Matthew Norman: Another police fiasco to divert attention from the last one

Seldom since September 11 2001 has there been a better day than Wednesday for the burial of bad news. With the Chancellor borrowing from compatriot Private Frazer, an undertaker himself, to tell us we're all doomed (I paraphrase the Budget very slightly), the announcement that a huge meteor was on course to disrupt the London Marathon on Sunday would have passed by barely noticed.
If Jacqui Smith had coughed to claiming £120,000 for being impregnated with a foetus cloned from Osama bin Laden in a Torinese clinic, it would have been lost. Had it emerged that Gordon Brown has signed up for a sex change, followed by extensive cosmetic surgery and the loss of his legs below the knee, in the cause of becoming a Susan Boyle tribute act (the only way, according to leading pundits, he could win an election), it might have made a two-paragraph brief on page 27.
Consider yourselves forgiven, then, if the trumpets of the Four Horsemen of the Fiscal Apocalypse drowned out the noise of a less sensational news cadaver being lowered into the ground with half the ceremony lavished on Eleanor Rigby... the very bad, if unstartling, news that the British police have contrived another colossal fiasco.
As it proudly takes its place on the honours board of terrorist-related policing calamity, alongside the "Ricin plot" sans Ricin, the "airline bomb plot" involving no airliners, the "London Underground cyanide plot" devoid of cyanide and aimed at no Tube trains, and the shooting of an innocent Muslim in east London technically known as Forest GateGate, please give a warm, Independent readers' welcome to the "Easter bomb plot" with nothing to do with Easter and not the hint of an explosive.
The special appeal about this one is its exquisite symmetry. The arrests of a dozen Muslim men, 11 Pakistanis here on student visas and a lone British national, were rushed through on 9 April in the wake of former Assistant Commissioner Bob Quick's little faux pas with that top secret folder as he strode manfully towards Number 10.
Given that all 12 have now been released without charge, we ask ourselves why Mr Quick was in Downing Street at all. And the odds-on 2-9 favourite, we answer, is that the Government and Scotland Yard were desperate to flam up a "police triumph" story to divert outrage from the possible manslaughter of Ian Tomlinson at the G20 protest.
And a triumph, for a while at least, it was. Gordon was thrilled to bits by Operation Pathway, lauding the police for foiling what he assured us, with neo-Blunkettian contempt for the basic precepts of natural justice, was a "very big terrorist plot". So big, it transpires, that the police and security services, these brethren defenders of life and liberty now engaged in a ferocious game of buck-passing, had amassed zero evidence. Houses, cars and computers were searched, and not a carrot found.
Apparently there'd been a tip-off from our spooks in Pakistan, which is nice, although ever since MI6 failed to predict the collapse of Soviet Communism, common sense suggests their intelligence be handled with giant tongs. One person's common sense is another's venal cynicism, of course, and the security world's faith in its own competence does credit to its trusting nature, if only towards itself.
Now although we cannot be certain that these men were harmless, their release after less than a fortnight, when the law now allows suspects to be held for 28 days, entitles us to make the presumption; just as we may assume that they were arrested, despite being under 24-hour surveillance that had unearthed no imminent "bomb plot", to remove Mr Tomlinson's death from the front pages; and just as we must suspect that the timing of their release, on the eve of the Budget, was more than coincidence.
The creation of a fresh policing catastrophe in the attempt to divert public fury from a previous one is, as I said, gorgeously symmetrical. If royalprotection officers had shot Prince Philip to deflect attention from their failure to keep Michael Fagan out of the Queen's bedroom, that would have done the trick too, but again you'd have wondered whether the game was worth the candle.
Yet however inured we've become to ministers and a frighteningly politicised police force crying wolf (you will recall the pre-election ringing of Heathrow with tanks for no other apparent reason than electoral gain), we cannot become blasé about the blithe vindictiveness that underscores this case.
Bending over backwards to be charitable, one might read the "Easter bomb plot" arrests as nothing more sinister than a loss of nerve... the blind terror, in a risk-averse world, that waiting to collect some evidence could lead to loss of life. It's very easy to be smug, sat behind a computer screen, about the nervous nelliedom of those responsible for keeping us safe. It isn't so easy, in truth, to imagine how men being followed round the clock, their phones and emails perpetually bugged, could hurriedly activate the plot to detonate so much as a stink bomb.
Lord Carlile, the independent reviewer of terrorism legislation, has promised a "snapshot review" of Operation Pathway, and if he sees fit to publish it perhaps we will learn more about the mechanics of this cock-up. Whatever his findings, however, and without excusing the evidently political nature of the timing or ignoring the damage all this premature incarceration does to relations with a justifiably livid and suspicious Muslim community, one does understand the general temptation to err on the side of caution.
What is utterly unforgivable is that the 11 Pakistanis have been released into not freedom but the unlovely arms of the immigration service, which will seek to deport them on the familiar catch that they are, in some nebulous manner of which they have no legal right to be informed so that they might defend themselves against the charge, a threat to national security. Having tainted them with the McBridean smear that they are would-be killers with his "very big terrorist plot" gibberish, in other words, Gordon Brown means to use their deportation as no-smoke-without-fire cover for a grave mistake in which he was complicit.
If an apology and compensation for their wrongful detention is an outlandish expectation from a government whose paramount concern remains the opinion of right wing tabloids, is it too much to ask that these chaps be spared the persecution they can, having been condemned as terrorists by a British PM, count on back in Pakistan?
Apparently it is. For far too long, idiots like myself have given Gordon Brown the benefit of every doubt, ever qualifying attacks on his abysmal leadership, relentless machine politician bullying and abundant cowardice in the line of fire with the rider that at least he, unlike his predecessor, is at heart a well-intentioned man. The sacrifice of these innocents to spare his blushes makes this a very good day to bury that credulous misjudgment in a concrete-lined coffin, never to be disinterred.
s.richards@independent.co.uk

Robert Brenner on the crisis: "The Economy in a World of Trouble"

The basic source of today’s crisis is the declining vitality of the advanced economies since 1973, and, especially, since 2000. Economic performance in the United States, western Europe, and Japan has steadily deteriorated, business cycle by business cycle in terms of every standard macroeconomic indicator — GDP, investment, real wages and so forth. Most telling, the business cycle that just ended, from 2001 through 2007, was — by far — the weakest of the postwar period, and this despite the greatest government-sponsored economic stimulus in U.S. peacetime history.
SJ: How would you explain the long-term weakening of the real economy since 1973, what you call in your work “the long downturn”?
RB: What mainly accounts for it is a deep, and lasting, decline of the rate of return on capital investment since the end of the 1960s. The failure of the rate of profit to recover is all the more remarkable, in view of the huge drop-off in the growth of real wages, over the period.
The main cause, though not the only cause, of the decline in the rate of profit has been a persistent tendency to overcapacity in global manufacturing industries. What happened was that one after another new manufacturing power entered the world market — Germany and Japan, the northeast Asian Newly Industrializing Countries (NICS), the southeast Asian Tigers, and, finally the Chinese Leviathan.
These later-developing economies produced the same goods that were already being produced by the earlier developers, only cheaper. The result was too much supply compared to demand in one industry after another, and this forced down prices and in that way profits. The corporations that experienced the squeeze on their profits, moreover, did not meekly leave their industries; they tried to hold their place by falling back on their capacity for innovation and speeding up investment in new technologies. But of course this only made overcapacity worse.
Due to the fall in their rate of return, capitalists were getting smaller surpluses from their investments. They therefore had no choice but to slow down the growth of plant and equipment and employment. At the same time, in order to restore profitability, they held down employees’ pay, while governments reduced the growth of social expenditures.
But the consequence of all these cutbacks in spending has been a long-term problem of aggregate demand. The persistent weakness of aggregate demand has been the immediate source of the economy’s long-term weakness.
SJ: The crisis was actually triggered by the bursting of the historic housing bubble, which had been expanding for a full decade. What is your view of its significance?
RB: The housing bubble needs to be understood in relation to the succession of asset price bubbles that the economy has experienced since the middle 1990s, and especially the role of the U.S. Federal Reserve in nurturing those bubbles.
Since the start of the long downturn, state economic authorities have tried to cope with the problem of insufficient demand by encouraging the increase of borrowing, both public and private. At first they turned to state budget deficits, and in this way they did avoid really deep recessions. But as time went on, governments could get ever less growth from the same amount of borrowing. In effect, in order to stave off the sort of profound crises that historically have plagued the capitalist system, they had to accept a slide toward stagnation.
During the early 1990s, governments in the United States and Europe, led by the Clinton administration, famously tried to break their addiction to debt by moving together toward balanced budgets. The idea was to let the free market govern the economy. But because profitability had still not recovered, the reduction in deficits delivered a big shock to demand, and helped bring about the recessions and slow growth between 1991 and 1995.
To get the economy expanding again, U.S. authorities ended up adopting an approach that had been pioneered by Japan during the later 1980s. By keeping interest rates low, the Federal Reserve made it easy to borrow so as to encourage investment in financial assets. As asset prices soared, corporations and households experienced huge increases in their wealth, at least on paper. They were therefore able to borrow on a titanic scale, vastly increase their investment and consumption, and in that way drive the economy.
So, private deficits replaced public ones. What might be called “asset price Keynesianism” replaced traditional Keynesianism. We have therefore witnessed for the last dozen years or so the extraordinary spectacle of a world economy in which the continuation of capital accumulation has come literally to depend upon historic waves of speculation, carefully nurtured and rationalized by state policy makers — and regulators! — first the historic stock market bubble of the later 1990s, then the housing and credit market bubbles from the early 2000s.
SJ: You were prophetic in forecasting the current crisis as well as the 2001 recession. What is your outlook for the global economy? Will it worsen, or will it recover before the end of 2009? Do you expect that the current crisis will be as severe as the Great Depression?
RB: The current crisis is more serious than the worst previous recession of the postwar period, between 1979 and 1982, and could conceivably come to rival the Great Depression, though there is no way of really knowing. Economic forecasters have underestimated how had bad it is because they have overestimated the strength of the real economy and failed to take into account the extent of its dependence upon a buildup of debt that relied on asset price bubbles.
