1108. Cuba: A Report on the Ongoing Economic Reforms

By Marc Frank, Reuters, July 22, 2013

First Vice President Miguel Diaz-Canel

(Reuters) - Every Monday in the bowels of Cuba's Palace of the Revolution, a group of men and women charged with revamping the island's moribund economy meets to review progress in building what they have dubbed "a prosperous and sustainable socialism."

They have their work cut out for them, as demonstrated by the recent discovery by Panama of decrepit Cuban weaponry on its way to North Korea for repair, a walk down any potholed Havana street or the Cuban government's admission that 58 percent of water pumped from reservoirs is lost to leaky pipes.

The men and women are members of a Communist Party commission charged with carrying out a 313-point, five-year plan to modernize the economy that was adopted in 2011.

First Vice President Miguel Diaz-Canel, in a recent interview with Cuban journalists, said the weekly gathering was chaired by the man he is in line to succeed, 82-year-old President Raul Castro, and reviewed "all the advances in terms of designing policy."

Talk of selling the state's more than 90 percent stake in the economy is apparently not on the agenda of the Monday meetings, according to the head of the party's reform commission, Marino Murillo.

Murillo told National Assembly deputies earlier this month that those outside and inside the country who thought his commission was restoring capitalism or planning a fire sale were terribly mistaken.

"You can't confuse transformation of property with modernization of its management; they are two different things," Murillo said in a two-hour speech.

"It (modernization)... does allow for new actors in the non-state sector (farms, small businesses, cooperatives and joint ventures)," Murillo said.

The non-state sector, which includes employees of small businesses and many people "working for themselves," such as taxi drivers and produce vendors, currently comprises 23 percent of the 5.1 million member labor force, according to Carlos Mateu Pereira, an adviser to the minister of labor and social security.

Murillo said central planning still ruled but would become more of a "regulator, not administrator" as the market was given more sway in pricing and other business decisions.

Murillo used agriculture to illustrate what he meant. He said 70 percent of the land is leased to co-operatives and small farmers while 20 percent is owned by private farmers and their cooperatives. State companies occupy 10 percent of the land.

Murillo said an increasing amount of what the farms produce was being sold on the open market, about 47 percent currently, bypassing the state's wholesale trade monopoly.

CAUTION RULES

To those who believe modernizing the economy is moving too slowly halfway through the five-year Party plan, Cuba's president at the July parliament meeting said, "There will be no shock measures here like in Europe."

Economic growth in recent years has averaged around 2.5 percent despite reforms, compared with the 5 to 7 percent economists believe is needed for development. Achieving that will require significant foreign investment, they say.

No speaker at the week-long National Assembly meeting dedicated to the economy mentioned foreign investment.

None of the foreign companies managing and participating in joint ventures in Cuba, 190 at last count, own any property outright, nor do they have the right to sell shares except with the authorization of their state partner.

According to Diaz-Canel, reform is indeed a painstaking process as it moves from lifting prohibitions on personal property, travel, minor economic activity and farming, to "a crucial and defining stage" where such thorny issues as the island's dual monetary system and the inefficiency of state companies are the focus.

Since the fall of the Soviet Union Cuba has had two currencies in circulation - the peso, valued at 25 to the dollar, and a dollar equivalent called the convertible peso, making accounting, budgeting and other matters extremely cumbersome.

Policies are proposed at the Monday meetings by commission subcommittees, he said, and then experiments launched to prove their efficiency, with studies to examine the impact of cutting subsidies and unleashing market forces on a society unaccustomed to living this way for the past 50 years.

There are many pilot projects these days.

For example, a wholesale market where farmers can buy supplies, instead of the inputs being assigned by the state, or an experiment in two provinces aimed at downsizing government.

At the same time, earlier pilot projects are now being generalized, such as the leasing of thousands of tiny state retail services to employees and larger ones to cooperatives, or allowing state companies to sell excess product on the market and keep 50 percent of their profits after taxes.

"This is very much like the early days of reform in Asian communism, when the Communist Parties tried to hold on to everything and restrict all investment," a western diplomat said.

"They soon learned that it wouldn't work and opened up further."

1107. Worldwide 0.6% of Those Who Control Any Financial Assets Own 39.3% ($223 Trillion) of the World's Wealth

By Tyler Durden, zerohedge.com, June 2, 2013

Back in 2010 we started an annual series looking at the (re)distribution in the wealth of nations and social classes. What we found then (and what the media keeps rediscovering year after year to its great surprise) is that as a result of global central bank policy, the rich got richer, and the poor kept on getting poorer, even though as we predicted the global political powers would, at least superficially, seek to enforce policies that aimed to reverse this wealth redistribution from the poor to the rich (a doomed policy as the world's legislative powers are largely in the lobby pocket of the world's wealthiest who needless to say are less then willing to enact laws that reduce their wealth and leverage). Now that the topic of wealth distribution (or rather concentration) is once again in vogue, below we present the latest such update looking at a global portrait of household wealth. The bottom line: 29 million, or 0.6% of those with any actual assets under their name, own $87.4 trillion, or 39.3% of all global assets.

