Global Policy Forum

Carl Tham:

… One I think important part of this will be to find out agreements and disagreements between the people we have here in the panel to see what kind of common ground there is and what kind of disagreements there may be. I will make a very short introduction… Amartya Sen … Joseph Stiglitz … Susan George … Candido Grzybowski … George Soros … That is the panel. I will first give the floor to Patrice Barrat who is a well-known awarded journalist and behind among other things the Bridge Initiative on Globalization and he will just say a few words about that and then we will start the discussion. The procedure is very simple…

Patrice Barrat:

Maybe some of you who came here today are expecting to attend another confrontation about globalization. Let us hope they will be very disappointed. I know that even if the panelists do not agree on everything, they are about to agree on certain measures, which could immediately change or save the lives of millions of people around the planet. I am saying this because in the past weeks, I have been coordinating exchanges of views between most of the panelists. And they do seem to agree for instance on:

· increasing international development assistance

· regulating financial markets through a Tobin Tax or SDRs

· debt cancellation

· changing global trade rules

· reforming international financial institutions…

Now, why, as a journalist, as a media person, have I been doing this?

I believe the media has a unique responsibility on many issues and specifically on globalization. We, in the media, cannot reduce the conflict to spectacular images between certain groups of protesters and the police. It is our duty to make sure that the public is made aware of the issues at stake.

Almost a year ago, we produced a special videobridge between Davos and Porto Alegre. It did show the gap between the protest movement and the powers that be.

Since then, with partners Evelyn Messinger and Mark Gerzon, we have created THE BRIDGE INITIATIVE ON GLOBALIZATION. We have organized contacts, meetings, between multilateral organizations (World Bank, IMF, WTO) and NGOs or organizations in the movement. Next week in Paris, they will meet to discuss the possibilities for serious discussions between them. But this event today, which is happening thanks to the Olof Palme Center, is probably as important. Because I trust that the participants can come out of here with very concrete proposals for changing globalization in its current unequal form…

Carl Tham:

Thank you very much. And with these few words I give the floor first to Amartya Sen. Please.

Amartya Sen:

Thank you. I am delighted to be here on this occasion and with such wonderful company too. I will begin with a few remarks on globalization and also begin with the statement that I am a defender of globalization, but more than that I would also argue that not only am I pro globalization, so is the mainstream of anti-globalization protesters, indeed the anti-globalization protests are possibly the most globalized event in the world now. These are not local voices in Seattle and Prague and Quebec and Genoa protesting, they are people from all over the world coming over and asking for global justice.

The process of globalization is a creative one. The technological spread, the economic contacts have the potential of making the world very much richer. What the debate is about is not about globalization, the debate is about the division of the enormous benefits that globalization can give and how fair is that division. That is really what the question is. In that context I think there is one befuddling thought, other than the befuddling idea that what one is protesting about is globalization itself, but there is another befuddling thought which I think one should avoid, which is sometimes the critique of the present arrangements that go with globalization. Take the form of arguing that the richer are getting richer and the poorer are getting poorer. In some cases that is true. In most cases that is not so. I think in many cases the poorer are not getting poorer. But that is not the central issue. Similarly on the other side those who defend globalization often argue by saying well, I do not mean to defend globalization in general as I am trying to do also, but the globalization in the particular form in which we have it and the institutional structures that we have, often point out even the poorer are benefiting. Ergo, this must be fair to all parts of the world.

But that is not really the issue at all any more than the focus on "the poor getting poorer" is the right focus. The central issue is the one which one of our… I am of course delighted that Joe Stiglitz got the Nobel price with two other friends of mine, I have been a great admirer of Joe's work for a very long time, but another Nobelist, if I may bring in, who is also here, is the mathematician J.F. Nahr (?) who wrote a wonderfully interesting paper in Econometrica 1950, called the Bargainian (?) problem. There he points out that in a situation of cooperation there are plenty of alternative solutions in which both parties benefit. The question if whether the division of benefits is fair. So to point out that even the poor may have benefited a little without comparing to what would have happened had there been no such global contact and interrelation, that does not establish anything whatsoever. We still have to ask the question: is the division of benefit fair in some sense.

One way of thinking of the analogy is that if we think of a family arrangement, we know that from the family arrangement men and women typically both can do benefits compared to having no family. And yet when the feminist critiques, which include me, point out that the family arrangements are very unequal. To retaliate on that by saying well, if you do not like the family arrangement why do you not live outside the family, would not be a possible answer, because that is not what it is about, it is not that women would do better if there were no families, it is just that the division of the benefits and chores within the family may be very unequal, very unjust, very unfair, and that question is not the same question as to whether either of the parties would be better off being outside it. So the issue is not whether the poorer countries would benefit from having no globalization, the question is how can the poorer countries have a better deal, a fairer deal, a more juste deal in the world in which we live, in which we have benefits to share, but the sharing is very unequal. That is the ???. To some extent there is an asymmetry, because for some kind of need for developing countries it is not difficult to raise investment. Those are industrial investments, or for that matter agricultural investments, but they are primarily industrial, in which you will find that there is a profit to be made and perhaps some benefits for the people locally too, privately profitable investments, they do find easily enough capital.

On the other hand if you are dealing with what economists call public goods, there is a real difficulty. These are expansion of education, particularly basic education, healthcare, social security, which are not primarily "economically profitable" operations in the narrowly defined market sense. And yet they are not only important for the quality of life for the living standards we enjoy, they are important even for the success of the market economy, because without people having the basic education so that they can participate in the globalized market world, without the kind of having basic health, without having the security of social security and insurance and social safety net that you need if something goes wrong, and things do go wrong, as East Asia has recognized not long ago, after years of thinking that that problem did not exist. These are issues which are very important for the market economy to operate, but the individual business firms do not have an interest in making investments in them. In fact sometimes the business firms have the contrary interest, as George Soros himself in his last book has pointed out, that quite often business firms have an interest in different types of priority in the developing countries, which are more about the safety of the managerial class or the protected small group of skilled labor who happens to be in the international, multinational sector. But from the point of view of the future of the economy of the world and indeed even the success of the globalized market economy itself, you need to expand the public goods, and these require a different channel of financing. The question is to what extent it can be provided within the present institutional structure. I personally am in favor of going beyond the present institutional structure. That is one of the points of difference which we agree on ??? not agree.

Another I would like… I think that the IMF and the World Bank and so on was created at the time in the 1940s when the world was very different, when half the world was colonial, when the whole idea of human rights had hardly been on the agenda, and what looked with the right focus was the bank of which Joe used to be earlier the senior economist, International Bank for Reconstruction and Development, the agenda of the post-war world is very clear in that. The world has changed. We do need a different institutional structure much more dedicated to issues of inequality between the rich and the poor countries, much more dedicated to environmental issues, to ecological soundness and so on. But that is a different issue.

