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The World Is Round: A Real Plan to
Solve Global Problems in this Generation
By Anil Hira

We live in an era of great transformation. Citizens everywhere can feel the ground shifting from under them, yet we do not yet have a road map of the changes, let alone a blueprint for how to address them. We have all noticed the breakdown of steady employment prospects. The dream of so many immigrants to make a middle class life for themselves in the West continues, but the reality is that most of us are constantly worried about losing our jobs and our benefits, as well as whether we will have adequate funds to retire. We all feel increasing insecurity, when, after the jubilation at the fall of the Berlin Wall, we now face not conventional armies but violence aimed towards us civilians at any time or place. Every time we enter the airport, the change from just 5 years ago is palpable. Our news is filled with more indirect threats that reflect this new age of insecurity. Citizens under the so-called "Minuteman" program are trying to enforce US- Mexican border. Leaders make pronouncements about the global fight against AIDs, but the battle is not anywhere near won.

In the meantime, diseases such as polio and tuberculosis threaten to make a comeback. Industries that employ thousands of workers, from coal mining to automobiles to IT (information technology) to textiles threaten to go under at any point. Financial disasters such as those in the Enron and MCI cases seem to demonstrate that these are not just events that occur in places such as Argentina and Indonesia.

Our graying population is finding it ever more difficult to retire amidst the dot com burst of stock market values and real estate prices shooting through the roof in what everyone expects will be another bubble.

What do all these changes in our way of life have in common? They can be tied in part, though of course not exclusively, to major changes in the way the global economy operates. Some of these changes have been documented by authors such as Thomas Friedman and William Greider, both in terms of a sense of great optimism and great pessimism, respectively.

Yet no one has clearly tied these things together in a way that gets us past the stage of lamentation and onto the point of what we can do to respond in a way that will help us to restore our way of life. The world is not flat but round--we are increasingly affected and interconnected from one remote corner to another--and the positive and negative effects of this transformation are both multiplying.

This article argues that a golden age is well within our grasp, and is not a pipe dream. It is a recognition that what is good for us in many ways now is tied in more and more directly with the welfare of others.

Those of us who grew up in the West are at a unique historical juncture. We have always believed strongly in our institutions and culture. We are not fools or ideologues, but rather we recognize the level of success that we have had in managing an open, free society in which there is both social mobility and a high level of general prosperity. Our standards of living have been steadily improving for over 200 years now. Part of that improvement is palpable- in cell phones and digital cameras, in women and minorities having more success than ever before, and in the increasing types of employment choices we have. Other parts of this success are based on factors that are less obvious. These include increasing improvements in our health care system and awareness about health risks, such as smoking; a steady stream of talented and hard-working immigrants, the best and brightest, who have come from abroad to continually inject new energy into our societies; educational institutions that are heads and heels above any others in the world; and a sense of trust and compromise based on a consensus that our institutions are working and that we can reform them democratically for whatever changes are needed, such as civil rights legislation.

Why, given this track record, do we now seem to face a wide range of intractable problems, problems that seem beyond our ability to solve? Problems including terrorism, global warming, the loss of jobs and whole industries to overseas competition, volatility in the financial system and health care threats, and corporations that seem to twist the rules to work for them, and not for society as a whole. We feel a profound sense of insecurity because we have not yet recognized the links to the underlying source of these changes, that is changes in the emerging global economy. In fact, we can note that both sides of the globalization debate are correct. While absolute poverty across the world is declining, much of these gains are concentrated in China and to a lesser extent, India. This means that absolute poverty is the same or worse in much of the world, including some parts of the North. Relative poverty and income levels, reflecting gaps between the haves and have-nots, is also increasing. These increasing gaps are affecting communities in both the North and the South. There are at least two long-term sources of increasing relative inequality that relate directly to work in the global economy . One is the loss of jobs and reduction of wages with the increasing liberalization and competitiveness of developing countries, esp. China. The second is the increasing gap between those who have skills in demand and those who do not. Our lives are intimately tied around family and work. Ultimately, our first task as human beings is survival and prosperity for our families. This means that economic enterprise is at the heart of our identities and activities, and the tectonic shifts in this area, which I call dislocations, are at the heart of our anxiety.