In the United States, during the recent business cycle of the years 2001-2007, GDP growth was by far the slowest of the postwar epoch. There was no increase in private sector employment. The increase in plant and equipment was about a third off the previous postwar low. Real wages were basically flat. There was no increase in median family income for the first time since WWII. Economic growth was driven entirely by personal consumption and residential investment, made possible by easy credit and rising house prices.
Economic performance was this weak, despite the enormous stimulus from the housing bubble and the Bush administration’s huge federal deficits. Housing by itself accounted for almost one-third of the growth of GDP and close to half of the increase in employment in the years 2001-2005. It was therefore to be expected that when the housing bubble burst, consumption and residential investment would fall, and the economy would plunge.
SJ: Many assert that the current crisis is a typical financial crisis, not a “Marxian” one of overproduction and falling profit, arguing that the financial speculation-bubble-bust has played the central role in this crisis. How would you respond?
RB: I don’t think it’s helpful to counterpose in that way the real and financial aspects of the crisis. As I emphasized, it is a Marxian crisis in that it finds its roots in a longterm fall and failure to recover the rate of profit, which is the fundamental source of the extended slowdown of capital accumulation right into the present. In 2001, the rate of profit for U.S. non-financial corporations was the lowest of the postwar period, except for 1980. Corporations therefore had no choice but to hold back on investment and employment, further darkening the business climate.
This is what accounts for the ultra-slow growth during the business cycle that just ended. Nevertheless, to understand the current collapse, you have to demonstrate the connection between the weakness of the real economy and the financial meltdown. The main link is the economy’s ever-increasing dependence on borrowing to keep it turning over, and the government’s ever greater reliance on asset price run-ups to allow that borrowing to continue.
The basic condition for the housing and credit market bubbles was the perpetuation of low costs of borrowing. The weakness of the world economy, especially after the crises of 1997-1998 and 2001-2002, plus East Asian governments’ huge purchases of dollars to keep their currencies down and U.S. consumption growing, made for unusually low longterm interest rates. At the same time, the U.S. Fed kept short-term interest rates lower than at any time since the 1950s. Because they could borrow so cheaply, banks were willing to extend loans to speculators, whose investments drove the price of assets of every type ever higher and the return on lending (interest rates on bonds) ever lower.
Symptomatically, housing prices soared and the yield in real terms on U.S. treasury bonds plunged. But because yields fell ever lower, institutions the world over that depended on returns from lending had an ever more difficult time making sufficient profits. Pension funds and insurance companies were particularly hard hit, but hedge funds and investment banks were also affected.
These institutions were therefore all too ready to make massive investments in securities backed by highly dubious sub-prime mortgage, because of the unusually high returns they offered, ignoring their unusually high risk. In fact, they could not get enough of them. Their purchases of mortgage-backed securities allowed mortgage originators to keep lending to ever less qualified borrowers. The housing bubble reached historic proportions, and the economic expansion was allowed to continue.
Of course, this could not go on for very long. When housing prices fell, the real economy went into recession and the financial sector experienced a meltdown, because both had depended for their dynamism on the housing bubble. Today, the recession is making the meltdown worse because it is exacerbating the housing crisis. The meltdown is intensifying the recession because it is making access to credit so difficult. It is the mutually reinforcing interaction between the crises in the real economy and financial sector that has made the downward slide so intractable for policymakers, and the potential for catastrophe so evident.
SJ: Even if one grants that postwar capitalism entered a period of long downturn in the 1970s, it seems undeniable that the neoliberal capitalist offensive has prevented the worsening of the downswing since the 1980s.
RB: If you mean by neoliberalism the turn to finance and deregulation, I do not see how it helped the economy. But if you mean the stepped-up assault by employers and governments on workers’ wages, working conditions, and the welfare state, there can be little doubt that it prevented the fall in the rate of profit from getting worse.
Even so, the employers’ offensive did not wait until the so-called neoliberal era of the 1980s. It began in the wake of the fall of profitability, starting in the early 1970s, along with Keynesianism. Moreover, it did not result in a recovery of the rate of profit, and only further exacerbated the problem of aggregate demand. The weakening of aggregate demand ultimately impelled economic authorities to turn to more powerful and dangerous forms of economic stimulus, the “asset price Keynesianism” that led to the current disaster.
SJ: Some have argued that a new paradigm of “financialization” or “finance-led capitalism” has sustained a so-called “Capital Resurgent” (Gerard Dumenil) between the 1980s and the present. What do you think of such a thesis?
RB: The idea of a finance led-capitalism is a contradiction in terms, because, speaking generally — there are significant exceptions, like consumer lending — sustained financial profit-making depends on sustained profit-making in the real economy. To respond to the fall in the rate of profit in the real economy, some governments, led by the United States, encouraged a turn to finance by deregulating the financial sector. But because the real economy continued to languish, the main result of deregulation was to intensify competition in the financial sector, which made profit making more difficult and encouraged ever greater speculation and risk taking.
Leading executives in investment banks and hedge funds were able to make fabulous fortunes, because their salaries depended on short-run profits. They were able to secure temporarily high returns by expanding their firms’ assets/lending and increasing risk. But this way of doing business, sooner or later, came at the expense of the executives own corporations’ long-term financial health, most spectacularly leading to the fall of Wall Street’s leading investment banks.
Every so-called financial expansion since the 1970s very quickly ended in a disastrous financial crisis and required a massive bailout by the state. This was true of the third-world lending boom of the 1970s and early 1980s; the savings and loan runup, the leveraged buyout mania, and the commercial real estate bubble of the 1980s; the stock market bubble of the second half of the 1990s; and of course the housing and credit market bubbles of the 2000s. The financial sector appeared dynamic only because governments were prepared to go to any lengths to support it.
SJ: Keynesianism or statism seems poised to return as the new Zeitgeist. What is your general assessment of resurgent Keynesianism or statism? Can it help to resolve, or at least, alleviate the current crisis?
RB: Governments today really have no choice but to turn to Keynesianism and the state to try to save the economy. After all, the free market has shown itself totally incapable of preventing or coping with economic catastrophe, let alone securing stability and growth. That’s why the world’s political elites, who only yesterday were celebrating deregulated financial markets, are suddenly now all Keynesians.
But there is reason to doubt that Keynesianism, in the sense of huge government deficits and easy credit to pump up demand, can have the impact that many expect. After all, during the past seven years, thanks to the borrowing and spending encouraged by the Federal Reserve’s housing bubble and the Bush administration’s budget deficits, we witnessed in effect probably the greatest Keynesian economic stimulus in peacetime history. Yet we got the weakest business cycle in the postwar epoch.
Today the challenge is much greater. As the housing bubble collapses and credit becomes harder to come by, households are cutting back on the consumption and residential investment. As a consequence, corporations are experiencing falling profits. They are therefore cutting back on wages and laying off workers at a rapid pace, detonating a downward spiral of declining demand and declining profitability.
Households had long counted on rising house prices to enable them to borrow more and to do their saving for them. But now, because of the buildup of debt, they will have to reduce borrowing and increase saving at the very time that the economy most needs them to consume. We can expect that much of the money that the government places in the hands of households will be saved, not spent. Since Keynesianism could barely move the economy during the expansion, what can we expect from it in the worst recession since the 1930s?
To have a significant effect on the economy, the Obama administration will likely have to contemplate a huge wave of direct or indirect government investment, in effect a form of state capitalism. To actually accomplish this however would require overcoming enormous political and economic obstacles.
The U.S. political culture is enormously hostile to state enterprise. At the same time, the level of expenditure and state indebtedness that would be required could threaten the dollar. Until now, East Asian governments have been happy to fund U.S. external and government deficits, in order to sustain U.S. consumption and their own exports. But with the crisis overtaking even China, these governments may lose the capacity to finance U.S. deficits, especially as they grow to unprecedented size. The truly terrifying prospect of a run on the dollar looms in the background.
SJ: What is your general assessment of the victory of Obama in the last Presidential election? Many regard Obama as a F.D.R. of the 21st century who wll bring a “new New Deal.” Do you think the anti-capitalist progressives can give critical support to some of his policies?
RB: The triumph of Obama in the election is to be welcomed. A victory for McCain would have been a victory for the Republican Party and given an enormous boost to the most reactionary forces on the U.S. political scene. It would have been seen as an endorsement of the Bush administration’s hyper-militarism and imperialism, as well as its explicit agenda of eliminating what is left of unions, the welfare state, and environmental protection.
That said, Obama is, like Roosevelt, a centrist Democrat who cannot be expected on his own to do much to defend the interests of the vast majority of working people, who will be subjected to an accelerating assault from corporations trying to make up for their collapsing profits by reducing employment, compensation, and so forth.
Obama's backed the titanic bailout of the financial sector, which represents perhaps the greatest robbery of the U.S. taxpayer in American history, especially as it came with no strings attached for the banks. He also supported the bailout of the auto industry, even though it is conditional on massive cuts in the compensation of auto workers.
The bottom line is that, like Roosevelt, Obama can be expected to take decisive action in defense of working people only if he is pushed by way of organized direct action from below. The Roosevelt administration passed the main progressive legislation of the New Deal, including the Wagner Act and the Social Security, only after it was pressured to do so by a great wave of mass strikes. We can expect the same from Obama.Crisis and Expansion
SJ: According to Rosa Luxemburg and recently David Harvey, capitalism overcomes its tendency to crisis by way of geographical expansion. According to Harvey, this is often facilitated by massive state investments in infrastructure, to back up private capital investment, often foreign direct investment. Do you think that capitalism can find an exit from the current crisis, in Harvey’s terminology, by way of a “temporal-spatial” fix?
RB: This is a complex issue. I think, first of all, it’s true and critically important to say that geographical expansion has been essential to every great wave of capital accumulation. You might say that growth of the size of the labor force and growth of the system’s geographical space are the essentials for capitalist growth. The postwar boom is a good example, spectacular expansions of capital into the U.S. south and southwest and into war-torn western Europe and Japan.