Here are the key highlights via Credit Suisse:

• Global household wealth in mid-2012 totaled $223 trillion, equivalent to USD 49,000 per adult in the world.  This is a decline of $12.3 trillion mostly due to a $10.9 trillion decline in European wealth, however it is double the $113 trillion in total wealth at the start of the millennium

• Losses in Africa, India and the Latin American countries were offset by modest gains in North America (USD 880 billion) and China (USD 560 billion),

• CS expects total household wealth to rise by almost 50% in the next five years from $223 trillion in 2012 to $330 trillion in 2017. What CS does not say is that the bulk of this increase is courtesy of Federal Reserve-facilitated wealth redistribution from the lower and middle classes to the upper class.
• The number of millionaires worldwide is expected to increase by about 18 million, reaching 46 million in 2017.
• China is expected to surpass Japan as the second wealthiest country in the world. However, the USA should remain on top of the wealth league, with $89 trillion by 2017.

Drilling down the distribution of global wealth, in charts:

By the middle of 2011, global wealth had recovered from the 2007 financial crisis; at that time, total wealth matched or exceeded the pre-crisis levels in all regions except Africa.

Global wealth by country: The figure for average global wealth masks the considerable variation across countries and regions (see Figure 3). The richest nations, with wealth per adult over USD 100,000, are found in North America, Western Europe, and among the rich Asia- Pacific and Middle Eastern countries. They are headed by Switzerland, which in 2011 became the first country in which average wealth exceeded USD 500,000. Exchange rate fluctuations have reduced its wealth per adult from USD 540,000 in 2011 to USD 470,000 in 2012; but this still remains considerably higher than the level in Australia (USD 350,000) and Norway (USD 330,000), which retain second and third places despite falls of about 10%. Close behind are a group of nations with average wealth above USD 200,000, many of which have experienced double-digit depreciations against the US dollar, such as France, Sweden, Belgium, Denmark and Italy. Countries in the group which have not been adversely affected have moved up the rankings – most notably Japan to fourth place with wealth of USD 270,000 per adult and the USA to seventh place with USD 260,000 per adult.

Interestingly, the ranking by median wealth is slightly different, favoring countries with lower levels of wealth inequality. As was the case last year, Australia (USD 195,000) tops the table by a considerable margin, with Japan, Italy, Belgium, and the UK in the band from USD 110,000 to 140,000, and Singapore and Switzerland with values around USD 90,000. The USA lags far behind with median wealth of just USD 55,000.

Trends in wealth per adult and its components: As Figure 5 shows, average household net worth trended upwards from 2000 until the crisis in 2007, then fell by approximately 10% before recovering in 2011 to slightly above the pre-crisis level. Further setbacks this year have pushed wealth per adult back below the previous peak. However, exchange rate movements account for much of the year-onyear variation. Using constant USD exchange rates yields a smoother time trend and a single significant downturn in 2008, after which point the recovery has continued more or less unabated.

At the start of the millennium, financial assets accounted for well over half of the household portfolio, but the share declined until 2008, at which point the global wealth portfolio was equally split between financial and nonfinancial assets (mostly property). In the period since 2008, the balance has again tipped slightly towards financial assets.

On the liabilities side of the household balance sheet, average debt rose by 80% between 2000 and 2007, and subsequently leveled out. It now amounts to USD 8,600 per adult, about 7% lower than it was the same time a year ago. Expressed as a proportion of household assets, average debt has moved in a narrow range, rising over the period, but never exploding.

The composition of household portfolios varies widely and systematically across countries. The most persistent feature is the rise in the relative importance of both financial assets and liabilities with the level of development. For instance, financial assets account for 43.1% of gross assets in Europe and 67.1% in North America, but just 15.9% of gross assets in India. Household debt as a percentage of gross assets is 16% in Europe and 18.1% in North America, but only 3.7% in India and 8.7% in Africa. There is also variation in portfolios unrelated to the level of development. Some developed countries, like Italy, have unusually low liabilities (10.0% of gross assets), while others have surprisingly high debt, like Denmark (33.7% of gross assets). In addition, the mix of financial assets varies greatly, reflecting national differences in financial structure. The share of equities in total financial assets, for example, ranges from 43.4% in the USA, down to just 20.1% and 6.5% in Germany and Japan respectively.

Changes to household wealth from mid-2011 to mid-2012; The adverse global economic climate and the USD appreciation that occurred during the year until mid-2012 meant that household wealth rose by more than USD 100 billion in only four countries: the USA (USD 1.3 trillion), China (USD 560 billion), Japan (USD 370 billion) and Colombia (USD 100 billion). Figure 6 shows that Eurozone members suffered the largest losses, led by France (USD 2.2 trillion), Italy (USD 2.1 trillion), Germany (USD 1.9 trillion) and Spain (USD 870 billion). These losses were exacerbated by the unfavorable euro-dollar exchange rate movement, but even in euro terms, wealth declined by EUR 50 billion in Germany, EUR 148 billion in France, EUR 177 billion in Spain and EUR 286 billion in Italy. Sizeable USD wealth reductions were also recorded in the UK (USD 720 billion), India (USD 700 billion), Australia (USD 600 billion), Brazil (USD 530 billion), Canada (USD 440 billion) and Switzerland (USD 410 billion).

