The Commodities Business

I recommend reading this article in Foreign Policy on Glencore. While it is short on analysis and focuses instead on personalities, it offers a good summary of many practices in the commodities business, from bribery and corruption to gangsterism and sanctions busting. It is notable how having a secure base in the imperial heartlands (US, UK, Switzerland), with ready access to politicians, cash and markets can combine to make these guys billionaires with relative ease.

Glencore’s founder, Marc Rich, was indicted on tax evasion and other charges in the US in 1983, but he had managed to flee to Switzerland shortly before. In 2001, on his last day in office, President Clinton took time out from photo calls to pardon Rich. Former Israeli Prime Minister Ehud Barak was among those lobbying Clinton on Rich’s behalf.

Information from a recent prospectus showed that Glencore ‘controlled more than half the international tradable market in zinc and copper and about a third of the world's seaborne coal; was one of the world's largest grain exporters, with about 9 percent of the global market; and handled 3 percent of daily global oil consumption … It recently announced a $90 billion takeover of Xstrata, a global mining giant [another FTSE100 company] in which it already holds a 34 percent stake … Glencore already trades, manufactures, refines, ships, or stores at least 90 commodities in some three dozen countries’.

Glencore is interesting in that it straddles the industrial, commercial and financial dimensions of monopoly capitalism. As the Foreign Policy report indicates, its profitability has been boosted by its own form of predatory behaviour, using its close links with agents, particularly in Africa and Eastern Europe, who could secure lucrative local deals.

Tony Norfield, 24 April 2012

Steve Jobs: Apple Monopolist

The death of Steve Jobs, co-founder and latterly chairman of Apple, has brought many comments on his creative vision, skills and innovation in the field of consumer electronics. US President Obama’s tribute said that “Steve was among the greatest of American innovators – brave enough to think differently, bold enough to believe he could change the world, and talented enough to do it”. Like many other people, I am a user of a Jobs-inspired gadget that has a design that looked more attractive and useful than its rivals in the market. But I am less inclined to write a glowing obituary.

If Jobs was the genius to create popular, innovative products, then he also made sure that this was done in a way that ensured monopoly profits. Not only in getting these produced at minuscule costs on the backs of exploited Asian workers, but also in building into all of the product designs technology barriers that would protect the commercial interests of Apple and limit the options for consumers – unless they paid a lot more for not much. He made full use of the marketing notion invented by another monopolist: Apple’s products are ‘reassuringly expensive’.

I was also somewhat surprised to learn, when seeing an Apple Mac getting fixed in an IT shop, that there was a message inside the box that had instructions along the lines of: (a) you undertake not to use this device to send out signals that could be disruptive (OK, fair enough), and (b) you must not obstruct any signals coming into this device (Which signals exactly? Surely not from the government?).

Jobs’ real legacy should be to make us think what price society pays when good design ideas become weapons of monopoly capital.

Tony Norfield (owner of a 2GB iPod), 6 October 2011