Making the Great Transformation (Conference): Session Three
Session Three: What Drives Transformations?
Shifting Public-Private Involvement: A Public Good Perspective
I will be presenting for Inge Hall, who though very eager to participate, was not able to attend. She is one of the founders of the Human Development Report Office at UNDP who introduced the concept of Human Development. She and I worked together on this presentation.
I would like to say a few things about the concept of global public goods, beginning with the notion of the shifting involvement between public and private. Then I go on to the concept of global public goods. And finally, I will try to show how this concept can be used to provide suggestions for mobilizing policy making.
The idea of shifting between public and private comes from work published in the 1980s by Hirschman, who claimed that societies tend to shift back and forth between public issues and more private individual concerns. In our own work at extending these ideas, we have found that this shifting essentially involves state and market. Over time there is a trend towards more market and less state involvement.
Although previous work emphasizes this shifting between public and private, we have also found it useful to look at the concept of public and private goods. We contend that well-being depends on the consumption of such private goods as food, clothing, shelter, and so forth, as well as such public goods as peace, security, a healthy environment, etc. In the longer range, public goods become more and more important. For example, no matter how much money we spend on private goods, our security can be threatened by international terrorism. Another example is infectious disease. In other words, the public domain can have a vast influence on our sense of well-being.
The examples I have just given are negative, but the concept of public goods does not imply a value judgment. The general trend, however, indicates that over time we are deriving more and more negative utility from the public domain. This is because the transition to planetary interdependence is causing an interlocking of public domains. Individual well-being cannot be safeguarded by private actions alone. So the ideal change in the relationship of private and public would have oscillations with low amplitudes and trends that move toward a balance between public and private goods. In order to achieve that goal, it will be necessary to change policy making so that it favors the provision of public goods, especially global ones, but the problem is very complex given the absence of international government.
Before I can make specific recommendations, I have to say a bit more about what public goods are. In economics, public goods are defined as non-rival—that is, if I consume them, others also can consume them in the same proportion—and non-excludable—that is, it is impossible to preclude any person from consuming them. This is true theoretically, although it may not be the case in fact. Some goods are excluded from being considered public by this definition. Our innovation is to suggest that goods can be brought into the public domain through deliberate policy and design. Education or health care are examples. In other cases, things can slip into the public domain through neglect and ignorance. Environmental pollutants are an example. We have two suggestions: First, public goods are related to each other by their inherent characteristics. Second, policy choices should be involved in many cases. These measures are especially important in the case of global public goods, which are public goods that have a trans-border nature and affect more than one country or generation.
Providing public goods has many implications for policy making. First, who makes the choices? Second, how are these goods produced, assembled, and distributed? These problems are especially acute in the case of global public goods, since we have no international or global government with the power and resources to accomplish these goals. In order to understand the problem better, we have to divide it into two aspects: a political one that deals with the choices that have to be made, and a technical one that addresses the production of these goods.
I would like to make a few recommendations. I urge extending the subsidiary principle or the equivalence principle of public finance to the global, international context. Decision making should be done by those affected by decisions. Presently, there is a mismatch between the circle of stakeholders and that of decision makers, most dramatically in the case of world finance. As for the production side, we have found it useful to think specifically about how goods are produced. International building blocks are involved here: international regimes and regulations as well as national and regional ones. The production of public goods involves private individuals, households, governments, firms, and civil society at large. All of them need to be engaged. To sum up, we are involved in a multi-level, multi-actor world. Once we understand and act on this insight, the oscillations I spoke of earlier are likely to have less amplitude and long-range trends will become more beneficial.
The World Is a Third-World Country
I will avoid presenting power points and instead concentrate on the gut feelings that the idea of change summons up in us. I will be interested in narrative as well as data. Our approach to subjects like great transformations is affected to a significant degree by our point of view. Today, by utilizing several metaphors and figures of speech, I would like to suggest some points of view that have not received the attention they deserve. The first is that the future is not a place we are going to, but something we are creating. The particular way we enter a planetary phase of civilization will reflect the ways we think about ourselves as a collectivity. We might start by thinking through the very ideas of global community and global identity.
