Global Social Economy

Development, Work and Policy

John B. Davis

• Publisher: Routledge
• Year: 2009
• ISBN:
  9781135203573
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

This book addresses 'global social economy' which addresses the relation of capitalism to human flourishing, the role of international governance in the world economy, the transformation of work and use of time in internationalizing economies, cross-country developments in gender, poverty, and ageing, and ethics economic policy issues in the international economy.

This edited collection examines the social nature of capitalism today, the possibilities for social and economic development in the world under the democratic leadership of the United Nations, and the middle ground between market and hierarchy occupied by gift exchange as a means of coordinating economic value creation and the creation of knowledge. It considers long term issues in the global social economy concerning gender and discrimination, intergenerational poverty transmission, and the role of ageing.

From a variety of internationally acclaimed contributors, this collection introduces new social economic perspectives on the global economy that contest the neoliberal Washington Consensus view dominant until recent financial crises.

1
Global social economy

An introduction

John B.Davis

Social economics investigates the social economy. The term “social economy” originated as a way of referring to the third sector in mixed market economies seen as distinct from the more familiar private and public sectors. With the development of national market economies in the eighteenth and nineteenth centuries, along with the development of capitalist market economies, it became apparent that there existed a significant amount of economic activity that neither reflected the standard logic of markets, nor that was part of the activities of the state. As there already existed an understanding of the institutions and economic functions of the market and the state, much of the early interest in this third sector was directed toward explaining the nature of its distinctive institutions and the social-economic structures. The principal forms originally identified remain those generally emphasized today, albeit in terms of a more contemporary vocabulary: cooperatives, not-for profit organizations, mutual associations, and voluntary activities and community organizations of various kinds. These institutions were argued to also possess their own distinctive set of motivating principles understood as a specific set of social values. These are less easy to summarize, but can perhaps be best associated with community, democracy, cooperation, equality, and the dignity and autonomy of individuals and social groups. These twin foundations—the institutions and social values of the social economy—constitute the primary basis on which social economics has developed to the present.

One might suppose, then, that as the market and the state dominate economic activity in the world today that social economic values and institutions play a subordinate role in modern economies. Yet we find at the beginning of the twenty-first century that they have in fact come to play a surprisingly important role in the global economy. Consider two quite different ways in which this has occurred. First, key supra-national economic organizations in the world today, such as the European Union, the North American Free Trade Association, the Asia-Pacific Economic Cooperation organization, the World Trade Organization, and many other regional economic associations, clearly function as cooperative associations that create shared rules for trade and investment for member countries. Indeed it is now widely agreed that the remarkable extension of trade and investment links between countries over the last quarter-century is very much due to a long record of post-war success in establishing these supra-national economic communities. In effect, the ideals of community as developed on a small scale basis within national economies in the past have been transferred in new form to the larger stage of the global economy. Of course, the principles of the market and state economic development still obtain, but they are now increasingly framed by international and regional cooperative agreements. Second, a key new actor in the post-war economy is the international non-governmental organization (NGO). These not-for-profit organizations are not only transnational in scope and mission, but they also explicitly value individuals and social groups for themselves; that is, they invest all individuals and social groups with an inherent dignity and the right to a relative autonomy simply as members of the world community. This goes beyond both the more traditional emphasis on freedom associated with market social values and the citizenship values of the state. Indeed, in keeping with their respective missions, NGOs value people irrespective of whether their nations do and whether or not they are successful in the marketplace.

Thus social economics today is in the process of acquiring a new subject of investigation: the global social economy. A little post-war history offers us clues as to why social economic values have come to have this new meaning. Consider what has brought about our globalized economy. The post-war global economy was effectively inaugurated in 1973 with the collapse of the Bretton Woods exchange rate system, the United States’ abandonment of the dollar-gold exchange system, and the world’s adoption of free floating exchange rates. One very important consequence of these developments was the opening of nations’ capital accounts, the resulting free flow of capital across national boundaries, the migration of multinational firms to all parts of the world, and the attendant emergence of international banking as a dominant form of cross-country finance. Until the Asian Crisis of 1998, then, the dominant values associated with this quarter-century of development were those of the free market neoliberal “Washington Consensus” which called for privatizing public property and liberalizing markets everywhere (Williamson 1989). However, the Asian Crisis created serious doubts about the stability of a global economy developed on this basis, and this in turn led to further doubts about the desirability of neoliberal values. In fact these doubts had been building for many years. The World Bank estimates that from the 1970s to the end of the century there were more than 100 important national financial crises with significant impact on economies and people’s well-being and livelihoods (World Bank 2001). But it was only in the aftermath of 1998, that many began to search for alternatives to the Washington Consensus world view and its social values.