The largest percentage gains and losses generate a slightly different list. A steady USD exchange rate, combined with an 11% improvement in market capitalization, helped Colombia to top the country rankings with a 16% rise in household wealth. Algeria, Hong Kong, Peru and Uruguay also recorded gains of more than 5%. The downside is more evident, especially in Eurozone countries, where double-digit losses were recorded everywhere (see Figure 7). Other sizeable declines were recorded for Russia (–13%), Mexico (–14%), South Africa (–15%) and India (–18%), while Eastern Europe had a very poor year, led by the Czech Republic and Poland (both with –18%), Hungary (–25%) and Romania (–36%).

* * *

But in a globalized world with virtually unlimited capital flows (for now: see Cyprus) physical borders mean little. Which is why next we look at the global wealth pyramid which breaks down wealth as percentage of the world population: i.e., who owns how much without geographic prejudice. It is here that is becomes most obvious how global policies since the Great Financial Crisis have benefitted the wealthiest at the expense of everyone else.

Presenting the global wealth pyramid:

Here are the stunning facts:

• In 2012, 3.2 billion individuals – more than two-thirds of the global adult population – have wealth below USD 10,000, and a further one billion (23% of the adult population) are placed in the USD 10,000–100,000 range.

• The average wealth holding is modest in the base and middle segments of the pyramid, total wealth amounts to USD 39 trillion, underlining the potential for new consumer trends products and for the development of financial services targeted at this often neglected segment.

• The remaining 373 million adults (8% of the world) have assets exceeding USD 100,000.
• And then the top of the pyramid: 29 million US dollar millionaires, a group which contains less than 1% of the world’s adult population, collectively owns nearly 40% of global household wealth.
• Some 84,500 individuals are worth more than USD 50 million, and 29,000 are worth over USD 100 million.

• The composition of the wealth pyramid in 2012 is broadly similar to that of the previous year, except for the fact that the overall reduction in total wealth increases the percentage of adults in the base level from 67.6% to 69.3% and reduces the relevant population share higher up the pyramid by a corresponding amount. The respective wealth shares are virtually unchanged.

Breaking it down by class.

Lower Class (base level of pyramid):

The various strata of the wealth pyramid have distinctive characteristics. Although members of the base level are spread widely across all regions, representation in India and Africa is disproportionately high, while Europe and North America are correspondingly underrepresented (see Figure 2). The base tier has the most even distribution across regions and countries, but it is also the most heterogeneous, spanning a wide range of family circumstances. In developed countries, only about 30% of the population fall into this category, and for most of these individuals, membership is a transient or life cycle phenomenon associated with youth, old age, or periods of unemployment. In contrast, more than 90% of the adult population in India and Africa are located within this band. In many low-income African countries, the percentage of the population is close to 100%. Thus, for many residents of low-income countries, lifetime membership of the base tier is the norm rather than the exception. However, lower living costs mean that the upper limit of USD 10,000 is often sufficient to assure a reasonable standard of living.

While bottom-of-the-pyramid countries have limited wealth, it often grows at a fast pace. In India, for example, wealth is skewed towards the bottom of the wealth pyramid, yet it has tripled since 2000. Indonesia has also seen dramatic growth, and aggregate wealth in Latin America is now USD 8.7 trillion, compared to USD 3.4 trillion in 2000. In contrast, while North Americans dominate the top of the wealth pyramid, wealth in the USA has grown more modestly, from USD 39.5 trillion in 2000 to USD 62 trillion today.

Middle Class (middle level of pyramid):

The one billion adults located in the USD 10,000–100,000 range are the middle class in the global distribution of wealth. The average wealth holding is close to the global average for all wealth levels, and the total wealth of USD 32 trillion gives this segment considerable economic weight. The regional composition of this tier most closely corresponds to the global pattern, although India and Africa are underrepresented. The comparison of China and India is particularly interesting.  India is host to just 3% of the global middle class, and the share has been relatively stagnant in recent years. In contrast, China’s share has been growing fast and now accounts for over one-third of members, ten times higher than India’s. 

Upper Class (upper level of pyramid):

High wealth segment of the pyramid The regional composition changes significantly when it comes to the 373 million adults worldwide who make up the “high” segment of the wealth pyramid – those with a net worth above USD 100,000. North America, Europe and the Asia- Pacific region together account for 89% of the global membership of this group, with Europe alone home to 141 million members (38% of the total).  This compares with about 2.4 million adult members in India (0.6% of the global total) and a similar number in Africa.

