Financing the global sharing economy
- Rajesh Makwana
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Rajesh Makwana, Director, Share the World's Resources, UK
Humanity is facing a global emergency. Extreme poverty and deprivation, policies of economic austerity and the impacts of climate change and other natural disasters are taking the lives of over 40,000 people every single day and severely affecting many millions of others. Dealing with the structural causes of this emergency will require transformative reforms on a scale never before attempted. However, in the simplest terms this emergency exists largely because governments have pursued policies that undermine the ‘sharing economy’ – systems of welfare that humanity has progressively established to protect the poor and vulnerable.
As an immediate response to this global emergency, sharing the world’s vast financial resources more equitably can help to prevent needless suffering and death and pave the way for more substantial reforms in the near future. We already have the money, the institutions and the expertise in place to take this crucial first step towards world rehabilitation. But what still lacks is a sufficient level of public support across the world to overcome the political and commercial barriers to implementing the necessary critical measures. Mobilising world public opinion to end life-threatening deprivation, reverse austerity measures and mitigate the worst impacts of climate change must therefore be the immediate task for campaigners and activists in all countries.
The sharing economy
Contrary to the common misconception that people are individualistic and selfish by nature, anthropologists have shown that gifting and sharing has long formed the basis of community relationships in societies across the world. A recent spate of scientific evidence further demonstrates that as human beings we are naturally predisposed to cooperate and share in order to maximise our chances of survival and ensure our collective wellbeing. In light of the historical and scientific evidence, it is not surprising that sharing, gifting and generosity have also been important components of many of the world’s religions. In broadly similar ways, Judaism, Islam, Christianity, Buddhism, Hinduism and numerous other faiths all expound the importance of sharing wealth and other resources fairly, as well as the need to protect the poor and vulnerable.
Building on these perennial human values and principles, modern systems of welfare are arguably the most advanced sharing economies ever established, and represent an important extension of the human capacity to share what we have in order to protect the least well off in our societies. Through the process of progressive taxation and redistribution, we share a portion of the nation’s financial resources (personal income and assets, as well as company profits) so that it can benefit society as a whole. In this way, sharing underpins the functioning of entire economies by ensuring that members of society take collective responsibility for securing basic human needs and rights for all citizens.
Rather than strengthening and scaling up the sharing economy, for decades governments have pursued polices that undermine systems of social protection and exacerbate poverty and inequality. Since the 1980s, governments have increasingly rolled back those policies that share the proceeds of growth more fairly across society, in favour of promoting unregulated wealth creation by the few. Today, the very basis of the sharing economy is being further eroded in countries where austerity measures are dramatically reducing public spending on social welfare and essential services.
Pursuing these ‘neoliberal’ polices in a highly unequal world has resulted in a global emergency that looks set to escalate further over coming years. For example, poverty rates across OECD countries have been rising for a decade and took a sharp turn for the worse after the global financial crisis of 2008. In poorer countries, just under a billion people are officially classified as hungry while not far from half of the developing world population (43 percent) is trying to survive on less than $2 a day. At the same time, 300 million people are currently affected by global warming and 300,000 people lose their lives every year as a result. Altogether, over 15 million people die every year largely due to a lack of access to nutritious food, basic healthcare services, clean water for drinking and sanitation - equivalent to more than 40,000 preventable deaths every single day.
Mobilising the world’s financial resources
The underlying causes of many of the most urgent problems facing humanity are complex and addressing them will necessitate extensive reforms to the institutions and policies that underpin the global economy - a task that is widely considered the defining challenge of our times. But humanity cannot afford to wait for these transformative changes to take place - we need to act now. Everything needed to mitigate the worst impacts of the global emergency already exists. The international community has both the money and the expertise to take a bold step towards saving lives and ending extreme deprivation – and doing so is eminently affordable.
According to research carried out by Share The World’s Resources (STWR), governments could harness more than enough money to strengthen sharing economies across the world in order to reverse policies of economic austerity, prevent life-threatening deprivation and mitigate the worst impacts of climate change, both at home and abroad. STWR has identified a number of policy options that the international community could implement to mobilise over $2.8 trillion every year to bolster the sharing economy within and between nations.
Policy recommendation ($) US dollars annually
Tax financial speculation 650bn
End fossil fuel and biofuel subsidies 531bn
Divert military spending 435bn
International tax justice 349bn
Increase development aid 298bn
End support for agribusiness 187bn
Harness International Monetary Fund
resources (gold and Special Drawing Rights) 116bn
Tax carbon emissions 108bn
International debt justice 81bn
Protect import tariffs 63bn
The structures, mechanisms and expertise needed to utilise these additional financial resources to protect the vulnerable and mitigate climate change have long been in place. For example, there are numerous international agencies working ceaselessly to provide disaster relief and prevent deprivation in developing countries. The international community has already established an array of funds and other programs to facilitate climate change adaptation and mitigation programs in developing countries. In terms of social protection, many countries already have various systems of welfare in place to provide essential public services to their citizens, and it would not be impossible to establish basic social protection programs in countries where they are currently lacking.
Utilising these existing measures also makes sound economic sense at a time when economies across the world are contracting and unemployment is rising. In an interdependent world where trade and financial relationships span the globe, this massive investment in human lives would stimulate demand, kick-start growth, create employment opportunities and substantially increase government revenues.
Many European governments understood the need to scale up the sharing economy after the Second World War when they brought in a comprehensive package of social welfare despite levels of national debt that surpassed those of today. President Roosevelt introduced similar commitments in the US during the country’s most severe economic depression as part of the New Deal series of economic programs between 1933 and 1936. In 1948, the US went on to kick-start a massive transfer of financial resources to a number of European countries as part of the Marshall Plan, designed to aid reconstruction and economic recovery in those countries devastated by war. Instead of further eroding these landmark commitments to share financial resources in ways that benefit the wider community at home and abroad, it is time we scaled up the sharing economy at every level of society.
Taking the first step
Implementing the measures highlighted above could yield major gains for humankind by significantly reducing needless poverty-related deaths and enabling nations to mitigate and adapt to climate change. Achieving these goals could mark a tremendous leap forward for the international community and pave the way for more substantial reforms that must urgently follow. If we have the money, the institutions and technical knowledge needed to ameliorate the worst impacts of the global emergency – and it makes sound economic sense to do so - why do we continue to neglect and undermine the sharing economy on both the national and international levels?
When pressed on these issues, elected officials often claim that their governments have simply run out of money to safeguard their own citizens, let alone help those living abroad. This lack of ambition and political inertia has many complex causes, including the dominance of a neoliberal consensus amongst policymakers, economists and business leaders. Policymaking has long been captured by powerful corporations and business lobby groups that have the ability to maintain their vested interests at all costs. For too long, an overemphasis on the private sector and free markets has undermined the sharing economy by pursuing an economic model that puts profit and growth before the welfare of all people and the environment.
In light of this political reality, implementing even modest proposals such as closing tax havens, diverting perverse subsidies or reducing military spending will require massive public support. The hope for a better world rests with the participation of the global public in a call for reform that extends beyond national borders. As the widespread mobilisation of people power in 2011 demonstrated, only a united and informed world public opinion is stronger than the private interests that obstruct progressive change from taking place. The responsibility to take a stand falls squarely on the shoulders of ordinary people, not just the usual campaigners and NGOs. It is imperative that millions more people recognise what is at stake and take the lead as proponents for change – the wellbeing of planet earth and future generations largely depends on this shift in public consciousness.