Even within the present structure there are possibilities on which particularly George Soros has written very eloquently and very convincingly that we can use the Special Drawing Rights to finance the global, the national as well as global public goods, in which private business investments may be very much lacking. So that is the direction, I just emphasize both that I would like, personally like to see more radical change as, as I emphasize, a defender of globalization, but a fairer distribution of benefits, but within the present structure there is still considerable possibilities, and at that point I am going to look at Joe Stiglitz to tell us about that.

Joseph Stiglitz:

Let me begin by taking up Amartya's basic premise, that globalization has an enormous potential for a good, but it has not lived up its promise, probably because of inequities, but partly because of its inability to provide for global public goods. I want to just highlight a little bit the importance of these global public goods. In a way analogous to a problem that occurs within all our societies with our national economies, we all talk about, we all recognize the importance of national public goods, things that have to be provided through collective actions at the national level. And one of the things that has happened over the last… recent… one of the changes along the lines that Amartya talked about, in the last quarter century, is that the process of globalization has brought home the importance of global collective action, the needs for global public goods. Some of these are things that were not really even on the agenda 50 years ago, for instance the importance of global environment, the importance of global warming, we would not talk about that. But there are other global public goods, issues of global health, public health… diseases in one country can spread to others, global international security, economic security, global knowledge, and global assistance, humanitarian aid and debt cancellation. So there is a whole ray of global public goods. And the problem is how do you finance these global public goods?

The current arrangements are completely inadequate for funding these global public goods. The current arrangements basically depend on the voluntary contributions of each national government, and the consequence of that is that some of the national governments, and embarrassingly mine, feels that it wants to use this occasion for imposing its own agenda, or an agenda of a particular group within the country, on the rest of the world, so it has been very difficult to get the kind of finance that is necessary to support the level of global public goods that I think is absolutely essential.

At the same time there is another problem and that is there is within our current international economic structure what might be called a deflationary bias. And interestingly this was a problem that was of worry at the time that the international economic institutions were set up in the World War II. At that time there was a real worry that at the end of war the world would return to the kind of depression situation that had occurred a decade earlier and one of the reasons that the IMF was set up was to provide funding for countries facing an economic downturn to encourage them to have expansionary fiscal and monetary policy and to provide them with the economic wherewithal to finance that expansionary policy. Now, over the more recent years, over the last decade, there has reoccurred a deflationary bias into the national environment, which is most evident in the last year or so. And what I want to do is spend just a minute explaining the origins of this deflationary bias in the world of economy. It originates from the fact that in our current arrangements there are strong incentives for countries to put aside some money into reserves, so what they are doing in effect is that out of their purchasing power, out of their income every year, they want to build up their reserves. To understand why that is the case one has to understand some of the peculiarities of the international arrangements and some of the basic totalities and basic laws that define economic relations. One of the basic principles, basic laws is that the sum of the deficits in the world, the trade deficits, has to equal the sum of the trade surpluses, that is to say that if one country exports more than it imports, another country has to import more than it exports, the sum has to add up to zero. If you do not believe me, it is true.

Now, what that means is that if some countries have surpluses, other countries have to have deficits. Now, the IMF focuses on deficits, but of course as long as there are some countries having surpluses, there will be countries with deficits. If China and Japan insist on having multi-billion dollar surpluses, there will be countries around the world that have to have multi-billion deficits. And the deficits are as much to be blamed on the surplus countries as on themselves. When one deficit country gets rid of its deficit, if China and Japan still have their surpluses, the deficits do not disappear, they move from one country to another. So Korea had a deficit, they got rid of it, and it showed up somewhere else. So deficits are like hot potatoes, nobody wants them, but you cannot get rid of them, and they get passed around. Now, the problem is that they cause a great deal of anxiety, because under the mantra that you hear all the time people say that if you have a deficit you are told that you are a naughty country, and that you are going to be slapped on your hand by the investors or by the IMF or by somebody, and you will be, except if you put aside enough reserves. So given that you have some countries that have surpluses you are going to have to have deficits, given that you have to have deficits, responsible governments have to put aside enough reserves.

As they are putting aside reserves their income is not being spent and the result of that is that there is a deflationary bias in the global economy. The magnitude of this is actually quite large. Now, what this means is that there is the potential to offset this deflationary bias effectively by creating money, creating money at the international level. And that is the concept of SDR, Special Drawing Rights, but it is basically internationally created money. It is important because, it is particularly important because in the recent years, the last decade, monetary authorities have become very attuned to having anti-inflationary policies within their countries, so you have a deflationary bias overall combined with a very strict monetary policies within each country, and that makes it even more important to create, both more important and a greater opportunity to create this international monetary emission.

Now, what we now have is two problems, the problem of financing global public goods and the problem of maintaining global economic prosperity. And what is great about the notion of SDRs is that they can marry these two problems together and solve both of them, because by having SDR emissions you can use the SDR emissions to finance global public goods and take the responsibility or the basis of financing the global public goods out of the hands of national budgetary processes subjected to the provincial, to the particular narrow-mindedness that occurs in some countries and put this on an international scale and have an allocative mechanism that will say that the money that is created through these SDRs will be allocated to the provision of international public goods and address some of the list of issues that Amartya talked about and that I talked about.

Susan George:

Well, I certainly wish I had had both Amartya Sen and Joseph Stiglitz as professors, I would have certainly majored in Economics if they had been available. Many thanks to Carl Tham and to the Olof Palme Center for organizing this and also to Patrice Barrat.

I am here as the vice president of ATTAC France but also someone who has been involved in north-south issues on the NGO side for many years and I want to thank Amartya for saying that the so-called anti-globalization movement is not anti-globalization at all, it is simply against the kind of globalization that we now have and it is pro solidarity and pro justice. We are indeed an extremely internationalist movement with a great concern for what is happening in the south, and in particular for the global public goods, which we see as now being incorporated into the market. We see many threats against public services where they exist and an attempt to privatize everything in sight and to make schools and healthcare effectively fee paying for people who cannot afford the fees and which deprives them of all of these public goods, so that is the, I would say, place where we certainly need, because we find that global public goods are becoming much scarcer than they were even 20 years ago, and that that is one of the major effects of globalization.

I think if we were having this discussion 100 years ago we would have noted that in the United States, in Britain, in France, probably in Sweden as well, the differences, the disparities between the very top of society and the bottom were in all respects comparable to the differences that we now find internationally. Certainly in New York in 1898 you would have found terrible living conditions. A book called How the other half lives by a pioneering sociologist of the time, Jacob Brith (?) describes the appalling mortality rates, the illness rates, the terrible housing and the generally precarious conditions of life in one of the largest cities in the world. And because of those disparities the debate began in the United States and elsewhere on how those differences could be reduced and of course the ideal was launched that what was needed was taxation and redistribution. This appeared to be at the time a utopian idea, and of course the rich in the United States screamed bloody murder, because they said goodness, this is my money and I have earned it and I am not going to be taxed even at 1 or 2 percent, but now everybody, although we perhaps do not like to pay our taxes, we find that this is pretty normal. And I think what is happening in the world right now is that we are moving this debate to a different level and we are trying to do something which is probably more difficult than anything anyone has ever undertaken in the whole of history, which is to create a much more democratic world, to democratize the global space, and this is extremely difficult.

