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Towards a Global Civil Society

Daniel Little, University of Michigan-Dearborn

Globalization

      There is a powerful impulse in the world today hastening the process of international economic integration.  Economic integration means greater inter-dependency among countries, greater international trade, greater market integration in commodity prices, and more extensive flows of investment and revenues.  The process of globalization incorporates a number of factors: the extension of international trade, the increased mobility of capital through liberalized financial markets, the enlargement of foreign direct investment in developing economies, the extension of manufacturing into global labor markets, the diffusion of technology, and the expansion of activities that affect environmental quality in the developing world.

      Economic development—poverty alleviation and consistent improvement of the quality of life in developing countries—requires the growth of employment opportunities and growth in labor productivity.  When labor productivity is low, wages will be low as well; so one of the chief goals of economic development strategy must be to achieve sustained growth in productivity and enhanced human development, leading to growth in wages and improved conditions of work.  These facts imply that it is generally desirable for a developing country to encourage international investment in modern factories and manufacturing sectors.  Poor countries need greater access to investment capital; they need easier access to emerging technologies (manufacturing, communications, agriculture, transportation); and they need the stimulus to economic growth that increased global demand for their products can create.

      But when international investors choose a locale for new manufacturing capacity, one of the features they are looking for is a source of reliable low-wage labor.  So these firms have an interest in keeping wages low.  The picture is not altogether bleak, however, because there are countervailing pressures that give the multinational employer incentive to raise wages and improve working conditions.  First among these is the need for high quality products, which implies a manufacturing process that involves increasingly skilled and committed workers.  And the second is the imperative that “ethical consumers” have begun to create for corporations to establish codes of labor and environment that they implement throughout their manufacturing operations world-wide.  And it is worth emphasizing that a labor environment can be simultaneously low-wage and decent; the employer can continue to offer low wages while at the same time observing standards of work time, health and safety, and fair treatment of workers.

      Critics of globalization have emphasized several central themes in recent years.  Does globalization inevitably involve the exploitation of poor countries by rich countries?  Do multinational corporations acquire too much power in an increasingly globalized world?  Does the pace of globalization create economic processes that lead to environmental harms—perhaps disproportionately in poor countries?  Do these processes lead to conditions of labor throughout the world that are inconsistent with reasonable standards of human development and well-being?  And does the process of globalization lead to intensification of inequality, both between rich and poor countries, and within developing countries themselves?

      There are other grounds that some critics have put forward to criticize globalization, having to do with cultural factors rather than economic factors.  It is sometimes claimed that the globalization of products through marketing and sales is itself a bad result, in which a few products drive out the valuable diversity of local variation.  The mass culture of global marketing extinguishes local culture and values—again, a result that many critics condemn.  Local arts, culture, and ceremony are diminished as Hollywood and Bollywood create a global mass culture.  And traditional cultures—Native American, aboriginal cultures, the various regional cultures and languages of Europe—are preserved only in theme parks.  These criticisms begin to converge on a general critique of the goals of modernization and material improvement that underlie the whole project of economic development.

      Let us examine some of the international institutions and trends that have led to an increasing pace of globalization in the past several decades.

Trading regimes

      Free trade regimes such as the General Agreement on Tariffs and Trade (GATT), the World Trade Organization (WTO), and the North American Free Trade Agreement (NAFTA), have made significant steps forward in the extension of free trade agreements among trading nations since World War II.  These regimes have had the goal of lowering the barriers to trade among nations by reducing or eliminating tariffs and quotas on goods.  The 1990 World Development Report put the point this way: “Open trade relations are ultimately in everybody’s interest.  Protection in the industrial countries preserves only a small number of jobs, and at great cost to consumers” (World Bank 1990 : 21).  Since 1990, however, free trade issues have been at the center of anti-globalization protests.  It has been held, variously, that free trade is the strongest single factor leading to poverty alleviation, on the one hand, and that it is a source of continuing exploitation in developing countries, on the other.  The central criticisms of free trade revolve around possible effects on poverty, environment quality, and labor standards.  Critics have also maintained that these trading regimes are weighted against the interests of poor nations in favor of rich and powerful nations—an allegation that gains some force when we consider the lagging progress of free trade in agricultural goods and fibers.

      What is the reality?  Does free trade harm the world’s poor or does it help—through stimulating economic development throughout the world, permitting countries and regions to make the most of their comparative advantage, and by giving the “ethical consumer” greater leverage on the conditions of work and environment in the developing world?  How do trade regimes work?  In what ways do they stimulate economic growth?  What good and bad effects do they have?  In what ways are they thought to harm the poor and powerless?  Are they “exploitative”?

      The free trade agenda aims to lower the barriers to trade throughout the world or throughout specific regions.  The impulse toward barriers to trade stems from governmental and private efforts to “protect” domestic producers against foreign competition.  Barriers to trade include quotas and tariffs.  A nation may choose to protect its domestic industries by forbidding or limiting import of goods in that industry, or it may attach a tariff to the import of the good (so that the domestic producer has a price advantage in selling the product to the domestic consumer).  Examples of quotas include the United States policy on sugar importation; the U.S. imposes a tariff-rate quota on sugar imports in order to protect domestic sugar beet producers.  Examples of tariffs include proposed new U.S. tariffs on imported steel.  When the United States imposes a tariff of 30% on imported steel, the action has the effect of increasing the effective cost of imported steel relative to domestic steel within the U.S. market, thereby permitting U.S. producers to sell their product at a higher price.

      International trading regimes emerged after World War II to set a framework for international trade.  The General Agreement on Tariffs and Trade (GATT) evolved after the Second World War as a framework for non-discriminatory trade practices among contracting parties.  The overall purpose of the organization was to reduce or eliminate barriers to international trade, including quotas, tariffs, and preferential trade agreements.  The World Trade Organization (WTO) is the successor to GATT, and has moved to eliminate quotas and bilateral agreements in favor of uniform (low) tariffs on sectors of goods (Overseas Development Institute 1995 (4)).  The establishment of the WTO through the Uruguay Round of trade negotiations significantly extended the importance of GATT for developing countries.  The WTO extends the scope of trade agreements to include clothing and agricultural products—which were excluded from GATT.  (Textiles and clothing were separately negotiated and were included in separate agreements under the rubric of several Multi-Fibre Arrangements (MFA).)  And developing countries have significantly increased their share of manufactured exports on world markets.  The Overseas Development Institute estimates that developing countries contributed 7% of manufactured exports in 1970, 12.5% in 1986, and 20% by 1990 (Overseas Development Institute 1995 (4)).  So trade reform is increasingly important for developing countries.

