The Policy Implications of Global Economic Inequity

Vincent Ferraro, Mount Holyoke College


A Talk Delivered to the Five College Program in Peace and World Security Studies
1996 Summer Faculty Institute on World Security Affairs
Friday, 14 June 1996
Amherst, Massachusetts 01002


A simple rephrasing of the title of this talk can suggest how ambitious its objectives are. Rather than asking the question, "What are the policy implications of global economic inequity?," one could ask a simpler question: "How does one make marginalized populations important?" Almost by definition, marginalized peoples do not warrant the attention of the state--outside of the mainstream of economic, social, and political activity, marginalized peoples generally lead lives unknown to the people within the society who do direct economic, social, and political activity.

This is not to say that the mainstream ignores marginalized people. Indeed, in many respects the mainstream relies upon the economic outsiders to provide goods and services which would otherwise be unavailable. Thus, the mainstream depends upon the poor to provide it with its recreation, in the forms of drugs and prostitution, as well as its unskilled labor to perform the unhealthy and unpleasant tasks of daily life. But this attachment to the poor does not imply any responsibility toward mitigating the desperation of poverty; the mitigation of poverty would be in a very real sense counterproductive for the mainstream.

No doubt this analysis of the global poor is abhorrent to us all. We exist in a world in which we are socialized to believe in obligations to those less fortunate than we. It is certainly the case that no one would want to deny a social responsibility to the poor. Scrooge is rightly reviled because he tried to deny what most regard as an very important personal obligation.

But personal charity probably is insufficient to address the problem of the global poor. The numbers are indeed staggering. Over 20% of the global population, over 1 billion people, are starving to death. Nearly 2 billion people lack effective medical care, with the miserable consequence of millions of children dying from the effects of what the West considers "childhood" diseases. Over a billion people have a life expectancy below 60 years. And I could go on with similarly horrific specifics suggesting the magnitude of the problem of global poverty.

If personal charity is not sufficient, then some other agent or agents must be called upon to address the problem. If one runs through the list of possibilities, including churches, non-profit organzations, and the like, then one quickly comes to the conclusion that the only institutions capable of mitigating the poverty of so many people are states. More specifically, the states with access to the capital, technology, and infrastructure to make a difference. Most specifically, the rich states.

But do states have obligations to reduce poverty? The liberal state has one overriding concern: the provision of security to its citizens. Historically, the definition of security has been limited to issues of physical attack, either internally from criminals or externally from foreign powers. Thus, the traditional role of the state has been to introduce and enforce laws, and to raise armies for a common defense. Only in the late nineteenth century and throughout the twentieth century has economic well-being been considered part of the responsibility of the state. But even that expansion of the responsibilities of the state was limited. First, no one argued that states had obligations to non-citizens (and the current debate in virtually all the advanced industrialized economies over the question of immigration is evidence of that proposition). Second, that expansion of the responsibilities of the state may have been only temporary. The late twentieth century has witnessed an intense assault on the domestic institutions created to provide economic security. Professor Galbraith may have been overly optimistic when he argued that the creation of the welfare state was a historical necessity. He may have been correct, but the essential part of the question--whether human beings have the wisdom to perceive that necessity--is still open.

But Professor Galbraith did provide a very important insight into the ways by which economic issues can be insinuated into our conceptions of the liberal state. Basically he argued that economic welfare was in fact a national security issue. Similarly, Professor Kennedy argued the same thing. I believe that both are correct. Still, however, we are left with the problem of how to effect such a redefinition of national security. Such a redefinition is quite difficult, but not impossible.

Let me develop some propositions which might help us to think more clearly about the problem. All of these propositions are contestable, and I suspect we might have a very stimulating discussion at the end over their validity. But I will use them only to guide my comments.

Proposition 1: The globalization of capitalism is nearing completion, ending a process which began in the 15th century

The discussions this week have all centered on the remarkable intensity and velocity of globalization in the late twentieth century, but it is a process which has been ongoing for a very long period of time. As Einstein suggested, however, perceptions of motion are relative. Montezuma probably thought that the pace of change after Cortez was dizzying--at the time of the Spanish Conquest the population of Mexico was about 13 million; by the end of the sixteenth century it was about 2 million. Similarly, the radical depopulation of Africa by the slave trade was an event which defied comprehension--in the space of single generations, whole areas of Africa became empty. There is nothing in the "modern" world which even comes close to the depths and rates of these changes. What is distinctive about the furor concerning globalization is that it is North American and European heads that are now spinning.

Moreover, the fact that there is opposition to capitalism is not evidence that the process of globalization is in question. There has always been what Karl Polanyi labeled the "countermovement" against capitalism, and much of the opposition to capitalism historically is based upon its ability to disrupt daily life. Christopher Hill, in his book entitled The World Turned Upside Down, quotes Gerrard Winstanley, one of the famous "Levellers" in the mid-17th century:

In the beginning of time, the great creator, Reason, made the earth to be a common treasury, to preserve beasts, birds, fishes and man, the lord that was to govern this creation...Not one word was spoken in the beginning that one branch of mankind should rule over another... But ... selfish imaginations ... did set up one man to teach and rule over another. And thereby ... man was brought into bondage, and became a greater slave to such of his own kind than the beasts of the field were to him. And hereupon the earth ... was hedged into enclosures by the teachers and rulers, and the others were made ... slaves. And that earth that is within this creation made a common storehouse for all, is bought and sold and kept in the hands of a few, whereby the great Creator is mightily dishonoured, as if he were a respecter of persons, delighting in the comfortable livelihood of some and rejoicing in the miserable poverty and straits of others. From the beginning it was not so...