But if we see the kinds of crises that we are up against in the world, and that we were up against even before the 11th of September, I think that decision-makers can probably agree that it is time to act. We could probably speak of three, four perhaps even five sets of crisis, I would say that the environmental destruction crisis has really come to a head, I am surprised not to see snow in Sweden in the middle of December. We are all so terribly dependent on fossil fuels, which seems politically foolhardy, we have got the poverty and inequality crisis between the north and the south which is going to come back against us in various boomerang forms and all of them will be extremely disagreeable. Joseph Stiglitz has referred to problems of international health, but there is a lot of other phenomena of poverty which do not respect borders.

We have also a crisis of democracy and empowerment. People feel that they are not in control of the most basic circumstances of their own lives, and this is a phenomenon which is gaining ground, even in the north where you hear more and more people saying that it does not do any good to vote, why bother. And the abstention figures show that democracy as it now stands is not working very well. And now we have got another crisis, because we have been officially declared in a recession. There is a huge over-capacity in the world for production in almost every area, and the whole economy seems to be sinking, mass layoffs after ten years of expansion, now even the West is hurting.

So all these crises together plus the terrorism that has been so traumatizing for us all and which we have all condemned, but it seems to me that all these things come together and could be dealt with through what I have come to call a planetary contract and it would, I think, although I am not an economist and I want to be corrected if I am not reasoning properly by the very distinguished economists who are here, but it seems to me that what we need is global Keynesianism, we need a program which can kick-start renewable energy and clean technologies, and that is not going to happen, it will not bring the prices of the alternative energies down, unless it is kick-started by a public program, but that is one public good that would be beneficial to all, stopping climate change if we can et cetera, and reducing our dependency on fossil fuels.

Certainly we have to deal with the poverty and inequality crisis, and there are many ways to do that, and we are going to be discussing them this morning. I believe also that when we come to the redistribution part of the taxation and redistribution, we have got to be very careful to do it democratically, and we have to involve civil society in a positive way. People are sick and tired of seeing aid squandered or wasted or lost through corruption. They want guarantees. They are not against spending more, particularly in wealthy countries, every opinion pool shows that people are prepared to devote more to aid for the poor, what they are not prepared to witness is the wastage of that money. So there has got to be mechanisms put in place, and I think the way to do that is to make the distribution and the disbursement of aid far more democratic.

And finally, if we have these kinds of Keynesian programs, then this, I believe, ought to lead us out of the recessionary cycle that we seem to have started. So there is many ways that a program of this kind could be financed. I am not saying that this would cure terrorism, because I do not think that terrorists have the slightest concern for the poor people in their own societies, so that is a different part of the problem. But for the other crises we need to have certainly I think that the Special Drawing Rights idea is brilliant, and would create a path of money next to the present oversees development aid budgets, but those ODA budgets are declining by 5-6 percent a year. We certainly need that relief which has not happened yet. At every G7 meeting there is a large announcement that we have really done that relief this year, and every year it is not true. What they are doing is what a Peruvian economist said to me some 10 or 12 years ago, he said: for God's sake, do not cancel what we are not paying. I will stop there. Just enumerate what we can do, debt cancellation, official development aids, Special Drawing Rights and international taxation of the Tobin type, all of these going into a pot for redistribution. Thank you.

Candido Grzybowski:

Thank you. Thank you to the organizers of this debate. Sorry for my poor English, let us make clear, it is not a problem with globalization, it is my own problem.

I would like to start clarifying some concepts and visions looking for a common ground we can build as a base for our discussions here. I would like to go directly to the point. Why we see these days so huge worldwide spread unhappiness with globalization? I think all of us here agree with the most fundamental and simple things, I am not an economist, but the economy system, resources, technology, management, markets, institutions and policies are ??? when they provide goods and services for societies. So simple and so difficult.

Our critic to the dominant economical model of globalization driven by markets under the control of big private corporations is exactly that, that they force between economy and society. The lost link between economic growth and the need of full people. The globalization makes it more clear, the huge capacity of production is clear, it is improving capacity of production, productivity, the financial resource we can have that exist, they cannot improve the quality of life of the majority of the population labor. The worst is that society are so needed to the logic of the economic process. Poors are not only an issue for churches, any issue like my ??? are social policies. They are a problem created by the economy.

I would like to discuss the idea of efficiency of this system. Never in human history we have produced so much, but never the gap between the existing production and resources with the needs and capacity of concrete people to access and use this are so big. Looking with a social perspective is an inefficient system. Maybe the problem is not an economic problem, but in the economy itself, like Keynes said in the 30s of the last century, all our analyses are based on growth or scarcity ??? the struggle for scarcity, like the central problem for economies, but today our problem is distribution, democratic and sustainable control, access to all products we have, to all resources we have.

It is a managing question, or let us better say, it is a political question, participatory problem. It is a power problem. The power, the poor, are people without political power and because they have no power they have no access to economical resources. We must look more for policies that favor this kind of economic, more to the economies themselves, looking more to the people, to the needs of societies than the economies themselves. For me the most clear and tragic example today is the Argentinean case. Micro-economic policies in line with global finance institute, let us say that, it was a good example for the IMF four years ago, are killing our Brazilian neighbor country. The worst and dominant globalization is this losing capacity in nearly all developing countries to do macro-economic policies.

Before pointing out some proposals, I think it is important to stress that yes, I am really against this kind of globalization, but the main organizations networks, campaigns and alliances and ??? legions against this kind of globalization. One globalization, but another kind of globalization, yes, we need this capacity, production capacity, productivity resources, based on democratic participation and sustainability. There are two bases for that, and the dominant globalization is the side product has ??? to make clear, I must recognize that. Never in human history the sense of humanity, the confuseness of ??? humanity all so strong, so clear about common types and responsibility like now, and this is a good thing of globalization, this kind of globalization. This is a chance for bringing us a new kind of society. It is not possible to have this isolationism strategy fragmentation fundamentalism like we see, these are challenges for all of us, not only for the poor, but also for the rich.

The second side product of globalization is the perception of limits and possibilities of our main common goods, the planet, the nature. The divorce between economy and environment is part of the divorce between economy and society. It is impossible to imagine the dominant production and consumption model for all, only to produce paper I think all useful land in the world will be needed to produce paper, not food, if we use paper like in the United States for example. The nature is the major force against this kind of globalization driven only by markets.

