Establishing
the Basis for Solidarity
Myron J. Frankman
myron.frankman@mcgill.ca
McGill University
May 31, 2001
It is neither necessary nor desirable that national boundaries should mark sharp differences in standards of living, that membership of a national group should entitle to a share in a cake altogether different from that in which members of other groups share.
The
extension of solidarity beyond the face-to-face required the construction
of what Benedict Anderson calls "imagined communities." Building national
communities required ingenuity and sustained effort over lengthy periods.For
those of you who have added a European identity to your basket of loyalties,
the possibility of adding at least one more allegiance should appear to
be a plausible project.For most
of the rest of us, this is likely to seem an unthinkably giant step.Nonetheless,
building world-scale democratic institutions may well be the only peaceful
and sustainable way out of our increasingly strife-prone global race to
the bottom.
FREE TRADE: THEORY
AND PRACTICE
Today’s
most active global project is not that of shaping solidarity, but rather
of extending the domain of free trade and free markets. Partisans of this
political agenda argue, based on the theory of comparative advantage, that
overwhelmingly benign outcomes can be expected to result from the opening
of a country’s markets to free trade: income differentials between countries
are expected to diminish. In the most elaborate theoretical expression
of the free trade model, wages in two countries trading exclusively with
each other will equalize (as will the returns to the owners of capital),
without international migration (or movement of capital).[2]
The
past fifty years has been a period of rapid expansion of world trade and
a general tendency toward the opening of external markets.Has
the equality-increasing promise of free trade been realized on a global
scale?While no definitive test
of assumption-ridden abstracteconomic
models is possible, there is sufficient evidence to suggest that free trade
on its own has failed to produce the outcome which is its principal justification.
To cite but a few signs of growing income inequality:The
UNDP's Human Development Report 1999 reported that the ratio of
the income share of the one-fifth of the world's people living in the richest
countries to that of one-fifth living in the world's poorest countries
has gone from 30:1 in 1960 to 61:1 in 1991 to 86:1 by the late 1990s and
that the assets of the world's three richest individuals exceeded the combined
GNP of the 600 million people living in the world's poorest countries.[3]
There
seems to be a means-ends confusion in the espousal of free trade.If
the real objective is reducing the divergence in income differentials and
free trade is merely a vehicle for doing so, then it seems appropriate
that either other policies must accompany free trade or a different means
be sought.Within nations, we have
long offset the income (and power) concentrating effects of market activity
with combinations of regulation, taxation and expenditure.Living
together sustainably and in peace would seem to require that such offsets
be established at the global level.
Foreign
aid & GROWTH:
The
Limits of Charity Andtrickle down
Foreign
aid was one of the institutional responses that was to lift developing
countries out of poverty.Thirty
years after the goal of 0.7% of GNP for foreign aid was first enunciated
by the developed countries, we find this very modest objective again reiterated
in A Better World For All, a policy statement co-issued in June
2000 by the OECD, the World Bank, the International Monetary Fund and the
United Nations.[4]
In 1998 the ratio of net official development assistance to GNP for the
21 country members of the OECD's Development Assistance Committee was only
0.24, with the ratio for the United States at a mere 0.10. The goal has
been regularly attained only by Denmark, theNetherlands,
Norway, Sweden.In fact, even if
that goal had been reached in 1998 it would have amounted to only US$150
billion (compared to the actual total of US$52 billion) and had the money
been allocated as unconditional grants in its entirety to those countries
identified in the World Development Report 2000-2001 as low income,it
would have amounted to a mere $63 per capita for each of the 2.4 billion
people living in those countries, a sum that would likely be insufficient
to pay for an evening's dinner for one person, including wine and tip,
in an upscale restaurant in any of the high income countries of the world.[5]Depending
on largesse from today's "dominant' countries with strings of conditionality
attached seems hardly to be the manner in which to construct a planet-wide
human partnership. That the four institutions that issued the report have
nothing fresh to offer in the realm of global public finance than an obsolete
formula for charity which is unequal to the task at hand belies their lack
