 Masao Abe, a Zen Buddhist master who is currently a visiting scholar at the status of here. During this time of emphasis on inter-religious dialogue, he published a book called Christ in a Pluralistic Age in 1975. A second phase of his career has been characterized by his work in ecology and theology. At this time, he paired himself with a leading ecologist, Charles Birch, to write their book The Liberation of Life, published in 1981. A third phase of his work was begun in the mid-1980s. His ecological concerns led him to an investigation of economic policies, and moreover, the ideological basis for current economic practice. It has become apparent that current economic theory is the most influential and pervasive belief system that will shape, for better or for worse, the human family and the environment that sustains us. In light of this growing realization, he co-authored a book in 1994 with World Bank economists Herman Daley. This book is entitled For the Common Good, Redirecting the Economy Toward Community, the Environment, and a Sustainable Future. I decided to go to Claremont Graduate University to do my doctoral work in theology with Dr. Cobb for several reasons. First, because of his extensive and practical interdisciplinary work. Second, because he has mentored women who have become some of the finest and best known theologians of our day. Third, because of his belief, the clear systematic thought from those attuned to intellectual history can be a tool that theologians can offer to a variety of disciplines when addressing today's most pressing issues. A brilliant feminist writer, Catherine Keller, recently dedicated her book, cleverly entitled Apocalypse Now and Then, to Dr. Cobb with this inscription. To John B. Cobb Jr., a guide to a world without end. And with those words, I will turn the podium over to Dr. Cobb. Thank you very much. It's certainly a privilege and an honor to be here. I was at a Nobel conference here 25 years ago, so I hope probably 25 years from now I may get another invitation. But I'll be in position to accept it then. I can't be too sure. I'll be exactly 100 years old. Globalization is an idea that has been important in the church as well as in other places. Actually, toward the end of the 19th century, Christians, especially in this country, decided that Christianity should be globalized. And there was an enormous missionary effort. And the idea was, I think, that we would win the world for Christ. It's very interesting that at the beginning of this century, a magazine was launched. And it's called the Christian Century. And suppose that the Christian Century, it's still around. It's still a very influential magazine. But the Christian Century was to be the 20th century. Now rather rapidly, in the course of the 20th century, we found out it was not to be that the world was to be globalized as Christian. And indeed, already before the end of the 19th century, we decided, maybe some of us decided, it might not be really such a good idea. Around 1895, there was a world parliament of religions. And for the first time, many Christians in this country listened to and heard about speeches by Hindus and Buddhists and others, where they heard wisdom that did not sound to them simply like the wisdom of their own tradition, but could not be gained, say, as having its truth and profundity and deep spirituality. So Christians began to decide there were other powerful spiritual forces in the world beside Christianity. And if we had succeeded in wiping them all out and replacing them all with Christianity, that would have been a disaster for humanity. So in some ways, we have withdrawn from globalization. We have moved from the interest in making Christianity the one global religion to concerns for understanding and dialogue and cooperation. And especially in the past 10 years, we had another world parliament of religion, and it was organized so that religious leaders from all the traditions are trying now hard to find basis for working together and dialoguing among one another with each other is a positive factor. Now, one of the problems of globalization is we experienced it with Christianity, and we did succeed in planting Christian churches all over the world. To that extent, it did succeed, but it was the problem of uprooting people from their own communities. And there was much loss as well as much gain in the process of breaking up traditional communities and introducing a new kind of institution, new kind of life in the midst of that. Now, I say all this to say the notion of globalization has been a problematic one for theologians and for Christians generally over a considerable period of time. Now, that does not mean that we are not interested in what happens in the whole world. And since our topic today is not churchly globalization, but economic globalization, I want to turn to that topic and I want you to understand I do so from my Christian background. So I'm functioning here as a theologian, talking about a theological perspective on what is happening in current globalization. Now, one of the things you'll need to understand is that theology is a word that economists sometimes use. Not many other people do, but economists sometimes do. And what it means is questions or theories that are so speculative or so remote as to be irrelevant to any serious conversation. And I suspect that from the point of view of some economists, what I will be saying today is theology, but I say it unapologetically, I think it has more relevance than they be sometimes recognized. Well, what perspectives, what values do Christians hold that are relevant? And let me hasten to say Christians have no monopoly on these values, I'm not saying Jews don't hold these values or that good humanists or lots of other people don't hold these values. I'm simply saying Christians do hold them. But one of them is we do have a global concern. We do care what happens to people in any part of the world whatsoever. Our interests cannot be limited simply to our next or next. And when we look at economic globalization from this perspective, we have a lot of congeniality. It's quite clear that the economists we have already heard here and many other economists and certainly those who are interested in globalizing care about the whole world. Everybody matters to them. Secondly, Christians believe that it is good to have food and drink and housing and clothing and all sorts of other things that enhance the quality of life. In other words, what are called economic goods are viewed positively. Now it is true that there are some spiritual disciplines and some people may elect to choose a road that is denying, well-denying or ascetic. But this is not dominant Christian teaching. Basically, we would like for that to be the goods that everybody needs and many of the wants that people should be satisfied. And there is no question, but that's the styles of economic activity that are celebrated by economists today have helped to bring far more desirable goods to a larger portion of the human population than was ever possible before these things came into being. So there is a positive relationship between the Christian perspective and the movements that have led to globalization economically. Now the third point, which I think is an obvious one, probably for all of us, whether we call ourselves Christians or not, but easily forgotten, is