- H. Lerner Revised
Distribution Draft 12/18/2002 Economic Globalization Class
Adult Programs Cedar Lane
Unitarian Universalist Church Bethesda Maryland
Adult Programs Cedar Lane Unitarian Universalist Church
Bethesda, Maryland
-
REVISED
AND EXPANDED PRESENTATION
Class
6: What Should Our Statement of Conscience Say?
- Our subject tonight is
“What Should the UUA’s Statement of Conscience Say?”
First, I will provide a summary of some of the moral and ethical
postures associated with the differing points of view on economic
globalization we have been considering in this course. Second, I
will discuss eight key issues lying at the foundation of the
economic globalization debate. I will then offer my interpretation
of where the August 2002 Draft Statement of Conscience fits into the
basic framework we have been using during the course and make some
brief final comments. [NOTE: The Draft SOC is reproduced as an
appendix to this presentation.]
- This has turned into a
rather long presentation, and I will be raising many questions.
Fundamentally, these boil down to:
-
- Have we defined
economic globalization properly?
-
Have we identified and
addressed the basic issues?
-
Have we done our homework
on these issues?
-
Do we have our facts
straight?
-
What is social justice as
it applies to these issues?
-
Are we sufficiently
certain of our preferred solutions to provide moral or ethical
advice on these issues?
- I of course have my
own opinions on these subjects – some of them firm, some of
them tentative -- but my objective is to persuade you to make up
your minds for yourselves. So I hope you will indulge me as I raise
these questions in various ways, and that you will postpone bringing
me my cup of hemlock until I finish!
- First, a quick summary
of the moral messages from the spokespersons we have heard in this
class.
-
- Tom Friedman, the
Liberal Integrationist Social Safety Netter with whom we visited
last week, believes that nations and international institutions have
not paid sufficient attention to the needs of those adversely
impacted by rapid change. Economic globalization, he says, reflects
the generally desirable “democratizations” of finance,
technology, and information, but the benefits of globalization could
be lost if we fail to pay attention to the needs of the vulnerable
and less adaptable. Workers should be provided with assistance in a
life-long process of learning and skill renewal. Globalization’s
gains also should be shared with those who are permanently
marginalized by its volatility or fundamental structural shifts.
Friedman denies that a rapacious master force imposes its will
through economic globalization. There is no central conspiracy or
control. To the contrary, he argues, “No one is in charge.”
With globalization, we are dealing with a new kind of liberty, an
emancipation that both enables and requires its own set of moral
restraints. He says that we should adopt an ethic focused on the
responsible use of this new freedom:
- For David Korten, the
Liberal Separatist Heavy, corporations, pervasive control, and
organized greed lie at the heart of economic globalization.
Capitalistic domination is the main theme of When Corporations
Rule the World. Governance by corporations, according to Korten,
is destroying democracy. The movement of goods across long
distances, the ruin of indigenous industries and ways of life, and
the spread of materialistic values are the work of a manipulative,
competitive, self-serving elite. At the foundation of this process
lies the doctrine of “materialistic monism,” which
subordinates human spirituality to scientific reductionism,
technological achievement, and material gain. The answer to these
threats, according to Dr. Korten, is to create a localized society
based on cooperation and the good of all, and to subordinate
corporations to the public good: Civil society, will however,
continue to strengthen its global ties. We, in the wealthy nations,
will have to cut back on our wasteful, conspicuous consumption, but
the gains in terms of personal safety, human welfare, and
enlightened values will far outweigh these superficial losses.
- Pat Buchanan, in the
Conservative Separatist camp, is concerned with threats to the
United States of America. He ties free trade to the heresy of
“economism,” the belief that man is an economic animal –
and nothing else. Buchanan would protect the traditional values as
well the jobs of hard-working Americans from the outside assaults of
low-wage imports as well as immigrants from alien cultures.
-
- The Libertarian
Conservative Integrationists also argue their case on moral grounds.
Protectionism, say our friends from the Cato Institute, is immoral
at its core: It produces political corruption, economic stagnation,
and international conflict, and hinders a nation’s ability to
feed, clothe, and house itself. They would protect consumers’
pocketbooks and freedom of choice everywhere in the world.
-
- Not one of the
spokespersons to whom we have listened in the past few weeks has
held up a hand and said, “I am against the public interest,”
“I am for corporate greed,” “I don’t give a
fig for the poor.” Each of these voices has spoken in
recognizably ethical tones. If you crawl inside their heads, if you
walk in the moccasins of each of their tribes, it seems pretty clear
that each one holds its beliefs in earnest.
- But these groups have
little patience with those who differ with them.
-
- When issues of public
policy are put on the table for debate, on come the war bonnets.
Each tribe charges to the top of the mountain, to claim the high
moral ground, and, in the heat of battle to treat those who disagree
as moral defectives. Moral condemnation is, I think, a rather
tricky business at any time. It is an approach that can come back to
whack you like a boomerang, reveal that you yourself face an ethical
predicament.
- Three
weeks ago we heard the voice of Joseph Stiglitz, speaking from the
top of the mountain in Globalization and Its Discontents
proclaiming the IMF’s conditionality and actions in times of
crisis, as ill-conceived and inhumane. He characterized IMF’s
actions as guided by narrow institutional concerns, ideological
rigidity, and insensitivity to the impact of its imposed measures on
vulnerable populations in developing countries.
-
- But, as you may have
gleaned from your homework, there is another version of events. In
his Open Letter to Joseph Stiglitz, Kenneth Rogoff, Director of
Research at the IMF says:
-
- In the middle of a
global wave of speculative attacks, that you yourself labeled a
crisis of confidence, you fueled the panic by undermining confidence
in the very institutions you were working for. Did it ever occur to
you for a moment that your actions might have hurt the poor and
indigent people in Asia that you care about so deeply? Did you ever
lose a night’s sleep thinking that just maybe Alan Greenspan,
Larry Summers, Bob Rubin, and Stan Fischer had it right – and
that your impulsive actions might have deepened the downturn or
delayed – even for a day – the recovery we now see in
Asia?
- Blame is tricky enough
when it focuses on a relatively concrete set of actions, such as IMF
financial and policy interventions. But it is particularly
problematic when one deals, at a level of summation, with the
abstraction of so complex a set of processes as those involved with
“economic globalization.”
- Just when we think we
have identified the malevolent enemy and have that source of trouble
in our sights, the image starts to blur and multiply. As we look
closely, we become not-so-certain observers of a long line-up of
suspects: greed; inefficiency; corruption, capitalism gone wild;
Marxism gone wild; unaccountable corporations; incompetent and
unaccountable governments; unethical local business practices; poor
policy regimes; cronyism; protectionism; polluters who do not pay;
population explosion unrestrained; secretive and manipulative Breton
Woods institutions; bloated UN bureaucracies; the boring and
cold-hearted profession of Economics; the fuzzy-minded irrationality
of the Humanities Department; the power-potent elite deciding our
fates in their own interests in the Council on Foreign Relations
and the Trilateral Commission; the legion of scruffy adolescent
protesters led into destructive negativism by power-hungry leaders
-- and on and on in endless procession. And just when we have
figured out whom to blame and what to demonize – reality
breaks in with yet more complications, qualifications, alternative
interpretations, and additional candidates for vilification.
-
- Maybe - - just maybe -
- finding someone to blame or something to demonize is not a
wonderful guide to an ethical public policy or communal spirituality
in dealing with economic globalization. Perhaps working ourselves
into an attitude of righteous indignation is just what Unitarian
Universalists should NOT do when we are trying to formulate a
Statement of Conscience on this subject.
- Five weeks ago, we
began by saying that this was a class primarily intended for persons
who have not made up their minds about economic globalization –
or at least for persons who have not entirely closed their minds on
this subject. At the start, we acknowledged that one of the
problems with this subject is its high level of abstraction, a
generality so pervasive as to make it vulnerable to the logical
fallacy of “reification,” the inappropriate imputation
of concreteness to an abstraction. Looked at in another way,
“economic globalization” can become a kind of Rorschach
test onto which we project whatever ideologically and emotionally
colored attitudes we bring to the table. We said that one way to
guard against these dangers is to look at contrasting views. Another
is to step down a level or two from our mountain-top general
inquiry, and tackle the important public policy choices that real
people face in the real world.
- Well, taking the
August 2002 Draft Statement of Witness as our text, what I would
like to do next is to address a set of key issues of globalization
that I call “The Eight Elephants on the Globalization Table,”
and they are listed in Exhibit 18 below.
EXHIBIT
18
EIGHT
ELEPHANTS ON THE TABLE
-
- ELEPHANT #1:
Elimination of rich nations’ barriers to
imports from developing countries
- ELEPHANT #2:
Using trade sanctions to raise environmental standards in
developing countries
- ELEPHANT #3:
Elimination of rich nations’ subsidies on
agricultural products that compete with the agricultural
products of developing countries
- ELEPHANT #4:
Changing the IMF’s role and practices with respect to
developing countries’ financial markets
-
- ELEPHANT #5:
Opening up developing countries’ producing
sectors to foreign competition
- ELEPHANT #6:
Determining how the poor in
developing countries have been affected by globalization
- ELEPHANT #7:
Offering debt relief to developing countries
- ELEPHANT #8:
Using doctrine as definition
- Let’s examine
these elephants one at a time.
- ELEPHANT #1
poses the issue of whether the United States and
other industrialized countries should eliminate tariffs and other
trade barriers on their imports from developing countries.
- In my view, the issue
of eliminating the barriers that wealthy nations maintain against
imports from the Third World is the biggest elephant on the table in
the globalization debate – by far the largest in its political
sensitivity, its potential effects on people, and hence its moral
significance. Economic globalization, our main concern
here, has its most far-reaching impacts through the medium of
international trade.