Thus the world-wide crisis that began in late 2008 is now widely seen as confirming evidence that the institutions and values of free markets are inadequate to the needs of people and nations. At the same time, it is also now widely believed that nations will be unable to address the crisis each on their own. Accordingly as policy-makers struggle to deal with the financial crisis and the economic downturn, it seems to have become consensus opinion that the way forward depends on devising new forms of cooperation and joint burden-sharing across countries that respects the interests and traditions of people everywhere as members of one world community. Remarkably, then, social economic values have emerged as an alternative foundation for thinking about the global economy. The sense many have today is that people all have an inherent dignity and equality irrespective of their economic prosperity and material success in life. This conviction is often defended under the banner of human rights. But why have human rights become so visibly important in the thinking of so many at this time in history? Prior to globalization, individual rights were mostly believed to be the liberal democratic rights of speech, political participation, religion, and thought—that is, essentially national citizenship rights. But globalization not only made these traditional rights the ambition of people everywhere, but with many countries’ tremendous development needs, it has also put social and economic rights on the agenda as the necessary concomitant of the former. Yet social and economic human rights, not having national foundations, have as their ultimate rationale simply that all people are members of a single world community. That is, they are human rights and indeed social economic values par excellence in virtue of valuing the inherent dignity of people irrespective of their locations, cultures, origins, or goals.

Nonetheless, these universal social values, despite their immense appeal in the world today, must still be seen as having a very fragile place in the global economy, particularly in the face of an increasingly disordered economic process that puts so many people at risk and threatens the whole idea of shared community. Indeed, whereas the social values of the Washington Consensus were paired with established economic institutions of open markets and free movement of capital, the social values of cooperation and community lack a comparable institutional basis in the international economy. A special difficulty they face is that historically these social values arose in national settings within the interstices of mixed capitalist economies, and were consequently generally local in nature with limited cross-national reach. Indeed one of the foundations of the idea of community is the sense of personal connection, as made possible by local proximity and ease of contact, in contrast to the sense of impersonal ties that operate in global markets that has motivated neoliberal social values. This makes the recent emergence of social economic values in the global economy all the more paradoxical. Why should people feel a sense of community and a desire to cooperate with people with whom they not only have no personalized contact but who are also likely to be dramatically different in background, culture, and experience? The answer can only be that these social values are more versatile than we have had reason to believe in that they are able to root in institutional settings far different from those in which they historically developed in modern market economies.

But there is still much to understand about how this new vision of the world economy is coming about. If the values of cooperation and human dignity are being adopted as the basis for an emerging global social economy, what institutional forms and arrangements exist that provide a basis for their development? The chapters in this volume are in search of answers to this question. They presuppose the social values of a global social economy, and ask what supports them, and how are they to be extended. In this respect, these chapters are exceptionally forward-looking. They are in search of the global social economy that frames private and the public. They are in search of how the third way becomes the main way forward.

Capitalism, human development and knowledge

The three chapters in this section of the book respectively appraise three overarching concerns facing the global social economy: the social nature of capitalism today, the possibilities for social and economic development in the world under the democratic leadership of the United Nations, and the middle ground between market and hierarchy occupied by gift exchange as a means of coordinating economic value creation and the creation of knowledge.

In the opening chapter, “Capitalism and human flourishing?: the strange story of the bias to activity and the neglect of work,” Des Gasper provides a broad overview of capitalism as a social economic system at the beginning of the twenty-first century. He focuses on a fundamental question: what sort of conception of human flourishing does capitalism promote? Most discussions of the relationships between capitalism and human flourishing, he notes, concern capitalism as a means or as an instrument. They consider how efficacious or not this instrument is with respect to some conception or conceptions of human flourishing. Capitalism is also defended as being, amongst other things, a field of freedom; a forcing ground of innovation; a system for widespread opportunity for involvement in decision making and hence for the growth of skills, knowledge and experience; a mechanism to reward effort and creativity; and a stable basis for political democracy. Each of these lines of defense carries a potential for critical assessment and for motivating reform and redesign. Most of these lines of thought also have implications for the conceptions of human flourishing that are associated with capitalism. But what conception of human flourishing does capitalism promote? While multiple conceptions of flourishing may exist under capitalism, he asks whether certain types of human flourishing are promoted by capitalism and are more in harmony with it, rather than simply able to co-exist with it. With reference to current conceptions of well-being—pleasure or satisfaction, preference fulfillment or fulfillment of substantive needs, and so on—he also suggests that capitalism does not fit any of them very well. Instead, its motor of unending restless expansion and destruction may fit an activist conception of well-being.

Keith Cowling et al. in “The United Nations and Democratic Globalization: A Reconnaissance of the Issues” are concerned with the direction of contemporary capitalism and the role the United Nations has in influencing the democratic development of economies. They seek to contribute to economic and political debate about the organization’s role in the modern world, and their chapter gives an initial reconnaissance of the issues. Without attempting to provide a detailed history or analysis of the current situation within the organization, and maintaining a distance from the baggage of its internal politics, their objective is to present and consider a perspective based upon a particular analysis of processes of economic development. The analysis focuses on the social economic goal of including all peoples in the realization of the economic development goals that they themselves would democratically identify and seek, given the opportunity. They suggest that this is an approach that is consistent with many of the principles of the United Nations. Most notably, it has the realization of the aspirations of peoples at its heart and to that degree is in line with Kofi Annan’s vision for the United Nations in the twenty-first century. If that vision is meant to be real and realizable, the issues they identify and discuss represent economic and political challenges that must be overcome.