that there are other extremely important values besides economic ones. And the reason that is so important, not that many economists don't agree, but that economic theory and practice that follows from economic theory often ends up being destructive of some of these other values. We will of course return to that. The book that I wrote with Herman Daley, we talked about in the subheading about community and the environment. And both human community and the environment have suffered greatly in the process of globalization. And the reason is that economic theory does not value either community or the environment. In the fourth place, we think it's very important that people have as much control over their own lives as is possible. Now this is a very mixed matter in some respects, economic globalization has no doubt given some people more control over their own lives. My personal judgment, I'm not going to pursue this particularly, that there are far more people who have been removed from the means of sustaining themselves, from the means of production, and are now dependent on decisions made about them by people at a great distance over whom they can have no influence. That many, though the problems of traditional societies and communities were on the whole people actually had more ability to shape their own lives in those societies than they do in the global capitalism that we are now creating. Another concern that Christians share and have always shared is a concern over time for future generations. It's important that we so act and so live and so relate to our well today that our children and grandchildren and great-grandchildren will also have the benefits that we now have. Now this is a point that is agreed upon by many globalizers, but we may have a different opinion about the way in which our present actions are shaping the future for our descendants. And finally, on this list, I would say that Christians like Jerry Sacks feel that we must be very much concerned for what Jesus called the least of these. In other words, that as we think about how well off we are or what the effects of any policy are, we have to look at them first and foremost from the perspective of what happened to the least of these. Now in New Testament times, the least of these were often spoken of as widows and orphans because it was widows and orphans who didn't have a clearly established place in the society of that day. They were the marginalized, the fringe people or again and again and again Christians were thought to orient their practice in such a way that the widows and orphans would benefit. Today, the poor are the ones that Jeffrey Sacks told us about so movingly and I'm deeply indebted to that and I feel no need to remind you of the enormous suffering that is going on in the well today in spite of or in my opinion because of. Some of the practices that we are discussing today. Now there is another element that Christians don't have a good record on but that we have repented about and have come to be concerned about and that is what's happening to the natural world, to the environment. Both Christianity and economic theory arose in a context in which human beings were taken as the one center of value and reality. That is anthropocentrism dominated Western thinking for a long time and there is no question but that economic theory to this day fully expresses it. Now the theology of the 19th century and the first half of the 20th century and well on into the second half of the 20th century was just as anthropocentric. This is not a case of saying we theologians and we Christians had it right and the economists had it wrong. It's simply saying that beginning at a well council of churches conference about 30 years ago, we have been in the process of trying to repent. Now repentance is not a quick thing and we haven't really succeeded yet. Repentance means changing your mind, shifting direction and the fact that you know you haven't been going in the right direction in the past doesn't automatically mean that you'll start going in the right direction. So I don't wanna say too much about how well we've done but at least in rhetoric and to some extent in the implications, the practical implications we draw from that rhetoric, we now speak of the importance of the rest of the world, not just human beings and that the rest of the world is not merely there as resources for our use. The language that the well council of churches has used is the integrity of creation and when we look at globalization in terms of the integrity of creation, we have to raise some very serious questions about it. So I want to turn to that but I also want to make it clear that what I've made a comment or two about economics. I would not be critical of economic theory if it had not been that the rest of the leadership of the world had decided that the economy is the most important part of our whole human existence and life on the planet and should be determinative of all the directions that governments and intergovernmental organizations should go. In other words, the problem is not so much economic theory as it is making one set of ideas dominant and subordinating all the other sets of ideas to that. I call this economism. When I was growing up, the world, what the religion of the world, that is what really shaped life was nationalism. I grew up in the 30s and nationalism was a very obvious threat. It was made very explicit, of course, in Germany and in Italy. I grew up in Japan and there was no question about the power of nationalism as the true religion that held the Japanese people together. Now, we Christians had a way of responding to nationalism. We said nations are good things. Loyalty to nations is good. But patriotism is not the same as nationalism. To love your country is not the same thing as idolizing your country. To take a nation as the supreme object of your loyalty or devotion, that's idolatry. Now, the remarkable change that began taking place at the end of World War II was that nationalism was dethroned as the dominant ideology, especially in Europe, but now progressively around the world. And there is much to celebrate about that. Christians rejoice that other values were placed ahead of devotion to one's own country. The problem is that this has been superseded by the view that economic growth is that which should organize and order all of our lives. In other words, we have organized life in the pursuit of wealth. And this is true both at an individual level and at a national level. One of the most explicit teachings of Jesus is you cannot serve both wealth and God. That means we are not serving God. And the Christian can't be entirely silent about the worship of wealth. Now, before I propose some alternative to the dominance of this kind of economic globalization that the world has been experiencing, let me summarize for you what I take to be the dominant proposal of the most purely economic thinkers. And I'm not saying that that's what I've been hearing. I've heard some other factors in the lectures here. But there has been a tendency among economic thinkers to believe that economic growth can save the world, can respond to all the major problems of the wealth. A very recent book written by Robin Maris is entitled, Ending Poverty, and it's dated 1999. And I have no doubt whatsoever about the sincerity of his commitment to the goal of ending