Investment by U.S. corporations played a critical role, not only in United States but in western Europe in this epoch. Without question, this expansion of the labor force and the capitalist geographical arena was indispensable for the high profit rates that made the postwar boom so dynamic. From a Marxist standpoint, this was a classical wave of capital accumulation and, necessarily, entailed both sucking in huge masses of labor from outside the system, especially from the pre-capitalist countryside in Germany and Japan, and the incorporation or re-incorporation of additional geographical space on a huge scale.
Nevertheless, I think that by and large the pattern of the long downturn, since the late 1960s and early 1970s, has been different. It is true that capital responded to falling profitability by further expansion outward, seeking to combine advanced techniques with cheap labor. East Asia is of course the fundamental case, and unquestionably represents a world-historical moment, a fundamental transformation, for capitalism.
Yet even though expansion into East Asia represented a response to falling profitability, it has not, I think, constituted a satisfactory solution. At the end of the day, the new manufacturing production that emerged so spectacularly in East Asia is to a great extent duplicating the manufacturing production already taking place elsewhere, though more cheaply. On a system-wide scale, it’s exacerbating not resolving the problem of overcapacity.
In other words, globalization has been a response to falling profitability, but because its new industries are basically not complementary for the world division of labor, but redundant, you have had a continuation of the problem of profitability.
To actually resolve the problem of profitability that has so long plagued the system — slowing capital accumulation and calling forth ever greater levels of borrowing to sustain stability — the system requires the crisis that has so long been postponed. Because the problem is overcapacity, massively exacerbated by the buildup of debt, what is still required, as in the classical vision, is a shakeout from the system of high-cost low-profit firms, the subsequent cheapening of means of production, and the reduction of the price of labor.
It’s by way of crisis that capitalism historically has restored the rate of profit and established the necessary conditions for more dynamic capital accumulation. During the postwar period, crisis has been warded off, but the cost has been a failure to revive profitability, leading to worsening stagnation. The current crisis is about that shakeout that never happened.
SJ: So you think that only the crisis can resolve the crisis? That’s a classical Marxian answer.
RB: I think that that is probably the case. The analogy would be this. At first, in the early 1930s, the New Deal and Keynesianism were ineffective. In fact, through the length of the 1930s, there was a failure to establish the conditions for a new boom, as was demonstrated when the economy fell back into the deep recession of 1937-1938. But eventually, as a result of the long crisis in the ‘30s, you shook out the high-cost, low-profit means of production, creating the basic conditions for high rates of profit.
By the end of the 1930s, you could say that the potential rate of profit was high and all that was missing was a shock to demand. That demand was provided of course by the massive spending on armaments for World War II. So during the war, you got high rates of profit and those high rates of profit provided the necessary condition for the postwar boom. But I don’t think that Keynesian deficits could have worked even if they had been tried in 1933, because you needed, in Marxian terms, a system-cleansing crisis first.
SJ: Do you think that the current crisis will lead to a challenge to U.S. hegemony? World-system theorists, like Immanuel Wallerstein, who was also interviewed for this newpaper Hankyoreh, are arguing that the hegemony of U.S. imperialism is declining.
RB: This is again a very complex question. Perhaps I am mistaken, but I think that many of those who believe that there has been a decline in U.S. hegemony basically view it as mainly an expression of U.S. geopolitical power, and in the end, force. From this standpoint, it’s mainly U.S. dominance that makes for leadership, it’s U.S. power over and against other countries that keeps the United States on top.
I don’t see U.S. hegemony that way. I see the elites of the world, especially the elites of the capitalist core broadly conceived, as being very happy with U.S. hegemony because what it means for them is that the United States assumes the role and the cost of world policemen. This is true, I think, of the elites even of most poor countries today.
What’s the goal of the U.S. world policeman? Not to attack other countries — mainly, it’s to keep social order, to create stable conditions for global capital accumulation. Its main purpose is to wipe out any popular challenges to capitalism, to support the existing structures of class relations.
For most of the postwar period, there were nationalist-statist challenges, especially from below, to the free rein of capital. They unquestionably were met by the most brutal U.S. force, the most naked expressions of U.S. domination. Although within the core of the system there was U.S. hegemony [meaning general consensus, enforced by the threat of military power only in the final analysis — ed.], outside of it there was dominance by violence.
But with the fall of the Soviet Union, China and Vietnam taking the capitalist road, and the defeat of national liberation movements in places like southern Africa and Central America, resistance to capital in the developing world was very much weakened, at least for the time being. So today, the governments and elites not only of western and eastern Europe, Japan and Korea, but also Brazil, India and China — most anyplace you can name — would prefer the continuation of U.S. hegemony.
U.S. hegemony will not fall because of the rise of another power capable of contending for world domination. Above all, China prefers U.S. hegemony. The United States is not planning to attack China and, until now, has kept its market wide open to Chinese exports. With the U.S. world policeman ensuring ever freer trade and capital movements, China has been allowed to compete in terms of cost of production, on an equal playing field, and this has been incredibly beneficial to China — it couldn’t be better.
Can U.S. hegemony continue in the current crisis? This is a much harder question. But I think that, in the first instance, the answer is yes. The world’s elites want more than anything to sustain the current globalizing order, and the United States is key to that. None of the world’s elites are trying to exploit the crisis, or the United States’ enormous economic problems, to challenge its hegemony.
China keeps saying, “we’re not going to continue to pay for the U.S. to continue its profligate ways,” referring to the way that China covered record-breaking U.S. current account deficits during the past decade and to the titanic U.S. budget deficits now being created. Do you think China has now cut the United States off? Not at all. China is still pouring in as much money as it can to try to keep the U.S. economy going, so that China can keep developing the way it did.
Of course, what is desired is not always possible. The depth of the Chinese crisis may be so great that it can no longer afford to finance U.S. deficits — or the ballooning of those deficits and printing of money by the Federal Reserve could lead to the collapse of the dollar, detonating true catastrophe.
If those things happened, there would have to be a construction of a new order. But under conditions of deep crisis that would be extremely difficult. Indeed, under such conditions, the United States as well as other states could easily turn to economic protection, nationalism and even war. I think, as of this moment, that the elites of the world still are trying to avoid this — they are not ready for it. What they want is to keep markets open, keep trade open.
They understand that the last time states resorted to protection to solve the problem was at the time of the Great Depression, and this made the depression way worse, because in effect when some states started to protect, everybody moved to protection, and the world market closed down. Next, of course, came militarism and war. The closing of world markets would obviously be disastrous today, so elites and governments are doing their very best to prevent a protectionist, statist, nationalist, militarist outcome.
But politics is not just an expression of what the elites want, and what elites want changes over time. Elites are, moreover, generally divided and politics has autonomy. So, for example, it can hardly be ruled out that, if the crisis gets very bad — which at this point would not be a big surprise — you could see a return of far-right politics of protectionism, militarism, anti-immigration, nationalism.
This sort of politics not only could have broad popular appeal. Growing sections of business might find it the only way out, as they see their markets collapse, see the system in depression, see a need for protection from competition and state subsidies of demand by way of military spending. This was, of course, the response that prevailed in much of Europe and Japan during the crisis of the interwar period. Today, the right is on its heels, because of the failures of the Bush administration and because of the crisis. But, if the Obama administration is unable to counter the economic collapse, the right could easily come back…especially because the Democrats are really offering no ideological alternative.The Situation in Asia
SJ: You spoke about a potential crisis in China. What do you think of the current state of Chinese economy?
RB: I think the Chinese crisis is going to be a lot worse than people expected, for two main reasons. The first is that the American crisis, and the global crisis more generally, is much more serious than people expected, and in the last analysis the fate of the Chinese economy is inextricably dependent on the fate of the U.S. and global economy. This is not only because China has depended to such a great extent on exports to the U.S. market. Most of the rest of the world is also so dependent on the United States, and that especially includes Europe.
If I’m not mistaken, Europe recently became China’s biggest export market. But, as the crisis originating in the United States brings down Europe, Europe’s market for Chinese goods will also contract. So the situation for China is much worse than what people expected, because the economic crisis is much worse than people expected.
Secondly, in people’s enthusiasm for what has been China’s truly spectacular economic growth, they have ignored the role of bubbles in driving the Chinese economy. China has grown, basically by way of exports, and particularly a growing trade surplus with the United States. Because of this surplus, the Chinese government has had to take political steps to keep the Chinese currency down and Chinese manufacturing competitive. Specifically, it has bought up dollar-denominated assets on a titanic scale by printing massive amounts of the renminbi, the Chinese currency. But the result has been to inject huge amounts of money into the Chinese economy, making for ever easier credit over a long period.
On the one hand, enterprises and local governments have used this easy credit to finance massive investment. But this has made for ever greater overcapacity. On the other hand, they have used the easy credit to buy land, houses, shares and other sorts of financial assets. But this has made for massive asset price bubbles, which have played a part, as in the United States, in allowing for more borrowing and spending.
As the Chinese bubbles bust, the depth of the overcapacity will be made clear. As the Chinese bubbles bust, you will also have, as across much of the rest of the world, a huge hit to consumer demand and disruptive financial crisis So, the bottom line is that the Chinese crisis is very serious, and could make the global crisis much more severe.
SJ: So you think the capitalist logic of overproduction is also applied to China?
RB: Yes, just as in Korea and much of East Asia in later the ‘90s. It’s not that dissimilar. The only thing that hasn’t happened yet is the kind of revaluation of the currency that really killed the Korean manufacturing expansion. The Chinese government is doing everything to avoid that.
SJ: Then you do not agree with characterizing Chinese society as a kind of non-capitalist market economy.
RB: Not at all.
SJ: So you think China is currently capitalist?
RB: I think it’s fully capitalist. You might say that China had a market non-capitalist economy maybe through the ‘80s, when they had very impressive growth by means of the town and village enterprises (TVEs). They were publicly owned, owned by local governments, but operated on a market basis. That economic form, you might say, initiated the transition to capitalism. So perhaps up to maybe the early ‘90s it was still a kind of non-capitalist market society, especially because there was still such a big industrial sector owned and planned by the central state. But from that point on there was a transition to capitalism, which has certainly by now been completed.