The number of people in a given country with wealth above USD 100,000 depends on three factors: population size, the average wealth level, and wealth inequality within the country concerned. In 2012, only 15 countries have more than 1% of the global membership. The USA leads with 21% of the total. In this instance, the three factors reinforce each other: a large population, combined with high mean wealth and an unequal wealth distribution. Japan is a strong second and is currently the only country that challenges the hegemony of the USA in the top wealth-holder rankings. Although its relative position has declined over the past couple of decades due to the lackluster performance of its equity and housing markets, Japan has 18% of individuals with wealth above USD 100,000, a couple of points more than a year ago.

The most populous EU countries – Italy, the UK, Germany, and France – each contribute 6%–8% to the high wealth segment, and each country has experienced a small decline in its membership share during the year. For many years, these countries have occupied positions three to six in the global rankings, but this year China edged France out of sixth place, a dramatic improvement from the situation in 2000, when China’s representation in the top wealth groups was too small to register. Brazil, Korea and Taiwan are other emerging market economies with at least four million residents with a net worth above USD 100,000. Mexico accounted for more than 1% of the group in 2011, but has dropped below this benchmark this year. 

The Ultra-High Class (the very Top of the pyramid):

A different pattern of membership is again evident among the world’s millionaires at the top of the pyramid (see Figure 3). Compared to individuals with wealth  above USD 100,000, the proportion of members from the United States almost doubles to 39%, and the shares of most of the other countries move downwards. There are exceptions, however. France moves up to third place in the rankings, and Sweden and Switzerland both join the group of countries with more than 1% of global millionaires. Thank you Federal Reserve. 

Welcome to (say goodbye to) the Millionaire's Club:

Changing membership of the “millionaire group”; Changes to wealth levels since mid-2011 have affected the pattern of wealth distribution. The overall decline in average wealth has raised the proportion of adults with wealth below USD 10,000 from 67.6% in mid-2011 to 69.3% in mid-2012 (as the poor get poorer), and reduced the number of millionaires by slightly more than one million (see Table 1). There were 962,000 new millionaires in the United States and 460,000 in Japan, but no significant increase in numbers elsewhere. However, Europe shed almost 1.8 million US dollar millionaires, most notably in Italy (–374,000), France (–322,000),Germany (–290,000), Denmark (–179,000), Sweden (–142,000) and Spain (–87,000). Australia, Canada, Brazil and Taiwan are the other countries in  the group of the top ten losers. The losses were sufficient to drop Brazil, Denmark and Taiwan (along with Belgium) from the list of countries with more than 1% of the total number of millionaires worldwide.

High net worth individuals; To estimate the pattern of wealth holdings above USD 1 million requires a high degree of ingenuity because at high wealth levels, the usual sources of wealth data – official statistics and sample surveys – become increasingly incomplete and unreliable. We overcome this deficiency by  exploiting wellknown statistical regularities in the upper parts of the wealth distribution to ensure that the top wealth tail is consistent with the annual Forbes tally of global billionaires and similar “rich list” data published elsewhere. This produces plausible estimates of the global pattern of asset holdings in the high net worth (HNW) category from USD 1 million to USD 50 million, and in the ultra high net worth (UHNW) range from USD 50 million upwards. While the base of the wealth pyramid is occupied by people from all countries of the world at various stages of their life cycles, HNW and UHNW individuals are heavily concentrated in particular regions and countries, and tend to share a similar lifestyle, participating in the same global markets for high coupon consumption items, even when they reside on different continents. The wealth portfolios of individuals are also likely to be similar, dominated by financial assets and, in particular, equity holdings in public  companies traded in international markets. For these reasons, using official exchange rates to value assets is more appropriate than using local price levels.

There are about 28.5 million HNW individuals with wealth between USD 1 million and USD 50 million in mid-2012, of whom the vast majority (25.6 million) fall in the USD 1–5 million range (see Figure 4). One year ago, Europe overtook North America as the region with the greatest number of HNW individuals, but tradition has been  restored this year, with 11.8 million residents (42% of the total) in North America and 9.2 million (32%) in Europe. Asia-Pacific countries excluding China and India have 5.7 million members (20%), and we estimate that there are currently a fraction under one million HNW individuals in China (3.4% of the global total). The remaining 753,000 HNW individuals (2.6% of the total) reside in India, Africa or Latin America.

Ultra high net worth individuals

There is an estimated are 84,500 UHNW individuals in the world, defined here as those with net assets exceeding USD 50 million. Of these, 29,300 are worth at least USD 100 million and 2,700 have assets above USD 500 million. North America dominates the regional rankings, with 40,000 UHNW residents (47%), while Europe has 22,000 individuals (26%), and 12,800 (15%) reside in Asia-Pacific countries, excluding China and India. In terms of individual countries, the USA leads by a huge margin with 37,950 UHNW individuals, equivalent to 45% of the group (see Figure 5). The recent fortunes created in China have propelled it into second place with 4,700 representatives (5.6% of the global total), followed by Germany (4,000), Japan (3,400), the United Kingdom (3,200) and Switzerland (3,050). Numbers in other BRIC countries are also rising fast, with 1,950 members in Russia, 1,550 in India and 1,500 in Brazil, and strong showings are evident in Taiwan (1,200), Hong Kong (1,100) and Turkey (1,000). Although there is very little comparable data on the past, it is almost certain that the number of UHNW individuals is considerably greater than it was a decade ago. The overall growth in asset values accounts for part of the increase, together with the appreciation of currencies against the US dollar over much of the period. However, it also appears that, notwithstanding the credit crisis and the more recent setbacks, the past decade has been especially conducive to the establishment of large fortunes.