poverty. This is a continuation of the Bruntland Report approach to ending poverty and of the white paper of the British government in 1997. So the idea that the growth of the economy should end poverty is one that is widely held. I'm skeptical of it, obviously, and I want us to think about it, see what the prospects are, evaluate them critically, and then come to some judgment. Now, the proposal that Robin Maris makes is that it is realistic for the poorer countries or the developing countries to grow at a rate of 5% per year throughout the next 100 years. And he believes that if they do so by the middle of the century, we will have eliminated extreme poverty throughout the world, and by the end of the century, given the fact that the developing countries will grow at a slower rate, income inequality between the rich nations and the poor nations will have been achieved. By that time, the total economic activity measured by GNP or GDP will be 30 times that which now occurs. So we require a 30-fold increase in economic activity in order to achieve what Robin Maris looks forward to as an economically just world. Now, I want to bring up three sets of problems about this kind of a proposal, which I think is at least one form of the thinking of economic globalization when it turns its attention to the alleviation of poverty. Not all globalization is that concerned about it. First, the question of the participation of the poor in growth. Robin Maris recognizes that his figures will work only if growth is equally distributed over the various classes of society. In other words, the poor will have to gain percentage-wise as much as the rich in order for them to be freed from the poverty that now shackles so many. The problem is that up until now, that has never happened, or at least happens rarely. It is not the normal situation in growth. In general, the rich gain much more out of growth than the poor do. Now, some economists have said this is a situation in a certain phase of economic development, but that as economic development proceeds and goes beyond that in a mature economy, then the poor will benefit at least as much as the rich. My difficulty in being persuaded by that is the fact that during a period of great growth in the United States in the past quarter century, the poor have not benefited. I have wages now, in real terms, I think about where they were a quarter of a century ago, whereas the income of the wealthy has skyrocketed. The situation is even worse if we turn from questions of income to questions of wealth. I saw some figures recently. I can't vouch for them, but they seem to be based on serious study, of which about what has happened in the 15-year period from 1983 to 1998. I frankly had thought I was shock-proof, but I discovered I wasn't. The top 1%, that is the wealthiest 1%, have increased their wealth by 42%. The next 39% have increased their wealth by 20%. The next 20% have increased their wealth by 10%. The poorer 40% have lost 76% of their wealth. Now we cannot suppose that policies which impoverish the poor while creating great increase in GNP are going in 50 years or 100 years or any other number of years to do away with poverty and bring justice to the wealth. Now, Robin Maris said we must have equal, I'm just saying it's a getting equal distribution of the wealth, of the growth and wealth. When policies are geared primarily to economic growth is talking about something that has not been our experience in the past. So simply to announce it, but not show what profound changes are needed in our policies in order to make this system work is it seems to me one-sided or inadequate. Now, about incidentally, the recent report of the United Nations indicating the last five years when globalization has been at its peak, the increase, there's been an increase in the percentage of the human population that is earning or living on less than a dollar a day from 17% to 19%. So I could continue to recite statistics that say we have to do some profound rethinking if we want to solve the problem of poverty by economic growth. My own judgment is we need policies that are primarily geared to dealing with poverty and then of course they may secondarily also involve growth, but it won't work in my judgment the other way. Now, we've already heard serious criticism of the Washington consensus. Someone asked me what it was and I think maybe it would be worthwhile to explain briefly about that, but around the beginning of the 1980s, the US government and the World Bank and International Monetary Fund jointly adopted a set of policies or a goal. I think we could describe the goal as that of shifting the burden for the development of the poor countries of the world and for general economic growth in the world as a whole from bilateral lending and granting of governments or loans or grants made by international organizations, loans especially by the World Bank, to shifting from that to transnational corporations as the major engine of economic growth. Far more money available to be invested in third world countries rather than to have third world countries develop their economies in an endogenous way, that is in an internal way with simply with certain aid coming in from the outside. Now this decision led to the pattern of structural adjustment policies which the World Bank and the IMF have pressed upon those nations that have became heavily indebted because of the oil crisis and other reasons so that most of the world today outside of China and of course outside of the United States and first world countries is bound to operate by policies which are designed to implement the globalization that was conceived in the Washington Consensus. Now the function of these policies is to make countries, two things, one is to enable them to pay their debts but secondly it is to make them attractive to investment by transnational corporations. Therefore they must give up all efforts to become self-reliant or self-sufficient economies and instead must become export driven economies. Also in order to become attractive to investment they need to lower wages and of course provide a docile and well organized labor force to not have too high standards with respect to the environment or any of these matters and thus to make it economically attractive for people to invest in them. Now they also did many good things. I don't have time to try to spell it out. I'm not saying every structural adjustment policy is only designed for the purposes of weakening a nation's ability to determine its own affairs and to make it subject to the decisions of transnational corporations but to a large extent that has been the intention and it has been successful. Now as a result of these structural adjustment policies growth rates instead of rising as expected have in the vast majority of cases slowed down. Therefore there are many criticisms of this model also criticisms because so much of the change that was involved was directly a way of impoverishing the poor. I mean one of the things you have to do is to lower wages and as we were hearing from Dr. Mondell one way of lowering wages is by depreciating your currency and usually countries when they structurally adjusted depreciated their currency and that means it's a way of lowering wages and many of them did not have exalted wages to start with we were thinking in general of rather poor countries. So when