SJ: What do you think of the severity of the coming Korean economic crisis? Do you think it could be more severe than the IMF crisis of 1997-1998? In order to cope with the coming crisis, the Lee Myung-bak government is now reviving Park Chung-hee style state-led investment for the construction of huge social infrastructure, especially Korean peninsula’s “Great Canal”, while copying Obama’s green growth policies. However, Lee Myung-bak’s government still tries to stick to the neoliberal deregulation policies of the post-1997 crisis period, especially by turning to the U.S.-Korea free trade agreement. You might call this a hybrid approach, combining what seems to be an anachronist return to a Park Chung-hee style state-led method of development with contemporary neoliberalism. Will it be effective in combating or alleviating the coming crisis?
RB: I’m doubtful that it will be effective. This is not necessarily either because it represents a throwback to Park’s state-led organized capitalism or because it embraces neoliberalism. It is because, whatever its internal form, it continues to depend on globalization at a time when the global crisis is bringing about an extraordinary contraction of the world market. We were just talking about China, and I was arguing that China is likely to be in serious trouble. But China has low wages, potentially a huge domestic market, so over time it conceivably could have a better shot than Korea of confronting the crisis, though I’m far from sure about this.
Korea, I think, will be hard hit. It was hard hit in 1997-1998, but saved by the U.S. stock market bubble and the resulting growth of U.S. borrowing, spending and imports. But, when the Wall Street stock market bubble burst in 2000-2002, Korea went into what promised to be an even more serious crisis than 1997-1998. Nevertheless, the U.S. housing bubble came to the rescue of Korea during the recent period; now the second U.S. bubble has collapsed, and there’s no third bubble to get Korea out of the current crisis.
It’s not necessarily because Korea is doing the wrong thing. It’s because I don’t think there’s going to be an easy way out for any part of what has become a truly global, interdependent capitalist system.
SJ: So what you are saying is that external environment is far worse than ever before.
RB: That’s the main point.
SJ: What then are the urgent tasks of progressives in Korea? Korean progressives are very critical of Lee Myung-bak, because Lee is very reactionary. They usually support the growth of the welfare-state and redistribution of income as an alternative to Lee’s project of investing in Canal construction, of big social overhead capital. This is the hot issue in Korean society today. Korean progressives point out that although Lee Myung-bak talks about green growth, his construction project would destroy whole environments. Do you agree with them?
RB: We should oppose such ecologically-disastrous projects.
SJ: Do you think that building a Swedish-type welfare state would be the reasonable strategy for Korean progressives in the midst of the economic crisis?
RB: I think the most important thing Korean progressives could do would be to re-strengthen the organizations of Korean labor. Only by rebuilding the Korean working-class movement could the left build the power that it needs to win whatever demands it’s advocating. The only way that working people can really develop their power is through building new organizations in the course of struggle, and it’s only in the course of struggle that they are likely to come to a progressive politics, or indeed decide what a progressive politics actually should be at this moment.
I think the best way to forge a left political response today is to help the people most affected to gain the organization and power to decide what’s collectively in their interest. So, rather than try to figure out now, from above in a technocratic way, what’s the best answer, the key for the left is to catalyze the reconstitution of the power of working people.
The Korean labor movement has obviously been weakened a great deal since the crisis of 1997-1998. At minimum, the priority for progressives is to do what they can to improve the environment for labor organizing, for re-strengthening the unions right now. That goes not only for Korea, but everywhere around the world. That’s the key objective. Without the revival of working-class power, the left will quickly find that most issues of government policy are truly academic. I mean if the left is to affect state policy, there must be a change, a big change, in the balance of class power.
SJ: Do you expect that there will be an opening for progressives in a world with recent failures of neoliberalism?
RB: The defeat of neoliberalism is definitely creating major opportunities that the left did not have before. Neoliberalism never much appealed to large parts of the population. Working people never identified with free markets, free finance and all that. But I think that large sections of the population were convinced of TINA, “There Is No Alternative.”
But now the crisis has revealed the total bankruptcy of the neoliberal mode of economic organization, and you can already see the change very powerfully manifested in the opposition by American working people to the bail-outs for the banks and financial sector. People are saying today is that “We are told that saving the financial institutions, the financial markets, is the key to restoring the economy, prosperity. But we don’t believe it. We don’t want any more of our money going to these people who are just robbing us.”
There is an ideological vacuum, consquently there is an opening for left ideas. The problem is that there is very little organization of working people, let alone any political expression. One can say there is a big opportunity created by the change in the political environment, or the ideological climate, but by itself that will not provide a progressive outcome.
So once again, the top priority for progressives — for any left activists — to be active is in trying to revive the organizations of working people. Without the recreation of working- class power, little progressive change will be possible, and the only way to recreate that power is through mobilization for direct action. Only through working people taking collective mass action will they be able to create the organization and the power necessary to provide the social basis for a transformation of their own consciousness, for political radicalization.

A criminally stupid war on drugs

By Clive Crook
Published: April 12 2009 17:41 Last updated: April 12 2009 17:41
How much misery can a policy cause before it is acknowledged as a failure and reversed? The US “war on drugs” suggests there is no upper limit. The country’s implacable blend of prohibition and punitive criminal justice is wrong-headed in every way: immoral in principle, since it prosecutes victimless crimes, and in practice a disaster of remarkable proportions. Yet for a US politician to suggest wholesale reform of this brainless regime is still seen as an act of reckless self-harm.
Even a casual observer can see that much of the damage done in the US by illegal drugs is a result of the fact that they are illegal, not the fact that they are drugs. Vastly more lives are blighted by the brutality of prohibition, and by the enormous criminal networks it has created, than by the substances themselves. This is true of cocaine and heroin as well as of soft drugs such as marijuana. But the assault on consumption of marijuana sets the standard for the policy’s stupidity.
Nearly half of all Americans say they have tried marijuana. That makes them criminals in the eyes of the law. Luckily, not all of them have been found out – but when one is grateful that most law-breakers go undetected, there is something wrong with the law.
Harvard’s Jeffrey Miron published a study denouncing drug prohibition in 2004*. He noted that more than 300,000 people were then in US prisons for violations of the law on drugs – more than the number incarcerated for all crimes in Britain, France, Germany, Italy and Spain combined. Today the number is higher – according to some estimates, nearly 500,000. The far larger number of people who have been convicted, at any point, of a drugs offence face permanently impaired employment prospects and all manner of other setbacks: in the US, once a criminal always a criminal.
Strict enforcement, Mr Miron explained, has reduced drug use only modestly – supposing for the moment that this is even a legitimate objective. The collateral damage is of a different order altogether. Violence related to drug crimes has surged in Mexico and in US cities close to the border, giving rise to renewed interest in the topic. Thousands are thought to have been killed by criminal gangs competing for the trade.
Many users also die because of tainted drugs, or because they share needles – consequences again of prohibition. There is an obvious national security dimension as well: in countries such as Colombia and Afghanistan, the huge surplus derived from prohibition supports terrorists.
The consequences of prohibition corrupt governments everywhere, and the US is no exception. Since a drug transaction has no victims in the ordinary sense, witnesses to assist a prosecution are in short supply. US drug-law enforcement tends to infringe civil liberties, relying on warrantless searches, entrapment, extorted testimony in the form of plea bargains, and so forth. Predictably, in the US the hammer of the law on drugs falls with far greater force on black people: whites do most of the using, blacks do most of the time.
Few policies manage to fail so comprehensively, and what makes it all the odder is that the US has seen it all before. Everybody understands that alcohol prohibition in the 1920s suffered from many of the same pathologies – albeit on a smaller scale – and was eventually abandoned.
The present treatment of alcohol, which is to regulate and tax the product, is the right approach for today’s illegal drugs. One could expect some increase in the use of the drugs in question, but also an enormous net reduction in the harms that they and the attempt to prohibit them cause. Adding the direct costs of prohibition (police and prisons) to the taxes forgone by the present system, the US could also expect a fiscal benefit of about $100bn (€75.7bn, £68.2bn) a year.
Is an outbreak of common sense on this subject likely? Unfortunately, no. Only the most daring politicians seem willing to think about it seriously. One such is James Webb, a refreshingly unpredictable Democratic senator for Virginia, who has called for a commission to examine the criminal justice system and the law on drugs. Politicians such as Mr Webb are very much the exception.
Elsewhere, signs of movement are minimal. Barack Obama has admitted that as a young man he used not only marijuana – and, unlike Bill Clinton, he inhaled; the whole point was to inhale, he joked – but also cocaine. This might suggest the president has an open mind on the subject. And in a departure from the previous administration, his attorney-general has said he will not bring federal prosecutions against the medical use of marijuana in states that allow it. But then at a recent event Mr Obama ran away from a question about the broader decriminalisation of marijuana under cover of a wisecrack.
For now, outright legalisation of marijuana, let alone harder drugs, is difficult to imagine. Even gradual decriminalisation – a policy that maintains prohibition but removes it from the scope of the criminal law – seems unlikely, though perhaps not unthinkable. A new study by Glenn Greenwald, a writer and civil rights lawyer, looks at Portugal’s policy of decriminalisation**. He judges it a success: “While drug addiction, usage, and associated pathologies continue to skyrocket in many European Union states, those problems – in virtually every relevant category – have been either contained or measurably improved within Portugal since 2001.”
Somebody in the White House should take a look. This national calamity is no laughing matter.
