Position Papers

Raising the Ethical Bar in a Shrinking World


We are living in a new world – the world of a global capitalist economy that is vastly more flexible, resilient, open, self-correcting, and fast-changing than it was even a quarter century earlier. It’s a world that presents us with enormous new possibilities but also enormous new challenges.
– DR. ALAN GREENSPAN, Former Chairman U.S. Federal Reserve Board [1]

In his foreword to Duncan Green’s classic, From Poverty to Power: How Active Citizens and Effective States Can Change the World, renowned Harvard Professor, Indian Economist and Nobel Prize winner Amartya Sen, classifies poverty as “a huge tragedy which ruins the lives of a great many people across the world. The immense tragedy of poverty is obvious enough: lives are battered, happiness stifled, creativity destroyed, freedoms eradicated by the misfortunes of poverty” [2]. One quickly remembers here George Bernard Shaw’s preface in his 1907 play Major Barbara in which he speaks of poverty as “The greatest of evils and the worst of crimes.” In the past, we have been accustomed to the classic view of poverty characterized as the shortage of income or the lack of the basic necessities of life. This may be well established in our minds, but ultimately, the situation of the 21st century, having strained this classic view begs for a re-conceptualization of the whole metaphysics of poverty as a phenomenon radically surpassing the mere lack of food, water, housing and other life basics. In the words of Amartya Sen, today’s global situation forces us to “see poverty as unfreedoms of various sorts” [3].

This situation has today been heightened in the emergence of the global financial crisis at the start of our century. At the beginning of the 21st century, the worlds of the rich and the poor, the west and the east, in essence the economic universe has been hit by a crisis for which it was never prepared for. In the view of Spanish Professor Jose T. Raga, “Its intensity and extent, as well as the speed of transmission of its effects, has surprised humanity, and even those who had been alerted of worrying symptoms in the area of economic activity, because the daily warnings of the markets – and the economic scenario in general – did not serve to restrain the foreseen event, the extent of which has been more accurately assessed ex post, than it could have been based on the ex ante opinions. Perhaps the change of framework in economic relations at the beginning of this century converted a common phenomenon into a hitherto unknown event.” [4]

In this paper, we shall attempt a re-conceptualization of the global metaphysics of poverty, noting how the global financial crisis and the economic meltdown both conspire to heighten the impact of poverty in the poor regions of the world and also how these events have made it urgent to raise the ethical bar of the global financial system today. The role of global civil society, active citizens and effective states in creating checks and balances on the global system and in championing the fight for poverty reduction in this era of Millennium Development Goals (MDGs) will also be explored. This paper will therefore be divided into a-six-point agenda:

i. The Situation of Poverty Today
ii. The Economic Meltdown as the Tipping Point of the Global Financial Crisis
iii. Impact of the Economic Recession on Poor Regions of the World
iv. Reconstructing a New Global Financial Ethic
v. Global Civil Society, Active Citizens and Effective States as Engineers of Social Change
vi. Conclusion

The Situation of Poverty Today
A discussion of this nature on the metaphysics of global poverty does not concern itself with the rumination of facts, statistics and data on the existence of poverty and on the variegated guises under which it manifests itself. Extensive volumes have been written on that, and properly speaking, an issue of that nature is the domain of the economist, social analyst or demographist. However, these statistics lend intellectual credence to this article’s attempt to understand the fundamental presuppositions, spiritual foundations and underlying philosophical assumptions that give rise to poverty and the vagaries of social exigencies it occasions wherever it exists and whichever guise it assumes [5].

From the cradle to the grave, the womb to the tomb, “a person’s life chances”, Duncan Green argues, “are dominated by the extraordinary level of inequality that characterize the modern world” [6]. Addressing an audience in London in 2005, Nobel Peace Prize laureate Nelson Mandela lamented the alarming situation of global poverty in an age that boasts of technological and industrial sophistication. In his words, “Massive poverty and obscene inequality are such terrible scourges of our times- times in which the world boasts breathtaking advances in science, technology, industry, and wealth accumulation- that they have to rank alongside slavery and apartheid as social evils.” According to the 2005 UNDP Human Development Report, the extent of inequality and poverty in today’s world creates a moral crisis and scars the conscience of the world. In the report, it is stated that the income of the world’s 500 richest billionaires exceeds that of its poorest 416 million people [7]. This is perhaps, the greatest global challenge of our century and it is one that concerns all nations, governments and leaders, since in a globalized world, poverty, inequality, deprivation and suffering are not restricted within borders but spill over in the form of conflicts, environmental degradation and migration.

