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	The 800th anniversary of the Magna Carta by Noam Chomsky The Nation   In a few months, we will be commemorating the 800th anniversary of the sealing of Magna Carta—commemorating, but not celebrating; rather, mourning the blows it has suffered.   The first authoritative scholarly edition of Magna Carta was published by the eminent jurist William Blackstone in 1759. It was no easy task. As he wrote, “the body of the charter has been unfortunately gnawn by rats”—a comment that carries grim symbolism today, as we take up the task the rats left unfinished.   Blackstone’s edition actually includes two charters: the Great Charter and the Charter of the Forest. The former is generally regarded as the foundation of Anglo-American law—in Winston Churchill’s words, referring to its reaffirmation by Parliament in 1628, “the charter of every self-respecting man at any time in any land.” The Great Charter held that “No freeman shall be arrested or imprisoned,” or otherwise harmed, “except by the lawful judgment of his equals and according to the law of the land,” the essential sense of the doctrine of “presumption of innocence.”   To be sure, the reach of the charter was limited. Nevertheless, as Eric Kasper observes in a scholarly review, “What began as a relatively small check on the arbitrary power of King John eventually led to succeeding generations finding ever more rights in Magna Carta and Article 39. In this sense, Magna Carta is a key point in a long development of the protection of rights against arbitrary executive power.”   Crossing the Atlantic, the Great Charter was enshrined in the US Constitution as the promise that “no person shall…be deprived of life, liberty, or property, without due process of law” and that “In all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial, by an impartial jury.”   The wording seems expansive, but that is misleading. Excluded were “unpeople” (to borrow Orwell’s useful concept), among them Native Americans, slaves and women, who under the British common law adopted by the founders were the property of their fathers, handed over to husbands. Indeed, it wasn’t until 1975 that women gained the right to serve on juries in all fifty states.   The Fourteenth Amendment applied the “due process” provisions to states. The intent was to include freed slaves in the category of persons, but the effect was different. Within a few years, slaves who had technically been freed were delivered to a regime of criminalization of black life that amounted to “slavery by another name,” to quote the title of Douglas Blackmon’s evocative account of this crime, which is being re-enacted today. Instead, almost all of the actual court cases invoking the Fourteenth Amendment had to do with the rights of corporations.   Today, these legal fictions—created and sustained by state power—have rights well beyond those of flesh-and-blood persons, not only by virtue of their wealth, immortality and limited liability, but also thanks to the mislabeled “free-trade” agreements, which grant them unprecedented rights unavailable to humans.   The constitutional lawyer in the White House has introduced further modifications. His Justice Department explained that “due process of law”—at least where “terrorism offenses” are concerned—is satisfied by internal deliberations within the executive branch. King John would have nodded in approval. The term “guilty” has also been given a refined interpretation: it now means “targeted for assassination by the White House.”   Furthermore, the burden of proof has been shifted to those already assassinated by executive whim. As The New York Times reported, “Mr. Obama embraced a disputed method for counting civilian casualties [that] in effect counts all military-age males in a strike zone as combatants… unless there is explicit intelligence posthumously proving them innocent.” The guiding principles are clear: force reigns supreme; “law” and “justice” and other frivolities can be left to sentimentalists..   Let us now put the sad relics of the Great Charter aside and turn to the Magna Carta’s companion, the Charter of the Forest, which was issued in 1217. Its significance is perhaps even more pertinent today. As explained by Peter Linebaugh in his richly documented and stimulating history of Magna Carta, the Charter of the Forest called for protection of the commons from external power. The commons were the source of sustenance for the general population: food, fuel, construction materials, a form of welfare, whatever was essential for life.   In thirteenth-century England, the forest was no primitive wilderness. It had been carefully nurtured by its users over generations, its riches available to all. The great British social historian R. H. Tawney wrote that the commons were used by country people who lacked arable land. The maintenance of this “open field system of agriculture…reposed upon a common custom and tradition, not upon documentary records capable of precise construction.   Its boundaries were often rather a question of the degree of conviction with which ancient inhabitants could be induced to affirm them, than visible to the mere eye of sense”—features of traditional societies worldwide to the present day.   By the eighteenth century, the charter had fallen victim to the rise of the commodity economy and capitalist practice and moral culture.   As Linebaugh puts it, “The Forest Charter was forgotten or consigned to the gothic past.” With the commons no longer protected for cooperative nurturing and use, the rights of the common people were restricted to what could not be privatized—a category that continues to shrink, to virtual invisibility.   Capitalist development brought with it a radical revision not only of how the commons are treated, but also of how they are conceived.   The prevailing view today is captured by Garrett Hardin’s influential argument that “Freedom in a commons brings ruin to all.” This is the famous “tragedy of the commons”: that what is not owned will be destroyed by individual avarice.   A more technical formulation is given in economist Mancur Olson’s conclusion that “unless the number of individuals is quite small, or unless there is coercion or some other special device to make individuals act in their common interest, rational, self-interested individuals will not act to achieve their common or group interests.” Accordingly, unless the commons are handed over to private ownership, brutal state power must be invoked to save them from destruction. This conclusion is plausible—if we understand “rationality” to entail a fanatic dedication to the individual maximization of short-term material gain.   