign demand. Exports featured prominently as the principal narrative of You, Me and the Economy.

The other mantra word is ‘productivity’. Most cafes do not need more cost-saving devices to improve their productivity; rather, to improve their productivity, cafés need more customers.

See Our inability to understand the exponential function is our biggest weakness, YouTube, posted by Professor Albert Bartlett about a month ago. All exponential growth, in nature, ends; sometimes catastrophically.

Finally

Why don’t the people we believe to be experts tell us these things? Could it be that the experts we most see and hear are experts in the arts of storytelling and story-marketing; in this case, experts in the fantasy rather than in the reality of growth? (Refer Greta Thunberg’s radical climate change fairy tale is exactly the story we need, The Conversation, 28 September 2019.)

*******

Keith Rankin (keith at rankin dot nz), trained as an economic historian, is a retired lecturer in Economics and Statistics. He lives in Auckland, New Zealand.

INTERVIEW: The Chris Hedges Report

After two years of genocide, it is no longer possible to hide complicity in Israel’s crimes against the Palestinians. Entire countries and corporations are — according to multiple reports by UN Special Rapporteur on Palestine Francesca Albanese — either directly or indirectly involved in Israel’s economic proliferation.

In her latest report, Gaza Genocide: a collective crime, Albanese details the role 63 nations played in supporting Israel’s genocide of the Palestinians. She chronicles how countries like the United States, which directly funds and arms Israel, are a part of a vast global economic web.

This network includes dozens of other countries that contribute with seemingly minor components, such as warplane wheels.

Rejection of this system is imperative, Albanese says. These same technologies used to destroy the lives of Palestinians will inevitably be turned against the citizens of Israel’s funders.

“Palestine today is a metaphor of our life and where our life is going to go,” Albanese warns.

“Every worker today should draw a lesson from what’s happening to the Palestinians, because the large injustice system is connected and makes all of us connected to what’s happening there.”

The transcript:
Francesca Albanese, the United Nations special rapporteur on Palestine, in her latest report, Gaza Genocide: a collective crime, calls out the role 63 nations have in sustaining the Israeli genocide. Albanese, who because of sanctions imposed on her by the Trump administration, had to address the UN General Assembly from the Desmond and Leah Tutu Legacy Foundation in Cape Town, South Africa, slams what she calls “decades of moral and political failure.”

“Through unlawful actions and deliberate omissions, too many states have harmed, founded and shielded Israel’s militarized apartheid, allowing its settler colonial enterprise to metastasize into genocide, the ultimate crime against the indigenous people of Palestine,” she told the UN.

The genocide, she notes, has diplomatic protection in international “fora meant to preserve peace,” military ties ranging from weapons sales to joint trainings that “fed the genocidal machinery,” the unchallenged weaponization of aid, and trade with entities like the European Union, which had sanctioned Russia over Ukraine yet continued doing business with Israel.

The 24-page report details how the “live-streamed atrocity” is facilitated by third states. She excoriates the United States for providing “diplomatic cover” for Israel, using its veto power at the UN Security Council seven times and controlling ceasefire negotiations. Other Western nations, the report noted, collaborate with abstentions, delays and watered-down draft resolutions, providing Israel with weapons, “even as the evidence of genocide … mounted.”

The report chastised the US Congress for passing a $26.4 billion arms package for Israel, although Israel was at the time threatening to invade Rafah in defiance of the Biden administration’s demand that Rafah be spared.

The report also condemns Germany, the second-largest arms exporter to Israel during the genocide, for weapons shipments that include everything from “frigates to torpedoes,” as well as the United Kingdom, which has allegedly flown more than 600 surveillance missions over Gaza since war broke out in October 2023.

At the same time, Arab states have not severed ties with Israel. Egypt, for example, maintained “significant security and economic relations with Israel, including energy cooperation and the closing of the Rafah crossing” during the war.

Francesca Albanese talks to Chris Hedges                      Video: The Chris Hedges Report

The Gaza genocide, the report states, “exposed an unprecedented chasm between peoples and their governments, betraying the trust on which global peace and security rest.” Her report coincides with the ceasefire that isn’t. More than 300 Palestinians in Gaza have been killed by Israel since the ceasefire was announced two weeks ago.

The first major ceasefire breach on October 19 led to Israeli air strikes that killed 100 Palestinians and wounded 150 others. Palestinians in Gaza continue to endure daily bombings that obliterate buildings and homes. Shelling and gunfire continue to kill and wound civilians, while drones continue to hover overhead broadcasting ominous threats.

Essential food items, humanitarian aid and medical supplies remain scarce because of the ongoing Israeli siege. And the Israeli army controls more than half of the Gaza Strip, shooting anyone, including families, who come too close to its invisible border known as the “yellow line”.

Joining me to discuss her report, the ongoing genocide in Gaza and the complicity of numerous states in sustaining the genocide in Francesca Albanese, the United Nations special rapporteur on Palestine.

Before we get into the report, let’s talk a little bit about what’s happening in Gaza. It’s just a complete disconnect between what is described by the international community, i.e. “a ceasefire”, the pace may have slowed down, but nothing’s changed.

FRANCESCA ALBANESE: Yes, thank you for having me, Chris. I do agree that it seems that there is a complete disconnect between reality and political discourse. Because after the ceasefire, the attention has been forced to shift from Gaza elsewhere.

I do believe, for example, that the increased attention to the catastrophic situation in Sudan, which has been such for years now, all of a sudden is due to the fact that there is a need for, especially from Western countries and the US, Israel and their acolytes to focus on a new emergency.

‘There is the pretence that there is peace, there is no need to protest anymore because finally, there is peace. There is no peace.’

There is the pretence that there is peace, there is no need to protest anymore because finally, there is peace. There is no peace. I mean, the Palestinians have not seen a day of peace because Israel has continued to fire, to use violence against the Palestinians in Gaza. Over 230 Palestinians have been killed since the ceasefire, 100 of them in one day in 24 hours, including 50 children.

And starvation continues. Yes, there has been an increase in the number of trucks, but far, far below what is needed with much confusion because it’s very hard to deliver aid. All the more, Israel maintains a control over 50 percent of the Gaza Strip while the entire Gaza population is amassed in small portions, guarded portions of the territory.

