Cadmus

The Turn Towards Unity: Converting Crises into Opportunities

5. Global Threats and World Unity
If unity is an emergent property that manifests in response to threats from a common enemy, what possible enemies could pose a common threat sufficient to unify all of humanity? Hollywood’s answer is an alien invasion of one sort or another or a wayward asteroid on a collision course with Mother Earth. But no resort to science fiction is required to answer this question. For we already confront those enemies face to face and call them international financial crisis, unemployment, nuclear proliferation, terrorism and climate change. Any one of these very real, present and imposing threats should be sufficient to forge all humanity into a unified, cohesive entity capable of collective response. But will we act even now? Further crises can be avoided, indeed crisis itself can disappear from our lexicon, if only we have the wisdom to consciously embrace and act upon the psychological truths and spiritual values that have brought us this far. Wisdom is to discover that the solution lies within the problem.

6. The Currency of Equality
Human beings have a unique capacity to fashion marvelous instruments for social advance and then to subordinate and enslave themselves as hapless victims to their erstwhile servants. This is the process by which one of the greatest of social innovations – money – has become one of the greatest threats to civilization.

Freedom is the final law, but freedom for whom and for what? The inviolable sovereignty of the nation state is a myth that can no longer be defended. What about the inviolable sovereignty of the individual whose rights are usurped by the dictatorship of majority rule? What about the inviolable sovereignty of humanity, whose sacred commons are raped and pillaged with utter abandon by those with the means who get there first?

In any case national sovereignty has already been defeated by the global marketplace, more specifically by international financial markets. Daily some four trillion dollars in surplus money circle the globe in search of higher returns, moving with the speed of light and the callous indifference to consequences of a tornado or tsunami. And like its natural cousins, this social tempest is utterly without conscience, but not without intention. It has an aim which is to maximize self-interest regardless of whose interests are sacrificed as a result. It has a strategy which is to destabilize every certainty, for in uncertainty is found the maximum opportunity for those who know the most and move the fastest. Ranging with the freedom of marauding barbarian hoards against the tiny defenseless outposts of civilization in the past – for history has always favored the barbarian – it seeks out and strikes every vulnerability, uttering the hallowed name of free markets and economic science as it plunders. Never before has human greed had such freedom of action and never has it been less human, for, the soul of the international financial markets is not human; it is a computer running black-box trading algorithms. Nations are defenseless against this most pernicious of all computer viruses, the virus of financial speculation, which moves with abandon across national borders. Even the strongest of central banks, acting on its own, is hapless to defend itself. But worst of all, the entire world economy is held hostage for an extortionist’s ransom. Tens of millions of jobs, which mean tens of millions of lives, are prey to its whims. In the name of free markets, growing numbers of people everywhere are deprived of the most basic of human freedoms, the freedom of livelihood.

Equality does not exist in Nature. Nor does it exist in society. The freedom we so cherish has become a powerful means and resourceful justification for preserving and magnifying inequalities. Yet the wise proclaim equality the most profound of truths, the common basis for our humanity and our spirituality. For freedom without equality is law of the jungle in a tuxedo. Freedom to speculate is a gross misuse of the original purpose for which money was invented as a means to facilitate exchange. Speculation diverts resources from the real economy and undermines its stability. Relative inequalities are no doubt a healthy spur to human initiative.1 But the rapidly expanding gap between rich and poor in recent times is channeling more and more wealth from productive purposes into a pseudo world where money chases money instead of creating real wealth and welfare.

Investors rightly point out that an effort to regulate or tax money flows and transactions nationally will only encourage the movement of money to foreign markets. Yet the very same group will vigorously protest against efforts to establish uniform policies and tax rates globally, for that would remove the threat which prevents the home government from regulating or taxing financial transactions. Thus the absence of a global financial regulatory mechanism is equivalent to the 19th century land rush in North America, according the greatest boon to those who came first and staked out a claim for free land. But this time the land is not free. It is the future prosperity of humanity that is up for grabs. The unabashed freedom of the market destroys far more than it creates and undermines human freedom. The wisdom of the marketplace is a myth. Wisdom is knowledge that preserves and enhances human life. Markets do not take cognizance of human welfare.

The unification of global markets necessitates the unification of the regulatory mechanisms for governing those markets, for differences in policy and enforcement are an open invitation for arbitrage. The destructive impact of speculative currency trading can be substantially mitigated without detriment to the global economy by imposition of a uniform Tobin Tax on short term, cross-border currency movements that are not directly related to trade or direct investment. Ultimately, a permanent solution requires a unified global financial organization backed by international law, a world reserve currency and a world central bank.

7. Right to Employment
Money is not the only challenge to national sovereignty. Jobs too have gone global. The traditional theories and policies available to national governments are no longer adequate. Compelled by investors demanding higher profits, multinationals move production facilities to low wage countries, unmindful of the impact on employment and living standards; unmindful also of the enormous benefits they draw from the sophisticated legal, scientific, financial, educational and physical infrastructure of their home base. Raise funds and innovate at home, create jobs abroad: that is the formula. Topping it off, they demand priority access to government contracts and campaign for lower tax rates with which to finance election of business-friendly candidates. This is plutocracy, not democracy.

Outsourcing has made many types of service jobs equally vulnerable. Visa restrictions can prevent foreign workers from coming in but are helpless to prevent jobs from moving overseas. It is true that this tendency is not new, but it used to occur gradually over decades, providing time for individuals to adjust, younger generations to acquire new skills, and society as a whole to adapt. But the speed with which it now occurs is so rapid that adapting is increasingly difficult and stressful. Unlike a tax that is equally felt by all, the cost of rising levels of unemployment falls disproportionately on the poor and less educated who are least capable of adapting.