*Drug War Crimes, published by the Independent Institute. **Drug Decriminalization in Portugal, published by the Cato Institute
clive.crook@gmail.com

Dark side of Dubai

Dubai was meant to be a Middle-Eastern Shangri-La, a glittering monument to Arab enterprise and western capitalism. But as hard times arrive in the city state that rose from the desert sands, an uglier story is emerging. Johann Hari reports
Tuesday, 7 April 2009
The wide, smiling face of Sheikh Mohammed – the absolute ruler of Dubai – beams down on his creation. His image is displayed on every other building, sandwiched between the more familiar corporate rictuses of Ronald McDonald and Colonel Sanders. This man has sold Dubai to the world as the city of One Thousand and One Arabian Lights, a Shangri-La in the Middle East insulated from the dust-storms blasting across the region. He dominates the Manhattan-manqué skyline, beaming out from row after row of glass pyramids and hotels smelted into the shape of piles of golden coins. And there he stands on the tallest building in the world – a skinny spike, jabbing farther into the sky than any other human construction in history.
But something has flickered in Sheikh Mohammed's smile. The ubiquitous cranes have paused on the skyline, as if stuck in time. There are countless buildings half-finished, seemingly abandoned. In the swankiest new constructions – like the vast Atlantis hotel, a giant pink castle built in 1,000 days for $1.5bn on its own artificial island – where rainwater is leaking from the ceilings and the tiles are falling off the roof. This Neverland was built on the Never-Never – and now the cracks are beginning to show. Suddenly it looks less like Manhattan in the sun than Iceland in the desert.
Once the manic burst of building has stopped and the whirlwind has slowed, the secrets of Dubai are slowly seeping out. This is a city built from nothing in just a few wild decades on credit and ecocide, suppression and slavery. Dubai is a living metal metaphor for the neo-liberal globalised world that may be crashing – at last – into history.
I. An Adult Disneyland
Karen Andrews can't speak. Every time she starts to tell her story, she puts her head down and crumples. She is slim and angular and has the faded radiance of the once-rich, even though her clothes are as creased as her forehead. I find her in the car park of one of Dubai's finest international hotels, where she is living, in her Range Rover. She has been sleeping here for months, thanks to the kindness of the Bangladeshi car park attendants who don't have the heart to move her on. This is not where she thought her Dubai dream would end.
Her story comes out in stutters, over four hours. At times, her old voice – witty and warm – breaks through. Karen came here from Canada when her husband was offered a job in the senior division of a famous multinational. "When he said Dubai, I said – if you want me to wear black and quit booze, baby, you've got the wrong girl. But he asked me to give it a chance. And I loved him."
All her worries melted when she touched down in Dubai in 2005. "It was an adult Disneyland, where Sheikh Mohammed is the mouse," she says. "Life was fantastic. You had these amazing big apartments, you had a whole army of your own staff, you pay no taxes at all. It seemed like everyone was a CEO. We were partying the whole time."
Her husband, Daniel, bought two properties. "We were drunk on Dubai," she says. But for the first time in his life, he was beginning to mismanage their finances. "We're not talking huge sums, but he was getting confused. It was so unlike Daniel, I was surprised. We got into a little bit of debt." After a year, she found out why: Daniel was diagnosed with a brain tumour.
One doctor told him he had a year to live; another said it was benign and he'd be okay. But the debts were growing. "Before I came here, I didn't know anything about Dubai law. I assumed if all these big companies come here, it must be pretty like Canada's or any other liberal democracy's," she says. Nobody told her there is no concept of bankruptcy. If you get into debt and you can't pay, you go to prison.
"When we realised that, I sat Daniel down and told him: listen, we need to get out of here. He knew he was guaranteed a pay-off when he resigned, so we said – right, let's take the pay-off, clear the debt, and go." So Daniel resigned – but he was given a lower pay-off than his contract suggested. The debt remained. As soon as you quit your job in Dubai, your employer has to inform your bank. If you have any outstanding debts that aren't covered by your savings, then all your accounts are frozen, and you are forbidden to leave the country.
"Suddenly our cards stopped working. We had nothing. We were thrown out of our apartment." Karen can't speak about what happened next for a long time; she is shaking.
Daniel was arrested and taken away on the day of their eviction. It was six days before she could talk to him. "He told me he was put in a cell with another debtor, a Sri Lankan guy who was only 27, who said he couldn't face the shame to his family. Daniel woke up and the boy had swallowed razor-blades. He banged for help, but nobody came, and the boy died in front of him."
Karen managed to beg from her friends for a few weeks, "but it was so humiliating. I've never lived like this. I worked in the fashion industry. I had my own shops. I've never..." She peters out.
Daniel was sentenced to six months' imprisonment at a trial he couldn't understand. It was in Arabic, and there was no translation. "Now I'm here illegally, too," Karen says I've got no money, nothing. I have to last nine months until he's out, somehow." Looking away, almost paralysed with embarrassment, she asks if I could buy her a meal.
She is not alone. All over the city, there are maxed-out expats sleeping secretly in the sand-dunes or the airport or in their cars.
"The thing you have to understand about Dubai is – nothing is what it seems," Karen says at last. "Nothing. This isn't a city, it's a con-job. They lure you in telling you it's one thing – a modern kind of place – but beneath the surface it's a medieval dictatorship."
II. Tumbleweed
Thirty years ago, almost all of contemporary Dubai was desert, inhabited only by cactuses and tumbleweed and scorpions. But downtown there are traces of the town that once was, buried amidst the metal and glass. In the dusty fort of the Dubai Museum, a sanitised version of this story is told.
In the mid-18th century, a small village was built here, in the lower Persian Gulf, where people would dive for pearls off the coast. It soon began to accumulate a cosmopolitan population washing up from Persia, the Indian subcontinent, and other Arab countries, all hoping to make their fortune. They named it after a local locust, the daba, who consumed everything before it. The town was soon seized by the gunships of the British Empire, who held it by the throat as late as 1971. As they scuttled away, Dubai decided to ally with the six surrounding states and make up the United Arab Emirates (UAE).
The British quit, exhausted, just as oil was being discovered, and the sheikhs who suddenly found themselves in charge faced a remarkable dilemma. They were largely illiterate nomads who spent their lives driving camels through the desert – yet now they had a vast pot of gold. What should they do with it?
Dubai only had a dribble of oil compared to neighbouring Abu Dhabi – so Sheikh Maktoum decided to use the revenues to build something that would last. Israel used to boast it made the desert bloom; Sheikh Maktoum resolved to make the desert boom. He would build a city to be a centre of tourism and financial services, sucking up cash and talent from across the globe. He invited the world to come tax-free – and they came in their millions, swamping the local population, who now make up just 5 per cent of Dubai. A city seemed to fall from the sky in just three decades, whole and complete and swelling. They fast-forwarded from the 18th century to the 21st in a single generation.
If you take the Big Bus Tour of Dubai – the passport to a pre-processed experience of every major city on earth – you are fed the propaganda-vision of how this happened. "Dubai's motto is 'Open doors, open minds'," the tour guide tells you in clipped tones, before depositing you at the souks to buy camel tea-cosies. "Here you are free. To purchase fabrics," he adds. As you pass each new monumental building, he tells you: "The World Trade Centre was built by His Highness..."
But this is a lie. The sheikh did not build this city. It was built by slaves. They are building it now.
III. Hidden in plain view
There are three different Dubais, all swirling around each other. There are the expats, like Karen; there are the Emiratis, headed by Sheikh Mohammed; and then there is the foreign underclass who built the city, and are trapped here. They are hidden in plain view. You see them everywhere, in dirt-caked blue uniforms, being shouted at by their superiors, like a chain gang – but you are trained not to look. It is like a mantra: the Sheikh built the city. The Sheikh built the city. Workers? What workers?
Every evening, the hundreds of thousands of young men who build Dubai are bussed from their sites to a vast concrete wasteland an hour out of town, where they are quarantined away. Until a few years ago they were shuttled back and forth on cattle trucks, but the expats complained this was unsightly, so now they are shunted on small metal buses that function like greenhouses in the desert heat. They sweat like sponges being slowly wrung out.
Sonapur is a rubble-strewn patchwork of miles and miles of identical concrete buildings. Some 300,000 men live piled up here, in a place whose name in Hindi means "City of Gold". In the first camp I stop at – riven with the smell of sewage and sweat – the men huddle around, eager to tell someone, anyone, what is happening to them.
Sahinal Monir, a slim 24-year-old from the deltas of Bangladesh. "To get you here, they tell you Dubai is heaven. Then you get here and realise it is hell," he says. Four years ago, an employment agent arrived in Sahinal's village in Southern Bangladesh. He told the men of the village that there was a place where they could earn 40,000 takka a month (£400) just for working nine-to-five on construction projects. It was a place where they would be given great accommodation, great food, and treated well. All they had to do was pay an up-front fee of 220,000 takka (£2,300) for the work visa – a fee they'd pay off in the first six months, easy. So Sahinal sold his family land, and took out a loan from the local lender, to head to this paradise.
As soon as he arrived at Dubai airport, his passport was taken from him by his construction company. He has not seen it since. He was told brusquely that from now on he would be working 14-hour days in the desert heat – where western tourists are advised not to stay outside for even five minutes in summer, when it hits 55 degrees – for 500 dirhams a month (£90), less than a quarter of the wage he was promised. If you don't like it, the company told him, go home. "But how can I go home? You have my passport, and I have no money for the ticket," he said. "Well, then you'd better get to work," they replied.
Sahinal was in a panic. His family back home – his son, daughter, wife and parents – were waiting for money, excited that their boy had finally made it. But he was going to have to work for more than two years just to pay for the cost of getting here – and all to earn less than he did in Bangladesh.
He shows me his room. It is a tiny, poky, concrete cell with triple-decker bunk-beds, where he lives with 11 other men. All his belongings are piled onto his bunk: three shirts, a spare pair of trousers, and a cellphone. The room stinks, because the lavatories in the corner of the camp – holes in the ground – are backed up with excrement and clouds of black flies. There is no air conditioning or fans, so the heat is "unbearable. You cannot sleep. All you do is sweat and scratch all night." At the height of summer, people sleep on the floor, on the roof, anywhere where they can pray for a moment of breeze.
The water delivered to the camp in huge white containers isn't properly desalinated: it tastes of salt. "It makes us sick, but we have nothing else to drink," he says.