So there is no peace. Meanwhile, while the Security Council seems to be ready to approve a Security Council resolution that will create a non-acronistic form of tutelage, of trusteeship over Palestine, over Gaza, the West Bank is abandoned to the violence and the ethnic cleansing pushed by armed settlers and soldiers while Israel jails continue to fill up with bodies to torture of adults and children alike. This is the reality in the occupied Palestinian territory today and so it makes absolutely no sense where the political discourse is.

CHRIS HEDGES: Two issues about Gaza. One, of course, Israel has seized over 50% or occupies over 50 percent of Gaza. And as I understand it, they’re not allowing any reconstruction supplies, including cement, in.

FRANCESCA ALBANESE: This is also my understanding. They have allowed in food, water and some essential materials needed for hospitals, mainly camp hospitals, tents. But anything related to sustainability is prohibited.

There are many food items that are also prohibited because they are considered luxurious. And the question, Chris, is, and this is why I harbor so much frustration these days toward member states because in the case of genocide, you have heard yourself the argument, well, the recalcitrance of certain states to use the genocide framework saying — and it’s pure nonsense from a legal point of view — but saying, well, the International Court of Justice has not concluded that it’s genocide.

Well, it has concluded already that there is a risk of genocide two years ago, in January, 2024. But however, even when the court does conclude on something relevant like in July, 2024, that the occupation is illegal and must be dismantled totally and unconditionally, this should be the starting point of any peace related or forward-looking discussions.

Instead of deliberating how to force Israel to withdraw from the occupied Palestinian territory, member states continue to maintain dialogue with Israel as Israel has sovereignty over the territory. See, so it’s completely dystopic, the future they are leading Palestinians out of despair into.

But they are also forcing the popular movement, the global movement that has formed made of young people and workers to stop. Because look at what’s happening in France, in Italy, in Germany, in the UK — any kind of attempt at maintaining the light turned on Palestine from Gaza to the West Bank is assaulted. Protests, conferences, there is a very active assault on anything that concerns Palestine.

So this is why I’m saying we are far, far beyond the mismanagement of the lack of understanding, I mean the negligence in approaching the question of Palestine, it’s active complicity to sustain Israel in the ethnic cleansing of Palestine.

CHRIS HEDGES: Which, as you point out in your report, has been true from the beginning despite a slight change in rhetoric recognising the two-state solution. The UK did this while only cutting back on shipments by 10 percent.

But I want to ask before we get into the report, what do you think Israel’s goal is? Is it just to slow-walk the genocide until it can resume it? Is it to create this appalling, uninhabitable, unlivable ghetto? What do you think Israel’s goal is?

FRANCESCA ALBANESE: I think that now more than ever it is impossible to separate and distinguish the goals of Israel from the goals of the United States. We tend to have a fragmented view of what happens, analysing for example the relationship between Lebanon and Israel, between Iran and Israel, or between Israel and the Palestinians.

‘One of the things that Palestine has made me realise is the meaning of “Greater Israel” because I do believe that what the current leadership in Israel has in mind and it’s supported by many willing or not in the Israeli society, many who are fine with the erasure of the Palestinians.’

In fact, do, I mean, one of the things that Palestine has made me realise is the meaning of “Greater Israel” because I do believe that what the current leadership in Israel has in mind and it’s supported by many willing or not in the Israeli society, many who are fine with the erasure of the Palestinians.

But there is this idea of Greater Israel and for a long time I have been among those who thought, who were wondering what it is, this “Greater Israel” because of course you look at the map by Israeli leaders in several occasions with this Greater Israel going from the Nile to the Euphrates and you say come on they cannot do that, they cannot occupy Egypt, Lebanon, Iraq.

But then everything changes when you look at it from a non-territorial border expansion perspective. And if you think that in fact domination can be exerted, established, other than by expanding the physical borders and through military occupation, but through domination and financial control, control from outside, power domination, you see that the Greater Israel project has already started and it’s very advanced.

Look at the annihilation of Iraq, Libya, Syria, Lebanon. So all those who were historically considered not friends of Israel have been annihilated. And the other Arab countries that remain either do not have the capacity to confront Israel and perish the thought they explored the idea of unity among them or with others. And the others are fine with it.

Ultimately, I think that Greater Israel is the quintessential explanation of the US imperialistic design in that part of the world for which the Palestinians remain a thorn in the side not just for Israel but for the imperialistic project itself because the Palestinians are still there resisting.

They don’t want to go, they don’t want to be tamed, they don’t want to be dominated so they are the last line, the last frontier of resistance, both physically and in the imagination. And therefore, you see, the fierceness against them has scaled up, with the US now getting ready with boots on the ground to get rid of them. This is my interpretation of the general design behind Israel-United States, where Israelis are going to pay a heavy price like many in the region, not just the Palestinians.

CHRIS HEDGES: So you see the imposition of American troops in Gaza as another step forward to the depopulation of Gaza.

FRANCESCA ALBANESE: Yes, yes, yes, I don’t trust any promise made to the Palestinians either by Israel or by the United States because what I’ve seen over the past two years shows me, demonstrates to all of us in fact, that they don’t care at all about the Palestinians. Otherwise, they would have seen their suffering.

‘The beginning of genocide has changed my perception of the world in a way, for me personally, it’s the end of an era of innocence when I really believed that the United Nations were a place where things could still be advanced in the pursuit of peace.’

It’s just not like people like us who can really divide their life. Is it pre-genocide? Does it happen to you as well? Are you talking of pre-genocide or after genocide? Because in fact, the beginning of genocide has changed my perception of the world in a way, for me personally, it’s the end of an era of innocence when I really believed that the United Nations were a place where things could still be advanced in the pursuit of peace.

Now I don’t think so, which doesn’t mean that I think that the UN is over, but in order not to be over, in order to make sense to the people, it is to be led by dignity, principles like dignity, equality and freedom for all. And we are absolutely far from that today.

CHRIS HEDGES: And what is it that brought you to this decision? Is it the acceptance of this faux ceasefire on the part of the UN, or was it before this moment?

FRANCESCA ALBANESE: No, it’s before. It’s before. It’s the fact that for two years most states, primarily in the West, but with the acquiescence of other states in the region have supported the Israeli mantra of “self-defence”.

