New Internationalist

The case for the new economic order

October 1975

Five major international conferences on world crises in four years – and now there is a clear consensus on the nature of the beast. A New Internationalist round-up by Peter Adamson.

If ever there was a tide in the affairs of men and women, this is it.

The earth community stands before a gathering storm of crises. And it knows it.

460 million people are actually starving. An estimated 200 million are unemployed. A guessed-at 75,000 people a day are migrating to overcrowded cities. Population is about to double in the next thirty years. The resources of the planet are steadily running out. The natural systems which encompass and sustain all life are nearing the outer limits of their tolerance.

In response, the international community has added to its understanding and awareness of these problems with unaccustomed speed over the last three years.

There has been a World Environment Conference (Stockholm, 1973), a World Population Conference (Bucharest 1974), a World Food Conference (Rome 1974) and, rest assured, there will be a World Employment Conference (Geneva 1976) and a Human Settlements Conference (Vancouver 1976).

These cumbersome conferences, rippling with expert muscle but lacking in political scope have sometimes seemed to flounder like whales in a swimming pool – all splash and no swim. But to dismiss them as a waste of time is just fashionable nonsense.

All of them have widened the world’s knowledge of its problems and that alone is an indispensable, if insufficient, step towards genuine solutions.

And the cross-fertilization – some would say in-breeding – of ideas which these conferences have permitted has sired a new generation of studies and seminars and reports whose analysis and proposals are as radical as the change that is needed.

From all this, a consensus is now emerging which, if taken at the flood, could yet lead on to fortune.

Signs of the times

The most important theme to be crystallized out of this solution of words is that the major crises of our times are not unrelated accidents, mere coincidental aberrations from an otherwise well-regulated world system.

The problems of food, population, employment and environment are now recognized as symptoms of the same sickness. And it is clear that a cure will not be found without a diagnosis of what that sickness is.

'The central problem of our times is this "two-tier" world'

The 1975 Dag Hammarskjöld Report, for example, describes the various crises as ‘only the most obvious signs of a great disorder under heaven’. And the latest Report to the Club of Rome by Mesarovic and Pestel also opens with the statement that ‘the whole multitude of crises appears to constitute one single global crisis of world development’.

Recent events have made it blazingly clear that this single global crisis, the sickness which underlies the symptoms, is none other than common poverty compounded by chronic inequality.

A United Nations seminar in Cocoyoc, Mexico, for example, concluded that ‘The failure of world society to provide a safe and happy life for all is not caused by any present lack of physical resources… but by economic and social maldistribution’. The Dag Hammarskjöld report already referred to also concludes that ‘The true limits of mankind in our time are not primarily physical but social and political’.

A closer look at the signs of disorder under heaven does indeed show them all pointing the same way.

Food and poverty

No-one at the World Food Conference, for example, denied that there is surplus food in the world.

There is food for sale in the rich nations, but heavy buying by the nations that can afford it has depleted reserves and pushed the price beyond the reach of the nations that need it. Bulk purchases of grain by the Soviet Union, from the United States, for instance, contributed to a trebling of world wheat prices and left India, with much more need but much less money, unable to buy enough grain. As one observer at the Rome Conference put it, ‘the food crisis is a crisis of price and distribution’.

Even inside many of the hungry nations, there is surplus food and more could be grown. But the poorest 40 per cent who need it do not have the resources to grow it or the money to buy it. Therefore there is no ‘economic demand’, therefore food is either not grown or it is sold to the rich nations where there is an ‘economic demand’ for animal feed.

‘No doubt everyone realizes how preposterous it is,’ commented Professor Georg Borgstrom, ‘that the most protein-needy continents are the main suppliers of animal protein food – and they supply those who already have plenty.’

‘Less than one tenth of the grains fed to Northern beef cattle equals this year’s global deficit in food grains,’ says the United Nations Development Programme.

The sickness could hardly be more clearly exposed. Economic demand is effective; human demand is not.

The food crisis is a symptom of poverty and inequality. And today there is a boredom of evidence to show it.

People and population

It has also come to light in the last few years that rapid population growth is more a result of poverty than a cause. And the World Population Conference was the crest of a wave which left the pill-as-panacea high and dry on the barren beach of its own infertile approach.

By shifting the spotlight from the problems of population to the problems of people, the Conference illuminated the fact that poor people generally have larger families because children can bring security in illness and old age, help in fields and homes, and hope and joy into lives that often have little of either.