Gerrard Winstanley, A Watchword to the City of London (1649) as quoted in Christopher Hill, The World Turned Upside Down (Harmondsworth, England: Penguin Books, 1975), p. 132

The countermovement against capitalism was always present--in the Levellers, the Diggers, the Chartists, the Socialists, and the Communists--and it always succeeded in slowing down the globalization of capitalism to some degree. In the late twentieth century, however, capitalism is reaching its only natural limit--the planet as a whole--and has succeeded in attaining a universality which is unique and historic.

There is little question that opposition to capitalism exists and that it may in fact be growing, particularly in the countries of the former Soviet bloc. But in other areas, such as Asia, support for a more state-centered capitalism is quite strong. Moreover, there is the question of what viable alternatives exist to the market as a mechanism for allocating scarce resources--until one is articulated, it is impossible for me to even imagine a non-coercive centrally-planned economy.

Proposition 2: At the same time capitalism is achieving universality, the politics of the world are becoming increasingly fragmented.

The world has witnessed a rather profound political transformation in the twentieth century. The political model--the model of empire--which had dominated human politics since the days of Ramses II, Alexander, Genghis Khan, the Chin Dynasty, Napoleon, Victoria, and Catherine was undermined by a revolutionary idea finally formalized by Woodrow Wilson in the early twentieth century, the idea of self-determination. The dissolution of the last great empires--the European domination--was no doubt induced by internal weakness and contradiction, but there is no question that the idea of self-determination offered an alternative political framework which made the transition possible.

Viewed from this perspective, the collapse of the Soviet Union was not only the collapse of the most organized center of opposition to capitalism, but it was also the collapse of the last European empire. We'll have to see whether the Chechnyans and others succeed in their attempts to finish off the process of decolonization.

What is especially dispiriting about this resurgence of national identity is its ruggedness and vulgarity. One would hope that the people of the world had learned, through painful and obscene lessons, that simple assertions of primacy of one group over another were unacceptable. Apparently such is not the case. Distinctions are being made in the world justifying the most heinous of all political acts--the taking of a human life for reasons of birth. Voices are especially loud, raising a chorus of hatred and exclusion. Somehow it has become respectable to articulate and hold positions of superiority.

The juxtaposition of these first two propositions yields an astounding vista: we see the economic organization of human activity submitting to allegedly universal rules and processes, while at the same time the political organization of human activity is asserting a profound degree of separation and idiosyncrasy. The tension between market capitalism and representative democracy is not new; what is new is that the tension now exists for everyone on the planet simultaneously.

Proposition 3: Market capitalism may induce a commitment to representative democracy

That tension between capitalism and democracy may have a happy outcome. The globalization of capitalism is perhaps one of the major forces in the world which is acting as a restraint on unbridled economic nationalism. The Left in America cannot help but be frightened at its ideological sympathy with Pat Buchanan as he demands that American jobs be saved from Free Trade. The reasons are clear: while the Left may in fact wish to preserve American jobs, there is no way it wishes to be associated with the underlying chauvanism which is at the heart of Buchanan's political platform. Free trade does have as its objective a borderless world; the question is whether that objective is desirable.

One cannot help but be struck by the symbiotic relationship between market capitalism and representative democracy. Both are ideologies of the Enlightenment and thus manifest a high regard for human rationality, an explicit faith in the idea of progress, and a profound respect for the individual as the center of the political universe. There have been attempts to institute democracies without a commitment to market capitalism--the Soviet Union sincerely felt that it was a democratic state. Conversely, there have been attempts to implement market capitalism without honoring the institutions of representative democracy--Nazi Germany prior to 1939 was such an example.

These hybrids are somewhat grotesque and their failures suggest that a people need both systems in order to succeed. The relationship between capitalism and democracy is indeed strong, and there are good reasons to believe that one cannot have one without the other. The Chinese experiment is an interesting case. The commitment to capitalism appears to be quite strong, although the implementation of the system is at this time quite flawed. Demands for human rights and representative democracy grew quite loud during the Tianemen Square protests, but were brutally repressed. Since that time, the demands for political participation have been shunted off and replaced by a complex system of bribery and corruption. There is no question in my mind that the fundamental nature of middle class conservatism--the protection of one's property--will ultimately lead to demands for the panoply of rights necessary for a representative democracy. Whether those demands will succeed is an open question, and I lack the expertise to make an assessment of the likely alternatives in China. I do believe, however, that a bribe is not a substitute for a right or a vote.

The first three propositions outline the context of my thinking on the effects of globalization. We can now turn to the question raised about the policy implications of global inequity.

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