you lower wages you obviously are not in any direct way benefiting the poor in the working class. Secondly countries had to reduce their expenditures in order that they would have sufficient surplus of income over expenditure that they could pay their debts and this required reduction in their expenditures on education and on healthcare and other fundamental human needs. So it's not surprising that the poor suffered under structural adjustment policies. The idea that in a few years this suffering would pay off in great increases in growth has occurred in only a small fraction of the countries which have been structurally adjusted. So the Washington Consensus and the ways it has been implemented globally have on the whole made the situation of the global poor worse. And I think that must be taken into consideration. Now within this country I've already indicated the situation of the poor in this country has also deteriorated during this same period. We've had what Bluestone and Harrison call the Wall Street Model. And I want to very briefly sketch one or two features of the Wall Street Model because it corresponds in many ways with the Washington Consensus Model that I have been talking about and its effect upon the poor should not surprise us. I'm taking it for granted it has had a negative effect on the poor. I think the statistics warrant that. So if you want to know why and how well why call it the Wall Street Model? Well one reason is that it is premised on the view that the engine of growth is investment and that investment will take place if interest rates are low and that one main threat to keeping interest rates low is rising wages for the especially for the lower paid segments of society. So it is set up to keep wages from rising. Now what is the instrument of preventing the rising of wages? Well that's the manipulation of interest rates so that if unemployment falls below a certain point sometimes pegged at six percent sometimes a little more a little less then it is the duty of the Federal Reserve Board to cool the economy so that wages will not rise. Now when you combine the fact that this is now the policy of the government to keep five percent, six percent of the population unemployed with the fact that then Congress passes welfare legislation designed to punish those who remain unemployed over an indefinite period of time. It seems to me we can see that we are systematically creating an underclass which simply has no possibility of participating in the increasing wealth of the nation as a whole. Well opposed to the Main Street model they speak excuse me the Wall Street model they suggest the Main Street model and the Main Street model seeks full employment rather than seeks systematically to maintain unemployment and it develops policies that are oriented to dealing with the needs of the people of the country. There is similarly in the economic in the global sphere what's called a people-centered model of development that seems to correspond much more with Christian values which says the important thing is not whether the GDP of a country goes up the question is what about the well-being of the people and especially what about the well-being of the poor. Now let me turn from my concern for distribution which is not against what Maris says at all but simply saying to ignore the very complex problem of how to have growth oriented policies which at the same time are dealing with the needs of the poor I think we can't neglect that and then have to get into that discussion as a separate one from how to promote growth growing wealth in the world. Now there's a second question and it's one that I have felt very keenly about since around 1970 when the issue first struck me that's we can use the title of a book that came out about that time to refer to it it's called Limits to Growth. That is, is the planet capable of supporting? We seem to be having playing a little game with the lights and power, okay. Is the planet capable of supporting vastly increased quantities of production and consumption by human beings? The idea of limits to growth is that we have to find some way of meeting our human needs within the limits of the biosphere. Now the notion of limits to growth has not been well received by economists generally. They have a conviction which has much empirical and historical support that limits to growth are not seriously relevant to our present and actual situation. They point out that again and again when we come close to using up some resource technological development expands the availability of the resource or also allows us to replace that resource with some other resource. And they're absolutely right. This has happened again and again and again. And the Malthusian principle we were talking about earlier simply hasn't been operative. Now let's talk about this however, quite specifically in relationship to food supply since of all of the uses of resources this is most important. When we are told that production must increase 30 fold, is it meaningful, is it realistic to think that we can increase the production of food 30 fold on this planet? Now we probably need to recognize that one of the ways in which we're going to deal with the oil crisis is by shifting to producing crops from which we can get ethanol or some other substitute for oil. So there will be other demands upon the land. Also the running out of forest to be cut down we'll have to more and more plant trees in order to have 30 times as much timber or 30 times as much paper available for us. And that's going to make a demand on land. But in any case, apart from these specific considerations I'd like to point out that the way in which the last crisis of this kind was solved was the Green Revolution. The Green Revolution was a technological solution which greatly increased food supplies. India had been a food deficit number our country but in spite of great increase of population the Green Revolution enabled it to produce enough food and I think some surplus food to export to other countries. There's no doubt but that the Green Revolution was a great success. And when economists tell us as Amartya Sen has told us fairly recently that we don't need to worry about future food supplies that technology always solves the problem. He's thinking certainly of the Green Revolution as the last great instance in which this happened. Now let me say there are two concerns that we must have if we simply assume that technology is going to solve the problem of vastly increasing the amount of food available on the planet. One of those concerns is that the Green Revolution for all of its wonderful achievements also had a lot of downside. It was sociologically extremely problematic. It made many of the poor poorer while it made many of the rich richer. It also made agriculture far more dependent upon oil than it had ever been before. And as we look forward to the depletion of these oil supplies we have to worry about an oil-based agriculture as the way of moving into the future. It also made our agriculture more susceptible to blights that would be more dangerous to the future security of the world. Now we may have another huge technological development ahead of us. There's all kinds of talk about that. We must remember that it has its downside also and that it produces all kinds of consequences. Now I can't say with some kind of confidence what the