      The European Union (EU) and the North American Free Trade Agreement (NAFTA) are both important developments in the establishment of large free-trade zones in Europe and North America respectively.  Each embodies environment and labor standards (a feature that WTO has promised to address in future negotiations).

Possible distributive effects of free trade

      An important potential harmful effect of free trade regimes requires a more detailed analysis of the winners and losers within each domestic economy.  Even if we accept the inference that the domestic accounts overall will increase for each country as a result of free trade, it is likely that this result will lead to a transfer of income from some sectors of the domestic economy to other sectors.  Consider a stylized narrative based on U.S.-Mexico trade following NAFTA, and suppose that only two industries are involved, banking and auto assembly.  Mexico has a relative advantage in auto assembly, whereas the U.S. has a relative advantage in banking.  Lower-wage, skilled industrial labor is available in Mexico, and it would be predicted that the equilibrium will be one in which more auto production occurs in Mexico and less in the U.S.; whereas more of the banking activity will take place in the U.S.  This is good for both the U.S. and Mexico as a whole; cars will be cheaper for consumers in both countries, and banking transactions will reflect lower transaction costs.  But this scenario may involve a shift of jobs from the U.S. to Mexico in the area of auto assembly, and a shift of banking jobs from Mexico to the U.S.  So this scenario is not good for auto workers in the U.S. and banking workers in Mexico.  Moreover, there will be inter-regional consequences within the U.S. that create benefits for some regions and net losses for other regions.  The Michigan economy may be a net loser of jobs and income on this scenario, whereas the Connecticut-New York-New Jersey region may be a net gainer.

      A second important effect of the globalization of trade is most pertinent to issues of human well-being in third-world countries: the effect of globalization on the extent of poverty and the range of inequalities in third-world countries.  Globalization is a blind economic process that is not inherently sensitive to human suffering and well-being.  In this way it is somewhat similar to laissez-faire capitalism in the nineteenth century—a system that created great wealth but also great poverty, great deprivation, and extensive inequality.  Most industrial countries recognized the need for the establishment of a social “safety net” to protect individuals from the harms created by rapid economic change (Kapstein 1999).  The social welfare state aimed to buffer citizens against the shocks of economic change and to prepare them for productive roles within expanding economies.  Public education, unemployment insurance, jobs training programs, and programs of aid to citizens unable to earn incomes are examples of programs of the social welfare state, and these programs can be seen as part of a large social compact assuring that all citizens benefit from the economic change made possible by free markets and industrial and commercial development (Esping-Andersen 1985, Lindblom 1977).  Social welfare programs require taxation.  They are financed through the ability of the state to redistribute wealth and income within society in such a way as to fund programs for the disadvantaged.  And here we encounter an immediate challenge for just globalization: it is national governments that have the ability to tax individuals and corporations, but globalization creates the opportunity for individuals and corporations to locate themselves beyond the reach of specific national fiscal regimes.  Moreover, the negative social consequences of a given country’s business activities are as likely to occur in another country—so the social welfare programs of the first country will not improve the lot of those most severely affected by those activities.  The social welfare state, then, faces two difficulties in the face of globalization: a competitive process through which social spending is forced to fall (because businesses will resist higher taxes by threatening to relocate off-shore), and a global distribution of harsh effects of global business that falls beyond the reach of the national welfare state.[1]

      Free trade and the globalization of business activity has been underway for at least fifty years.  What have been the effects of these processes on inequalities and poverty in the developing world?  Globalization appears to have left poverty and inequality essentially unchanged in Latin America in the past twenty years (Ocampo 2001, Ocampo and Franco 2000).  It is a familiar story; growth in economic activity does not inherently favor the poor, and it does not inherently work to reduce inequalities.  Rather, it is necessary for public policy to make specific policy choices that will propel economic processes in ways that are socially desirable, and to establish public policy programs and regulations that establish the public good in zones of activity that are not well served by market processes.

Global economic activity

      Let us turn from issues of trade and investment to issues of the globalization of production.  The other mechanism of globalization is through the multinational company that conducts its business in many countries.  Corporations make investments in foreign countries; they sometimes establish production centers in off-shore locations; they market and sell their products in many countries; and they gather revenues and profits into the corporation’s control.

      It is possible to estimate the overall employment and revenues of multinational companies.  In a report on multinational corporations, the International Labour Organization finds that “in 1996, the total revenues of the 500 largest companies globally were $11.4 trillion, total profits were $404 billion, total assets were $33.3 trillion, and the total number of employees was 35,517,692” (International Labour Organization 2002).  These figures have increased dramatically since 1970.  The world’s economy is more interconnected, and a relatively small number of large corporations handle a larger percentage of the volume of business activity and employment, than ever before.  Is this a good thing?  How would we begin to answer this question?

      One criterion for answering is to ask whether the welfare and incomes of the workers who are involved in this global system are improving over time.  Second, we can ask whether the presence of multinational production in a national context (e.g. Indonesia) has multiplier effects on economic development.  Does the presence of a relatively well-paying shoe factory in Jakarta have the effect of stimulating demand and raising wages for other sectors in the region?  A somewhat more difficult question is to ask whether these improvements are themselves more substantial and rapid than other sectors of developing economies.  And an even more hypothetical question asks whether there is a different pathway of development that would have had greater and more rapid effects than either of these alternatives.

      Consider this favorable scenario.  Multinational investment in a developing economy leads to the establishment of relatively modern production capacity.  It leads to expanded employment in the country, at wages that are low by developed-country standards but higher than domestic standards.  Labor conditions (health, environment, length of the working day) are on average better than local domestic industry.  The presence of the multinational factory introduces a competitive pressure that results in improvement of wages and conditions in other industries as well.  As wages rise, demand for consumer goods rises as well; leading to increased production and employment.  The standard of living of working people rises and unemployment and underemployment fall.  On this scenario, multinational business activity in a developing country is a progressive force.

