Centre for Global Negotiations

The Brandt Equation: 21st Century Blueprint for a New Global Economy

Potential Revolution: Unleashing Global Demand

The monetarist emphasis on over investment, dismantling of local regulation, entrenched production, supply accumulation, and unused capacity creates lopsided conditions, draining the earning power of developed and developing nations alike. As the Brandt Commission declared,

"It is increasingly obvious that we are all in the same boat, that the North cannot contemplate with unconcern the fact that the South's end of the boat is sinking. The North's end of the boat is already none too buoyant either" (CC, 27).

As long as the market suppresses income levels, everyone has a diminished potential to buy the world's surplus products. The dominion of producers over wage earners affects not just individuals, but also plays out in the realm of North-South interrelations. When developing countries are forced to cut wages, local consumers can't buy foreign imports. This, in turn, slows production and eliminates jobs in developed nations. Ultimately, the global market sabotages its own capacity for growth, as consumers and businesses are driven heavily into debt just to finance the oversupply.

"Perhaps one can illustrate part of the problem from the development of some of the present industrialized countries in the nineteenth and early twentieth centuries. A long and assiduous learning process was necessary until it was generally accepted that higher wages for workers increased purchasing power sufficiently to move the economy as a whole. Industrialized countries now need to be interested in the expansion of markets in the developing world" (N-S, 21).

The world needs to generate enough private spending to make use of the available capacity. Adopting international standards for higher wages and measures for wider distribution of income to poor and new consumers would quicken demand for the world's expanding surplus of goods, factories, and labor. The elevation of income levels has broad implications for global society, well beyond labor-management negotiations on wage increases. Such a program has a clear basis in international human rights.

Article 25 of the 1948 UN Universal Declaration of Human Rights guarantees the fulfillment of essential needs for every human being:

"Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control."

Article 28 of the UN Declaration also promises each person the public environment in which to live with dignity: "Everyone is entitled to a social and international order in which the rights and freedoms set forth in this Declaration can be fully realized." In practical terms, these two articles guarantee to every member of the human family the right to a certain standard of material well-being, and hold society responsible when its citizens sink below that level of protection and into the vicious cycle of poverty, alienation, and disenfranchisement.

As many know well, deprivation of physical needs results in a personal experience of abandonment, resentment, and isolation, which, in turn, leads to political disempowerment, as people blame themselves for their own adversity and feel unworthy of improving their situations, incapable of taking responsibility and becoming involved in the policy decisions affecting them. They are "people," said Brandt, "excluded from economic growth as well as from participation in shaping their own environment; they live in conditions of absolute poverty and misery unworthy of mankind" (N-S, 24). Vast resources are required just to lift these millions back from the downward spiral of unmet potential, thwarted hopes, and smoldering discontent, and renew their capacity to take control, improve, and transform their lives.

A massive public investment project to end hunger, eliminate poverty, increase global aid, and cancel the debt, would help poor workers out of this desperate slump by boosting their purchasing power and restoring to them the initiative and self-sustaining power they lack. The Brandt Commission believed that:

"in the long-run countries have to strengthen their capability to sustain development, through structural transformation. There is an analogy for individuals and families. Meeting essential human needs will require substantial public expenditures and welfare, but ultimately only the provision of remunerative employment will ensure development and be consistent with human dignity. The most basic of all needs is the right to participate in change and to share in the outcome" (N-S, 63).

The transformation of need into effective demand is a potential revolution for global society – as well as a revolution in human potential. People of the world can scarcely envision the opportunities for peace and prosperity that await the creation of coequal economic conditions, enlargement of per capita income, and the unleashing of human incentive on a global scale. A global financial commitment to these measures for economic revitalization would yield enormous returns for everyone, far greater than the initial investment. When developing nations generate a healthy and prosperous infrastructure – mobilizing the savings and resources of citizens, overcoming personal helplessness, and widening democratic participation – they will provide markets for the richer countries, leading to new jobs, increased spending, saving, investment, new production, and greater social stability in both developed and developing worlds.

Of its many forward-looking proposals, perhaps the greatest contribution of the Brandt Commission was its insistence that eliminating poverty is the key to stimulating aggregate demand and maximizing productive capacity in a sustainable global economy:

"We believe that the present predicament of the world economy can be resolved only with a major international effort for the linking of resources to developmental needs on the one hand and the full utilization of under-utilized capacities on the other" (N-S, 254).

When basic needs are met, debt is written off, trade agreements are commensurate, money is stable, and finance is supervised, the negative net flow of capital from workers to producers will be reversed, and international capital will stop siphoning the wealth of consumers and potential consumers. Unmet needs and aspirations will be given new value. Direct earning power will be restored and incomes will rise, creating new buyers for the world's surplus products. Resources will be allocated equitably and supply will flow to need, invigorating economic growth for all nations. With a new financial base and increased opportunities, poor people will also gain the political power they had been without, enabling them to root out corruption and ensure transparency, accountability, and democratic order.

Global monetarism has already built the infrastructure and prepared the ground for economic democracy to flourish, but it will require a counterbalancing of the scales of supply and demand for this regeneration to occur. The stimulus must be on demand, effectively offsetting debt and equity investment as the driving force of the global economy. When that balance is struck, a vast potential revolution – the transformation of need – will occur across the planet, as the excesses of globalization are equalized, absorbed, and recast. Only the international public can wield the prodigious strength and energy required to equalize world economic conditions, by giving new expression to the silent burdens, the unsated needs, and latent power of the masses, and sounding a global appeal for a new equilibrium. The motto of the monetarist economy was, "produce it and they will buy." The rallying cry of democracy international is, "raise our wages and we will buy."

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