These forecasts have received some challenge. The late Elinor Ostrom won the Nobel Prize in economics in 2009 for her work showing the superiority of user-managed fish stocks, pastures, woods, lakes and groundwater basins. The historical review in her study, Governing the Commons, ignores the Charter of the Forest and the practice over centuries of nurturing the commons, but Ostrom did conclude that the success stories she’d investigated might at least “shatter the convictions of many policy analysts that the only way to solve [common-pool resource] problems is for external authorities to impose full private property rights or centralized regulation.”   * * *   As we now understand all too well, it is what is privately owned, not what is held in common, that faces destruction by avarice, bringing the rest of us down with it. Hardly a day passes without more confirmation of this fact.   As hundreds of thousands of people marched in the streets of Manhattan on September 21 to warn of the dire threat of the ongoing ecological destruction of the commons, The New York Times reported that “global emissions of greenhouse gases jumped 2.3 percent in 2013 to record levels,” while in the United States, emissions rose 2.9 percent, reversing a recent decline. August 2014 was reported to be the hottest on record, and JAMA: The Journal of the American Medical Association predicted that the number of 90-degree-plus days in New York could triple in three decades, with much more severe effects in warmer climates.   It is well understood that most of the world’s fossil-fuel reserves must remain in the ground if an environmental disaster for humankind is to be averted, but under the logic of state-supported capitalist institutions, the private owners of those reserves are racing to exploit them to the fullest. Chevron abandoned a small renewable-energy program because its profits are far greater from fossil fuels.   And as Bloomberg Businessweek reports, ExxonMobil announced “that its laserlike focus on fossil fuels is a sound strategy, regardless of climate change.” This is all in accord with the capitalist doctrine of “rationality.”   A small part of the remaining commons is federal land. Despite the complaints of the energy lobbies, the amount of crude oil produced from onshore federal lands in 2013 was the highest in over a decade, according to the Interior Department, and it has expanded steadily under the Obama administration. The business pages of newspapers like The New York Times and The Washington Post are exultant about “the boom in American energy production,” which shows “no signs of slowing down, keeping the market flush with crude and gasoline prices low.”   Predictions are that the United States will “add a million more barrels of oil in daily production over the next year,” while also “expanding its exports of refined products like gasoline and diesel.” One dark cloud is perceived, however: maximizing production “might have a catastrophic effect” in “the creation of a major glut.” And with climate-change denier James Inhofe now chairing the Senate Committee on Environment and Public Works, and others like him in positions of power, we can expect even more wonderful news for our grandchildren.   Despite these long odds, the participants in the People’s Climate March are not alone. There is no slight irony in the fact that their major allies throughout the world are the surviving indigenous communities that have upheld their own versions of the Charter of the Forest. In Canada, the Gitxaala First Nation is filing a lawsuit opposing a tar-sands pipeline passing through its territory, relying on recent high-court rulings on indigenous rights. In Ecuador, the large indigenous community played an essential part in the government’s offer to keep some of its oil in the ground, where it should be, if the rich countries would compensate Ecuador for a fraction of the lost profits. (The offer was refused.)   The one country governed by an indigenous majority, Bolivia, held a World People’s Conference in 2010, with 35,000 participants from 140 countries. It produced a People’s Agreement calling for sharp reductions in emissions, as well as a Universal Declaration on the Rights of Mother Earth. These are key demands of indigenous communities all over the world.   So, as we commemorate the two charters after 800 years, all of this gives us ample reason for serious reflection—and for determined action.   * This article is part of The Nation’s 150th Anniversary Special Issue, featuring a range of essays: http://www.thenation.com/article/200785/150th-anniversary-issue Visit the related web page
	State Trustees lose disabled and mentally-impaired life savings by investing in high-risk funds by Chris Vedelago Fairfax News, agencies Australia - Victoria   February 2015   The life savings of disabled and mentally impaired Victorians have been lost by the state-owned company that administers their estates after it invested their money in high-risk funds.   A news investigation has found that State Trustees ignored its legal obligation to act in the best interests of clients, allowing its financial planning division to speculate in high-risk investments that led to substantial losses.   This included putting savings and money from government pensions with LM Investment Management, a Gold Coast-based scheme that lost $800 million when it collapsed in 2013 amid allegations of misconduct.   State Trustees controls more than $1 billion belonging to 9500 vulnerable people who have been deemed unfit to manage their own financial affairs and now depend on the investments made in their names to meet their living expenses.   State Trustees would not reveal how many of its clients lost money in the schemes, citing privacy laws and the need to protect "community confidence" in the system.   Among the victims was Christa Simmons, a 75-year-old woman with dementia who was under the administration of State Trustees for 15 years before her death.   Due to privacy laws, the family of Ms Simmons has been kept in the dark about her finances since the Guardianship & Administration Board (now VCAT) appointed State Trustees her financial and legal administrator in 1997.   "It"s State Trustees – it"s practically the government. You assume they have the highest level of integrity and there"s checks and balances in place. We never had any reason to suspect otherwise," her daughter Darlene told reporters.   