of serious commitment to building a peaceful and just democratic global
order.We should not forget that
there once was serious commitment to sharing with others: in 1949,during
the Marshall Plan years, the United States extended $6.3 billion in grants
for economic purposes to countries in need (principally in Europe and East
Asia), an amount which represented 2.5 percent of US GNP.[6]
In
1978 Robert S. McNamara, then President of the World Bank, wrote in his
Foreword to the first World Development Report that
despite a "quarter century . . . of unprecedented change and progress in
the developing word" 800 million people continued to be trapped in absolute
poverty.His remedy was substantial
acceleration of growth in the developing countries, without which, given
population increase, "numbers of the absolutely poor will remain unacceptably
high even at the end of the century."[7]
In fact, there are now 1.2 billion people reported to be living on less
that $1 per day and another 1.6 billion living on less than $2 per day.[8]Think
about it: after one-half century of freeing of trade and commitment to
fostering development,2.8 billion
people, constituting 47 percent of the World's population, are living at
the material, political and social margin.The
preceding facts suggest that solidarity has decreased rather than increased
in recent decades and that the results of our efforts to close the income
gap between the rich and the poor have been nowhere near the proportion
desired.
CITIZEN’S INCOME
AND GLOBAL EQUITY
The Universal Declaration of Human Rights affirms that "Everyone has a right to life, liberty and security of person." (Article 3). These rights, in my view should be sought directly and not as some hoped-for residual of the pursuit of other objectives.One mechanism for securing the "right to life" is through the establishment of a planet-wide citizen's income.
Writings advocating a minimum income for all under the name of a guaranteed income, social dividend, basic income, citizen’s income or negative income tax, while differing in design, all address the desirability, if not the right, of all people to a guaranteed minimum annual share of the revenues of either individual countries or of the world.As the case for a citizen’s income is amply developed in documents that can be found on the World Wide Web (http://www.bien.be/), as well as in papers on the conference Extranet written by the other two members of the McGill delegation, Clarisse Kehler Siebert and José Uribe, I shall limit my discussion of the concept to the essentials.
There
is an intellectual record of proposals for guaranteed incomes under various
names, dating back at least to the time of the French Revolution, when
Thomas Paine advanced a plan which dissociated in part reward from effort
and recognized as a "right and not a charity" the just claim of all to
a share in produce of the soil, which he regarded as being originally the
common property of the human race.[9]
In the middle of the 19th century John Stuart Mill spoke of our common
inheritance.[10]In
a manner similar to that of Paine and building on Mill, Thorstein Veblen
referred to our "joint stock of knowledge."[11]
More
recently, in the 1960s and 1970s, the "common heritage of mankind" was
used in the discussion of global sharing of the proceeds from the economic
exploitation of regions that are not part of the territory of any sovereign
state (res nullius).Yet
in the very forum, that of the Law of the Seas, in which the notion of
common heritage was being frequently invoked,a
great sea grab took place assigning resources not in proportion to need,
but rather in proportion to length of coastline and the richness of the
resources located there.As William
Cline pointed out, the creation of exclusive economic zones represented
yet another extension of property rights, quite inconsistent with the notion
of the common heritage.[12]As
long as thinking about our common heritage is limited to what is no country's
land, then the domain which is left as the common heritage is what little
remains after all else is appropriated.The
residual territorial common heritage is scarcely likely to provide the
hoped for revenues to finance global public purposes, among which is the
quest for greater equity in the distribution of the world's income.
In
the mid-1970s we find a suggestion from Nobel Prize winner Jan Tinbergen
for an even broader application of the common heritage concept "to new
domains such as mineral rights, science and technology, means of production
and other sources of wealth."[13]In
terms of the present discussion, animportant
point to note is that an open-endedinterpretation
of the common heritage of humanity can be invoked to provide philosophical
underpinning for the case for a global system oftaxation[14]to
finance both the maintenance of international order and global income redistribution
intended to universalize concretely the "right to life".
