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Untitled Document
Globalization And Humanity
Dr. Akmal Hussain
Newspaper: The Daily Times
Dated: Thursday, October 2, 2003

The world during the last fortnight has witnessed two significant events, which raise important questions about the management of globalization and the future of capitalism. In mid September, the WTO talks in Cancun on the rules that are to govern international trade, collapsed. This was mainly because the rich countries insisted on protecting their domestic producers through subsidies and trade restrictions, while demanding that poor countries practice free trade. The failure to reach an agreement on the international trading system, was followed closely by a major set back to hopes for an agreement on protecting the earth’s environment: President Putin of Russia at the beginning of this week announced during the Moscow talks, the withdrawal of his earlier pledge to quickly ratify the UN Treaty on the reduction of global warming. This involved reduction of green house gas emissions by an average of 5.2 percent compared to the year 1990 level. The US had already withheld support of this treaty (also known as the Kyoto Treaty), partly on grounds that it would restrict US industry and slow down US economic growth and partly on grounds that the Third World was not required to reduce emissions proportionately.

While the Cancun talks aimed to remove the fetters on free trade for the public good, the Kyoto Treaty for the same purpose, sought to place restraints on industry. The Cancun talks failed because the poorer countries objected on grounds that the selective application of the principles of free trade against them, would benefit the few at the cost of the many. The Kyoto Treaty was undermined because the U.S. was not willing to pay the cost of protecting the world’s environment. In this case the few refused to pay a cost for the benefit of the many.

In a recent article in the Guardian (reprinted in the Daily Times, September 28), Professor Joseph Stiglitz proposes that globalization provided the opportunity to create a new international order based on American values “reflecting our sense of the balance between government and markets, one which promoted social justice and democracy on a global scale”. He bemoans the fact that this was not done and something has “gone wrong, badly wrong”. Professor Stiglitz implies that the failure to implement these undoubtedly admirable values is essentially a policy failure. I will argue in this article that this failure may be rooted not just in the proclivities of a particular regime but in the paradox of a globalized economy and the pursuit of individual happiness within nation states that are essentially unequal in power and economic resources.

The failure of the countries of the world to agree on two key treaties, that would determine the pattern of economic life in the future, signifies the apparent contradiction between the existence of a globalized economy across nation states and the absence of a sense of global human responsibility between nation states. Underlying this paradox is the question of how to mediate the free play of the market mechanism with institutions that would humanize its functioning. This is related with the question of how can the human endeavour for economic well being, be made sustainable through equitable distribution of its fruits and protection of the natural environment within which this endeavour is conducted. At another level there is the question of whether at all there is a relationship between the pursuit of individual happiness and the effort to enhance the happiness of others. The future of capitalism will depend on the way the world community deals with these questions. In the ensuing series of articles I will attempt to provide a perspective for thinking about these questions.

Let us begin by rethinking the relationship between markets, communities and the environment. Since the industrial revolution in the late eighteenth century, human existence has been preoccupied with the production and consumption of goods, primarily within the framework of the market mechanism. In the contemporary neo-classical conception of markets there is neither history nor communities. Markets are seen as detached information systems whose ‘hidden hand’, guides the process of production and distribution such that it leads to the maximum good of the maximum number. Yet (as Professor John Gray has shown) in actual history, until the Victorian period in mid nineteenth century England, markets were embedded in society and subject to the “need to maintain social cohesion”. What Professor Gray has not examined is the emergence of economic and social forces, which placed the continuous expansion of capital rather than social needs as the driving force of economic activity. I will discuss this phenomenon in the next article. In this week’s essay we will focus on how the continuous expansion of capital and the associated increase in the volume of production is related with the question of the natural environment and the issue of market regulation for sustaining human life on earth. In this context three propositions can be advanced:

  1. In the global economy since the late eighteenth century, the process of production (and indeed consumption) was driven by the imperative for the continuous expansion of capital. When modern industrial production is conducted, it involves in most cases the use of heat energy to fabricate raw materials into products, as well as disposal of industrial waste. There is a consequent burden on the world’s eco system. Similarly when consumption of such products occurs, the consequent waste material (in case it is not biodegradable), also burdens the eco system since all waste is disposed off either in the air (where it is gaseous), or land or sea. Thus, the intensive and growing penetration of nature over the last three centuries has resulted in some cases (example global warming), in threshold levels of damage to the life support systems of the earth. The fact that existing levels of ‘green house gas emissions’ could have catastrophic consequences for life on earth, is now a mainstream view amongst scientists. Apart from this, industrial pollution of the world’s water systems, soils and air are known to have adverse consequences for human health.
  2. The fact that the earth’s fragile ecology has an absolute loading capacity for the pollutants resulting from the process of production and consumption, raises the following question: Can the global community achieve and maintain sustainable levels of economic growth? There are broadly two schools of thoughts on this issue. The first contends that it is possible to maintain increasing economic growth rates at the global level through the use of ‘green technologies’. This view of course assumes: (a) that green technologies can develop at a fast enough rate to provide an economically feasible alternative to environmentally damaging technologies before the point of no return is reached in environmental degradation, (b) that the world’s market system can be regulated effectively and in time to induce private sector investment to adopt green technologies. Given the resource constraints to research in green technologies and the existing difficulties of achieving international norms for pollution control, the idea that high growth will somehow be sustainable, appears optimistic.
    The second school of thought contends that given the scientific, economic, and institutional constraints to developing and adopting green technologies at the required pace, means that global economic growth rates would need to be slowed down if the life support systems of the planet are to survive.
  3. My third proposition is that if (as the above view proposes), a reduction in the average global economic growth rate is to be achieved without mass starvation in the Third World, then the advanced industrial countries would have to cut down their growth rates drastically. This is necessary in order to enable Third World countries to achieve economic growth rates consistent with providing the minimum conditions of human life to the population. This implies a massive net resource transfer from the developed to the developing countries. For such a resource transfer to take place, there would have to be a major reform of the institutional framework of the global market system, which is currently structured to transfer resources from the developing to the developed world. Even more important, for people in the developed countries to sacrifice their existing or potential consumption levels would require the emergence of a genuine sense of a global human community: That is, a willingness to sacrifice material benefits for others. This implies a change not only in the way human beings currently relate with each other across the globe but also in the way they relate with commodities in market based societies.

Human beings in contemporary society are used to a particular kind of relationship with goods: The more of them we have, the more of them we want. The notions of prosperity and development are linked with increases in the level of consumption of commodities. At present this pursuit is being conducted within nation states with unequal power and economic resources. For us to relate with commodities and with other human beings in a different way, a more evolved human civilization is required: We would have to change the way we relate with commodities, with other human beings and essentially with ourselves in a market driven society.

Finally, we would have to change the basis of conducting state power. Globalization of the economy is a relatively recent phenomenon. Yet the experience of being human, has always been global. Amongst unequal nation states humanity typically fails to inform the conduct of state power. It is this failure that may lie at the heart of the difficulties faced in both Kyoto and Cancun. These are some of the issues that emerge if we are to consider implementation of the admirable goals set out by Professor Stiglitz, of building an international order in which the goals of environmental conservation, social justice and democracy could be pursued on a global scale.

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