domingo, 17 de abril de 2011

Alternative to neoliberal globalization. English version


The current social and economic system is unfair. In this period of human evolution in which men and women desire to live in freedom, to be treated equally and to give way to their natural feelings of fraternity, an unfair economic system –the foundation of material life- is an unpredictable blasting charge that if it explodes, it would put at risk our civilization, even life on earth. Any future world war would be fought with nuclear weapons whose devastating effects have more than enough evidence.

Times have changed. There was a stage when the economic order was established by itself and, in an almost direct way it took hold the political order and finally gave birth to the Positive Law. Those who can analyze the events during the XIX and XX century without prejudices will be able to see that things have been reversed in the Contemporary Age. More and more the Positive Law (given by successive governments and supported by an omnipotent state) has taken a central place in the national and international stage.

Because many factors push civilization back to barbarity, those who honestly desire to avoid such a frustrating destiny should be aware of the central place that Law has in the real composition of modern society and of the dangerous character it has taken for the course of human evolution.

To give Law a main role in the social composition does not imply that the political, economic and spiritual roles in a given culture are less important. Their raison d’etre is huge. Yet, to understand why they are not in their right place and why they act against human condition, one has to analyze and explore with lucidity what the current Law looks like.

In past times, men had two norms to legally guide the order of their social life. In every occasion their behavior was ruled by a limited and exceptional positive law which was measured and judged by a superior law: the “divine law”. At the end of the Middle Ages this law became what it’s known as “natural law” and later on in the Modern Age “the rational law”. Things have changed in our age. We had to go through horrible genocides that embarrass the twentieth century to feel obliged to rescue from the ark of history some “human rights” as norms above those dictated by governments.

The legislative advancement in this respect has been remarkable; but the fruits are not. In our view, without detriment to other factors, the root cause of most current social conflicts derive directly or indirectly from lack of proper treatment to a couple of foundational and fundamental human rights.

One is the individual human right that enables and conditions the particular life of each individual and the free associations established between individuals. This right needs to be examined, acknowledged and brought into existence as the right of every person to have equal access to the material basis of life: Nature. Today, it is outrageously limited to the majority of the population in each country, beyond political systems and regimes.

The other fundamental human right has to be taken care of by society. It’s a social human right because without a healthy society that provides public services the individual advancement declines or completely disappears. This social right has a decisive function in the establishment of democracy, individual liberty, equality and fraternity treatment. This social right generates a primordial duty for all governments: to raise the rent, expressed in the market value of the land, generated annually by the economic activity. This rent should pay the expenses incurred in providing public services.

These two fundamental human rights (the individual and the social) have been alienated by the positive law present in the heart and mind of both, public and ordinary, men. Just as the XIX century shines because it put an end to the legal institution of slavery, the XXI century should be remembered in the future for having eliminated the outrageous legislation that deprives men of an equal right to land, at the same time that - to mock the moral – it puts on the overburdened shoulders of the workers the load of reducing their income to hand it over to the government. This evil scheme reaches its peak when, besides the aforementioned consequence, it generates two deleterious effects: the increase of social inequality -clear in the growing number of poor- and the reduced amount of rich people on the one hand and “state gigantism” on the other. These are the results of a “paternalism” carried out by governments that are incapable of making the necessary legal changes so that there is social justice, i.e. a just and fair social order.

On the other hand, the phenomenal development of material sciences –also started in the Modern Age- and the no less fantastic progress of technology that functions together with that one, has provided humanity with miraculous benefits that have been achieved thanks to economic orders whose extent and complexity have never been imagined or reached before in the history of human kind. This phenomenon has given contemporary life a visible materialistic bias to the detriment - not less visible - of spirituality, man's distinctive feature.

An obvious consequence of these processes has been the excessive growth of positive law in every society and the world. Back in 1930, there were lawyers who reported the damage of "legislative inflation" Given that materialist bias, the Positive Law has been reduced to a dry and soulless technique used by the power to order the lives of individuals and society.

The effect of this mutation -suffered by the legal system that every society needs- is not discussed in almost any College or University. On the contrary –as we mention in our document- they have stated that the positive law has been handed down by God. It is accepted without a serious critique, and considered useful to lay a peaceful groundwork for a better society.