      Now consider an unfavorable scenario.  The multinational company seeks out low-wage opportunities world-wide.  It structures its investments in such a way as to take advantage of low wages as long as the low-wage environment persists.  Managers pursue a cost-minimization strategy that leads to persistently poor labor conditions—long hours, poor conditions of environment, health, and safety.  When domestic conditions begin to change—the domestic government imposes more restrictive standards of safety and health, wages begin to rise—the multinational company closes its factory and seeks out another low-wage destination.  The standard of living of working people is essentially unchanged, and employment levels are static over time.  This scenario is plainly not one that leads to sustained improvement in the quality of life in the country in which it takes place.

      There are real examples of both scenarios.  So in order to make significant progress in debates over the human consequences of globalization, we need to have a substantially better understanding of the real effects of international business activity in many different locations in the world.  This approach to evaluation of the overall benefits and harms of globalization focuses on human well-being.  It gives a positive evaluation to a given process of change if it results in higher and broader standard of living and better conditions of work and life.  And it faults the process if its effects in these areas are neutral or negative. 

Foreign direct investment

      Foreign direct investment is an important avenue of globalization.  Businesses and corporations in one country invest in plants and facilities in another country and produce goods that are then traded in world markets.  Foreign direct investment would appear to be a very direct engine of economic development in poor countries.  The total volume of non-governmental investment in the developing world dwarfs the volume of official development assistance; in 1998, the net private flow of capital to developing countries exceeded $268 billion (World Bank 2001 : 190), compared to $60 billion in official development assistance from DAC countries.  FDI is defined as investment by foreign corporations in the domestic economy.  When a corporation establishes a factory in a developing country; when it develops mining capabilities in a developing country; or when it invests in land and farming for export—the corporation is making a business decision that promises profits for the corporation and that stimulates employment and exports for the host country. 

      However, the flow of foreign direct investment is very unequally distributed among the poorest countries in the developing world.  A recent briefing paper by the Overseas Development Institute provides data concerning the profile of foreign direct investment across low-income countries between 1986 and 1995.  China was the recipient of the lion’s share of foreign direct investment in 1995, with 86% of the total.  Nigeria and India were the next largest recipients.  Significantly, the poorest countries of sub-Saharan Africa and Latin America received almost no foreign direct investment during these years.  The report cites small domestic markets, small size of GDP, and low levels of openness as the most significant obstacles to foreign direct investment in the poorest countries.  Economies that have higher levels of exports generally attract higher levels of FDI.  Low labor costs, adequate infrastructure, political stability, and dependable rule of law are identified as incentives to FDI (Overseas Development Institute 1997 (3)).  The report concludes with a gloomy observation: “For the vast majority of low-income countries, however, FDI is minimal.”[2] 

Labor standards

      The internationalization of production and manufacturing has cast new and critical light on the labor standards that are in place in various developing countries.  Manufacturers look for suppliers who can provide parts and finished products at the lowest possible cost; so there is a powerful incentive for large companies to seek out production capacity in ultra-low-wage countries.  Multinational firms produce finished goods and components in many countries for a global market.  The soccer ball sold to the Boston teenager may have been sewn in a shantytown home in Pakistan, assembled in a factory in Sialkot, and sold in a Cambridge sports shop.  The conditions of work under which men, women, and children have undertaken various stages of this process have varied widely, from decent and fair to exploitative and destructive.  Likewise, the coffee sold in the multinational coffee shop on the corner may have been cultivated and harvested under reasonable conditions of employment or abysmal conditions.  We know with confidence that bad conditions of labor are epidemic throughout the developing world, and we know that labor performed under these conditions is embodied in the consumer products that we buy.  And we know that improvement in conditions of labor is possible, even inevitable, over time.  The question is whether we can identify strategies and structures of incentive and regulation that have significantly greater efficacy in bringing about these improvements in a shorter period of time.

      How are we to think, then, about issues of sweatshops, limited labor rights, child labor, and toxic workplaces?  Are there justifiable and feasible “standards of labor” that ought to be applied universally throughout the world?[3]  Are there feasible strategies through which we as “ethical consumers” can encourage the promulgation of these standards more and more widely throughout the world?  And can we be confident that establishing such standards would be a net good thing, all effects considered? 

      It is sometimes remarked that it is difficult to influence labor conditions in the developing world because of globalization.  Multinational firms are insulated from national regulations, it is sometimes said, and therefore succeed in evading labor standards.  The question of the feasibility of improving labor standards globally arises out of the global nature of the contemporary manufacturing system.  Manufacturing is now performed on a global, cross-border basis, and the regulatory reach of any particular state is limited.  So how is it possible to exert influence on the global workplace in such a way as to prevent the worst abuses of third-world labor?  On this perspective, labor standards in the developing world might be thought to lie beyond the zone of feasible inspection or regulation.

      There is another valid perspective on this issue, however, that is substantially more hopeful.  It is possible to argue that labor conditions in the developing world are substantially more accessible to intervention from progressive organizations than are other areas of human rights abuses.  When military dictatorships or authoritarian countries violate the civil and political rights of their citizens, there are almost no levers of influence that exist for non-governmental organizations and ordinary citizens.  But when indecent labor conditions are exposed in the developing world and they are linked to large multinational corporations, the ethical consumer has a very significant lever of influence.  It is precisely because the multinational corporation has the power to change labor conditions in the developing world, and the ethical consumer has the power to influence the behavior of the corporation, that labor rights are more accessible to change than civil and political rights.

      There are very substantial variations in conditions of work across the world and within particular countries.  A great proportion of labor in the developing world is dehumanizing and exploitative.  Special areas of abuse include ultra-low wages, coerced labor, child labor, toxic working conditions, limited or absent rights of labor organization, and unregulated hours of work.  Bad conditions of labor constitute a critical issue from the perspective of development ethics because of the direct linkages that exist between employment, income, and human development.  The labor environment itself creates a hazard for the development of the normal human being; and an ultra-low wage guarantees the extremes of poverty that make full human development impossible.  When children are forced to work at an early age, their health and educational status is compromised, and their development capabilities are stunted.  When men and women are compelled by economic necessity into unsafe and toxic places of work, their liberty, their human dignity, and their physical well-being are affronted.  And when workers are paid ultra-low wages, they are confined to a continuing cycle of poverty and constrained opportunity. 

      So bad conditions of work are a direct source of human ill.  They are also implicated in the injustice of coercion.  Persons do not freely choose to work in sweatshop conditions.  Rather, they do so because the alternatives available to them are even worse.  Extreme poverty—involving as it does malnutrition, homelessness, bad health, and lack of education—compels individuals to accept conditions of work that fall far short of decent, fair conditions of labor. 