Sorry, it was a mantra because again, self-defence has a very, I’m not saying that Israel had no right to protect itself. Of course Israel had suffered a ferocious attack on October 7. Some say similar to the attacks it had inflicted on the Palestinians. Others say more brutal, say less brutal. It doesn’t matter.

Israel suffered a horrible, violent attack. Israeli civilians suffered a horrible attack on October 7th. But hey, this didn’t give the possibility to Israel to invoke Article 51 of the UN Charter, meaning the right to wage a war.

This is not legal. And on this I can say I’m surprised by how conservative are member states when it comes to the interpretation of international law, except on this, in the sense that the International Court of Justice (ICJ) has already set the limits of the right of invoking self-defence for member states.

And it can only be done against states where there is a concrete threat that the state will attack which is not the case here. So yes, Israel could defend itself, but not wage a war. And while the war was clearly identifiable more for its crimes than not its tendency to avoid crimes, member states have continued to say nothing and it was very extreme violence against the Palestinians in Gaza but also against the Palestinians in the West Bank. And for two years they’ve not used their power to stop it.

So I’m convinced that in order to have a political shift vis-à-vis Israel, there must be a political shift at the country level, because governments are completely subdued to the dictates of the US. Of course, if the US wanted, this would stop, but the US with this constellation of figures in the government is not going to stop.

And plus look at how the West in particular has contributed to dehumanise the Palestinians. Even today you hear people saying yes, Palestinians have been killed in these numbers because they’ve been used as human shields when the only evidence that they’ve been used as human shields is against Israel because Israel has used Palestinians as human shields in the West Bank and in Gaza alike.

You see Palestinians have returned to be wrapped into this colonial tropism of them being the savages, the barbarians, in a way, they have brought havoc upon themselves. This is the narrative that the West has used toward the Palestinians. And by doing that, it has created, they have created the fertile ground for Israel’s impunity.

CHRIS HEDGES: Let’s talk about the nations that you single out in your report that have continued to sustain the genocide, either through weapons shipments, but also the commercial interests. I think your previous report talked about the money that was being made off of the genocide. Just lay out the extent of that collaboration and to the extent that you can, the sums of money involved.

FRANCESCA ALBANESE: Yeah, yeah, let me start with introducing generally two components, the military component and the trade and investment ones, which are quite interrelated. And states have, in general, I name 62 states, primarily Western states, but with substantive collaboration of states from the Global South, global majority, including some Arab states.

So they have altogether ignored, obscured and somewhat even profited from Israel’s violations of international law through military and economic channels. So military cooperation through arms trades or intelligence sharing has fueled Israel’s war machine during the occupation, the illegal occupation, and especially during the genocide while the United States and Germany alone have provided about 90 percent of Israel’s arms export.

At least 26 states have supplied or facilitated the transfer of arms or components, while many others have continued to buy weapons tested on the Palestinians. And this is why in my previous report, the ones looking at the private sector, I was shocked to see how much the Israeli stock exchange had gone up during the genocide.

And this is particularly because of a growth in the military industry. On the other hand, there is the trade and investment sector. Both have sustained and profited from Israel’s economy. Think that between 2023, 2024, actually the end of 2022 and 2024, exports of electronics, pharmaceuticals, energy minerals and what is called the dual-use have totaled almost US$500 billion, helping Israel finance its military occupation.

Now one third of this trade is with the European Union while the rest is complemented by North American countries, the US and Canada, who have free trade agreements with Israel and several Arab states that have continued to deepen economic ties.

Only a few states have marginally reduced trade during the genocide, but in general the indirect commercial flows, including with states that have supposedly no diplomatic relations with Israel, have continued undisturbed.

It’s a very grim picture of the reality. But let me add just one extra element. I do believe that in many respects, the problem is ideological. As I said, there is a tendency to treat Ukraine, for example, vis-a-vis Russia, in a very different fashion than Palestine versus Israel. And this is why I think there is an element of Orientalism that accompanies also the tragedy of the Palestinian people.

CHRIS HEDGES: Talk a little bit about the kinds of weapons that have been shipped to Israel. These are, and we should be clear that, of course, the Palestinians do not have a conventional army, don’t have a navy, they don’t have an air force, they don’t have mechanized units, including tanks, they don’t have artillery, and yet the weapons shipments that are coming in are some of the most sophisticated armaments that are used in a conventional war.

And as a leaked Israeli report, I think it was +972, provided, 83 percent of the people killed in Gaza are civilians.

FRANCISCA ALBANESE: Yes, yes. First of all, there are two things that are weapons, what is considered conventional weapons and dual-use. And both should have been suspended according to the decision of the International Court of Justice concerning Israel in the Nicaragua v. Germany case.

Meanwhile, there are two things: there is the transfer of weapons directly to Israel, and this includes aircraft, materials to compose the drones, because Israel doesn’t produce anything on its own, it requires components — artillery shells, for example, cannon ammunition, rifles, anti-tank missiles, bombs.

So these are all things that have been provided primarily by the United States. Germany, which is the second largest arms exporter to Israel has supplied a range of weapons from frigates to torpedoes.

And also, and then there is Italy, which has also provided spare parts for bombs and airplanes and the United Kingdom, who has played a key role in providing intelligence. And there is also the question of the UN. Not everything is easy to track because the United States have traveled … the United States are the prime provider of weapons, also because they are the assembler of the F-35 programme.

So there are 17 or 19 countries which cooperate and all of them say, well, you know, I mean, yes, I know that the F-35 is used in Israel, by Israel, but I only contribute to a small part. I only contribute to the wheels. I only contribute to the wings. I only provide these hooks or this engine.

Well, everything is assembled in the US and then sold or transferred or gifted to Israel. And it’s extremely problematic because this is why I say it’s a collective crime, because no one can assume the responsibility on their own but eventually all together they contribute to make this genocide implicating so many countries.

CHRIS HEDGES: So Francesca, Israel is the ninth largest arms exporter in the world. To what extent do those relationships have? I mean, I think one of the largest purchasers of Israeli drones is India. We’ve seen India shift its position vis-a-vis Palestine.

Historically, it’s always stood with the Palestinian people. That’s no longer true under [Narendra] Modi. To what extent do those ties affect the response by the 63 some states that you write about for collaborating with the genocide.