- International trade
consists predominantly of the movement of manufactures, agricultural
commodities and minerals across national borders. The moral
or ethical dimensions of the debate usually
refer to the effects of imports and exports on workers, living
standards, and environmental conditions. The spotlight is on poor
and vulnerable populations, particularly those in developing
countries.
- In previous classes,
we have heard that international trade has lifted the living
standards of hundreds of millions of people, but also that it has
had a disrupting influence on the lives of many others. The
venerable NGO, Oxfam, whose program we have examined in some detail,
has made the elimination of rich countries’ barriers to
imports from developing countries the centerpiece of its program for
raising living standards in the Third World. Its report, Rigged
Rules and Double Standards [at page 5] says:
-
- There is a paradox at
the heart of international trade. In the globalized world of the
early twenty-first century, trade is one of the most powerful forces
linking our lives. It is also a source of unprecedented wealth. Yet
millions of the world’s most powerful people are being left
behind. Increased prosperity has gone hand in hand with mass poverty
and the widening of already obscene inequalities between rich and
poor. World trade has the power to act as a powerful motor for the
reduction of poverty, as well as economic growth, but that
potential is being lost. The problem is not that international
trade is inherently opposed to the needs and interests of the poor,
but that the rules that govern it are rigged in favor of the rich.
-
- The human costs of
unfair trade are immense. If Africa, East Asia, and Latin America
were each to increase their share of world exports by one per cent,
the resulting gains in income could lift 128 million people out of
poverty. Reduced poverty would contribute to improvements in other
areas, such as child health and education.
-
- In their rhetoric
governments of rich countries constantly stress their commitment to
poverty reduction. Yet the same governments use trade policy to
conduct what amounts to robbery against the world’s poor.
When developing countries export to rich country markets, they face
tariff barriers that are four times higher than those encountered by
rich countries. Those barriers cost them $100 billion a year- twice
as much as they receive in aid.
-
- Various polite
formulations can be found to describe the behavior of rich-country
governments. But the harsh reality is that their policies are
inflicting enormous suffering on the world’s poor. When rich
countries lock poor people out of their markets, they close the door
to an escape root from poverty.
- But of course there
are other views. Let’s listen to two voices at the hearings
held by the United States Trade Deficit Review Commission held in
Pittsburgh in late October 1999:
-
- George Meany,
President of the American Federation of Labor and Congress of
Industrial Organizations:
-
- Working people know
from direct experience the tremendous costs borne by families and by
communities when imports or outsourcing displace good-paying jobs. A
$300 billion trade deficit represents $300 billion worth of goods
not produced here in the United States, not supporting
families, not contributing to the tax base.
- While growth in the
trade deficit may have only a small impact on aggregate employment,
it clearly affects the composition of employment, causing
manufacturing jobs to be replaced by lower-paying service jobs.
This trade deficit has been a significant contributor to the loss of
over 500,000 manufacturing jobs since March of 1998. This job loss
affects not only the workers and communities directly impacted, but
also the overall health of the U.S. economy, as the shift from
manufacturing employment to service sector jobs contributes to
greater wage inequality and slower productivity growth.
-
- Manufacturing
employment pays higher than average wages and contributes much to a
more equal income distribution. The average hourly wage in
manufacturing is 20% higher than the median national wage, and
manufacturing jobs are more likely to pay health and pension
benefits than the average U.S. job. Manufacturing jobs provide a
ladder to the middle class for millions of American workers who
don’t have a college degree.
- Paul Wilhelm,
President of U.S. Steel Corporation:
-
- The question you have
to ask is why is the U.S. market the largest place for steel
dumping. At first, it’s because the world steel industry has
an extraordinary huge excess capacity of approximately 250 million
tons, which is largely the result of government policies in
subsidies.
- Secondly, because most
of the world’s steel is subject to private and public
restraints on trade. Those are restraints in which our industry in
the United States does not participate.
-
- Domestic cartels in
major steel markets like Japan, foster dumping. Cartel arrangements
between mills in different countries restrict trade flows between
national markets and world regions. These arrangements have the
effect of channeling dumped steel production into the United States
markets. Government restrictions on imports also limit international
steel trade flows and access to some of the world’s largest
steel markets, including the European Union, China, Japan, and
Brazil.
- the environment,
threaten to undercut support for WTO initiatives in the United
States and other countries.
-
- T.N. Srinivasan,
Professor of Economics at Yale, is one of several well-known
economists of Asian Indian background who view international trade
as a potentially constructive force. He has little patience with
apologists for wealthy nations’ trade barriers. He castigates:
-
- The unholy alliance of
protectionists -- consisting of industrial trade unions in the rich
countries, such as the American Federation of Labor and Congress of
Industrial Organizations (AFL/CIO), masquerading as champions of the
welfare and rights of workers (particularly child and female
workers) in emerging markets, naïve do-gooders who may be
genuinely concerned with the welfare of children and misguided
environmentalists . . . [“Commentary.” Federal
Reserve Bank of St. Louis Review, July/August 2000, p. 25.]
- So what should be our
denominational position on restricting imports from low0\-wage
countries into the United States? Yea or nay? The Draft
Statement of Conscience in fact says nothing about
this largest of all elephants on the table, one that is clearly
within the control of our government. The Draft SOC mentions the
word, “trade agreements” twice, once in connection with
including environmental provisions (discussed under Elephant #2
below) and once in connection with trade agreement intellectual
property provisions, but does not connect them to a position on
barriers to our imports from the Third World. One might even say
that the Draft SOC’s failure to deal with the very tough issue
of U.S. restrictions on imports from developing countries denotes a
moral predicament of our own.
-
- Let’s turn now
to Elephant #2, Using trade mechanisms to raise environmental
standards in developing countries. “Trade” is
only mentioned once in the Draft SOC. It is contained in a sentence
in the section on the interdependent web of all existence that
says:
- We must advocate for
trade agreements that safeguard the natural environment including
the air and the oceans.
- As we shall see, that
short single sentence is quite ambiguous, perhaps even confused.
Nevertheless, the idea that environmental conditions in developing
countries are being worsened by economic globalization and can be
improved by attaching sanctions or other conditions to trade
arrangements is an important one. So we will give this single
sentence fairly careful scrutiny
-
- In September of 2001
President Bush signed the implementing legislation for the United
States-Jordan Free Trade Agreement (FTA). It contains the first
environmental provisions ever negotiated into a bilateral trade
agreement. Alia Hartough-Boran and John Audley of the Carnegie
Endowment for Peace describe these environmental provisions as
follows:
- The environmental
provisions of the FTA . . . obligate both countries to “strive
to ensure” that lax environmental laws do not encourage trade,
as well as to establish high levels of environmental protection.
Commitments like these should be familiar to many businesses, as
they mirror language found in environmental management systems like
ISO 14000 and Responsible Care.
Nowhere in the agreement do the countries agree to adopt or enforce
standards set by the other – in fact, there is language that
explicitly recognizes the right of each country to exercise
discretions in setting its own standards for the environment and
economic development. What this language implies is that both
countries will take into consideration the environmental
implications of increased economic activity, and not use the
environment as a guise for protectionism. [Carnegie Endowment for
International Peace Global Policy Program,
http://www.ceip.org/files/Publications/audleyjordan.asp?p=43&from=pubdate
]
-
- Is the U.S.-Jordan
trade agreement what the Draft Statement of Conscience has in mind
when it says “We must advocate for trade agreements that
safeguard the natural environment ,,,”? Or must we advocate
something tougher and more intrusive than these provisions? If so,
you can expect opposition from the developing countries and those
who champion their cause – as well raised eyebrows from
advocates of free trade elsewhere.
-
- In Rigged Rules and
Double Standards, Oxfam says:
-
- Whatever problems may
be associated with the expansion of exports, their contraction would
destroy the livelihoods of millions of women workers and small
farmers. Nor is trade necessarily damaging to the environment as
some critics allege. There is no doubt that badly managed trade can
contribute to environmental damage, both locally and globally. But
the same applies to any form of production, whether for local or
global markets, which fails to take into account the need for
environmental sustainability. (page 23)
-
- Serious environmental
problems have emerged, posing a threat to public health. Yet these
outcomes are a consequence of domestic policy failures, not an
inevitable consequence of trade. The case of East Asia demonstrates
that it is possible to reap enormous benefits from progressive
integration into the world economy, provided the process of
integration is well managed. By the same token, there are other
developing regions – notably Sub-Saharan Africa which
demonstrate the simple truth that it is perfectly possible to
combine weak performance on exports with social, economic, and
environmental disaster. (page 52)
-
- Globaphobia,
authored by senior analysts from the Brookings Institution and the
Progressive Policy Institute, says:
-
- . . . one must also
honestly confront the reality that insisting that another country
adopt tougher labor and environmental standards for its citizens
will reduce the likelihood that any agreement is reached. In this
light, it is legitimate to ask whether the real purpose of those who
favor standards linkage to trade is to help those overseas or
protect certain workers at home. (page 124).
-
- Multilateral
environmental agreements (MEAs) like the Kyoto Accord on Global
Warming and the Montreal Protocol on Substances that Deplete the
Ozone Layer (as distinguished from bilateral trade agreements) have
been the customary means of handling transnational air and sea
issues.
-
- In Globalization,
Growth, and Poverty, the World Bank says:
-
- There are various
proposals to introduce new issues into [trade] negotiations. These
proposals rightly generate concern among developing countries. In
particular, they oppose the notion of using trade sanctions to
impose labor and environmental standards. There is a real danger
these would turn into new protectionist tools. Improving standards
and working conditions is at the heart of the development process
and requires a legal framework and programs . . . to be developed
and expanded. Our assessment is that measures to support these
positive programs offer a great deal more than the use of punitive
sanctions – especially when the risk of protectionist capture
of labor standards is taken into account. (pages 64-65)
-
- Already, more than 200
multilateral environmental agreements (MEAs) have been concluded.