‘Every reputable demographer now knows,’ wrote Geoffrey Barraclough in the New Yorker this year, ‘that the only historically proven way of reducing population growth is to improve living standards and that it is the hungry, indigent and despondent who have large families.’

‘There will be little chance of bringing birth-rates down rapidly enough to avert disaster,’ writes food and population expert Lester Brown, ‘without a more equitable distribution of income and social services.’

Yes, the population problem also points its finger at poverty and inequality.

No jobs for the poor

The rich nations have the capital and the purchasing power to invest in factories, machines, research, new technologies, long production runs, cheap unit costs, subsidies, competitive exports, and jobs.

The poor countries have unemployment.

Inside developing countries too, the length of the job queues is roughly proportionate to the breadth of inequality. Paul Harrison, writing in the London Financial Times of 12 December 1974, reported that ‘World Employment Programme researches have shown that the rich in the developing countries spend more on imported luxuries and on expensive items produced by capital intensive methods. Redistribution of income would mean more spending on items produced locally and by labour-intensive methods. Redistribution equals more employment.’

Inside developing countries too, the length of the job queues is roughly proportionate to the breadth of inequality

The crisis of the overcrowded and underemployed cities can also be brought home to inequality’s door. In most developing countries, limited resources have been concentrated on the modern urban centres, creating what Dr E F Schumacher has called ‘the total imbalance between city and countryside, an imbalance in terms of wealth, power, culture, attraction and hope’.

‘The dual society,’ writes Indian economist A K N Reddy, ‘is associated with the evils of massive rural employment and underemployment, of mass migration to the metropolitan centres.’

Too much and too little

Finally, the environmental crisis itself is a running sore of inequality.

On the one hand the environment is threatened by too much – by the 1,000 new chemicals and 300,000 tons of pollutants being pumped into our atmosphere each year; by the industrial effluents and wastes from the manufacture of new products which we want but don’t need; by the 48 billion metal cans, 26 billion glass bottles and 7 million cars which are ‘junked’ each year by the United States alone.

On the other hand the environment is also threatened by too little – by the poverty and consequently accelerated population growth which forces people to cultivate marginal lands at great risk of soil erosion, the destruction of trees, and the advance of deserts.

Maurice Strong, Executive Director of the UN Environment Programme, told the 60th session of the International Labour Organization’s Conference this year that ‘the environmental problems of the industrialized countries stem from the excesses and abuses of the same process of industrial and urban growth which produced their present wealth and power, whilst the environmental problems of the developing countries are rooted primarily in the poverty and underdevelopment which still afflict the majority of the world’s people.’

Only One Earth, the book produced for the World Environment Conference in Stockholm, also concluded that ‘there is an inevitable and essential element of redistribution of resources underlying the problem of the environment’.

New cure needed

In these ways, the symptoms point to poverty and inequality. And today, these symptoms are so severe because the disease is so acute. ‘Judged against the sweep of history,’ writes Richard Jolly, Director of the Sussex Institute for Development Studies, ‘present world inequalities in income and wealth are recent and unprecedented.’

Although palliatives are plentiful, there is as yet no medically approved cure for chronic inequality. The Madame Guillotine and Robin Hood remedies are traditional antidotes, but the side effects of the atomic bomb are greater than those of the bow and arrow. A new cure is needed.

‘The central problem of our times,’ writes Professor Christopher Freeman, ‘is this “two-tier” world, and our central task is to explore paths by which inequalities between and within nations might be reduced.’

A new economic order

In May 1974 the governments of almost every nation in the world came together to discuss the central problem of inequality in wealth and opportunity. Meeting at the Sixth Special Session of the UN General Assembly – the first Special Session ever called by a developing country – they approved ‘by consensus’ a ‘Declaration on the Establishment of a New International Economic Order’. It was a hard-fought 2,000-word document, incorporating a coherent set of principles and accompanied by a definite Plan of Action, with the stated aim of ending the gross inequalities of the present time.

Since then, the New Economic Order has become almost synonymous with world development and provided a common focal point for a legion of conferences, studies, and reports over the last 16 months.

Despite the fact that the developed nations filed over 200 pages of reservations on the Declaration, and despite the fact that the degree of inequality inside many poor nations sometimes makes a mockery of their claims, the New Internationalist believes that a New Economic Order – between people as well as nations – is now the main hope and rallying point for change towards a more just, and therefore less hungry, less crowded, less violent and less physically degraded world.

Therefore this special issue is devoted to the content of, the case for and the consensus now gathering around the New Economic Order.

This feature was published in the October 1975 issue of New Internationalist. To read more, buy this issue or subscribe.

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