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Les bonnes feuilles de Vent d'Auvergne
16 novembre 2007

Globalization and social models

1. The human dimension of globalization
Beyond its political and economic implications, globalization bas a significant human dimension: it can change the life of millions of human beings.
Thanks to the development and growth it triggers, globalization frees men from poverty illness and ignorance.
But, freed in this way, men are also the actors of their own liberation: it is their efforts, their initiatives and their sacrifices which allow them ta play on the global stage.
Last but not least, the close ties that it creates beyond borders imply that globalization is a vehicle of understanding and peace, it brings together again the great human family, uselessly and for too long tom apart.
Thus, globalization gives way to liberated men, acting men and gathered men.

2. The human condition in a globalized economy
As an outcome of the lndustrial Revolution in the 19th century , the condition of the working class was one of hard work, of social uprooting, and, sometimes, of physical and moral distress. Even if historians have often painted an even bleaker picture, as social progress has unceasingly gone hand in hand with economic growth, the fact remains that many people think that we can help the poorest people on earth stay clear from most of the sufferings borne in the past by factory workers in Europe.
For the avowed opponents ofglobalization and the market, the human condition in poor countries is the outcome of capitalist exploitation. Success on the global market allegedly cornes at the price of "social dumping", in other words, of low wages and absence of social coverage for Asian, African and Latin American workers. ln Europe itself, social dumping is allegedly practiced by Central and Eastern European countries.
Other more moderate commentators do not fail to observe the sufferings and degradations endured by women and children at work.

3. The regulation of the labor market
According to some; in the name of social justice or the dignity of human beings, the se drawbacks of globalization call for a global regulation of the labor market.
Some doubts can be cast about the relevance and the intentions behind this regulation.
On the one hand, it is hardly possible to imagine that the standard of living of poorest people on earth can catch up with those attained in old developed countries within the span of a generation. In poor regions where what is at stake is survival itself, the meager salary is a manna for an unskilled and uneducated worker. Gradually, with the acquisition of experience and qualification, and with greater mobility , it becomes possible for him to raise some meager savings in order to build a home and invest in the education of his children. It is only then that a middle-class emerges and that inequalities tend to disappear.This process which demanded more than one century of efforts to Europeans is taking place before our eyes sometimes in less than ten years.
In order to highlight the importance of the institutional environment, let us mention that it is those among the poor countries that are freer that have enjoyed economic development, while those which are less free have impoverished themselves.
On the other hand, the intentions of those in favor of the regulation of the labor market are not always well-meaning. Under the pretext of protecting the poor, what they often seek is to protect themselves against competition in their Jobs. "
Regulation of the tabor market leads in fact to the denial of the freedom of labor contract, and,
sometimes, to the denial of the freedom of work itself. ln those developed countries that have proved themselves unable to adapt to competition from emerging countries, the gap between productivity and earnings is growing. lnstead of responding to the challenge posed by unskilled labor by better formation and increased productivity, we want to maintain a purchasing power and a standard of living at an economically unjustified level. Competitiveness declines and with this decline, millions of jobs are destroyed.

4. Social coverage
In contrast to what the detractors of social dumping argue, the coverage of risks linked to life and employment is not a priority; rather, it represents a progress that has only slowly been achieved. People without means who live from day to day have a low aversion for risk. For them, the usual risks are often borne by familial or community solidarity .The needs for security and insurance serv~ces will be met well after other necessities: food, clothing, lodging. These needs will be met once savings are raised.
At the other end of the ladder, in those countries where the Welfare State dominates, we can observe significant spending in the area of social coverage. The idea of social dumping demands that all countries align themselves little by little on the maximal norms -an utopian option that ruins any chance of global social progress.