      In a national economy it is possible to restrain these cruel choices through regulation.  The state can set standards of fair labor practice, and it can enforce these standards through inspection and monitoring.  In an economy in which effective regulation of the work environment exists, poverty may persist, but labor standards are honored in the workplace.  Effective regulation and monitoring activities are enormously more difficult in the global economy.  There is no single government that has the authority to establish labor standards (or economic standards, or standards of gender justice, or standards of other areas of social importance); and there is no effective power that is capable of directly enforcing standards.

      Consumers in the developed world have gradually come to have a clearer appreciation of the relationship between the goods that they consume daily and the conditions of work in which these goods are produced.  There is a variety of organized efforts that consumers and activists in the developed world have made to attempt to improve working conditions in the developing world. 

      A number of monitoring organizations have been established in the past decade, and ethical consumers and activists have attempted to elicit agreements from major apparel manufacturers to abide by the protocols of one or more of these organizations.  The general approach that these organizations take is to use consumer concern about unfair labor practices in the developing world as a lever to induce major apparel corporations to enter into agreements that stipulate a code of labor standards and a monitoring and compliance regime.  Several such organizations are the Fair Labor Association, Workers’ Rights Consortium, and Social Accountability International (for some useful websites, consult www.fairtrade.org.uk, www.fairlabor.org, www.fairtrade.net, www.workersrights.org).  What these organizations have in common is an effort to influence multinational manufacturing labor practices by gathering information about those practices and mobilizing consumers to make choices based on comparative performance in labor practices.  Firms want to avoid the label “sweatshop producer”, and they are subject to exposure of bad practices through monitoring efforts.  Over time, on this approach, we would expect gradual improvement in the conditions of labor in the developing world.

      A particularly innovative concept in new regulatory regimes suitable to the global economy has been advanced by Fung, O’Rourke, and Sabel (Fung, et al. 2001).  These authors advance a concept that they refer to as “Ratcheting Labor Standards” (RLS) that attempts to bring together the separate business interests of the manufacturers, the evolving character of the supply chain in “lean” manufacturing, and the rising interest that many consumers have in assurances that their products have been manufactured in a non-sweated environment.  They propose a system in which manufacturers are encouraged to subscribe to credible monitoring firms (analogous to accounting firms).  The monitors will assess labor conditions within the total manufacturing process and will make their findings publicly available in a way that permits comparison with other firms.  And consumers and activists will then make purchases and decide on strategies of pressure depending on their assessment of various firms’ performance.  Fung, O’Rourke, and Sabel argue that such a system would have a justified form of flexibility—in that it would permit comparisons of like circumstances—and would have the effect of gradually improving the global workplace as firms compete for high ratings in a dimension that consumers care about (quality of labor standards involved in production of the commodity).

Protecting the global public good

      Within a single political and economic system it is well understood that the state has a number of important social functions.  The state needs to collect funds to finance public goods and amenities (roads, schools, health clinics).  It needs to provide a social safety net to prevent citizens from falling into immiseration as a result of illness, age, or loss of a job.  It needs to establish a set of laws and regulations that secure the public health and safety—health and safety regulations in the workplace, environmental regulations, regulations governing contracts and conditions of labor, and so forth.  And, perhaps, it needs to engage in some degree of income and wealth redistribution in order to keep inequalities within an acceptable range.

      Globalization poses a serious challenge to this paradigm of government and the public good.  Much economic activity now falls beyond the jurisdiction of states that have the interest and ability to appropriately regulate the actions, policies, and behavior of corporations and to assure the well-being of the people who are affected by that behavior.  The harms created by a French corporation may be significant but may be imposed on the citizens of Senegal—and the government of Senegal may lack the will or capacity to regulate those effects.  “Weak states” may be unable to establish effective regulatory schemes—or may lack the political will to do so. 

      This analysis implies that developing countries are likely to be characterized by weak regulation and minimal safety nets.  But, as Ethan Kapstein points out, the circumstances of globalization may push back even into the domestic political and economic system of wealthy countries in such a way as to undermine regulation and social security in the wealthy country (Kapstein 1999).  Competition between regulated and unregulated zones in the world create a business imperative to reduce the tax burden in the regulated zone.  This imposes pressure on the regulatory regime and on the social safety net—with the result that future citizens in even the wealthy countries may find themselves with less effective protection against harmful business activities and less security in the face of life’s emergencies.

      The issue of regulation for the public good is particularly important.  Effective regulation is needed to establish decent conditions of life for the citizens of the world.  Otherwise unregulated profit incentives will push economic activity into more and more harmful forms (along the lines witnessed by nineteenth century industrial development).  This need includes regulation of environmental harms, resource depletion, use of oceans and atmosphere, and conditions of labor.  Is it possible to establish regulatory regimes that transcend national borders?  And is it possible to create fiscal systems that collect revenues beyond the national level? 

      International institutions exist that provide a basis for establishing regulatory regimes governing these sorts of issues.  Negotiations within the World Trade Organization, for example, involve inter-state negotiations over the terms of environmental protection and workplace standards that the signatory states will agree to.  Institutions such as the United Nations, the Universal Declaration on Human Rights, or the International Labour Organization represent interstate agreements about schemes of regulation and the protection of citizens’ rights and well-being.  The Achilles heel of such agreements is the problem of enforcement, however.  And the most favorable strategy for global improvement in regulations and compliance is the establishment of more inter-connected institutions that shift the balance of incentives against the national “scoff-law”.  On this score, then, the future well-being of the citizens of the world depends heavily on the success of international processes and regimes that create an environment in which there is a higher level of national compliance with international norms.