Extreme manifestations of poverty and inequality provoke fury, anger, rage and condemnation basically because they violate the widely held belief that all people, wherever they exist, are privy to the enjoyment of basic rights. After all, the 1948 United Nations’ Universal Declaration of Human Rights (UDHR) states this clearly [8]. And that is why there is something wrong and deeply unjust about a global system that allows 800 million people to go hungry while an epidemic of obesity blights millions of lives in rich countries [9]. Inequality seems to hold the key to the poverty that exists around the world since at the sharp end of the skewed distribution of power, assets and opportunities are the billions of people who live a life of misery and want. In “Fighting Poverty to Build Peace” his 2009 Message for the World Day of Peace, the Catholic Pontiff, Pope Benedict XVI said that “Poverty is often a contributory factor or a compounding element in conflicts, including armed ones. In turn, these conflicts fuel further tragic situations of poverty” [10] This contrast enables us to see poverty and inequality as cousins. Where poverty exists, traces of inequality and discrimination are always present.

Poverty, as we have affirmed, is much more than low income or the relative lack of access to social services. It is a sense of powerlessness, frustration, exhaustion and exclusion from the decision-making organism of society and public life. It is a deprivation of sorts, a lack of the basic opportunities for positive self-determination. Addressing the Economic and Social Council (ECOSOC) of the United Nations in June 1993 in Geneva, Switzerland, then UN Secretary-General Boutros Boutros-Ghali called attention to the radical manifestations of poverty evidenced in the generally dehumanizing phenomenon of deprivation. In his words, &#8

220;Deprivation is a multi-dimensional concept. In the sphere of economics, deprivation manifests itself as poverty; in politics, as marginalisation; in social relations, as discrimination; in culture, as rootlessness; in ecology, as vulnerability. The different forms of deprivation reinforce one another. Often the same household, the same region, the same country is the victim of all these forms of deprivation. We must attack deprivation in all its forms. None of the other dimensions of deprivation, however, can be tackled unless we address the problem of poverty and unemployment” [11]

This analysis permits us to see poverty, in the eyes of Professor Akin Mabogunje, as entailed in “a web of deprivation, a criss-crossing of circumstances serving as a trap from which, once caught, it is difficult for many to escape without assistance. It emphasizes that what the poor loses by being caught in the trap is more than a matter of income and assets. Being poor means that a person is marginalised in the decision-making process of his community; is discriminated against in society; feels generally that he has no abiding roots in the community; is usually displaced to the more environmentally unsafe areas of societal space; and he and his family members, particularly his women and children, are vulnerable to various hazards and threats” [12].

Although we can tick out many situations of catastrophe across the globe in which the outpouring of aid and support from governments and people of goodwill to help victims of poverty and disaster show that ‘compassion fatigue’ does not exist, it is also true that poor people should not simply be consigned to a state of mere passive reception of charity and humanitarian assistance. Their suffering and distress arouse deep moral concerns in the very conscience of humanity. This issue was raised with great urgency by Pope John Paul II when in his 1993 Message for the World Day of Peace he addressed the global human family in these terms: “Our world also shows increasing evidence of another grave threat to peace: many individuals and indeed whole peoples are living today in conditions of extreme poverty. The gap between rich and poor has become more marked, even in the most economically developed nations. This is a problem which the conscience of humanity cannot ignore, since the conditions in which a great number of people are living are an insult to their innate dignity and as a result are a threat to the authentic and harmonious progress of the world community” [13]. An analysis of the current global situation reveals that many of these challenges are not being met. Poverty cannot be overcome by the fiat of instituting government programmes, neither will marginalization nor inequality be defeated through legislations. Individuals and local communities must be part of the answer as much as national programmes and international concern [14]. This is why Amartya Sen argues that “If the evil of poverty and the crime associated with it can come through the actions and inactions of a great many persons, the remedy too can come from the co-operative efforts of people at large” [15].