The result is a form of environmental globalization – a
growing international structure for environmental management
reflecting the diversity of issues and interests involved. . . .
-
- In general, trade
restrictions are not the best option to protect the environment.
Measures should be designed to affect the primary source of the
problem in production, consumption, or waste disposal, regardless of
whether the product is internationally traded. Where one country’s
production or consumption decisions impose environmental
externalities, such as acid rain, global warming, and biodiversity
destruction, MEAs should be established to tax unwanted emissions or
fund the installation of appropriate technology or institutions.
Only if this approach is not feasible may there be a theoretical
case for using trade policy. . . .
- . . . to force
developing countries to adopt OECD-quality environmental standards
through trade threats would be an abuse of power by industrial
countries. Tariffs would be a form of taxation on poor countries –
and in reverse. If rich countries want higher standards than poor
countries would themselves choose, they should induce poor countries
to adopt higher standards through incentives rather than coercion.
(pages 138-139)
-
- The World Bank report
also argues that while domestic economic growth
has caused environmental problems in developing countries, their
exports have not.
-
- During the third
[current] wave of globalization, the new globalizers have indeed
increased their share of global industrial production. This has
increased their share of pollution intensive industries. However,
this increased production of pollution-intensive goods was not
related to exporting: it largely met domestic demand. Developing
countries harnessed their comparative advantage in labor-
intensive industries, not in pollution-intensive
industries. They have not increased their share of
pollution-intensive industrial exports. Indeed, their exports to
rich countries are less pollution-intensive than their imports. The
rich countries have actually increased their comparative advantage
in pollution-intensive industries despite stricter environmental
standards. . . . developing countries do face severe problems of
industrial pollution, but not as a result of pollution haven
effects. Indeed, foreign-owned plants in developing countries,
precisely the ones that according to the theory would be attracted
by low standards, tend to be less polluting than indigenous plants
in the same industry. Most multinational companies adopt
near-uniform standards globally, often well above local
government-set standards. This suggests that they relocate plants
to developing countries for reasons other than environmental
standards. Paradoxically, the pollution haven effect may be more
important within the national boundaries of a developed country than
between rich and poor countries. (pages 132-133)
-
- So, where are we now?
It is really not clear whether the intention of the single sentence
in our Draft Statement of Witness is to introduce trade sanctions
into current multilateral agreements where they do not presently
exist, to encourage the more widespread use of the fairly bland
environmental provisions of the bilateral U.S,-Jordan trade
agreement, or to employ any form of leverage available to us to
mandate that the environmental standards in developing countries
that more nearly approximate our own.
- Should the Statement
of Conscience specify the objectives we are pursuing as we advocate
including environmental provisions in our trade agreements? Should
we be explicit about what kinds of environmental provisions we seek
to have governments include in which kinds of agreements? And, if
so, is not more than a single sentence on this subject required?
-
- ELEPHANT #3,
poses the issue of whether rich countries should be
permitted to subsidize agricultural products that compete with the
agricultural products of developing countries.
- We usually think about
barriers to trade as consisting of tariffs and quotas and
antidumping procedures that directly restrict imports. Agricultural
subsidies have less obvious effects on international trade, but they
operate in ways that both defend domestic agricultural producers
from imports and attack the markets of foreign producers. They
defend the domestic agriculture of a rich country by lowering the
price of food below levels that can be matched by imports from
abroad. By means of subsidized prices, they also attack markets
served by farmers in foreign countries that cannot afford such
subsidies - - as most developing countries cannot. Though often put
forward on environmental or socio-cultural grounds (“save our
country’s family farms and farm communities”), these
subsidies often have the effect of tilting the playing field against
poor farmers in developing countries.
-
- Oxfam says [at pp.
112-113 of Rigged Rules and Double Standards]:
-
- Farmers in the poorest
nations are competing not just against farmers in the industrialized
world, but against the financial power of the world’s richest
countries . . .
-
- The sheer scale of
Northern subsidization, and the resulting unfairness of
international trade, can be demonstrated by some simple comparisons:
-
- Total OECD
agricultural subsidization exceeds the total income of the 1.2
billion people living below the poverty line.
-
- The program of
“emergency” farm payments exceeds the UN’s
humanitarian aid budget.
-
- During the Uruguay
Round of world trade talks, European and US negotiators reduced the
debate on agricultural trade liberalization to a game of semantics.
Having agreed in principle to reduce subsidies, they proceeded to
change the definition of a subsidy to allow them to continue on a
business-as-usual basis.
- The World Bank’s
position on this issue accords with that of Oxfam, Greenpeace,
Friends of the Earth, and several other NGOs. A recent World Bank
report, Global Economic Prospects 2002
[http://www.worldbank.org/prospects/gep2002/toc.htm at p. 171]
contains a projection showing that removal of all barriers to
trade including subsidies could result in additional income
to low and middle income countries of $539 billion in 2015. Of this
amount $390 billion (72%) represents these countries’
additional income from agriculture and food, $123 billion (23%)
would be additional income from textiles and clothing, and $27
billion (5.0%) represents all other sectors. So the potential gains
from removing agricultural subsidies far outweigh the gains in other
sectors.
-
- These subsidies do, of
course, protect the jobs of farm workers in the United States,
Europe, Japan, and other high income areas. They ensure the survival
of at least some family farms and sustain local enterprises that
provide agricultural inputs, storage, transport services, and
financial services required by local agricultural production units.
Ironically, however, large corporations, rather than individual farm
families, are the largest beneficiaries of these subsidies.
- Our Draft Statement of
Conscience is silent on agricultural subsidies, a public policy that
is fully within the control of our own government. Should we take a
position on this subject? And, if so, what should this position be?
- Up to this point, we
have been talking about sectors that produce physical outputs, such
as food, garments and petroleum. We now turn to finance. ELEPHANT
#4 concerns what should be done about the IMF, its
interventions in times of financial crisis, and its policies on
opening developing countries’ capital markets as part of a
structural readjustment process for highly indebted countries.
- In the past, the IMF
and the World Bank have encouraged developing countries to open
their financial sectors to outside competition. In the case of loans
requiring compliance with IMF guidelines, this policy has been
mandated. A number of analysts have opined that the premature
opening of financial sectors in developing and transition economies
were major contributors to the financial crises of the late 1990s.
- David Korten’s
solution to such problems is to decommission the IMF along with the
World Bank and the World Trade Organization [When Corporations
Rule the World, Second Edition, p. 281]. Korten would replace
the IMF with a UN International Finance Organization. This
replacement organization would maintain a central data base on
international accounts and facilitate negotiations among trading
partners to correct imbalances, but it would have no lending or
structural adjustment role. Its main purpose would be to “free
national and global finance from the distortions of international
debt and debt-based money.”
-
- Joseph Stiglitz says
that trying to eliminate the IMF is pointless. If the IMF were
abolished, he says, [in Globalization and Its Discontents, at
page 215] it would likely have to be recreated.
- Stiglitz’
concerns have been with the IMF’s market ideology, its
identification with the interests of the financial community, its
lack of transparency, its drive to expand of its own role and
funding, and its failures during the financial crises of the
late1990s. He finds fault with the IMF practice of “bailing
in” of private sector creditors, a process which requires
these creditors to forgive portions of their loans as the IMF
supplies funds to enable developing countries to meet their
remaining obligations in times of financial crisis. [page 203-205]
He also criticizes the IMF’s opposition to government controls
on movement of foreign exchange in and out of developing countries
(e.g., restricting inflows or delaying the repayment of short-term
dollar loans during periods of capital flight.) He cites Malaysia’s
successful defiance of this IMF canon during the crisis of the late
1990s. He compares Malaysia’s record of relative success in
dealing with financial turmoil with that of Thailand, a country that
followed the IMF’s advice and – Stiglitz says -- came to
regret it.
- Dr. Stiglitz believes
that the IMF should return to its original mission of providing
assistance to countries with good economic fundamentals that are
experiencing foreign exchange difficulties. He would relieve the IMF
of its responsibilities for transitional economies (like those of
the former members of the Communist bloc) and for structural
adjustment in highly indebted developing countries. The Fund should
focus on the task Keynes originally had in mind for the institution:
loaning hard currencies to countries with sound economies that
experience temporary shortages of foreign exchange, enabling them to
maintain employment, production, and imports -- and thus avoid
transmitting negative trends to their trading partners.
- As we saw
in our fifth class on Liberal Integration, Tom Friedman does not
share a gloomy assessment of the outcome of the financial crises of
the 1990s, nor does he level wrath at the IMF in The Lexus; and
the Olive Tree. He says [at pp. 452-453]: that globalization
did us all a favor by melting down the economies of Thailand, Korea,
Malaysia, Mexico, Russia, and Brazil in the 1990s, because it laid
bare a lot of rotten practices and institutions in countries that
prematurely globalized. He does not think the money-moving
“electronic herd” of lenders and investors can be
effectively controlled, without risking serious unanticipated
trouble.
- Paul
Blustein of the Washington Post has written a book entitled
The Chastening: Inside the Crisis that Rocked the Global
Financial System and Humbled the IMF (2001). Blustein agrees
with Stiglitz on capital controls, but disagrees with him on
bail-ins, which he sees as the IMF’s most effective and
socially equitable strategy.