The work is "the worst in the world," he says. "You have to carry 50kg bricks and blocks of cement in the worst heat imaginable ... This heat – it is like nothing else. You sweat so much you can't pee, not for days or weeks. It's like all the liquid comes out through your skin and you stink. You become dizzy and sick but you aren't allowed to stop, except for an hour in the afternoon. You know if you drop anything or slip, you could die. If you take time off sick, your wages are docked, and you are trapped here even longer."
He is currently working on the 67th floor of a shiny new tower, where he builds upwards, into the sky, into the heat. He doesn't know its name. In his four years here, he has never seen the Dubai of tourist-fame, except as he constructs it floor-by-floor.
Is he angry? He is quiet for a long time. "Here, nobody shows their anger. You can't. You get put in jail for a long time, then deported." Last year, some workers went on strike after they were not given their wages for four months. The Dubai police surrounded their camps with razor-wire and water-cannons and blasted them out and back to work.
The "ringleaders" were imprisoned. I try a different question: does Sohinal regret coming? All the men look down, awkwardly. "How can we think about that? We are trapped. If we start to think about regrets..." He lets the sentence trail off. Eventually, another worker breaks the silence by adding: "I miss my country, my family and my land. We can grow food in Bangladesh. Here, nothing grows. Just oil and buildings."
Since the recession hit, they say, the electricity has been cut off in dozens of the camps, and the men have not been paid for months. Their companies have disappeared with their passports and their pay. "We have been robbed of everything. Even if somehow we get back to Bangladesh, the loan sharks will demand we repay our loans immediately, and when we can't, we'll be sent to prison."
This is all supposed to be illegal. Employers are meant to pay on time, never take your passport, give you breaks in the heat – but I met nobody who said it happens. Not one. These men are conned into coming and trapped into staying, with the complicity of the Dubai authorities.
Sahinal could well die out here. A British man who used to work on construction projects told me: "There's a huge number of suicides in the camps and on the construction sites, but they're not reported. They're described as 'accidents'." Even then, their families aren't free: they simply inherit the debts. A Human Rights Watch study found there is a "cover-up of the true extent" of deaths from heat exhaustion, overwork and suicide, but the Indian consulate registered 971 deaths of their nationals in 2005 alone. After this figure was leaked, the consulates were told to stop counting.
At night, in the dusk, I sit in the camp with Sohinal and his friends as they scrape together what they have left to buy a cheap bottle of spirits. They down it in one ferocious gulp. "It helps you to feel numb", Sohinal says through a stinging throat. In the distance, the glistening Dubai skyline he built stands, oblivious.
IV. Mauled by the mall
I find myself stumbling in a daze from the camps into the sprawling marble malls that seem to stand on every street in Dubai. It is so hot there is no point building pavements; people gather in these cathedrals of consumerism to bask in the air conditioning. So within a ten minute taxi-ride, I have left Sohinal and I am standing in the middle of Harvey Nichols, being shown a £20,000 taffeta dress by a bored salesgirl. "As you can see, it is cut on the bias..." she says, and I stop writing.
Time doesn't seem to pass in the malls. Days blur with the same electric light, the same shined floors, the same brands I know from home. Here, Dubai is reduced to its component sounds: do-buy. In the most expensive malls I am almost alone, the shops empty and echoing. On the record, everybody tells me business is going fine. Off the record, they look panicky. There is a hat exhibition ahead of the Dubai races, selling elaborate headgear for £1,000 a pop. "Last year, we were packed. Now look," a hat designer tells me. She swoops her arm over a vacant space.
I approach a blonde 17-year-old Dutch girl wandering around in hotpants, oblivious to the swarms of men gaping at her. "I love it here!" she says. "The heat, the malls, the beach!" Does it ever bother you that it's a slave society? She puts her head down, just as Sohinal did. "I try not to see," she says. Even at 17, she has learned not to look, and not to ask; that, she senses, is a transgression too far.
Between the malls, there is nothing but the connecting tissue of asphalt. Every road has at least four lanes; Dubai feels like a motorway punctuated by shopping centres. You only walk anywhere if you are suicidal. The residents of Dubai flit from mall to mall by car or taxis.
How does it feel if this is your country, filled with foreigners? Unlike the expats and the slave class, I can't just approach the native Emiratis to ask questions when I see them wandering around – the men in cool white robes, the women in sweltering black. If you try, the women blank you, and the men look affronted, and tell you brusquely that Dubai is "fine". So I browse through the Emirati blog-scene and found some typical-sounding young Emiratis. We meet – where else? – in the mall.
Ahmed al-Atar is a handsome 23-year-old with a neat, trimmed beard, tailored white robes, and rectangular wire-glasses. He speaks perfect American-English, and quickly shows that he knows London, Los Angeles and Paris better than most westerners. Sitting back in his chair in an identikit Starbucks, he announces: "This is the best place in the world to be young! The government pays for your education up to PhD level. You get given a free house when you get married. You get free healthcare, and if it's not good enough here, they pay for you to go abroad. You don't even have to pay for your phone calls. Almost everyone has a maid, a nanny, and a driver. And we never pay any taxes. Don't you wish you were Emirati?"
I try to raise potential objections to this Panglossian summary, but he leans forward and says: "Look – my grandfather woke up every day and he would have to fight to get to the well first to get water. When the wells ran dry, they had to have water delivered by camel. They were always hungry and thirsty and desperate for jobs. He limped all his life, because he there was no medical treatment available when he broke his leg. Now look at us!"
For Emiratis, this is a Santa Claus state, handing out goodies while it makes its money elsewhere: through renting out land to foreigners, soft taxes on them like business and airport charges, and the remaining dribble of oil. Most Emiratis, like Ahmed, work for the government, so they're cushioned from the credit crunch. "I haven't felt any effect at all, and nor have my friends," he says. "Your employment is secure. You will only be fired if you do something incredibly bad." The laws are currently being tightened, to make it even more impossible to sack an Emirati.
Sure, the flooding-in of expats can sometimes be "an eyesore", Ahmed says. "But we see the expats as the price we had to pay for this development. How else could we do it? Nobody wants to go back to the days of the desert, the days before everyone came. We went from being like an African country to having an average income per head of $120,000 a year. And we're supposed to complain?"
He says the lack of political freedom is fine by him. "You'll find it very hard to find an Emirati who doesn't support Sheikh Mohammed." Because they're scared? "No, because we really all support him. He's a great leader. Just look!" He smiles and says: "I'm sure my life is very much like yours. We hang out, have a coffee, go to the movies. You'll be in a Pizza Hut or Nando's in London, and at the same time I'll be in one in Dubai," he says, ordering another latte.
But do all young Emiratis see it this way? Can it really be so sunny in the political sands? In the sleek Emirates Tower Hotel, I meet Sultan al-Qassemi. He's a 31-year-old Emirati columnist for the Dubai press and private art collector, with a reputation for being a contrarian liberal, advocating gradual reform. He is wearing Western clothes – blue jeans and a Ralph Lauren shirt – and speaks incredibly fast, turning himself into a manic whirr of arguments.
"People here are turning into lazy, overweight babies!" he exclaims. "The nanny state has gone too far. We don't do anything for ourselves! Why don't any of us work for the private sector? Why can't a mother and father look after their own child?" And yet, when I try to bring up the system of slavery that built Dubai, he looks angry. "People should give us credit," he insists. "We are the most tolerant people in the world. Dubai is the only truly international city in the world. Everyone who comes here is treated with respect."
I pause, and think of the vast camps in Sonapur, just a few miles away. Does he even know they exist? He looks irritated. "You know, if there are 30 or 40 cases [of worker abuse] a year, that sounds like a lot but when you think about how many people are here..." Thirty or 40? This abuse is endemic to the system, I say. We're talking about hundreds of thousands.
Sultan is furious. He splutters: "You don't think Mexicans are treated badly in New York City? And how long did it take Britain to treat people well? I could come to London and write about the homeless people on Oxford Street and make your city sound like a terrible place, too! The workers here can leave any time they want! Any Indian can leave, any Asian can leave!"
But they can't, I point out. Their passports are taken away, and their wages are withheld. "Well, I feel bad if that happens, and anybody who does that should be punished. But their embassies should help them." They try. But why do you forbid the workers – with force – from going on strike against lousy employers? "Thank God we don't allow that!" he exclaims. "Strikes are in-convenient! They go on the street – we're not having that. We won't be like France. Imagine a country where they the workers can just stop whenever they want!" So what should the workers do when they are cheated and lied to? "Quit. Leave the country."
I sigh. Sultan is seething now. "People in the West are always complaining about us," he says. Suddenly, he adopts a mock-whiny voice and says, in imitation of these disgusting critics: "Why don't you treat animals better? Why don't you have better shampoo advertising? Why don't you treat labourers better?" It's a revealing order: animals, shampoo, then workers. He becomes more heated, shifting in his seat, jabbing his finger at me. "I gave workers who worked for me safety goggles and special boots, and they didn't want to wear them! It slows them down!"
And then he smiles, coming up with what he sees as his killer argument. "When I see Western journalists criticise us – don't you realise you're shooting yourself in the foot? The Middle East will be far more dangerous if Dubai fails. Our export isn't oil, it's hope. Poor Egyptians or Libyans or Iranians grow up saying – I want to go to Dubai. We're very important to the region. We are showing how to be a modern Muslim country. We don't have any fundamentalists here. Europeans shouldn't gloat at our demise. You should be very worried.... Do you know what will happen if this model fails? Dubai will go down the Iranian path, the Islamist path."
Sultan sits back. My arguments have clearly disturbed him; he says in a softer, conciliatory tone, almost pleading: "Listen. My mother used to go to the well and get a bucket of water every morning. On her wedding day, she was given an orange as a gift because she had never eaten one. Two of my brothers died when they were babies because the healthcare system hadn't developed yet. Don't judge us." He says it again, his eyes filled with intensity: "Don't judge us."