When we think about human beings, birth is a beginning and death the end. With communities, on the other hand, death is often the beginning. The death of an eponymous martyr can crystallize a national or ethnic identity. When in the future we look back at the present, we may well think that a global identity coalesced around September 11 rather than more positive developments like the Internet or the convening of important international conferences. We should also pay attention to our own hubris. Almost all discussions of globalization evoke a sense of arrogance and uniqueness. We have heard this tone before in places like India and Pakistan around the time of independence. Such feelings have negative consequences if they foster a sense of arrogance, but they can also be positive if they encourage a sense of responsibility for the world.
Before I begin my major thesis, I would like to recall an idea of Ortega y Gasset, who suggested that the history of civilization is the story of taming the instincts of the collectivity. We externalize our sense of ourselves as individuals onto the collectivity, which then operates by means of collective drives. But the animal that we have placed in the cage of civilization escapes from time to time. We thought we had placed capitalism in a cage for good, but we are now faced with the project of retaming it so that it serves us rather than eats us.
I would urge us to think of the world today as a kind of developing Third-World country that is undergoing a fundamental crisis. The tremendous wealth that is being generated by the transition to a global community is now causing an ever-increasing inequality. The world as a whole, in fact, is far more unequal in the distribution of goods than any one country, and it is growing more and more unequal. We have no political community currently that can respond to issues of injustice, unfairness, and inequality. The world is struggling to overcome a fundamental dualism between modern and traditional sectors. The first is corporatized, dynamic, and connected to the global economy. The traditional sector, on the other hand is biomass based, poor, and excluded from power. Though the conflict between these two sectors is muted in rich countries, it is quite obvious in developing countries of Africa, Asia, and Latin America.
Seventy percent of the world’s resources are used by the top ten percent of the world’s population. The bottom 40 percent enjoys only the most basic of technological advances. This conflict puts the world into the position of a dualistic country with two different economic, cultural, and political systems. Power is confined to the metropolis, while the countryside remains in a pre-industrial, pre-democratic apartheid state, where large groups are excluded from power and access to their fair share of resources. It is not at all certain if people will remain in this position much longer. When we consider social change we should not think of Switzerland, Norway, or the United States but rather of a developing Third-World country.
Ben Anderson distinguishes between what he calls popular nationalism and official nationalism. Popular nationalism is a creation of a collective identity which operates through popular intellectual or economic processes. The development of the printing press, the spread of literacy, and all the beneficial cultural changes that followed are examples. Today, the Internet takes the place of the printing press, and cross-country migration replaces rural-to-urban migration. Official nationalism, to the contrary, is created intentionally by census (putting people in categories), map (creating national and ethnic boundaries), and museum (fostering a historical cultural identity). Popular nationalism unifies people, while official nationalism divides them and places them under the direction of elite groups that enjoy access to power and privilege.
The experience of the South suggests that democracy can be used to bypass the people rather than include them in decision making. Nowadays, decisions are made by elite groups in Washington, the World Bank, or the IMF. Contemporary democratization bears interesting and instructive resemblances to colonialism and imperialism. Although several imperial powers like England moved from exploitative forms of colonialism to more liberal ones, many today fear a return to old, exploitative forms of colonialism. A country can be united by the popular hatred of its government. The sense of a collectivity can therefore take the form of resistance to open democratic processes. This may lead to a kind of guerrilla democracy, which need not be illiberal in nature, but may allow NGOs and other ad hoc groups to come together to form politically effective alliances.
We who are part of the global elite need to engage with new sensibilities that are moving to globalization through processes that are characteristic of the Third World. Its preconditions are almost identical to conditions of previous developing countries. Fear of returning to colonialism can retard progress towards globalization, as can a general distrust of official nationalism or a lack of confidence in the market. In the South, civil society has played an important role in the development of collective identities by building social capital, providing services, rights and advocacy, fostering legitimacy and trust, and placing the concerns of the poor and disenfranchised at the center of their programs. This new sensibility will most appropriately bring about the planetary phase of civilization. As part of civil society, it belongs among nongovernmental organizations.
Heraclitus said, “There is only one struggle in the world, and that is justice. Justice is the strife.” Planetary society cannot be built unless a planetary group forms that is centrally committed to justice.
This is a chapter from Making the Great Transformation (Conference).
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