- Neither does Blustein
buy [at page 377] Tom Friedman’s warning about attempts to
control the Electronic Herd:
- [Friedman] . . .
argues against putting “a little sand in the gears” to
slow the movement of hot money: “I don’t think it is
ever wise to put sand in the gears of a machine when you hardly know
where the gears are. If you put sand in the gears of such a fast,
lubricated, stainless steel machine, it might not slow down. It
could come to a screeching, metal-bending halt.”
-
- One doesn’t have
to be anticapitalism, or antiglobalism, to find this sort of faith
in markets inordinate. The “longhorns” within the Herd
– the Nikes, Hewlett-Packards, and other multinationals that
build factories abroad – may indeed convey the blessings of
resources and technology, but the fact remains that when the
“shorthorns,” or financial investors and lenders, become
too ebullient about a country, the excessive amounts of capital they
inject may lull the political leadership into ignoring festering
problems rather than addressing them. This clearly was a major part
of what was wrong in Thailand and Russia in particular.
-
- As for what happens
when the shorthorns’ sentiment suddenly turns negative, the
human cost of the recent slew of crises is reason enough to question
whether the result “did us all a favor.” Even if the
Thais, Koreans, and others ultimately gained by having their
countries’ rotten practices and institutions exposed, the
phenomenon of contagion offers yet another compelling reason for
doubting the wisdom of leaving global capital markets unfettered.
- Our Draft Statement of
Conscience (second dotted paragraph on the second page) says:
-
- The policies and
practices of the International Monetary Fund . . . must be
reevaluated and realigned, such that the freedom and dignity of
individuals in all countries must be the primary consideration in
the formulation of economic policy.
- What does this
statement mean? Do we think the IMF cannot fix itself and that we
know what should be done to set matters right? Or is this the
platitudinous advice of Polonius given to a Hamlet unable to make
hard choices in the face of an ambiguous reality?
-
- David Korten would
replace the IMF with a successor that would stay entirely out of the
loan and financial restructuring business, its current most
important functions. Is this what the SOC means by “reevaluated
and realigned”? Joseph Stiglitz would have the institution
abandon its liberalization initiatives and return to Keynes’
vision of its role in extending emergency foreign currency loans to
enable nations with sound economies to maintain full employment. Tom
Friedman offers no criticism of the IMF’s policies and would
leave the electronic herd to discipline itself on the basis of
experience. However, Friedman would have the IMF or other sources
commit funds to maintain minimum social safety nets once
“bad-borrowing” countries have set their policies and
practices right. Paul Blustein urges an expanded and more
interventionist IMF approach, enabling governments to clamp down on
outward capital flows and requiring the private sector to cut its
own returns in times of crisis. Which of these approaches reflects
the dictates of conscience as we see it?
-
- The World economy came
very close to a melt-down in the 1990’s, and issues of
international financial structure continue to be of very great
importance. However, as far as I can discern, our Draft Statement of
Conscience gives precious little guidance as to what, if anything,
should be done about it.
- Intervention in
financial markets before and during times of crisis is the rocket
science of economic globalization. The International Monetary Fund,
the institution primarily responsible for such interventions is
controversial and its policies are not easy to understand. If we
believe we know enough to take a moral position on the institution
and its policies, should we not be clear about what changes we
propose?
-
- ELEPHANT #5
concerns whether developing countries should open their own
producing sectors to foreign competition by
eliminating their barriers to imports
- Note that the question
of whether developing countries should be encouraged
(or required) to dismantle barriers to imports can be viewed as a
very different question from whether the rich countries should
remove their own. All three Breton Woods institutions -- the
International Monetary Fund, the World Bank, and the World Trade
Organization – are engaged in giving advice and/or
establishing mandatory requirements for developing countries’
trade regimes.
-
- Our Draft Statement of
Conscience in fact lumps all three institutions together. To repeat,
it says:
-
The policies and practices
of the International Monetary Fund, the World Trade Organization,
and other financial institutions advancing globalizatin must be
revaluated and realigned, such that the freedom and dignity of
individuals in all countries must be the primary consideration in
the formulation of economic policy.
-
- In the past, the World
Bank, the IMF, and WTO have – with the active support of most
of the governments of the industrialized countries -- urged
developing countries to open up their economies to international
trade in products. In Rigged Rules and Double Standards,
Oxfam argues that First World insistence that Third World countries
reduce their trade barriers is hypocritical [at page 26]:
-
- During their own
industrial development, today’s rich countries insisted on the
right to nurture infant industries behind protective tariffs.
Countries such as the USA and Germany categorically rejected free
trade until they had established themselves as major economic
powers. Unfortunately, the analogies are not just items of
historical interest. While rich countries keep the door to their own
markets firmly closed, they use their control over institutions such
as the WTO, the World Bank, and the IMF to open up
developing-country markets. The message from the rich countries can
be simply summarized: “Do as we say, not as we do.”
Unbalanced liberalization is one of the reasons why the benefits of
world trade are biased in favor of rich countries.
- The World Bank’s
Chief Economist has picked up, and perhaps attempted to co-opt, a
part of Oxfam’s own argument. Jagdish Bhagwati, Professor of
Economics at Columbia University has noted this move, and it is not
much to Bhagwati’s liking. In the OECD Observer for
November 22, 2002 (“Wanted: Jubilee 2010 for Dismantling
Protection”)., Dr. Bhagwati observes:
-
- This view was echoed
at a conference in New Delhi, when Nicholas Stern, Chief Economist,
World Bank, said it was “surely hypocritical of rich countries
to encourage poor countries to liberalize trade and to tackle the
associated problems of adjustment, while at the same time succumbing
to powerful groups in their own countries that seek to perpetuate
protection of their own self-interest.”
- Then Bhagwati rejoins:
-
- As a political
principle, this seems sound, but in economics, it is an elementary
error. As Joan Robinson famously said, if your trading partner has
rocks in his harbor, that is no reason to throw rocks in your own.
Many western NGOs and some church groups that often echo Mr. Sterns’
argument fail to understand that protection does the poor nations no
good. Rather, it adds to the harm.
- Dr. Bhagwati (and Joan
Robinson) echo Adam Smith’s arguments against mercantilist
trade theories and practices. Each of these economists rejects the
mercantilist notion that trade is a kind of warfare in which the
winning nations are those that maintain the biggest barriers, whilst
knocking down those of their trading partners. There may be winners
and losers within nations, so the free trade theory goes, but
the overall economies of both trading partners come out ahead. From
this perspective, international trade is a win-win, not a zero-sum,
game -- and unilateral reduction of trade barriers makes good sense
for developing countries.
-
- But there is another
viewpoint based on the “infant industries” theory. This
theory was first developed by Alexander Hamilton, elaborated by
Friedrich List, and adopted (and then abandoned) by John Stuart
Mill. In order to industrialize, it argues, an underdeveloped nation
must first provide a protected learning environment for the infant
industries essential to its economy. Given time to develop, the
theory runs, these industries will mature to the point that they can
face outside competition. If you do not protect your children, your
society will have no strong adults, it says.
- Industrialization
needs the equivalent of a golf handicap, a margin permitting growth
that can be reduced as a nation’s competence in production
improves. This, its advocates argue, is how the United States grew
from an agricultural nation into a great industrial power and how
the Tigers of Southeast Asia (Korea, Taiwan, Singapore, Thailand,
and Malaysia) got to be tigers.
- Others contend that
infant industries never grow up. Instead they become skilled at
hanging on to their large “handicaps” -- import
protection and subsidies. This, say opponents, is why the portions
of the Asian Tigers’ economies that have not been opened up to
trade remain noncompetitive and inefficient to this day, and why the
United States continues to protect steel, textile, and some portions
of its agricultural production against “unfair competition”
from abroad.
- Oxfam has developed an
analytical tool called the “Trade Liberalization Indicator”
(p. 131) to measure both the speed and depth of import
liberalization. It concludes that a number of countries that have
been very effective at exporting (e.g., China, Vietnam, and
Indonesia) have been slow to liberalize imports, whereas a number of
countries that have liberalized imports rapidly (e.g., Haiti,
Zambia, Nepal, Peru, and Bolivia), have not done as well at all. (p.
133).
- Will Martin of the
World Bank’s staff points out that 40% of developing
countries’ exports go to other developing countries [World
Bank Development Research Group, “Trade Policies, Developing
Countries, and Globalization” (October 9, 2001), p. 10,
www.worldbank.org/research/global
] and a recent World Bank report [Globalization, Growth, and
Poverty: Building an Inclusive World Economy (2002), p. 56.]
states that more than 70% of the tariff burden faced by manufactured
goods from developing countries is now imposed by other
developing countries. This report says that developing
countries would benefit a lot by reducing their tariff barriers
against each other.
-
- In “Economic
Reform and the Process of Global Integration (Brookings Papers on
Economic Activity, No. 1, 1995), Jeffrey Sachs and Andrew Warner
examine growth rates 1970-1989 for 117 countries, both rich and
poor. They conclude that the evidence supports the claim that
openness and related reforms are keys to growth for developing
economies. They reject the theories of Raul Prebisch (widely adopted
by Latin American countries following World War II) that developing
nations need early protection in order to develop import-competing
industries.
- However, Francisco
Rodriguez and Dani Rodrik challenge the Sachs/Warner conclusions in
“Trade Policy and Economic Growth: A Skeptic’s Guide to
the Cross-National Evidence,” NBER Macroeconomics Annual
2000’. They find little evidence that open trade policies,
in the sense of lower tariff barriers to trade and non-tariff
barriers to trade, are associated with economic growth.
[http://papers.nber.org/papers/w7081]
Neither, however, do they find credible evidence that trade
restrictions are associated with higher growth rates.
- Thus one set of
analysts compares the recent success of openness in Asia with the
failures of protection in Latin America and concludes that openness
is the proper policy for the developing world. Another group
believes that Asia’s recent success could not have occurred
had not it been built on a foundation of protection, and attributes
Asia’s recent difficulties to openness.