The 2005 bombings in London were a reminder of how much the world changed since the Sept. 11, 2001 bombing of the World Trade Center. Terrorism is now on the minds of the both the West and Middle East as a daily obsession. As some observers have pointed out, many of the terrorists, including Bin Laden himself, come from backgrounds that were middle-class or better. These observers imply that the "war" on terrorism has more to do with irreconcilable ideological differences and extremism than poverty. Bin Laden and others’ goals have to do with American presence in the Middle East rather than poverty. This perspective buttresses the US and UK approach so far to use force to beat back the threat of terrorism. Billions of dollars have been spent, thousands of lives lost, yet there is no end in sight to the escalating costs of the war on terrorism. Even more costly is the loss of young soldiers in their prime in Afghanistan and Iraq. So far, the results of this war, well-known, have been hardly encouraging. Afghanistan remains as lawless and factionalized as ever, in fact, it is now re-emerging as a major centre for narco-trafficking. Iraq appears to be on the verge of a civil war, with no "exit strategy" in sight. In the best case scenario, a Sh’ia-dominated government will reach some form of truce with the Kurds in the North, yet the former, like the Sunnis, have no love lost for the West. Perhaps more significant for us is the daily reminder of the paranoia that surrounds us. We can not board a plane or ride a subway car without being reminded that there are possible enemies ready to strike us down randomly at will. We are aware, but have been able to do little, to secure the millions of tones of cargo flowing across borders, any one of which might contain an explosive device. Where we have successes against a few cells, others, cut off from any central chain of command, seem to be proliferating.

Despite the veracity of the experts’ claims about the middle-class backgrounds of some of the terrorist leaders, this seemingly counter-intuitive observation is missing the bigger picture behind terrorism. It is not pure coincidence that peace has come to Ireland at the same time that Irish economy has taken off. We know that the foot soldiers in the terrorist bombings often come from deprived origins, and that the leaders generally experienced strong frustration as middle class immigrants. It has been pointed out, for example, that the unemployment rate among the immigrant communities of the London bombers is estimated in the double digits, well above the national norm. We know that life for many Palestinians is appallingly insecure and difficult. We know that many in the Middle East suffer from the repression of autocratic governments, from the pseudo-democracies of Egypt and Jordan to the harsh repression of Syria and Saudi Arabia. While many in the Middle-East are anti-American foreign policy, they are not, as the terrorists claim, against achieving the benefits of the Western way of life. In Beirut, Cairo, and Tehran, the youth of those countries push for democracy and everywhere in the region, follow the consumer trends of the Western world. They prefer to watch television, get their kids good educations, and otherwise live a good life rather than living in a cave in Afghanistan hoping to live through the next day. It is the lack of opportunity and a strong sense of frustration, in short, that is the underlying combustible fuel behind latent support for terrorism in the region, not some ideological promise or the promise of heavenly rewards.

The vision of what the terrorists would do if they won is instructive in its emptiness. As the Islamic Revolution has been rejected amidst the hypocrisy of the mullahs in Iran, it could not offer a model for how a "non-Western" true theocracy would live. Indeed that hypocrisy extends to the terrorists themselves. These groups rely upon the internet and films to publicize their struggle and to create fear in the West. They rely upon the international financial system and drug and oil revenues (paid for by us) to supply their operations. They purchase their bombs and guns from our military suppliers. They count on our liberal atmosphere of tolerance and the immigrant communities in our borders to allow for new recruiting and organizing. In other words, the world economy, in its effervescent integration, is quite ironically integral to terrorism’s success thus far. The unwillingness and inability to deal with the root causes of terrorism- our current strategy is essentially the equivalent of us setting a series of blow torches to dry up the ocean- is reflective of our inability to understand the way that terrorists rely upon the world economy.

For most of us, our sense of rightness is based not upon some missionary zeal to promote Christianity as many terrorists and some extremists here would like to think. It is based upon the obvious fact that we have been successful in creating a good and improving way of life for our citizens for around 2 centuries now. It is not Christianity that brings forth immigrants to the West, but the possibility to have a better life. So, we can not understand the vociferous hatred that others have towards us. Ultimately, that hatred can be traced to our failed foreign policies past and present, towards the region, as well as jealousy at the growing power differentials between the haves and have nots in the world.

