Wednesday 29 August 2018

Another Day Older and Deeper in Debt …

The question of debt is often absent from media coverage of the progress, or not, of the world economy. But a troubling problem is that debts have continued to rise since the 2007-08 crisis. Compared to the size of the economy, the total outstanding debt of the non-financial sector rose from just over 200% of GDP at the end of 2008 to over 244% at the end of 2017, with a 10 percentage point jump in 2017 alone.[1] Given that world economic growth remains weak, this is not likely to be a sign that optimism about future prospects has led to more borrowing for investment and consumption. Some recovery was likely once the banking system had been stabilised, but the latest numbers are the highest on record.
High debt is a dull, but debilitating burden for corporations, consumers and governments who have built up their borrowing. But this liability is also an asset for those who have lent their money or bought the debt securities. The latter include not only banks, but directly or indirectly, many corporations and consumers, especially the rich and those whose pensions and other income relies on interest and debt repayments. So the debt cannot just be wished away with no consequence. For example, even if banks wrote off the debts owed to them, this would damage their finances and risk insolvency, with further repercussions throughout the financial system, as became clear in the wake of the 2007-08 crisis.

Data details

The latest data from the Bank for International Settlements show a worse picture for global debt than indicated in a note I made on this blog a few months ago (see also the article with country details two years ago). As remarked before, the burden of debt will increase not only with its level – indicating how much has to be repaid eventually – but also with any extra funding cost that comes from higher interest rates.
On the latest data, both the ‘advanced’ countries and the ‘emerging market’ countries as a group showed a rise of debt compared to GDP in recent years. The rise in emerging market debt was from a much lower base, but much more rapid. Pictures for different countries are mixed, however.
Among the advanced countries, debt ratios stabilised in the US, though they have remained at a high 250% of GDP. They have fallen in Germany to around 175%, down from near 200% in 2010. In France, debt ratios have now risen to just over 300% of GDP; Japan remains the basket case, with a rate rising to 373%.

In emerging market countries, for many the debt ratio has stabilised in the past year or two. China’s rose strongly in the previous decade to just over 250% of GDP, but may have now flattened out. Similarly for South Korea, which now has a debt ratio of around 230%. Brazil’s debt ratio is lower and has steadied at around 150%. India’s is lower still, and has been flat at close to 125% of GDP.

Tony Norfield, 29 August 2018

[1] The figures are for the more than 45 areas reporting to the Bank for International Settlements, a group that includes all the major ‘G10’ countries and also the principal ‘emerging market’ countries such as China, Brazil, India, Russia, Korea, Indonesia, Philippines and Turkey.

Wednesday 22 August 2018

Jews, Zionism and Israel

The reason behind the turmoil in the British Labour Party about anti-Semitism is not any actual anti-Semitism among party members. Instead, the turmoil is largely promoted by supporters of Israel who have worries about Jeremy Corbyn, and it is joined by other Corbyn opponents. Here is a leader of a major British political party who supports (some) Palestinian rights and who has dared to criticise the Israeli government for oppressing them. Given that the Labour Party has traditionally been the major pro-Israel force in British politics, one can see why the pro-Israelis have been apoplectic. Issues brought out by this episode (‘series’?) lead me to examine the relationship between being Jewish, Zionism and Israel.

