global economic ethic
“If there is a magic formula for reducing poverty without growth, I would like to know!”
Jesus Crespo Cuaresma, Advisor to the World Bank, Professor at the Wirtschaftsuniversität Vienna, Institute for Money – and Financial Policy. Learn more about him: http://www.wu.ac.at/fileadmin/wu/d/i/vw1/CV_2015_Crespo.pdf
The UN NGO Committee on Sustainable Development (CSD) in Vienna/Austria elaborates on the project
“A Healthy Planet for Future Generations, Human Rights and Sustainable Development – 2 obstacles to progress in the present world economic system.”
how the current economic system can be positively adapted to gain sustainability.
Many (hobby) economists make the claim that their interpretation of economics is the only correct one. The discussions denigrate at the low level with the aim of trying to enforce their view and ideas about the economy. When analyzing comprehensive their contrary opinions, it turns out that there are numerous similarities.
Arthur Koestler’s describes in his book the “Sleepwalkers” how many great thinkers of the past seem to have wandered around and around the concepts they were seeking until they eventually stumbled upon them. Researchers, Hobby-Economics. Realists and Idealists and others are “sleepwalking” around trying to come up with concepts to solve the big problems of our time such as over- indebtedness of countries, resource depletion, economic growth and unemployment, climate change, the growing gap between rich and poor, etc.
Below is an overview of alternative economic and social concepts: (source modified and supplemented: RELEVANT, Das Magazin der Österreichischen Kontrollbank Gruppe, Sondernummer # 1a/2013)
Green Economy: The vision is the green transition of the economy leading to sustainable development; representatives of this vision are UNEP and OECD; it’s a political national and international approach, http://www.unep.org/greeneconomy/
Inclusive Growth: The goal is employing productively many people as possible to generate economic growth for example by means of endorsing education in all it’s alternative forms; representatives are EU, UNDP and others. The approach is political national and international; http://siteresources.worldbank.org/INTDEBTDEPT/Resources/468980-1218567884549/WhatIsInclusiveGrowth20081230.pdf
Europe 2020: smart, sustainable and inclusive economy should help the EU and the Member States deliver high levels of employment, productivity and social cohesion; representatives are the European Commissions and European Council; the approach is political, European and national. http://ec.europa.eu/europe2020/index_en.htm
Enquete Commission für Wachstum, Wohlstand und Lebensqualität: concrete policy recommendations to create more prosperity and quality of life in Germany; 17 deputies of the German Bundestag, 17 external experts; Germany in international context, https://www.youtube.com/watch?v=C6B7LRc8PN4,
Blue Economy: The innovative use of waste and resources leads to a prosperous Zero Emission Economy; Gunter Pauli, Blue Economy Institute, Blue Economy Alliance; Applying internationally, scientific and entrepreneurial.
Cradle to Cradle: Closed material cycles make “intelligent waste” possible, Michael Braungart, William McDonough, International, scientifically and entrepreneurially, https://en.wikipedia.org/wiki/Cradle-to-cradle_design
Faktor X: More prosperity from less nature by increasing resource productivity by a factor of X; Friedrich Schmidt-Bleek, Ernst Ulrich von Weizsäcker, factor X Institute; on the national and international level; scientific, entrepreneurial and political; http://factor10.de/category/factor-10-club/, http://www.faktor-x.info/wissenschaft/schmidt-bleek-mai-2003/interview-schmidt-bleek.html
Degrowth: Downsizing of the economy for more social equality, environmental sustainability and well-being; many activists and scholars; local to global; science and civil society; http://www.degrowth.org/
Degrowth Society: An economy that leads to high standard of living within ecological limits without growth; Tim Jackson, Niko Paech, Peter Victor; national, scientific and civil society,
Buen Vivir: Economical Development model which leads to a good life; Alberto Costa, Eduardo Gudynas; South America, Ecuador, and Bolivia, national, civil society and enterprising, http://buenvivir.biz/index.html;
Common Welfare Economy (The Economy for the Common Good): economy based on welfare-oriented principles; Christian Felber, 500 pioneering companies, national, civil society and entrepreneurial;
Solidarity Economy: The variety of grass-roots democracy and needs-based forms of economic life: many actors, mostly locally, civil society, self-organized; http://socialeconomy.itcilo.org/en; www.unrisd.org/
Global Economic Ethic: approach on global understanding and ethical force (Principle of Humanity and Golden Rule) bringing the ethical framework into the heart of business, economic and management actions – Economic success (profit) and ethical action are not mutually exclusive; Hans Küng, Klaus M. Leisinger, Josef Wieland; national and international approach on all levels: political, economical and management; http://www.globaleconomicethic.org/
Value Based Economics (Wertewirtschaft) : Bridging the gap between “egoistic ” economy and for the called “values”; Austrian School of Economics; Institut für Wertewirtschaft (“Institute for value-based economics”) in Vienna/Austria), Rahim Taghizadegan, Eugen Maria Schulak; international, national, political, philosophical, economical and management.
