Globalization and Social Justice.

Globalization is one of the buzz words of contemporary economics. Defined as the creation of a single world market for goods and services, globalization is transforming the planet's economy by dramatically stimulating international trade and investment. Undergirding this process is the electronics revolution, by means of which billions of dollars can move into and out of economies at the stroke of a key.

Is it good? Archbishop Francois Nguyen Van Thuan, president of the Pontifical Council for Justice and Peace, points out that the results of globalization have been both positive and negative. "The social doctrine of the Church," he says, "suggests that we understand this phenomenon as a sign of the times...." The dimensions are "broad and profound, typical of the history of this period of humanity.

"The Church does not condemn the liberalization of the market, but it appeals for respect for the primacy of the human person, to whom all economic systems must be subject."

John Paul II 

Pope John Paul II sees globalization as both economic and political. For all its risks, he says, it offers exceptional and promising opportunities. These should enable humanity to become "a single family, built on the values of justice, equity and solidarity." This, however, requires a complete change of perspective. "It is no longer the well-being of any one political, racial or cultural community that must prevail, but rather the good of humanity as a whole." What this means is that "The pursuit of the common good of a single political community cannot be in conflict with the common good of humanity." The principle of solidarity, which promotes the common good, at the same time advances the individual good, particularly that of the weakest and poorest. The Pope says solidarity must be made an integral part of the network of economic, political and social interdependence that globalization tends to consolidate. A commitment to solidarity makes the poor the agents of their own development. It "enables the gre atest number of people, in their specific economic and political circumstances, to exercise the creativity which is characteristic of the human person...." The Pope recognizes that the wealth of nations depends on this creativity. His Holiness cites the dire poverty of countless millions of men and women as the issue which most challenges our human and Christian consciences. He states that because humanity, called to form a single family, is tragically split in two by poverty, we urgently need to reconsider the models which inspire policies of development.

We also need to foster "a consciousness of universal moral values" to face challenges that are assuming an increasingly global dimension. These include:

* the promotion of peace and human rights;

* the settling of armed conflicts within states and across borders;

* the protection of ethnic minorities and immigrants; the safeguarding of the environment;

* the battles against disease, drug and arms trafficking;

* and political and economic corruption.

These issues, which concern the entire human community, must be faced and resolved through common efforts. No nation is in a position to face them alone.

We must find a way to discuss humanity's problems in "a comprehensible and common language." The basis of such a dialogue, the Pope says, is natural law, "the universal moral law written upon the human heart." He states that by following this "grammar" of the spirit, "the human community can confront the problems of coexistence and move forward to the future with respect for God's plan."

A fair interpretation of the foregoing is that the Church is offering its social teaching as a basis for the global economy and for international political institutions up to and including a world government.

Good or bad?

Positives and negatives of globalization, actual and anticipated, are being widely discussed. Economically, proponents credit the more open and integrated markets with dramatic increases in world trade, vast new business opportunities, record levels of foreign business investment, and more jobs. Due to globalization, proponents say, most major developed nations and many emerging markets have experienced prolonged economic growth. Moreover, inflation is said to be much lower than it would otherwise have been. This is attributed in part to the entry of new competitors into the more open markets, which has helped to keep prices down.

Opponents of economic globalization say that it is enabling a relatively few transnational corporations to shape national and international law to suit their interests. Under international trade agreements, tribunals set up to resolve disputes supersede the legal systems of nation states and supplant their judicial processes. This, the opponents state, undermines the democratic basis of our legal systems, threatens public social programs, and limits the ability of governments, among other things, to protect the environment and safeguard human rights.

Some opponents have blamed whimsical or irrational global speculation for financial crises in Asia, Russia and Latin America. Others criticize transnational monopolies for shifting production to areas where labour is cheapest, taxes are lowest and controls are weakest.

Politically, proponents of globalization are heartened by international agencies and initiatives that seek to limit war and promote universal respect for human rights. The establishment of an international criminal court to try crimes against humanity regardless of where they are committed is considered a major step forward.

Critics are concerned lest proponents of militant secularism and moral individualism gain control of international agencies. As national sovereignty defers to world government, these agencies could overrule individual and communal efforts to promote traditional religion and morality. This is already beginning, in fact, as national governments face pressure from United Nations agencies to impose contraception, abortion, homosexual privileges, and questionable affirmative action.

Misuse of wealth

If economic globalization is to contribute to the civilization of love which the Church fosters, it must empower the poor to create wealth, as the Pope has indicated. No matter how substantial, grants of money, loans, and even windfall profits cannot guarantee success in this endeavour.

Consider the experience of the Arab nations. During the sixteen years following the OPEC supply restrictions of 1973, these countries earned an estimated two trillion dollars by exporting oil. Writing in 1990, Sever Plotsker, professor of economics at Rehovot University, said this could have turned the region into an economic power and ensured its future.

The Arabs, however, invested very little of it in "industrial, educational, and social infrastructure that would prepare...for the post-windfall era to come." As a result, "The economic situation, except for Saudi Arabia and the Gulf, is...very bad. Education per capita is on the decline....There is no industry, let alone the high-tech or export kind. The dynamic Asian states have overtaken the Arab world even though they do not produce oil (except for Indonesia). There are few productive jobs."

The intriguing question is "Where did all the money go?" Professor Plotsker estimates that the Arabs spent at least half of it on wars and armies and much of the rest on risky investments and "showy projects devoid of economic sense or logic."

In the West, the shock of higher oil prices contributed to inflation, unemployment, and a prolonged economic slump. World Bank economist Alan Gelb concluded that since most of the oil-exporting nations were worse off than before the boom, the era of windfall profits constituted a massive net loss for the whole world.