This is a central issue for economists, I think. What I propose is more a political orientation than concrete policies. First of all change the focus in political economy from production, productivity growth, financial stability to fight of social inequality in the world and within societies to establish, rebuild environmentally sustainable systems, economic systems under democratic control. Let us say distribute the power, pre-oriented knowledge and research, look for major possibilities in human nature and natural and cultural needs.

Second. To stop adjustment programs oriented only by market economies, privatization, liberalization and open market deregulation and reducing of public and state intervention in economy. Present adjustment programs, we need adjustment programs to sustainability, ???, access, inequality and empowering people participation and make all macroeconomic policies to society and not to the interest of international finance like in my country. All is made priority to pay external interest and debt.

Third. Rebuild international relations starting by the cancellation of external debt. We need a financial mode for development, because we need finance. It is not a problem of financing, it is a problem that we can control, that one country can control other countries financing. It is not for dominational control of single economies by markets or powerful nations, but to make a partnership system in the world. We need trade for development, we are not against trade. To establish a partnership international relation we must rebuild international governs itself, like you say in your document. And the rule in a democratic base more accountable to people than to share of the market. We must face the central problem, how to redistribute world wealth. It is not a problem to produce more.

And I finish with the fourth question to control this kind of casino economy starting by finishing the fiscal free trade paradise and I pass to you.

George Soros:

I feel about globalization the way Mark Twain felt about the weather. According to Mark Twain everybody speaks about the weather but nobody does anything about it. I think it is time to do something about globalization. I think w all know and see what is wrong with globalization: it is too one-sided. We have global financial markets but we do not have a global society. Financial markets are amoral; they facilitate a free exchange among willing participants. That is not immoral; morality simply does not come into it, and that is what makes financial markets so efficient. But society cannot exist without morality. Therefore we must find some mechanism other than the market to introduce morality into the world. Put in another way, globalization i

s based on competition and competition is very good at creating wealth. But society cannot exist without some degree of cooperation. That is not just a question of morality; it is also a question of survival. September 11 is a painful reminder that morality, cooperation and survival are closely related. We must therefore do something to increase international cooperation. There must be a better balance between international trade and international aid. But trade has been growing and aid has been falling. The wealthiest and strongest country in the world, the United States, spends less than one tenth of one percent of its gross national product on international assistance. That is a pittance. It is justified by claiming that foreign aid is ineffective and often counterproductive. And what is worse, the claim has some merit. The fact is that foreign aid, as it is currently administered, is designed to serve the interests of the donors first and the needs of the recipients second. We must therefore increase the amount of money available for international assistance and we must do it in a way that will put the needs of the recipients first.

Now, Joe Stiglitz and I have both arrived at a proposal independently, which will do just that – and that is to issue Special Drawing Rights, SDRs, that the rich countries would donate for international assistance. Joe explained something about the monetary mechanism, the monetary justification. I would like to focus on making international assistance more effective, because that is what I care about.

I have established a network of foundations that gives away nearly $500 million a year. That is not a pittance. I know the needs and I am aware of the difficulties in meeting those needs. International assistance can never be as efficient as a business enterprise. Because business can focus on the bottom line, profit. But a social enterprise must take into account all the lines above the bottom line, all the human and social implications, and they cannot be reduced to a single criterion like profit. We must not abstain from serving the public good just because it can be done as efficiently as the pursuit of private profit; but we must try to make international assistance more effective.

In this SDR plan there is an independent Board that selects the programs that are approved for SDR donations, but the Board does not control the allocation of money. That is left to the donors. The result is a marketlike interaction between donors and programs, supply and demand. That is far better than central planning, or top-down, as it is done in the international institutions. The independent Board ensures the quality of the programs and public opinion judges the quality of the selection. The SDR plan would not rule out other ways of financing international assistance, such as the Tobin tax that you are proposing. Nor would it replace either the multinational or the national aid agencies; but by bringing additional resources to bear, it would lead to better coordination among them.

The primary goal would be to assure the provision of public goods on a global scale, such as the fight against infectious diseases, but the SDRs would also come in useful in tackling special tasks like Afghanistan today. At present, various donors pledge funds at donor conferences then they go their own merry way. By channeling funds through a lead agency – in this case it would be the UNDP, the United Nations Development Program, which is already strong on the ground – we could do better than we did in the Balkans.

The mechanism is available. A special issue of SDRs was approved by the IMF in 1997 and ratified by 71% of the membership. All it needs is action by the United States Congress, and a pledge by all the rich countries to donate their SDRs according to this Plan. It will not cure all the ills of globalization, but it will surely make the world a better place. Carl Tham:

Well, thank you, all of you. It seems almost as if this panel has had a kind of rehearsal before the panel, you so wonderfully put the argument to the next speaker, but there has been nothing of that sort. But now maybe you would like to pick up something which has been said, not necessarily in the order you started, or if you wait a while, I would like to make a question really. We have not touched that much upon trade and in fact I think today is just the very day when China joins the WTO and of course I think Amartya said and many of you have said that what is at stake is that poor countries must have a more fair deal and what is now… what do you think about the possibilities in the trade sector yesterday and this very day, as we see that the United States have announced maybe or will announce a kind of tariff for steel, for the steel sector, and we have the famous agricultural, or infamous, yes famous agricultural policy of the European Union and so forth, what is your reaction on this and what do you think about the prospects of giving the poor countries a fair deal when it comes to the trade discussions? Who would like to pick up that?

Joseph Stiglitz:

First of all, let me say that even if one were successful in trade, it does not address the issues that we have been talking about here on global public goods, that the kinds of issues, debt relief, poverty, environment help, trade enhances, when successful enhances their incomes and be of enormous benefit, but it does not solve the problem of global public goods, which is one of the things that we have been emphasizing in terms of why and SDR and other forms of revenue and for financing global public goods has to be on the agenda. On this specific issue I am very pessimistic of whether… I think we have… there is an increased awareness today of how unfair the global trade agenda has been. There is an increased awareness for instance after the last round of trade negotiations that worked way around that ended in 1994. It was not just that the benefits accrued disproportionately to the rich, but actually the poorest region in the world, sub-Saharan Africa, was actually worst off according to a world bank study, because of terms of trade effects. And the good news is that in the negotiations that went on at the ??? in Qatar, that there was an awareness of the inequities of previous rounds and a commitment that this would be a development round, so that was all good news.

But if you look at where the United States is on the kinds of issues that you are talking about, the very moment that they are talking about… You know, Secretary O'Neill said, the US Secretary of Treasury said, the problem with the world is not that there is too much capitalism, but there is too little, and then he announces a global cartel for steel. There is a certain irony in this. The United States announces that it is going to put agriculture on the agenda and at the same time Congress increases the magnitude of agricultural subsidies. And those are the issues that are of concern to developing countries.