“Social-solidarity economies” applying the concept of co-operatives (Genossenschaften): Appreciation and application of the “original” cooperative thoughts of co-operatives; local and internationally, scientific and entrepreneurial approach. Persons giving momentum in Austria: http://hefte.gea.at/brennstoff40/#p=13;
These are just some of the concepts of post-capitalism. The NGO Committee on Sustainable Development (SDG) would be pleased to learn about other existing concepts, or you represent your own.
Roland Leithenmayr VfV
Sustainability and CSR (Corporate Social Responsibility) require holistic thinking, mental activity and a change in Paradigm. CSR shall be integrated continuously in any system such as an organization and institution. It is essential that the human (as stakeholder) shall be integrated in the system as well as around it by considering strongly moral and ethical values. Those values are fundamental for the development of sustainability principles (among others ethical standards and moral direction). The international Guidance Document ISO 26000 shall be used as criteria catalog as well as framework. Only humans can create Sustainability and not all those countless papers full with well-intended principles: Everybody is responsible to start “doing” instead to remain inactively. It is common that “One large meeting after the next is followed by inactivity” (Jeffry Sachs). The ISO 26000 as guideline will not advise minimum requirements, but formulates the main principles and key areas providing assistance for the implementation and communication of CSR. Additional to the guideline ISO 26000 the UN Global Compact as well the OECD demand cross-cultural ethical values and standards. To achieve sustainability the means of “Learning by Doing”, Agile Principles, Learning Organization and Learning Regions shall be applied; however, the impact of decisions and (global) activities shall be balanced between economic, social and ecological matters carefully, in particular reflecting the principle of humanity: “What you do not wish done to yourself, do not do to others”. This principle should be applied to the Universum including everything all around: animals, plants, ocean, – biodiversity.
Contrary to sustainability (the arrival), – which is a static condition -, “sustainable development” is a continuously dynamic undertaking (in the form of decisions and actions) to achieve the desirable sustainability. One of the steps to achieve the desired Sustainable Development is “Global Economic Ethic”. (Manifest Global Economic Ethic, Hans Küng, Klaus M. Leisinger, Josef Wieland, 2010).
There are many opportunities to end the scourge of war, poverty, hunger, decease, earth degradation, catastrophes, migration, unequal human rights, cultural and religious conflicts. Besides failures in moral virtues, there are many problems in systems like institutions, organizations, and infrastructures. Instead of wasting money on wars and by shoddy practices (banks, corporations, politics), resources shall be provided to promote innovations to abolish those above stated negative facts. We need innovation to create sustainable products and services, sustainable consumption, environmental improvement, organizational processes and social behavior.
Business itself is a community of action, managers, linking employees, customers and suppliers; therefore, the business as moral actor shall contribute to the advancement of Sustainable Development global as well as local. The complexity of global production systems are stretching out across cultures, religious and political boundaries this means: laws are not enough and common values are vital. Politic is often too weak to fight against greed, fraud, corruption and self- aggrandizement, and so no legal provision can be implemented without any ethical standards. But it is not just an issue of individual morality, but an issue of corporate morality and it concerns the global market economy as a whole. (Hans Küng, Global Economic Crises Requires a Global Ethic, The Manifesto Global Economic Ethic, page 167).
Sustainability and Sustainable Development, – as we perceive in Austria is unfortunately not guaranteed: inappropriate macro-economic politics; excessive speculation; inefficient functioning of the regulatory and supervisory system; an inadequate justice and education; lack of accountability and transparency; inadequate standards in financial reporting; casino capitalism and corruption; lack of truthfulness; trust and social responsibility; not enough money for development assistance; excessive greed of investors and institutions; falsified balance sheet and illegal manipulation of the markets; – all that we learn every day from the media.
The European Commission has been working since ten years with CSR (as a generic term of Sustainability) and adopted in 2011 a new framework and definition of CSR: the responsibility of organizations, institutions, businesses (and other systems) for their impacts on society. The EU Commission asked their members to develop their own National Action Plan for CSR. The purpose of these CSR NAP is to clarify which political framework is needed to promote the CSR Management Approach on a voluntary basis or required by laws and regulations. The Government, respectively the state should serve as a lighthouse respectively as model. The Austrian Federal Government has commissioned three Ministries to develop this National Action Plan for CSR. Unfortunately this CSR NAP so far has not been published and it is not clear how the Austrian Government wants to keep track to promote and guarantee CSR and Sustainability. So it is true that one large meeting after the next is followed by inactivity!
Roland Leithenmayr VfV
2015 will be a big year for global governance. Perhaps too big !
Mar 28th 2015 | From the print edition
MARY ROBINSON, a former president of Ireland, calls 2015 “the Bretton Woods moment for our generation”. In 1944 the small town in New Hampshire of that name hosted a conference which was to shape the post-war economic order. The open trading rules it established laid the foundation for decades of post-war growth and the “Bretton Woods twins” that it founded, the IMF and World Bank, still influence global financial governance.