More than 200 years ago, fertile minds gave foundation for the development of a society of free men, living in equality and fraternal coexistence. These modern ideas inspired in Occident great continental revolutions: the English, the American, the French and the Latin-American revolutions in 1810. The guiding ideas, expressed in different ways were similar: claim for individual freedom, establishment of equal treatment and promotion of brotherhood. The different scenarios where they tried to grow where very different and therefore the results were different, too. Broadly speaking we can consider two distinct kinds of fields to test the necessary conditions that those seeds needed to grow: North America and Latin America.

Two foundational features distinguished the nascent North American society in 1625. One was having a moral favorable to those guidelines; the other one was the vast extension of land available that the settlers left out and that, set aside, would be a large reservoir of "free land" (cheap) for all the people in the world who wanted to inhabit the North American land. There were two features that raised the wretched colony to world power status - while it became home for millions driven from their homeland due to lack of freedom- land and labor.

One feature conditioned the development of the Latin-American society and it affected their life up until now. Born before the North American society, the settlers in Latin America brought to this land the dying medieval law and presented it as “the new law”. It lasted for two centuries. This law, embodied in past habits and customs, was the soil in which the most illustrious patriots in the XIX century, sought to sow the triple modern ideology. Their failures and hesitations are visible.

The two hundred years of Latin-American history that go from 1800 until now are full of clashes between the effects of the old and the modern law. This one shines with wonderful, foundational Constitutions. The old law is in their Civil Codes. These codes, of modern design, have tried to reconcile the right to land of the settlers and their descendants with the modern law of freedom of work and full ownership rights to the profits of each individual. To get to this reconciliation the coders in each country resorted to the Roman Law on land ownership. But the reconciliation has not been achieved as it wasn’t achieved in Rome in over a thousand years. It was not possible and it is still not possible unless there is a substantial reform in the way the state gets resources. The key to this dilemma is to be found in the combination of the two systems that lawyers separate (private and public rights).

The exemplary cases of “the new World” should be carefully observed by scholars as a social experiment. Through a careful analysis, free of nationalisms and prejudices, it would be possible to discover the legal beams that allowed the 13 colonies reach the rank of first world power, a social order capable of accommodating more than 300 million inhabitants, of whom - suggestively - 50 million are immigrants from Latin America.

After this analysis, one should question what have been the legal reasons that have acted so that Latin America is still unpopulated (compared to other continents). There are hardly 300 million people and most of them live in inhuman conditions in cities and dream about emigrating from their homeland, abandoning their roots to get to places where they can build a more dignified future. This is not a scientific duty, it’s a moral obligation.

In the document we attach here, we give clues to the most necessary and urgent measures to get to suitable conclusions and to show the leaders of each society -specially the scholars and the politicians- the rules of the social order that have to be established in the world -by law first and custom thereafter- so that all human beings can enjoy freedom, can be treated equally and can enjoy the material and spiritual benefits that inevitably entail living together in brotherhood.

We should go back to the Law (Right) from the correct vision of the tridimensional condition of the human beings –body, soul and spirit- to design the roads and social spheres of life –economy, politics and culture- necessary for the development and enrichment of each and every individual.

This is the challenge, as we have stated in our brief essay, emerging from contemporary problems and from the demands that have to be met so that the development of each man and mankind as a whole is full of meaning.


1- The positive legal order which sets the rules for the construction of the public and social economy violates the requirements of the first Argentinean Constitution (1853/60). That positive right contradicts the demands derived from the modern, social ideal expressed in the words liberty, equality and fraternity. When the owners of the land were authorized to take hold of the land so that they could benefit themselves with the economic value created by the society as a hold – natural rent- a new system was promoted which allowed some people to take away the social funds needed to face public spending. As a consequence, common governments were obliged to make a lot of extractions from the agents of the social economy. These extractions are called “taxes”.

2- When a law allows the private ownership of the natural rent, - a value which is not earned through work- the land becomes the most powerful source of financial speculation for the enrichment of those who do not work or produce anything and the impoverishment of most people who can only live with what they earn through their work.