- Probably we will never
be entirely sure that national economic policy, as distinguished
from culture or governance or other variables, provides the most
important key to lifting a particular country at the bottom of the
scale out of poverty. However, I think it is fair to ask whether an
instruction to the effect that “freedom and dignity of
individuals in all countries must be the primary consideration in
the formulation of economic policy” provides sufficient
guidance to determine whether developing countries should or should
not maintain barriers to imports.
-
Let’s
turn to Elephant #6, which is concerned with debt
relief.
-
- The Draft Statement of
Conscience calls for the World Bank and other international
institutions to forgive the debts of the most indebted nations. The
statement does not provide a rationale for debt relief or describe
how the debt relief would be accomplished.
-
- The arguments put
forward elsewhere for debt relief include the following:
-
- Poor countries should
have access to a procedure, equivalent to bankruptcy, by means of
which their unsustainable debts can be written off, without the
imposition of any external requirements for policy change or reform
- Poor countries ought
not to pay off debts incurred by irresponsible leaders or
ineffective development projects
- Industrialized
countries are in debt to the developing countries because of an
extended period in which the terms of trade have been unfair,
capitalism has been exploitive, and/or environmental impacts on poor
populations have resulted from the extravagant use of resources by
the rich countries
-
Debt relief can become an
occasion for adopting reforms of the practices that got the country
into financial trouble
- Debt relief is a
politically acceptable way of providing foreign aid to developing
countries that rich countries would otherwise be unwilling to fund
- The IMF and the World
Bank presently collaborate in a program, called the HIPC initiative,
by means of which heavily [H] indebted [I] poor [P]
countries [C] can qualify for the writing down of their
external debts to sustainable levels. The objective is to insure
that no highly indebted country faces a debt burden it cannot
manage. The IMF describes this program in part as follows:
-
- Central to the HIPC
Initiative is the country’s continued effort toward
macroeconomic adjustment and structural and social policy reforms.
In addition, the Initiative focuses on ensuring additional finance
for social sector programs – primarily basic health and
education . . .
- The Initiative is not
a panacea. Even if all of the external debts of these countries
were forgiven, most would still depend on significant levels of
concessional external assistance; their receipts of such assistance
have been much larger than their debt-service payments for many
years.
- The idea of developing
a procedure that would enable nations to declare bankruptcy is now
being considered by the International Monetary Fund. Presumably,
the choice is between debt relief procedures that permit the IMF and
the World Bank to prescribe the conditions on which relief will be
granted, versus establishing a procedure that will simply wipe the
slate clean.
- William Easterly of
the World Bank argues that relieving the debts of highly indebted
countries does not work because the underlying problems are those
very similar to the spend-thrift behavior of individuals. Once
relieved, he says, many developing countries go right back to
accumulating debt. He concludes:
-
- Debt relief is futile
for countries with unchanged long-term preferences [behavior
patterns]. At best, only governments that display a fundamental
shift in their development orientation should be eligible for debt
relief. To assess whether governments have made such a fundamental
shift in preferences, some track record of development-oriented
behavior should be required prior to granting debt relief. There
were important steps in the 1996 HIPC initiative, which
unfortunately may have been weakened by the 1999 Cologne G-7
proposal that suggests speeding up the process of debt relief.
Official lenders should not keep “filling the financing gap”
in violation of prudential standards of creditworthiness.”
-
- So, is it to be tough
love or a fresh start without conditions? And, if it is to be a
fresh start without conditions, who provides the next loan, if there
is to be any?
- In the
first edition of his book, When Corporations Rule the World,
David Korten simply proposed shutting down the World Bank and the
regional development banks on the grounds that creating indebtedness
in the Third World is not a useful function (First edition, p. 323).
In his second edition, Korten says that the World Bank should be
replaced by a United Nations Insolvency Court that he calls UNIC [at
page 281]:
-
- Whereas the World Bank
has led low-income countries more deeply into debt bondage that
holds their economies and resources hostage to the predators of the
global economy, the primary responsibility of the UNIC will be to
help countries relieve themselves of this burden . . .
-
- An assessment process
would determine how much a country owes and is able to pay over time
without compromising its ability to perform essential governmental
functions, including the delivery of social services. The Court
would also review the country’s debt portfolio to identify
odious debts that were not legitimately contracted – which
would include many World Bank and IMF loans -- or were used for
purposes that yielded no public benefit – such as World Bank
designed projects that failed to produce the projected benefits due
to faulty design or negligent oversight. The UNIC would sanction
the repudiation of such odious debts on the basis of international
legal precedents. Repudiation of World Bank and IMF loans would
force them to call guarantees from their member countries to cover
their own debts, which would in turn build political support to
decommission them.
-
- A negotiated debt
relief plan would provide for the rescheduling, reduction, and
cancellation of the remaining debt on terms that would allow the
indebted government to continue necessary functions, including
delivery of essential social services. Such plans would ideally take
into account the implicit debt owed to the debtor country by
creditor countries in the North for the wealth previously extracted
without just compensation. Debt relief plans should include a plan
for freeing the country of international debt and putting in place
mechanisms henceforth to keep its international accounts in balance.
-
- Our draft Statement of
Conscience says the following:
-
- The policies and
practices of the International Monetary Fund, the World Trade
Organization, and other international financial institutions
advancing economic globalization must be reevaluated and
realigned, such that the freedom and dignity of individuals
in all countries must be the primary consideration in the
formulation of economic policy. Existing debt of the poorest
nations of the developing world needs to be forgiven by the World
Bank and other international lending agencies.
-
- What does this
language mean? Should the present IMF-World Bank HIPC program be
expanded and expedited? Should this program be replaced with an
international bankruptcy court for poor countries -- debt relief
without conditions? And if there are to be no conditions on debt
relief, what should happen next? Will the former debtors simply be
hung out to dry if they need to finance new roads, new factories, or
the construction of alternative energy facilities? Or is there to be
a new round of indebtedness and forgiveness? And if grants are to
replace loans, where – given the past behavior of the rich
nations of the world -- is the grant money to come from?
- Is it enough to state
our principles on this subject in general terms? Should we have
some idea of whether this statement on debt relief is taking us in
David Korten’s direction (eliminating World Bank and IMF
lending functions and establishing many ways to wipe the slate clean
of developing country debt) or toward the William Easterly’s
approach (insisting on evidence of changed behavior before reducing
debt) before we sign off on a denominational Statement of
Conscience?
- Elephant #7
concerns how poor populations in developing countries have been
affected as their nations have been integrated into the world
economy.
- This is about cause
and effect, and the interpretation of facts. I want to take some
time on this issue because, to my mind at least, it concerns
integrity in the presentation and characterization of evidence.
-
- The Summary Statement
of Conscience, contained in the boxed first paragraph of the Draft,
says the following:
-
- It
[economic globalization] has resulted in marginalizing and
impoverishing peoples of the developing world
and people of color, as well as the destruction of the environment
and the depletion of natural resources. [Summary]
-
- Let’s consider
that statement in the light of two studies, one done by the World
Bank (which is essentially favorable to globalization), the other by
The Center for Economic and Policy Research (reflecting a
contrasting view.)
- In your homework,
there is a brief summary of the World Bank Report, Globalization,
Growth and Poverty: Building an Inclusive World Economy
(December 2001). It concludes that 24 developing countries that
increased their integration into the world economy ending in the
late 1990s achieved higher growth in incomes, longer life expectancy
and better schooling. These countries, representing some 3 billion
people, achieved an average 5 per cent growth rate in income in the
1990s as compared with 2 per cent in the industrialized countries.
The World Bank report says that many of these countries have adopted
domestic policies and institutions particularly well suited to
global markets and have increased the share which international
trade contributes to their national incomes. These countries, which
include China, India, Hungary and Mexico, it says, are catching up
with the rich countries.
- However, according to
the World Bank report, about 2 billion people live in countries that
have not successfully integrated into the world economy. These
include countries in sub-Saharan Africa, the Middle East and the
former Soviet Union. The ratio of trade to national income in these
countries has actually declined, most of these economies have
contracted, poverty levels have risen, and educational levels have
risen more slowly than in other developing countries. The study
calls on developing countries to improve both their investment
climates and their social protection for poor people. It asks rich
countries to open their markets to exports from the developing
countries, to cut agricultural subsidies, and to greatly increase
foreign aid, particularly in the fields of health and education.
-
- The Bank report uses
the cases of China, India, Uganda, and Vietnam to illustrate the
potential of global integration to reduce poverty. In Vietnam the
income of the poor has risen dramatically, and the number of persons
living in absolute poverty has been cut in half within a decade.
Child labor has declined and school enrollment has increased.
- But there is a
striking divergence between the globalizers and the non-globalizers.
The number of poor people is falling rapidly in the globalizers and
rising in the rest of the developing world. Life expectancy and
education is rising in the globalizers to levels close to those
prevailing in the rich countries in 1960. And, while the data and
methodological approaches used in individual studies has been
questioned on occasion, the composite effect of all studies taken
together indicates these reported trends can be relied upon.
- So says the World
Bank. But there is another view.
-
- Mark Weisbrot is
Co-Director of the Center for Economic and Policy Research. Using
essentially the same basic data as the Bank, he and three colleagues
(Dean Baker, Egor Kraev, and Judy Chen) say something quite
different. In their report, The Scorecard on Globalization:
Twenty Years of Diminished Progress, [http://www.cepr.
net/globalization/scorecard_0n_globalization.htm]
- They say
that the twenty years before globalization (1960 to 1980) were much
better years for economic growth and social indicators than the
subsequent twenty years (1980-2000) in which globalization has
predominated. Rather than attempting to measure the impact of
policy on the countries’
success, they do two other things. First, they examine how much
improvement for the countries of the world as a whole took place in
the first twenty-year period and compared with the second
twenty-year period. They conclude that less progress was made in the
second twenty- year period than in the first twenty-year period.