      Let us turn now to the international fiscal issues that must be addressed if supra-national social goods are to be financed.  Many of the economic activities involved in the global economy today are beyond the reach of national taxation.  So it is natural to ask whether there are global taxation schemes that could be adopted that would serve to benefit the development of the global economy, provide a basis for development investment in poor countries, and serve as a social safety net for those affected negatively by globalization.  There are several such alternatives.  The most prominent is the “Tobin tax”, a small tax on currency transactions (Haq, et al. 1996).  The Tobin tax idea was developed by the Nobel Prize-winning economist, James Tobin.  It would serve two purposes.  First, it would provide a break to short-term currency speculation; Tobin argued that such speculation imposed a serious risk to the financial security of the global economic system.  And second, it would generate some $100-300 billion that could be used to solve the problems of poverty alleviation, environmental protection, and adjustment that are endemic within a globalizing world.[4]

Global civil society

      So far we have examined some of the dynamics that are at work in global economic development today.  In writing about these issues in 2002, it is impossible not to take heed of the violence and terror that characterize our world today.  Surely this violence, this hatred, this disregard of innocent humanity, have much to do with the issues we have confronted.  So we must ask a profound and deeply important question: what principles, commitments, and institutions can lead us toward a better and more just world—a global civil society?  Is it possible that the pursuit of justice and human equality throughout the world is itself a crucial component of a peaceful and humane future for world society?  The answer is apparent.  International justice and poverty alleviation are issues that will affect global peace and security as well as global ethics.  If the world does not make progress in alleviating poverty, in improving the life circumstances of the world’s disadvantaged people, and in enhancing human equality, then it appears unavoidable that conflict and violence will continue.

      The processes of economic, political, and communications integration of the world that we have discussed here—the processes of globalization—are surely irreversible.  The extension of markets and international trade, the increased mobility of capital, the expansion of foreign direct investment, and the extension of the reach of global media are all processes that are likely only to intensify in the coming years.  The world of tomorrow will unavoidably be one of increasing global interconnectedness and interdependency.  The question is, will this global interconnectedness be of a sort as to lay the ground for a just and peaceful future for humanity, or will it be such as to lay the seeds for continuing deprivation, injustice, and conflict?  Many of the global economic processes that we have examined are blind and undirected, but we have seen that there are avenues of influence through which we can intervene.  The extension of democracy is one such avenue.  The creation of effective and far-sighted international institutions is a second—which will require the active engagement of citizens of many countries.  And the cultivation of a culture of “ethical consuming” for citizens of the wealthy nations is a third.

      The hazards of globalization are already clear.  Multinational companies operating within the context of impersonal global market economies have no inherent concern for the human and environmental consequences of their actions.  The logic of competition and profit is no less powerful in the 21st century than it was in the 19th century.  So if we do not invent effective national and international institutions that protect the global public good, then we can expect that pervasive harms will accumulate—harms to the environment, harms to the conditions of life and labor, and persistent inattention to the poor and powerless (Kapstein 1999), (Stiglitz 2002).  Unconstrained globalization has the potential for deepening North-South inequalities, worsening the proliferation of exploitative and harmful conditions of work, and extending the proliferation of environmental degradation—if we allow these outcomes to emerge.

      How, then, are we to endeavor to steer our world towards a future that is humane, just, and supportive of full human development?  It is also important to have a vision of the world in which we wish to live—a concept of a practical utopia, a vision of the world that is both desirable and feasible.  Such a concept is important because it can help guide us in the choices that we make, as citizens, as members of human communities, and as cosmopolitans.[5]  Here I will reflect briefly on one such concept—the ideal of a global civil society—and will consider how various ethical issues and principles are pertinent to attaining this practical utopia.  In this conception, we consider a world that is diverse in all the ways that global humanity presents itself.  It is a world in which we have succeeded in establishing the economic and political institutions that are necessary to provide a high minimum standard of living for all persons.  It is a world in which democratic institutions effectively embody protections for the human rights of all persons.  And it is a world in which citizens can have a reasonable confidence in the fairness of the basic institutions that govern their lives.

      In attempting to envision a humane future for globalization, we can begin by considering the values associated with a “civil society”.  This vision emphasizes two aspects of the word “civil”.  The first is the value of civility—the value within a community that is placed on mutual respect, tolerance of difference, and a commitment to the legal resolution of conflict (Gutmann and Thompson 1996), (Taylor and Gutmann 1992).  People embody the value of civility in their actions and their values when they are committed to maintaining a structure of relationship with one another that continually renews the basis of cooperation, respect, and non-violence.  The value of civility rests upon the value of respecting the moral importance of the individual human being.  But it is also a social value.  It expresses the importance of the ideal of a community of equals in which individuals honor the importance of each others’ life plans and purposes.  This shared value in turn provides each citizen with the assurance that he or she needs to assume the sacrifices for the public good that citizenship requires.  The broad availability of the value of civility gives citizens the confidence they need that their interests will be fairly treated.  The value of civility represents a view of social life that stands in sharp contrast to the state of nature that Hobbes describes as a war of all against all (Hobbes 1996).

      The second aspect of civil life that I mean to emphasize here is the notion of civil society—the idea of a society in which members have a variety of cross-cutting activities and associations, and where the state is not the sole source of social power.  On this conception, a civil society is one that is characterized by multiple associations, free activities and choices by individuals, and a framework of law that assures rights and liberties for all citizens.  It is a society with multiple forms of power and influence, minimizing the potential for exploitation and domination by powerful elites or the state.  And it is a society in which citizens have developed a sense of mutual respect and consideration for each other.  The fact of civil association serves to enhance the strength of collective identities among citizens, by building new loyalties and affiliations.  Citizenship and unity are built through association with other citizens and the knowledge that they can pursue their interests and values through their associations (Putnam 2000, Putnam, et al. 1993).  But we can emphasize as well the importance of civil associations as a counterweight to the power of the state.  Citizens have greater security when they can be confident that the state cannot act against their interests with impunity.

      What is involved in sustaining a civil society?  What are the conditions that enhance civility within a community?  There are several factors that are particularly important.  There is solidarity—some degree of shared identity among the individuals who make up the society as groups with interests in common.  There is a sense of justice—confidence that the basic institutions are fair to all.  There is confidence in the future, that one’s children will have reasonable (and improved) life prospects.  There is a sense of dignity—of being treated with human dignity, of being assigned equal human worth.  And there is a need for stable, fair, and predictable institutions that give citizens the confidence that they can pursue activities, form associations, and engage in civil discourse without fear.  When these conditions are satisfied we can have the greatest confidence in the stability and flourishing of a civil society.

      Several of these features fall within the concept of what John Rawls calls a well-ordered society.  Rawls introduced the concept of a well-ordered society in A Theory of Justice (Rawls 2001, Rawls 1971).  It is the conception of society “as a fair system of cooperation over time from one generation to the next, where those engaged in cooperation are viewed as free and equal citizens and normal cooperating members of society over a complete life” ((Rawls 2001 : 4)).  Citizens within a well-ordered society respect one another; they have confidence that their most basic interests are fairly treated; and they have confidence that the basic institutions of society permit them fair access and permit them to pursue their conceptions of the good.  A well-ordered society is thus a powerful and pervasive foundation for a stable society, and justice is an important causal factor in sustaining and reproducing a society.[6]  The underlying hypothesis is that shared moral values, including particularly the values that determine the terms of social interaction, create the grounds of stability in a society.  And profound disagreement about these values creates the possibility of serious conflict. 