Expenditures
in support of global equity and global order can also be thought of as
investments in the maintenance and expansion of our global joint stock
of knowledge.Paul Streeten made
this argument in 1972,suggesting
that there is a harmony of interest between the fulfillment of basic needs
and the pursuit of sustainable growth:
It is not only a moral duty to enable human beings, wherever born, to develop theirfacilities, but it is in the interest of all that these human resources should be fully developed, so that, instead of being a drain on the world's resources, they may contribute to their growth.[15]
No less than four Nobel Prize winning economists (James Meade, Milton Friedman, James Tobin and Herbert Simon) have all espoused one version or another of a minimum income guarantee and another Nobel prize winner, Amartya Sen, has insisted on the centrality of entitlements.The essential rationale is quite simple:all earned income takes advantage of pre-existing institutions, knowledge, communication and transportation nets, which are part of what is commonly regarded as social capital (a topic addressed by Sue Jones in her Extranet paper). While social capital, like so many concepts, is generally spoken of in a national context, it can also be viewed from a global perspective.Herbert Simon, in what was likely his last published paper prior to his death in February 2001,put the case most strongly:
I
personally do not see any moral basis for an inalienable right to inherit
resources, or to retain
all
the resources that one has acquired by means of economic or other activities.
. . .
When we compare the poorest with the richest nations, it is hard to conclude that social capital can produce less than about 90 percent of income in wealthy societies like those of the United States or Northwestern Europe. On moral grounds, then, we could argue for a flat income tax of 90 percent to return that wealth to its real owners.[16]
To the extent that each of us is a common beneficiary of the cumulative global process of civilization, we are entitled to some reasonable monetary dividend and thosewho reap the greatest gain should be subject to charges for the use of the collective social capital of our increasingly globalized society.
CITZEN’S INCOME:
AN EXAMPLE
The
actual form that the citizen’s income takes is at this juncture not the
issue, it is the principle that needs to be accepted nationally and globally.Nonetheless,
one brief example can be instructive.One
recent variation by Patrice Spadoni suggested that the citizen’s income
be set at no less than 50% of a country’s per capita income.[17]A
phase-in arrangement for a planet-wide citizen's income intended to narrow
the global income gap might set the initial annual, unconditional stipend
to all at 20% of either a country’s per capita income or the world per
capita income, whichever is greater.By
this criterion the citizens of all countries of the world whose per capita
income is below the world average would qualifyfor
an income supplement related to the world per capita income.The
universal entitlement version of a guaranteed income that I have chosen
here is probably the most costly of the possible versions of the social
dividend schemes, although it may be the least expensive in terms of associated
administrative costs. My choice in part reflects a wish to illustrate that
embracing the income redistribution implications of taking global solidarity
seriously will not "break the bank."
That
A Better World for All envisages reducing the share of those living
on less than $1 a day from the current level of 20 percent of the world
population to 15 percent by 2015, suggests a lack of any sense of urgency.In
contrast, a citizen's income equal to 20 percent of the world average per
capita income in 1999 of $4890 would come to $980, equivalent to about
$2.70 per day, an amount which would more than double the income of half
the world's population. The payments to the 20 percent of world's population
living in the poorest countries would be equivalent to 4.7 percent of the
income of the 20 percent living in the richest countries.[18]
An
example involving the largest European country, the Russian Federation
(which will be represented at this meeting), might be instructive. The
per capita income of Russia is reported to have been $2270.The
transfer to each of the Russian people of $980 per yearwould,
if this had been in place in 1999, have come to $143.8 billion, which can
be contrasted to receipt by Russia of official development assistance in
1998 of $1.0 billion($7 per capita)
in 1998 and net private capital flows of$19.3
billion. In fact, the unconditional hypothetical transfers would have amounted
to 78% of Russia's total outstanding external debt of $183.6 billion,
the management of which carries with it countless externally imposed conditions.
