The Academy’s General Assembly at the Taj Mahal Hotel in New Delhi on November 9-11, 2011 is a landmark event in the recent history of the Academy. All those who were able to attend will affirm that the creative energy and enthusiasm which marked the event signal the Academy’s definitive emergence from the challenges of the past year and its readiness to embark on a new era of dynamism and achievement. In all, about 30 Fellows actively participated in the event.
The GA was a resounding success in another respect as well. It confirmed the value of our new strategy of working in closer collaboration with like-minded organizations such as the Club of Rome and The Mother’s Service Society (India). As Trustee Orio Giarini who was present at the birth of the Club reminds us, our links with the Club date back decades. Two of our past Presidents, Harlan Cleveland and Carl-Göran Hedén, came from the Club. Today about 35 Fellows, including four of our current Trustees, are also members of the Club. Combining our GA with the Club’s annual conference proved an excellent way to expand and enrich the intellectual exchange for both organizations.
Contents:
Peace & Security
Revolution in Human Affairs
The spread of democratic governance and human rights, the rapid economic growth and growing disparities between rich and poor, and the explosive spread of communications technologies to the masses have spawned a silent revolution that is rapidly reshaping global society – what former WAAS President Harlan Cleveland termed “a revolution in rising expectation”. This revolution releases enormous social energy which can lead to greater dynamism and more rapid progress. But what happens when the energies released find no positive outlet for constructive expression? What happens when the rising expectations of youth enter a world without sufficient employment opportunities and when the poor become passive but firsthand witnesses through the mass media to the lavish life styles of the consumer classes?
These are questions which Jasjit Singh has framed for study in the WAAS project on “Revolution in Human Affairs”, launched last February at a seminar in Delhi and presented for further exploration at the Delhi GA this November. His startling and timely conclusion is that when these rising expectations are frustrated and prevented from positive expression, they build up as tension beneath the surface until they gain sufficient pressure to explode into action, as evidenced by the Arab Spring, the Occupy Wall Street Movement, the rise of fundamentalism, and the spread of Naxalite violence in the poorer rural parts of India.
Examining history as well as current affairs, this helps us understand why France underwent a violent revolution in 1789, while England underwent more gradual evolutionary change; how greater freedom and higher levels of education can ignite social tensions; and how growing prosperity can be associated with growing discontent. Recognizing the essential role of employment in positively absorbing these social energies is one of the reasons that since 2005 India has operated the largest employment program in history. This perspective poses an urgent policy question for the Academy to examine: “How can the Revolution of Rising Expectations be vectored in a positive direction for greater constructive, peaceful and productive outcomes?”
Read more in Cadmus, “Revolution in Human Affairs: The Root of Societal Violence” by Jasjit Singh and “Rising Expectations, Social Unrest & Development” by Ashok Natarajan.
Law & Governance
Theory of Social Development
The relationship between law and social development is complex and poorly understood. Law plays a crucial role in the development of society, and social development drives the evolution of law. In his presentation at the Delhi General Assembly, Håkan Hyden stressed that a theory of law is essential to comprehend the connection between the development of law, the development of society, and the phases through which each of them passes. There is a pressing need for research on this relationship.
Social development, according to Håkan, is a movement from the collective to the individual orientation. This expresses in law as a shift in focus from externally imposed authority to self-regulation, which increases the significance of contract as a legal instrument. The social movement unfolds as a progression of waves, which can be depicted as a series of “S curves”. Each stage of transition is characterized by contradictions that appear between the old and the new forms of organization, leading to rising tensions and the transformation of energies.
In contrast, Håkan depicts the development of law as an interplay between opposing pairs of forces, static and dynamic elements, giving rise to a locomotive effect. Differences in speed and rhythm between the social and legal processes give rise to problems and incongruities, hindering the advance of society until the legal framework gradually evolves in accommodation to the new cycle of social development. See Håkan’s full paper for details.