Beneath this international scene of conflict are the seeds of domestic discontent in the West. In the last 20-30 years, there has been a steady erosion of labor strength. Hand-in-hand with this has been a breakdown of employer-employee relationships. Whereas in the 1950s, our fathers could look forward to the possibility of working for a steady employer, with strong benefits and merit-based mobility built in, today’s graduates are facing quite uncertain prospects. As many skilled-blue collar jobs, which were essential to social mobility through much of the century have started to move overseas, leaving hollowed-out towns where there were coal mining, steel, and auto plants in England, Pittsburgh, Buffalo, West Virginia, and Detroit, among others, the necessity of a university education seems more important than ever before. Yet, today, a bachelor’s degree does not mean entry into a good white collar job. Ask any student what their job plans are, and there is an increasing vacuum of answers. The brief IT boomlet of the late 1990s and the subsequent plundering of jobs to outsourcing offshore means even sure bets, such as engineering and computer science are now under siege. The twenty-something’s now living at home longer and longer are essentially living off the capital and wealth accumulated over the past 3 generations of hard work. Even where we find a good job, we never know when or if health and pension benefits will pay out, whether our company will be bought out, or if we will be relocated or downsized. This breakdown of steady and stable employment possibilities in the West can also be tied to changes in the world economy.

The loss of strength of labor unions and the more essential breakdown of mutual interests between the employer and employee in the West can be tied proximately to Reagan-era reforms, but those reforms reflect changes on a wider scale. We can look at these changes on both the demand and supply sides. On the demand side, suppliers of everything from coffee to computers have to look at global markets. As we discuss below, the growth of free trade means that there is a freer flow of goods than ever before in history. This means that a firm, such as Apple, needs to consider the demand needs of simultaneous markets in Europe, Japan, and the US, as well as smaller emerging markets. The revenue streams as well as the product and marketing needs for each product will have to be considered as parts of a whole, rather than as separate markets which are part of a conglomerate. The changes to the supply side of production are more profound still. In most products now there is a global supply chain, in which components of products are produced and assembled in a variety of places around the planet. Most of these operations have multiple possible locations, thus if one area of supply is cut off, say a factory making semiconductor chips in Thailand, other production facilities in other areas can easily be changed to increase output. The mobility of production essentially means that companies are no longer tied to local labor forces. For a long time, we thought the exception would be high tech, high value-added complex processes for which the labor pool was quite limited, however now we see with Silicon Valley that there are no exceptions.

Not only do terrorists and narco-traffickers use offshore and Swiss banks, but most corporations do as well. The deposits in offshore banking havens such as the Cayman Islands are designed specifically to help companies to avoid paying taxes. Their existence means that we are unable to trace financial transactions for security purposes in the fight against terrorism and drugs. It also means that the billions of dollars each year in corporate profit, essentially from spending by the West’s consumers, are unavailable to the community and governments from which they came. The recent famous cases against Enron et. al, as the public suspects, are just the tip of the iceberg of corporate and accounting practices--because of the globalization of trade and finance it is increasingly difficult to push corporations to act responsibly. This reality undercuts our long-term financial security, including our ability to save and invest and to be secure for our retirement. Indeed, a recent book traces much of the Enron debacle to games played with offshore bank accounts to reduce the appearance of risk in Enron’s investments . For those who are getting ready to retire now, the 1998-9 Asian financial crisis, one of a string of international crises as well as the dot com bust, underscore that financial capital, often in the form of large pension funds, is increasingly mobile and risky. With the push of a button, a herd of pension fund withdrawals acted as the straw that broke the back of the Asian financial system, reducing the fastest growing region’s ability to push the world economy forward, and to raise the millions there out of poverty. While small levels of investment enjoy deposit insurance, the inherent riskiness and volatility of the financial system reduces savings and makes our lives insecure.

