Overcoming theTrauma of Transition:Trends and Changes on theThreshold of the 21st Century

N U M B E R 23

WOODROW WILSON INTERNATIONAL

CENTER FOR SCHOLARS

WASHINGTON, D.C., 1999

Jorge Wilheim

translated by

Mário Santos

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Woodrow Wilson International Center for Scholars

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Comparative Urban StudiesOccasional Papers Series

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About the Author:

Jorge Wilheim (born in Italy (1928)), is a Brazilian architect and urbanist, living in São Paulo, where he startedhis current private practice in 1953, immediately after receiving his degree from the local Mackenzie University.He designed São Paulo’s “Parque Anhembi Exhibition Pavillion and Convention Hall” and the Albert EinsteinHospital, among a long series of industrial, hospital, office and residential buildings. He designed or oriented ca.20 master plans of important Brazilian cities, including Curitiba, São Paulo, Campinas, Goiânia, Fortaleza, aswell as new towns (Angelica and participation in the contest for Brasilia) and large private developments.

Mr. Wilheim is an international consultant and also held several public posts: São Paulo’s State Secretary forEconomy and Planning, Municipal Secretary of Planning, State Secretary for Environment, Director of the Metro-politan Planning Agency, President of the International Bienial of Arts. In 1994, he was appointed by the UnitedNations, Deputy Secretary General of the Habitat II Conference (Istanbul, 1996), in charge of its technical designand articulation.

He is author of 8 books on planning, development and urban life and is currently writing in magazines andnewspapers. He can be reached by e-mail at wilheimj@uol.com.br.

Wilheim, Jorge. Overcoming the Trama of Transition: Trends and Changes on the Threshold of the 21stCentury . Washington, D.C.: Woodrow Wilson International Center for Scholars (Comparative Urban Stud-ies Occasional Paper Series, 23), 1999.

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Overcoming the Trauma of Transition:Trends and Changes on the Threshold of the 21st Century

by Jorge Wilheim

Translated by Mário Santos

Acknowledgments

This is a revised translation of the appendix titled “Nosso Fecundo Fim-de-Mundo” in my book OCaminho de Istambul (1998), which would translate as The Road to Istanbul. It has been amended hereand there in order to update it, such is the speed of changes occurring in our present world. I am mostgrateful to Joseph S. Tulchin for his invitation to publish this English version and for his Introduction.

I am also grateful and forever in debt to my good friend Mário Santos for his painstaking translation.The issues I deal with in this text—our common future while we are in transition towards the 21stCentury—were very often a matter of informal and lively debate at his home in Nairobi where heserved as the Brazilian ambassador while I was posted at the United Nations Centre for Human Settle-ments as the deputy secretary-general of the Habitat II Conference.

After having proposed the structure for Habitat II, the so-called “road map to Istanbul,” I had theopportunity to develop my thoughts regarding the historical transition period I believe humanity isgoing through during my “year of apprenticeship” (l995) at Habitat Centre in Nairobi; I honed themfurther at many seminars and conferences in which I participated, and eventually at the “Dialogues onthe 21st Century,” a parallel activity of Habitat II. I also had the opportunity to collaborate with thepress in several countries by way of articles, commentaries, and notes in which I expanded on one ortwo of the ideas contained in this particular view of the future—which, I should add, is not exclusivelymine.

I learned a lot during my wandering on the road to Istanbul. I avidly read works by authors such as E.Hobsbawm, J. Mandrick, I. Sachs, R. Kurtz, M. Castells, K. Polanyi, J. Rifkin, O. Paz, P. Drucker, J.Borja, M. Berman, Bresser Pereira, L. Thurow, R. Kuttner, G. Marinotti, and many others who inspiredand helped shape some of my hypotheses. Companions at seminars and conferences such as K. Shah, J.Brugmann, M. Cohen, C. Sachs-Jeantet, R. Stren, J. Somavia, J. Rees, G. Link, J. Mabogunje, A.Tarozzi, T. Hancock, R. Gakenheimer, A. Fazal, G. Lawrence, N. Barry, H. Henderson, H. Girardet, S.Antoine, K. C. Sivaramakrishna, and I. Serageldin also influenced and helped me to develop and ma-ture some of my ideas. And, among my colleagues at Habitat Centre in Nairobi, I enjoyed with J. Moor,P. Garau, and R. Wickmann many fruitful exchanges of ideas.

Finally, I am grateful to Ignacy Sachs who read with a critical eye the first version of this text and whomade several topical and provocative contributions.

Fellow travelers on the road to Istanbul, I am happy we are all together in this English version of“Overcoming the Trauma of Transition.”

J.W.

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Introduction

by JOSEPH S. TULCHIN, Director,Latin American Program, and Co-Chair,Comparative Urban Studies Project at theWoodrow Wilson International Center forScholars

Organizing an international meeting can be anout-of-body experience. Attempting to combine theinterests and cultural norms of government repre-sentatives, international agencies, non-govern-mental agencies, academics, and private citizensis a mind-boggling and often thankless task. Theresult has elements of a three-ring circus, acrowded souk, the formalities of plenary sessionsdriven by protocol, and enough logistical detail totax the capacity of a large computer, not to men-tion a large staff of people. Add to that the ten-sions inherent in public and private discussions ofa subject as sensitive as the contemporary city andyou have an idea of what it must have been like toput on Habitat II in Istanbul in 1996.

That, of course, is exactly what Jorge Wilheim did.He, more than any other individual, was respon-sible for organizing Habitat II. One in the seriesof momentous United Nations summits, this onefocused on cities, a subject fraught with politicalconflict and academic dispute. He did it withequanimity, almost limitless energy, inspiration,and determination. The result was a fascinatingmeeting that combined high politics, stimulatingintellectual debate, passionate advocacy, and richexchanges of information, experience, and opin-ion.

My participation in Habitat II was as the co-orga-nizer, along with my Wilson Center colleague BlairA. Ruble, and member of a working group on thecontemporary city. Drawn from every region ofthe world and from five different academicdisciplines, the working group met four timesbefore the Istanbul conclave to discuss the

modern urban dilemma and to contemplate the ur-ban future. With Jorge Wilheim’s unstinting sup-port and encouragement we produced a volume,Preparing for the Urban Future: Global Pressuresand Local Forces, which actually was ready in timefor the Istanbul gathering. Compared to Wilheim’stask, ours was relatively simple, yet fiendishly com-plex: to analyze the patterns of urban develop-ment throughout the world, select the specifictopics to be treated in the volume by way of ap-propriate examples of those patterns, and then sug-gest some likely future scenarios for the world’scities. It was an exhilarating exercise, and one thatleft us with plenty of things to study.

Jorge Wilheim has published a volume ofreflections on his experience, O Caminho deIstambul. Memorias de uma conferencia da ONU,that is well worth reading. Like the authorhimself, it is generous of spirit and demonstrateshow this wonderful man was able to put his fortyyears of experience as an urbanist to good usetapping into the networks of scholars andpractitioners around the globe to join him in thequixotic enterprise of putting together so mammothand complex a meeting.

The appendix to that volume, “Nosso FecundoFim-de-Mundo,” is an academic summary of hisreflections on the state of the city. That portion ofthe volume has been translated, so we can nowmake it available to an English-speaking audienceof urbanists. We are proud to do so as anOccasional Paper of the Comparative UrbanStudies Project.

The document makes several points worth high-lighting. First and foremost is the generalassertion that the pace of change in the world to-day amounts to an historic transition, a break withthe past, causing considerable trauma. The trendsthat cause Jorge Wilheim greatest disquiet have todo with the globalization of the world economy im-pelled by radical changes in the way and the rate

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at which information flows and is shaped by thealmost mindless embrace of neoliberal reforms.The results of these changes that bother him arethe growing gap between rich nations and poornations and between rich and poor within nations.Everywhere there is evidence of exclusion— un-employment, poverty, alienation, growing inequity.At the same time, the state is shrinking and losingresources, eroding its capacity to deal with socialdemands, mediate among contending interests, orcorrect injustice. Since the world is largely urbanand becoming more so, the manifestations of ex-clusion are most evident and most painful in cit-ies, where deteriorating infrastructure emphasizesthe negative impact of exclusion. Urban violenceand citizen insecurity have become a sad clichéof the urban lifestyle.

But, it is not in Jorge Wilheim’s nature to tear hishair and rend his garments in lament. He sees aglimmer of hope in the local forces that shape cit-ies, what he calls the “tribal” forces that holdpeople together. In addition, while the nationalstate is losing resources and downsizing, anumber of important functions of the central statehave devolved to local administrative units—states, regions, and cities. Although most citiesdo not have the resources to solve all of their prob-lems and few have the tradition of dunning theirresidents to pay for services through taxes, thefact remains that by turning to cities in times ofsocial and economic crisis does, at the very least,serve to bring the problems—and the responsi-bility for finding solutions—closer to the peopledirectly affected.

To expand the glimmer of hope to a ray of opti-mism, we should note that the decentralization ofpower comes to many parts of the world at a timewhen political democracy has become the modeof choice of political organization. That means,in terms of the trends listed in Jorge Wilheim’sdocument, giving cities more responsibilities andmore power strengthens the possibilities forinclusion through political action or citizenship.

Mobilizing residents no longer needs be understoodas a mechanism of complaint or a declaration ofthe people’s opposition to the state or the powersthat be. Now, it can become a mode of citizen ac-tion, a mechanism to articulate the legitimate de-mands and interests of city dwellers confronting thetransition to the new century and the new millen-nium.

Foreword

On the eve of my departure for Nairobi in l994,FAX—Messages from a Near Future was published.I had written Fax the previous year when I was stilltotally unaware that Habitat II lay in my future. Init, I speculated on the future of humanity in the nextthirty years. Although I received a few letters fromreaders expressing amusement at the fictional struc-ture I used as a conduit for my speculations, I stilldo not know whether the view of the future I out-lined was thought-provoking or not. Until now, thebook has not been reviewed, and the few articlesthat came out announcing its publication refrainedfrom commenting on my ideas about what the fu-ture has in store for us.

I had better luck with the English edition, publishedby Earthscan of London in l996. Two long reviewsappeared in magazines specializing in urban devel-opment. I realize now that the fictional setting ofFax might have produced perplexity in the readerand in the bookstore. How should such a book beclassified—as science fiction or as a simple tale?Could it really be an essay on the way the futurewould develop?