future is, but I can say that those who I have talked to who are agriculturalists rather than economists find the prospect of vast increase in the amount of food produced extremely problematic. The man who was most responsible for the Green Revolution has himself devoted his life since then to pointing out that this is not the way the problems of the future can be solved. He's written a book which is entitled Who Will Feed China? And he points out that with growing Chinese affluence China will begin to have to import huge quantities of grains that this will raise the price of grains around the world and countries that do not have the money that China has will no longer be able to purchase these grains. And he very anxious about the even relatively imminent prospect. I do not think that simply using statistics which imply that we can grow indefinitely at a very rapid rate into the future, use more and more food, more and more wood, more and more fish, more and more oil or some oil substitute, more and more energy, 30 times as much as we now use and that we will have a planet that can sustain us. I do not think this is realistic thinking. But Maris himself, I'm glad to say, recognizes the problem of the greenhouse effect. He says he thinks that the greenhouse effect that is global warming will cost us about one and a half percent of our GNP per year in order to deal with it. Now this is an example of what I want to talk about next and that is that growth has its costs. If every time you grow, you also have to pay for the growth that you have engaged in, there may come a time when growing is not profitable. I want to do a cost benefit study of the value of economic growth. And I've been very serious about this for a long time. Quite some years ago I read North House and Tobin's work. North House and Tobin are certainly two of the great economists of our time and I deeply respect them. And in the 19, around 1970, they did a serious study in response to criticisms, criticisms of a sort of which I'm sure many of you have heard in at least anecdotal ways that GNP was not a measure of economic well-being. Now no economist will say it is a direct measure of economic well-being. But as we heard already this morning, it works for economists as a kind of substitute for, a useful substitute for a measure of economic well-being. Well that is a relationship which I want very seriously to challenge. North House and Tobin took the various criticisms that were developing in the 60s about the GNP and said they would work out a measure of economic welfare to see whether economic welfare correlated closely with increases in GNP. And they did so for a period of about from, I think around 1930 to 1965. And their results were very interesting. On a very simple graph, it showed that as GNP went up from 1930 to around 1945, MEW also went up at roughly the same rate. Not quite as fast, but it did go up at roughly the same rate. But if one focused only on the period after World War II from about 1950 to 1965, where as GNP continued to go up, the measure of economic welfare flattened off. Now to me, that's very significant. But North House and Tobin in the article that they wrote, though they gave us the statistics and even the chart, made no reference to this difference between the earlier period and the later period and simply said, overall there's enough correlation between the two that we can ignore the discrepancy and continue to use GNP or GDP as a measure. Now my own view is if in the last 15 years there had been no such correlation, we should keep studying it for a while and not just drop this important issue of whether trying to increase GNP actually increases human economic welfare. Well, I tried to get a group together to do that and it turned out we didn't have access to the statistics. We couldn't just bring theirs up to date. There were also other problems. They had not been particularly interested in environmental issues and we were interested in environmental issues. A third problem was that what had tended to level the growth of MEW had been largely amount of leisure. The reduced leisure time played a very large role in their figures. And they said, well, there are three ways to measure leisure and it makes a huge difference as to which one you use. And we decided, well, we agree that reduced leisure is an economic consideration of importance but let's see how our figures come out if we don't pay any attention to this matter of leisure. So a group of us developed what we call the Index of Sustainable Economic Welfare and we showed continuing growth of economic welfare because we didn't include the leisure issue during much of the period in which their measure had already flattened off. But in the last 10 or 15 years, our measure also flattened off. It turned out that the improvement of the increase in GNP contributed nothing to improved human economic welfare as we measured it. Now, of course, you can disagree with our measures. I hope you will. I wish we tried to get as much critical response from economists as we could and we did get some and we published a book that includes them so this is not totally outside the sphere of expertise of those who have given matters thought on this matter but to me it seems an exceedingly important point. If the costs of growth are now equal to the benefits of growth, to order our whole global life in such a way as to increase the speed of growth seems to me unwise to put it mildly. Now, I haven't even mentioned social costs that one cannot put in terms of dollars but all of us are surely aware that very often the steps that are taken in order to increase growth also lead to devastation because of that destruction of human communities. In this country, I've been interested to see how economists who for whom I have the greatest respect have said that the one great success story in the United States since World War II is in the field of agriculture. Now, it is certainly the case that it takes far fewer people to produce far more food in the United States now than it did prior to World War II or in the first days after World War II but if you talk to sociologists about what has happened in the long process of bankruptcy and depopulation of the countryside, they would talk about a lot of human suffering, a lot of human loss because so many communities have been destroyed. They wouldn't regard this as all pure gain as it appears in economic statistics or when we move a factory and of course for the sake of growth you often need to move a factory, you move it to a place where it can be more profitable, where you can produce the same amount of goods for less or produce more goods for the same amount but factory closings have social costs. If we only look at the GNP those social costs all add to the GNP. People are spending more money on liquor and more money on healthcare and more money on divorce lawyers and it all adds to the GNP. But if one thinks about the human consequences it is not pure gain. It's far more loss than there is gain. I thought I was going to get through in an hour. So what is an alternative? I think that there are patterns of global development where the costs do not come anywhere nearly as high as the gains. And I can't spell them out but let me just say that many church groups and also many humanitarian organizations and non-governmental organizations have been engaged in bottom