The sequence of disasters unfolding in South-East Asia at present
should lead to more urgent debate on the provision of international
public goods. Such a debate itself cannot go far, however, without
a degree of consensus on (i) the role of public goods in general,
and (ii) international sovereignty. A conceptual consensus needs
to be provided by the academic community, and should be set apart
from disagreements arising from divisive questions such as "how
many" public goods and "how much" international
political cooperation.
The Asian disasters are consequent on the practices of traditional
slash and burn agriculture, of exploitation for profit of forests
which are themselves international public goods, of an inability
(and sometimes an unwillingness) of 'Third World' sovereign nations
to respond to international disasters that take place within their
territories. The sequence of disasters in the region now include
an airliner crash in Sumatra, and a second collision of ships
in the Malacca Straits, the latest resulting in the loss of 29
Indian lives.
The problem today is that the provision of both national and international
public goods is decreasing rather than increasing. At the international
level, we see that the major issue at the September meeting of
the United Nations General Assembly was simply to try somehow
to get the United States to meet its past debts. An expansion
of the role of the UN cannot make the agenda in the current ideological
environment characterised by short-term selfinterest. The
process of trying to extract some social responsibility from the
US has proved particularly frustrating. This is because the contemporary
philosophical rejection of public goods as a useful economic concept
has its origins in the US; indeed in the "Chicago School"
in particular, with the irony that Chicago more than most fails
because of the lack of appropriate public goods.
The most prominent public goods provision in Chicago today is a criminal/justice infrastructure that warehouses, in particular, the poor, the black, the unemployed. Such public goods are provided at great cost, only because the more appropriate and often less expensive public goods - proactive rather than reactive - are not provided. In "Chicago Getting Real" God Bless America (Granada 1995; TV1 [ETV], 15/3/96), Scott Turow, Chicago author and lawyer, observes of his city:
Do I hear the words "Sharon Moke" and "Anaru Rogers"?
Or "NZISS" (New Zealand Income Support Service) which
comes out as "NAZIS" on my computer's spelling utility?
In the mid-1960s, there was a commitment in the USA to settle the major outstanding problems in the American socioeconomy through the "Great Society" program - a set of proposals building on the social policy initiatives of Roosevelt and Kennedy to create a society characterised by publicly guaranteed affluence; a new kind of affluence that would both complement and temper the unsustainable private affluence for which America had become renown. Daniel Fox (The Discovery of Abundance: Simon N. Patten and the Transformation of Social Theory, 1967, Ithaca, N.Y., Cornell University Press, p.171) noted:
The problem in the United States was graphically revealed in a
recent BBC documentary about the wholesale dismantling of Lyndon
Johnson's program. One of the most graphic images of the documentary
was that of the demolition of a near new public hospital in Detroit.
(At the same time, numerous new custodial facilities were being
built.) That sounds remarkably like recently announced proposal
to close the recently built oncology wing of Dunedin's public
hospital.
In today's selfish and privately affluent western and westernising
societies, the concepts of public goods and the need for increasing
taxes to fund them are very unfashionable. We cannot provide the
international public goods that we need to both prevent and manage
the social and environmental crises that characterise the global
socio-economy today while we have such a negative attitude to
public goods in general and to taxes in particular. An efficient
cosmopolitan economy of the future needs more international public
goods, without any erosion of national public goods.
A common view within the neoliberal (neoconservative in the US)
community is that private insurance will efficiently provide national
and international public goods, or efficient substitutes for public
goods. In reality, private insurance can be very inefficient,
thanks to what economists call "moral hazard". Ships
will bump in the haze so long as the costs are borne mainly by
the better operators through their insurance premiums, and by
the working classes of countries like India and the Philippines.
As a result of market failure in the private health insurance
industry, the US health system in the 1980s costed four times
per person as much as ours did, with few obvious health gains.
We have a common response to the question "Where will the
money come from to fund the public program that you advocate?"
That response is to say that it will cost more to not fund
the public good than to fund it. Unfortunately the costs
of not funding the public goods needed to enhance the economic
efficiency of our societies will often be accounted for outside
of the standard public balance sheet. Furthermore, the system
of national accounts - which is much wider than the public accounts
- is an underfunded public good.
The national accounts require both conceptual improvements and
measurements of production in the domestic and voluntary sectors,
especially with respect to environmental accounting and social
wage accounting. And they need to be incorporated into a system
of international accounts. If the improvements are not made then
many of the costs of not providing public goods will continue
to be unaccounted for, and hence treated as if nonexistent.
Unaccounted costs - such as the costs arising from the failure
to regulate the international forestry industry - are of course
very real, as anyone living in Malaysia can see and breathe. In
this case, these costs represent a failure to protect the lungs
of the earth, the forests of Borneo and Brazil.
The fires in South-East Asia are just one example of international
market failure made visible. They serve as a warning. Indeed if
they continue for months as has been predicted they will soon
be interpreted as a millennial 'Armageddon'. The fires and the
haze tell us that an efficient economic order requires public
goods to not only create more just and more sustainable forms
of affluence, but also to ensure the survival of our grandchildren.
We still treat individual lung cancer through a public health system. The public good includes the regulation of the tobacco industry, education about the effects of smoking as well as the medical treatment of lung disease. Should we not also treat global lung cancer through global public health provisions? We cannot do this so long as the economic interests responsible for the problem - a mixture of poor peasants with few realistic alternatives to unsustainable traditional practices, and transnational capitalists who operate at present as de facto sovereigns of the international economy - are neither enabled nor obliged to change.
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