Who Will Help the Poor?

Paris – With the deepening of the economic crisis and the prospect of another recession looming large on the horizon, growing social inequality has become an increasingly urgent issue. How does one reinforce a sense of solidarity and responsibility within a country? Who will protect the weakest?

As I ponder this issue, I am reminded of a debate that I had more than ten years ago in Berlin with the German theologian Hans Küng and American and Asian participants. The subject was “Globalization and Ethics” – specifically, a comparison of the ways that Europe, the United States and Asia protect the most fragile members of their respective societies.

All of the participants agreed that in Europe the state traditionally filled the role played by private philantropy in the US and by the family in Asia. But we all hastened to add that no model was “pure,” i.e., the family was no longer what it used to be in Asia, the state was playing a bigger role than expected in America, and it was often underperforming in Europe.

Reality has become even more complicated since then: the family’s role continues to decline in Asia; philantropy, despite a few extraordinarily generous individuals, has more than met its limits in America; and, with the possible exception of the Nordic countries, the state in Europe, overburdened by debt, no longer has the means or the will to shoulder new responsibilities.

So who will take on the responsibility to protect the weakest if none of these three actors can do it properly? Are we heading toward a world united by shared incompetence and inadequacy?

In the Western world, the poorest are the worst affected by economic stagnation. But, in rapidly growing emerging-market countries, the rich tend to close their eyes to the suffering of the poorest, except when they feel threatened by the risk of political upheaval, as in, say, Saudi Arabia.

In fact, wealthy elites in emerging countries live in a state of denial towards their poor, literally ignoring them. Brazil and India are particularly striking in this regard. Economic growth is necessary, but not sufficient: a strong sense of social responsibility is needed as well.

It would be absurd to condemn, as some do, globalization as the main and only culprit in the erosion of traditional sources of support for the poor. Globalization is above all a context, an environment, even if the consequences of the first major financial and economic crisis of the global age will further deepen the gap between the very rich and the very poor.

But globalization makes the weakest among us more visible, and therefore makes the absence of social justice more unacceptable. A world of much greater transparency and interdependency creates new responsibilities for the rich. Or, more precisely, it makes the old responsibility to protect the weakest both more difficult and more urgent.

In a world of increasing complexity, perhaps what is needed are simple solutions. One could follow, for example, Adam Smith’s principle of comparative advantage: what Europe does best is the state, while Asia still relies on the family and the US continues to focus on individual initiative. The problem is that in a world of universal benchmarking, the legitimacy of solutions will stem more than ever from their cultural acceptability and their efficiency.

In Western Europe, for example, the call for sacrifice from all citizens in order to resolve the debt crisis runs up against a lingering perception that not all will contribute equally, and that social inequality will be exacerbated by austerity. Restoring growth in the short term while addressing debt problems in the medium and long term may well be the only valid response to the crisis.

But it will not work, in Europe or elsewhere, without a much greater emphasis on social justice. While some of the very rich complain, as Warren Buffett did recently, that they do not pay enough taxes, the enlightened generosity of these happy few – who want to save capitalism and liberalism – is unlikely to be emulated by the new rich in the emerging countries, much less by the rich elsewhere. Let’s be realistic: people like Buffett and Bill Gates have very few followers even among the very rich in the US. And can Asian societies really revive an effective sense of family responsibility?

Globalization does appear to have weakened cultural differences noticeably in the past decade. But, when it comes to the protection of the weakest and the struggle against rising social injustice, perhaps “global deculturation” creates an opportunity to combine the best of what remains in particular traditions. Perhaps countries should seek to base their social-welfare systems on a new synthesis of the state, the family, and philanthropy.

Copyright 2011, Project Syndicate.