Money, even in large amounts, does not produce economic activism. Economic activism produces money. The Arab experience and the history of official foreign aid confirm this. In the absence of wealth-creating strategies, huge transfers of money are ineffective.

The strategies of wealth creation are no secret. You can see them at work in the West and in Japan and some of the other Asian states. Each implements them in its own way and in accordance with its traditions and culture. Other nations could do the same. What they basically require is a legal system and institutions that reward rather than discourage economic initiative among the masses.

Specific strategies

Specific strategies include incentives for widespread ownership of enterprises, easy and inexpensive incorporation of small businesses, relief from excessive taxation and oppressive regulation of agriculture and commerce, ready access to credit to finance productive activities, protection of patents and copyrights to encourage innovation, investment in universal education and training at all levels, privatization of state enterprises where these command a disproportionate share of the economy, and financial policies that maintain the soundness of currencies and discourage capital flight.

Such strategies and institutional arrangements set the stage for development. Equally important are the individual and social attributes--self-reliance, discipline, perseverance, co-operativeness, belief in the future-required to focus initiative and effort on economic advancement. Mores, values, attitudes, social institutions, and political structures, as well as individual aptitudes, are crucial.

When political and economic arrangements are conducive to development, people can be expected to respond accordingly. They did it in the West and they are doing it in the emerging economies of the East. Because of cultural and other differences, some societies will move faster and do better than others. But all that want to develop can learn how. The creativity that fuels economic advancement is a fundamental and universal human good.

International lending and borrowing

Massive Third World debt has been identified as a barrier to economic development and an oppressive burden on the poor. In 1994, the Pope proposed that we consider reducing, if not cancelling, international debts that threaten the future of many countries. Debt relief, he said, would be an appropriate initiative for the Jubilee of the Year 2000. Social activists, both religious and secular, are campaigning to have these debts forgiven, and world leaders are responding. Last September, the Pope stressed that the benefits of debt relief must reach the poorest. This should be done "through a sustained and comprehensive framework of investment in the capacities of human persons, especially through education and health care."

He described debt relief as a precondition for the poorest countries to make progress in their fight against poverty. But he said that it must be accompanied by "the introduction of sound economic policies and good governance."

The last point is crucial, because unsound financial policies and government corruption have too often characterized international lending and borrowing. Over the last half century, both public and private agencies have loaned hundreds of billions of dollars internationally, often with a shocking lack of due diligence. Much of the money went directly into the pockets of corrupt officials, helped Third World elites oppress the already downtrodden, or financed grandiose vanity projects that held little prospect of providing a return on investment. First World lenders can afford to be reckless in their financial dealings when they are confident that governments--that is to say taxpayers--will bail them out.

And we have bailed them out. Not only do we stand behind the World Bank and the International Monetary Fund, but we have already come to the rescue of the Chase Manhattans and Citicorps for much of the reckless private-sector lending that precipitated past Third-World debt crises.

Unless we remove the inducements to irrational lending, debt cancellation will be a mixed blessing. It will relieve the Third World poor of repaying loans that failed to help and often harmed them; but it will also reward First World lenders for their lack of due diligence and encourage them to float similar loans, whose risks, they know, will be underwritten by western taxpayers.

So yes, for moral and economic reasons we should forgive much of the Third World debt. For similar reasons, we should make lenders, not taxpayers, assume the risks of future loans. If they are made fully accountable, as private lending agencies usually are for domestic loans, international lenders will be disinclined to underwrite economically unsound activities and projects.

If we are moving toward one world, politically as well as economically, we must strive mightily to avoid the errors of the past. It would be tragic, indeed, if we created a global welfare state with massive bureaucracies and publicly funded interest groups dedicated to coercive social engineering in the service of secularism, amorality or worse. To avoid that, and promote a civilization of reason, morality and love, we must embrace natural law, as the Pope indicated, and safeguard genuine religious freedom. This, I submit, should be a prerequisite for the establishment of any world government. In particular, we must entrench in a global constitution the principle of subsidiarity. This principle respects the autonomy of communities in areas which are properly theirs, and protects them from the intrusions of distant and often unaccountable agencies.

Footnote

The above quotes are taken from a statement by the President of the Pontifical Council for Justice and Peace, Mexico City, Oct. 28, 1999; Message of Pope John Paul II for the Celebration of the World Day of Peace," Jan. 1, 2000, Nos. 5 & 6; and L'Osservatore Romano, September, 1999. Herewith a bibliography providing readers with other references for aspects of Catholic social teaching that should be taken into account when reflecting on globalization:

Further reading

Readers wishing to delve further into aspects of Catholic social teaching that should be taken into account when reflecting on globalization are referred to the following: Christian Freedom and Liberation, Congregation for the Doctrine of the Faith, 1986, Chapter V, which gives an overview of the Church's social doctrine, in particular the primacy of persons over structures and the principles of solidarity and subsidiarity; Sollicitudo Rei Socialis, Pope John Paul II, 1987, especially Chapter VI, which stresses that, more than in the past, the Church's Social doctrine must be open to an international outlook; Laborem Exercens, John Paul II, 1981, which stresses that labor has priority over capital (12), that work is for man, not man for work (6), and that man ought to be treated as the effective subject of work and its true maker and creator (7); Centesimus Annus, Pope John Paul II, 1991, especially No. 42, which discusses capitalism and free human creativity in the economic order, and No. 48, which discusses excesses and abuses of the welfare state; and Veritatis Splendor, John Paul II, 1993, especially No. 79, which discusses natural law, personal goods and intrinsic evil.

Joseph Campbell writes from Saskatoon, SK