V. The Dunkin' Donuts Dissidents
But there is another face to the Emirati minority – a small huddle of dissidents, trying to shake the Sheikhs out of abusive laws. Next to a Virgin Megastore and a Dunkin' Donuts, with James Blunt's "You're Beautiful" blaring behind me, I meet the Dubai dictatorship's Public Enemy Number One. By way of introduction, Mohammed al-Mansoori says from within his white robes and sinewy face: "Westerners come her and see the malls and the tall buildings and they think that means we are free. But these businesses, these buildings – who are they for? This is a dictatorship. The royal family think they own the country, and the people are their servants. There is no freedom here."
We snuffle out the only Arabic restaurant in this mall, and he says everything you are banned – under threat of prison – from saying in Dubai. Mohammed tells me he was born in Dubai to a fisherman father who taught him one enduring lesson: Never follow the herd. Think for yourself. In the sudden surge of development, Mohammed trained as a lawyer. By the Noughties, he had climbed to the head of the Jurists' Association, an organisation set up to press for Dubai's laws to be consistent with international human rights legislation.
And then – suddenly – Mohammed thwacked into the limits of Sheikh Mohammed's tolerance. Horrified by the "system of slavery" his country was being built on, he spoke out to Human Rights Watch and the BBC. "So I was hauled in by the secret police and told: shut up, or you will lose you job, and your children will be unemployable," he says. "But how could I be silent?"
He was stripped of his lawyer's licence and his passport – becoming yet another person imprisoned in this country. "I have been blacklisted and so have my children. The newspapers are not allowed to write about me."
Why is the state so keen to defend this system of slavery? He offers a prosaic explanation. "Most companies are owned by the government, so they oppose human rights laws because it will reduce their profit margins. It's in their interests that the workers are slaves."
Last time there was a depression, there was a starbust of democracy in Dubai, seized by force from the sheikhs. In the 1930s, the city's merchants banded together against Sheikh Said bin Maktum al-Maktum – the absolute ruler of his day – and insisted they be given control over the state finances. It lasted only a few years, before the Sheikh – with the enthusiastic support of the British – snuffed them out.
And today? Sheikh Mohammed turned Dubai into Creditopolis, a city built entirely on debt. Dubai owes 107 percent of its entire GDP. It would be bust already, if the neighbouring oil-soaked state of Abu Dhabi hadn't pulled out its chequebook. Mohammed says this will constrict freedom even further. "Now Abu Dhabi calls the tunes – and they are much more conservative and restrictive than even Dubai. Freedom here will diminish every day." Already, new media laws have been drafted forbidding the press to report on anything that could "damage" Dubai or "its economy". Is this why the newspapers are giving away glossy supplements talking about "encouraging economic indicators"?
Everybody here waves Islamism as the threat somewhere over the horizon, sure to swell if their advice is not followed. Today, every imam is appointed by the government, and every sermon is tightly controlled to keep it moderate. But Mohammed says anxiously: "We don't have Islamism here now, but I think that if you control people and give them no way to express anger, it could rise. People who are told to shut up all the time can just explode."
Later that day, against another identikit-corporate backdrop, I meet another dissident – Abdulkhaleq Abdullah, Professor of Political Science at Emirates University. His anger focuses not on political reform, but the erosion of Emirati identity. He is famous among the locals, a rare outspoken conductor for their anger. He says somberly: "There has been a rupture here. This is a totally different city to the one I was born in 50 years ago."
He looks around at the shiny floors and Western tourists and says: "What we see now didn't occur in our wildest dreams. We never thought we could be such a success, a trendsetter, a model for other Arab countries. The people of Dubai are mighty proud of their city, and rightly so. And yet..." He shakes his head. "In our hearts, we fear we have built a modern city but we are losing it to all these expats."
Adbulkhaleq says every Emirati of his generation lives with a "psychological trauma." Their hearts are divided – "between pride on one side, and fear on the other." Just after he says this, a smiling waitress approaches, and asks us what we would like to drink. He orders a Coke.
VI. Dubai Pride
There is one group in Dubai for whom the rhetoric of sudden freedom and liberation rings true – but it is the very group the government wanted to liberate least: gays.
Beneath a famous international hotel, I clamber down into possibly the only gay club on the Saudi Arabian peninsula. I find a United Nations of tank-tops and bulging biceps, dancing to Kylie, dropping ecstasy, and partying like it's Soho. "Dubai is the best place in the Muslim world for gays!" a 25-year old Emirati with spiked hair says, his arms wrapped around his 31-year old "husband". "We are alive. We can meet. That is more than most Arab gays."
It is illegal to be gay in Dubai, and punishable by 10 years in prison. But the locations of the latest unofficial gay clubs circulate online, and men flock there, seemingly unafraid of the police. "They might bust the club, but they will just disperse us," one of them says. "The police have other things to do."
In every large city, gay people find a way to find each other – but Dubai has become the clearing-house for the region's homosexuals, a place where they can live in relative safety. Saleh, a lean private in the Saudi Arabian army, has come here for the Coldplay concert, and tells me Dubai is "great" for gays: "In Saudi, it's hard to be straight when you're young. The women are shut away so everyone has gay sex. But they only want to have sex with boys – 15- to 21-year-olds. I'm 27, so I'm too old now. I need to find real gays, so this is the best place. All Arab gays want to live in Dubai."
With that, Saleh dances off across the dancefloor, towards a Dutch guy with big biceps and a big smile.
VII. The Lifestyle
All the guidebooks call Dubai a "melting pot", but as I trawl across the city, I find that every group here huddles together in its own little ethnic enclave – and becomes a caricature of itself. One night – in the heart of this homesick city, tired of the malls and the camps – I go to Double Decker, a hang-out for British expats. At the entrance there is a red telephone box, and London bus-stop signs. Its wooden interior looks like a cross between a colonial clubhouse in the Raj and an Eighties school disco, with blinking coloured lights and cheese blaring out. As I enter, a girl in a short skirt collapses out of the door onto her back. A guy wearing a pirate hat helps her to her feet, dropping his beer bottle with a paralytic laugh.
I start to talk to two sun-dried women in their sixties who have been getting gently sozzled since midday. "You stay here for The Lifestyle," they say, telling me to take a seat and order some more drinks. All the expats talk about The Lifestyle, but when you ask what it is, they become vague. Ann Wark tries to summarise it: "Here, you go out every night. You'd never do that back home. You see people all the time. It's great. You have lots of free time. You have maids and staff so you don't have to do all that stuff. You party!"
They have been in Dubai for 20 years, and they are happy to explain how the city works. "You've got a hierarchy, haven't you?" Ann says. "It's the Emiratis at the top, then I'd say the British and other Westerners. Then I suppose it's the Filipinos, because they've got a bit more brains than the Indians. Then at the bottom you've got the Indians and all them lot."
They admit, however, they have "never" spoken to an Emirati. Never? "No. They keep themselves to themselves." Yet Dubai has disappointed them. Jules Taylor tells me: "If you have an accident here it's a nightmare. There was a British woman we knew who ran over an Indian guy, and she was locked up for four days! If you have a tiny bit of alcohol on your breath they're all over you. These Indians throw themselves in front of cars, because then their family has to be given blood money – you know, compensation. But the police just blame us. That poor woman."
A 24-year-old British woman called Hannah Gamble takes a break from the dancefloor to talk to me. "I love the sun and the beach! It's great out here!" she says. Is there anything bad? "Oh yes!" she says. Ah: one of them has noticed, I think with relief. "The banks! When you want to make a transfer you have to fax them. You can't do it online." Anything else? She thinks hard. "The traffic's not very good."
When I ask the British expats how they feel to not be in a democracy, their reaction is always the same. First, they look bemused. Then they look affronted. "It's the Arab way!" an Essex boy shouts at me in response, as he tries to put a pair of comedy antlers on his head while pouring some beer into the mouth of his friend, who is lying on his back on the floor, gurning.
Later, in a hotel bar, I start chatting to a dyspeptic expat American who works in the cosmetics industry and is desperate to get away from these people. She says: "All the people who couldn't succeed in their own countries end up here, and suddenly they're rich and promoted way above their abilities and bragging about how great they are. I've never met so many incompetent people in such senior positions anywhere in the world." She adds: "It's absolutely racist. I had Filipino girls working for me doing the same job as a European girl, and she's paid a quarter of the wages. The people who do the real work are paid next to nothing, while these incompetent managers pay themselves £40,000 a month."
With the exception of her, one theme unites every expat I speak to: their joy at having staff to do the work that would clog their lives up Back Home. Everyone, it seems, has a maid. The maids used to be predominantly Filipino, but with the recession, Filipinos have been judged to be too expensive, so a nice Ethiopian servant girl is the latest fashionable accessory.
It is an open secret that once you hire a maid, you have absolute power over her. You take her passport – everyone does; you decide when to pay her, and when – if ever – she can take a break; and you decide who she talks to. She speaks no Arabic. She cannot escape.
In a Burger King, a Filipino girl tells me it is "terrifying" for her to wander the malls in Dubai because Filipino maids or nannies always sneak away from the family they are with and beg her for help. "They say – 'Please, I am being held prisoner, they don't let me call home, they make me work every waking hour seven days a week.' At first I would say – my God, I will tell the consulate, where are you staying? But they never know their address, and the consulate isn't interested. I avoid them now. I keep thinking about a woman who told me she hadn't eaten any fruit in four years. They think I have power because I can walk around on my own, but I'm powerless."
The only hostel for women in Dubai – a filthy private villa on the brink of being repossessed – is filled with escaped maids. Mela Matari, a 25-year-old Ethiopian woman with a drooping smile, tells me what happened to her – and thousands like her. She was promised a paradise in the sands by an agency, so she left her four year-old daughter at home and headed here to earn money for a better future. "But they paid me half what they promised. I was put with an Australian family – four children – and Madam made me work from 6am to 1am every day, with no day off. I was exhausted and pleaded for a break, but they just shouted: 'You came here to work, not sleep!' Then one day I just couldn't go on, and Madam beat me. She beat me with her fists and kicked me. My ear still hurts. They wouldn't give me my wages: they said they'd pay me at the end of the two years. What could I do? I didn't know anybody here. I was terrified."