3- When a law allows the private ownership of the income generated by the society (making private that which is naturally public) a pervert tax regime is created which conspires against work, the investment of real capital and consumption. This substitution of the public funds by taxes –which are voted by the Congress-, turns the free worker into a slave.

4- The speculation with the land – which is generated by the legal order- is increased by the financial speculation which leads workers to pay very high rents for a place to live, destroys the monetary system and turns the State into the destroyer of the social order, family life, and of all the individuals.

5- When the material wealth becomes bigger, inequality becomes more visible between the appropriators of the public rent and the workers who receive a salary. The results of this phenomenon which is not easily understood, is generally unknown to most intellectuals and politicians because the system hides it. The system changes the blessings of material and scientific progress into evil. Human beings start living tense situations and as a result economic, social and political derangements arise. The systematic inequality between human beings is the most powerful cause which makes “man, wolf to man” . This kind of society cannot survive; the ruins of former societies say so.

6- We think, the legal system is the immediate cause of this horrible phenomenon in many modern societies. Abominable inequality, injustice, inflation, deflation, unemployment, poverty, massive migrations and emigrations, currency devaluation, financial crisis and mortgage, auctions, evictions, moral relativism, legal relativism, legal uncertainty, crime, corruption, drugs, human trafficking, prostitution, slavery and servitude, abuse, terrorism, civil wars between countries, invasions, unplayable foreign debts, gulags, depression, destruction, family disruption, religious, ethnic and racial hatred, xenophobia, tyranny, despotism, anarchy, insecurity, theft, social manipulation, disinformation, media management, degradation of the behavior and mass suicide become daily news. We have become accustomed to the monstrous.

7- When corruption becomes chronic, the public spirit is lost; when the tradition of honor and patriotism is weakened, law is detested and human beings lose their hope in a reform. When fury bursts out, masses destroy everything. At this moment, strong and unscrupulous men become interpreters of the popular passions and they go against all institutions, because the institutional world has lost its vitality.

A repeated error and the challenge of our time

8) It’s useless to see separately each sign of the generalized disease without correcting the root. Every 18 years, a crisis occurs in the western world (Fred Harrison and Fred Folvary). The only remedy, then, is to replace the unfair legal system to one that responds to the ideal of social justice. The only remedy, calls for brotherhood among all as a necessary basis for the development of equal treatment and individual freedom

Two conflicting legal systems: The Judeo / Christian law

9) For the Judeo/ Christian law, the "principle of order" is that the fruit of labor is the worker’s property and that there shouldn’t be taxes to work. But, to finance governments, taxes are needed. The Lord says, “The land must never be sold on a permanent basis, for the land belongs to me. You are only foreigners and tenant farmers working for me." (L.25: 23) What other destiny should the rent have but pay for the public expenses and free the land?

10) The Jesuit Father Juan de Mariana from Salamanca expresses the Christian spirit in “On the king and the royal institution”. In 1599, he said: “the fruit of labor is private property and belongs to the workers” ... "the intervention of a king in the private property of his dependants - through taxes - without their consent, is tyranny"… "It’s a good Christian's duty to kill the tyrannical and despotic King" ... The author distinguishes between the King (good pater familiae) and a Tyrant (arbitrary despot) who does not hesitate at all in taxing everything.

11) The legal Judeo / Christian regime of the land suffered ups and downs. It revived in the Middle Ages after the collapse of the Roman Empire. At the start of the Modern Age (S. XVII) three different episodes took place: first, a Puritan migration from England to North America (1625), then, the Glorious Revolution (England, 1688) and finally, the French Revolution in Africa (1879). The problem of the land and the taxes was present in the three processes, but with different solutions. In America, the settlement of the 13 colonies was based in the love for free access to land and the rejection of the tax, which was expressed in the Will of Rights" (1776) and the conquest to the West -frontier- was continually encouraged. In France, the first economic thinkers (1750) created the "economic science", based on land and income. The 1789 Revolution failed as the 10,000 new owners revived the Roman law. The unhealthy product of this greed was the Napoleon Code which spread in Latin America.

12) The Roman law (the current canonical / neoclassical law) allows not only the private appropriation of the public property but it also allows taxes to punish work. This is their essence.

