Humanizing Global Capitalism
If inequality is a byproduct of capitalism, how can it be made beneficial for all?
Inequality results not from economic activity itself, but from political decisions about the distribution of gains from economic activity. What is allocated to private consumption, public spending and social responsibilities is never fixed. Ultimately, it is democracy’s job — not the role of markets — to determine our collective goals and common interests.
Yet, throughout history, we have not had much success with alternatives to capitalism. So we are left with the task of humanizing capitalism, that is, preserving the dynamism of markets, trade and entrepreneurial energy while finding better ways to distribute the surplus they create and reshape the processes that produce it.
So why then settle for silence when an active conversation could make the marriage of markets and society happier and more fulfilling? Whether you line up on the left or the right of the political spectrum, there are three reasons why international cooperation is central to a “conversation” of this kind.
The first is that integrated markets essentially dictate a coordinated response to social and environmental questions. After all, few governments will impose eco-taxation or insist on improved labor standards unless other countries agree to do the same.
Second, there is no consensus on how to humanize capitalism, now that the traditional ways of doing so through trade unions, welfare states, a large public sector with extensive market regulation, and expanding progressive taxation have been eroded.
The measures recommended to replace these things — such as better education and training or partnerships between the public and private sectors — seem inadequate.
Third, it is hard to have a dialogue when you are starving, and difficult to innovate without a basic level of security, voice and equality of rights. The preconditions for a successful “conversation” have not yet been established in most poor countries.
The question, then, is how to go about that? This is difficult to answer in the context of one society. But globalization internationalizes both the dilemma and the response. Unilateral action in a globalizing economy will either hurt people elsewhere, be undermined by international markets — or erode the global commons on which all our futures depend (like the atmosphere and water resources.)
What we are left with is this insight: We cannot build a decent society in a single country, because the necessary sacrifices (like environmental taxation or higher labor market standards) will be exploited by others unless there is a wider agreement for all to move in step. Although cooperation cannot supply all the answers to the problems we face, no solution will work without it.
Still, the need for such cooperation is not new. “The supreme difficulty of our generation is that our achievements on the economic plane have outstripped our progress on the political plane.” Thus wrote The Economist magazine — all the way back in 1930. International cooperation is the only way to harness the power of globalization to a vision of the good life for all.
Adapted from “Future Positive” by Michael Edwards. Copyright © 1999 by Michael Edwards. Used by permission of the author.