The
intent here is not to minimize the effort that would be required to implement
any such scheme, butrather to illustrate
that the magnitudes involved are not unrealistic.The
far more difficult roadblocks are our preconceptions that first lead us
to insist that individuals and countries must earn their living and then
lead us to blame the victims when their earnest efforts fall short.
CITIZEN’S INCOME,VOLUNTARISM
AND A NEW RENAISSANCE
A
Citizen’s Income sufficient to assure a reasonable level of subsistence
could have a profound effect on the time devoted unpaid activities for
which a lack of remuneration is currently a distinct barrier and a basis
for social exclusion.A partial listing
of such activities include household work, voluntary activities, democratic
political participation, creative endeavors, cultural representations,
sports and learning.John Collett
made the point in his Extranet paper: "participation in society does involve
having a disposable income – something that benefits do not provide."
Voluntarism,
in particular, might receive a significant boost from the creation of a
citizen's income. The vast majority of the students that I advise in the
International Development Studies program at McGill,would,
I believe, be on their way right now to do volunteer work with NGOs in
Africa, Asia or Latin America if they were recipients ofa
citizen’s income and they would also probablyabandon
their part-time school year jobs in favor of volunteer work with NGOs in
Montreal.Instead, many are shut
out of voluntary participation by the need to work throughout the yearin
whatever unskilled job is available to finance their education.
Indeed,
in today’s neo-liberal context, voluntarism is often either exclusionary
and/or exploitative.Fro example,
tudent internships are increasingly offered without either remuneration
or any allowance for living expenses.I
know of at least two McGill students who were offered unpaid internships
with the United Nations in New York for this summer.One
was desperately seeking funding sources; the other has resolved to work
evenings and weekends as a waitress in a New York restaurant to be able
to take advantage of the opportunity.When
voluntarism excludes those who can’t shoulder the financial burden, it
does not serve as a source of solidarity.While
a citizen's income would not completely level the playing field of possibilities
and opportunities, it could reduce the slant significantly.
Writing
in 1969, Buckminster Fuller fully imagined that within a decade an income
support scheme would come into being. He preferred to speak of it as a
"life fellowship in research and development or in just simple thinking."
He firmly believed that this would allow each person to "be able to dare
to think truthfully and to act accordingly without losing his franchise
to live."[19]
For Fuller, an income guarantee has the potential to unleash both human
creativity and "humanity's unique capability -- its metaphysical capability."[20]
CONCLUSION
Aplanet-wide
citizen's income supported by a global system of public finance could free
individuals and nations from the pursuit ofenvironmentally
and socially destructive policies pursued in thenameof
competitiveness.In the words of
Philippe van Parijs, one of today's foremost advocates of the introduction
ofnational income guarantee systems,
a universal social dividend would provide "real freedom for all."[21]In
my view, the achievement of a world-wide socio-economic system in which
people matter requires the shaping of a political system in which people
matter, namely the crafting of democratic institutions and practices at
all levels from the local to the global. [22]
In
a market economy, entitlement to income is related in part to property
rights, relative bargaining power, market conditions, legal constraints
and position within a family.Without
property, job or family, one's claim on a share of a community's flow of
income may be limited or even nonexistent.And
even one's claim to a limited share may be subject to severe restrictions
and limitations. In effect, if one doesn't "earn a living", one may not
have the "right to live".[23]
Assuring
the "right to life" is part of the task of building global social justice.
A next step in this direction might be to create global citizenshipcarrying
with it as a start and as a minimum a global system of guaranteed entitlements
to income, goods and services which would be supportive of the development
of human capability.
I
contend that theexclusion and inequality
generating effects of free-market globalization-from-above require that
a world-wide system of entitlements to services and income (a citizen's
guaranteed income or social dividend) be created if ourcollective
commitment to the preservation of human rights, including world-wide freedom
of movement in the fullest sense (including the "real freedom" not to migrate),is
to berespected and if world peace
is to be preserved.