You mentioned that today China is admitted to the WTO, that debate itself was a very peculiar debate, where the United States insisted that China ought to be treated like a developed country, even though its income was that of not only a developing country, but one of the low-income developing countries. But what people do not recognize is that the United States insisted on being treated like a less developed country, that is to say it said that it needed longer transition to get rid of textile quotas, that it was already given ten years by the Uruguay round and wanted several more years, because it is a less developed country and finds it difficult making these adjustments. Given that context I think, I am not optimistic.

Amartya Sen:

I basically agree with Joe and let me add a couple of other things. I think the issue of trade is important and you are right to raise it, but one has to see it with the degree of realism and the variety of consideration that Joe mentioned, but let me add some more to it.

One of the things is, and you may think it is a marginal issue, but it is not, one of the trades which does, of course, flourish in the world is the trade in armament and when the G8 countries, the leaders of the G8 countries sitting in Genoa were complaining about the irresponsibility of the anti-globalization protesters, they paid not much attention to the fact that 87% of the world armament are exported by G8 countries, with devastating impact on these countries.

Of course, there are tensions within the countries, but there is a long history in which the West has played a part in the undermining of Africa, in which the warfare has played a big part. I mean, the cold was fought out in Africa, in which Mobutu or Savambio (?), depending on which side you are on, always had backers, either in the Soviet Union or the United States. Now, the ??? of the Soviet Union is now gone. The inheritance of that destabilizing contribution of the West I think is now very much on the armament side. 68% of US export of armament goes to developing countries. The US alone is responsible of 50% of the total world armament export, going up a little from 48%. This is at 50% right now, 1996 to 2000 it would be about 48%. So there is… one has to see exactly what these, what the particular content of it is, and the issue of responsibility comes into the story.

Let me give one other example, this is an example of commission, an error of commission. This discussion today is primarily about errors or omission. But it is good that the errors of commission should be also discussed. Another of course is the commission that comes with the patent law, then it is not only related to the issue that Joe raised about the steel cartel and so on. I mean we know it ??? patented ??? does, and people do not recognize how restrictive this is in terms of trade possibilities.

I discovered it quite accidentally about three months ago when I went to India, and since I live abroad mostly I often take these anti-malaria tablets called Larium (?). Usually I pick them up in America, they cost 4 dollars a tablet, I forgot to. When I arrived in India I had to pick it up and I wondered how much it would cost, usually of course because of protected market in the less developed countries they tend to cost more. I bought a packet of ten, I asked how much it was, and when I translated the Rupees into it, it was 6 cents for ten. So it is like 6/10 of one cent compared to 4 dollars. I asked my cousin, who actually is concerned with pharmaceuticals, as to whether their chemical is the same, and I was told they are exactly the same. And are they reliable? They are perfectly reliable. Why is the price so low? To which I was told, that is what it costs to produce.

Now just to imagine what the extent of the royalty of the patent here is, it is just a massive difference it makes. So what we are dealing with is not only the ability of the poor countries to make use of the existing knowledge in the world in dealing with such things as the HIV infection and drugs connected with it, also the ability of your issue of trade expansion. Can these countries, India and other countries, export Larium to the United States? No, they could not, because the United States is, as Joe points out, a less developed country and it will take some time to get adjusted the competition coming from elsewhere.

So I think there are a whole lot of ways of thinking about that issue we ought to think about. But you know, this is a meeting which has to have the focus and while we bear in mind that SDRs belong to a world in which there are many other problems, many other injustices, I am very keen that the focus particularly on this scheme in which Joe Stiglitz and George Soros in particular have been involved and I think we ought to give very strong support to that. But at the same time recognize, and this is where I think Susan and I and others will come in, namely that there are other issues that remain on the agenda of which we should not lose sight.

Carl Tham:

We should come back to this, I think, very important thing, but Susan, you would like to add something about the trade. You live in France, which is the most, the strongest defender whatever of the agricultural policy.

Susan George:

Our friends in ATTAC who are from the small farmers' union, the Confédération paysan, are very much against export subsidies, so I feel that I have a clean record in this regard. A couple of points on trade. Let us not forget that trade is controlled at least two thirds directly by transnational corporations, so when one third, 40% of trade really takes place between branches of the same corporation, this is not trade as most people understand it. Second point is that for the least developed countries, which have been under structural adjustment for decades now, everyone exporting the same relatively reduced range of products and having to keep exporting no matter what, has reduced commodity prices to a point where it is not surprising that they cannot live on their export earnings, much less pay their debt, and that the northern policies are largely responsible for that. For the least developed countries they only represent about one half of 1 percent of the world trade, that is peanuts, we could allow total freedom for their goods tomorrow morning and it would not make the slightest bit of difference to the world economy. It is really a political problem.

Then I will just… I just want to repeat that we are very much afraid that the public goods, there are many forces that want to put them into the market and make them profit earning, profit centers really, the health market as these companies refer to, it is about $2.5 trillion a year, education is nearly as much. These are very juicy markets, water, culture, environment. All of these things are considered, not by this panel, certainly not, but by a great many very powerful forces as moneymaking articles. So I think if we could center a bit more on who would be against all our good ideas? What is the power relationship here? Because it is all very well to have good ideas, but if the real forces in the world are against them, then we are not going to get very far.

Carl Tham:

But let us discuss the power for a while, I mean, Candido, you mentioned that also as a crucial issue, and obviously we are talking about global issues, but the main decision-makers are the national governments, and a few governments have much more influence and more power than others, so obviously if we should reform international institutions and if we should have this concrete idea of the SDR thing, that means that there must be a change of mind in many governments. What are the prospects to get that kind of change of mind? Amartya, you talked about that there must be more dedication to equality in the world, and, well, we do not see that much about that.

George Soros:

Fortunately, most of the governments of the developed countries are democratic, and therefore they have to respond to public opinion. So I think if public opinion will demand let us say the issue of SDR or some other mechanism for greater resource transfer, then I think the governments will exceed and I think actually the present time, the chock of September 11, has really in particular… because basically it is a aggression for the United States, because the United States is where these ??? got stuck, those 71% have approved it, not for donation, but just as an issue. So it really requires action, without action by the United States congress it cannot be done. I think at the present time if there were a real pressure from various segments of society, I think that it could be… it is a realistic project right now.

Amartya Sen:

Just to add to that, that I think that George is absolutely right to emphasize the fact that the countries being democratic does make a dramatic difference to it. It also of course raises the importance of public debate and knowledge about these. Just to give a couple of examples. There was an interesting report in the New Yorker about three or four years ago, where an American public was asked whether the Americans give to much aid. Now, bear in mind, the aid is less than one tenth of one percent, as Joe said. The answer was yes, absolutely, an tremendous agreement on that. A little too much, far too much, dramatically too much?