Religion and ethnicity

Judaism is an unusual religion in having an ethnic, or genealogical dimension of how a ‘Jewish’ person is defined, rather than focusing only upon religious affiliation. Religion is commonly a social-political marker, not an ethnic one, although often people follow the religious label, if not the religious practice, of their parents or of the community in which they live. In the cases of Christianity and Islam, anyone who decides to follow the relevant beliefs can become a Christian (Catholic, Protestant, etc) or a Muslim (Sunni, Shia, etc), once they have gone through certain rituals. But it is a more protracted process to become Jewish, and is often bound up with whether one’s mother is also determined as being Jewish. If the mother is not, that does not bar the son or daughter from becoming Jewish. But if the mother is already considered to be Jewish, then automatically her son or daughter is so too, even if that person does not practice Judaism. For example, it is possible to be a ‘Jewish atheist’. The line only seems to be drawn against those who openly practise another religion, who thereby are no longer defined as being Jews.
This genealogical factor is reflected in Israel’s infamous 1950 Law of Return, whereby it is possible for all Jews, both ‘ethnic’ and religious, to go to Israel and gain citizenship. As a 1970 amendment to the Law defines it: ‘For the purposes of this Law, “Jew” means a person who was born of a Jewish mother or has become converted to Judaism and who is not a member of another religion’. That amendment also added in the ‘grandchild of a Jew, the spouse of a Jew, the spouse of a child of a Jew and the spouse of a grandchild of a Jew’ for good measure.
Although the genealogical criterion of Judaism is not the same as a purely ethnic definition of ‘Jewishness’, it is something that fits very well with the Zionist political objective of identifying Israel as the ‘homeland of the Jews’, one from which they had supposedly been cast out some two thousand years before. There are many ironies and contradictions in this, not least that early Zionism was mainly atheistic and had been in conflict with Orthodox Judaism. David Ben-Gurion, a future founder of the state of Israel, was also not religious and did not believe in the ‘exile’ story – though by 1948 he had abandoned this view.[1] To add to the mix, one should also note that some branches of Judaism reject the establishment of an Israeli state before the coming of the Messiah, while some Christian Zionists see the ‘ingathering of the exiles’ as a precursor to the Second Coming of Jesus!

Zionist mythology

There is no evidence for any mass expulsion of the inhabitants of ancient Israel, by the Romans or by anyone else. But an ethnic definition of Jewishness seems to have taken root among Zionists who were heavily influenced by the blood and soil racism of 19th century Europe, and who looked to define an ethnic people for their corresponding ‘national home’. (That the Zionists were responding to anti-Semitism and pogroms, especially in Eastern Europe, does not excuse their reactionary views.) Studies showing close links between the DNA of many different groups originating in the Middle East, Jewish and non-Jewish, undermine the notion of a specific Jewish people. Judaism has also long been a proselytising religion, converting people in Europe, Asia and Africa, an inconvenient fact covered up by the story of an ethnic group that must ‘return’ to its lost land.
But let us suppose for a moment that this Zionist mythology were true. Let us imagine, for example, that all the Jewish settlers in Palestine who come from the US, from Poland, from Russia or wherever could claim to trace their bloodlines back to King David. Would this have any bearing on how to assess the state of Israel? It is no justification at all for the expulsion of Palestinians and the seizure of their land after the 1947 UN Plan of Partition or in the 1948 war – in which over 700,000 Palestinians were expelled – or in the subsequent years. Just imagine being kicked out of your home because somebody shows up and claims that their ancestors lived there more than a thousand years ago! Of course, Jewish settlers in Palestine do not need to make this absurd claim; they can just rely upon the power of the Israeli state to drive out, kill or marginalise non-Jews.

Jews, the Holocaust and Israel

Many people who identify themselves as being culturally or religiously Jewish may not support political Zionism. To be more specific, they may not support political organisations and parties labelled Zionist, and especially not the right-wing parties that now dominate Israeli politics. But how many do not support the state of Israel, or do not see it as a necessary haven just in case there is a resumption of murderous anti-Semitism seen in Europe from the early 1930s and in the Holocaust? Those events turned even some prominent socialists and anti-Zionists into supporters of Israel.
The problem with this view is that it takes the crimes of Europeans and asks, even demands, that the Palestinians pay for them! Somehow, the slaughter of Jewish people by Europeans is seen to justify the dispossession of Palestinians from their land. This foundation stone of the state of Israel in 1948 is commonly ignored in public debate. At most, concerns are raised only about the subsequent outrageous injustices and land grabbing of the Israeli regime.
To understand the establishment of the state of Israel one needs to examine imperialist politics, not the Old Testament of the Bible or Hebrew scriptures. Important issues were not so much the efforts of Zionists to designate Palestine as the rightful homeland of ‘the Jews’. More significant were the rabid nationalism that swept Germany in the wake of the post-1918 international treaties that had impoverished and humiliated it, and the more general conditions of the time that had promoted fascism. Attacks on Jewish communities were rife, not only in Germany, and major countries like the US and the UK had also taken steps in their immigration laws to restrict the influx of Jewish, and other, refugees. In that context, the Zionist choice of Palestine as a destination became an attractive option by the time of the post-World War Two deliberations among the major powers.