Statistically, the emerging trend of global human decimation occasioned by poverty and unequal distribution of wealth and resources paints a bleak picture of an unpleasant future. Reports show that almost half the world- roughly three billion people live on less than $2.5 per day while, at least, 80% of humanity lives on less than $10 per day. More than 80% of the world’s population lives in countries where income differentials are widening by the day. The poorest 40 percent of the world’s population accounts for 5 percent of global income while the richest 20 percent accounts for three-quarters of world’s income. According to UNICEF, 22,000 children die each day due to poverty. And they “die quietly in some of the poorest villages on earth, far removed from the scrutiny and the conscience of the world. Being meek and weak in life makes these dying multitudes even more invisible in death” [16] every minute of every day, a woman dies needlessly in child birth or pregnancy, somewhere in the developing world, and at least 20 children are lost to avoidable disease such as diarrhoea or malaria. In areas where the need is greatest, government spends least on healthcare [17].

While inequality and discrimination limits the impact of economic growth on poverty reduction, they also transmit poverty from one generation to another. For instance, the cruelty of poverty of a mother can impair and ruin the entire lives of her children. In the developing countries, around 30 million children are born with impaired growth due to poor nutrition during foetal development each year. We are told that babies born with a low birth weight are more likely to die, and should they survive, they are more likely to face a lifetime of sickness and poverty [18]. Little wonder then that Duncan Green asserts that “the many dimensions of poverty reinforce one another. Poor people are discriminated against, but many people are also poor because they suffer discrimination” [19].

The truth of the matter is that the complex and human account of poverty encompasses issues that are often ignored in academic literatures or on the global headlines. Many people feel the need to look good, to feel loved and cared for, to be able to give one’s children a good start in life and to enjoy the minimum standards of human living. Again and again, the conclusion that emerges from the mental anguish of rotating in and out of poverty is that at the base of the problem is a sense of powerlessness which makes it impossible for poor people to determine their life and their future. This is the very reason why a good model of development should build on the skills, strengths, assets and ideas of people living in poverty rather than treating them as empty receptacles of charity. According to the UN, $300 billion a year would lift everyone on the planet above the extreme poverty line of $1 a day, which is just a third of each year’s global military spending. One recalls with pain and nostalgia the moving remarks of Dwight Eisenhower, America’s former president when he lamented the situation of a world that has run bankrupt of the sight of suffering people while devoting billions of dollars to a military god of security: “Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed. This world in arms is not spending money alone. It is spending the sweat of its labourers, the genius of its scientists, the hope of its children” [20].

Dom Helder Camara observes that poverty, marginalization and discrimination exist in three stages. At the first stage, the marginalized does not reap the benefits of economic progress. At the second stage they are deprived of productive power. At the third stage, they are deprived of the power of decision [21]. This is the logic of the many faces of poverty that many people do not see. Jim Wallis identifies and elaborates on these three faces of poverty. He speaks of material, civic and spiritual poverty. In material poverty, people lack the basics necessities that make human living worthwhile. Civic poverty entails exclusion from decision-making and the denial of the opportunity for people to shape their future. Their voices are not heard or are used by those with power as pawns for change. Spiritual poverty affects all people and it involves a yearning and a longing for discovery of life’s true purpose [22]. Malcolm Duncan adds two other faces of poverty: poverty of identity and poverty of aspiration. In identity poverty, people are told that they do not matter, that they are worth less than others or that they are useless. When people are told that their condition cannot change and that their destiny are already determined by forces to powerful for their confron

tation, they are already in a situation of poverty of aspiration [23].