FRANCESCA ALBANESE: So let me first expand on this. Weapon and military technology sale is a core component of Israel’s economy. And since 2024, it has constituted one third of Israeli exports. And of course, there are two elements connected to this, is that these exports enhances Israel’s manufacturing capacity, but also horribly worsens the life of the Palestinians because Israeli military technology is tested on the Palestinians under occupation or other people under other Israeli related military activities.

Now, the fact that the arms export has increased of nearly 20 percent during the genocide, doubling toward Europe. And only the trade with Europe accounts for over 50 percent of Israeli military sales, selling to so many other countries, including in the Global South, the Asia and Pacific states in the Asia-Pacific region account for 23 percent of the purchase, with India being probably the major. But also 12 percent of the weapons tested on the Palestinians are purchased by Arab countries under the Abraham Accords. So what does it tell us?

It explains what you were hinting at in the question, the fact that this is also reflected in the political shift toward Israel that has been recorded at the General Assembly level. If you see how some African countries and Asian countries, including India, are behaving vis-a-vis Israel, it’s 180 degrees turn compared to where they were in the 1970s, 80s and 90s.

This is because on the one hand, Israel is embedded in the global economy, but also it’s a global economy that is veering toward ultra liberal, I mean, it’s following ultra-liberalist ideologies and therefore capital and wealth and accumulation of resources, including military power, comes first.

‘It’s very sad, but this is the reality . . . since the end of the Cold War that there has been an increasing globalisation of the system where the common denominator is force.’

It’s very sad, but this is the reality. And it’s important to know because this is a long, as I was hinting before, my sense is that this is a long term trajectory that didn’t start on October 7, 2023. I mean, probably since the end of the Cold War that there has been an increasing globalisation of the system where the common denominator is force.

I mean, there is this, not a common denominator, but the unifying factor for many is force, how the monopoly of force that comes with weapons, capital and algorithms. And yeah, this is where the world is going.

CHRIS HEDGES: Well, we’ve seen these weapons systems which of course are tested. They’re sold as bad. say the term is battle tested without naming the Palestinians, but they are sold to Greece to hold back migrants coming from North Africa. They are used along the border in the United States with Mexico.

And it’s not just that these weapons are “battle tested” on the Palestinians and we haven’t even spoken about these huge surveillance systems, but the very methods of control, the way they’re used are exported through military advisors.

FRANCESCA ALBANESE: Of course, because in fact, the Israeli population is made almost entirely of soldiers. Of course, there are those who do not enlist in the army for religious reasons or because they are contentious objectors, they’re a tiny minority. But the majority of the people of Israelis go through the army.

And then many of them transfer their know-how or what they have been doing into their next career steps. So the fact that Israel, as I was documenting in my previous report, Israel’s startup economy has a huge dark side to the fact that it’s connected to the military industry and to the surveillance industry.

There is a significant body of Israeli citizens who are going around providing advice, intelligence and training in the Global South both to mercenaries and states proper like Morocco. So there is an Israelisation and Palestinianisation of the international relations or rather of the relations between individuals and states.

And I think the interesting thing, this is why I’m saying Palestine is such a revealer, it’s because, as you say, eventually these tools of control and securitisation have concentrated in the hands of those who are fortifying borders at the expense of refugees and migrants.

So it’s really clear what’s happening here. There are oligarchs who are getting richer and richer and more and more protected in their fortresses where the state is providing the fertile ground to have it, but it’s not states that are benefiting from this inequality, because the majority of the people within states, look at the US, but also in Europe, are not benefiting from anything, in fact.

They’re victims. This is why you equally exploit it. This is why I’m saying it’s another degree of suffering, of course, than the Palestinians. But every worker today should draw a lesson from what’s happening to the Palestinians, because the large injustice system is connected and makes all of us connected to what’s happening there.

CHRIS HEDGES: Well, internally as well. I mean, with Sikh farmers who were protesting Modi were out on the roads, suddenly, over their heads were Israeli-made drones dropping tear gas canisters.

FRANCESCA ALBANESE: Yeah, exactly. Drones are one of the most exported devices from Israel’s technology and they are in use by Frontex to surveil the Mediterranean Sea, as you were saying, the US-Mexican border. But more and more, they’re getting into people’s lives.

Also look at the way certain technologies have been perfected across borders. I remember earlier this summer, this is very anecdotal, I’ve not done research on it, but I knew that we were seeing something quite and horribly revolutionary.

This year, this summer during the protests in Serbia, where students and ordinary citizens were taken to the streets against the government and have been protesting for one year now, people in Serbia. I saw the use of these sound weapons, oxygen-fed weapons.

So there are bombs that produce such a pain in the body who finds itself in the wave that it’s excruciating. And then of course people try to flee, but they also lose senses, et cetera. And I’ve seen this in Serbia.

And now I understand that it’s being used in Gaza as well, where the bomb doesn’t produce fire, it produces a movement of air that causes pain to the body and even to internal organs. It’s incredible. And these are weapons that have been perfected through testing here and there, and Serbia keeps on selling and buying military technology to and from Israel.

CHRIS HEDGES: I just want to close with, I mean, I think your reports, the last two reports in particular, show the complete failure on the part of governments as well as corporations to respond legally in terms of their legal obligations to the genocide. What do we do now? What must be done to quote Lenin?

How, because this, as you have pointed out repeatedly, really presages the complete breakdown of the rule of law. What as citizens must we do?

FRANCESCA ALBANESE: I think that we have passed the alarm area. I mean, we are really in a critical place and I sense it because instead of correcting itself, the system led by governments is accentuating its authoritarian traits. Think of the repressive measures that the UK government is taking against protesters, against civil society, against journalists standing in solidarity with Palestine, for justice in Palestine.

In France and in Italy at the same time, conferences academic freedom is shrinking and in the same days, conferences of reputable historians and military and legal experts have been cancelled owing to the pressure of the pro-genocide groups, pro-Israel groups in their respective countries. People, including in Germany, are being persecuted, including academics, for their own exercise of free speech.

This tells me that there is very little pretense that Western states, so-called liberal democracies, the most attached to this idea of democracy are ready to defend for real. So in this sense, it’s up to us citizens to be vigilant and to make sure that we do not buy products connected or services connected to the legality of the occupation, the apartheid and the genocide.

And there are various organisations that collect lists of companies and entities, including universities that are connected to this unlawful endeavor. BDS [Boycott, Divestment and Sanctions] is one, don’t buy into the occupation who profits profundo, but also students associations.