The authors state [at page 4]:
-
… by
almost every measure, the progress achieved in two decades of
globalization has been considerably less than the progress achieved
from 1960 to 1980. This finding does not prove that the policies
associated with globalization are necessarily the cause of
diminishing progress (or even backsliding) in low or middle income
countries. Proponents of these policies could argue that other
factors were responsible, and without the benefits of globalization,
the deterioration in the performance of these countries would be
even worse. While this is possible,
it would then be necessary to identify what forces in the world
economy led the period from 1980 to 2000 to be so much worse for low
and middle-income countries than the period from 1960 to 1980. In
any case, the data presented here certainly contradict any claims
that the last two decades of the twentieth century were a time of
extraordinary progress for people living in the less affluent
countries – they were not.
-
Comparing the
overall rate of progress over these two twenty-year periods, was the
first thing that Weisbrot and his colleagues did. The second thing
was to divide countries into five groups for each of several
criteria such as GNP, life expectancy, and infant mortality. They
placed the countries into five categories as of 1960, and then held
the definitions of the categories constant over the period of forty
years from 1960 to 2000. Thus, as you can see from Figure 1, the
rate of growth of countries in the lowest category of $375-$1,121
per year actually has moved from positive to negative from the first
twenty-year period to the second. But note also that the number of
countries in this category
declined from 30 to 17 as some of the countries in the lowest
categories moved up the scale. The number of countries in the two
highest categories doubled.
- It strikes me that the
World Bank and Dr. Weisbrot have looked at the same data and asked
two quite different questions about it. Should we be trying to find
out what the winners are doing right so others can emulate them? Or
should we be asking whether the basic policies and systems now in
place have to be radically revised because globalization isn’t
solving the problems at the bottom end of the scale and the lagging
countries in fact are going backward?
-
Given the finding that the
worldwide growth rate has slowed down over the period of forty years
(as it has in the United States as well), I am not sure that the
pattern shown in Figure 1 is particularly remarkable. As some
countries have moved up the scale, they leave the less fortunate and
less effective behind. And, as the more fortunate countries move
into higher categories, they tend to bring down the averages of
their new locations because they usually start at the bottom of the
next higher echelon. Note that Figure 1 shows the absolute number of
countries in two highest categories doubled during the period under
consideration.
- Looking at the bottom
group of countries, whose numbers have dwindled over time, and whose
fortunes appear to have turned for the worse, I would like you to
consider a metaphor. What happens when the more successful members
of a community move out of the ghetto or off the Indian reservation
to a lower-middle class community? They leave the less affluent
behind and lower the average income of their former community. They
may also lower the average income of the more prosperous community
to which they are moving.
- Advocates of
globalization would say that it is unfair to blame globalization for
the condition of the countries at the bottom -- because the
countries that are stuck at the bottom are the very ones that have
not installed the reforms necessary to enable them to participate
effectively in the world economy. If you don’t do the right
things, no wonder you are in trouble, they would say.
- Thomas Carothers of
Carnegie Endowment for Peace makes the point that the larger part of
the poorest of the 40 to 50 poorest countries of the world are not
only poor – they are chronically poor reformers as well. [“The
New Aid,” Washington Post Op-ed, April 16, 2002.]
- So how does it help
matters for development institutions to say that policy reform is
the key to the salvation of these countries at the bottom? And how
is it legitimate for contrarians to blame the troubles of these
countries on globalization, rather than on, say population
explosion, topographical isolation, centuries-old ethnic strife,
external warfare, deep-seated governance issues, chronic natural
disasters, and/or a seemingly congenital inability to install policy
reforms?
- One can look at the
events in the former Yugoslavia or Zimbabwe or Burma or Afghanistan,
countries that have been sliding backwards over time, and ask
whether their difficulties -- and the difficulties of countries like
them -- can legitimately be ascribed to globalization.
- Should we rhapsodize
about the winners, and try to understand what China, India, Hungary,
Mexico, and Uganda have done (or are supposed to have done) right?
Should we urge every other country to follow the same pattern
because these winners seem to be more or less successful? Or should
we agonize about the losers -- wherever they are -- and ascribe
their chronic difficulties to outside influences, such as
globalization or colonialism or capitalism or elitism?
- Or should we
acknowledge that we not yet know how to fix the problems of the
least developed countries at the bottom of the pile, that we simply
have to try one thing and then another until something works - - and
stop looking for someone to blame?
- There is
plenty of evidence to indicate that international trade and other
dimensions of globalization create both winners and losers. The
absence of effective safety nets in most of these countries means
that the effects on the lives of individual losers can be
devastating. However, I have yet to see a convincing case that the
poor in developing countries are losers on balance, and
the opposite well may be the case.
- In
summary, there does not appear to be a sound factual or analytical
foundation for the summary statement that economic globalization,
has resulted in marginalizing and impoverishing peoples of the
developing world and people of color, with its
strong implication that the number of losers exceeds the number of
winners and economic globalization is somehow responsible for the
circumstances of countries that maintain policies contrary to
international trade. Given evidence that increasing international
trade has been associated with improvements in the lives of many
millions of people in some parts of the developing world, a
statement of this kind seems intemperate and misleading, if not
plainly untrue. That, as I see it, is what Amartya Sen seeks to
convey in his mild way when he says “By
claiming that the rich are getting richer and the poor are
getting poorer, the critics of globalization have, often enough,
chosen the wrong battleground.” [“A World of
Extremes: Ten Theses on Globalization”
(www.globalpolicy.org/globaliz/define/0717amrt.htm)]
Would it be better to say that the gains from international trade
should be more equitably shared with those who are adversely
affected by it, both as a matter of fundamental fairness and in
order to better equip such persons to adjust to a changing world?
-
- Now we come to our
Eighth Elephant on the table, using doctrine as
definition. Here are a few passages from the draft Statement of
Conscience:
-
- From the Draft SOC
section on “Defining Economic Globalization:”
-
- The underlying theory
of economic globalization is the unleashing of unregulated free
market competition, driven by self-interest as measured by the
accumulation of capital.
- And next, from the
section on “Benefits and Liabilities:”
-
- The market forces of
globalization are driven predominantly by economic imperatives set
forth by the United States. Economic globalization is, therefore,
increasingly perceived as America’s imperialist colonization.
-
- And next:
-
- The globalization
ethic has allowed systematic exploitation of labor and the
environment, coercive monopolistic pricing of goods and services,
criminal evasion of local legal controls, growing debt among
developing nations, widening gaps between economic classes, and
devastation of traditional culture in societies marked by
urbanization and exploitation.
-
- And
finally, from the concluding paragraph:
-
- . . . we are
challenged to bring a spirituality of resistance to privilege. Such
a spirituality of resistance to globalization would have us turn
from fierce individualism firing a self-serving globalization toward
a relational sense of ourselves in a globally inclusive community of
all living things. [Concluding paragraph]
-
- I think it is fair to
say that these characterizations do not waste a whole lot of time
emphasizing the positive contributions of international trade,
investment, and markets to living standards in the Third World. Nor
do they dwell on the failings and limitations of government in Third
World countries or elsewhere.
-
- The intractable
problems of the least developed countries – the combination
of poorly functioning economies, poorly functioning governance
structures, and a range of other serious internal difficulties --
seem to disappear in the face of a vision of the onrushing forces of
capitalist greed and destruction. This singular threat is to be met
through a spirituality of personal resistance and a vision of a
different kind of society – yielding a kind of protestors’
credo. In the words of the Reverend Dr. Marilyn Sewell, whom we met
in our second class:
-
- We wonder what to do
in the face of such insurmountable forces as these that rule our
economic lives. Well, we can say no, and no, and no. We can say no,
until they hear us. And we can say yes, here is a new way.
-
- But after we say “No
and no and no,” the intractable problems of the least
developed countries are still there. And I think it is reasonable
to ask, “In what new way?”
- In our fifth class,
Greg Palast (The Best Democracy Money Can Buy, page 74)
introduced us to the southern Indian State of Kerala, “a
laboratory for the humane development theories of Amartya Sen,
winner of the 1998 Nobel Prize for Economics. “As the world’s
most literate state, it earns its hard currency from the export of
assistance to Gulf Nations.”
- Another name for
“export of assistance,” however, is “international
trade in services.” Rich nations earn hard currency this way,
too.
-
- “In what new
way?”
- Joseph Stiglitz says
[Globalization and Its Discontents, page 217]:
- But there is not just
one market model. There are striking differences between the
Japanese version of the market system and the German, Swedish, and
American versions. There are several countries with per capita
income comparable to that of the United States, but where inequality
is lower, poverty is less, and health and other aspects of living
standards higher (at least in the judgment of those living there).
While the market is at the center of both the Swedish and the
American versions of capitalism, governments take quite different
roles. In Sweden, the government takes on greater responsibilities
for promoting social welfare; it continues to provide better public
health, far better unemployment insurance, and far better retirement
benefits than does the United States. Yet it is every bit as
successful, even in terms of innovations associated with the “New
Economy.” For many Americans, but not all, the American model
has worked well; for most Swedes, the American model is viewed as
unacceptable – they believe their model has served them well.
For Asians, a variety of Asian models has worked well and this is
true for Malaysia and Korea as well as China and Taiwan, even taking
into account the global financial crisis.
- International trade,
it should be noted, has played a significant
role in the growth of each of the countries cited by Stiglitz as
successful models, be they considered capitalist, socialist,
communist, or “mixed.”
