Global poverty and inequality: is welfare only for the lucky few?

June 18, 2014 - 04:55

A new research project sets out to investigate what happens when the fight against global poverty and inequality is left to the corporate sector.

Is the idea of welfare for everyone a utopian project? Postdoc Christian Christiansen will investigate how companies have changed the way we fight global poverty and inequality. (Photo: Aleksandar Todorovic / Shutterstock.com)

Once upon a time in the 90s large multinational businesses such as Nike and Disney made international headlines due to their scandalous treatment of their employees in developing countries.

Lots have happened since then -- both small and large businesses have made an effort to swap the scandalous for heart-warming stories with happy endings -- and the vast majority of international businesses have a Corporate Social Responsibility Strategy, also known as CSR. However, the degree of responsibility each company assumes varies hugely.

A new research project lead by Christian Christiansen, a postdoc from Aarhus University, will examine whether the corporate initiatives around the world have changed the way we fight global poverty and inequality.

“My thesis is that we’ve abandoned the idea of giving all human being rights and chosen to leave the responsibility for fighting poverty and inequality to the companies,” says Christiansen.

“Have we abandoned the ideal of ‘welfare for everyone’?”

In the past the ideal as defined by the UN was that governments should provide basic rights for all.

Today the ideal tends towards companies providing decent wages, safe and healthy working conditions, and even health insurance, for their employees in all parts of the world. However, they are not legally bound to do this -- and not all companies conform to this ideal.

“Despite plenty of positive stories about companies that take responsibility, there will always be people who aren’t part of any company and are left out of that development,” says Christiansen. “That problem will be the starting point for my research, which will examine how we ended up fighting poverty and inequality in this manner.”

The shock following WW2

Christiansen's project, which is funded by the Danish Council for Independent Research, distinguishes between two basic views on the fight against global poverty and inequality.

  • The notion of inherent rights was written into the UN’s Universal Declaration of Human Rights from 1948 after World War 2 and the Holocaust. It’s based on the belief that all human beings have the right to welfare in different forms.

“The notion of inherent rights is based on the idea that all human beings have some basic economic and social rights, such as the right to food, medicine, clothes, proper wages, proper working conditions and a number of other things,” says Christiansen.

According to Christiansen the notion of inherent rights is largely comparable to the Scandinavian welfare model where high taxes ensure the welfare of everyone.

Christiansen plans to focus on the period following the 1970s when Amnesty International and Human Rights Watch gave fresh impetus to the notion of human rights.

From rights to responsibility and from state to businesses

However, the Human Rights organisations Amnesty International and Human Rights Watch primarily focus on political and civil rights, which doesn’t cover wages or working conditions.

These make up the core of the second way of viewing the fight against global poverty and inequality:

  • The other way of regarding the fight against poverty is the so-called ‘responsibility thinking’, which arrived with globalisation where businesses broke down barriers of nationality, making the whole world their workplace. This is based on the belief that a company has responsibility for itself, its workers and its suppliers, etc. The companies manage this responsibility through their CSR-strategies.

With the arrival of globalisation, companies took advantage of the opportunity to lower their production costs. This meant low wages and poor working conditions.

Facts

The UN initiated the Global Compact initiative in 1999 with the purpose of engaging companies in finding solutions to the world’s social and environmental challenges.

Companies are encouraged to support ten specific areas, such as employee rights, human rights, and sustainable development.

“The globalisation we got in the 1990s was an economic globalisation that focused on free trade. It wasn’t a ‘rights’-globalisation -- at least not in regards to social and economic rights. In fact, quite the opposite,” says Christiansen.

Free trade had some consequences that culminated in serious rights-related scandals over issues such as child labour. It marked the beginning of the CSR wave which quickly gained momentum.

Is welfare for everyone a utopian project?

While the CSR wave continues to roll, the notion of welfare for all as presented by the UN’s 1948 Universal Declaration of Human Rights remains an unfulfilled dream.

According to Christiansen, there are many possible explanations as to why the attempt to get states to collaborate on basic human rights for all has never succeeded. Perhaps it was always a utopian project?

Where the notion of rights at least as a general rule was meant to include everyone, the notion of responsibility only applies to the lucky few who are fortunate enough to be part of a company that takes special responsibility.

Potential third wave

In Denmark the focus and emphasis on companies’ CSR-strategies is so advanced that it has been written into the legislation. Christiansen says this development could have a number of implications.

“It could be a sign that this perhaps isn’t just the transition from state to the free market but a third wave in the shape of a collaborative system between states and companies could be on its way,” he says.

Christiansen calls it a hybrid system where the focus rests on what the state can do and what the companies can do. He concedes that Denmark is a somewhat unusual example from a global point of view.

“My focus is on the global agenda and here the US and certain UN institutions are key players,” says Christiansen.

UN under scrutiny

In order to establish whether a paradigm shift has really taken place between the 1970s and today, Christiansen will start by analysing a large number of texts from the period, particularly on the economic development.

He will also examine the most prominent criticism and defence of the ideas about universal social and economic rights and the social responsibility of businesses. In addition, an organisational perspective will accompany the analysis in order to clarify how important players have participated in the fight to define rights and responsibility.

The UN will be a central case in the final thesis. Christiansen says the UN’s Global Compact initiative from 1999 is one of the best examples of the paradigm shift -- particularly considering that the UN was originally at the forefront of the fight for universal rights.

“Even the UN has realised that companies have taken over the agenda. The Global Compact initiative illustrates this as it’s a way for the companies to commit to working for a number of different rights,” says Christiansen.

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Translated by
Iben Gøtzsche Thiele

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