‘There is a need to speak about Palestine, to make choices about Palestine and not because everything needs to revolve around Palestine, but because Palestine today is a metaphor of our life and where our life is going to go is clearly evident in this.’

And this is something that has taught me, it’s very touching because it’s really the work of students, faculty members and staff that has mapped what each university does. And I think it gives the possibility to act, everyone in our own domain. Then of course there is a need to speak about Palestine, to make choices about Palestine and not because everything needs to revolve around Palestine, but because Palestine today is a metaphor of our life and where our life is going to go is clearly evident in this.

But also we need to make sure that businesses divest. Either through our purchase power, people have to step away and stop using platforms like Airbnb or Booking.com. I know that Amazon is very convenient, but guys, we might also return to buy books in libraries, ordering books through libraries.

Of course, not all of us can, but many do, many can. On the way to work, buy a book in a library, order a book in a bookstore. We need to reduce our reliance on the tools that have been used, that have been perfected through the slaughter of the Palestinians. And of course, make government accountable. There are lawyers, associations, and jurists who are taking government officials to court, businesses to court. But again, I do not think that there is one strategy that is going to be the winning one.

It’s the plurality of actions from a plurality of actors that is going to produce results and slow down the genocide and then help dismantle the occupation and the apartheid. It’s a long trajectory and the fight has just started.

CHRIS HEDGES: Thank you, Francesca, and I want to thank Thomas [Hedges], Diego [Ramos], Max [Jones] and Sofia [Menemenlis], who produced the show. You can find me at ChrisHedges.Substack.com

Article by AsiaPacificReport.nz

On 29 October 2022, the New Zealand Listener published 10 Billion reasons to be cheerful, an article by Greg Dixon summarising “futurologist” Hamish McRae’s 2022 book The World in 2050: How to think about the future. (Note also the accompanying article, A blast from the past; and the letters responses.) The headline was somewhat worrying; I am sure many readers would have wanted there to be rather fewer than ten billion reasons for McRae’s optimism. Dixon’s article incongruously followed an editorial by Nigel Roberts, Back on the Brink, with the following highlighted “In 1962, I didn’t think the missile crisis would result in a nuclear war. Of today’s crisis I’m not so sure”. In addition to the Listener story, McRae gave this interview on RNZ (4 October 2022): The World in 2050: How to Think About the Future.

An important bit of context is that Hamish McRae had in 1994 published The World in 2020, in which he seems to have got many predictions correct (though not the coming significance of the internet, and social media). It should be noted that McRae’s focus was as a business and economic futurist, in the context of a world economy made up of ‘countries’, rather than a global economy of ‘people’. Thus, the achievement of having lifted many people out of poverty is based essentially on the economic success of nations (in the conventional sense of per capita average incomes) rather than of people, with the supposition that the success of a country translates to the success of its people.

A contrary point of view would point to the appalling day-to-day air quality in cities such as Beijing, New Delhi, Lahore, and many other large but smaller and less well known cities. At best, the success of 2020 vis-à-vis 1990 is that environmental poverty has displaced income poverty. Taking a more realistic view of the world in just before 2020, when looking at matters of inequality and debt entrapment withinnations, not all was as rosy in 2019 as he perceived, in McRae’s improved middle-class world.

Nicolai Kondratiev

Helpful to thinking about future history in quarter-centennial chunks, is the (fate of, and speculations of) Russian historical economist Nicolai Kondratiev (1892-1938). Kondratiev was murdered by Josef Stalin, it is said, because he believed that the 1930s’ crisis of western capitalism (the Great Depression), would be temporary; the west would eventually recover. More important for us is that Kondratiev in the early 1920s had predicted the great 1930s’ crisis of western capitalism; a crisis which, if we include World War 2 (as we should), can be argued to have lasted from 1926 to 1946.

Kondratiev is best known for his long wave hypothesis, which suggested there has been a fifty-year economic cycle characterised by alternating downswings and upswings. That would mean, in each century, there would be two of each type of cyclical ‘swing’. (Kondratiev’s work was taken up by Joseph Schumpeter – mentioned in my 30 November essay How do Left-Wing Elites Make their Money? – in his 1939 tome Business Cycles.)

Conveniently perhaps, the century years may be cusp years for this cycle, or at least for our thinking about it. Thus, possibly back to the sixteenth century (or before), we can consider world history (or, realistically, European history given the hegemony of Europe over the world from that century) in 25-year chunks. For each century, the first quarter-century was one of optimism and progress, albeit laced with large doses of inter-kingdom violence. The second quarter-century would be a period marked by deep crisis; crises which would bring about profound change, including significant technological and intellectual advances. The third quarter would be much like the first (another upswing), though probably not as violent. And the fourth, a downswing like the second, but not as revolutionary.

From my point-of-view as a political economist with an interest in economic crises, we may see the core decades of socio-economic crisis as the ‘thirties’ and the ‘eighties’. (In that context, we may understand the history of New Zealand becoming the country it is today as being rooted in the 1830s, a decade most definitely not associated with the expansion of empire, hence the reluctance of the British crown to take us on; and certainly the then reluctance of the British Treasury to commit money to the cause of what would later come to be seen as the ‘Britain of the South’.)

So, my prediction – in line with Kondratiev – is that the 2030s in particular will represent a turning point for humanity; a kind of prediction that Hamish McRae’s methodology restricts him from making. (Turning points are notoriously hard to predict, but the hardest part is to predict the ‘what’, then the ‘when’; the ‘whether’ is comparatively easy to forecast.) Probably the ‘what’ will not become apparent until around 2050. The nuclear-risk notwithstanding, my sense is that we are looking at an implosive rather than an explosive crisis.

If the post-crisis world-orders are not clarified until the end of each crisis period (eg 1850, 1950, 2050), then the Kondratiev crises themselves have usually been clearly signalled – in bits – in the early ‘twenties’ of each century (and also in the ‘seventies’ of each century). We have had enough rumblings just in the last three years – indeed a ‘perfect storm’ of pre-shocks – to suggest that the future will not be a predictable extension of the past.

While Kondratiev ‘cycles’ should not be treated as in any way deterministic, or even that any historical turning point will happen on cue, they are useful as a way of warning us that the medium-term future will most likely not be a case of the ‘linear progress’ as suggested by McRae’s form of ‘futurology’.