      These ideas find their most common application in the context of local or national communities.  How does this concept pertain to the idea of a world society?  Is there any meaning we can assign to the notion of a global civil society?  Or does this concept apply only to connected populations engaged in face-to-face interactions with each other?  The practical utopia that I advance here depends on the assumption that a global civil society is feasible.  This is a world in which all persons recognize and respect the human reality and worth of all others—near and far.  It is a world in which people are tied together through cross-cutting civil associations—local, national, and international.  These may include labor organizations, women’s organizations, environmental organizations, or religious groups.  It is a world in which persons share a sense of justice—they share a basic agreement on the essential fairness of the institutions that govern their lives.  And it is a world in which all people have grounds for hope for the future—that there are opportunities for them to improve their lives, that they will have fair access to these opportunities, and that their children will have better lives than they themselves have had.  Such a world has every prospect of sustaining stable, peaceful, and civil social life—both local and international.  And this is an ideal worth striving for.

      How do ethical perspectives relate to this vision?  The connections are profound.  We have emphasized the importance of an urgent commitment to ending poverty throughout the world.  We have emphasized the importance of democracy and human rights—and the effective legal institutions that can secure both.  We have emphasized the deep importance of the values of fairness and human equality, and the importance of reshaping international institutions with these values in mind.  And these are precisely the values that are needed to establish the basis of peaceful civil society.  If these values are genuinely and deeply embedded in our planning for the future—and if the people of the developing world become convinced that these are real, guiding priorities for the people and governments of the wealthy world—then the potential bonds of international civility will be established.  And in each country the positive institutions of law, democracy, and economic opportunity will ceaselessly reinforce the values of civility and mutual respect.

      So the important values that pertain to just economic development are arguably critical to a decent future for humanity.  A world order that is not grounded in a permanent commitment to human dignity and justice is not only disfigured from the perspective of morality.  It is likely to be an increasingly unstable and violent arena for deep and desperate conflict.  So for our own sakes and for the sake of future generations we need to commit ourselves in practical and enduring ways to the establishment of global justice, an end to poverty, and the extension of effective democratic and human rights to all persons in all countries.

      Three specific points are particularly central.  First, poverty is not simply a problem for the poor or for poor countries.  Rather, it is a problem for the world, and one that we must confront with determination and resources.  This means that we need to develop plans that have a likelihood of success for poverty alleviation; we need to work toward the political consensus that will be needed in order to carry these plans out; and we need to exercise our democratic rights and voices so as to bring about the large commitment of resources that will be needed. 

      Second, the equality of worth of all persons is an essential moral fact.  All persons are equally deserving of attention.  And much follows from this fact.  The extreme inequalities of life prospects between citizens of the north and the south are inconsistent with this principle.  The persistence of anti-democratic and authoritarian regimes throughout the developing world is inconsistent with the equal rights and worth of the citizens who suffer under those regimes.  And the inequalities of voice that are present in current international institutions represent an affront to the moral equality of all persons who are affected by those institutions.

      Finally, democracy and human rights are critical.  It is only through effective democratic institutions for government and decision-making that the interests and concerns of citizens will be aggregated into just policies and progressive social institutions.  Democratic institutions permit all citizens to influence the policies that affect the terms of their lives, and they represent a meaningful obstacle to the emergence of exploitation and domination of the powerless by elites.

      Are there examples of international settings that embody some of the features of a global civil society?  The European Union, and the pan-European institutions and identities that the EU is in the process of forging, offer a promising example of a system that can bring about a just international order.  Here we find fledgling experiments in the creation of solidarities that transcend language, religion, nation, or place.  And we find an emerging discourse of solidarity that may provide the political basis that will be needed to bring about global justice (and the international transfer of resources and knowledge that this will require).[7]  There is a measure of “global thinking” among European citizens that offers a basis for optimism about the feasibility of an engaged world citizenry.  OECD institutions have already gone a long way in the direction of giving meaningful priority to the needs of developing countries.  The OECD and the Development Assistance Committee represent effective and broadly supported institutional agents of change within the processes of economic development.  And surveys of European public opinion suggest an emerging and strengthening public support for global justice (European Commission 1996, European Commission 1997, European Commission 1997).

      What does the concept of a global civil society imply for the durability of national or cultural identities?  Can the Brazilian, Sikh, or Muslim at the same time be a member of a global civil society?  This question can be posed at virtually every level of scale—village, region, nation, or global system.  And the answer is everywhere the same.  One can be both cosmopolitan and Muslim, both Brazilian Catholic and citizen of the world (Nussbaum and Cohen 1996), (Taylor 1992).  In other words, my conception of a just global civil society does not presuppose a process of homogenization of world cultures.  Instead, it presumes the development of a cross-cultural consensus about the importance of civility as a necessary context for the many cultural, religious, or national differences that will persist and that constitute one of the positive engines of creativity that are available to the world’s people.

      What specific conclusions can we draw from normative political theory?  Progressive economic development involves several characteristics:

·      growth in the productive capacity of society: growth in productivity of labor, agriculture, and capital (leading to growth in per capita incomes and per capita assets)

·      development that leads to significant and continuing improvement in the quality of life for the poor and the near-poor (that is, the majority of the population in most developing societies)

·      development that serves to broaden the distribution of economic assets and incomes

·      development that leads to improvement in conditions of health and safety in the workplace

·      development that leads to improvement in “quality of life” dimensions for all citizens: improved access to health care, clean water, education

·      development that leads to improvement in gender equity over time

·      development that leads to sustainable environmental change and resource use

·      development that enhances the pervasiveness and effectiveness of democratic institutions

·      development that embodies respect for human rights

These characteristics embody a combination of moral and empirical beliefs.  They depend centrally on the moral importance of the free and fully developed human being.  They emphasize the importance of the moral equality of all persons.  They postulate the moral and institutional importance of democracy.  And they recognize the empirical necessity of designing development strategies that enhance productivity and output (“growth”) while at the same time creating social and economic institutions that enhance human equality and equality of opportunity (“equity”).