As our way of life in terms of our security, work and savings possibilities declines, we are reminded of other long-term disasters in the making. The millions of dollars we have spent on AIDs have not led to a cure, though treatments are remarkably improved. Yet, we are continually reminded of the ramifications of the millions of new AIDs infectees on a regular basis. A few years ago, we were afraid of the possible spread and mutation of the Ebola virus from Africa, and more recently by that of mad cow disease and the avian flu (SARS) from Asia. These warnings signs remind us of previous global epidemics such as bubonic plague, influenza, polio, tuberculosis (tb), and smallpox that made life miserable for thousands of years. A few years ago, we thought through immunization that we would have wiped some of these diseases as threats out. Yet, through the lack of eradication of the disease throughout the world, new polio cases have been found, and new strains of tb are feared. Our sense of vulnerability to a new epidemic comes not just from a terrorist nefariously planting such problems, but from the millions of air and cargo shipments that come across our borders every day. As our grocery stores are filled with everything from Chilean grapes to Ethiopian coffee, and immigrants continue to come across our shores, we recognize that our food safety standards, geared towards local production, can not catch every possible problem. In areas of heavy concentration of immigration, such as California, basic health and educational services are overwhelmed from immigration. Yet to cut off illegal immigrants from emergency rooms means merely escalating the costs of that injury to society, and possibly, not containing an infectious disease. To close off our borders (in the ridiculously infeasible solution proposed by anti-immigration extremists), ignores that the products from other countries, as well as the flow of immigrants is now part of our economic way of life. These immigrants are essential in an era in which Northern populations are graying at an alarming rate.

There are other stories in the backburner of our minds that we need to bring forward. Everyday we are put in fear about global warming, over fishing, and the extinction of species. We do not need a speculative film of long-term impending disaster to understand this threat. The air is hardly breathable now in Shanghai and Mexico City, and what will happen as the millions of new autos being demanded hit the road? The air in China and Mexico affects the air that we breath as well as the temperature of our climate. Whereas a generation ago, we could count on the possibility of enjoying the wild animals and environment of different areas, increasingly those possibilities are being extinguished. Yet, as the debacle around the implementation of the Kyoto Protocol demonstrates, we seem to be unable to move from recognition of the problem to action in terms of slowing down the threat to the environment. Such inactivity hurts not only our overall quality of life, but also our economic prospects. For example, areas such as Newfoundland are all too aware of the inability of national authorities to prevent over-fishing.

Given the benefits of global trade, finance, and immigration it is both self-defeating and impossible to think about reversing such trends. For those who are virulently anti-globalization, the idea of going back in developing countries to a period of import substitution, in Eastern bloc countries to socialist state planning, and in the West to a gold standard of currency control are patently ludicrous. Yet, we no longer seem to have the national means of dealing with these international problems. To be sure, there is justified skepticism about current international institutions. The WTO, World Bank, and IMF are dominated by the developed countries and are undemocratic- affecting the lives of millions who have no representation in their decisions. The UN is plagued by mismanagement, corruption, nepotism, and ineffectiveness, as well as a budgetary crisis. While the IMF can dominate developing countries such as Argentina, most financial flows are between Northern countries and out of its purview. The management of these artery systems of financial flows are done on an ad hoc consultation basis, which, absent a run on US debt, has so far managed to stay afloat. Moreover, trade negotiations remain stalled--agriculture and intellectual property rights being two main concerns. The financial system remains vulnerable--both volatile and with little liquidity available to Southern states who need it most. The flow of people remains unchecked, despite massive efforts in the wake of terrorism to crackdown on borders. Even the decades-old battle against drugs continues to be futile. With the new wave of corporate scandals and loss of jobs in the North, it is clear that our current institutions are incapable of dealing with these global crises. The question we face now is whether we want a convergence at bottom, due to inadequate or failing global institutions, or whether we will step up the challenge by creating a new global system of institutions appropriate to a global economy.

A proposal to create a global institutional system including regulatory and welfare capacity undoubtedly will create huge nationalistic reactions. If countries can not agree to give up their sovereignty to the EU, and the US can not reach agreement with allies for an enormously costly war in Iraq, how likely is it that they would invest in a global government? The problem with this knee jerk reaction is that it ignores the fact that these global problems can not be solved by nations. Even with the US’s relative if temporary dominance, it is unable to move past the current system. With the rise of China as the #2 economy in the world, the architecture set up by others will no longer be acceptable. The question, then, is not whether we need to remake global institutions, but how. As the world economy transitions from an old system of US dominance into one in which US, Chinese, and to a lesser extent, EU power, dominate the globe, there is an opportunity to remake global institutions to not only reduce the current acute problems but also to set up a system in which the global economy can prosper and offer opportunities for improving standards of living for all. The remaking of such systems does not mean a loss of sovereignty or domestic preferences, but rather the creation of institutions that are responsive on the global level to both states and citizens just as domestic ones are in Northern states. In other words, the extent of a new system of global government need only be built to deal pro-actively with global problems, rather than relying on ad hoc and inconsistent efforts by individual or temporary groups of states.

