The following article is based on an edited transcript of a presentation by STWR's Rajesh Makwana for the Dialogue Eurasia Forum, Antalya, Turkey, November 2012, which was held under the theme ‘Rethinking the global economic order'.
Distinguished delegates, colleagues and friends, in my contribution to this important discussion I will present a paper based on a recent report published by Share The World's Resources entitled ‘Financing the global sharing economy'.
I am sure we all agree that addressing the root causes of the many crises we face will require significant reforms to the global economy. If we are serious about creating a fair and sustainable world, every aspect of the global economy - from our management of natural resources to our patterns of production and consumption - must be dramatically reformed. And it is not hard to imagine how sharing can be part of the solution. In simple terms, sharing resources more equitably can reduce poverty and inequality; sharing scarce natural resources sustainably is clearly good for the planet; and sharing rather than competing over resources can help de-escalate conflict and increase international peace and security.
Instead of talking about these structural reforms in detail I would like to focus on ways of addressing the very worst human impacts of the many crises we face, and how they can be addressed within an immediate timeframe - even before more transformative reforms are implemented.
There is much in the world today that can be called a crisis, from natural disasters like Hurricane Sandy to the financial and economic crises that continue to take their toll around the world. But largely due to our collective failure to share the world's wealth, power and resources more fairly and sustainably, humanity now faces what can only be described as a global emergency.
The global emergency
This emergency is defined by the human impacts of poverty, climate change and austerity policies. For example, the impacts of climate change are already very significant: 400,000 people already lose their lives each year as a result, making it one of the greatest humanitarian challenges the world faces.
The impacts of austerity measures across Europe and North America are also well known, with severe cuts in public spending leading to rising unemployment, particularly among graduates and the youth. Since 2008, unemployment has increased by 50% across Europe as a whole, while 23% of people in the region now live below the poverty line.
But the most severe aspect of this global emergency is the prevalence of poverty and life-threatening deprivation around the world. According to the World Bank's most recent data, 43% of the developing world population survive on less than $2 a day, and an astonishing 95% of people in developing countries live on less than $10 a day (comparable to what $10 would buy in the United States). UN agencies report that a billion people are classified as hungry, and 2.5 billion have no access to sanitation. Altogether, some 40,000 people die needlessly every day from a lack of access to basic resources such as food, water and healthcare - that's 15 million preventable deaths every year.
The root causes of these crises are of course complex, but in simple terms this emergency exists largely as a consequence of our failure to share the world's vast financial resources more equitably, both within and between nations. In order to explain this adequately, let me outline another key concept that we have put forward in the report: the sharing economy.
What is the sharing economy?
Some of you might already be very familiar with this term, as it has recently gained mainstream media coverage in Europe and the US. The emergence of the sharing economy has been spearheaded by the phenomenon of ‘collaborative consumption' whereby people organise ways of sharing goods, services and other resources rather than purchase new ones.
In our report, we refer to the sharing economy as encompassing the many systems of sharing and redistribution that exist locally, nationally and globally, whether facilitated by individuals, states or other institutions. It is concerned with the social, economic, environmental, political and spiritual benefits of sharing both material and non-material resources - everything from time and knowledge to money and natural resources.
There are already many widely recognised aspects to the sharing economy. They include digital open source platforms that drive computer operating systems and websites such as Wikipedia; platforms for crowd funding and crowdsourcing; community-led projects such as time banks and community gardens; and food-sharing schemes and other forms of collaborative welfare provision.
But as we outline in our report, systems of sharing are much more fundamental to the way we organise societies than most people realise. Perhaps the most important and complex form of sharing that takes place in modern economies are systems of progressive taxation and public spending on welfare and essential services. Through these systems of sharing, we take collective responsibility for ensuring that basic human needs are universally secured.
Well known historical examples that illustrate the evolution of the sharing economy include New Deal Policies that were introduced during the Great Depression in the US, as well as the introduction of the National Health Service and other forms of social security in Britain after WWII. These systems of sharing expanded to cover many other countries in Europe as the welfare state became more common place in the 1970s.
In our report, we also identified the ‘global sharing economy' as a system of international sharing that is still in its infancy. The global sharing economy refers specifically to systems of sharing and redistribution that are international or global in nature, whether facilitated directly by people, organisations and governments or by global institutions like the United Nations. It refers to the many methods by which the international community can share their financial, technical, natural and other resources for the common good of all people.
International aid, although in need of extensive reform, is obviously one of the key examples of the global sharing economy. Another is the work of the United Nations, the first truly global body funded and animated by the international community. One day, when systems of international trade and finance are genuinely fair and sustainable, they too could be classified as being part of the global sharing economy.
Why focus on the principle of sharing?
You may ask why we focus so much on the principle of sharing. The simple answer is that sharing is a natural human behaviour that humanity has practiced since the dawn of civilisation, and by considering complex economic processes such as taxation, international aid and even trade in terms of sharing, it helps us to understand them in more human and down-to-earth terms. This is very important for us as an organisation as we aim to raise public awareness of critical global issues and increase public involvement in campaigning for a just and sustainable world.