up development policies over against the top down ones that dominate in the process of globalization. Gandhi was of course himself in favor of a bottom up development program for India. I wish there had been a chance for it to be tested in a wide and significant way. But it is still possible in many, many communities for people to go there, help the people find out what it is that they most care about. Perhaps they need more access to water. Perhaps they need more access to a wood lot. Perhaps they need better plows. Some simple development that will improve the quality of their lives without disrupting that community. The community as a whole will prosper and the people will prosper as participants in that community. And the environment can also be improved in the process. Bottom up development. We all know and many international organizations are now recognizing that micro loans are also another very effective way of bottom up development. Full cost pricing of goods in my opinion would be an enormous gain in directing expenditures in less destructive directions. I also think that we could put limits on the amount of extraction of scarce resources from the earth and then allow the price to be set by the market when the availability of the goods was less. This would of course increase pricing. All of these, none of these policies are designed for the sake of increasing growth but are designed to channel growth in less destructive channels or even in positive channels when that's possible. Obviously technology can play an enormously important role in increasing the efficiency of our use of natural resources and even of reducing the pressure that we place on sinks. I don't in any way wish to disparage extreme dependence upon technological development of this kind. It is a form of technology of which we have a good deal but when we simply talk about technological progress it is not always oriented to this greater efficiency. I think I mentioned earlier that the greatest problem in distribution is not an income but in wealth and I believe we need to be seriously considering taxing wealth rather than taxing income. The best proposal I know for taxing wealth is not to tax all wealth but to tax land and there is much in economic theory that holds that gains that people make on land are not based upon any contribution that they have made to society but upon social changes that have altered the value of their land. My wife and I profited greatly from that and we are rich in our retirement for reasons that we can claim no credit on whatsoever but the piece of the place where we had our home increased in value many fold while we were living there and it was a wonderful boon so I'm not speaking out of self-interest but I believe really that money belonged to the society and not to us and that we could have a much more just society if we would shift in that direction. Well, a word in conclusion, the directions that I'm talking about are quite counter to the dominant directions in the world today. They are not actually being discussed in this presidential campaign except peripherally. They are raised by the extreme candidates on the right and the left and I'm glad for that but they won't get a chance to be heard in the public debate. I'm not optimistic about shifting basically our direction from seeking to increase growth generally to seeking to meet urgent human needs by policies that sometimes include growth and sometimes don't include growth but I do believe that as a Christian I must call for a shift of priorities away from the worship of wealth and toward the deepest possible concern for the least of these who are our neighbors. Thank you. And if you have questions, please write them on the card and give them to the ushers. We'll first give analysts a chance to react and then we'll try to get to as many questions as we can this time. Those of you who might have questions to pass to the ushers, if you could make that process as expeditious as possible so that we can try to get our panel discussion underway. We've been a little pressed for time here as our program has unfolded and so we're running just a bit behind. I believe this time I'll ask for comments from the panel members beginning on my own left instead of my right since before we did run out of time before we completed the chance to have all the panel members respond to the last lecture. And so if I might call on Professor Mundell for a question or comments or Professor Cobb. Well, I have to say that I came in late because of discussions with the press and interviews with the journals but I just catch part of the message at least. And I think the problem is how to cope with the bad aspects of globalization and the extent to which that concerns the lack of equity in income distribution in the world economy. And I've heard of course proposals for vast redistribution of income in the world economy, helping the poorest part. First of all, if we're going to help the poorest elements of society we should do this on a global basis rather than on just a regional, state, local or national basis. And if we do that then we get into a big problem because if we address the resources of that are available for redistribution on the global economy to the poorest elements of the global economy, then we aren't able to pay enough attention to the effectiveness of that money. How much can money help primitive societies in the Brazilian jungle? How much, what good does it do to send money in computers and things like that to places that can't make use of them? To what extent should we send money if we're going to redistribute money in some way to the places where it's going to be most productive or should we do it to the places of greatest need? We're never going to find a solution if we adopt either one or the other of that. We'll have to pay attention to this but I think myself that on the best means is no grand solution of this problem but very ad hoc solutions. And paying attention I think to the poorest part of the world economy is of course Africa, countries of the greatest need. The biggest need in those economies are social and political organization, countries more in medical solutions in that terribly disturbed continent. And I myself think that the best approach that at least as an economist I can offer is to do all we can to put our own house in order, meaning by that to get back to at least an international economic system that is fair and just. And to me that means moving on the monetary side to a world currency and on the trade side to following through on the developments that are taking place through the World Trade Organization as they currently exist. Professor Beguati, would you have a comment or a question in response to the lecture? Yeah, that's more common than a question I'm afraid Dr. Kahn. I appreciate your concern about ethics and of course we all share it. Many of us have been in development economics trying to develop the world. Since my case for 40 years, having started out my career in the Indian Planning Commission and my first book had a picture in 1966 of a starving child in Ghana. And I was told by my friends in America that I'd lost my reputation with Retrievably by including such a photo in a book on development. I think it is true that some economists probably need to be reminded that while economics is about value, there are also values to worry