I must admit that I did attempt such an essay. Andafterwards I used the view of the future presentedin FAX to underpin conceptually the Istanbul con-ference and to give it a coherent perspective.Essentially, I espoused the view that humanity isgoing through a transition period in its history; thatthis period is characterized by discontinuities andbreaks in a multiplicity of social, economic, andpolitical structures; that these events will lead us

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into a mostly urbanized 21st Century, reborn aftera fin-de-siècle trauma; and that a new social con-tract, which will redefine the role of the state, theproductive sector, and civil society, is being nego-tiated. Therefore, within this perspective, theIstanbul conference would attempt to set up aframework to facilitate partnerships between build-ers and managers of cities, as well as to serve as amodel for the United Nations that would enable itto move beyond its current function as a forum ofgovernments, to become a forum of nations.

It is worthwhile from time to time to consolidate aset of ideas and expose them to others for criticalanalysis. The purpose of this text is to do just that.In the following pages, I extract from the HabitatII memoires the ideas, which I shall unabashedlycall theses, that guided me during the two years Idedicated to the preparation of the conference, aswell as the experience I gained on the road toIstanbul. These theses thus become clearly recog-nizable and, most likely, more vulnerable as well.I feel that it is important to participate, with allpossible clarity, in the anxious and necessary de-bate on the future, so crucial for the planning ofdevelopment in which we all are, to a greater orlesser extent, engaged. More and more persons andorganizations are being drawn into this debate ascontradictions and conflicts intensify. AsHobsbawn wrote: “Our world risks both explosionand implosion. It must change. (...) And the priceof failure, that is to say, the alternative to a changedsociety, is darkness” (The Age of Extremes, pg.585). While there is still time—and time is fastrunning out—I deem it necessary to contribute,even if minimally, to shorten this transition, so fullof painful exclusions, in which humanity finds it-self.

FIRST THESIS

We are in the throes of a transition in history.Breaking with the past, not only adjusting, is theemerging pattern.

The fall of the Berlin Wall in 1989 symbolized thecollapse of an economic and political system thatwas clearly falling apart. In East Germany, the re-pudiation of police repression and authoritarianmethods of government signaled the apex of a pro-cess that had started many years before. The Wallfell without any apparent resistance. In l987,Gorbachev, with acute insight and singular cour-age, perceived that the faltering Soviet regime,drained of all vitality, needed to undergo radicalchange in order to address the many serious prob-lems it was facing. The corrupt and stiflingBrezhnev years, with their blind insistence on cen-tral planning and top-down decision making, hadfinally thrown the Soviet economy into an uncon-trollable tailspin. The light that Gorbachev let intothe Soviet political system (glasnost) and the pro-cess of restructuring (perestroika) he initiated twoyears later resulted in a dramatic demise of old doc-trines, beliefs, and related institutions and in thesudden break up of the Soviet Union. “All that issolid melts in air,” as Marx once wrote, and asMarshall Berman (1982) used as a title.

The many consequences, such as the end of theCold War, which stemmed from this momentousevent received reiterated media attention to thepoint of becoming commonplace. However, nonewere more hackneyed perhaps than the apparenttriumph of the market economy and the capitalistsystem and, closely associated with it, the unques-tionable although probably temporary hegemony

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of the United States over the world economy. Atthe risk of oversimplification, this hegemony hassparked a “war” within the reigning world systemwhose main characteristics are: the accelerationof the European Union and the formation of re-gional economic groupings to fend off the incur-sions of American economic might; a much fasterpace in the activities of around 37,000transnational companies whose strategies havealready become independent of those of theircountry of origin; and, in the former Soviet Union,the emergence of a wave of national feeling, thesudden surge of large-scale criminality, and, in thewake of foundering institutions, the predatory on-slaught of bureaucrats and criminals against thestate and public property.

With so many changes taking place at the sametime and at an accelerated pace, economists andthinkers had to come up quickly with a theory toexplain such bewildering times. Resorting to prag-matism, they grasped at an already available modelthat, though somewhat frayed and probably obso-lete, seemed nevertheless useful to justify the ab-sence of an all-embracing concept from whichcould be derived an understanding of the presentand perspectives for the future. They added “neo”to “liberalism.”

In the perplexing aftermath of the Cold War, sev-eral prominent economists, pressured by the speedof events, circumscribed their theoretical effortsto devise adjustment mechanisms and apply themto a reality that had not yet completely revealed,in terms of numbers and facts, the risks and im-passes it contained. Therefore, the idea of adjust-ment, even before it became a foundation for na-tional policies, sprang up in the minds of theseeconomists who were not only anxious to find anexplanation, but also concerned to assure that, withthe disappearance of the socialist bogeyman, thehegemonic capitalist system would eventually sortout all the social and political problems of theworld. Expunged of contradictions and with only

temporary difficulties remaining, history, that is, thedialectics of opposing forces, had reached its end.

In terms of political action and economic measures,adjustment under the aegis of a “new” economicliberalism focused initially on shrinking the role ofthe state, which meant of course, deleting regula-tions, cutting expenditures, and eliminating deficits.Applied to the private sector, the concept was spelledout to mean the reduction of costs by contractingout to third parties, a practice that cuts down on theneed to maintain inventories and stocks, and em-ploying labor-saving technologies (computerizedautomation). The reduction of costs, together withgains in productivity induced by automation, wereimperatives demanded by stiffer competitionbrought on by globalization as it extended its reachover the world economy, toppling customs barriersand cutting protectionist taxes as it did so.

In the oversimplified way that the “triumph of capi-talism” has been presented, one fact has frequentlybeen overlooked: if it is true that industry has gainedin productivity, the same can certainly not be saidof the social services sector. The challenge in thiscase is not just automation or the need to reducelabor or even the pressure of international competi-tion, but how to expand the sector as a whole sothat it can absorb labor and diversify and improvethe quality of social services provided to citizens.

Nobody can be against the reduction of public ex-penditure if by that is meant raising productivityand doing away with favoritism, corruption, andinefficiency. By the same token, few can deny thatthe state should withdraw from the manufacture ofgoods and leave industry in the more efficient handsof the private sector and in the care of the tradi-tional laws of the market. The concept of adjust-ment, however, is not enough to deal with the com-plex phenomena that have resulted from the recentabrupt change in the course of history, just as it isincapable of addressing the many vital issues thatface humanity in this historical transition period.

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On the political level, for example, adjustmentseems to be taking an antisocial and even anantisociety direction, witness the tendency of gov-ernments everywhere to divest the state of respon-sibilities with the purpose of protecting, withgreater leeway and less accountancy to society,inefficient jobs and protectionist policies that, atthe expense of the nation as a whole, benefit itsown political corporation or special interest groups.

Let us not shy away from our duty to think. AsDurkheim said, “There is nothing more practicalthan a good theory.” At best, the adjustment de-manded by globalization can deal with some ofthe many problems with which humanity is strug-gling, but as a conceptual framework it is far fromreflecting our fin-de-siècle situation with all itsfrustrations and hopes. If it becomes a symbol oris raised to the status of a myth, globalization willobscure rather than illuminate the real meaning ofthe profound changes that are taking place insociety. It is already coining comfortable slogansthat seem to explain everything but in reality onlyhide the facts. While blurring the truth, it gener-ates at the same time a rhetoric that seems to focusmore on process than substance. What are theworthwhile facts that we should keep before usand on which we should focus? Here are a fewthat could lay claim to our attention.

The enormous improvements in communicationtechnology, especially with regard to satellites andcomputers, by bringing nations closer than everbefore and by promoting exceptional increases inproductivity and savings, have resulted in the glo-balization of markets and in a substantial increasein international trade. It is (worthwhile here to keepin mind that about one third of international tradetoday takes place “within the borders” oftransnational companies.)

These same factors have also led to an impressiveexpansion of capital markets. In l983 financial op-erations totaled US$60 billion per day; in l995,

the value of paper circulated daily reached US$1.29trillion. In other words, the scale and pace of op-erations in the capital markets has made a quan-tum leap.

Though the Gross National Product (GNP) indeveloped countries, especially in the United States,rose considerably in the twenty years from l975 tol995, industrial production has lagged behind. Thus,economic growth, though at a slower pace than inthe preceding decades, has taken place innonmanufacturing sectors. This sluggishness in theindustrial sector has been the main cause in the riseof unemployment, for it is here that unemploymentis most acute. Nevertheless, productivity, at thelevel of the enterprise, has made considerablestrides, thanks to automation. The obvious con-clusion is: by substituting machines for workers,industry is bringing about a discontinuity in themanufacturing process. Manu-facturing is gradu-ally disappearing.

The computer has brought about a change in theworkplace. To remain competitive, both the indus-trial and service sectors require workers with muchhigher qualifications than before. The modernworkers must not only be computer literate but alsoable to manipulate information. They are first andforemost handlers of knowledge, quite differentfrom the blue-collar types who, according toDrucker’s (1971) description, only move objectsalong the assembly line. Therefore, we have hereanother discontinuity: the market is demanding aworker with new and higher qualifications to per-form tasks whose nature has radically changed.

Computerization has created other new situations.For example, the ability to simultaneously trans-mit enormous amounts of information around theworld has inevitably lead to the acceleration of thedecision making process. Transposing this new re-ality to the world of finance, it is easy to see that,as information is turned into knowledge, it is pos-sible to perform any number of financial operations

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and move huge sums around the globe in a veryshort period of time. This “speed” has given riseto speculation on a very large scale and has deter-mined a shift of financial resources away from pro-ductive activity. This trend has thus brought aboutanother radical change: money is not where it usedto be.

The migration of financial resources to capitalmarkets and to mutual and pension funds, a themeto which I shall return below, besides affectingthe security and the capitalization of the manu-facturing sector, also leaves the state bereft offunds and severely curtails its ability to implementfinancial policies. This situation is aggravated bythe tendency of some governments to foregofiscal revenue in a desperate attempt to attract in-vestors, hoping to relieve the pressures of unem-ployment. Government budgets are everywheresuffering from the lack of funds to meet welfareobligations, to invest in infrastructure, and to pro-vide more and better services to the population.The public sector is being pressured by unemploy-ment and by the struggle among social groupswho, uncertain about the future, seek to avoid lossof status by defending their class and corporativeinterests. The unstructuring of employment, theexacerbation of international competition, thegreater time span needed to absorb complex newknowledge, the lack of financial resources, andthe resistance to public policies and regulationsby conservative and short-sighted business inter-ests all conspire to weaken the state and its abilityto govern. In certain cases, discontinuity threat-ens the very existence of government as institu-tions are weakened and destabilization expands.