Hamish McRae

One point to note is that Hamish McRae belongs to what I call here the ‘Pollyanna generation’, born 1935 to 1945. The progressive gains of the twentieth century fell into their laps (especially the post-depression post-war socio-economic reforms established by their parents’ and grandparents’ generations); then that generation largely dismantled those reforms. (We may note here David Thomson’s 1989 book Selfish Generations?, in which he argues that the twentieth century welfare state had its own implicit sunset clause. And note this review in the Social Policy Journal of New Zealand, by Ann Reeves.)

McRae is a socio-technological optimist who sees the wellbeing of peoples as closely tied to the economic success of the nation states they belong to (and presumably hold allegiance to). In that sense, I feel that the underlying globalisation of the 1990s and 2000s – with its detachment of many people from their nation states, the creation of an effective global citizenry (English-speaking; though, for most, not as their first language) – has not been well understood. It means that the present phase of the reassertion of nation states is much more fraught than he understands. Far from being the vehicles for beneficent growth, nation states and their rigid rules-based structures are becoming barriers to non-elite human development.

Despite his emphasis on nation states, McRae uses the word ‘we’ a lot. I heard the same use of ‘we’ a lot in the third episode of Brave New Zealand World (on artificial intelligence). The ‘we’ in these contexts, I understand to be ‘humanity’ (as a single collective). But it really means ‘elite humanity’, with the sense of each nation being a different delivery system for national elites cloned from a supra-national ‘liberal’ template; a template highly infused with the largely outdated western ‘progressive’ assumptions of the Pollyanna generation. These values of economic growth are not the values of today’s progressive young.

An interesting quote from McRae in the Listener article is: “[One of] the two most important of these [technological challenges] will be productivity in the service sector.” He is thinking firstly about productivity in services such as health, education, and journalism; this is the techno-visionary utopian view that forever-improving high-tech will raise life expectancy (due to more and better medical interventions), will create more and better ‘human capital’, and will enable ‘us all’ to be better informed. (My guess is that we will see retrogression on those laudable outcomes; technology in those industries can also have retrograde consequences.)

But what about the other service industries? In my Using the Sex Industry to Critique Textbook Economics, I looked at ‘personal services’, with the sex-industry as my principal example. In this case, it’s very hard to increase productivity in the way McRae means. Some of these services represent ‘retreat-industries’, occupations people go to when they are casualties of productivity increases in sectors more amenable to technology. As well as the sex industry, this probably includes the ‘street-retail’ sector ubiquitous in the ‘third world’ cities where so much of humanity lives. These industries are generally characterised by overcapacity (especially excess labour capacity); they become more productive when overcapacity reduces, their ‘marginal product of labour’ is typically zero.

The ‘elephant in the room’ however is ‘producer services’. These are often well-paid services – especially financial, management, marketing, public relations, and other overlapping professional business services – performed by businesses and consultants for other businesses, for governments and for government-dependent entities. Not producers of consumable services, these are the service industries to which elite labour migrates; these are ‘problem solvers’ who market their services in part by upplaying the competitiveness problems of their potential clients. ‘Producer services’ is a sector with significant predatory elements. (As a very current example, we may note the destructuring of AUT University, where a capricious management is tithing that institution’s academic wing; see ‘Huge distress’: Post-grads students feel impact of AUT staff cuts, RNZ 6 December 2022.)

In today’s world, the problems of non-elites represent income-earning opportunities for the new service-sector elites who work not by solving these problems, but by profiting from them, and perpetuating them.

This exchange in Kathryn Ryan’s interview (27′ 15″) with Hamish McRae is instructive:

Ryan: “One final point, I think you just touched on it when you said 70 percent of the economy being services … are we going to see, are we already seeing, a significant shift from manufactured goods and consumer goods which we binged on in the second half of the twentieth century, to economies built on services, and many of these services being ‘problem-solving’? And I raise these because of the crises of climate change and environmental degradation, population explosion over the last 100 years. Might many of our economies be built on services, and might many of those services be about solving our problems? Is that too optimistic?

McRae: “no you’ve put your finger exactly what I’m trying, on one of the themes I’m trying to say. I suppose, I’ll plead guilty to being an optimist … a service-based economy inherently uses less resources than a manufacturing-based economy. Once you’ve got one decent car you can’t drive another one at the same time. True it would be nice to travel more, but maybe we’ll spend longer where we are and travel less frequently. So I think that a world where we try to live better, live more orderly lives, have a nicer time, eat well, is actually not a bad world, rather than one that insists on absorbing more resources in ways that are not much fun; I don’t really want to drive around in a big American truck, I’d much rather have my Prius and my vintage car.”

See the Pollyanna problem! What planet are they on? Both interviewee and interviewer paint a world economy piloted by problem ‘solving’ elites as utopian; an economy dominated by elites who make money off the problems they cannot solve, and have no interest in solving. If that’s 100 million elite global citizens and another billion technicians providing ancillary services to them, that leaves 89% of the world’s population in 2050 in dire straits. The expansion of marketing and marketed services – from public relations to sexual relations – will prove to be more dystopian than utopian. (We may also note that ‘people smugglers’ represents the bottom end of the same market that has ‘immigration consultants’ at the top end.)

‘Piloting’ our way out of trouble like this is not likely to work; especially when the pilots have already crash-banged-walloped the world into the problem-state that it is in. (Useful reading: The Shock of the Anthropocene, 2017, by “scientific historians” Christophe Bonneuil and Jean-Baptiste Fressoz. See reviews in The Guardian and New Scientist, with the latter referring to the piloting issue as “raising the spectre of a new self-selecting scientific geocracy” of problem solvers.) It’s fitting that the new Oxford ‘word of the year’ is Goblin mode (Guardian, 5 December 2022).

Hamish Macrae sees a better future arising from both higher productivity and a continuation of labour expansion into these understudied service industries; occupations and industries in which the assessment of productivity is extraordinarily difficult. How do we measure the productivity of elite problem-solvers? Further, if the future world is dependent on problem-solving services, what happens if the problems are actually solved? What does a successful post-problem-solving economy look like? Might it be even worse than an economy with a multitude of unsolved problems? (Obviously, such an economy need not be worse! But we have no well-enunciated vision of what a problem-solved economy looks like.)