Four UN conferences comprise the new Bretton Woods. Though they are unlikely to produce institutions that will matter in 50 years, if they go well they could boost growth and development in poor countries. If they do not, the only outcome will be windy and pointless political rhetoric.
The first of the conferences has just finished in Sendai, the nearest city to the epicentre of an earthquake and tsunami that devastated Japan in 2011. The importance of its subject—how to reduce the risk of disasters—was dramatically highlighted the day before it started when Cyclone Pam smashed into the tiny island chain of Vanuatu in the South Pacific, ravaging its economy and killing at least 17 people. The country’s president, Baldwin Lonsdale, who was in Sendai at the time, said the storm had wiped out many years’ development gains.
Another of the conferences is a special meeting of the UN in New York in September that will be dedicated to development. Its aim is to approve a set of “Sustainable Development Goals” (SDGs) to replace the “Millennium Development Goals” (MDGs) which were agreed in 2000. The MDGs measure progress towards such aims as providing clean water, combating HIV/AIDS and cutting child and maternal mortality, and are due to expire in 2015. Negotiators are busy arguing about what the SDGs that replace them should be.
Before that, in July, another meeting will be held in Addis Ababa, Ethiopia’s capital, to talk about how to raise more money for projects that would speed development. The idea is to find ways to ensure that a larger share of global savings is used for the plethora of big proposals that need funding. HSBC, a bank, recently estimated that Asia alone will need to spend $11 trillion on infrastructure over the next 15 years. But commercial lenders and investors are not willing to take on many sorts of infrastructure risk. The aim of the conference is to encourage risk to be shared more widely, as well as to persuade rich countries to stump up more money for aid.
The final conference is in Paris in December, when governments hope to sign a global treaty on tackling climate change. It is supposed to be based upon what countries are already planning to do to rein in greenhouse gases and adapt to climate change. By the end of March each country is to spell out its policies (or, in the jargon, “contributions” to the treaty) in such a way that negotiators can construct a deal.
The aims of the four meetings overlap. Climate change can increase the number and severity of disasters, and increase poverty since hundreds of millions living just above the poverty line risk being pushed back into destitution by a flood or epidemic. It is also linked to development because some of the most vulnerable countries are very poor, for example Sahelian states threatened by desertification and small island states affected by rising sea levels and ocean acidification. Conversely, though coal-fired economic development can reduce poverty, it also increases carbon emissions, thus contributing to climate change.
Helen Clark, a former prime minister of New Zealand and now head of the UN Development Programme, says success in 2015 means getting agreement on all of these negotiating strands: a climate treaty with teeth; most of the proposed SDGs, lots of financial promises. That will not be easy. The conference in Sendai shows some of the difficulties. It approved various targets—to reduce the number of people killed in disasters by 2030 “substantially”, for instance (it was 700,000 in 2005-15). But the target was vague, and there was little on how it is to be achieved.
The bigger problem is that the other three strands are enormously ambitious. The climate treaty, assuming it is signed, would be the first global climate treaty since the Kyoto protocol in 1997. Though the decision to base it on what countries are doing anyway should make a deal easier to reach, rich and poor countries are still bickering over how much the rich ought to pay the poor to help them deal with the costs of climate change.
The meeting in Addis Ababa also risks a split over how generous rich countries are prepared to be. There are plenty of opportunities for disagreement: it is supposed to deal not only with the vast costs of financing infrastructure and climate policies but also to crack down on illicit trade flows and give a boost to world trade talks. Each of these is knotty enough to scupper the event on its own.
But the most ambitious of the conferences concerns the SDGs. The MDGs were mainly about the poor; their successors are supposed to go far beyond that, with goals proposed for urbanisation, infrastructure, standards of governance, income inequality and climate change. The MDGs, says Homi Kharas of the Brookings Institution, who helped draft an early version of the SDGs, were about reducing poverty; the new goals are about creating peaceful and inclusive societies.
The number of SDGs reflects this breadth of ambition: there are 17 overarching goals and 169 targets, compared with just eight MDGs. It also shows what happens when a bureaucratic process runs out of control. The organisers sought to consult as widely as possible, with the result that each country and aid lobbyist got a target for its particular bugbear and is now unwilling to give it up unless others give up theirs. Something for everyone has produced too much for anyone. Making matters worse, some developing countries think each extra goal will come with a pot of money, so the more goals, the more aid. All attempts to chop down the list have failed: last year negotiators cut the number of proposals from 212 to 169, but largely by running separate targets together into one.
The original Bretton Woods conference established lasting institutions partly because its members faced a common enemy (Japan and Germany); shared a clear set of beliefs (that open markets were essential if economic nationalism was to be defeated); and were willing to take unpopular steps (such as lowering their own barriers to trade). But now rich and poor countries are divided, there is no consensus on how to tackle climate change and most countries are demanding that others, not they, should make sacrifices to strengthen the global economic system. The Bretton Woods moment is not doomed to failure. But seizing it will not be easy.
Posted by Peter Lillie