In Search of a New Rule of Law Paradigm
The principles and practice of law are a composite of multiple forces – the force of past precedent, established custom, and accepted tradition; the force of present political, economic and social power; and the force of emerging aspirations and ideas striving for acceptance. At any point in time, law consists of a more or less precarious balance between the past and the future. It is both a condition and a consequence of social development. As a social organization, law is a mechanism for channeling social energies. It reflects the prevailing values of society and the precise points at which there is contention between conflicting values. Thus, legal choices go to determine what to conserve, what to bury, what to affirm and what to enhance. Since values are changing rapidly in the modern era, social change leads to changes in the interpretation and application of law over time.
The governing principles of law are progressively shifting from a conflict paradigm of naked coercion to the exercise of authorized social power influenced by higher values. The early ‘law’ of humanity was the law of the jungle, survival of the fittest, might is right. The stronger imposed their will on the weaker, reinforced by force of arms or popular support. Hereditary rule became prevalent as a means to ease the transition from one leader to the next, avoiding frequent challenges to legitimacy and wars of succession. Law evolved as an instrument to manage the politics of conflict, to replace violence with understandings reflecting authorized basic decisions about social order. Coercive rule based on force of arms was progressively replaced by notions of authority based on a written text and backed by the implicit threat of coercion. Money too played a central role in the transition from violence to social order. As governance and law evolved, coercion gave way to social custom, conscious legislation and jurisprudence as the dominant means of managing conflict and resolving disputes. This transition from violence to law continues today in both national and international contexts. Law involves an implicit acceptance and internalization of authority by the collective, and establishes a major expectation about the shaping and sharing of human values. Unless the community accepts the authority of its rulers and the laws they pronounce, the rulers may be compelled to resort to coercion to maintain themselves. Thus, the ultimate determinant of law will be the major expectations that the community holds about the exercise of authority and control in the common interest. The individual plays a key role in this process. This has profound implications for the evolution of both national and international law and emerging expectations of justice and value.
The search for a new rule of law paradigm must be driven by an approach which integrates disparate discourses, and incorporates scientific views of change and a global view of justice, fairness and human dignity. The work of former WAAS President Lasswell and Fellow McDougal is the closest approach that is compatible with the fundamental values and interdisciplinary orientation of the World Academy and can serve as a useful starting point for a WAAS project.
Winston Nagan and Garry Jacobs
New Economic Theory
Paradox of Value & Uncertainty
The question of value is central to the formulation of new economic theory. In his presentation at the GA, Orio Giarini called for a
radical reassessment of economic value based on the real purpose of economy, which is maximizing human welfare, not maximizing economic growth or monetary wealth.
These apparently synonymous terms are often in direct conflict for a number of reasons:
1. The confusion between flow and stock blinds us to the fact that increasing economic activity can be and often is achieved by consuming non-renewable resources that reduce real wealth even as they increase economic activity.
2. Measures of economic growth neglect the concept of negative value. Growth may result in greater destruction of real wealth than it creates. Are higher levels of military spending and environmental remediation really indications of rising human welfare?
3. Real economic value has to take into account the utilization value of goods and services over time. In a modern service economy, true cost and value can no longer be fully defined at the point of sale. R&D expenditure, warranty and liability costs may occur years before or after the sale transaction. Many services such as health care are delivery systems that we invest in to provide for on-going service and security over time, and cannot be properly valued at the time of sale.
4. Important aspects of human welfare do not fall within the monetarized economy, such as home care for children and the elderly. We now spend $60 billion a year on bottled water which formerly was a virtually free commodity. The monetarization of drinking water is at least partially a result of declining quality of life, not progress.
More profoundly, the evolution from the industrial to the modern service economy has led to a paradox of uncertainty. Uncertainty is the source of doubt and insecurity which human activity strives to minimize. At the same time it is a rich creative cauldron of untapped potentials from which new wealth is constantly emerging in the form of new aspirations, products, services, technologies, organizations, etc. The key to future prosperity is to learn how to tap the creative value of uncertainty.
For a detailed discussion of these issues, see “The Evolution of Wealth & Human Security” in Cadmus Issue 3.