Hail Bernanke (and Kuroda, and Draghi, and Carney, and Jordan, and so on), the ultra high net worth individuals on the chart below salute you.

1106. More Food Through "Sustainable Intensification" of Agriculture?

By Science Daily, July 5, 2013

230 millions go hungry in India

July 5, 2013 — A policy known as sustainable intensification could help meet the challenges of increasing demands for food from a growing global population, argues a team of scientists in an article in the journal Science.
The goal of sustainable intensification is to increase food production from existing farmland says the article in the journal's Policy Forum by lead authors Dr Tara Garnett and Professor Charles Godfray from the University of Oxford. They say this would minimise the pressure on the environment in a world in which land, water, and energy are in short supply, highlighting that the environment is often overexploited and used unsustainably.

The authors, university researchers and policy-makers from NGOs and the UN, outline a new, more sophisticated account of how 'sustainable intensification' should work. They recognise that this policy has attracted criticism in some quarters as being either too narrowly focused on food production or as representing a contradiction in terms.

The article stresses that while farmers in many regions of the world need to produce more food, it is equally urgent that policy makers act on diets, waste and how the food system is governed. The authors emphasise that there is a need to produce more food on existing rather than new farmland because converting uncultivated land would lead to major emissions of greenhouse gases and cause significant losses of biodiversity.

Sustainable intensification is the only policy on the table that could create a sustainable way of producing enough food globally, argues the paper; but, importantly, this should be only one part of the policy portfolio. 'It is necessary, but not sufficient,' said Professor Charles Godfray of the Oxford Martin Programme on the Future of Food. 'Achieving a sustainable food system will require changes in agricultural production, changes in diet so people eat less meat and waste less food, and regulatory changes to improve the efficiency and resilience of the food system. Producing more food is important but it is only one of a number of policies that we must pursue together.'

Increasing productivity does not always mean using more fertilisers and agrochemicals as these technologies frequently carry unacceptable environmental costs, argue the authors. They say that a range of techniques, both old and new, should be employed to develop ways of farming that keep environmental damage to a minimum.

The authors of the paper accept that the intensification of agriculture will have some implications for other important policy goals, such as preserving biodiversity, animal welfare, human nutrition, protecting rural economies and sustainable development. Policy makers will need to find a way to navigate through the conflicting priorities on occasion.

Lead author Dr Tara Garnett, from the Food Climate Research Network at the Oxford Martin School, said: 'Improving nutrition is a key part of food security as food security is about more than just calories. Around two billion people worldwide are thought to be deficient in micronutrients. We need to intensify the quality of the food we produce in ways that improve the nutritional value of people's diets, preferably through diversifying the range of foods produced and available but also, in the short term, by improving the nutrient content of commonly produced crops.'

'Sustainability requires consideration of economic, environmental and social priorities,' added Dr Michael Appleby of the World Society for the Protection of Animals. 'Attention to livestock welfare is both necessary and beneficial for sustainability. Policies to achieve the right balance between animal and crop production will benefit animals, people and the planet.'

Agriculture is a potent sector for economic growth and rural development in many countries across Africa, Asia and South America. Co-author Sonja Vermeulen, from the CGIAR Program on Climate Change, Agriculture and Food Security (CCAFS), said: 'It is sustainable intensification that can provide the best rewards for small-scale farmers and their heritage of natural resources. What policy-makers can provide is strategic finance and institutions that support sustainable and equitable pathways, rather than quick profits gained through depletion.'

Journal Reference:

1. T. Garnett, M. C. Appleby, A. Balmford, I. J. Bateman, T. G. Benton, P. Bloomer, B. Burlingame, M. Dawkins, L. Dolan, D. Fraser, M. Herrero, I. Hoffmann, P. Smith, P. K. Thornton, C. Toulmin, S. J. Vermeulen, H. C. J. Godfray. Sustainable Intensification in Agriculture: Premises and Policies.Science, 2013; 341 (6141): 33 DOI: 10.1126/science.1234485

1105. Interview: Is there Anything Truly Sustainable or Humane About Eating Meat?

By Joshua Frank, Counterpunch, July 12-14, 2013

Natural food sections in our grocery stores are chock full of them. The ethical foodies seek them out. They’re intended to inform the consumer about where our food comes from and how it’s produced: “Sustainable,” “organic,” “free-range,” “local” products — we’ve all seen the terms and we hope they genuinely convey what they imply.

