Of globalisation and new insecurities

Interview with Dr Guy Standing, Director, ILO Socio-Economic Security Programme.

Dr. Guy Standing, Director of the International Labour Organisation's Socio-Economic Security Programme, which compiled the "Economic Security for a Better World" report, spoke to T.K. Rajalakshmi on what he thinks are some of the concerns facing democracies in the 21st century. Excerpts:

What has globalisation-induced growth meant for democracies the world over?

It has obviously meant adopting essentially what we call the Washington Consensus, which means a policy of economic liberalisation, relying much more on markets; a reduced role for the state and, more important, for organisations and institutions; the liberalisation of social policy; and, in recent years, the privatisation of pension and health schemes and so on. Even in developing countries with relatively small schemes, they have been privatised. One of the big consequences of liberalisation has been greater inequality. We believe that the inequality that has emerged is actually underestimated by conventional methods of measuring income distribution. Many of the inequalities are in access to resources, benefits and forms of protection. They have become much more differentiated according to wealth and status and hence they compound many of the income inequalities. Globalisation has meant much more open systems, much more liberalised, much more individualised economic relationships. All these have compelled governments to make their economies more competitive; firms more competitive and individuals more competitive. This, in turn, has created a lot of pressure on people to be better than others, to outwit one another, encourage short-term opportunistic activities and has created a sort of frenzy of competitiveness.

The worst form of this stress is what they call in Japan Karoshi. This is literally death from overwork. We have seen an increase in the number of suicides, and an increase in strain among people trying to compete more with one another. We can see stresses and illnesses associated with that all over the world. Globalisation as a system has fostered a structure of economic activities without the safeguards of either traditional community support systems or the structures giving people a lot of protection.

I don't want to go from that point to argue that we want to reverse what we know as globalisation and go back to some old discredited system. The challenge is that globalisation is a new transformation in which the old systems of protection, regulation and redistribution are no longer functioning. We have new insecurities and we have to deal with them before they become so destabilising that they threaten human communities and the viability of the development process.

Should the insecurities you mentioned be challenged within the framework of globalisation, or should one look for alternative models of development?

I think the picture in ten years from now is going to be very different. We cannot predict, but the existing situation is non-sustainable in the long-term. Every time the world has evolved with new economic forces, governments have learnt that they would have to have new systems of redistribution. What that will be, we do not yet know. But clearly, inequalities of wealth and income are the grotesque aspects of globalisation. The key resources in the world are finance capital and the access to economic resources. Finance capital must be regulated in some way so that more people can gradually have a share in the income generated by it. This is one of the big challenges for the world at the moment.

Unless it is shared, the dynamics of inequalities will erode, in the eyes of ordinary people, the legitimacy of a system that produces those outcomes. Protection reforms will have to be made very different. We have to move away from labour-based entitlements to citizen-based rights and that means strengthening the trend towards universalisation of basic security and realising that for any society to be stable and profitable, there has to be a sense of social solidarity. That means that winners will have to share [their gains] with the losers; otherwise the losers will get so angry and frustrated that they will threaten everybody. Social protection reforms are going to be one of the most exciting policy areas in the next few years.

How is social protection different from social security measures? Are we not talking about the same concept?

Not exactly. Social protection is different from social security and social assistance schemes. Both these models are under strain in the new liberalised economies and flexible labour markets. Most people are unable to make contributions to insurance schemes and social assistance doesn't work as means-testing does not reach the poor. The tendency of many a developing country government is to place faith in populist measures like micro-credit and micro-insurance schemes. But this does not help deal with the worst forms of insecurity - those associated with systemic risks. Increasingly, we are dealing with systemic risks where whole communities are being hit by major crises; a whole county is hit. This turns people chronically insecure. We cannot rely on old style social insurance and social security schemes. We need a rights-based system of income transfers and universal schemes so that everybody can participate and benefit from that.

There seems to be an increasing realisation that globalisation has not worked and has caused a lot of distress and governments do not seem to be reversing their policies. Why is this so?

Let me be the devil's advocate here. I think some countries are beginning to wake up to the need to move to a new model where basic securities are being given more attention. We should be encouraged by what the Lula government is doing in Brazil. It is trying to address grotesque inequalities in the country. We are reaching a stage where more and more governments are realising that adopting an international set of blueprints is not appropriate and that they need to exert more national autonomy over their policymaking and escape from the conditionalities imposed on them.

Also, there is increasing doubt among the advocates of the old model underlying globalisation as evidence is stacking up that it has not been working. This is when they start changing their tune. And the stake for autonomy in policymaking increases. One is seeing that. International financial agencies are no longer preaching a minimalist state. They are suddenly finding that institutions are more valuable. And they are promoting institutions, while only a few years ago the message was: minimise the state. A very different set of tunes is being heard now.

I think we are still in the midst of a huge global debate about the role of the state, civil society in new forms of state and accountability of governments. It is important for all of us to be looking at the innovative skills emerging all over the world that seem to be offering change in some direction. There is definitely an associational revolution taking place where people are feeling that the only way to gain security and gain the space and control over their lives is to participate in those organisations that represent those spaces. The most important asset that we have globally is the anger of the youth. Every change for the better has come up when the youth has stood up and said that these inequities are not acceptable and that we do not wish to go through lives seeing them get worse. The anger must be channelled. It is a beginning - whether against war or against the ecological destruction of the planet. Our only hope is that young people will stand up and demand the change.