Dramatically too much. How should it be cut? Should it be cut by 10%, by 20%, half, by three-quarters? Three quarters. Tremendous agreement. The final question: What percentage of US GNP is actually given out in aid to the abroad? And the answer, the mean answer, I have forgotten, like 8% or 18%, so after cutting by three quarters what they were suggesting was a massive hike and the tension between that is knowledge really and it is important. It is important to recognize that more people died on September 11 from AIDS than died from terrorism. I think that the world in which we live is not much understood, and I think, even though people tend to be skeptical of the power of knowledge, I think the power of knowledge is great, the power of public discussion is great. And given the fact that democratic countries have a particular opportunity in translating clear thinking, and that is why meetings of this kind I think are important. Clear thinking into a resolve for action. I think that is an opportunity that we have to really seize, rather than ???. I think the need on a constructive way to place before the world both the realities as to how dreadful the situation is in the world, and what we can do to change it. When you say the world does not seem to be so keen on ???. I do not know that it is not. I think it is based on the position of neither understanding the magnitude of the problem nor what we can do about it. So I would not take such a skeptical view, I think humanity with every time the opportunities as well as the problems have been outlined in great detail to them with clarity, have responded in a way that we have every reason to be proud, and I think that applies here too.

Candido Grzybowski:

I think the national state in the big south in the developing countries, less developing countries, all these kinds of countries, the majority of the world, they are controlled by external burden that finances and supports their needs. They are not really independent to say in a formal way states will control international institutions. This is the first thing. The second one is that these national states are the invention of the 17th century, it is not good enough to deal with world problems today. It is incredible. We must prevent this. The principle of democracy is one citizen one vote. What we will deal with that. The United States will ??? that China will have, I do not say 20% of the international power, that India will take more 20%, will the world system ??? that? This will be the biggest change in power. I know, we are not… we must look to concrete, we are living now, not tomorrow. What we can deal today, I believe the first step must be to create a will, because there are power people supporting this kind of policies. I can see in my country, power people sell their vote, it is like that, democracy in our country, it works like that.

We need to create a public opinion will that debates like that, not like the world's social forum, life, we must improve this debate to create a worldwide will to change. I think humanity can invent, I have not solution. What I know is that the unique solution is a dominant solution. There will be a lot of solutions, a lot of ???. When we look where we are improving a little bit nowadays where there are some policies looking first of all to equality, like for example the policy, joint policies in Europe, then looking only to liberate market. It is clear that. In our Merco Sur (?) example we can improve the Merco Sur, because this is ??? burden, but the idea to have a more… look into our problems more to our markets, to possibilities in our society can be a way to improve power participation and so on. I think like that.

Joseph Stiglitz:

Let me just say I join those who think that more public discussion is going to be… has the potential-bearing fruits in our democracies. And I take one example that is the success of the ??? movement, not that it has been perfectly successful, but it certainly has gotten debt relief of a kind that was almost unimaginable two-three years ago, and it was pressure on the governments. I think most of it is hope that this kind of discussion can lead to that kind of pressure. I think the time is a good one, because the ??? of a global alliance against terrorism has become well accepted. That is a negative. You really want to have a global alliance for, a global alliance for eradication of poverty, a global alliance of better global environment. Those are the positive things that people can really get behind.

Let me make two other very brief points. One of them is that under the current financial arrangements, the United States in some sense benefits from the current financial arrangements and it is not surprising that it has not been endorsed it, because when people demand to have more reserves, under the current arrangements they have to, most countries hold their reserves in dollars. So the US gets in effect the benefit of this current arrangement because everybody is holding dollars. And so it is a financial benefit. I do not know if it is explicit, but I think it is a little bit part of the reason for support of the current arrangement, and opposition in the United States to these system is that we are one of the major beneficiaries.

That leads me to the view that I think that the rest of the world can go ahead without the Unites States. I think in terms of the willingness of the rest of the world to accept a reserve currency, the SDRs, and they would use that like dollars, would create an environment that would put enormous pressure on the United States to go along. So I think that in this complicated bargaining situation that we are in, where the United States has been a dominant, and is now the super-economic power as well as a super-power, one has to think about how do you bring pressure to change the international arrangements in ways that otherwise would be difficult.

Carl Tham:

I will give the floor to you, George, then we will open for some questions here from the audience. Maybe we should mention a little about the amount of money we are talking about. I mean, by and large, the international assistance flow today is approximately $50 million or something of that magnitude, and I think the World Bank has said that we need at least maybe $100 billion for the forthcoming years to have any opportunity to reach the target of poverty reduction in 2015. This SDR we are talking about, how much are they? We are talking about $20 billion annually or something of that magnitude?

George Soros:

28. But it could be more than that, but this is the current plan that could be implemented right away, it is for 28 billion, of which 18 would come from the countries that would be donating. So 18.

Carl Tham:

But you have also the floor, you would like to say something else.

George Soros:

Well, we are supposed to be agreeing here, but I have to disagree with both of you a little bit if I may. First, Joe, I do not think it would really do any harm to the dollar as the dominant currency to have SDRs, because SDRs have to be converted before they can be spent and they would be basically converted mostly into USD. I just want to correct that, because I would not like, you know, some opposition from ??? on that ground. I do not think that is a valid concern for the United States.

And as far as your remarks are concerned, I think that the idea of global democracy is really unattainable. As you said, you cannot have, you know, ten times as many Chinese votes as American votes, so that is not realistic. But what is realistic is to seek, to improve, or introduce democracy or foster democracy, foster what I call open society throughout the world, because that is in everybody's interest. I mean, we are… the main source of poverty and misery in the world today is bad government, repressive government, corrupt government or badly functioning government, government lacking the capacity, failed states, that is a new phenomenon, so this ??? in directly with this provision of public goods, because a good government is a main public good that needs to be supported, and that I think is a realistic objective.

Carl Tham:

Would you like to respond on that shortly? No. Okay.

Joseph Stiglitz:

There are different ways of organizing the SDR and what George says is right about the current proposal, but one could imagine the SDR arrangement where the SDRs themselves could be handled as reserves.

George Soros:

Yes, but that is not where we are…

Carl Tham:

One at the time.

Amartya Sen:

Can I also say something about democracy, because I agree with George, the only thing I would say is that I think Joseph just said so many of the foundational terms are not adequately I think explored, of which globalization is a good example. I think democracy is another. Given democracy is not just majority vote. Democracy is participatory decision, it is open public discussion, what you call the open society is part of democracy too. So I think that when Candido and others and Susan ask for more global democracy, I do not think that it is an idea that the Chinese and the Indians to ??? the world, I do not think that is really what we are looking at. I think the issue is to have much more participation, much more give and take, much more open discussion. These are characteristics of democracy. It is easy to see that there are countries where you have vote but no open public discussions at all, and we do not regard them to be full-fledged democracies really, and I think the same applies on the more positive side, that it is the pluralism, it is the ??? present and their ability to present points of view and to participate in the discussion. That is really what the global ??? movement is about, I think.