      This enumeration identifies some of the most important elements that would be needed to create the foundations of a global civil society.  It emphasizes the importance of human development and full opportunities.  It stresses the centrality of fairness in the basic institutions of the world order and the domestic economies of the world.  It insists on the importance of gender equality.  And it gives central importance to the role of democratic institutions and effective guarantees of human rights.  From one point of view, then, we can regard the central ethical perspectives that should guide economic development as providing as well a diagnosis of what global civility requires.

      The ideal of a global civil society represents a liberal ideal for the future.  It celebrates diversity, mutual respect, and just legal, political, and economic institutions; while at the same time it emphasizes a global commitment to improving the conditions of humanity.  It represents, in short, a democratic vision of the future that gives expression to the value of full and free human development for the world’s people.

      Finally, let us ask again the question with which we began:  Why is it important for us to think deeply and well about the ethics of development?  These are issues where clear thinking about values and principles can make a material difference in the quality of our thinking, planning, and outcomes.  We need to navigate well into the world of the 21st century, and thinking about the social, political, and ethical values that surround poverty and inequality is a crucial part of our navigation.  Only with a clear understanding of the values and principles that we respect will we be able to design the institutions and policies that will guide us to a human future that honors all human beings as free and equal persons.  And only through such debate, deliberation, and action will we succeed as a global civilization in creating a just and stable world.

A role for the ethical citizen

      How should the ethical citizen engage with the processes of globalization and international aid?  Several imperatives and strategies seem particularly important.

      First is an imperative of concern.  It is all too easy to turn one’s eyes away from suffering in other countries—poverty, repression, malnutrition, and brutality.  But it is morally critical for each person to remain sensitive to the human situation of people in other parts of the world; to recognize their human reality, to give moral importance to their suffering, and to assume both a motive and an obligation to aid.

      Second is an imperative of being well informed.  The processes of economic development, political change, and democratization that are underway in the world today are complex and inter-dependent.  So the efforts that are offered as strategies of improvement must reflect accurate understandings of the dynamics of these processes.  Slogans cannot replace clear thinking.  Being well informed is costly—we need to find the avenues of information that exist to let us form an understanding of the state of affairs in various parts of the world, and we need to exercise our intelligence in evaluating and organizing this information.  And it is a highly critical element of the process of progressive change.  If citizens are well informed about the conditions of labor that are embodied in the various products they consume, they can then apply effective pressure on abusive producers.  The World Wide Web provides a highly effective tool for gaining information about the global economy and global poverty.

      Third is an imperative of reflective consideration of the action possibilities that exist for us as ordinary citizens.  What are some of those possibilities?  Think of the various roles we play and the opportunities for change that these roles create for us.  We are consumers.  Therefore we have the ability to choose among products based on knowledge of the circumstances under which these products were made.  We are citizens.  Therefore we have democratic rights of participation that permit us to form associations aimed at influencing our governments in the direction of well-considered progressive action.  We are wealthy, relatively speaking.  Therefore we can contribute our financial resources to support progressive development—famine relief, financial support for children, financial support for effective NGOs active in the developing world.  We are intelligent, productive people.  Therefore we have the ability to lend our own labor to help people in the developing world—through the Peace Corps, Doctors without Borders, civil engineers who provide volunteer assistance in developing local water resources. 

      Citizens are also consumers, and consumers have power.  A consumer is a person who purchases goods to satisfy needs and preferences.  An ethical person is one who makes decisions with appropriate consideration of the principles and moral goods and bads that are involved in the choice at hand.  What, then, is an ethical consumer?  It is a person who takes principles and values into account as she or he makes choices about purchases of goods.  The central idea underlying the “ethical consumer” is the notion that the consumer collects information about the production history of the products he or she consumes, and selects among available products on the basis of favorable ratings on these criteria.  Have the producer and its sub-contractors observed reasonable labor and environmental standards?  Have the raw materials for the product been acquired through fair trading agreements with primary producers?  Have farmers, miners, or fishermen been treated fairly in the commercial relations that govern the sale of their products?

      Collecting this sort of information for even a few products is difficult and costly.  The product does not come labeled with a description of the labor conditions or trade conditions through which it came to be.  However, two developments in recent years have made ethical consuming more feasible.  First, a variety of non-profit organizations have emerged that have taken on the task of monitoring conditions of production and trade in specific consumer industries.  These organizations commonly certify specific products or brands as having complied with a given set of criteria, and offer the consumer the assurance that the product conforms to minimal standards of fairness in its production history.  An example is Fairtrade Labelling Organizations International (www.fairtrade.net).  FLO surveys conditions in the product markets of coffee, drinking chocolate, chocolate bars, orange juice, tea, honey, sugar, and bananas and licenses particular producers that conform to a specific set of standards.  Other examples of product monitoring organizations are easily found on the world wide web. 

      Another major innovation that shifts the balance toward the ethical consumer is the proliferation of resources available on the world wide web.  Monitoring organizations can quickly make public the data that they collect on particular industries, and consumers can quickly collect that data as they make choices about alternative products in their consumption lives. 

      The credibility and independence of information sources is critical to their effectiveness.  Information that is collected through a process that is strongly influenced by any of the parties—the growers, the producers, the farmers’ associations—will be suspect and potentially biased.  Information that is collected to “prove” a particular point of view—whether the fairness of free trade, the negative environmental impact of globalization, or the positive or negative character of labor standards in the world today—will not provide an objective basis for making comparisons across products or processes.  Ideally we would be in a situation in which a few organizations have emerged that have the resources necessary to provide effective monitoring of a given industry; an institutional commitment to fair and unbiased analysis; and a track record of accuracy, comprehensiveness, and credibility in its reports over a number of years.  This is precisely the situation in which we live with respect to human rights organizations—for example, Amnesty International has won high praise for its investigations and reporting on human rights issues throughout the world over several decades.

      These two developments substantially change the information costs associated with choosing products.  Normally consumers can collect information about price, quality, and consumer satisfaction about the products they are considering.  Organizations such as Consumer Reports provide quality and satisfaction data (financed by subscriptions by consumers).  The emergence of organizations that collect information about the conditions of labor, environment, and trade that are involved in the production of various consumer goods, and the emergence of a communications medium (the web) through which these sources are easily accessible, have made it possible for the consumer to take this set of factors into account at reasonable cost (time, effort, and money).