- “In what new
way?”
- Ralph Nader would
withdraw the United States from NAFTA and the WTO. David Korten
would eliminate the basic functions of the World Bank and the IMF on
the grounds that these institutions do more harm than good as they
unleash the unregulated forces of capitalism on the world..
- With the Draft
Statement of Conscience’ definition of globalization we come
back to our first class in which “Beware of where a definition
is leading you” was offered as a fundamental lesson. How
comfortable should we be with the definition in the Draft Stastement
of Conscience that incorporates the statement, “The
underlying theory of globalization is the unleashing of unregulated
free market competition, driven by self-interest as measured by the
accumulation of capital”?
- As we saw in that
first class, there is not one but instead several theories of
economic globalization. In Class 4, we discussed the classical
theory of “comparative advantage” as we visited with
Conservative Integrationists. And we saw that modifications and
limitations of that theory have been suggested by Michael Porter of
the Harvard Business School (The Competitive Advantage of
Nations) as well as in the work of Dani Rodrik (Has
Globalization Gone Too Far?), an economist of the Liberal
Separatist Lite persuasion at the Kennedy School on the other side
of the river. In this class, we have been introduced to the
Hamilton/List/Mill theory of infant industry protection.
-
We also saw in our first
class that there are various socio-political theories of
globalization, described in the Oxford Companion to Politics
as those of the “hyperglobalists,” the
“transformationalists,” and the “skeptics.”
-
Books such as
Globalization in Question (Paul Hirst and Grahame Thompson
(London: Blackwell Publishers, Ltd. 1996, 1999) and The Follies
of Globalization Theory (Justin Rosenberg, London: Verso, 2000),
written by social scientists associated with the skeptical camp,
take strong issue with the hyperglobalists and the
transformationalists. So there is a big academic debate going on
with respect to globalization theory.
- Is a statement to the
effect that the underlying theory of economic
globalization is “the unleashing of unregulated free market
competition” intellectually supportable when there appear to
be quite a variety of contrasting theories from which to choose and
they are presently the subject of vigorous academic debate? When we
say “the underlying theory of economic
globalization” and “the globalization
ethic,” are we engaged in a free and responsible search for
truth and meaning? Or are we propounding dogma?
- Why not just go ahead
and define the phenomenon (globalization) without
reference to a theory?
- Oxfam [at page 32 of
Rigged Rules and Double Standards] says:
- In the most general
terms, “globalization” describes the growing
interdependence of the countries of the world.
-
- Is it necessary to say
more than that? Well, Joseph Stiglitz goes a little bit further. He
says [at page 10 of Globalization and its Discontents]:
- Fundamentally, it is
the closer integration of countries and peoples of the world which
has been brought about by the enormous reduction of costs of
transportation and communication, and the breaking down of
artificial barriers to the flows of goods, capital, knowledge, and
(to a lesser extent) people across borders.
- And Amartya Sen goes a
bit further still. In Bridges Between Trade and Sustainable
Development, [quoted at page 335 in the Second Edition of When
Corporations Rule the World] he says:
-
- Opponents of
globalization see it as a new folly, but it is neither particularly
new nor, in general, a folly. It is largely an intensification of
the processes of interaction involving travel, trade, migration, the
dissemination of knowledge that have shaped the progress of the
world for millennia. The polar opposite of globalization is
persistent separatism and relentless autarchy.
-
- That last statement
brings forth an energetic disavowal from David Korten. Responding to
this passage from Dr. Sen, Dr. Korten says [also at page 335 of the
Second Edition of When Corporations Rule the World]:
-
- When corporate
globalists say globalization is beneficial and inevitable, most
people nod their heads and say “of course.” When
protesters say they are against globalization, they sound like
xenophobic crazies to those who, like Sen, aren’t aware
that globalization is a code word for global corporate rule at the
expense of democracy, people and planet. [emphasis added]
The resulting miscommunication is a dream come true for the
corporate spindoctors.
- If we define
“globalization” as a “code word for global
corporate rule at the expense of democracy, people, and planet,”
does that turn a definition into a conclusion? And, when the
definition section of our Draft Statement of Conscience says:
-
- The underlying theory
of economic globalization is the unleashing of unregulated free
market competition, driven by self-interest as measured by the
accumulation of capital . . .
- . . . does that turn a
definition into a conclusion as well?
-
- Well, so much for
Elephant #8, and my many rhetorical questions concerning
definitions.
-
- I would now like to
make some comments about where the August Draft Statement of
Conscience fits into our basic framework and then conclude with a
few words about a thought experiment.
- Let’s start on
our final lap by going back to Exhibit 1 from our first
class.
-
EXHIBIT
1
BASIC
FRAMEWORK
- LIBERAL
INTEGRATIONIST CONSERVATIVE INTEGRATIONIST
-
Persona: James
Wolfensohn Persona: Alan Greenspan
-
Message: Humanize
Globalization Message: Efficiency Lifts All Boats
- Book: The Lexus
and the Olive Tree Book: The Competitive Advantage of
(Thomas Friedman) Nations (Michael Porter)
-
- LIBERAL
SEPARATIST CONSERVATIVE SEPARATIST
-
Persona: Ralph Nader
Persona: Pat Buchanan
-
Message: Protect Them
Against Us Message: Protect Us Against Them
-
Book: When Corporations
Rule the World Book: Death of the West
- (David Korton)
(Pat Buchanan) .
- “Protect Them
Against Us” is the message that seems to me most prominent in
the content of the draft SOC. There is none of the explicit
nationalist protectionism of the Conservative Separatists (e.g., Pat
Buchanan), although some latent ambiguity concerning the
protectionism issue may reside within the SOC’s treatment of
trade agreements. Neither is there any of the “efficiency
lifts all boats” rationale of the Conservative Integrationists
Nor does the SOC combine the commitment to free trade with the
emphasis on improved safety-nets that are the hallmarks of the
Liberal Integrationists.
- The Draft SOC
certainly contains much of the negative rhetoric on globalization
reminiscent of that we have heard from Liberal Separatist Heavies
during this course:
-
At the same time, the
Draft SOC does acknowledge that economic globalization (or at least
“globalization” stripped of the adjective “economic”)
has benefits -- even if it seems to take particular care to link
them with liabilities:
-
- Globalization brings
with it us many benefits, but the fruits of globalization have been
inequitably distributed and many of its costs have been
disproportionately paid by the least able. As a community of faith,
Unitarian Universalists are challenged to do what we can to reverse
the devastation it has created without becoming part of a myopic
backlash against it.
-
- Although some people,
especially those with access to capital, have enormously benefited
from complex economic global transformation, many people have not
and are becoming increasingly angry. . . . Often despite the world
being more technologically integrated, many so-called “winners”
feel increasingly isolated.
- I think it is fair to
say that the SOC gives faint praise to the “benefits” of
economic globalization.
- In our second class, I
described the differences between the two versions of Liberal
Separatism as follows:
-
- What clearly marks the
border between Liberal Separatism Heavy and Lite is the difference
in their respective assessments of the desirability of external
trade. The Heavies prefer to minimize external trade in favor of
goods of national or local origin. The Lites view external trade as
a potential boon to disadvantaged nations and their needy
populations.
- The Heavies are
inclined to reject economic growth as a strategy for poverty
eradication, citing environmental concerns and cultural values as
key considerations, and seeing localization as a preferable
alternative. . . The Lites see serious current problems with the
current international trade regime, but believe lowering some kinds
of barriers to trade can help to lift large numbers of people out of
poverty.
-
- The Draft SOC reflects
none of the Liberal Separatist Lite optimism that properly managed
trade is a positive social instrument for relieving poverty in the
Third World. The most positive sentence in the SOC in this regard
says:
-
- The current expansion
of economic growth has contributed mightily to the high standard of
living enjoyed by many in the West and by others living and working
elsewhere in the world.
- But even that sentence
conveys the sense that benefits accrue almost exclusively to people
who are better off. There is no recognition of international
trade’s role in poverty reduction in the Third World, past or
potential. That particular lamp of social justice seems to have
been hidden under a bushel labeled “others working and living
elsewhere in the world.” The Draft’s evocation of a
“spirituality of resistance to privilege” well fits the
mold of the anti-globalization movement. The reluctance to give
Liberal Separatist Lite pro-trade themes their due in the Draft SOC
leads me to conclude that it is mostly a Liberal Separatist Heavy
document, as shown in Exhibit 19 below.
EXHIBIT
19
LIBERAL
SEPARATISTISM AND THE DRAFT SOC
![](lerner-6R_html_m5da86653.gif)
- On the basis of what I
have observed in preparing and presenting this course, I would guess
that the UUs who feel most passionately about the subject of
economic globalization are likely to hold Liberal Separatist Heavy
views. Many deeply committed persons identify with the
anti-globalization movement, even if they may not have been directly
involved in it. They share the concerns expressed by David Korten
in When Corporations Rule the World, and are inspired by his
vision of a better world based on greater local self-sufficiency.
They see and feel the pain of the world’s poverty, which they
attribute to unrestrained capitalism and corporate control. They
recoil from the fearsome onrush of economic globalization described
in William Greider’s One World Ready or Not, and do not
want that kind of world. They are ready to work for very large
changes in our institutions and our public policies. The views of
such committed persons, I believe, are embedded in the August 2002
Draft Statement of Conscience.
-
- I think that heart
and soul of the August 2002 draft SOC lies largely outside of
the shaded areas shown on Exhibit 19. The shaded areas
on the chart represent the views of those who believe that economic
globalization and our existing institutions possess the capacity to
make the world a much better place, and that they should be our
instruments of choice in dealing with the world’s poverty.