But what do they really mean? What’s the truth behind the label? Can meat ever really be sustainable? Is purchasing local a good thing for the environment? Not always, says activist, author and educator Lee Hall, who serves as legal affairs VP for Friends of Animals. Hall is also an active supporter of HumaneMyth.org, a group that seeks to expose the facts behind our misleading food labels and farming practices.

I spoke with Hall, a CounterPunch writer and contributing editor, whose latest book on animal-rights theory and advocacy, On Their Own Terms: Bringing Animal-Rights Philosophy Down to Earth is out now.

Joshua Frank: As someone who frequently shops at farmer’s markets and natural food stores, I have noticed a rapidly growing trend toward so-called ethical eating. People are becoming aware of the dark side of industrialized farming, and as a result more and more animal products are being labeled with terms like “cage free,” “humane certified” and “organic.”

Lee Hall: You’re right; this trend is growing fast and the advertising hype that’s driven by enterprises such as Whole Foods have a lot to do with it, as does the reality that global warming really is upon us. Climate disruption is the most frightening thing since the bomb (and that’s not gone). People are looking for pacifiers. People want to be able to say they’ve grasped the inconvenient truth but they still want peace of mind. If they’ve got money, they’ll pay a bit more these days for that.JF: But you’ve argued that these are simply marketing terms that do not necessarily mean what they convey to consumers. Can you explain why? What’s the reality behind these terms?

LH: First, they’re usually just marketing ploys. There’s no legally binding definition for cage-free eggs, for example. These items are bought by people who want to believe the birds were treated OK. That’s well-meaning. But think about what’s going on. Packing a mass of birds into a shed isn’t much better than jamming them into a cage. Cannibalism increases in shed situations where so-called cage-free chickens lay eggs, as does bone breakage. Recall that birds who are purpose-bred to lay eggs do that a lot. So they’re always short of calcium; it leaves their bodies and goes into the shells. That means osteoporosis is common in commercial birds. I don’t mean to be a party pooper here; I assure you there are great vegan recipes for just about anything you’re making with eggs now.

I know some people will say: Oh, but my eggs, my ham — it really does come from a good farm; look at their Web site and all the greenery! Well, you must have a lot of money to eat that way all the time. But even if the animal farms you support are spacious, think about the ramifications. More space for agribusiness concerns, less free animals in wild spaces. Just like suburban development, farms take up a lot of land. Why would we as a society continue to think this is a good trend?

JF: What about grass-fed cattle? Michael Pollan and others have touted the alleged environmental and ethical benefits of eating free-range beef as opposed to cows raised in CAFOs (confined animal feeding operations). Isn’t this method of raising animals qualitatively better?

LH: To my mind, Michael Pollan’s arguments are clever, but ultimately unconvincing. Eight years ago, Pollan wanted to be assured that eating the flesh of cattle could be done without barbarism. This was no easy feat. To prove the thesis of compassionate carnivorism, this contributing writer for the New York Times Magazine actually bought a calf. Pollan chronicled the growth of the little Black Angus steer from a nursing baby up until the end of it all. The animal was killed a few weeks after turning one year of age.

Do you remember the name Pollan referred to that calf by? Number 534. Compassionate, isn’t? Now we’re supposed to believe that there’s no ecological barbarism in eating these animals either — if it’s done on pastures, not in factories. Balderdash. As the human population continues to rise, as biofuels compete with agricultural land, as energy and water become concentrated in fewer hands, mass production will be the norm. Only a select few will have the opportunity to eat that grass-fed flesh Pollan’s touting.

And what happens to the wolves, coyotes, bobcats, and other animals who once roamed the land made over to farm sprawl?

If you really want to tread lightly on the earth and its conscious life, the answer is to stop breeding these poor beings only to betray them and stop annihilating wildlands for malls — and the farms too. There’s a great saying ascribed to Confucius: “The way out is via the door.”

JF: I’ve always been skeptical of the free-range cattle notion. Spending a considerable amount of time hiking around the rural West, I have seen many grass-fed cattle roaming our public lands and shitting in and around some of the state’s remaining wild rivers. A study by UC Davis Medical Center recently confirmed that free-roaming livestock are polluting rivers in the Sierras with their waste.

LH: That study is on to something: water on public lands and wilderness areas are dirtiest where cattle graze. And what a word from an ethical point of view. Livestock. Live today, stock tomorrow. It’s really a bane, this notion that conscious life can and should be a commodity. Imagine if we dared to challenge that. Environmental advocacy would be revolutionized overnight.

This is what the locavores aren’t talking about. Cows aren’t part of the natural biocommunity. As commercial cows became widespread, their free-living ancestors, the aurochs, went extinct in the seventeenth century, when a poacher shot the last one in Poland. Free-range? Not really. The ones we see today are purpose-bred animals, imposed on the land.

JF: Since you bring up the locavore movement, I’m reminded of Prof. James McWilliams at Texas State University who has argued that “If you want to make a statement, ride your bike to the farmer’s market. If you want to reduce greenhouse gases, become a vegetarian.” Why do you think the broader environmental movement has yet to fully embrace vegetarianism as one way to challenge climate change?