      It is possible, then, for the consumer to collect information at reasonable cost about the conditions of production and exchange through which a given product arrives in the local marketplace.  Two questions arise.  First, are consumers willing to make choices based (in part, at least) on this sort of information?  Are they willing to pay higher prices for goods with higher “production fairness” ratings?  And second, is there evidence or theory that support the potential efficacy of such choices?  Can the overall fairness of global production and commerce be enhanced by the emergence of “ethical consumer” behavior? 

      There is survey data concerning North American and Western European consumers that supports the conclusion that consumers would take such information into account, and that they would be willing to pay higher prices for products with high production fairness ratings.[8]  If the cost of acquiring the relevant data is high, we would expect only a few consumers to do so; but if the cost of the data is low and falling (as suggested above), then we may find a basis for optimism that ethical consuming may become substantially more prevalent.  In other words, it is entirely possible that large numbers of consumers may come to differentiate among products on the basis of their production and trade histories. 

      This scenario suggests a possible answer to the question of efficacy.  If large numbers of consumers express a preference for goods with superior labor or environmental ratings, then we can expect a competition among producers to enhance their ratings in these areas.  Higher ratings contribute to higher sales.  And if we can have reasonable confidence in monitoring organizations, then the only way to raise the rating is to improve conditions in the production process.  This would suggest, then, that there is a credible economic mechanism linking ethical consuming to improvement in the conditions of work and life at the point of production (the worker or farmer).

      And, indeed, we can see some manifestations of competition among producers along these lines.  Large producers in the sports apparel industry direct part of their marketing efforts toward establishing that their production processes comply with appropriate standards for labor and environment.  And through organizations such as the Fair Labor Association or the Workers’ Rights Consortium it is increasingly possible for consumers to assess the veracity of such claims.  So it would appear we can see the earliest stages of “ratcheting” of labor standards in the sports apparel industry.

      A similar process appears to be underway in the high-end coffee industry.  Large consumer coffee providers are including the theme of “fair prices to producers” in their marketing and advertising—clearly acknowledging the consumer’s preference for this feature.  And organizations are emerging that are capable of monitoring conditions in the field that allow the consumer to evaluate the veracity of these claims. 

      These are the easy cases, however: large, visible corporations with a substantial investment in reputation.  It is credible that Nike or Starbucks would be increasingly vulnerable to negative publicity deriving from information concerning factory conditions or coffee farmers’ conditions, and would therefore have compelling business reasons to give intense scrutiny to its associated production process.  This means that the strategy of “ethical consuming” may be effective in these special cases.  But what about other types of commodities—groceries, automobiles, computers, cell phones, furniture, clothing?  Is it credible to suppose that the consumer will evaluate all of the hundreds of products he or she purchases at the grocery store every week?  Will consumers choose one brand of automobile over another because of better labor-standards performance in some of the suppliers the company uses?  (Here the answer appears to be “yes” with regard to environmental performance.)

Conclusions on globalization

      What conclusions can we draw from these points?  It is not justified to conclude that globalization is inherently unfavorable to the poor, or that progressive people should oppose free trade and global business activity.  Rather, we need to find ways of addressing the fact that globalization is blind to public goods.  Analogous to the creation of the welfare state in the early 20th century, we need to find ways of addressing public welfare in the 21st century (Kapstein 1999).  Central to this task is the issue of enhancing the human capabilities and productive talents of the poor in the developing world.  This means that states need to put a high priority on education and the other elements of social infrastructure through which human capabilities are developed.

      Second, processes of globalization need to be linked with effective public institutions—local, national, and international—that will function to buffer the hardships created by blind market forces—unemployment, increasing inequalities, and pockets of poverty.  Citizens therefore should exert their efforts to the establishment and maintenance of such institutions—through their investment choices, their consuming choices, their political influence within their own democracies, and their engagement in international organizations. 

      Further, when the partnership between market and institutions of public policy falters, the bonds of civil society are threatened.  Harmonious social life depends on a broad confidence in the justice and fairness of underlying institutions.  All citizens need to be confident that their interests are being fairly served through existing economic and social institutions.  And this confidence will not be sustained in the face of persistent and debilitating inequalities and poverty.


References

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Questions and answers

lIs democracy best for Latin America?  Why?

lDoes your “practical utopia” depend on elimination of national sovereignty (EU writ large)?

lWhy do you emphasize a “multi-ethnic” world?  Doesn’t ethnicity breed violent conflict?



[1] See also Dani Rodrik’s careful attempt to answer the question of the distributive effects of globalization on wages (Rodrik 1997).  Rodrik concludes that the benefits of international trade outweigh the risks; but he also cautions about the importance of the establishment of institutions that compensate losers in order to secure the basis of social stability.

[2] Michael Twomey provides a valuable historical account of foreign direct investment over the past century in (Twomey 2000).

[3] See, for example, the Declaration on the Fundamental Principles and Rights at Work adopted by the International Labour Organization in (International Labour Organization 2000).  These rights include freedom of association, the right to collective bargaining, elimination of forced labor, abolition of child labor, and elimination of employment discrimination (World Bank 2001 : 73).

[4] For valuable information about the Tobin tax initiative, consult www.ceedweb.org/iirp/.

[5] The “Real Utopias” project, directed by Erik Olin Wright at the A. E. Havens Center at the University of Wisconsin, represents a substantial effort to offer rigorous and innovative thinking in support of significant social change.  The project “ … is founded on the belief that what is pragmatically possible is not fixed independently of our imaginations, but is itself shaped by our visions” (Wright 1999).  The project has published volumes on associative democracy, market socialism, and new visions of egalitarianism.

[6] This conception bears an important similarity to Kant’s concept of the state as a realm of ends, in which the laws of the state embody equality of respect for the autonomy of all citizens (Kant 1999).

[7] See Jürgen Habermas’s discussion of the role of constitutional debate in the emerging European Union (Habermas 2001).

[8] See, for example, the Eurobarometer study, “Attitudes of EU Consumers to Fairtrade Bananas” (European Commission 1997).  The study finds that EU consumers would be prepared to pay a premium for bananas that are labeled “fairtrade;” that there is only a low level of consumer knowledge about fairtrade labeling; and that both variables show significant variation across European countries.  The Netherlands population shows the highest participation in both measures—highest awareness of fairtrade labeling and highest willingness to pay a price premium for the goods carrying this label.

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