5. Social Security contributions and competitiveness
In contrast, we should reflect about those social expenditures that handicap some countries in global competition.
If it is a deliberate and voluntary choice by individuals and families, there is not much to say about it, save to specify that they must bear themselves the cost of this better coverage ofrisks.
But, to be precise, it is political decisions that impose these high levels of coverage and ever-growing mandatory tax and social security deductions. Far from helping the insured persons, public health insurance schemes lead them towards bankruptcy for at least two reasons: the first one is the way the scheme is managed, absence of control, absence of incentives, absence of responsibility. The second reason is the preference for "redistribution", an option which is unmanageable for ageing populations.
Globalization will seriously jeopardize the se systems of social security. In order to rescue "their" Social Security , some governments will not hesitate to make their population bear the burden of growing deficits, and social debt will accumulate.
They will use artifices by increasing contributions, by reducing coverage, by reviewing in unilateral fashion the conditions under which they insure people, and even by making foreigners bear part of the cost. These measures will not prevent the explosion of the systems, in those countries where no genuine reform is undertaken.

6. All enemies or all together?
In the end, discussions about social dumping are quite disheartening for they lead us to believe that the interests of people are conflicting, as a global economic war is taking place. This is a new version of the class struggle, now being played at the global level. It is as open to criticism and obnoxious than the former understanding of the class truggle, because it opposes peoples ones against the others, exacerbates patriotism which transforms itself rapidly into xenophobia, and because it is a denial of this fundamental reality: market ex change generates a substantial bene fit to all those who take part to it, it enriches the poor without impoverishing the rich.
Globalization provides in fact an opportunity to constitute a sphere where people and cultures can meet, an opportunity to wipe off misunderstandings and wars from history .The institutional changes that it involves boil down to the recognition of individual rights in conformity to the nature and the dignity of the human person. Globalization provides to each of us the opportunity to blossom in the service of others. Globalization is an opportunity to render man more human, more creativé, more serviceable, more free, and, more responsible. "Homo globalis" is much more appealing than the "homo economicus". It is the selfsame Adam Smith who explained the causes of the wealth of nations and why it demanded moral sentiments: moral sentiments create the wealth of nations.

7. Freedom, responsibility and subsidiarity
To be sure, moral sentiments flourish and are nurtured in a favorable institutional environment: this is what we call the common good, the common recognition of the good. But, whatever be the institutional reforms likely to place men in a context of freedom and responsibility , individual behaviors remain the determining factor. .
Whatever be the merits of the market order, they cannot smooth out the necessity of a comrnunity order. Voluntary solidarity finds in globalization the opportunity to express itself, it complements the endeavors of those that are lagging behind in terms of economic development. Solidarity organizes itself following the principle of subsidiarity. A new world can be built that is closer to human aspirations.
Does the educational system prepare young people to build this new world? The tradition of
universities, of intemationaI gatherings and meetings, provides the opportunity of discovery and understanding. Familial and associative life allow them to acquire and cultivate the spirit of service.
Most of the young people are-open to difference, and respectful ofdiversity. Today, they are well fitted to fulfill through globalization the hope of humanity, that of rediscovering harmony and the dignity sought by people of goodwill in all countries.

8. Conclusion: Freedom and the dignity of the human person
Our reflection about globalization and institutional reforms which go hand in hand with it concludes with ethical considerations.
This is a tradition of the Summer University of the New Economics.
It's been thirty years now that we have tried, in this same building, sometimes with the same
interlocutors, to diffuse the ideas of freedom. For 30 years, we have chosen to conclude our Summer University with ethical considerations. We have done so for a fundamental reason: it is above all for ethical reasons that we are liberals.
Liberalism is often advocated and defended on purely economic grounds, as an efficient system. It is indeed true that free trade and freedom of enterprise are much more efficient than planned economies.
Scientific considerations establish the superiority of liberalism.
But many people are less concemed with efficiency than with justice and peace.
If we envisage it in terms of a mere economic doctrine, we are leaving a whole chapter of liberalism aside. Liberalism is beyond and above all a vision of man and relationships between men.
The theme of our 20th Surnmer University was "Freedom of acts and dignity of the human person." Freedom is bestowed to each man, he carries it in his very nature. But it is not the ultimate goal. Its objective is to allow men to flourish their personality, to participate to this civilization of love to which Pope John Paul II referred.
It's certainly by embracing the whole dimension of liberal thought that we will defeatthe ignorance and the contempt from which it suffers' in France especially.
It certainly belongs to others, younger and more tal~nted, to prolong this work initiated thirty years ago: informing people that it is human dignity that we defend through his freedom.

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