LH: Much of what we call the environmental movement relies on donations. So there’s a hydraulic pull to behave as though laws and lawmakers should fix things. That’s convenient. Potential donors aren’t challenged to make personal changes.

At the same time, the moneyed donors non-profits hope to attract will find comfort in promotions of “humane, sustainable, all-natural meat” and the like. Rarely do environmental groups ask potential supporters to begin with the personal, essential paradigm shift that a full vegetarian commitment involves.

What underlies this hesitance? Well, imagine the Catholic authorities’ initial resistance to the Copernican revolution. People had to leave their comfort zone to grasp the reality the universe does not revolve around the human being. Galileo got the picture, and wound up under house arrest.

Suggest that humans are part of the biocommunity rather than in charge of it? Say the universe does not revolve around us? Humanity is not quite ready to accept that reality — although everything from the climate to the extinction rate is telling us the time has come to do so.

JF: In 2006 the UN Dept. of Food and Agriculture reported that the world’s cattle industry was responsible for more greenhouse gas emissions, by CO2 equivalence, than all the vehicles on the road. Even if big environmental groups aren’t addressing this very serious problem, why do you think popular climate activists, such as Al Gore and Bill McKibben, aren’t talking about this issue in any substantive manner?

LH: Al Gore, pressed on this issue, has said, “Cutting back is a responsible alternative” but Gore is not a vegetarian. Likewise Bill McKibben — who, in the March/April 2010 issue of Orion, criticized factory farming, but gave grass-fed beef a pass. If they haven’t seen fit to personally get beyond animal agribusiness, they aren’t prepared to take vegetarianism seriously in their public commentaries.

Gidon Eshel and Pamela Martin, assistant professors in geophysical sciences at the University of Chicago, observed in 2006 that a fully vegetarian diet is the most energy-efficient. Fish and red meat virtually tied as the least efficient. And while the average person on our landmass puts out four tons of carbon dioxide-equivalent a year, each person who goes vegan cuts that by some 1.5 tons. How’s that for direct action?

Professor Eshel, once a cattle farmer in Israel, became a proponent of vegan-organic farming. What I’ve seen Eshel say to interviewers that I’ve not yet seen from Gore or McKibben is the understanding that animals have thoughts, and their death is a dreadful sight. That understanding — a queasy response to violent human privilege — is a vital characteristic of people who undergo a personal paradigm shift.

There’s some genuine transformation going on, with knowledge-sharing in and between communities; it’s happening, for example, through the vegan-organic movement. We need to look for people who show our population what to strive for, not what we can settle for.

JF: Let’s talk a bit more about some of the locavores. In Portland, Oregon, for example, the movement is so substantial that even Oprah’s magazine has lauded a local chef and former vegetarian for her “sustainable” food practices. Of course, her menu is loaded with meat, including foie-gras of all things.

Hip Portland is even home to the so-called “Ethical Butcher,” a former vegan, whose love for the environment and animals has caused him to give up his plant-based diet and embrace “humane” animal slaughtering. How should environmentalists and animal rights activists challenge this aspect of the locavore movement that seems so dominant these days?

LH: First the PR agents need to assure us that whatever they’re marketing — sausages, aircraft, bottled water — is ecologically benign. Also known as greenwash.

Then they want to assure us that animals are happy to be farmed and eaten. Also known as hogwash. So there are two faulty claims that environmentalists and animal advocates, together, can and should challenge: that animal agribusiness can be kind and that it can be green.

It was an uncle’s “idyllic” farm that impelled Vegan Society founder Donald Watson to organize a movement. As a child visiting the farm, Donald was always greeted by a pair of pigs — until the day one was killed. Donald couldn’t forget the screams, and henceforth regarded the farm as Death Row. The folks at HumaneMyth.org have gathered some intriguing samples of “happy meat” PR, coupled with counterpoints offered by people in the know.

And no matter how they’re grown or how far their bodies are transported, the cows, lambs, pigs, and birds raised as food on any local farm are potent emitters of methane — regardless, too, of where their feed came from. And their manure produces nitrous oxide, which has nearly 300 times the immediate warming effect of C02.

A comprehensive study, funded by Britain’s Department for Environment Food and Rural Affairs, was conducted earlier this decade and released by Adrian Williams of Cranfield University. It showed that free-range chickens, used for eggs or flesh, have a 15-20 percent greater impact on global warming than factory-caged birds. That’s because “sustainable” chickens take longer to raise, and eat more feed. Not that I’m endorsing high-volume farming. I’ve found it’s quite easy, once you make the initial adjustment, to cook without ever selecting animal products at all.

Joshua Frank, Managing Editor of CounterPunch, is the author of Left Out! How Liberals Helped Reelect George W. Bush, and along with Jeffrey St. Clair, the editor of Red State Rebels: Tales of Grassroots Resistance in the Heartland, and of Hopeless: Barack Obama and the Politics of Illusion, published by AK Press. Hopeless is now available in Kindle format. He can be reached at brickburner@gmail.com.