The difficulty of putting together a budget on asound base has its mirror image on the expendi-ture side, where one observes diminishing finan-cial support for development strategies. This is sobecause current political habits reduce the bud-geting exercise to a battlefield where regions and

special interests wage a continuous war to maxi-mize their piece of the pie. Paradoxically, in manycountries, governments are abandoning planningand thus relinquishing the crucial function of demo-cratically building scenarios for the future with aview to elaborating, negotiating, and choosing ap-propriate priorities and strategies. In sum, politicaland party patrimonial interests and corporativismare eroding democratic institutions while govern-ments waive the function of planning just when it ismost needed.

Insecurity, unreasonable decisions, decline in soli-darity, alienation, unemployment, and new meth-ods of production are disquieting fin-de-siècle fea-tures. These aspects clearly define a framework forand are ingredients of discontinuity, of ruptures withthe past, as have occurred before in human history.

The malaise is not yet universal but contaminationwill spread according to a timetable dictated by thepeculiar circumstances of each country and region.In spite of globalization and the lightening flow ofinformation, discontinuities and ruptures will nottake place all at once like the fall of the Bastille.They are however beyond the reach of adjustmentbecause they reflect deep changes that stem from aperiod of historical transition that humanity hasentered and from which a new social model willemerge. I will delve deeper into the discontinuitiesoutlined above and try to throw some more light onthe direction of this transition. For the anguishingquestion still stands: transition toward what?

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SECOND THESIS

The control of the economy is shifting from thestate to pension funds, capital markets, andpossibly elsewhere.

Is there anybody who doesn’t complain about thelack of funds? Yes, there is! Mutual and pensionfunds and capital markets, spurred on by the pros-pects of high profits enhanced and accelerated inthe era of information, notwithstanding increas-ing risks and crisis. As least as long as it lasts...

Globalization resulting from advances in computertechnology, or, to be more precise, from telematics(the combination of computers and satellites), hashad a tremendous effect on capital markets, whichnow are able to move vast amounts of funds aroundthe world at electronic speed 24 hours a day. Thisnew capability has also given rise to an increase inspeculative ventures, such as short-term invest-ments, buying and selling of controlling capitalstock, and volatile investments in emerging mar-kets, derivatives, currencies, and futures. It is infact gambling on a global scale that is attractinghuge sums, where investments are synonymouswith wagers. The derivative and futures markets,for example, no matter how much objectivity so-phisticated probability analysis may give them,nevertheless contain a considerable element ofchance. A Nobel prize was given in 1997 to econo-mists who developed a sophisticated process tobetter speculate; one year later their fund (LongTerm Capital Fund) had to be rescued by the Fed-eral Reserve because it was on the edge of bank-ruptcy. The giddying swirl of financial transac-tions, where money is gained and lost in a flash,creates the impression that the economy is work-ing at high productivity. This frantic activity, how-ever, does not correspond to productivity gains nordoes it produce development. In fact, it erodes andeventually destroys the economy.

The instability of the capital markets, the volatil-ity of speculative capital, will eventually cause fi-nancial crises that cannot remain local because ofthe context created by globalization; they mighteasily grow to a global crisis and even develop intoa systemic crisis of the market economy. PaulErdman (1996) sees currency fluctuations as aninternational game; he underlines that the US tradedeficit is linked to fluctuations between dollars/yen/marks, and that the $1.3 trillion worth ofAmerican assets that are in foreign hands mightgrow to $2 trillion, if and when US exports to Chinaand other countries increase. Thus, the Americanfinancial bubble, burst by currency crises, mightprovoke a global systemic crisis.

Today’s spiraling capitalism is a throwback to thevoracious liberalism prevalent in the 1900s, butsomewhat softened by modern laissez-faire prac-tice. According to Lester Thurow (1996, pg. 56)

It is probable that no country . . . has had an increase in

inequality so fast and so generalized as the United States in

the last two decades. . . . In the beginning of the ’90s, the

difference in salaries between the 10% of the highest earn-

ers and 10% of the lowest of the working force, in 12 of the

17 OECD countries that keep such statistics, was increasing

at an average rate of 7.5 to 1 in 1969 to 11 to 1 in 1992.”

In his recent book, Everything for Sale (1997),Robert Kuttner points to the risks of abandoningthe successful and cautious mixed capitalisteconomy proposed by Keynes for a return to the“pure” but unreal capitalism now proposed by theneoliberals. He stresses that the “consumer haswants, but the citizen has values,” (pg. 47) and thatboth states co-habit the same person, this beingone of the causes of “imperfection” in the market.A hypothetical free market, completely deregulatedand with minimal state intervention, would in factundermine democratic freedom and bring on so-cial catastrophe:

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“Some domains are inherently beyond the reach of the mar-

ket. They belong to the province of rights, which by defini-

tion cannot be alienated or sold.” (pg. 361) And: ”A society

that was a grand auction block would not be a political de-

mocracy worth having.”(...) Everything must not be for

sale.”(pg. 362)

Peter Drucker, in his pioneering articles, was al-ready calling attention to three new features ofcapitalism: the decreasing need for labor; the de-creasing need for raw materials per product; anda dangerous dissociation between the capital mar-kets and the real economy. Robert Kurz (1996,newspaper articles) develops this last point fur-ther. He focuses on the emergence of a virtualeconomy driven by speculation and divorced fromactual work and from the physical reality of peopleat work. In this virtual economic world, profitsare increasingly being dissociated from the real-ity of assets and physical production.

The stakes are impressive, even though theamounts do not correspond to palpable assets.According to Michael Hirsh (1994), the amountsheld by pension funds, insurance companies, andcapital markets in 1990 reached US$756 billion;US$468 billion was kept by banks in the sameyear. But three years later, in 1993, while bankloans slightly increased to US$555 billion, thecapital markets alone were processing an astro-nomical US$42.3 trillion! Speculative profits doexist, as do gains in productivity, but hand in handwith high concentrations of income, unemploy-ment, social deprivation, and ecological damagethat are not quantified or factored into the eco-nomic equation. Some economists refer to theselightly as “externalities.”

Mutual and pension funds are the institutions thatmost benefit from the massive concentration of fi-nancial resources. They are the quintessential capi-talists in this transitional period. Their prime ob-jective, legally, is to guarantee the participation andpension rights of members. Yet, the “owners” andmembers of these mutual and pension funds havenot come together to orient their administrators toredirect even a small percentage of “their” moneytoward social ends, in order to contribute to a saferfuture for all, which includes the future of the fund.Financial resources are neither under state controlnor are they in the care of the traditional custodi-ans, the banking system. Besides pension funds,capital markets, and insurance companies, who havecommand today over a much larger volume ofmoney than banks, there is also “cybercash,” com-mercial transactions via the Internet and using sat-ellites, a new phenomenon best described as bank-ing without banks. Global trade via the Internet hasreached US$16 billion in 1996 and is estimated toreach $268 billion in the next four years. This phe-nomenon is already attracting the attention of banksand credit card companies who are actively consid-ering entering the virtual market of the Internet toavoid losing customers.

In addition, unknown amounts of money, but cer-tainly very considerable, formerly under the con-trol of the state, are now finding their way into theclandestine economy, be it drug trafficking or otherillegal ways of making money. The sums involvedare so large (estimates mention a yearly laundry of750 billion dollars) that there is now a constantsearch all over the world for ways to legalize them.Should money laundering continue to expand, fedby these ever increasing criminal activities, it might

13

even be possible that drug dealers will create theirown banking system instead of relying on the dif-ficult traditional methods of legalizing their ill-got-ten earnings. This would be a further blow to thestate which, already suffering from a dearth offunds, might see its essential functions strongly in-fluenced or even co-opted by yet another player,in this case a criminal organization.

At this point, it should be glaringly obvious thatthere is a need for state intervention through itsregulatory powers, based on the democratically ex-pressed wish of the people and aimed at attainingplanned, long-term objectives. If private enter-prises express interest in shouldering greater re-sponsibility for the fate of their countries, their par-ticipation in this endeavor should be subjected to,or better still, “negotiated” with the state, the onlypartner that has the inherent responsibility to gen-erate and carry out public policies (such an arrange-ment is already in place in the Scandinavian coun-tries, where it is called a “negotiated economy”).In other words, there already exist some new op-tions to replace the traditional arrangementwhereby only one subsector of society, that is, thestate, is invested with the power to exercise con-trol over the market economy. All of them have astrong social content and reflect a negotiated un-derstanding of how the economy is to be run underthe aegis of democratically supported public poli-cies.

THIRD THESIS

The nature of work is changing. Productivity isincreasing while jobs are being cut.

To demand increased qualifications from the sala-ried classes is nothing new, and normally followsa generalized assimilation by industry of a signifi-cant technological advance. Historically, inventionsand new technologies, in agriculture or manufac-turing, have been determining factors in modify-

ing the behavior of individuals and their relation-ships, with corresponding social repercussions. In1867, Karl Marx, in Das Kapital said that produc-ers will always seek to reduce costs and expandtheir control over the means of production, replac-ing labor with machines. In his seminal work, TheGeneral Theory of Employment, Interest andMoney (l936), John Maynard Keynes wrote: “Wehave been struck by a new illness which some read-ers may not have heard of but of which a lot willbe said in the next few years—technologicalunemployment” (quoted in Rifkin 1995, pg. 25).

The nature of work itself is changing radically. Theparadigm of a manufacturing enterprise in the 20thCentury, so thoroughly studied by Taylor, was rep-resented by the assembly line at which each workeradded something on to a constantly moving ob-ject. But since the silicon chip made automationpossible, it is now the robot that performs thosetasks, and with greater precision and less cost. Thusworking thesis proposed by Taylor and the tradi-tional worker and his job are gradually sliding intohistory. The same radical changes are also occur-ring in the service sector. Millions of messageswere registered daily in ledgers, copied and dis-tributed, and finally put away in large steel filingcabinets. Millions of public servants were em-ployed to perform these tasks. The silicon chip isdoing away with all of that, permitting the regis-tering, distributing, and filing of messages withspeed, precision, security, and much lower cost.

The worker engaged in the production of goods israpidly being transformed into a “worker of knowl-edge” who manipulates complex machines. Thesame is happening to the worker in the service sec-tor. According to Drucker (1993), forty years ago,this category of labor, in the developed countries,represented less than one-third of the work force;today it constitutes nearly four- fifths. Competi-tion on a global scale demands ever-increasing pro-ductivity from these “new workers,” especiallythose engaged in the state sector, whose produc-

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tivity is notoriously low. The state sector is underpressure to reform and modernize its workingmethods and scope, as well as to abate regulationsto give more leeway to the market; but the effortto minimize the state is shortsighted and will inno time result in unbearable social tensions viaunemployment. The market itself may have toplead for the state to come back, set up some newregulations, and take care of the dramatic accruedsocial tensions caused by greed, global concen-trations, and financial speculation.