David Satterthwaite argues that urban poverty (and we may say poverty in general) tends to exhibit eight major aspects. These are: Inadequate income; inadequate, unstable or risky asset base; inadequate shelter; inadequate provision of “public” infrastructure; inadequate provision of basic services; limited or no safety net to ensure that basic consumption can be maintained when income falls as well as to ensure access to shelter and health care when these can no longer be paid for; inadequate protection of poorer groups’ rights through the operation of the law and poorer groups’ voicelessness and powerlessness [24]. This is obviously why Nelson Mandela ranks poverty, a social evil, as the worst form of slavery. In this light, true change and transformation can only come about when the change in poor people’s circumstances is accompanied by a corresponding or even greater change in the way these poor people seem themselves. This is the point that needs to be stressed today. If we ever wonder why the billions invested in curbing world poverty does not make meaningful impact, then we must look for alternative new ways of fighting this global scourge. Dom Helder Camara thus identifies the liberation of people from slavery as the urgent cause for our century. “Without underestimating other causes worthy of devotion and sacrifice” he says, “we can confidently say that today there is one cause which is the most important in our century, to free those two out of every three men who are still in slavery, even if they are no longer called slaves” [25]. The World Bank has argued for equality of opportunity and an even greater equality of outcome in relation to avoiding absolute deprivation. People do not just need rights which guarantee their freedom and create opportunities for self-determination, they also, in the words of Amartya Sen, need capabilities, that is “rights and the ability to exercise them- an ability that is undermined when people are poor, illiterate, destitute, sick, lack vital information, or live in fear of violence” [26]. Capabilities are what determine what people can do and who they can be.

If Duncan Green’s argument is anything to rely on, it follows that “Feeling that someone has a right to something is much more powerful than simply needing or wanting it. It implies that someone else has a duty to respond. Rights are long-term guarantees, a set of structural claims or entitlements that enable people, particularly the most vulnerable and excluded in society, to make demands on those in power, who are known in the jargon as ‘duty bearers’” [27]. All rights are necessarily responsibility-related. They constitute the web of moral connecting tissues and obligations that bind society together. However poor, people have responsibilities towards their communities, but powerful individuals and organizations, notably government institutions, bear a huge burden of responsibility if a better society based on the principles of justice, fairness and equality is to be built. According to popular opinion, the improvement of the world and the building of a new world constitute the essential duty of politics. For Joseph Ratzinger, politics is the sphere of moral reasoning since the end of every state and the ultimate purpose of politics is by its very nature, moral, namely the promotion of peace and justice. Thus, rational discernment of what fosters peace and justice must be constantly carried on and defended against all that could obscure and diminish human reason’s capacity for discernment [28].

In the past, academic literatures used to emphasize the positive potential of inequality to reward the creators of wealth and so encourage innovation and economic growth. Today, economists no longer hold that opinion. They rather argue that it is equality that is good for economic growth which makes that growth more effective in poverty reduction. Obviously, we have seen the limitations and failure of the invisible hand of market forces to regulate the economic order. The rethinking of a new global ethic of economic life must come to the fore. Vincent Nichols clearly stated the importance of this urgent need for higher ethical standards in the general organization of global economic life in his Lecture at the London School of Economics in March 2011. He argues that across the political divide, and more widely in society, there seems to be a genuine desire to go beyond mere slogans and to explore how to create a more engaged and thriving civil society. With the benefit of hindsight he says: “Looking back now on a decade of continuous economic growth we know that human contentment did not rise as expected with GDP. It’s about time we started to ask why, even if we might quickly admit that it doesn’t make much sense for government to promote happiness as a policy aim. Equally important – and still too often ignored – are the profound moral questions that have come to the fore in the diagnosis of the financial crisis and its aftermath, as we think through the role and limitations of markets in serving society and promoting the common good” [29].

Two days before the G8 Meeting in Italy in July 2009, Pope Benedict XVI published his social encyclical Caritas in Veritate [Charity in Truth] on Integral Human Development. Therein, he teaches that in the global market, “Profit is useful if it serves as a means towards an end that provides a sense both of how to produce it and how to make good use of it.” However, he goes on to say that “Once profit becomes the exclusive goal, if it is produced by improper means and without the common good as its ultimate end, it risks destroying wealth and creating poverty” [30]. This is discernible from the complexity and gravity of the present economic situation which, he says, rightly cause us concern. However, he says that present situation is one in which “we must adopt a realistic attitude as we take up with confidence and hope the new responsibilities to which we are called by the prospect of a world in need of profound cultural renewal, a world that needs to rediscover fundamental values on which to build a better future. The current crisis obliges us to re-plan our journey, to set ourselves new rules and to discover new forms of commitment, to build on positive experiences and to reject negative ones. The crisis thus becomes an opportunity for discernment, in which to shape a new vision for the future” [31].

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