But documents show a State Trustees financial planner invested a significant portion of her entire savings in a "pension account" that fed into three investments with high- to very high risk ratings.   In 2010, State Trustees reviewed Ms Simmons investment position and noted her risk profile should be "moderate". The report recommended that the pension account be transferred to a marginally safer financial product that charged lower fees and commissions.   The recommendation was not implemented and two years later the account had lost nearly all its value.   The major problem was a significant investment made on her behalf in a mortgage fund run by entrepreneur Peter Drake, founder of now-defunct LM Investment Management. When the fund ran into trouble in 2009 all investments were frozen, leaving investors to watch as its value dropped but their money could not be withdrawn. LM eventually collapsed with losses estimated at $800 million.   At the time of her death in 2012, Ms Simmons had just $3700 left in her pension account in potentially accessible funds.   The family of Ms Simmons was completely unaware of the troubled state of her finances until she died, when they began to question State Trustees about her will. But the group, acting as her legally appointed administrator and executor, refused to disclose detailed information.   After a protracted dispute, her daughter took over as executor and obtained some of her mother"s records.   "It"s unfathomable how a government body awarded guardianship over frail, sick and vulnerable people appear to have a licence to gamble with their savings with impunity for the loses," Darlene said. She is now considering taking legal action.   It is not known exactly how many other of the State Trustees 9500 clients may have lost money in risky investments.   Documents show the three financial products Ms Simmons money was invested in required State Trustees to make a minimum buy-in investment of $20,000, $25,000 and $100,000 for each, suggesting many other clients have been assigned stakes as well to meet this target.   State Trustees has ignored repeated requests to provide figures about its investment activities or losses.   With State Trustees claiming it cannot disclose information about losses due to privacy rules, it is likely any potential victims may never know they are victims.   The collapse of LM is now the subject of a pending class action lawsuit by law firm Slater & Gordon, which is seeking compensation for investors tipped into the fund on the advice of their financial planners.   Financial planner-turned-whistleblower Jeff Morris, who exposed wide-ranging malfeasance inside the Commonwealth Bank"s financial planning arm in 2013, said the problems at State Trustees would likely go beyond just one rogue planner.   "The lack of accountability to clients and secrecy in this case makes that a racing certainty. No competent adviser would put clients into these dodgy mortgage funds but it is important to remember that the incompetence is systemic because it is the dealer group that decides the menu of products that planners can recommend," he said.   The losses are the latest in a series of scandals to plague State Trustees, which was the subject of a damning report from the Auditor-General in 2012 that found it could not demonstrate it acted in the best interests of its clients.   "Flawed implementation, ineffective oversight, and a failure to regularly and systematically test how effective controls are in practice, limit the assurance it can provide ... about organisational compliance and performance," the report said.   In 2009, State Trustees agreed to pay $13.5 million in compensation to investors that were burned in the collapse of Perth-based property scheme Westpoint.   It was also blasted by the Victorian Ombudsman over the quality of care provided to vulnerable people following an investigation in 2003.   * Article 21 of the Universal Declaration of Human Rights stipulates, “the will of the people shall be the basis of the authority of government.” Corporate capture is defined by the undue influence that corporations and corporate culture exerts over public institutions, manipulating them to act according to their priorities, at the expense of the public interest and the integrity of the systems required to respect, protect and fulfill human rights. Through corporate capture parties exert political influence over the legislative process, and the state regulators charged with enforcing laws, weakening provisions in the law or their implementation.   Regulatory capture is a form of political corruption that occurs when a regulatory agency, created to act in the public interest, instead advances the commercial or special concerns of interest groups that dominate the industry or sector it is charged with regulating.   University of Chicago economist, George Stigler first highlighted regulatory capture, in 1971, publishing his famous essay “The Theory of Economic Regulation” in the Bell Journal of Economics and Management Science. He studied reported empirical data from various markets and concluded that “as a rule, regulation is acquired by the industry and is designed and operated primarily for its benefit”.   Regulatory Capture writes Adam Thierer, a senior research fellow from the George Mason University:   “Regulatory capture” occurs when special interests co-opt policymakers or political bodies — regulatory agencies, in particular — to further their own ends. Capture theory is closely related to the “rent-seeking” and “political failure”. Another term for regulatory capture is “client politics,” which according to James Wilson, “occurs when most or all of the benefits of a program go to some reasonably small interest (industry, profession) but most or all of the costs will be borne by a large number of people (for example, all taxpayers).”   While regulatory capture cannot explain all regulatory policies or developments, it does provide an explanation for the actions of political actors with dismaying regularity. Because regulatory capture conflicts with romanticized notions of “independent” regulatory agencies or “scientific” bureaucracy, it often evokes a fair bit of denialism.   Yet, countless studies have shown that regulatory capture has been at work in various arenas: transportation and telecommunications; energy and environmental policy; farming and financial services; and many others.   Corporate and Regulatory Capture is the prevailing sad reality across Government, accountability agencies and regulatory bodies across Australia, and in too many "developed" economies worldwide.
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