about. And so once in a while it's important to remind us economists of this. But I think when it comes to the specifics, I think I couldn't disagree more with you on many of the things you said. Let me just concentrate on a couple of things. One is the problem of growth. Growth is absolutely central in my judgment to eradicating poverty, if that's your major concern, as it has been, say, in India for at least 40 years. The problem is we didn't have any real growth. We had very bad policies for producing growth. So over a quarter of a century, India's growth rate was about 3.5% per annum when we were following policies which my good friend, Amartya Sanhum, you quoted actually supported in a big way our target policies, denying integration of the world economy, supporting all kinds of interferences with the senseless intervention in the economy, denying the foreign investment in 91 when we started economic reforms. We had $100 million worth of direct foreign investment. That's probably smaller than the budget of this college, which is ridiculous when you think of India's size. So we had shot ourselves in the foot and produced very low growth rates which then had very little impact on poverty because sometimes economics and common sense do go together and if you grow very slowly, you can't pull people up actively into gainful employment and give them the dignity and decency which we look for. After eighties, we did move out into a very different set of policies, particularly in strengthening them in 91 and we've had about six to six and a half percent growth rate and now with the information technology revolution which Bob Mandel mentioned this morning, we hope to get into about eight to eight and a half and we've seen a dramatic impact on poverty because we've managed to pull people into gainful employment. I think Dr. Cobb you mentioned also the green revolution and I think you were right to raise that but many of us thought exactly the way you said just now that the green revolution would lead to a red revolution because it would lead to increasing polarization of the poor and the rich. In fact, in reality is that it really did not do that and the main reason was that by multiplicating crops due to irrigation, fertilizer, that you could really, you increase the demand for the poor unskilled landless labor. So fortunately it worked out okay. So the only point I want to make really here is that I think you're a little too skeptical of growth process. Growth is not an end, should not be an end in itself. It is an instrumental variable. It without prosperity as President Clinton and Tony Blair and many of the more enlightened Europeans, socialist governments or left of center governments realize without prosperity, you just simply are putting a little button on the lapel of your jacket saying I'm against poverty but you're not going to be able to do anything about it. You're going to be a limousine liberal. It's great for your conscience. It does nothing. So it is a necessary condition. It's not a sufficient condition in many cases. So that's point number one. The other I think on the Washington Consensus, I'll just finish in a moment, but on the Washington Consensus, it is Washington's hubris to call it Washington Consensus. It was thought of by many people like me and others way back because it is simply a combination of democracy, which I think certainly my country, India, has practiced right from the beginning. It's one of the shining parts or things of India. And markets, why markets? Because that was implicit in your anti-globalization or skeptical views about growth. You're very careful and I compliment you on that. But I think the main problem is that when you look back at the history of the whole thing, of poor countries, you went around and you found knee-juck interventionism simply because scarcity promotes this tendency to go and do something immediately. The more behind you are, the more as the historian Gershengron pointed out, you want to intervene, to catch up. So there are natural political or psychological and other reasons why you will go into denying the use of markets to achieve your goals, not as celebrating themselves. And I used to just go around sort of saying and after dinner, speeches, that the problem with the developing countries was that Adam Smith's invisible hand was nowhere to be seen. And you really had to therefore move away from that interventionism at the first opportunity to loosening up. So when you assess what people say about globalization and about markets, you have to put it in the perspective of the fact that the post-war period saw an enormous amount of interventionism, denial of the benefits of globalization. In that context, when people like me and others go out and say, this is good for you, it is because we're trying to shift the balance away from one extreme to another. And of course, if you go too far in the other direction, that's also bad. And you see that in relation to capital flows, which I think needs to be distinguished from free trade. There, the hasty, imprudent, freeing up of capital flows helped bring about the Asian financial crisis. And now that has given globalization a very bad name. But that's one particular, imprudently handled form of globalization, which if Bob is right, we will learn how to handle by just having a global currency. I'm not that sanguine about that solution, but this is a problem. That is an area you want to be very careful about. Thank you. Thank you. I'm very reluctant to get into an argument about what's happened in India with someone who knows so much more than I. But I think I might, as an indication of what I mean by a different approach, mention that I've seen a good many statistics about the state of Kerala, where the per capita income is about the same as it is in the rest of India, but where infant mortality is far less and literacy rates are much higher. And in general, human suffering has been much less than it has in other parts of India. Population growth has been slowed down. My point is that to think of the policies dealing with the serious problems of the poor, only in terms of throwing money at them, I think is, I'm not saying you did, but nevertheless, it cut in that direction when you suggested alternatives. I think that's a mistaken approach. There are other kinds of changes. Perhaps the state of Kerala had too much interventionism. I can't speak to that, but there is not that closer correlation between the well-being of the poor and the growth of the GNP in various countries. I might also say I very recently read a little piece which you may know the statistics better than I, but that indicated that in the 60s, 70s, and I think in the 80s, the percentage of poverty in India had declined, whereas it had leveled off in the 90s. Now, your indication was that it was declining still more rapidly. I can't argue statistics because it's just what I happen to read. Yes. It was wrong. Well, I'm perhaps, and I'm quite sure I'm too optimistic, but I would see a possibility to marry your, I think, very well-founded warrior for the poor in the world with growth and by introducing what I've learned is the major factor behind growth and that is investment in human capital. More sort of simply put, schools which would empower people, give them human capital, which will increase their productivity in economic terms and thereby make