In “Knowledge development and coordination via market, hierarchy and gift exchange,” Wilfred Dolfsma and Rene van der Eijk ask us to consider how economic value creation in general and knowledge creation in particular require coordination, and that coordination can take several forms. In addition to markets, where prices coordinate, and hierarchy, where authority coordinates, there are networks that coordinate activities. This chapter suggests that the idea of gift exchange allows for the middle ground between market and hierarchy to be explored more fruitfully. The three coordination mechanisms are assessed in the context of knowledge creation and diffusion. Each has particular advantages, but those offered by gift exchange make it an effective and sometimes preferred alternative.

Time and work

The second section of the book is devoted to one of the most fundamental issues in social economics, the nature of work. Perhaps no other issue is of greater concern than how people earn their livelihoods in interaction with one another. The particular focus of the four chapters here is the changing nature of the relationships between time and work in modern economies and the impact of work time arrangements on well-being, all in the context of changing technologies of work in the global economy.

François-Xavier Devetter, in “‘Time sovereignty’: Its meaning and externalities,” begins with an examination of changes post-1980 in the meaning of working time. From the 1930s until the 1980s the Fordist wage-earner relationship remained relatively stable, and applied to a large majority of salaried workers. However, this organization of time, which can be called a Fordist regime of temporal availability, seems to have been disputed since. This challenge is partially visible from a statistical point of view, but seems more pronounced when examined from the point of view of its legitimacy. The Fordist organization of working time is criticized both from the points of view of the wage-earner and the employer. For the wage-earner the criticism is based largely on the desire for greater flexibility or “choice” in working hours. Requests from the employer for greater flexibility are equally numerous and have intensified over the past 20 years. These two positions seem to merge in the writings of various observers to clear the way for a new compromise based around the concept of “time sovereignty.” It is this kind of time sovereignty—the freedom to work more to earn more—that is the subject of this chapter. The issue is particularly important today in France, but could come to concern other countries such as the United Kingdom or the United States where managerial autonomy to shape the organization of work is less restricted. The situation is slightly different elsewhere in Western Europe, particularly in the Nordic countries. Nevertheless, the French case could be important for understanding larger trends. After describing what is currently meant by time sovereignty in France and highlighting the role it plays in an eventual new “post-Fordist” compromise, the chapter demonstrates how this mechanism favors long working hours and entails important externalities.

In “Age differences in the consequences of overwork,” Beth A.Rubin and Charles J.Brody begin by noting that feeling “overworked” is a frequent experience of work in the contemporary economic life. Its negative consequences for employees are also increasingly well documented. The non-profit Families and Work Institute has issued two reports, one in 2001 and one in 2004 that demonstrate the prevalence of feeling overworked and its personal costs to employees of increased stress, depression, and anger. This chapter asks if these negative effects differ by age group. Using the 2004 “Overwork in America” data, and building on their previous research, the authors examine the impact of feeling overworked on employees by age group since their prior research, as well as anecdotal accounts, that suggest that younger workers differ fundamentally from older workers in their expectations about the labor force experience. They test competing hypotheses from the perspective of normative social contract theory and life course theory, and find minimal support for life course explanations of the moderating effect of age on the negative consequences of overwork.

Robert M.LaJeunesse, then, in “The implications of happiness research for work time reform,” inquires about how people view work from the perspective of their self-perceived happiness. Recent psychological research on the impact of economic growth on well-being has challenged the efficacy of traditional Keynesian macroeconomic policies to foster improved well-being. The findings are that, beyond an adequate subsistence level, relationships and social engagement are more important to life satisfaction than income. This has important implications for socio-economic policy. In particular, achieving the goal of full employment will require significant labor market reform if the outcome is to be welfare enhancing. This chapter reviews the recent research on happiness in the context of work time reform, and seeks to identify a role for work time reorganization in improving lives and well-being.

Finally, Esther Ruiz Ben’s “Social time in international work environments” looks at the impact that new information technologies have on the nature of working time in international work environments. Different time dimensions and temporality meanings are interwoven in international work environments through these new information technologies. In this chapter, she advances a theoretical model to analyze the relation between social temporalities and information technologies in inte...

Table of contents

• Routledge advances in social economics
• Contents
• Illustrations
• Contributors
• 1 Global social economy
• Part I Capitalism, human development and knowledge
• Part II Time and work
• Part III Gender, poverty transmission and ageing
• Part IV Ethics and social economics
• Index