1104. Video: Redesigning Civilization with Permaculture

By Toby Hemenway, January 6, 2013

Modern agriculture, industry and finance all extract more than they give back, and the Earth is starting to show the strain. How did we get in this mess and what can we do to help our culture get back on track?

The ecological design approach known as permaculture offers powerful tools for the design of regenerative, fair ways to provide food, energy, livelihood, and other needs while letting humans share the planet with the rest of nature. This presentation will give you insight into why our culture has become fundamentally unsustainable, and offers ecologically based solutions that can help create a just and sustainable society.

This is the sequel to Toby's popular talk, "How Permaculture Can Save Humanity and The Planet, but not Civilization."

For a related article see The Last Nomads and the Culture of Fear.

1103. Video – We Are the Wind: Resistance on the Isthmus to Mareña Wind Park

By El Enemigo Común, July 11, 2013

This documentary shows the conflict generated by the intention to establish the San Dionisio del Mar Wind Park on the Isthmus of Tehuantepec, focusing on the realities and opinions of the inhabitants of the region and giving voice to people who don’t appear in the commercial media. The film also shows the logic of the wind parks in a more global vision, briefly explaining what lies behind corporate promises of “green energy” and “clean development”.

1102. Wastewater Wells, Geothermal Power Triggering Earthquakes

By Christopher Joyce, NPR, July 11, 2013

A geothermal energy plant near the Salton Sea in California taps deep underground heat from the southern San Andreas Fault rift zone. A new study ties the amount of water pulled from the ground by the geothermal plant here to the frequency of earthquakes.

The continental U.S. experiences small earthquakes every day. But over the past few years, their numbers have been increasing. Geoscientists say the new epidemic of quakes is related to industrial wastewater being pumped into underground storage wells.

Now there’s new research that reveals two trigger mechanisms that may be setting off these wastewater quakes — other, larger earthquakes (some as far away as Indonesia), and the activity at geothermal power plants.

Most of these little quakes in the U.S. are too small to feel. They tend to happen in “swarms.” Over the past year, geoscientists traced some of these swarms to underground faults near deep wells that are often filled with waste fluid from the oil and gas drilling boom.

Nicholas van der Elst, a geophysicist with Columbia University’s Lamont Doherty Earth Observatory, says there are lots of small faults all over the country. The injection of fluids migrates in and around the fault itself, “and kind of pushes outward on the fault walls and makes it easier for the fault to slip,” he says.

The wastewater “loads up” these faults with tension until, at some point, they slip and the earth moves.

So what van der Elst wanted to know was: “What prompts that slip?” Sometimes it’s just all that water building up. However, he discovered that in three cases in the past decade — in Oklahoma, in Colorado and in Texas — the trigger was yet another earthquake, a really big one, thousands of miles away. In each case, the large earthquakes set up large seismic waves that traveled around the surface of the earth “kind of like ripples,” van der Elst says. “You can even see them on seismometers, going around the world multiple times.”

Those three big quakes rang the planet like a bell. And when their seismic waves reached underground faults near waste wells in those three states, they nudged the tension in the faults past the brink. Soon, the area near the wells was swarming with mini-quakes.

And some of those swarms eventually culminated in pretty big temblors — in the magnitude-4.0 to -5.0, which is big enough to do some damage.

Van der Elst’s findings appear in this week’s issue of the journal Science. In the same issue, geoscientist Emily Brodsky at the University of California, Santa Cruz, reports yet another trigger mechanism for mini-quakes: the production of geothermal energy.

The power plant in question, near Southern California’s Salton Sea, extracts hot water from beneath Earth’s surface and turns it to steam to make electricity, then returns most of it underground. “What we found,” Brodsky says, “is that the earthquake rate correlates quite strongly with the extraction of water from the field” underground.

On average, extracting half a billion gallons of water per month resulted in one detectable earthquake every 11 days.

Now, scientists have known that geothermal power plants cycling water from underground can cause small quakes. But Brodsky’s research actually matches the amount of water moved to the frequency of the quakes.

These quakes are very small, she notes. But it concerns her that the geothermal plant she studied is near the southern tip of California’s San Andreas fault — the source of many of the state’s biggest temblors. “We ought to know what’s happening on the southernmost terminus of the San Andreas fault,” she says. “Of various places in the world to induce earthquakes, this is a particularly sensitive one.”

Brodsky says it’s unlikely that the geothermal plant could induce a major quake on the fault, but it’s theoretically possible. The chance is more than zero, she says, but she doesn’t know what the real risk is; that’s what she wants to find out next.

The company that owns the plant, Mid-American Energy Holdings, declined to comment on the research.

The U.S. Geological Survey’s William Ellsworth has been in the thick of this science. “One of the major questions we’re concerned about,” he says, “is, ‘How large might an induced earthquake be?’ We don’t have the answer to that, and it’s one of the keys to being able to better forecast the seismic hazard going forward.” Ellsworth says geologists need more seismic-monitoring stations and more data from waste wells and geothermal plants to figure out the risk.