the distribution of income and possibilities much more even. This is a much more efficient way than transferring money or trying to steer the income distribution which follows from a given set of production factors. It's much more interesting to see to it that the empowerment is spread evenly and this should mean this would create growth but from the bottom up, as I understand you were talking about. So there is at least an area where there is no necessary conflict between growth and a better distribution of wealth. We will move to some of the questions that have been submitted to the ushers from the audience. What specifically is being done to bring globalization and environmentalism into better harmony? If nothing, how can we best bring about such causal change? Thank you. I'm sure everybody here could say something about that. Back in 1992, there was a conference at Rio and the slogan that came out of that conference was sustainable development. And the World Bank has taken over some responsibility to steer development in that direction so it's not the case that nothing is being done. On the other hand, as I understand sustainable development, it primarily means sustainable growth and the policies that have been promoted under the rubric of sustainable development are still, as all my colleagues I think are indicating up here, the commitment to growth is not being challenged. That's primary. Then if we can do something for somebody along the way, that's okay. I'm saying that's the wrong set of priorities. That if we really want a sustainable world, that comes before the question of what kind of growth is possible and what kinds of growth are sustainable. So I think something is being done and the NGOs in many cases are pushing for a different weighting of the priorities between concern for finding ways to live sustainably with the environment and meeting the growth concerns. That comes out rather differently from what the dominant institutions are saying. I think this is one of the reasons that when we have meetings in Seattle at the WTO or meetings in Prague that there are many, many people who want to say you're going in the wrong direction and I share their concerns. Another question from the audience. One negative effect of globalization is the destruction of indigenous cultures. Given the painful history of Christian missions as a tool for similar destruction is there a way we can learn from that history to theologically and practically develop real respect for indigenous cultures as we develop economies? Thank you. I began by talking about the problems of Christian globalization with issues of that kind in mind because I do think we have become a little more sensitive to those problems and I don't see that same sensitivity playing much role among the globalizes of the world today. There is a constant tension. There isn't it because often indigenous people are living in areas where there are still under exploited resources and their livelihood is dependent upon those forests or whatever rivers and so forth remaining much as they are but that's not good for growth. It doesn't show up in the GNP. So the pressure to use those resources in a way that counts as economic progress and then find some other way to deal with the problems of the indigenous people remains a great issue around the world. I obviously believe again our priorities are lopsided and destructive and I think we need to find a way of treating these indigenous people with the deep respect that would be involved in leaving their homelands to them. At the World's Parliament of Religion, there's a name I can't quite read, Hans Kung, made a distinction between capitalism and a market economy. He recommended a global ethic. Do you think the rewards of greed will pale and will move toward a global ethic that will deal with spiritual fulfillment? Well, I think that it's obvious that the almost total victory of what I call economism is a sign of the extreme weakness of the traditional religions, including but certainly not only Christianity, that the values that all of the traditional religions have had would be a major check upon the nearly unrestricted goal of economic advancement and economic advancement measured in terms of the increased economic activity in a geographical region rather than the benefits to particular people who need it first. The World's Parliament of Religions is certainly a step toward the religious voices of the world coming into some kind of a consensus instead of sort of so spending their energies on contradicting one another that the overall shared values are ineffective. I hope it will help, but I'm not sure that it has gone very far yet. This distinction between capitalism and a market economy, I think that that may be an important one. I'm certainly for market economies. I would like to see small market economies rather than large market economies. Obviously, they're not as good for growth, but I think they may be better for the people who participate in them. This question may make a suitable followup to that one that Professor Cobb just answered. Gustavus Coffee Shop now offers Peace Coffee, a socially and environmentally responsible product that is fair trade and organic certified. What role does, quote, responsible consumerism, close quote, like purchasing fair trade coffee or sweatshop free apparel, play in redefining globalization? I think that these are the kinds of acts that citizens can engage in and that they are appropriate acts for citizens to engage in, so I have nothing but support. By themselves, they are very unlikely to have any great effect upon what goes on on a global basis, but if in the process of engaging in them, our consciousness is raised and we become more aware of the broader issues and the broader problems and then can act politically in relationship to those wider concerns, it's a wonderful beginning. Have been real. Well, but this morning also, we were hearing about Jubilee and I think this is a wonderful instance, a very rare instance of how the conscience of ordinary people, this did not come from governments, it didn't come from leading figures in the World Bank or the IMF, it came out of concerned citizens who saw that what we are doing now is just terribly destructive of human life and at first that proposal sounded so far out and so contrary to good globalizing policies that it seemed it would just be one more of those protests that don't get anywhere, but now our leaders all over the world have paid attention. I very much believe that we Christians and other people with conscience and concern can take action that affects many people, though eventually it has to be at a level of policy, national policy and international policy, it can't just be person to person. Thank you very much. I think we will conclude the panel discussion with those last comments. I think that's an appropriate place to stop and we are just now pretty nearly back on our scheduled ending point. We'll let you, I think we've had a very fine day. This will conclude our session for the day. Let me remind you that we have an art exhibit beginning at six o'clock with a reception. We have a Nobel concert once again with more glorious music beginning at seven o'clock and at 8.30 if you'd like a chance to meet our panelists for no more than one hour between 8.30 and 9.30. You'll have a chance to ask them some more questions.