We should also note that problem-solving has always been central to economic life. Many services presently purchased by the poor are to a large extent ‘problem-solving’ too. Personal services are either pro-pleasure or anti-pain; all the latter fit the ‘problem-solving’ moniker.

And a final note on McRae; his disparaging views about the future of Russia. If the global-warming scenarios are as bad or worse than widely-predicted today, Russia may be sitting on some of the world’s most promising (and underpopulated) real estate. The hitherto inhospitable territories of Russia may become some of the most attractive for immigration; whether by liberal means or by conquest.

The Surveillance, Propaganda and Geopolitical Dystopia

We should be aware of just how prescient George Orwell’s 1984 has proved to be, in 2022. (In an important sense, Orwell was not making a prediction for the year 1984; though that did prove to be a prescient year in New Zealand’s history. Rather, he was making a commentary about post-war life in 1948, and the concerns about how his experiences of World War 2 might be projected forward into a tri-partite cold war era. The story I heard was that 1948 was the provisional title of that book.)

In 2022 the propaganda war is between Orwell’s ‘Oceania’ and ‘East Asia’, whereas today’s physical war is between ‘Oceania’ and ‘Eurasia’. In 2022 the geopolitically-contested territory is Ukraine; in the 1960s it was Vietnam. There is a fourth geopolitical contestant, symbolised by Iran (and by the concept of ‘caliphate’, and, before that, Samuel Huntingdon’s 1996 Clash of Civilisations thesis); a contestant which has played an important role in late-modern times only since 1979, so which did not figure in Orwell’s book. In the post-Orwellian narrative, we may call this still-divided geo-bloc ‘West Asia’.

While bloc geopolitics was an important part of Orwell’s dystopia, it is the ubiquitous role of surveillance and propaganda today that may be especially problematic in affecting non-elite human life in the next quarter century. While Orwell emphasised propaganda from official sources, today we are subject to prominent cultural narratives from both pro- and anti-government sources. We in ‘Oceania’ (ie ‘The West’) can see how authority-sourced propaganda is stressing out ‘East Asia’ and ‘Eurasia’ (and ‘West Asia’). We find it harder to see, from the inside, such direction of information in our own bloc; that was, of course, George Orwell’s main point.

Macroeconomic Dystopias

In its essence, the capitalist world economy depends on the production of mass-produced ‘wage goods’ (which include those consumer services which accompany a mass-consumption society); indeed, that’s how the post-industrial-revolution captains-of-industry past-and-present made their fortunes. The problem now is that we need a massive edifice of consumer debt in order to support such spending. If we attempt to unravel that edifice in the next 25 years, the resulting deflationary depression will make The Great Depression seem rather innocuous.

If the working-class cannot afford to buy wage goods, it’s not only the human producers of wage goods that become redundant; it’s also the machines – the robots, if you like – whose main purpose (we understand) is to produce wage-goods more cheaply. This constitutes a deflationary technological dystopia; widely feared also in the 1820s and 1920s.

On the other hand, higher wages – starting to happen today – if uncontained, can lead to a cost-inflationary spiral; a process of competitive access for resources that could be exacerbated by elites wanting to spend or restructure their savings before they become worthless. This constitutes an inflationary dystopia.

If we move away from a global economy based on wage-goods to a global economy based on elite-goods, then we regress into an eighteenth-century-type world of extreme privilege, servitude, drug-assisted-ennui, and criminal desperation. Haiti, anyone?

Or we could move into the kind of capitalist world Karl Marx foretold, in which austere capitalists would keep building capitalist unconsumables until the whole edifice collapses under its own weight. (There were anti-capitalists in the 1920s’ Labour Parties who promoted pro-capitalist policies in order to bring forward the date of capitalist collapse.)

Other Candidates for Coming Revolutionary Crises

I avoid the phrase ‘existential crisis’, because, in history, Kondratiev crises have always given way to better times.

In Aotearoa New Zealand, we have just seen a locally-made television series Brave New Zealand World. It looks at these topics: nuclear war, climate change, pandemics, biological warfare, and artificial intelligence. The last two of these topics (and indeed the first) might better have been characterised as ‘artificial evil’; as such the final programme gives an unintended insight into why (at least until 2020) we – and especially the political left – never trusted ‘scientists’. Another interesting theme of the series is the idea that global elites – such as those from Silicon Valley – are eyeing up this South Pacific archipelago as a bolt-hole from which new beginnings might be possible; indeed, scheming another round of colonisation. (On bolt-holes, I cannot help but think of the final scenes from Don’t Look Up!)

Interestingly, there was no episode on socio-economic catastrophe. Maybe that’s now seen as too mundane; or maybe the new catastrophists struggle with the nuances of economics’ discourse? Perhaps we need a follow-up to Don’t’ Look Up, called Don’t Look Down? Kondratiev and Schumpeter were socio-economists, who instinctively looked to socio-economic history. As such, demography and epidemiology fall into that socio-economic brief. So does the intellectual bankruptcy of Stalin’s Soviet Union and its socialist offshoots; a bankruptcy that has, for example, made nuclear exchanges thinkable. Further, top-down politics has created (and exported) what I think of as AU; ‘artificial unintelligence’. It’s not so much humanity being displaced by robots; more it is humanity becoming robotic.

My underlying Kondratievan optimism, however, is reflected in this parody: ‘You can roboticize some of the population all the time, and all of the population some of the time; but you cannot roboticize all of the population all the time.’ We become hidebound by rules, and the ruling elites who make and enforce those rules. Humanity finds a way out, however, and we are only just seeing a bit of this in China (and in Iran) these last two weeks.

In my view the essential economic threat is liberal mercantilism, which represents a fusion of ‘nationalism’, the ‘sovereignty of exclusive property rights’, and growth as ‘the accumulation of wealth’; where wealth is conceived (in a financial sense) as being ‘money, combined with many types of tradable assets’. Liberal mercantilism is indeed the root cause of the previously mentioned ‘existential’ threats – threats that result from the linear growth mindset: climate change, trickle-down inequality leading to heightened pandemic risks, and the AU idea that new technology can always come to rescue economic growth. (Also see my Northern European Mercantilism and the Covid‑19 Emergency, Evening Report, 9 April 2020; and this reference to “individualistic mercantile capitalism” in The Shock of the Anthropocene review – a crisis centuries in the making.)