The more evident manifestations of this social up-heaval are the breakdown of the traditional struc-tures of work and massive unemployment, initiallyrestricted to the developed industrialized countries.With the concomitant onset of automation, em-ployment itself is undergoing dramatic change.New types of employment have emerged and newand more demanding qualifications for workersare replacing traditional job descriptions. How-ever, automation, both in industry and in the ser-vice sectors, has been the bogeyman of laborunions ever since the l950s. Rifkin (1995, pg. 229)also quotes Paul Kennedy (Preparing for the 2lstCentury) who estimates that each robot will re-place four jobs in the economy and, if used 24hours a day, will recover its cost in little over ayear. The effects of increasing automation onemployment are crushing, especially in the indus-trialized countries. Two examples should suffice:US Steel’s payroll was sliced from 120,000 jobsin 1980 to 20,000 in 1990; the Victor Company ofJapan replaced 150 workers with 64 robots thatneeded the supervision of only two employees!

The jobs lost to technological adjustments aregone forever. In the United States, large enterprisescompete to see who will lay off more workers.These corporate killers, hailed by the establish-ment as the courageous champions of modernity,are the main source of unemployment. Just fiveof them (GM, SEARS, Boeing, IBM, and AT&T)wrote off, in successive and swift actions, 252,000

jobs in five years (Dupas 1997). These redundantworkers may eventually be reabsorbed by other ac-tivities, although generally at lower salaries, but itis impossible to remain undisturbed by the largenumbers of this “released” labor, who will be clas-sified formally as “excluded” from the system, un-less they shift to another productive activity. It mustalso be noted that, even though statistics show anincrease in the number of jobs, they fail to revealthat a redundant worker may have had to accepttwo jobs to make up, and barely, for the one salarylost.

The shortsightedness of those who see only a pro-cess of adjustment instead of a break with the past,a crisis that begs thoughtful consideration as to howsociety can be reorganized, can only lead to politi-cal passivity and injustice, both of which containthe seeds of social unrest. For certain politicians aswell as for certain economists, the changes in thestructure of employment implies inevitable exclu-sions, for they are cynically convinced that a por-tion of the population is superfluous, if not unde-sirable. Neoliberalism adopts an attitude of indif-ference toward social distress, reflecting, in a throw-back to the untamed laissez-faire capitalism of the1900s, the illusion that the “invisible hand” willeventually sort things out in the social sphere aswell. Since fewer and fewer people are needed toproduce everything that the world consumes, thosewho have been excluded should simply disappear,or remain quiet.

But of course they will not. Viviane Forrester (1996),in her vehement literary protest against the indif-ference with which politicians and certain sectorsof society regard the realities of unemployment andexclusion, points out that there still prevails the ideathat employment is something pertaining to the in-dustrial era, to “real estate capitalism; we [in France,Europe] see unemployment as something associ-ated with the factory, as an address, as somethingrooted in our environment” (pg. 23). If, as seemsto be the case, the definition of work is being re-

15

vised, the adaptation of workers and their familiesis not keeping pace. Where, then, are the policiesand initiatives, both from the captains of industryand from society in general, that address the plightof people in transition in this age of change? IgnacySachs, in a recent conference (1998), underlinedthat work, from the human point of view, is some-thing more than a paycheck. Besides being aworker and a consumer, a person is also, andmainly, a citizen, a human being with certain in-alienable rights. Is it possible, then, to leave thetask of facilitating the transition of a person to hap-penstance?

It may be that Marx was right after all when heproclaimed that social rupture, that is, revolution,would be the result of a conflict of class interestsreaching a breaking point in the most advancedcapitalist countries. From this point of view, thebirth of the Soviet Union would seem to have beenthe application of that theory by a daring and suc-cessful political leadership taking advantage of fa-vorable circumstances. It is possible that the So-viet Union will be seen by future historians as awhim of history, albeit one that has left a richlegacy, both good and bad, because a group of boldrevolutionaries used Marx’s socialist banner op-portunistically and inappropriately; for, it shouldbe recalled that three factors, which Polányi con-sidered essential for a revolution and a change ofregime did not exist in 1917 Russia: a developedindustrial sector, a literate population, and demo-cratic traditions.

It would seem therefore that Marx’s predictionsthat revolution will result from unbearable socialtensions generated by the clash of contradictoryclass interests has still to be put to the test in ad-vanced industrial countries, this time under verydifferent circumstances and in the light of the vasthistorical experience of the 20th Century.

Experience of the 20th century.

It is certainly food for thought, as history marcheson, with its discontinuities and accidents, alwayschallenging the theories that attempt to interpret it.

The worker engaged in the production of goods israpidly being transformed into a “worker of knowl-edge” who manipulates complex machines. Thesame is happening to the worker in the service sec-tor. Drucker (1997) comments that, 40 years ago,this category of labor, in the developed countries,represented less than one-third of the work forcebut that today they constitute nearly four-fifths.Competition on a global scale demands ever-in-creasing productivity from these “new workers”,especially those engaged in the state sector, whoseproductivity is notoriously low.

The state sector is under pressure to reform andmodernize its working methods and scope as wellas to deregulate, so as to give the market moreelbowroom. This however must be done with cau-tion in order not to overdo the process of minimiz-ing the state. Those who push for this are short-sighted in their motivations, for the complete freeplay of market forces can only result in unemploy-ment and unbearable social tensions, the result ofwhich will be a shrinking market and increasedcompetition, the opposite of what was originallyintended. I predict that, should such an eventualitycome to pass, those who pressed for a minimal statewill plead for its return to exercise its fundamentalfunction of prime social arbiter. Only the state, act-ing as such arbiter, can impose the preservation ofcivil rights, and resolve the exacerbated social ten-sions caused by globalization, excessive concen-tration of economic power and unrestricted specu-lation in the world’s financial markets.

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Finally, a last comment on this subject. As hasbeen seen, changes in the mode of production havebrought with them growing automation and, asits main consequence, structural unemploymentand a potential for social unrest. Beyond thesechanges, and furthermore, they have introducedsensitive alterations in the way work is organized.Contracting out to third parties and the fragmen-tation of the work place have produced an autono-mous and, at the same time, salaried worker. Statesupervision of labor relations is adapting to thesenew trends, as are its methods for calculating rev-enue. From the changing ways of organizing workis emerging the concept of partnership and net-working as new forms of relationship that willproduce it own methods and paradigms.

Finally, transnational enterprises have developedtheir own new operating methods, of financing andmarketing of goods.

FOURTH THESIS

Relations between organizations are changingas hierarchical structures give way to networksand partnerships.

Enterprises that emerged from the Industrial Revo-lution adopted a structure modeled on military or-ganization. So did governments. Essentially, it hasa tree-like, hierarchical configuration, with manyat the bottom subordinate to fewer and fewer athigher levels. As enterprises grew and expandedinto the international arena and, indeed, as theybecame transnational companies, they found itnecessary to develop new organizational criteria.Decentralization was one of them, and, to main-tain the high productivity so necessary to com-pete successfully in international trade and pro-duction, great stress was laid on management andthe manager.

Drucker (1993) emphatically underlines the newrole of the manager in transnational production.Instead of being the chief, the owner of a portion ofpower within a hierarchical structure, the new man-ager is now “responsible for the performance of thepeople who work with him” and, in future, will alsobe “responsible for the application and the perfor-mance of knowledge” (pg. 143). As these changesoccur within an organization, accelerated by ad-vances in computer technology, what is happeningin the relationships between different types of or-ganizations?

It is necessary here to distinguish between the char-acteristics of an industrial-age society from thoseof a computer-age society. According to Rosnay(l996 in Le Monde Diplomatique), the former isnoted for the concentration of the means of pro-duction, for the large-scale distribution of standard-ized goods, for the specialization of tasks, and forthe application of the hierarchical principle in theorganization and control of institutions. In a com-puter society, on the other hand, decentralization ofproduction, desynchronization of activities, anddematerialization of exchanges are the norm. Goodsand services are produced by a spontaneous pull-ing together to attain certain common objectives,by jumping over legal and formal barriers, by net-working, all in the name of achieving goals at lowercost and in least time.

Networking will inevitably bring about a review ofold paradigms and work methods, the results ofwhich will eventually be reflected in a new socialcontract. If a certain task is to be performed by thegovernment and an outside partner, be it an enter-prise or NGO, or by all three, how can such a schemebe put into effect with gains in productivity and ef-ficiency? In several countries and at several levels,the state is already calling for “participation,” sum-moning partners to share responsibility in the per-formance of tasks and their costs. But the institu-

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tions and the legislation that shape the state as it istoday are neither keeping pace with the rhetoric norwith the experimentation that is already widespread,notwithstanding very positive results. The currentlegal framework prevents progress in the directionof more flexible arrangements and at the same timeprotects the forces of conservatism.

When the three potential partners (the state, the pri-vate sector, and civil society) belong to differenthierarchical categories, the natural and traditionalform of partnership is be for the state to contractthe services of the other two. However, sinceoftentimes the public sector is prevented from do-ing this because of lack of funds, a way of gettingaround the difficulty is to network. Setting up anetwork can be proposed by any one of the threepartners, but since the state is responsible for es-tablishing public policies and regulations, as wellas proposing development goals so that they canbe democratically endorsed, it is very likely that itwill be the initiator of a network when crucial is-sues are at stake.

In such a network, the partners draw up a protocolwherein the procedures and the obligations of eachare clearly defined. Most important in this processis the establishment of a consensus with regard tothe “goals” and “products” to be attained, on thebasis of which the partners devise strategies and awork program, including timetables and the assign-ment of tasks. Because the hierarchical principledoes not obtain in a network, leadership is divestedof the power to command. Any member of the net-work may exercise ad hoc leadership for the sakeof efficiency, if all are in agreement. Guidance isachieved by constant discussion and even by nego-tiation. Communication between the partners,which makes for strengthening mutual confidence,must be constant and proceed both ways, in con-trast to a hierarchical structure where it is usuallytop-down.

The difference between a hierarchical structure anda network can be clearly seen in the graph below:

HIERARCHICAL NETWORK

What are the practical steps to form a network?For each network, the partners would draw up aprotocol where procedures and the obligations ofeach one are clearly defined. Most important inthis process is the establishment of a consensuswith regard to the “goals” and “products” to beattained. On the basis of these goals and products,the partners would then proceed to devise strate-gies and a work program, wherein timetables andthe commissioning of tasks are contained. In a net-work, leadership is divested of the power to com-mand, for in it the hierarchical principle does notobtain. Guidance, however, is achieved by con-stant discussion and even by negotiations withinthe group. Any member of the network may exer-cise ad hoc leadership for the sake of efficiency ifall are in agreement. Communication between thepartners must by constant and should proceed bothways, in contrast to a hierarchical structure whereit is usually top-down. The continuous flow ofcommunications makes for strengthening mutualconfidence.