Extreme inequality destroys freedom and undermines peace. Rising levels of unemployment aggravate income inequality and increase social unrest and the propensity for violence, as Jasjit Singh argues.2 Economically disenfranchised youth in the Middle East are toppling authoritarian regimes, while impoverished tribals in rural India challenge a democratic state by morphing into armies of Naxalites organizing crime and terrorism. We welcome the former and fear the latter. But what will happen if those youth are unable to find jobs in the new dispensation?

Today some 44 million people in OECD countries are jobless. In Spain unemployment tops 21%, including 46% of youth. In the USA alone 25 million people are either unemployed or underemployed and the length of unemployment now averages 40 weeks. Globally the number of jobless exceeds 200 million, a disproportionate number of which are young. This situation would be tragic if national governments were really helpless to address the growing problem, but they are not. They are unable to act because they are held ransom by misconceptions and myths mistaken for scientific truth and pragmatic realism.

The problem of unemployment is the result of policies and priorities held sacrosanct, because they benefit established seats of social and economic power. Change the rules and the results will be dramatically different. Organize to optimize human welfare rather than unbridled growth. A society that can mandate universal education can mandate universal employment opportunities as well. Promote investment in people rather than hedge funds and commodity futures. Develop entrepreneurship and self-employment rather than new weapons systems. Insist on minimum assured income for all rather than tax cuts for the wealthy, who in Germany are actually demanding to be taxed more. Abandon the convenient superstition that more inflation is necessarily harmful in favor of the recognition that more jobless families is absolutely disastrous.

Solution to the global employment challenge necessitates a global modeling of employment markets. It necessitates global coordination of policies and strategies to harness the enormous potential of human capital as well as financial capital to ensure stable employment opportunities for workers everywhere. The alternative is increasing inequality, instability and unrest that threaten to tear apart the delicate social fabric woven so patiently, yet so sensitive and intolerant of neglect. The combination of rising expectations fueled by the information age and rising human insecurity in the name of unfettered markets is not a formula on which a peaceful and prosperous world can ever be built.

Here too, the absence of international regulation or uniformity is exploited to the advantage of employers at the expense of the employed. Global policy coordination can stabilize global labor markets, but it will not address the severe inequalities in wages, which are aggravated by the ease with which jobs now move from one place to another. Some form of global minimum wage, which could be graded according to average national income, would more substantially benefit low income workers with minimal impact on total employment. Its main affect would be to remove the price subsidy which presently benefits more wealthy consumers domestically and abroad.

Policies alone will not be sufficient to meet the global employment challenge. Policies are always based on ideas and values. Current policies are based on the faulty idea that full employment is neither possible nor even desirable and on a system of values that gives greater importance to money than it gives to man. Human capacity is the most precious and remarkable of all Nature’s creations. The human resource is the most creative and productive of all resources. Yet we live in a world where the resourcefulness of hundreds of millions languishes for want of employment and the capabilities of a few billion more are grossly underutilized, but not for want of willingness to work. People are a perishable resource. Their capacities grow when engaged, decline when left inactive. Side by side with this unconscionable waste of human resources, society has a vast array of unmet and inadequately met needs – for education, health care, housing, environmental remediation, etc. Efficient market theory is a terrible misnomer. Rationality may have its limits, but this is simply limited rationality.*

Therefore, we need most of all to evolve valid theory of employment based on the premise that the primary purpose of economic systems is to generate human security and promote human welfare, not to maximize growth or preserve accumulated wealth. Such a theory must be founded upon the right to gainful employment as a fundamental human right. For in the market-based economic system now globally prevalent, access to employment is the principal means to obtain access to social freedom and other rights. It is the economic equivalent of the right to vote in democracy. A theory of employment must explain the underlying principles by which global employment increased from 900 million to three billion during the past sixty years.3 Employment being a subset of economics, such a theory must be based on a more fundamental theory of wealth and welfare which does not exist today. 4 The need for new theory is eloquently expressed by Orio Giarini: “It is nonsense to be in crises with all the progress in knowledge, technology, etc.; we now have far more tools to develop wealth than at the time of Adam Smith!” It is not limits to growth, but the limits imposed by imperfect ideas and narrow, self-centered values that presently limit our growth. The potential for growth is limitless.

The greatest obstacle to global full employment is not population, automation, world trade, multi-national corporations or outsourcing. It is our collective faith in the myth of market fundamentalism and the intrinsic value of money. As Adam Smith so well understood, money is only a symbol for productive capacity and only as valuable as what it can purchase to promote human welfare. “It is not for its own sake that men desire money, but for the sake of what they can purchase with it.”5 The real obstacle is our collective refusal to recognize the most fundamental of all human values – the value of the human being – and the most essential of all social objectives – the security, welfare and well-being of all members of society.


1. Ivo Šlaus and Garry Jacobs, “Human Capital and Sustainability,” Sustainability 3, no. 1(2011): 97-154 http://www.mdpi.com/2071-1050/3/1/97/pdf
2. Jasjit Singh, “Revolution in Human Affairs: the root of societal violence,” Cadmus 1, no. 2(2011): 114-120
3. Garry Jacobs and Ivo Šlaus, “Global Prospects for full employment,” Cadmus 1, no. 2(2011): 60-89 http://www.cadmusjournal.org/files/pdfreprints/vol1issue2/Global%20Prospects%20for%20Full%20Employment,%20Jacobs,%20Garry%20and%20Slaus,%20Ivo.pdf
4. Orio Giarini et al., “Introductory paper for a programme on the wealth of nations revisited,” Cadmus 1, no. 1(2010): 9-27
5. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (London: W. Strahan and T. Cadell, 1776)


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