Carl Tham:

As I said, we can take a few questions here, unfortunately we have to restrict ourselves here to the floor, I am sorry for you at the gallery, but for practical reasons that is not possible. We have a microphone here and you, please. Very short questions really and please tell us who you are, that is always very nice for us to know.

· Eskil Ullberg: My name is Eskil Ullberg from SMG Consulting and I have a question to the panel and in particular Mr. Soros. The question is: technology has always played a major role, a key role in wealth creation and also the production you say on a global basis, what role does technology, particularly the IT area, Internet and so on, play in today's development for the good of globalization? So this is about technology, what role does technology play in the good globalization?

· Carl Tham:We can take a few more questions.

· Nils-Gí¶ran Sundin: My name is Nils-Gí¶ran Sundin. This addresses the issue of poverty and misery caused by war and terrorism. It causes huge costs to humanity due to election procedures that put the wrong leaders in power and one dilemma could be that political leaders on the global arena or even governments are accountable only to public opinion, while scholars and business people need also to legitimize their decision by proving that they are right or they make good decisions according to a scientific and macro-economic standard. How would the panel like to resolve this dilemma in the near future?

· Carl Tham: Well? Easy question. We can take three questions in a row, I think.

· Female from the audience: I have a very short question. I am thinking about patenting and specially patenting of knowledge, which appears to be a huge problem. How can we deal with that in this context? Knowledge is patented everywhere like ancient knowledge, like privatizing it, someone owns the knowledge that common ordinary people have had for centuries, how do you deal with that?

· Victor Olsson:Victor Olsson from the TT News Agency. I would like to know which would be the most important and realistic decision that can be taken in the meeting in Mexico this March?

· Carl Tham: I think we should stop there for a while so we do not forget the questions really. Who would like to start? We have a question about the technology, how to get better governments generally and politicians in particular, not ??? once, and the question of knowledge. Who would like to start? Susan.

Susan George:

It is very important I think to recognize the importance of social movements. There is a question clearly addressed to the legitimacy of the social movement, but it is not trying to become either a political party or a government, it has responsibilities to its own membership and it has the responsibility indeed of proving that its arguments are correct, but I think that the legitimacy comes from the people who join it and the very great number of organizations that they represent, but this movement is something quite new in history in that it represents small farmers, some trade unions, women's movements, north-south solidarity organizations and environmentalists, and there is a great spectrum of people who are involved and technology is certainly helping it to function better, I do not think we could have covered the ground we have covered using telephones and faxes, it would simply have been too expensive to do that.

I think that the question raised about the patenting of intellectual property is a very serious one and it comes back to this whole notion of a great many forces in the world wanting to include every human activity in the profit making sphere, including knowledge. So I would again pose the question: what are the forces opposing? I do not think that we have confronted that problem specifically enough and Amartya, I wish I could agree with you that humanity is somehow going to come up with the right ideas, but as someone who has worked on the debt issue for about 15 years it is my feeling that there is no level of human suffering which in and of itself is going to make policy change automatically. We can show the levels of human suffering caused by debt, but that has not made policy change. The only thing that change that is the rapport de force (?), is the balance of power in the society, and that is why we are trying to get organized.

Amartya Sen:

Could I answer to that? You know I think that was not what I said, Susan, it was not that humanity would automatically like you know a kind of biological processor come up with that. It is just that I do not think that we should give humanity a bad name, what we lack is the public discussion and the institutional structure. That is what I was mentioning. That is not, and that relates to the question that was raised also by somebody about academics or people who are speaking in some kind of expert capacity want to get things right and that is not the same thing as public opinion. But I think ultimately it is the same thing. I mean I think if there is one big thing on the context of judicial understanding, it is that justice not only be done but also be seen to be done. It is very important. In some ways you can think of it, it is in the ??? direction of objectivity and I think that it is. But I think quite a lot of the problems arise from not paying adequate attention to get over the point of view across. Of course, it is extremely important that you get things right.

And one could debate about whether the description is right and I think if I had come to question Susan, I might have wondered whether global Keynesianism would be the right way of thinking about it, because I think the Keynesian discussion is so non-distributional oriented. When I came here in 1998 in the same position as Joe is today, after the Nobel, one of the questions I was often asked was, you must be a Keynesian, so I said I was not actually, I did not work on that, and then there was a question saying well, in the debate like ??? which is about money ??? economic you must be on Keynes side, so I said no, actually I do not work on that ???, but I am too generally on Keynes side, so I said here is a guy who has never talked about any inequality, he never talked about poverty, unlike the ??? he talked a great deal about poverty and inequality, why should I be? Just because it so happens that on the question about what the role of money is in prizes Keynes may be on one side. So I think Keynesianism gets far too much uncritical acceptance in that. We need an approach, which is sensitive to the concern that we have, and here I come back to humanity, I think people are concerned about poverty, people are concerned about inequality, and if we fail to get people moved I think it could be institutional, they are not open to ???, as George would say. Or we are not sufficiently active in pushing it. But it is really… what I am saying is that we should not blame humanity for something which is basically the fault of our being unable to put across what we think to be the quite point of view.

Carl Tham:

I would like just some short answers, then we have a possibility to have another one. Please Joe and Candido.

Joseph Stiglitz:

First on the issue of patents, I was in Ecuador a few weeks ago, way up in an Indian, up in the Andes in a town-village where there was an Indian mayor and he started talking about the Trips, the trade-related ??? property, provisions of the WTO, and he said how he was having it described, how it was having an adverse effect on them, that multinational American companies were patenting native drugs and making them pay for what they had been using for a long time.

When I told that story to advocates of the Trips agreement of the intellectual property agreement, what they say is, well, if they really are, if that were really the case those patents would not survive challenge in court. But the point is that the Indians are not able to challenge the patent in an American court, they do not have the money to wage that challenge and what one often forgets is that when you have a legal framework, part of justice involves access to the courts and part of the access to the courts is finance. That whole aspect of it was not really taken into account.

When I was in the White House actually both the council of economic advisors and the OSTP, the Officer of Science of Technology Policy, argued against the US position in Trips, which was dominated by the US trade representative. The argue was that there ought to be a balance between users and producers of knowledge. But the US policy was dictated by the US trade representative which is the producers of knowledge, and what came out of that agreement was not a balance. Now, the lack of balance has been brought home by the issue of drugs and aids, but in fact there are lots of other aspects of that lack of balance, and I hope what happens when they go into the new round that they will re-examine that whole framework and recognize that it was originally not done in a balanced way.