The new work paradigms that emerge from thepatterns of these partnerships will, in time, bringabout substantial changes in institutions. On theside of the state, they will facilitate its engage-ment in such arrangements. For the private sector,it will entail a change of roles, from one of subor-dination as in a contractual relationship, to one ofequal status within the framework of the partner-

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ship. Furthermore, instead of receiving money forwork performed, the private sector will foot partof the bill. A promising future may also be seenin the development of the third side in the part-nership triangle, represented by foundations andnon-governmental organizations. Their inclusionwill add efficiency to the exercise, especially whenimportant social issues are at stake.

FIFTH THESIS

State/private sector/society relations are chang-ing as anew social contract is being negotiated.

Private organizations dedicated to the productionof goods and services, the so-called productiveforces, are referred to today as the private sector.During its development, the private sector, that isbusiness, has suffered reverses, such as in the GreatDepression (1929-33), but it has also shown in-credible flexibility and powers of adaptation. Forexample, when Fascism took hold in Europe, fol-lowing unemployment and the social crisisbrought on by the Great Depression, the privatesector allied itself with the state to produce a veryefficient war economy. After l960, businessesevolved into transnational companies, the harbin-gers of globalization, which, as they took root withthe help of the rapid advance in computer tech-nology, created a totally new environment—as amatter of fact, a new system of internationaltrade—that was to present capitalism with newchallenges, perplexities, and risks.

In the Soviet Union, development on the basis ofstate ownership of the means of production, anauthoritarian regime, and central planning of theeconomy resulted in the failure of the system inthe long run. Therefore, the private sector, for thetime being, does not have to prove that a marketeconomy is superior to a state-run economy andthat private ownership of the means of production

is definitely better than their ownership by the state.Nevertheless, capitalism faces new dilemmas, notonly those pertaining to the rules of the game, suchas the ability to compete, to maintain high produc-tivity, and to restructure production methods, butthose that stem from the relationship between theprivate sector and the state, on one hand, and be-tween it and civil society, on the other.

The primary, and shortsighted, impulse of privateenterprise is to want the state out of the way so asnot hamper its activities. In other words, the stateshould not engage in the business of producinggoods and should reduce its regulating functions toa minimum. But the more far-sighted representa-tives of the private sector realize the risks involvedin the minimization of the state, some of the veryserious possibilities among them being unemploy-ment and violence. Such concerns are not just thefruits of ethical and ideological lucubrations but areindigenous to the long-term interests of the sectoras a whole. A world of redundant manpower and aThird World reduced to irrelevancy can only meansmaller markets and cutthroat competition with alltheir attendant risks.

These considerations are impelling the private sec-tor to participate, to collaborate, and to enter intopartnerships with the state for the solution of socialproblems. But the productive private sector shouldnot be restricted to the shareholders; it should alsoinclude its workers. Curiously, workers and theirorganizations are often not included in discussionson a renegotiation of the social pact. They are pa-tronized by well-intentioned intellectuals or NGOsinstead of being invited to participate in their ownright. Their frequent exclusion from the debate re-sults either ideologically from the collapse of theSoviet Union and its supposed dictatorship of theproletariat or from the natural perplexities of work-ers’ unions facing the profound transformations inthe production system and the global economy.

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Also noteworthy is the response of civil society inthe last four decades to the social, cultural, educa-tional, environmental, and health problems that arebesetting the planet with increasing magnitude.The extraordinary number of organizations dedi-cated to the solution of these problems eloquentlytestifies to the acute awareness of society to themalaise that marks the present transition period.The coming of age of civil society was signaledby a number of events easy to identify a poste-riori: the hippie movement of the 60s, the environ-mental movement of the 70s and 80s, the women’sliberation movement, the peace movements, espe-cially in the United States as a reaction to the Viet-nam War, and the antinuclear movement in Europein the 80s. In this context, one should not forgetthe very profound effect that the invention andpropagation of contraceptives had on behavior,bringing about a new dialogue between the gen-ders as well as changes in private life.

Political decisions and initiatives, therefore, willcome from different sources, mainly but not ex-clusively from the state, who will no longer be theirsole initiator. With the risk of being pedantic, agovernmental organization with political functionslinking two or more equal partners could be calleda polyarchy, a word used by Fernando HenriqueCardoso (l993).

How will the state, the government, move from itscurrent hierarchical manner of doing politics to anew and promising redefinition of its functions anda reorganization of its style of governing, tapping,in its new role, format and methods, the energy ofnew social partners?

SIXTH THESIS

In its new role, the state will act as a strategicplanner, regulator, rights guarantor, and facili-tator of partnerships.

The globalization of the economy, as we see it to-day, puts a premium on competition and underlinesthe role of transnational companies. It has alsogiven rise to the creation of regional groupings, likethe European Union and Mercosur, that can bar-gain competitively from a position of strength foraccess to markets. As Celso Furtado said in l997,when commenting in an article (“Folha deS.Paulo”) on Lester Thurow’s book:

Globalization has given prominence to transnational com-

panies to the detriment of national states. These, however,

while refusing to disappear, take on new functions, since it

behooves them to monitor the emergence of a new standard

of income distribution. (Furtado 1997)

But the state has not yet demonstrated its willing-ness or its readiness to do this. For a start, it wouldhave to think out the country’s position vis-à-visglobalization because, though this new phenom-enon is universal by definition, its effects vary fromcountry to country. For example, in Brazil the statehas not yet elaborated a coherent developmentpolicy that takes into account the risks and oppor-tunities of globalization as it stands today; in theUnited States, on the other hand, globalization hasbeen instrumental in the consolidation of US worldhegemony.

What are the risks and opportunities that the statemust be aware of in developing a policy for glo-balization? Sachs (1993, pg. 48) has pointed outsome of these risks very clearly:

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a) Do not rely on artificial competition based on very low

wages and setting too low a value on natural resources and

energy . . . but instead use as a base the dynamic competi-

tive advantages obtained through knowledge.

b) Do not put too much emphasis on the competitiveness of

companies to the detriment of systemic competitiveness,

which rely on efficient infrastructure, banking and insur-

ance systems, telecommunications, etc.

c) During the process of sustained export growth, do not

forget the internal market, whose importance is fundamen-

tal, especially in large countries; the greater the present de-

gree of social exclusion and asymmetry in the distribution

of income, the better are in fact the perspectives of expand-

ing the internal market by applying the instruments for re-

distributing income and growth. The internal market is an

asset, not a liability.

d) Do not cause the collapse of the industrial structure of

the country by total deregulation, instead of adopting se-

lective processes of liberalization.

e) Be selective when applying policies with regard to tech-

nology. They always demand a balance between the impor-

tation of black boxes, the acquisition followed by its adap-

tation, and adequate support for local research efforts.

In the context of the globalization of the economyand an informational society, the role of the statewill grow in importance. Its withdrawal from pro-ductive activities, at which the private sector andthe market have shown themselves to be usuallysuperior, should not, however, mean that the stateshould abdicate its role as “regulator” or its pri-mary function of democratically determining pub-lic policies of national interest. New systems,mechanisms, and specialized public agenciesshould be set up for this purpose.

In a transition period, when exclusion becomesan ever-growing social problem and changes takeplace at an ever-increasing pace, social tensionsare aggravated, leading very likely to violence. Insuch a situation, the importance of the state can-

not be overemphasized, for it is the only competentsocial organization able to defuse tensions and po-litically arbitrate between contending sectors of so-ciety, some with more clout than others, persuad-ing them to sit at the negotiating table. In otherwords, the state is the ultimate guarantor of civilrights.

Therefore although the state should reduce its pub-lic debt and increase the efficiency of its bureau-cratic apparatus, the pressures of the private sectortoward minimizing the state reveal extraordinaryshortsightedness. Social tensions without the sooth-ing presence of the state can only result in reducingthe size of the market, thus frustrating the very goalsthe private sector has set for itself. Such tensions,when they lead to social unrest and violence, aredetrimental both to the citizens and to the market.

It would seem necessary to ponder the role oftransnational companies in the evolving new con-text. When they first appeared, in the early 60s, itbecame obvious that their interests and strategiesdid not always coincide with those of their countryof origin or where their main office was located.This parting of the ways would not only give themthe ability to act as independent players in the in-ternational political arena, but would also maketransnational companies potential partners in the de-veloping polyarchy defined by Fernando EnriqueCardoso (1993, pg. 151) as a governmental organi-zation with political functions linking two or moreequal partners.

There are about 37,000 transnational companiestoday. Though they continue to pursue individualstrategies for expanding their market presence, es-pecially in emerging economies, some of their tac-tics are once again influencing policies in certaincountries. Martin Carnoy (Carnoy et al. l993) pro-poses a revision of the theory of “disconnection”(the objective’s disjunction between transnationalcompanies and country of origin) because of theimportance he assigns to national governments inexpanding domestic markets, still vital to the life

21

of the transnational company. Carnoy argues thatthe revision should examine the role of the state,particularly in the United States, in the educationof experts in development and telecommunications.He also assigns importance to state backing of pub-lic policies and formulation, as well as the partici-pation of transnational companies in diplomaticnegotiations.

Moreover, since 1997 two new factors call for ur-gent state and international regulations: the recentphenomenon of huge corporate mergers, initiat-ing a new stage in monopolistic market economy;and the recent successive financial crises causedby massive global speculation that could very wellbe pointing to a systemic crisis in the worldeconomy.

In support of the significance and the probably in-creasing role of the state, Cardoso (1998, pg. 12)describes the situation in the countries below theequator and in the east: “Policies aimed at inclu-sion are necessary in order to overcome the newand growing inequalities in the ability to produceinformation.” These policies can only be demo-cratically drawn up at the initiative of the state.Therefore, the search for an adequate role for thestate becomes more urgent as society moves for-ward and deeper into the computer age—”the in-formation era,” as Castells (1998) defines it—andfaces new fields of endeavor and demands. Besidesestablishing public policies tuned to a strategy con-sistent with the problems of transition and capableof avoiding the traps of globalization, regulationof the economy and coherent planning seem to benecessary ingredients to deal with the situation.Planning here, of course, though strategic in con-cept, would not only be indicative, limited to evalu-ating situations, constructing scenarios, but also

serving as a framework, proposing and inducinginteraction with society to garner inputs for deci-sion-making.