The unshaded areas represent the views of those who see economic
globalization – particularly imports from low-wage countries
-- as destructive of workers’ lives and of the environment.
- While those with
Liberal Separatist Heavy views are probably among the most active
and articulate among us, I would hazard a guess that a considerably
larger number of UUs lean toward one of the positions shown in the
shaded portions of the Exhibit 19. They are either integrationists
of kind or another, or incline to the Separatist Lite position that
rich nations should reduce their trade barriers to Third World
countries, even as developing nations are permitted to retain their
own. Some UUs in this shaded area doubtless represent a generation
whose early hopes for a better world embraced the Breton Woods
institutions -- and these UUs remain disposed to support these
institutions. Some are quite ready to back a certain amount of
moving and shaking of the status quo, but do not wish to go
beyond the advice of persons and institutions they believe to be
knowledgeable and reliable – the likes of Thomas Friedman of
the New York Times, senior analysts at the Brookings
Institution, Nobel Prize winners, Amartya Sen and Joseph Stiglitz ,
and the respected NGO, Oxfam. Still others are deeply committed to
the principles of free trade as a matter of intellectual conviction
or practical experience.
-
- If I am anywhere near
to the mark in my assessments, there is something of a disconnect
between the terms of the draft SOC (largely Liberal Separatist
Heavy, I think) and the larger UU constituency (largely
Integrationists of all varieties and Liberal Separatist Lites, I
would guess). All this, however, is quite speculative on my part.
The basic questions are where you stand on economic globalization
and why.
- Well, this brings me
full circle, and to my final comment on a thought experiment.
- Last February I was
transfixed by a parenthetical note in the Study/Action Issue
Resource Guide on Economic Globalization suggesting that UUs
should study globalization. It said we should:
- Form a study circle to
study globalization, using books such as When Corporations Rule
the World by David Korten. (NOTE many UUs have said that this
book is more appropriate than the one listed in previous versions,
The Lexus and the Olive Tree. They believe that Korten’s
book will lead to more creative thinking and reflection.)
[emphasis added]
-
- I thought, “How
many UUs have even read both books?” “And
why wouldn’t those who have done so challenge their fellow
Unitarians also to read them both, so that they can size up
for themselves the contrasting viewpoints each presents?
- I took a ruler to the
Study/Action Issue Resource Guide and found an
overwhelming imbalance in favor of references reflecting what I now
call “Liberal Separatist Heavy” viewpoints. I thought,
“How could any but the most ideologically committed be
comfortable with such a one-sided foundation document?” I
thought, “Why not encourage Unitarian Universalists to
understand and discuss all the main viewpoints, and then to make up
their own minds about what our Statement of Conscience should say?”
- I was told that the
League of Women Voters had approached this subject in a remarkably
balanced and fair-minded way. I checked out that report, and found
that it was so.
- I thought, “We
Unitarian Universalists ought to be able to deal with economic
globalization in a balanced and fair-minded way, too.”
- This course has been
my experiment with that thought.
-
APPENDIX
Economic
Globalization
Draft Statement of
Conscience (August 2002)
Unitarian Universalist
Association of Congregations
-
Summary of the
Statement of Conscience
- Economic globalization
is a complex and dynamic system of connections, facilitating the
flow of information and technology and commerce. It is a process of
transformation that accelerates the integration of social and
economic activities around the world. It has resulted in the
marginalizing and impoverishing of the peoples of the developing
world and people of color, as well as the destruction of the
environment and the depletion of natural resources. As people of
faith with respect for the worth and dignity of all creatures and
for the interdependent well of all existence, Unitarian
Universalists are called upon to bring an ethic of care to our
understanding of globalization and to do what we can to reverse the
harm it causes without joining a myopic backlash against it. We are
challenged to affirm our connection with all life and our
responsibility for one another and the planet that sustains us.
- Our world is one
world:
-
- its ways of wealth
affect us all:
-
- the way we spend,
the way we share,
-
- who are the rich,
who stand or fall?
-
- “Our World is
One World” is a prophetic hymn written by Cecily Taylor in
1930. Its verses capture the essence of today’s debate over
globalization. Globalization brings with it many benefits, but the
fruits of globalization have been inequitably distributed and many
of its costs have been disproportionately paid by the least able. As
a community of faith, we are challenged to bring an ethic of care to
our understanding of globalization and to do what we can to reverse
the devastation it has created without becoming a part of a myopic
backlash against it.
-
Defining Economic
Globalization
- Economic globalization
is a complex and dynamic system of connections, facilitating the
flow of information, technology, and commerce. It is also an ongoing
process of transformation. The underlying theory of economic
globalization is the unleashing of free-market competition, driven
by self-interest, measured by the accumulation of capital. The
fundamental ideas fueling globalization are the same as those that
inspired primitive tribes thousands of years ago to trade something
of value to another tribe. Unlike primitive tribal communities,
modern communities have developed technological advances such as the
Internet, which facilitate rapid market integration. By breaking
through traditional, national, cultural, and social boundaries that
have divided people throughout history, economic globalization has
resulted in the near instantaneous exchange of information, the rush
of commerce, the massive migration of peoples, thereby integrating
economic and social activities around the world. Although the
globalization of world markets has reaffirmed the intrinsic ways in
which humanity is interconnected, injustice and inequities exist.
Benefits and
Liabilities
- The market forces of
globalization are driven predominantly by economic imperatives set
forth by the United States. Economic globalization is, therefore,
increasingly perceived as America’s imperialist colonization.
The current expansion of economic growth has contributed mightily to
the high standard of living enjoyed by many in the West and by
others living and working elsewhere in the world. Many Americans,
accustomed to our fiercely individualistic and competitive culture,
find it difficult to grasp and uncomfortable to bear the crude
global realities of abject poverty, hunger, and cultural and
environmental destruction.
-
- Although some people,
especially those with access to capital, have enormously benefited
from complex economic global transformation, many people have not
and are becoming increasingly angry. The globalization ethic has
allowed systematic exploitation of labor and the environment,
coercive monopolistic pricing of goods and services, criminal
evasion of local legal controls, growing debt among developing
nations, widening gaps between economic classes, and devastation of
traditional culture in societies marked by urbanization and
exploitation. Often, despite the world being more technologically
integrated, many so-called “winners” feel increasingly
isolated and disconnected from their immediate communities. Many
react to these senses of change and isolation by turning to
ideological and religious fundamentalism. Others become myopic and
parochial. Still others turn to criminal behavior and international
terror.
-
- As people of faith, we
have a responsibility to take a stand to make democracy work for all
people, locally and globally. We are challenged to find ways to
create political and economic democracy and to develop vital
egalitarian community life, addressing the needs and fostering the
participation and leadership of the disenfranchised.
-
- We are challenged to
develop a vision to uphold human rights and to help preserve the
identity-based traditions that give meaning and continuity to
people’s lives, while empowering them to do what is necessary
to thrive in a system of economic globalization.
-
- As Unitarian
Universalists, we affirm and promote:
-
- The acceptance of
one another and the encouragement of spiritual growth, and a free
and responsible search for truth and meaning. As a people of
faith, we are called to study further and better understand the
economic, political, and cultural issues of our times. Deepening our
global awareness can enhance our individual and communal
spirituality.
- The
policies The goal of world community with peace, liberty, and
justice for all; and justice, equity and compassion in human
relations. and practices of the International Monetary Fund, the
World Trade Organization, and other financial institutions advancing
globalizatin must be reevaluated and realigned, such that the
freedom and dignity of individuals in all countries must be the
primary consideration in the formulation of economic policy.
Existing debt of the poorest nations of the developing world needs
to be forgiven by the World Bank and other international lending
agencies. We can become more effective advocates for increased
funding for international economic, environmental, and humanitarian
assistance as well as the expansion of educational opportunity. We
need to work to ensure that intellectual property provisions of
international trade agreements do not put profit making over the
rights of people to medication, seed, and the ownership of their own
cultural and genetic material.
- The right of
conscience and the use of the democratic process within society at
large. We must recommit ourselves to active participation in
local, state, and national elections. We need to network with other
progressive faith-based and community organizations to increase
voter registration and turnout within disadvantaged communities. We
need to advocate for the reversal of American laws and policies that
perpetuate unjust economic systems. We need to hold our political
leaders accountable for their policies.
-
The inherent worth and
dignity of every person. Individual Unitarian Universalists,
congregations, and the Unitarian Universalist Association m;ust
actively participate in the work of international organizations that
advocate for human rights, worker rights, and environmental
protections. The privilege of transacting business is extended to
corporations by the countries in which capital is invested –
corporations have the responsibility to pay their workers a
comfortable, locally defined living wage, provide a healthy and safe
work environment, and respect the right of their workers to bargain
collectively in independent labor unions.
-
Respect for the
interdependent web of all existence of which we are a part.
Through partnerships with Unitarian/Univeralist congregations
throughout the world, service in the Peace Corps, participation in
international youth and cultural exchanges, and travel, we will have
our perspectives and our hearts opened to the ideas, ideals, and
dreams of others throughout the world, thereby making us better
partners in the quest for a more equitable and environmentally aware
global community. We must advocate for trade agreements that
safeguard the natural environment including the air and the oceans.
- As Unitarian
Universalists, we are challenged to bring an ethic of care to our
understanding of globalization. The transformation from ignorance
to knowledge, from silence into speech, and speech into action, is
not easy. If we are to see the world for the interconnected web it
really is, we are challenged to build a spirituality of resistance
to privilege. Such a spirituality of resistance would have us turn
from fierce individualism firing a self-serving globalization toward
a relational sense of ourselves in a globally inclusive community of
all living things. The privilege now cultivated by unfettered global
markets would be replaced by an ethic and practice of constraints
serving the common good.