Though we are in a unique age, there are parallels with previous periods. My suggestion is that we should look at globalization in the same way that North Americans saw the problems of industrialization at the turn of the century. An entire generation of "muckrakers" pointed to the excesses of the robber barons at the turn of the century. Steady progress was made through the early part of the century in smoothing out the exigencies of cushioning and adjustment to markets, culminating in the New Deal in the 1930s. The efforts of these activists led to women’s voting; labor protections; anti-trust; worker and child safety statutes; and to the basic social security protections that balanced out the volatility of the market and reduced poverty. The stability of these reforms did not squelch economic growth, on the contrary the post-World War II era was a booming economic period. During this period, other important social legislation made a significant difference for Americans, including civil rights and environmental protections. These changes further raised the American standard of living. While occurring in fits and starts, there is no question that global governance of the economy has steadily increased.

The tired old solutions of calling for coordination, trade adjustment, or flexibility no longer work in a globalized world. Similar to trying to close off borders, such solutions are both myopic and ineffective. There has been no progress on world trade negotiations because of the huge gaps between North and South. There has been no plan to avoid another meltdown a la the numerous crises that rocked the world economy the last 2 decades, from Mexico to Russia to E. Asia to Argentina. Our welfare systems’ ability to provide health care, our unions’ ability to preserve basic living standards, and our ability to provide security through firepower alone, and to preserve basic aspects of the environment are all breaking down as domestic policies falter in the face of globalization.

Global environmental problems, immigration pressures, downward wage pressures, insecurity from terrorism and reliance on far flung commodity suppliers, humanitarian and global disease problems all promise visions of a series of crises for the coming future that each nation can only deal with in haphazard fashion. Yet, there is a key pressure point upon which all of these crises touch, which if addressed could turn the nightmare towards a paradise. The pressure point is population growth. Uncontested evidence shows that healthy families where women have the opportunity to work have less children. This means slower population growth which reduces pressures on immigration, the creation of new terrorists, and competition linked to weak labor and environmental standards. The slash and burn agriculture of the rainforests, the desperate turn to narco-trafficking or sweatshop conditions to support oneself would all be diminishing enterprises, if we treated one of the chief causes rather than symptoms of global problems. Reducing population pressure is a chicken-and-egg problem. Urbanization reduces family size, as do access to contraceptives, education, and health care. Ensuring female access to education and health care are the surest ways to reduce population growth without controversy over abortions or contraceptive use. More prosperous families are healthier and provide a productive contribution, rather than a drain or threat to the global economy. However, huge populations in developing countries, even at a reduced pace, make such transformations seem glacially slow and overwhelming. The fastest growing populations, indeed, are in the poorest regions, including South Asia and Sub-Saharan Africa. A global system is needed to accelerate the change to a low population, high quality of life economy. Without such attention the average American, Japanese, European and Canadian will find it impossible to compete with the thousands of hungry, hard working, and, in Asia, well-educated growing middle classes, let alone to stop them from finding a way into our economies.

Such a system would ensure that no one starves, that labor has reasonable bargaining rights, that a policy that respects the environment is enforceable, and that basic human rights are afforded to all. The initial reaction to my proposal would be to avoid such commitments at all costs as too expensive. The general ineffectiveness of the pittance of what we call aid is well documented and incontrovertible given the continuing sorry state of most of humanity. Indeed, the one major global welfare transfer, namely, the Marshall Plan, set the world on a growth spree for 2 decades, simultaneously creating new markets while lifting millions out of poverty. Unfortunately, there seems little prospect of a massive increase in aid flows anytime soon. However, such a view would ignore the costs now spent on terrorism and defense, cracking down on illegal immigrants, preparing for the transmission of diseases, such as polio (now making a comeback) from abroad, and environmental degradation. By recognizing that we are now living in a global economy, we simply move to regulate that economy in a fashion where it can best thrive. Not only do we reduce the costs of such problems, but we can create a whole new generation of consumers. Let us consider some basic "back of the envelope" costs for creating a system that moves beyond aid towards basic global welfare:

Spending on Global Fund to Fight AIDS Costs of illegal immigration enforcement Costs of war in Iraq and Afghanistan respectively Costs of refugee crises Costs of narcotrafficking  Costs of environmental degradation	$3 billion and climbing $28.9 billion and climbing $252 billion and climbing $1.35 billion just by the UNHCR $12.2 billion just by US incalculable
vs. estimates of costs of reaching UN Millennium Development Goals related to basic improvements in health, education, gender equality, environmental improvement, and disease eradication in the developing world
	28 billion in 2006