It is particularly important to think in such human terms at a time when the thrust of economic policy across the world is dismantling existing systems of sharing and redistribution. For decades, governments have neglected to share the proceeds of economic growth fairly. Excessive privatisation, Structural Adjustment Programs and austerity measures have all undermined the sharing economy and led to a massive growth in inequality.
This is something that the Occupy Movement captured very well in their slogan ‘We are the 99%’. The evidence is indisputable: according to research by the New Economics Foundation, for example, economic growth benefits the richest 1% of the world’s population 120 times more than it benefits the poorest 10%. Research published by UNICEF also showed that at the current rate of change, it would take more than 800 years for the ‘bottom billion’ of the world’s population to achieve just 10% of global income.
Mobilising $2.8 trillion
It is now a matter of great urgency that the international community reverses these trends and finally puts an end to the global emergency. What could possibly be more important than preventing unnecessary deprivation and saving the lives of 15 million people every year?
Our research demonstrates that achieving this is entirely possible, even within the framework of the current economic system that is now so close to breaking point. We put forward 10 concrete policies that would enable governments to mobilise more than enough money to reverse austerity measures, prevent life-threatening deprivation and mitigate the human impacts of climate change.
- Tax financial speculation: $650bn
- End fossil fuel and biofuel subsidies: $531bn
- Divert military spending: $434.5bn
- Stop tax avoidance: $349bn
- Increase international aid: $297.5bn
- End support for agribusiness: $187bn
- Redistribute IMF resources: $115.5bn
- Tax carbon emissions: $108bn
- Cancel unjust debt: $81bn
- Protect import tariffs: $63.4bn
Using the latest research available, we calculated that by utilising these 10 policy recommendations governments could mobilise over $2.8 trillion every year to strengthen and scale up systems of sharing and redistribution, both within and between nations.
Each of these policies is extremely beneficial in its own right. They could help establish a world with less military spending, less national debt, less corporate welfare, a fairer international trade regime, and more progressive and effective forms of taxation. Together they could pave the way to a more sustainable, fairer and peaceful world.
These policies also have the support of millions of campaigners and ordinary people across the world. In some cases, advocacy by civil society has pushed these proposals to the top of the political agenda - the public debate for financial transaction taxes across European countries is but a recent example. As many economists would also acknowledge, redistribution on this scale would also amount to a significant investment in human life and act as an important economic stimulus.
In addition, we already have many of the institutions and mechanisms in place to make effective use of the financial resources that such policies could mobilise. These include numerous humanitarian agencies such as the Red Cross, many UN organisations including the World Food Program and the World Health Organisation, thousands of NGOs, as well as established global funds to help facilitate climate change adaptation and mitigation in developing countries.
Not only are these systems already in place, we also know that it would not cost much to address these crises. For example:
- Lifting 1.4bn people above the $1.25 a day extreme poverty line: $173bn per year
- Central Emergency Response Fund (CERF) shortfall for 2011: $45m
- Financing the Global Climate Fund: $100bn per year
- World Food Program shortfall for 2011: $141m
- Providing vaccines for all infants in poor countries: $3bn
- The total cost of meeting the MDG financing gap for every low-income country: $143bn in 2010
The International Labour Organisation has also calculated that providing basic social protection to all people living in extreme poverty would cost only $1.26tn - about 2% of global GDP, or less than half of the figure we propose that governments could mobilise through the policies mentioned above.
The key to change is the rise of the people
So if we have the money, the institutions and technical knowledge needed to ameliorate the worst effects of the global emergency - and it makes sound economic sense to do so - why do we continue to neglect and undermine systems of sharing around the world?
These questions are rarely put to policymakers, and there is a stark lack of public debate about the extent of the global humanitarian emergency or how easily life-threatening deprivation could be prevented if we prioritised doing so. Of course, this political inertia has many complex causes, including the excessive influence of neoliberalism with its over-emphasis on free markets and competition, as well as the billions of dollars spend by large corporations on lobbying and influencing governments to protect their vested interests.
To speak plainly, for too long governments have pursued an economic model that places profit, privatisation and free markets before the welfare of all people and the environment. It is now beyond doubt that this modus operandi undermines systems of sharing and redistribution and benefits only the few at the expense of the majority.
In light of the many vested interests that seek to uphold the status quo, implementing even modest proposals such as closing tax havens or redirecting global military spending will require massive public support. The hope for a better world therefore rests with the participation of the global public - millions of ordinary people - in a call for sharing and justice that extends beyond national borders. And as the inspiring events of 2011 demonstrated, things are just beginning to shift in this direction.
The Arab Spring demonstrated the awesome power of a focussed and directed public opinion. In city squares across the developed world, the Occupy movement, Indignados and many other social movements - from Chile to Greece and even Israel - focussed the world's media on the plight of the ‘99%'. Yes, people are demanding freedom. But they are also calling for sharing: social and economic justice.
All those involved in the process of rethinking the existing economic order have a unique opportunity to work with this momentum, but we need many more people to get involved. If public support for scaling up and strengthening sharing in all its forms continues to grow - not least through the policies outlined above - the possibility of mobilising public opinion on a global scale fast becomes a reality. I urge us all as academics, progressive policymakers and activists to do everything we can to support this process by engaging with ordinary people in an unprecedented effort to mobilise world public opinion for sharing and justice.