The state can also play a vital role in a social pactthat encourages the convergence of partners. Thisis particularly relevant with regard to the changingnature of work and production. Here, the state canpropose partnerships, create a favorable environ-ment for social participation, and reform institu-tions to allow and facilitate the “decentralizationof power” and the setting up of synergistic net-works. Politicians, and the state itself, speak fre-quently of “participation,” but in the majority ofcountries, the legal framework that defines the state,as well as the ingrained habits of bureaucracy, frus-trates such rhetoric and the good intentions it mayhold and places many difficulties in the way of es-tablishing partnerships with non-government enti-ties.

Patrimonialism in Brazil has always pervaded thebureaucratic apparatus of the state, keeping it weakand submissive, pliant both to the powers that beand to the manipulations of the private sector.Hence the appropriate observation of FernandoHenrique Cardoso when he said (l993) that it isnecessary to “de-privatize” the state.

From patrimonialism and the accompanying weakbureaucracy, aggravated by the strange Brazilianhabit of appointing members of Congress to highpositions in the executive branch, thus violating therepublican principle of the separation of powers,stem the ills of administrative discontinuities. Asmaller but stronger bureaucracy with a new briefshould be able to change the prevailing politicalstyle and do away with political practices that havefed both populism and authoritarianism in the his-tory of Brazil.

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SEVENTH THESIS

Society is moving into the information era, seek-ing knowledge, hoping for wisdom.

Telematics disseminates data globally. Sometimesit goes beyond “data” and propagates “informa-tion.” But this still does not constitute “knowl-edge.” And nothing assures us that knowledge willlead to “wisdom.” Technology is an extremelyuseful tool; it is, however, necessary to build andto operate educational systems to create knowl-edge. This goes beyond the mere employment ofavailable technology.

Everything seems to indicate that “to teach a wayto learn,” a “method,” a discipline, together witha good knowledge of where “to look for informa-tion,” would constitute the operational base of edu-cation at all levels. This base should prepare thespecialist to interact with other fields of knowl-edge, because there is no field that can really besaid to be self-contained. The issue here is notonly to be able to work in multidisciplinary teams,but to develop the intellectual ability to placethings in perspective, both in time and in space,and a broader understanding of one’s own field,of understanding what one is doing and why. Spe-cialization on one side, and a broader understand-ing on the other, would therefore be two impor-tant paradigms for maximizing productivity at theworkplace and for a more significant performanceand participation in the shaping of new values.

Drucker (1993) comments that developed coun-tries today spend around one-fifth of their GrossNational Product in the production and dissemi-nation of knowledge. But not every country hasbeen able to extract the best return on their invest-

ment in knowledge. Although Great Britain lost theleadership in the production and use of knowledgea few decades ago, Japan has had spectacular suc-cesses. Drucker (1993, pg. 148) goes on to say:

As knowledge becomes increasingly specialized, it is neces-

sary to develop a methodology to realize this potential, be-

cause if this is not done, a greater portion of available knowl-

edge will not become productive and will remain as mere

information.

If this period of transition leads to a society in whichwork means first and foremost “to know,” the chal-lenge of facilitating this passage would impose onsociety the obligation to draw up development strat-egies that take this new paradigm into account. Thestate here plays an important role, and a significantpart of its efforts should be devoted to providingeducation guided by this new vision, and less spenton trying to create new opportunities for a kind ofwork that is quickly becoming obsolete. Strategiesfor the transition period will have to be carefullythought out politically and socially (with an eye onunemployment) and will vary according to eachsocial context. The wise timing for their introduc-tion represents one of the greatest political chal-lenges facing every country.

To know cannot be limited to acknowledging theexistence of immense amounts of available infor-mation stored away in an electronic medium. Toknow implies “learning” and “understanding”; thisgoes beyond the ability to recover data from a com-puter file. The real challenge lies in education latusensu and for each separate subject requires answersto very basic questions: what? for whom? why?how? Without these answers, we will remain lostin the vastness of available files, under pressure todecide quickly, unable to understand what we aredoing.

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EIGHTH THESIS

The 21st Century will see a mainly urbanizedsociety.

Toward the end of the Neolithic period, humanityinvented agriculture and became sedentary, and thiswas the beginning of human settlements. From thenon, the collection of huts grew into a village, thena burg, a city, a megacity, a metropolis, and finallya megalopolis. Urban space took on different formsand varied according to functions, customs, rites,production, services, and, of course, the natural en-vironment. Available technology also helped toshape these spaces as it performed the role or rolesrequired by society in each stage of its develop-ment.

We live in a world that is on the threshold of hav-ing the greater part of its growing population liv-ing in cities or other types of human settlements.The status of world urbanization was 37.5 percentin l975, and will be 47.5 percent in the year 2000,reaching 61.0 percent in 2025. Although thesenumbers show that the 21st Century will be an “ur-banized century,” it is the rate of growth that lendsa dramatic touch to the changes cities are under-going. Africa will have the highest urbanizationrate—a yearly average of 4.37 percent betweenl975 and 2000, and 3.81 percent during the periodof 2000 to 2025. In countries like Burkina Faso,Mozambique, Botswana, Kenya, and Tanzania, hu-man settlements will increase between 7.05 and9.64 percent a year. Poor countries, with scarcehuman and financial resources and an underdevel-oped infrastructure, when subjected to rapid ur-ban expansion, face grave difficulties in copingwith burgeoning city population, with all the at-tendant health, food, housing, and security prob-lems.

It is undeniable that the 21st Century will see theadvent of a highly urbanized world, and attentionmust be paid to the concentration of huge massesof people in metropolitan conurbations, where

problems tend to multiply instead of convergingtowards common solutions. These megacities willbe a feature of the coming century and they will beconcentrated mainly south of the equator, in thatpart of the globe that used to be called the ThirdWorld.

The rates of growth that produce such huge humanconglomerations are occurring parallel to and inthe context of a period of transition in full swing;that is to say, in a chaotic environment resultingfrom insecurity, employment instability, and anxi-ety in the face of changing structures. How, then,can one expect to have comfortable, pleasant, andsecure cities if a large part of their inhabitants suf-fer exclusion, lack of solidarity, and hopelessness,besides job insecurity and all sorts of other fears?The discontinuities of the current transition periodmake for dangerous and tense cities, thus settingthe stage for conflicts that, undoubtedly, will givebirth to a new and better world, but only after apainful and cruel period, when violence, intoler-ance, and the breakdown of solidarity might pre-vail.

In nearly every metropolis, the citizenry is no longera patrician class with strong local roots, but an amal-gam of successive waves of migrants impelled thereby diverse circumstances. In the 19th century, or-ganized emigration from Europe to the Americasrelieved the pressure of social problems caused byunemployment in Italy, Portugal, Spain, and othercountries caught up in the throes of an agriculturalcrisis. Emigration in this century followed wars andpolitical and racial persecution.

The turmoil that is at the heart of the present tran-sition period is partly due to a remarkable, unorga-nized, and spontaneous mobility of populations.Whether organized or spontaneous, the ongoingprocess of cultural adaptation was, is, and will bean enriching experience in the long run. But this isnot enough. For city dwellers to become citizens,they must have access to services, be able to housethemselves and their families properly, as well as

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to sustain them. To express themselves and to par-ticipate in the life of their community are also nec-essary ingredients of urban citizenship. Are theseconditions being met in cities today?

Dwellers in a large metropolis or a medium-sizedcity nowadays have two distinct experiences. Onthe one hand, they are in permanent contact withthe rest of world. On the other hand, they are striv-ing to find their own corner in the vast urban land-scape. These two forces, one cosmopolitan andcentrifugal, the other “tribal” and centripetal, mustsomehow be accommodated in the apparent so-cial chaos of the city. However, to find one’s nichein a metropolis that does not enjoy the benefits ofproper planning, especially in this transition pe-riod, a heavy price must be paid. Traffic jams willget worse until society draws a line limiting thenumber of vehicles in circulation to the availablespace for driving and parking. Insecurity will pe-nalize everyone, both rich and poor, if violence,resulting from increasing inequality in the distri-bution of income, is not kept in check by an effi-cient police force.

In the midst of this chaos, values (both personaland of groups as well as ethical and moral) willbe strengthened by the coming together of like-minded individuals to form a new “tribe” whereinthe citizen will seek identity and refuge from en-croaching massification. It is here that the newsocial contract will open the way for efficient andgratifying partnerships. Through participation inthis cooperative exercise, citizenship will developand flourish, leading to a polis-ticized society. Theurban panorama of the 21st Century will thus berepresented by and reflected in the polis, the placewhere politics was born and where it is exercised.Participation in partnerships, networking with thestate, can motivate and reinforce civic awareness,public ethics, and the feeling of responsibility ofcitizens and their organizations toward the com-

munity, thus transforming each individual into a po-liticized member of society. And civic society willincreasingly become a political society.

There is a felt need to resurrect human solidarity incities, to uphold and redeem indignation in the faceof corruption and injustice, and to deny cynicismand vulgarization. The emerging civil society isplacing before the public themes that were once theexclusive domain of academic circles and the statepower elite. It can be said, therefore, that the role ofthe citizen in democratic regimes will further ex-pand as a result. It is not unthinkable that democ-racy will finally realize its full potential as each citi-zen is called upon to dedicate a substantial part ofhis or her time to running the affairs of his or hercommunity. As Bobbio suggests, the 21st Centurycould be the century of human rights.

There are, however, limits to such optimism.

NINTH THESIS

Values are changing, and ethics, gender, longev-ity, and the use of time will become major issues.

Globalization, the extremes of urbanization, and theacceleration of processes are new cultural phenom-ena. Following the creative chaos they have set inmotion, certain standards and common traits willemerge and eventually coalesce into what histori-ans of the future shall call “the culture of the 21stCentury.” Urbanization and globalization, that is,close and intense collective existence and the con-dition of being permanently plugged into the world,seem to point to the two opposite trends of the cos-mopolitan and the “tribal.” Since they are old words,“neo” must be added to each to stress the noveltyand the characteristics they represent. Neotribalism,therefore, connotes here a bonding through affini-ties and a commonality of interests, and not, as inthe original meaning, a social system defined bycommon ethnic origins, creeds, traditions, and fam-ily ties.

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Global connectivity, enabled and encouraged bytelematics, makes it impracticable to ignore whatis happening in the world beyond the confines ofthe community. The flood of information exacer-bates the difficulty of placing events, data, or theinformation itself in an understandable frameworkor in a meaningful thought structure. These arepractical difficulties that must be faced, for the in-dividual cannot escape the fact that he or she is a“world citizen.” This cosmopolitanism is still inthe early stages, in spite of the emergingtransnational connections even at the level of smallenterprises and individuals.