The other question I want to be very briefly about is that on the meeting in Mexico in March which is finance for development, the one aspect of that that I, to relate to the major theme that we have talking about here, is that part of the aspect of finance even for private investment is that there has to be a corresponding provision of public good, you have to have roads, you have to have education and so if you are going to be successful in creating an environment for private investment you have to have a finance for public goods. And that is where the kinds of things that we have been talking about here is absolutely essential if you really are going to have an effective market economy…

Candido Grzybowski:

… looking our booklet also the idea that intellectual property ??? a big problem, we must look and to improve these treaties and so on. But for me the central problem is the link between public goods and private goods. I do not believe it is possible to think about public goods without changes in private goods. Let us look to many things. How we will deal with a public good health with intellectual property rights produce medicines, as is a problem in that debate, but we can say the same about other things, the links between public goods and private goods. Brazil is exporting soya to your cows here in Europe and we are importing subsidized milk. It makes sense? We are destroying our environment, export soya for you and we are importing a cheaper food from you that we can produce ???, it is cheaper than in Brazil. This is incredible. And the link between private and public is so, is like that…

· Carl Tham: We can have one more question and then we have to end.

· Jacob von Uexkull: Jacob von Uexkull, founder of the Right Livelihood Award, also known as the Alternative Nobel Prize. It seems to me that one of the main weaknesses of the present world economic model is its inability to deal with the whole concept of sufficiency and enoughness in a ??? world. Here you have the Japanese, one of the most prosperous peoples on Earth, who have decided that they are rich enough, you know, they have consumed enough, and instead of saying wonderful, how can we all reach that stage as quickly as possible, we are attacking them and castigating them and saying you are destroying the global economy by not wasting more. I would appreciate your comments.

· Carl Tham:That will be the final comments of this debate and who would like to pick it up as a kind of closing argument?

Susan George:

I would love to if I am allowed. Hello, Jacob. It is clear that we do not even know how to count in our present world, we count as growth a great many things which are actually destroying the environment or are simply repairing past mistakes. I think if we got our accounts in order we could see that we are destroying natural capital and any business that started spending all of its capital would not be in business for very long, so it has to start with the intellectual machinery that we have, we cannot even show that the economy is a sub-system of nature. Economists today proceed as if the economy were the whole system and that nature were a little sub-system inside it, from which you can take what you need and throw what you have to back into that sub-system, but this is crazy, it is the biosphere that is the whole system, and our economy is a sub-system and we are producing in one week today what the whole world produced in 1900 in a year, so this clearly cannot go on. We need five or six planets if we want to keep running things in that way.

George Soros:

There is a concept called the tragedy of the commons, and that is that something that is common property you want to deplete for your benefit, but you do not want to add to it, you do not want to make any investments, because the investments have to be shared by everyone and it does not pay to invest, so this is what led to private property in agriculture, you had an enclosure movement, which in a way was at the beginning of eventually of the industrial revolution.

And we now sort have an enclosure movement also in the field of culture. What used to be public property is now becoming private property, and it is understandable up to a point because how can you for instance expect a pharmaceutical company to spend money on developing a drug unless they can make a profit on it. But a lot of the research, it used to be in the public domain, and it still is, and in fact many of the drug companies are using research done in universities, which is financed by public funds and are actually appropriating it, privatizing it, so we are in the process of privatizing public property, so you do need some patent protection, but the calculation is very different for a country that is basically the forefront of technological advance than for the less developed countries, which are paying the royalties. So there are as you pointed out a lot of imbalances in this whole situation, and particularly we really need a lot more to be in the public domain.

There has been an extension of market values into areas where they do not traditionally belong, particularly in the field of culture. But the same is true in professional values, in medicine, the practice of medicine. So these are very deep problems. I think one has to recognize them, then there is the question of what can you do about it, and then it gets much harder, because it really requires a change of values, it is not just a change of arrangements. Because if you let us say removed protection, patent protection, or the result let us say of the drug companies having to basically provide now medicine more or less at cost will be to redirect research into other areas. Already there is a lot more money spent on research in cosmetics than researching cures for AIDS, so I think our efforts have to go much deeper than what we have done so far.

Carl Tham:

The last word, Amartya.

Amartya Sen:

Well, just to say that when one deals with a problem like the environment, the tragedy of the commons to which George referred, I think it is important to think that there are two really quite different ways of approaching the issue. One is to say maybe it is comment more like private goods. Parcel them out and so the people have property rights in some ways, it is not very easy to do with global warming, but it can be done in some other cases and proceed in that direction. That is one approach. And quite a lot of the literature on the environment tend to go in that direction, sometimes directly, sometimes indirectly, and it is to use the market model ???.

The other approach is to recognize that human beings respond not just to profit incentive, but also to thinking about what is an appropriate way of behaving in the world. And that is a different approach. And that requires to rethink about how shall we act? What kind of people are we? How should we behave? Now I think one of the reasons why I somewhat resist the idea of trying to calculate these environmental losses being put in like a capital loss, it is just that it adds to what I would regard the ??? of the language, it is not just the economists who do it, Susan, it is done across the world. That is the language ??? talk. What was understood earlier something else it is suddenly called social capital and what capital then immediately convey something. Intellectual property rights. When one talked about doing mathematics in one way or another, one did not think of it as an intellectual property right of the someone who did the ??? equation for the first time or anything like that, but somehow it is an attempt to ??? into that market gate.

Now, what I want to emphasize, and this is I think a fairly important point, both Joe and I are professional economists, that the economic, the strategy of economic, the technique of economic, the tradition of economic is not concerned only with looking everything in the mirror of the market, everything else in terms of how people behave, what their concerns are, is part of that. If you think of Adam Smith, people keep referring to the invisible hand, I think there are exactly three references in the whole of Smith's writing and one of them is about, quite critical, about the bloody and invisible hand, referring to Lady Macbeth's the lamentation, and the fact that ??? of sentiment which has ??? in into his economic analysis is overlooked, that is a part of the tradition of economics as well. And we ought to emphasize that, the limitations of the market way of thinking about it, which I think are very great. It is not the limitation of economics as such, the discipline is broader, and I think in trying to shift economic thinking into that mould, we sacrifice the enormous expanse, the enormous tradition, the enormous humanity of the discipline of which both Joe and I are proud to be professional ???ness.

Carl Tham:

Well, I think that was a very good… Obviously we have not discussed many issues where there are disagreements, but it is obvious that there is a shared view here on many important issues and specifically the need for public goods and the need to finance that, whether extraordinary increase of public assistance in some way or another, I think that is a very important message out of this from this panel and also the hope which Amartya Sen here and also others that more knowledge and more information and debates like this could mobilize people to press for changes and also make the changes possible or to ??? the phrase to make another world possible. Thank you.

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