Agreed values needed to solve equity disputes

In recent weeks a number of events have occurred at world, European and domestic level which demonstrate that people are seriously…

In recent weeks a number of events have occurred at world, European and domestic level which demonstrate that people are seriously perturbed about the relationship between the economy and society. The World Trade Organisation (WTO) ministerial conference in Seattle failed to reach any decision about the future liberalisation of world trade.

At European level Tony Blair and Gerhard Schroder disagreed over Vodafone's $1.25 billion hostile bid for the German telecommunications company, Mannesmann, Schroder fearing this could lead towards a form of predator capitalism radically at odds with a culture that prizes consensus not only within but between companies.

In Ireland, a Budget decision which appeared to put the needs of the economy above those of society, as interpreted in terms of the role of stay-at-home spouses, had to be quickly amended.

We see in these events the essence of an ideological dispute about the course of future progress.

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The 20th century has been one of exceptional progress, with a breathtaking scale and speed of change. Then there is the darker side of the picture, with countless millions eking out a miserable existence, with many burdened by debt and others forced into slavery.

This heady mixture of progress and problems presents the major challenge for the management of our common global future. Concerns about the impact of further globalisation were at the heart of the debate in Seattle. The collapse of the talks was welcomed by more than a thousand protest groups objecting to the WTO. Some were workers from richer countries fearing job losses from cheap imports, others saw freer trade as benefiting the large companies of rich countries at the expense of the poorer nations.

The reality is that globalisation and freer trade have been central to the economic progress triggered off by the Industrial Revolution, and bodies such as the WTO are part of the solution to the issues posed by the more democratic nature of today's world.

The alternative to the freely negotiated rules and procedures of bodies such as the WTO or the UN for dealing with disputes is to see them resolved by force. After the horrors of two world wars in the first half to the 20th century, one of the most hopeful developments has been the growing acceptance of the need to replace force by diplomacy.

What the conflicting protests in Seattle and elsewhere illustrate is the absence of any agreed set of core principles or values for guiding the resolution of all such disputes.

The great political question for mankind is how to combine economic efficiency, individual freedom and social justice.

The collapse of communism and the decline in Christianity have weakened two of the opposing value systems which had guided policy-making for much of the 20th century.

For over 100 years the social teaching of the Catholic Church has been consistent in arguing that the rights of mankind must always be superior to the needs of the economy. Populorum Progressio in 1968 stated: "It is evident that the principle of free trade, by itself, is no longer adequate for regulating international agreements. It certainly can work when both parties are about equal. But the case is quite different when the nations involved are far from equal. Market prices that are freely agreed upon can turn out to be quite unfair. It must be avowed openly that in this case the fundamental tenet of liberalism, as it is called, as the norm for market dealings, is open to serious questions . . . When two parties are in very unequal positions, their mutual consent does not alone guarantee a fair contract, the rule of free consent remains subservient to the demands of the natural law."

While the concept of natural law might not retain much support in the contemporary world, the notion that economic agreements should be tempered by consideration of their social consequences would command widespread support, since ultimately economic development is not an end in itself but rather the means to providing a better way of life.

In the context of a global economy and the workings of the WTO, it points to the need for an open, transparent system of competition that is regulated in the wider interests of its members.

Whatever the problems for the wealthier nations, the circumstances of the developing countries surely constitute a priority concern in the shaping of any new WTO agreement. Even if the targets for international development over the coming decades are fully met, they suggest that almost a billion people will still be living in absolute poverty. Surely it is morally unacceptable for the rich of the world to derive the major benefits of further globalisation?

It would be a great mistake not to recognise the enormous potential for economic progress which globalisation presents. What we must recognise is that competitive markets alone cannot distribute the wealth they generate in the way we would prefer. It is not enough simply to desire such an outcome. If we want a better world, we must work for it.

Slavery was eradicated in most parts of the world because it became ethically and politically unacceptable. We should accord the same priority to ending the obscene prospect of a billion destitute people two decades from now. It is not beyond the capacity of mankind to design a system of global governance capable of the social justice that would deliver the economic freedom to make a reality of the political freedom already achieved.

David Begg is chief executive of Concern. Martin O'Donoghue is a former government minister.