One day, after yet another beating, Mela ran out onto the streets, and asked – in broken English – how to find the Ethiopian consulate. After walking for two days, she found it, but they told her she had to get her passport back from Madam. "Well, how could I?" she asks. She has been in this hostel for six months. She has spoken to her daughter twice. "I lost my country, I lost my daughter, I lost everything," she says.
As she says this, I remember a stray sentence I heard back at Double Decker. I asked a British woman called Hermione Frayling what the best thing about Dubai was. "Oh, the servant class!" she trilled. "You do nothing. They'll do anything!"
VIII. The End of The World
The World is empty. It has been abandoned, its continents unfinished. Through binoculars, I think I can glimpse Britain; this sceptred isle barren in the salt-breeze.
Here, off the coast of Dubai, developers have been rebuilding the world. They have constructed artificial islands in the shape of all planet Earth's land masses, and they plan to sell each continent off to be built on. There were rumours that the Beckhams would bid for Britain. But the people who work at the nearby coast say they haven't seen anybody there for months now. "The World is over," a South African suggests.
All over Dubai, crazy projects that were Under Construction are now Under Collapse. They were building an air-conditioned beach here, with cooling pipes running below the sand, so the super-rich didn't singe their toes on their way from towel to sea.
The projects completed just before the global economy crashed look empty and tattered. The Atlantis Hotel was launched last winter in a $20m fin-de-siecle party attended by Robert De Niro, Lindsay Lohan and Lily Allen. Sitting on its own fake island – shaped, of course, like a palm tree – it looks like an immense upturned tooth in a faintly decaying mouth. It is pink and turreted – the architecture of the pharaohs, as reimagined by Zsa-Zsa Gabor. Its Grand Lobby is a monumental dome covered in glitterballs, held up by eight monumental concrete palm trees. Standing in the middle, there is a giant shining glass structure that looks like the intestines of every guest who has ever stayed at the Atlantis. It is unexpectedly raining; water is leaking from the roof, and tiles are falling off.
A South African PR girl shows me around its most coveted rooms, explaining that this is "the greatest luxury offered in the world". We stroll past shops selling £24m diamond rings around a hotel themed on the lost and sunken continent of, yes, Atlantis. There are huge water tanks filled with sharks, which poke around mock-abandoned castles and dumped submarines. There are more than 1,500 rooms here, each with a sea view. The Neptune suite has three floors, and – I gasp as I see it – it looks out directly on to the vast shark tank. You lie on the bed, and the sharks stare in at you. In Dubai, you can sleep with the fishes, and survive.
But even the luxury – reminiscent of a Bond villain's lair – is also being abandoned. I check myself in for a few nights to the classiest hotel in town, the Park Hyatt. It is the fashionistas' favourite hotel, where Elle Macpherson and Tommy Hilfiger stay, a gorgeous, understated palace. It feels empty. Whenever I eat, I am one of the only people in the restaurant. A staff member tells me in a whisper: "It used to be full here. Now there's hardly anyone." Rattling around, I feel like Jack Nicholson in The Shining, the last man in an abandoned, haunted home.
The most famous hotel in Dubai – the proud icon of the city – is the Burj al Arab hotel, sitting on the shore, shaped like a giant glass sailing boat. In the lobby, I start chatting to a couple from London who work in the City. They have been coming to Dubai for 10 years now, and they say they love it. "You never know what you'll find here," he says. "On our last trip, at the beginning of the holiday, our window looked out on the sea. By the end, they'd built an entire island there."
My patience frayed by all this excess, I find myself snapping: doesn't the omnipresent slave class bother you? I hope they misunderstood me, because the woman replied: "That's what we come for! It's great, you can't do anything for yourself!" Her husband chimes in: "When you go to the toilet, they open the door, they turn on the tap – the only thing they don't do is take it out for you when you have a piss!" And they both fall about laughing.
IX. Taking on the Desert
Dubai is not just a city living beyond its financial means; it is living beyond its ecological means. You stand on a manicured Dubai lawn and watch the sprinklers spray water all around you. You see tourists flocking to swim with dolphins. You wander into a mountain-sized freezer where they have built a ski slope with real snow. And a voice at the back of your head squeaks: this is the desert. This is the most water-stressed place on the planet. How can this be happening? How is it possible?
The very earth is trying to repel Dubai, to dry it up and blow it away. The new Tiger Woods Gold Course needs four million gallons of water to be pumped on to its grounds every day, or it would simply shrivel and disappear on the winds. The city is regularly washed over with dust-storms that fog up the skies and turn the skyline into a blur. When the dust parts, heat burns through. It cooks anything that is not kept constantly, artificially wet.
Dr Mohammed Raouf, the environmental director of the Gulf Research Centre, sounds sombre as he sits in his Dubai office and warns: "This is a desert area, and we are trying to defy its environment. It is very unwise. If you take on the desert, you will lose."
Sheikh Maktoum built his showcase city in a place with no useable water. None. There is no surface water, very little acquifer, and among the lowest rainfall in the world. So Dubai drinks the sea. The Emirates' water is stripped of salt in vast desalination plants around the Gulf – making it the most expensive water on earth. It costs more than petrol to produce, and belches vast amounts of carbon dioxide into the atmosphere as it goes. It's the main reason why a resident of Dubai has the biggest average carbon footprint of any human being – more than double that of an American.
If a recession turns into depression, Dr Raouf believes Dubai could run out of water. "At the moment, we have financial reserves that cover bringing so much water to the middle of the desert. But if we had lower revenues – if, say, the world shifts to a source of energy other than oil..." he shakes his head. "We will have a very big problem. Water is the main source of life. It would be a catastrophe. Dubai only has enough water to last us a week. There's almost no storage. We don't know what will happen if our supplies falter. It would be hard to survive."
Global warming, he adds, makes the problem even worse. "We are building all these artificial islands, but if the sea level rises, they will be gone, and we will lose a lot. Developers keep saying it's all fine, they've taken it into consideration, but I'm not so sure."
Is the Dubai government concerned about any of this? "There isn't much interest in these problems," he says sadly. But just to stand still, the average resident of Dubai needs three times more water than the average human. In the looming century of water stresses and a transition away from fossil fuels, Dubai is uniquely vulnerable.
I wanted to understand how the government of Dubai will react, so I decided to look at how it has dealt with an environmental problem that already exists – the pollution of its beaches. One woman – an American, working at one of the big hotels – had written in a lot of online forums arguing that it was bad and getting worse, so I called her to arrange a meeting. "I can't talk to you," she said sternly. Not even if it's off the record? "I can't talk to you." But I don't have to disclose your name... "You're not listening. This phone is bugged. I can't talk to you," she snapped, and hung up.
The next day I turned up at her office. "If you reveal my identity, I'll be sent on the first plane out of this city," she said, before beginning to nervously pace the shore with me. "It started like this. We began to get complaints from people using the beach. The water looked and smelled odd, and they were starting to get sick after going into it. So I wrote to the ministers of health and tourism and expected to hear back immediately – but there was nothing. Silence. I hand-delivered the letters. Still nothing."
The water quality got worse and worse. The guests started to spot raw sewage, condoms, and used sanitary towels floating in the sea. So the hotel ordered its own water analyses from a professional company. "They told us it was full of fecal matter and bacteria 'too numerous to count'. I had to start telling guests not to go in the water, and since they'd come on a beach holiday, as you can imagine, they were pretty pissed off." She began to make angry posts on the expat discussion forums – and people began to figure out what was happening. Dubai had expanded so fast its sewage treatment facilities couldn't keep up. The sewage disposal trucks had to queue for three or four days at the treatment plants – so instead, they were simply drilling open the manholes and dumping the untreated sewage down them, so it flowed straight to the sea.
Suddenly, it was an open secret – and the municipal authorities finally acknowledged the problem. They said they would fine the truckers. But the water quality didn't improve: it became black and stank. "It's got chemicals in it. I don't know what they are. But this stuff is toxic."
She continued to complain – and started to receive anonymous phone calls. "Stop embarassing Dubai, or your visa will be cancelled and you're out," they said. She says: "The expats are terrified to talk about anything. One critical comment in the newspapers and they deport you. So what am I supposed to do? Now the water is worse than ever. People are getting really sick. Eye infections, ear infections, stomach infections, rashes. Look at it!" There is faeces floating on the beach, in the shadow of one of Dubai's most famous hotels.
"What I learnt about Dubai is that the authorities don't give a toss about the environment," she says, standing in the stench. "They're pumping toxins into the sea, their main tourist attraction, for God's sake. If there are environmental problems in the future, I can tell you now how they will deal with them – deny it's happening, cover it up, and carry on until it's a total disaster." As she speaks, a dust-storm blows around us, as the desert tries, slowly, insistently, to take back its land.
X. Fake Plastic Trees
On my final night in the Dubai Disneyland, I stop off on my way to the airport, at a Pizza Hut that sits at the side of one of the city's endless, wide, gaping roads. It is identical to the one near my apartment in London in every respect, even the vomit-coloured decor. My mind is whirring and distracted. Perhaps Dubai disturbed me so much, I am thinking, because here, the entire global supply chain is condensed. Many of my goods are made by semi-enslaved populations desperate for a chance 2,000 miles away; is the only difference that here, they are merely two miles away, and you sometimes get to glimpse their faces? Dubai is Market Fundamentalist Globalisation in One City.
I ask the Filipino girl behind the counter if she likes it here. "It's OK," she says cautiously. Really? I say. I can't stand it. She sighs with relief and says: "This is the most terrible place! I hate it! I was here for months before I realised – everything in Dubai is fake. Everything you see. The trees are fake, the workers' contracts are fake, the islands are fake, the smiles are fake – even the water is fake!" But she is trapped, she says. She got into debt to come here, and she is stuck for three years: an old story now. "I think Dubai is like an oasis. It is an illusion, not real. You think you have seen water in the distance, but you get close and you only get a mouthful of sand."
As she says this, another customer enters. She forces her face into the broad, empty Dubai smile and says: "And how may I help you tonight, sir?"
Some names in this article have been changed