To be sure, these are very rough estimates, given only to demonstrate that the costs of providing basic welfare for the planet are far exceeded by the costs of Not doing so. We do not need to be rocket scientists to understand that a little investment in prevention and improvement will avoid disastrously expensive consequences down the road. For instance, a series of Rand reports note that an investment in greater educational access to education for illegal immigrants would benefit the state of California handsomely in terms of a more skilled workforce that could then contribute more greatly to the state’s economy, besides reducing pressures on public services . The same would hold analogously true on the global level. As we can see, it is clearly illogical for us to continue to pay the costs of the symptoms of global problems without addressing the costs, which is much cheaper besides all the humanitarian benefits.

The main problem with the United Nations, and the variety of other celebrities and non-profit organizations who have echoed this line, is that they continue to rely upon a system of voluntary charity in order to fund these commonsense projects. In my 2004 book, I outlined why development in general is simply ineffective, a few of which bear highlighting here. For one thing, development reduces world citizens to charity cases. That means that rather than looking at education or health as an investment in a future citizen that can then pay taxes and grow the economy even more, beneficiaries are constructed and treated as helpless cases for pity. Charity at the international level is closely tied to national interests, rarely coordinated, and arrives in haphazard and inconsistent fashion. Development projects and agencies rarely, if ever, undergo any serious independent evaluation, and there is no system for learning from projects. The main result of development aid seems to be to fund middle class bureaucrats who have good intentions but neither the resources nor the wherewithal to make a real difference on the ground. There is a basic lack of resources, only a few countries actually meet their agreed upon target of giving 0.7% of aid. Moreover, they answer to both donor country politics and host country politics, as well as the bureaucratic maze of their own organization, constantly pulled in different directions. By code, they effectively support corrupt and inefficient regimes in developing countries who are to a great degree responsible for the development projects to begin with. In responding only to governments, they have come under fire from ngos (non-governmental organizations) and citizens who wonder why they should spend money on organizations that have no direct accountability to them. Obviously, this system is not working. What is needed is a global system that parallels the basic protections we enjoy in the North. This system should have its own revenue base and independent action, as well as direct accountability to world citizens. Let us briefly discuss how such a system could be constructed.

In this section, I would like to make 2 points. First, I would like to point out that a global welfare system does not mean giving up local decisions, or rendering us to the whims of some distant bureaucracy. There are an infinite variety of systems by which these goals could be accomplished. The strategic Xs and Os of a few of the possibilities can be laid out here, with actual numbers showing the feasibility of the project. The alternative is to continue to see the downward convergence and increasing segmentation between the haves and have nots in the global economy, both domestically and globally.

The backbone of this system is a new global taxation framework. The criteria for a global taxation authority should be that any tax should be progressive, non-discriminatory, and least distortionary of trade and investment flows. By creating a global tax system, we would effectively reduce distortions multiply manifest throughout the system. For a number of years now, economists like Tobin have been calling for a tax on international financial transactions to reduce the volatility of financial flows. Countries such as Chile and Malaysia successfully put controls on "hot" money to reduce such volatility. This concept could be extended to a basic tax upon all international transactions, including trade and finance. If we included were able to incorporate a global tax for corporations, who sitting offshore, presently pay none, we would raise billions of dollars with minimal effect.

In the spirit of the Live Aid and Live 8 concerts, we could place a small tax on rock concerts and other entertainment, such as films and video rentals in the North to pay for such schemes. If we added a small % tax on all entertainment, including the billions we spend annually on sporting events in the developed world, we would have a vast pool of resources, and an entertainment industry that could make an effective difference. We could also institute various tax sources that related problems directly to solutions. For example, we could have a small % tax on pharmaceutical sales and a series of sin taxes on alcohol and tobacco to raise money for health concerns. We could put a small tax on gourmet food items, such as coffee, or on luxury items, to pay for improving educational access. One of the biggest revenue producers would be to create a small % tax on arms sales, which could then be used for peacekeeping and international security operations designed to make the world safer. We could place a small tax on the energy consumption, to help pay for environmental protection.