Imperialist politics

The Balfour Declaration of 1917 that the British ‘Government view with favour the establishment in Palestine of a national home for the Jewish people’ is widely seen as the beginning of the process to establish the Israeli state. But while it was the first major concession to Zionist opinion by a big power, its main aim was to build support for Britain’s war effort, both in Europe and the US. It was a deceitful document, pretending also to be concerned with the rights of other communities in Palestine, and it was not seen by the British then as a definite commitment that they could or would need to implement in the future. Above all, the Balfour Declaration was an expression of imperial arrogance, relating to a land that the British had not yet even taken from the Ottomans. However, this seizure was later endorsed by the League of Nations, and the British Mandate for Palestine included the terms of the Balfour Declaration.
In the event, British policy was not especially pro-Zionist in the thirty years after the Balfour Declaration. This was both because there were different factions in the British ruling elite and because its policy was mainly concerned not to ruin important relationships with Arab countries – for example, the UK abstained in the vote on the 1947 UN Plan of Partition. Although the British put down Arab rebellions in Palestine and British military and police commanders usually supported the Zionists, they also limited the immigration of Jewish refugees from Europe into Palestine. Zionist leaders continued to press their case with the British, but this did not stop their terror attacks on the British in Palestine – notably the King David Hotel bombing in 1946. They also moved to do deals with the French, who, rivals with the British for control of the Middle East, provided Zionist militias with military aid with which to oppose British control.
Zionist leaders were fully aware of the precarious position they would find themselves in with their plans to steal Palestinian land. That problem was to be overcome by a deal with one or more of the major powers. The early, but only partial success was with the Balfour Declaration, with some British statesmen seeing the future Israel as a ‘little loyal Jewish Ulster in a sea of potentially hostile Arabism’, so they were open to such deals. Later, the French would also cooperate with any local force to combat Arab nationalism opposed to its colonial rule in the region. The culmination of these views resulted in the British-French-Israeli plot against Egypt’s Nasser in the 1956 Suez crisis. But when that failed, and the British and French were revealed as second rate powers, the Zionists turned more fully towards cooperation with the US, which was growing concerned about how to control the Middle East.
These days, Israel’s US connection is paramount, exemplified by US support in terms of military supplies, of US vetoes at the UN of any resolution criticising Israel and by the billions of dollars of US government aid and private contributions every year. However, support from European powers is also important for Israel. Europe is sometimes more critical of Israel, but offers special trade deals and, highlighting the contradictions of the ‘Jewish homeland’ supporters, allows Israel to take part in the Eurovision Song Contest and to be affiliated with UEFA, the Union of European Football Associations!

Too much trouble?

Israel was established as a tool for imperialism. It remains one today, but in recent years Israel has become more of an embarrassment than an unquestioned asset. It is a ‘country’ that cannot define its borders, because it always wants to seize more land; a ‘democracy’ that oppresses a large proportion of its citizens on ethno-religious grounds, with discriminatory laws, checkpoints, police brutality and murder; a racist, gangster state that repeatedly threatens destabilising military action in the Middle East and steps beyond its boundaries by interfering in major power politics. Israel has another problem too: recollections of the Holocaust that in past decades had given it so much unquestioned support are fading as a political force. Despite the efforts of pro-Israel lobbies to talk up the threat of anti-Semitism today, and despite the continued acquiescence of mainstream media in covering up its crimes, the foundational non sequitur, Europeans kill, so Palestinians must pay, is no longer enough completely to silence liberal concern about the massacres in Gaza and to prevent questions being raised about the nature of the Israeli state.

Tony Norfield, 22 August 2018

[1] On these topics, I would recommend the book by Shlomo Sand, The Invention of the Jewish People, Verso, 2009, and also Sand’s more recent article in the Israeli newspaper Haaretz, ‘How Israel Went From Atheist Zionism to Jewish State’, 21 January 2017.