Dialectic

I would however argue that an even bigger danger than capitalism in its present form is anti-capitalism, including some of the sentiment from the ‘occupy’ movement of 2011/12. This is where anti-establishments went wrong in the 1920s, 1930s and 1940s; we still have the legacies of anti-capitalist totalitarian states which formed in those decades. The challenge is to move away from the blunt primitive capitalism which our older elites still take for granted, and to address the three components of liberal-mercantilism: nationalism, an absence of inclusive public property rights (of economic democracy), and the equating (throughout the now 500-year-old modern era) of wealth as money.

Maybe, following the formal dialectic process, we need a synthesis of capitalism and anti-capitalism; a synthesis that evolves liberalism, dumps mercantilism, and develops democratic structures more local, more global, and less national.

*******

Keith Rankin (keith at rankin dot nz), trained as an economic historian, is a retired lecturer in Economics and Statistics. He lives in Auckland, New Zealand.

Prime Minister Jacinda Ardern’s acceptance of an invitation to speak at this week’s NATO leaders’ summit in Madrid has fuelled a narrative that New Zealand’s independent foreign policy is falling victim to a new Cold War.

According to this view, Ardern’s participation is a reward for recently aligning New Zealand’s foreign policy more closely with the US and its allies against Russia and, to a lesser extent, China.

This narrative claims this shift has been exemplified by sanctions against Putin’s Russia, humanitarian and military assistance to Ukraine and public questioning of China’s growing involvement in the Pacific.

These developments purportedly show American power has forced New Zealand to abandon its preferred strategy of hedging between the two superpowers and instead follow Washington at the expense of its own national interests and the country’s crucial relationship with China.

But this reading of the current international situation and its impact on New Zealand foreign policy is wide of the mark.

Prime Minister Jacinda Ardern’s decision to attend the NATO summit in Spain – but to skip the Commonwealth Heads of Government Meeting (CHOGM) in Rwanda – symbolizes the changes she is making to New Zealand foreign policy.https://t.co/r1nX5IEm8V pic.twitter.com/atnitdaTkX

— The Diplomat (@Diplomat_APAC) June 25, 2022

There is no new Cold War
The post-Cold War era is fundamentally different from the period between 1947 and 1989 and its rival global economic systems and competing but comparable alliance systems. Those features simply do not exist in the globalising world of the 21st century.

China’s rise to superpower status has been based on full-blooded participation in the global capitalist economy and its dependence on key markets like America, the European Union and Japan.

At the same time, the Ardern government has distinctive reasons, beyond simply following America’s lead, for opposing Putin’s Ukraine invasion and expressing public reservations about the China-Solomon Islands security deal.

Not reading too much into ⁦@jacindaardern⁩ attendance during NATO Summit. NZ has had dialogue relationship with NATO for 2 decades. I once attended meeting on Afghanistan w/ NATO leaders. Can be consistent with maintaining independent foreign policy: https://t.co/AAVaEbFdRn

— Helen Clark (@HelenClarkNZ) June 25, 2022

Since the Second World War, New Zealand has been a firm supporter of a strengthened international rules-based order, enshrined in institutions such as the United Nations and embodied in norms such as multilateralism.

Putin’s invasion of Ukraine was a flagrant violation of the UN Charter. It confirmed what has been clear for much of the post-Cold War era — the UN Security Council is no longer fit for purpose.

Ukrainian President Volodymyr Zelenskyy has pledged to campaign for a reformed Security Council that can more effectively hold aggression in check. The Ardern government believes it has a big stake in helping Kiev defeat Putin’s expansionism.

By framing concerns about China’s “militarisation” of the Pacific region as a possible breach of the 2000 Biketawa Declaration, the Ardern government is seeking to foster local resilience against China’s assertiveness in a region considered as New Zealand’s neighbourhood.

New Zealand’s worldview remains distinctive. It shares many of the concerns of close allies about the threat of authoritarian states to an international rules-based order. But it also rejects the view any great power should enjoy exceptional rights and privileges in the 21st century.

Here New Zealand’s foreign policy parts company with that of its traditional allies. New Zealand not only seeks to defend the international rules-based order, it wants to strengthen it.

New Zealand’s strategic positioning
There are other important strategic and economic reasons for Ardern to make this five-day visit to Europe.

She will have the chance to emphasise to so-called realists within NATO that ceding Ukrainian territory to Putin to bring peace is delusional, only likely to invite more territorial demands from the Kremlin.

China will also loom large in the discussions. Xi Jinping’s regime has diplomatically backed the Kremlin and recently declared Putin’s Ukraine invasion was “legitimate”.

Ardern has said China should not be “pigeonholed” with Moscow. But she will also be mindful a failure to strongly counter Putin’s assault on the rules-based order in Ukraine could increase China’s pressure to incorporate Taiwan, a state with vibrant trade and cultural ties with New Zealand.

Ardern should tell leaders in Madrid the best China strategy at this time is to make sure Putin’s invasion is rebuffed. If Putin’s army is defeated and ejected from Ukraine, it will be a serious blow to Xi’s leadership and could complicate any plans he might have for annexing Taiwan.

Chance to advance bilateral trade talks
The NATO meeting will also facilitate bilateral meetings with European leaders on some crucial trade questions.

In Brussels, Ardern and Trade Minister Damien O’Connor will seek to progress already advanced talks for a New Zealand-EU Free Trade Agreement (FTA). The EU single market remains the world’s largest and most prosperous. It offers New Zealand the prospect of enhanced trade links with an important like-minded partner.

In London, Ardern and O’Connor will meet UK Prime Minister Boris Johnson to build on a “gold-standard” New Zealand-UK FTA negotiated earlier this year.

The UK government has applied to join the Comprehensive Progressive Trans-Pacific Partnership (CPTTP). Ardern may warn Johnson that breaching the EU withdrawal agreement in relation to the Northern Ireland protocols could jeopardise this goal.

Ardern’s participation in the NATO summit and bilateral discussions in Europe at a time of geopolitical uncertainty mirror New Zealand’s key national goals of promoting an international rules-based order and diversifying trade links.

Dr Robert G. Patman is professor of international relations, University of Otago. This article is republished from The Conversation under a Creative Commons licence. Read the original article.

Article by AsiaPacificReport.nz