Social Responsibility in an Age of Globalization

November-December 1997

By Barend A. de Vries

MILWAUKEE—In celebration of the 10th anniversary of the U.S. Catholic Bishops' pastoral letter, "Economic Justice for All," Archbishop Rembert Weakland and Center of Concern director James Hug, S.J., organized a conference here last May on the theme of social responsibility in the age of globalization. The conference also celebrated the 25th anniversary of the Center of Concern in Washington, D.C.

The aim was to examine the economic and cultural forces now operating on a global scale. Economic developments are having a favorable impact on economic growth, integration and international trade, bringing major nations such as China and India into the world economy. But the constructive aspects of these developments have bypassed many people and regions such as Africa and even some communities in the United States.

In his opening address, Archbishop Weakland, who led the Catholic bishops in developing their economic pastoral letter, stressed that the analysis of the U.S. economy and the ethical arguments offered in "Economic Justice for All" did not have to be updated. Instead, it is necessary now to focus on global issues that have emerged in the past ten years.

Speakers at the conference confirmed the need to counteract the growing gap between rich and poor, to provide debt relief and new concessionary finance for poor countries, to cut defense expenditures and the drug trade, and to encourage environmental policies and protect workers' rights in circumstances of intensifying international competition. Theologians and ethicists, on the one hand, and business leaders, economists, and labor leaders, on the other hand, deepened their understanding of one another and came to substantive agreement on many critical issues.

On a number of questions, however, considerable disagreement remains, and participants differed in the emphasis they gave to particular actions. The social responsibility of corporate leaders is one such example. International corporations make very substantial contributions to their host economies, but they should also exercise responsibility to restrain the negative environmental impact of their operations and not take advantage of local laws and customs to the detriment of local communities. However, regulation of international investment capital to make it compatible with environmental protection and workers' rights may be hard to accomplish and implement in practice. Moreover, the recipient countries will have to be the primary players in such an initiative.

Other areas of disagreement included:

1. Figuring out the best way to adjust consumption and savings in order to release sufficient resources for fighting poverty.

2. Learning how to develop a proper assessment of the negative and positive aspects of population growth in light of clear ethical standards.

3. Deciding on the best means of governing the global economy, which requires responsible behavior by national governments supported by key international institutions such as the United Nations, the World Trade Organization (WTO), and the Bretton Woods institutions—the World Bank and the International Monetary Fund (IMF).

4. Determining the best policies for adjustment programs financed by the World Bank and the IMF. Some ethicists criticize current policies because they endanger anti-poverty efforts in poorer countries. However, the World Bank has substantially modified its lending policies in the wake of the 1987 UNICEF report, 'Adjustment with a Human Face," and is giving increased emphasis to anti-poverty programs in its own policies.

5. Deciding how best to allocate decision-making power within the IMF and the World Bank. Some ethicists have objected to the voting structure in these institutions, since one vote is not given to each participating country, as is done in the U.N. Voting is weighted in favor of the those countries that lend the most money To change the governance structure to one country, one vote, however, would lead to a severe reduction in the amount of money the richer countries would contribute.

The final conference document attempts to reconcile differences by focusing on essential areas of agreement in the assessment of global conditions. The document points to the churches' challenge to place the "painful and tragic consequences of globalization" in the center of its preaching and education activities. It also stresses the critical importance of spiritual rebirth in personal and social life and the important role of the Holy Spirit in guiding our actions in the social arena.

[Dr. de Vries is a former chief economist of the World Bank. His new book, Champions of the Poor: The Economic Consequences of Judeo-Christian Values, will be published by the Georgetown University Press early in 1998]