Equity and Justice in a Globalized World: A Liberal Review

(June 15 - 22, 2007)
by Dr. Julio C. Teehankee

Dr. Julio C. Teehankee

Now more than ever, liberals around the world are being challenged to address growing demands for justice due to rising inequality in incomes and wealth within and between countries. Amid the rise of wealth and prosperity unleashed by forces of globalization, increased trade among countries have so far failed in reducing inequalities, especially in poor countries. Poverty continues to impede development for the majority of the world’s population. Poverty and the lack of opportunities are manifestations of the lack of freedom. Freedom is a primordial social value of liberalism. Promoting social development, however, without impeding the individual freedoms and free markets has always been a major dilemma faced by the liberal tradition. Worse, economic liberals – sometimes called as libertarians – have been largely criticized in many parts of the world for championing free trade and globalization in the form of neo-liberalism.

Liberal politicians, economists, academics and NGO activists from around the world gathered at the Theodor-Heuss-Akademie in Gummersbach, Germany from June 15 to 22, 2007 to discuss these challenges to liberalism. Being an academic by profession and a liberal activist by choice, I greatly appreciated the opportunity to participate in the intellectual exchange and spirited debates offered by the IAF seminars. Aside from teaching and writing in political science and development studies at De La Salle University, I am actively engaged in the ongoing review and revision of the Liberal Party (LP) platform in my capacity as a member of the LP National Executive Committee (NECO) and as a board member of the liberal think tank National Institute for Policy Studies (NIPS). I believe that my participation in the seminar has provided me with fresh insights in rethinking the LP platform.

Global Inequality on the Rise

Globalization opened new opportunities for economic growth for some, but have not for most. Recent controversial claims made by Firebaugh and Goesling in the September 2004 issue of the prestigious American Journal of Sociology assert that global income inequality has declined in recent decades as a result of globalization and the rapid industrialization in the densely populated regions of China and India. Robert Wade of the London School of Economics and Politics, on the other hand, presented a comprehensive critique of Firebaugh and Goesling based on the methodologies used to measure global inequality (how incomes are compared, populations weighted and inequality measured) as well as the datasets that were used and interpreted (national income accounts or household surveys).

The claim of Firebaugh and Goesling that “global income inequality is lower today than it was two decades ago” rest largely on the inclusion of China. Wade cites other studies that show otherwise. The exclusion of China from the measure of inequality, in the study of Sutcliffe in 2003, reverses the direction of inequality. Thus, one cannot immediately conclude that falling inequality is a general property of the world economy under globalization. Another flaw in the analysis of Firebaugh and Goesling is overlooking the internal inequality within countries. Wade argues that internal inequality has in fact widened. For Wade, the evidence strongly suggests it has risen in the last 20 years. Notwithstanding methodological issues and debates, the trend is clear — the concentration of world income in the wealthiest quintile (20 percent) of the world’s population resembles a champagne glass, with a wide shallow bowl at the top and the slenderest of stems below. Global inequality has much deeper implications within poor countries as it has an impact on the increases and decreases in jobs, criminality and education — either reducing or exacerbating inequalities.

Aspects of a Liberal Theory of Justice

The impetus for addressing inequalities within and between countries is often justified on the grounds of justice. Justice, however, is a contested concept that evokes varied claims to fairness, equality, impartiality and appropriate rewards or punishments. Liberalism, as Dr. Hilmar Schmiedl-Neuburg shared in the seminar, “is not a monolithic theory or philosophy but describes a family of many different approaches to the fundamental problems of politics, law, economics and society.” Hence, there are three liberal conceptions of justice, namely: libertarianism, liberal egalitarianism, and liberal developmentalism.

Libertarianism gives strict priority to freedom, especially negative freedom which means non-interference, and the absence of external constraints upon the individual’s inalienable right to life, liberty and property. The foremost libertarian thinker, August von Hayek, asserted that the market, with its price mechanism and its tendency to spontaneous self-organisation, is not only the most efficient way of allocating goods, but that it is also the most just way of distributing goods from a perspective of justice.

Liberal egalitarianism believes that freedom should be as dispersed as possible, rather than limited to a minority. Freedom should provide opportunities for the vast majority in order to make inequalities in outcomes less extreme. The foremost proponent of liberal egalitarianism, John Rawls, emphasized the notion of “justice as fairness.” Using a form of social contract theory, Rawls argued that in a hypothetical starting point in which we were to choose our positions in life under a “veil of ignorance,” we would choose a position of equality. From this “original position,” he derived two principles: the first is the “liberty principle” — each person must have the maximum amount of individual liberty compatible with the freedom of other individuals to enjoy the same liberties. The second is the “difference principle” — any social and economic inequality must offer the greatest possible benefit to the least advantaged and must derive from occupations and official positions to which there are equal opportunities of access.

Liberal developmentalism is a fairly new dimension to the liberal concept of justice that emerged from the writings of Amartya Sen. Reviving the Aristotelian concept of the “good life,” Sen emphasized that the goal of both justice and poverty reduction should be to expand the functional capability people have to enjoy “valuable beings and doings” such as being nourished, being confident or taking part in group decisions. Thus, individuals should not only have access to necessary positive resources, but they should also be able to make choices that matter to them. Sen accentuated the need for development to remove various forms of “unfreedoms” — illiteracy, hunger, sickness, criminality — that prevent individuals from exercising rational action.

Freedom and Opportunities = Equity and Development

Liberty, according to Dr. Otto Grof Lombsdorff, “is the best remedy against poverty.” A deeper appreciation of liberal principles and tradition reveals a common thread that blends the three conceptions of justice. Individuals accomplish their best when they pursue their best interests under conditions where their fundamental rights are protected. Freedom, be they economic or political, will be hollow if individuals are not empowered to participate and realize their full human potential. The lack of access to education, health and justice inhibit the capacity of individuals to combat poverty and underdevelopment. In this regard, public good provisions that guarantee them equal access to participation in society regardless of their social backgrounds play a central role.

Markets are the most efficient means of distributing goods and services in a society where all individuals have equal opportunities to access income, wealth and property. Government should play as minimal role as possible in the free exchange of goods and services, and instead play a strategic role in helping individuals help themselves. Ultimately, the protection of freedom and the provision of equal opportunities are the means to attaining a “just and fair society.”