As members of two worlds both in a broad andnarrow sense, individuals, even today, are alreadyplacing a premium on whatever helps them to in-sert themselves harmoniously in these worlds.Owning a computer and a cellphone and beingplugged into the Internet are the material condi-tions of connectivity, but the knowledge of English,the new “Esperanto,” and traveling abroad are partand parcel of the cultural outlook of the cosmo-politan person.

Nevertheless, even the most cosmopolitan of indi-viduals will still lead daily life in one place, onecity, one country, with an indigenous language, lo-cal customs, and its own peculiar culture. Thisplace, however, is nowadays big, complex, and,especially, heavily populated. Under these circum-stances, although maintaining open links to the restof the world, one will naturally seek a restrictedsocial environment one can call one’s own, withwhich one can identify, and that is inhabited byother individuals belonging to one’s own “tribe.”In this new non-ethnic tribalism, the individual cir-culates in an environment that transcends the im-mediate family. It is a network, or in a broadersense, a universe inhabited by like-minded people,defined by the interpersonal relationships so nec-essary to conduct professional and productive lifeand pervaded by a common culture that facilitatescommunication and mutual understanding.

What, then, are the emerging values? Neotribalismneeds formal rituals and meeting places where ex-periences, both personal and professional, are ex-changed. Urban spaces are thus turned into“places,” that is, loci that have special meaning fortheir patrons. Distinctive forms of behavior pecu-liar to the neotribe will develop and, with them,dress and speech codes used by those who are “in.”A mass society, segmented by affinity groups, doesnot necessarily limit the exercise of citizenship. Onthe contrary, by individual participation in thesegroups, citizenship is enhanced, acquiring legiti-macy and representation.

In a society made up of “tribes,” affinity groups,and other types of nodes, two issues will remainon the agenda whose development will raise ques-tions that concern its every member: gender andold age.

Despite major progress in human rights in this cen-tury, the struggle for equal rights and opportuni-ties for both sexes is still an issue that is very muchalive. In most countries of Africa and Asia, womenstill lag behind with respect to ownership of prop-erty, inheritance, freedom, and rights over their chil-dren. In some countries in Europe and the Ameri-cas, discrimination against women in terms of sala-ries, managerial positions, and high offices in gov-ernment and politics is far from being resolved.

Nevertheless, by virtue of the strong participationof women and their representative organizations ineconomic and political life, it is becoming evidentthat their contribution has a distinctive quality thatis clearly identifiable and is being increasingly ap-preciated. The feminine, that is, the peculiar out-look of women towards life, society and the manyways and circumstances that give it expression, ischanging the approach, sometimes in a fundamen-tal way, of facing and solving social problems.Therefore, alongside the struggle for equality, an-other should be initiated in favor of the right andvalue of being different! The gender difference asa new value.

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In fact it would be useful to recall and acknowl-edge the very basic differences between male andfemale in their approach to the preservation of thespecies, as well as the anthropological conse-quences of the different strategies that were builtupon them throughout history. The two genderslook at a same phenomenon from different per-spectives and slightly different ultimate objectives. Thus, an analysis based on the recognition ofthese differences, a male/female approach, willvery likely produce a more balanced understand-ing of the issues under discussion, resulting in aricher perception of reality.

The rise of women to position of power in organi-zations, in businesses and in the state administra-tion, although not a central desire for most women,will very likely have a strong effect in the selec-tion of priorities, putting more emphasis on thosethat benefit and protect the human developmentof people. I would go so far as to say that womenin positions of command would insure greaterpeace in the world. Women are more vulnerableto emotions (for better or for worse) and moreimmune to transgressions, perhaps due to a his-torical fear of the their comparative physical frailtyand the resulting male social and economicaldominance. Therefore, it would be natural to ex-pect that, as women participate equally in deci-sion-making or ascend to positions of command,ethical values will also be given increasing socialauthority.

Another social and cultural change that calls formore thought and for the development of newparadigms is the change in the daily division oftime brought about by change in the structure ofemployment and the way work is performed. Tech-nological changes “free up” labor. In the currenttransition period, however, productivity is increas-ing to such an extent that one can question if therewill be enough consumers to match productive ca-pacity. A time will come when work will occupyfewer hours. What is to be done with longer hours

away from work? How can undesirable idleness bereplaced by gratifying activity?

One also has to deal with the change in the life-long division of time. Improvements in the qualityof life, in sanitation and public health, together withadvances in medicine, have constantly expanded lifeexpectation and longevity. But while developingcountries still have a lot of catching up to do to reachthe health levels of developed countries, and newillnesses threaten the excluded in the latter, the factis that a growing proportion of the population inboth the First and Third worlds is made up of thosewho have reached the “third age”: the senior citi-zens.

Until today this segment of the population was con-sidered a burden because they are not productiveand have to be supported by those who work. Someeconomists go so far as to consider them a liability,while there are politicians who would “exclude”them altogether from statistics so as to enhancenational income figures. However, society cannotafford to exclude such a large part of itself. It wouldseem more rational to find social functions to whichthis ever growing segment, bearer of increasinglyvalued and necessary qualities, such as “life expe-rience” or “accumulated knowledge” or even “wis-dom,” can make its contribution.

The last twenty-five years of a lifetime, if ill healthdoes not impair them, are those that develop anunderstanding of the historical process, a sharperperception of underlying causes, and the ability tosynthesize reality, all of which adds up to wisdom.The younger generation can derive much benefitfrom such an understanding, so vital to putting tobetter use the vast stores of information availableto a computerized society. Norberto Bobbio, in hisreflections on old age (l993, pg. 29), wrote: “Theelderly know from experience what others do notyet know and must learn from them, be it in ethicsor custom or even survival techniques.” It is pre-cisely the knowledge of the recent past that young

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people and adults could use in order to place inperspective the daily flows of information that swirlaround them.

How will the time of day and the days of a life-time be divided as a result of such profoundchanges, to which adequate values must be ap-pended? It is not just a question of reducing workhours with the immediate purpose of accommo-dating a larger number of workers. Although suchmeasures could be part of a transition strategy, thenew division of time will represent a very signifi-cant cultural change. What will men and womendo, at different ages and in different circumstances,during the 24 hours of their day and during theirlifetime to improve the quality of their lives, be-sides gaining their daily bread?

TENTH THESIS

To reach the Renaissance of the 21st Century,obstacles must be overcome.

The long 19th Century came to an end with theFirst World War, which signaled the beginning ofa new period, called the “short century” by EricHobsbawm (1994). He argues that the First WorldWar and the Bolshevik Revolution introduced anew period in history which, after passing throughthe Great Depression of 1929-33, unemploymentand recession, Nazi-Fascism and the resulting Sec-ond World War, came to an end with the disinte-gration of the Soviet Union. From this point on, atransition period has set in, bringing with it thediscontinuities and breaks with the past we havebeen discussing.

There are indications that within the current socialcrisis, a new cultural synthesis is in the making.Historians of the future might call it the Renais-sance of the 21st Century. As with the rebirth ofclassical culture in the 15th and 16th centuries, thecharacteristics of this new Renaissance are becom-ing evident in the arts and will reflect a spirit, aculture that will acquire internal coherence around

a number of basic values, principles, and criteria.But in contrast to the humanism of the 15th and16th centuries, whose main characteristic was therediscovery of classical ideals, the new humanismwill be a response to the dramatic features of thecurrent transition period. Its purpose is the rebirthof human solidarity, the retrieval of human valuesand fundamental ethical principles from the chaosthat has strained social fabric to breaking point inthe last decade of this century.

As a result of the instability and insecurity causedby current structural changes, aggravated by un-certainty as regards to the future of work, gover-nance, and customs, the majority of human beingswill understandably seek self-preservation, adoptconservative attitudes, and even take up a postureof self-defense. A similar trend is also observablein institutions, where a hardening of a defensiveesprit de corps is going hand in hand with symp-toms of withdrawal. This trend is particularly no-table with regard to trade unions, whose perplex-ity vis-à-vis changing structures has forced theminto the defensive. Organizations of civil society,such as NGOs, are also being affected. Excessivefragmentation as a result of the search for ultimateautonomy is an observable trait, as is the adoptionof extreme and exclusive positions and goals. Withregard to national policies, there is a resurgence ofnationalism and an insistence on regional au-tonomy. For individuals, suspicion and fear havebecome hallmarks for determining social behav-ior, leading to a rekindling of the destructive firesof prejudice, to an exacerbation of self-centeredness, and to the phobic and at times vio-lent rejection of everything that is “foreign.”

These attitudes of self-preservation and extremeconservatism might, in the long run, lead to de-spair, violence, and other forms of senseless be-havior. The stage is thus set for a fin-de-siècledrama, full of exclusions and frustrations, probablyviolent and irrational. Perhaps Nostradamus (1503-1566) was right when he foresaw the end of theworld at the close of this millennium. His pro-

28

phetic visions, according to Lemesurier (1993),predicted an Islamic invasion from Turkey, cross-ing the Balkans, overrunning Italy, and subse-quently reoccupying the north of Africa, the Ibe-rian Peninsula, and the South of France. Lead by“a commander with a blue turban,” the Islamichordes would destroy the Church of Rome.Though the invaders would eventually be defeated,the ultimate consequence of this episode, forNostradamus, was the end of the Church’s moralhegemony, which meant for him the end of theworld.

I do not intend to give Nostradamus’s obscure textsa literal translation. Instead of a military opera-tion, the invasion he foresaw could very well berepresented by the spread of Islam and the chal-lenge that competing Christian sects pose for theChurch. Be that as it may, then, as now, a changein culture, customs, and civilizations is takingplace, and it is not necessary to call uponNostradamus to bear witness. All one need do islook around.

A review of art in this century, not just for enjoy-ment and intellectual satisfaction, but to searchfor “explanations”, could reveal a number of cluesas to the intuitive vision of great artists regardingunderlying trends in society. In all its manifesta-tions, from painting to music, from literature toarchitecture, one can identify a constant search,an instability of trends, a multiplication of sup-porting media, imparting to contemporary art apanorama of chaos (notwithstanding its interestand beauty). Besides immateriality and variety inthe support structure of art, not only the artists,but also the art critics and the theoreticians of arttalk about a renewed anthropocentrism, as revealedin many exhibitions and writings that revolvearound such themes as “masculine/feminine”, “sexand art”, “the new figuration”, “identity andalterxity”, “antropophagy”. Could one infere thatin a pendulum movement within the spiral of his-tory, artistic expression might focus in the next

decades once more on a “classical” humanism, al-though new in its formats and expressions ?