Need for a New Paradigm in Economics
The world needs a paradigm shift in economics similar to the one physics experienced a century ago, when quantum mechanics and relativity theory were formulated to address phenomena not explainable by Newtonian mechanics. This was the central thesis of Roberto Peccei in his presentation on November 11.
The emergence of a paradigm change in Physics came from understanding the limitations of the existing theories, and then inventing new concepts appropriate for these new regimes. A similar reassessment is needed in economics today.
The central issue facing the world today is that unbridled population and economic growth are untenable in a finite world. This calls for development of legal and social instruments which will provide solutions to our present predicament outside of present economic theory. New economic theory is needed based on sustainability rather than growth.
Economics is still based on many of the concepts formulated in the time of Adam Smith which were applicable to the transition from an agrarian to an industrial economy. We need new theory that incorporates concepts of biocapacity and sustainability. Okun’s law describing the relationship between growth and employment is really a tautology, rather than a valid theory.
New theory must also address the true role and purpose of financial markets to support human well-being, rather than speculative activities driven by greed, and promote investment in the real economy, creation of new jobs and equitable distribution of wealth.
To see Roberto Peccei’s Delhi presentation click here
See his article on “Rethinking Growth: The Need for a New Economics” in Cadmus Issue 3.
Full Employment
Global Employment Challenge
Employment is the economic equivalent of the right to vote in democracy. Without access to employment opportunities, citizens are
deprived of the essential condition for survival and well-being. This was one conclusion of the Academy’s highly successful, multidisciplinary e-conference on the Global Employment Challenge which examined the economic, political, legal, social, technological, ecological and psychological factors impacting on job creation.
After presenting the conclusions of the GEC at a Club of Rome conference in Bern late last year, WAAS has been exploring fresh insights into a comprehensive social theory of employment in collaboration with Ian Johnson, the Club’s Secretary General. Their conclusions have been published as a series of articles in recent issues of Cadmus by Fellows Winston Nagan, Ashok Natarajan, Garry Jacobs, Ivo Šlaus, and Patrick Liedtke. In addition, WAAS has had discussions with the European Commission and ILO to explore the potential for collaboration to evolve fresh strategies to address this crucial issue.
A remarkable fact emerged during a session on “Creating Sustainable Work” at the Delhi GA, in which Orio Giarini, Ivo and Garry were speakers. In spite of the challenges posed by the population explosion, automation and globalization, employment growth has, over the past six decades, outpaced rapid population growth. This fact suggests that the short term gloom generated by the recent financial crisis and global recession need not result in a perpetual job crisis, provided countries act decisively to remove the destabilizing and destructive impact of unregulated financial speculation. Introduction of a Tobin Tax on international financial transfers can be an effective means to redirect a portion of the 216 trillion dollars in global financial assets into productive investments in the real economy.
Three conclusions seem inescapable. First, high levels of unemployment, especially youth unemployment, are incompatible with national and global peace and social stability. Second, the social costs of high levels of unemployment in terms of rising levels of welfare expenditure, crime, violence and terrorism are greater than investments needed to remove this scourge. Third, a permanent solution requires recognition of employment as a fundamental human right and the restructuring of economic policies to maximize human welfare.
Global Employment Model
Employment has been traditionally regarded as a problem that falls within the purview and sovereignty of national governments. Like
the dangers of nuclear weapons proliferation, the international financial crisis and global warming, recent events highlight the fact that employment now represents a global challenge which can only be fully understood and effectively addressed by a global approach.
Over the past six months WAAS and the Club of Rome have conducted numerous discussions to formulate the outlines of a Global Theory and Model of Employment. At a meeting in Dubrovnik in September, Ivo Šlaus, Ian Johnson, Orio Giarini and Garry Jacobs identified more than 100 significant factors and trends impacting on global employment markets, including population growth, energy and ecology, immigration, globalization of trade and financial markets, rising levels of education, faster technology dissemination, law and human rights, social organization and changing social attitudes.
At the GA, Garry presented an overview of a proposed project to develop a global theory and model of employment in collaboration with organizations such as the Club and ILO.