Another basic tax that would be easy to administer would be a universal tax. A global tax regime would allow us to ensure corporations pay an appropriate share in taxes, and avoid using offshore banking or transfer pricing or a myriad of other schemes to avoid taxes. There are a number of possible ways to administer this type of tax. One way would be to simply have a global income tax, based on the publicized figures of worldwide profits. Howard Wachtel suggests that this could be done proportionate to the % of worldwide sales occurring in each jurisdiction; he uses the example of Nike, 40% of whose sales occur in the US . Another alternative would be a universal sales tax, or ust. A small % would be added onto existing tax collections to help. Both of these taxes would be progressive in the sense of taxing the larger markets and richer consumers more, as they spend more and consume the lion’s share of energy and other resources. As with other sales taxes, basic needs items such as basic foods and transport and poorer areas could be made exempt or taxed at a lower rate.

The key thing for this system is that a few small % points added to each transaction would be almost unnoticeable after the initial outcry. Such taxes would be progressive by placing more of a burden upon those who consume more, however they would also be fair and have long-term vision in the sense that richer consumers in the developing world who have similar consumption habits would also be contributing. There would be no need for direct enforcement, as the tax would be simply added onto the already functional tax systems in the North. This would have the added benefit of taxing rich elites from the South who place their assets and often own properties and businesses in the North. The universal system would also end the beggar-thy-neighbor type of financial havens and tax jurisdictions that have so aided dictators, terrorists, and narco-traffickers.

Before answering who and how the taxes raised would be spent to deal with global problems, we have to cut through one major remaining obstacle, namely that direct expenditures in a developing setting or otherwise would mean dealing with corrupt international organization bureaucracies and host governments. Simply put, the mentality in this regard needs to change. International organizations such as the UN are extremely weak because they must constantly cobble together different powerful nations’ support for their missions, and there is little scrutiny or evaluation of their results. In this case, a steady revenue stream would resolve the problem of continual coalition-building and begging for resources. Secondly, the agency, with assured resources would act in concert with powerful nations, but essentially would have independent authority to make decisions. Such decisions would be limited to where and how much to spend on specific global welfare programs over any given 5 to 10 year period. Because the mandate of the agency would be limited to these specific tasks, there would be no concern on the part of citizens or states of infringement or dictation from a world government. Many developing country governments are corrupt and ineffective. They would be given a choice of accepting world welfare as direct payments to their citizens as a package or not receiving anything. The world welfare council could thus work with host governments cooperatively without compromising their mission and direct duty to every citizen. In international finance, it would mean that local banks have to conform with a universal set of sound management and transparency principles, and greater resources would have to be provided to ensure liquidity and stability in the financial system .

The best and only way to ensure accountability would be to set up democratic systems, just as we do on the domestic level- taxation with representation. To ensure that members of this agency were accountable to world citizens, we would need to discuss some combination of voting and representation for a deliberating council. Also important would be to ensure that there is an independent auditing and evaluation arm of the council. A wide variety of governance systems could be envisioned. For example, one half of the council could be popularly elected and the other appointed by the 10 states with the largest contributions. Or citizens from each country could elect delegates. These delegates could elect representatives along geographic, development status, or other lines to ensure representation of the appropriate interests. The council itself would not have to become a massive bureaucracy. It could receive competing proposals for bids to complete programs or projects that it suggests. While this idea may seem hard to swallow for some people, these initial thoughts, hopefully, will spark greater discussion. Over 200 years ago, there was no such thing as democracy. Over 100 years ago, slavery was accepted and women had few legal rights. Over 50 years ago, there was no such thing as development or the WTO. While it may seem shocking to us in prospect, in hindsight, such adjustments will look like a continuation of a natural evolution towards a better functioning system on this small unhappy planet we all share.

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About the Author:
Anil Hira is an associate professor of political science specializing in international political economy at Simon Fraser University, Burnaby, BC, Canada V5A 1S6. He is co-author, with Ron Hira, of Outsourcing America (AMACOM, 2005), and co-author, with Trevor Parfitt, of Development Projects for a New Millennium (Praeger, 2004).

This paper was sparked by a talk given by Marjorie Griffin Cohen on "Collective Economic Rights and International Trade Agreements in the Vacuum of Post-National Capital Control," published in Poverty: Rights, Social Citizenship and Governance (UBC Press, 2006). The author also thanks Patrick Clark Coaty for comments.

Another version of this paper appears in the May-June 2007 issue of THE FUTURIST.

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