The new humanism will be . . . called collective humanism.

At the level of practical action something new is being gener-

ated, not based on the individual nor on his soul, nor on the

state or its bureaucracy. Its thrust is addressed rather to the

fashioning of intermediary bodies that are, in reality, not ex-

actly that, but new spheres of public action. (Cardoso 1993,

pg. 154)

This new collective humanism of the 21st Centurywill consolidate a set of values that are today in themaking. They will enhance the concept of citizen-ship and the sense of collective responsibility, aswell as confirm the individual as a fully cognizantmember of a social network where protection frommassification can be found. Confirmed in their so-cial standing, in a world of radically less distancebetween rich and poor, having overcome thestruggle for survival and finally attained a high qual-ity of living, the chances are that the new citizenswill become more tolerant of the “other” instead ofexcluding him or her, in the context of a worldwideprocess of cultural adjustment. Contrary to theircounterparts in the current crisis situation, the Re-naissance citizens of the 21st Century will be en-dowed with greater knowledge and cosmopolitanunderstanding, resulting from education systemsadapted to the era of information, and from toler-ance and a measure of regained privacy—and willhave the means and the time to lead a more hedo-nistic lifestyle with social responsibility.

But, this Renaissance faces setbacks. Current dif-ficulties and obstacles that could lead humanityastray and postpone “better days” must temper suchan optimistic vision. Ethnic intolerance could, hereand there, become exacerbated by global recession,mainly felt in the Third world, and by the increas-ing migratory flows toward the developed countries.In Europe and in the United States, tensions couldbe heightened by unemployment, recession, and thebreakdown of the welfare system. Should this hap-

29

pen, violence and all its tragic consequences can-not be ruled out. In the context of future insecu-rity, fundamentalism, both political and religious,could make politics even more irrational. In theeconomy, arrogant protectionism of powerful coun-tries might substitute solidarity by fakedcompetitivity. Political exclusion, ethnic intoler-ance, extreme nationalism, cultural repression, theloss of social benefits, all this can occur under thebanner of fundamentalist ideologies. Political un-derdevelopment, a product of cultural backward-ness still thriving in the Third World, is anothermajor hurdle that the march of progress must over-come. Finally, authoritarianism can stifle for a longtime the emergence of an organized civil societyin many countries.

Delays in introducing countervailing economicmeasure to balance the tendency of neoliberalismand globalization toward monopolistic concentra-tion and global hegemony—in a reedition of theuntamed capitalism of the 19th century, as well asthe lack of international regulations to restrict un-bridled speculation in the world’s capital markets,capable of destabilizing whole countries and pro-voking global recession—could result in an intol-erable level of unemployment and a crushing ab-sence of perspective. Such despair could generaterebellions and, more serious still, setbacks in thedemocratization process in those countries that arestill grappling with its complexities.

Although birth rates are declining as a result ofbetter education, longevity is on the increase and,in several parts of the globe, the “demographicproblem” still defies the working out of a com-fortable balance vis-à-vis the availability and con-centration of resources. In China, India, and partsof Africa the absence of well-thought-out transi-tion strategies could very likely result in excessiveurban concentrations and intolerable frustrations,thus setting the stage for all sorts of serious socialdisturbances and political backsliding.

The social disasters described above could set inmotion a chain reaction by feeding upon itself. Iftragedies, violence, transgressions, pornography,unpunished corruption, and injustices occur fre-quently enough and are continuously disseminatedby the media, they might become commonplace,acceptable banalities. Thus, a state of indifference,of alienation and insensibility, could develop, fos-tering a permissive attitude in the citizenry that willsap resistance and weaken the sentiment of indig-nation.

Intolerance, radicalism, demographic problems,and insensibility could lead to a disastrous futurein the medium term as well as to political regres-sion, to the detriment of one or more generations.These are the enemies that can postpone a renais-sance. The expectation of empowerment of a setof renovated human values, together with the chal-lenges outlined above, demand the attention of usall and a thorough discussion of what it all meansfor society. Laying before the citizenry the op-tions, clarifying the potentialities and risks, con-stantly opposing those enemies of progress, caringand cherishing the seeds of innovation and soli-darity, and proposing adequate strategies to guidesociety as it overcomes this traumatic period of tran-sition, seem to be the only ways to make the mostof the times’ inherent potential for a better future.

FINAL THOUGHTS

Toward a transition strategy.

The foregoing ten theses seek to contribute towardsetting up a framework, piecing together a coher-ent picture, placing reference marks, and present-ing a consistent interpretation of the end of thiscentury (or of the millennium, to be more dramatic).They do not make up a full-fledged theory, but arerather an invitation to debate the future and the bestway to get there. For this purpose, it is not neces-sary to imagine a utopia or lay down a design for

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the “good society.” All attempts to impose a sim-plistic, all-embracing concept should be shunned;there are enough hypotheses making the roundsand plenty of information available to guaranteea sufficiently lively and varied debate.

This debate about the future will produce enoughscenarios from which can be chosen some thatseem most feasible. For the chosen scenarios tobecome reality, however, it is necessary to pre-pare and implement appropriate transition strate-gies that fully grasp the essence of the crisis. Ifthis period is indeed one of painful transition (al-beit at times intellectually stimulating), it wouldseem that every effort should be made to shortenit. Such strategies must be able to minimize presentand future risks and to make the most of opportu-nities (and even to create them) so as to reduce ifnot eliminate the turmoil and suffering producedby structural change.

Sachs (1993, pg. 12, 14) advances sound argu-ments for the need to differentiate between na-tional and regional strategies of transition:

Growth through inequality based on a market economy with-

out controls can only deepen the gap between North and

South as well as the internal dichotomy within each soci-

ety. In fact, the tendency will be to exacerbate the vicious

circle of poverty and environmental degradation. (1993)

It is necessary to note from the beginning that theglobalization of the economy and the accelerationof economic activity affect in different ways coun-tries that find themselves in different circum-stances:

The abyss between the North and the rest of the world be-

comes evident from the fact that the OECD countries, with

only l6% of the world’s population and 24% of its land area,

concentrate 72% of global gross product, 75% of interna-

tional trade, 78% of all vehicles and 50% of all energy con-

sumed. They are responsible for 45% of all carbon dioxide

emissions, 40% of sulfur oxides, 50% of nitrogen oxide and

60% of all industrial waste (OECD 1991). (ibid.)

It would, therefore, seem to be up to the OECDcountries to shoulder the major responsibility foradjusting and correcting their development modelwith a view to lessening the damage, ecological andotherwise, stemming from this transition period. Itis also up to them, particularly the members of theG-7, to take the necessary measures to set up somesort of control over the world capital markets whereunfettered speculation can unhinge the worldeconomy.

The asymmetry between countries should also betaken into account in international trade and lawwhich currently allow countries in the northernhemisphere to practice protectionists policies withthe excuse that they are “obliged” to do so in orderto adjust their economies and their national legisla-tion to globalization. This stance, however, does notprevent them from unabashedly demanding thatother countries drop their tariff barriers and submittheir economies to the full play of market forces, apolicy that, in reality, is simply a return on a muchvaster scale to 19th Century laissez-faire and un-tamed capitalism. Such unrestrained political arro-gance can only be explained by the demise of theSoviet Union and the deliberate discrediting of thecountervailing policies, whether valid or not, that itchampioned.

A national strategy for the transition period shouldinclude and emphasize local governance and shouldseparate clearly those objectives that pertain to thetransition period from those that purport to go be-yond it. In other words, long-term and medium-termgoals must be set up. The importance of this dis-tinction and of the connections between the two setsof objectives becomes clear when developing poli-cies to deal with the structural transformation inemployment.

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As to long-term goals, a transition strategy shouldtake into account the “workers of knowledge” as anew emerging category of labor; salaried autono-mous workers resulting from technological changeand discontinuity in the work place; new and flex-ible rules for contracting out production and ser-vices to third parties; systems connecting academiccenters, research institutes and the productive sec-tor; an insurance system, most probably private,but flexible enough to cover the several forms ofautonomous activity; a well-tuned policy for en-hancing the dialogue with regional groupings rep-resented by bodies that can negotiate competently;and so on.

As for the medium term, however, a transition strat-egy, if it is to lead the process, should consider, forexample, employment policies and the division oftime; insurance coverage of the autonomousworker reacting to unemployment; subsidies, de-creasing and limited in time, for housing and ba-sic foods; the adoption of the principle of mini-mum income; incentives for a policy of wage re-distribution; emphasis on education, from theelimination of illiteracy to the sophisticated phi-losophy and methodology of learning. Of course,labor would have to cope with temporary setbacksif they are unavoidable. In this connection, rene-gotiating foreign debts and even the temporary sus-pension of international payments should be seri-ously considered if they lead to accelerated devel-opment and to the creation of new work opportu-nities. To this end, policies that reduce dependenceon foreign capital, control international specula-tion, and carefully regulate imports (following thefrequent example of OECD countries) should notbe ruled out.

The future does not arrive all at once. If transitionstrategies are not put in place and implemented ina timely way, marginalization will occur as a newpolitical map of the world is drawn showing pock-ets of well-being (in each country and city) sur-rounded by masses of the poor and the excluded,despairing and resentful in their struggle for sur-vival.

The task will be to set up action strategies that ad-dress local, national, and regional circumstances.Thinking and debating the future and formulatinga transition strategy are urgent tasks facing plan-ners and an obligation for those in government whohave a responsibility to look ahead. But, first andforemost, it is an undertaking in which every citi-zen and representative organization, as well as theprivate sector, should take part. Only partnershipsthat democratically bring together the state, theprivate sector, workers and employers, civil soci-ety, and all other players in a negotiating processwill overcome probable conflicts stemming fromthe legitimate clash of interests. The debate andnegotiation of a transition strategy should focus onthe definition of what is the public interest at stake.In this respect, it would be well to recall Jean-Jacques Rousseau’s warning that the public inter-est and the interest of all should not be confused.

A market economy might be acceptable, but not amarket society. This should be kept in mind whenspeculating on what a market economy will looklike in the 21st Century. Even if the untamed 19thCentury capitalism proposed by the neoliberaleconomists is purged from such speculation, it isdifficult to visualize what profile the marketeconomy and capitalism will take in the next cen-tury. Will it be a sort of “social capitalism” in tunewith its social responsibility? Or a type of “marketsocialism” without state ownership of the meansof production? New theories will appear, new con-cepts will be produced, and new words will becoined by the neo-encyclopaedists. Fine, as longas we collectively prove that we are able keep upthe struggle to shorten the painful and hazardoustransition period in which humankind is immersed.

32

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