13) Significant milestones linked to the canonical neoclassical paradigm. In Western history, from the Middle Ages to the present day, there are recurrent social problems which show a persistent, unresolved social issue

a) Athens: Theseus reorganized Athens with the principle that those who were “well born” were granted land ownership and land rent. As a result, social conflicts arose which led to the "oligarchy", that is to say, the government of the wealthy families. The reforms of Solon and Lycurgus gave more political power to a great number of families, provided they did not touch the system, only noble families were benefitted. Then, the democracy which was thought to be the government of/ for freedom, showed a total absence of control of the power to the ruler. The law was dictated by those who governed, as a result, a great tension arose which was followed by chaos, and tyranny. And, tyranny was the fourth and final illness of the city. (This summery highlights the role of the positive law in the fall of the Greek civilization)

b) Rome: In 109 BC, when Marcus Junius Silano endorsed the Licinia law (367 BC) there was a great slaughter of slaves and as a consequence, the Roman Republic collapsed. On the eve of a new age, the dictator Caesar becomes Emperor and lots of conflicts and revolutions took place. The Graco brothers’ revolution in 134 BC was based on the question of land and income as there were three social classes, the patricians (landowners), the commoners (tenants) and the proletariat (the landless). The collapse of Rome was inevitable.

c) Later, the Roman Catholic canon law (contrary to the patristic) ended up producing the fall of Western Roman Empire.

d) The French Civil Code of 1804 was a counter reform to the French Revolution (1789)

e) The Latin American Civil Codification in the late nineteenth century, was a counter reform to the Latin American revolution of 1810.

f) The German Civil Code (1900). The original meaning of the word code denoted by Savigny was forgotten and by code was meant “a sum of laws issued by the State”. The "Ruling of the Rights” was replaced by the “Ruling of the Law” issued by the government (state law).

g) In the nineteen hundreds, the major universities in the USA designed ad hoc, the "neo-classical economics” or Neoliberalism so, the "classical economics" was displaced.

h) After the Cold War (1949), the teaching of neoclassical economics started in Western universities and governments were nourished with its ideas/ concepts.

i) The Washington Consensus (1989) spreads to the rest of the world, the economic forms of Neoliberalism.

j) In 2008, the most virulent and biggest global economic crisis broke out –similar to the crisis in 1929- risking the global economy and world order.

The conservative defense of the equation LAND/ TAX has led humanity to a near abyss. During the twentieth century, this issue so poorly resolved, killed more than 180 million people.

The neo-classical canonical system is based on three fundamental paradigms: the legal, the economic and the historical communication

1- The legal paradigm relies on the interpretative technique of the Given Law usually called The Legal positivism which derives from the roman legium ponere which means “that who has the power sanctions the law". As a result, the "Ruling of the Rights” Jus secular naturalism was replaced by the “Ruling of the Law” sanctioned by the state. Two irreconcilable views with legal, economic and political consequences. The LAW is no longer the principle of social order but an instrument of domination.

It is has been said that Ciceron’s translation of nomos by lex was very unfortunate, because it replaced the term "Ruling of the Rights" by "Ruling of the Law." Its effects are manifested today in that we believe that the Ruling of the Law is something ideal, i.e. we believe that what the sovereign or a legislative body sanctions is “ideal”. A former judge in charge of delivering the jus, would only be concerned with the validity of general principles and rules, he wouldn’t be concerned with specific orders (laws and decrees) based on power, never on justice.

"A code should only contain those principles from which the decisions of the specialties emanate, because the Law, as in geometry, subsists by founding and fertilizing points” .... " As the laws are sanctioned by the powerful, far from being the laws we need, they may sometimes corrupt and spoil the powerful.... The laws exert their influence primarily by the Codes and the codes have become a sort of "legal program" - governmental program - by which the State abolishes everything that is not in the State... .. "(Karl von Savigny “The vocation of our century for the legislation and the jurisprudence ")

"When I read Lerminier, his pages made me change in the same way Lerminier had changed when reading Savigny. I stopped thinking of Law (Rights) as a collection of written laws. I found that the Law (Rights) was the moral law of the harmonious development of social beings, the very constitution of society, the binding order in which individuals develop as such. I began to conceive the Law (Rights) as a living phenomenon that needed to be studied in the organic economy of the State. Thus, the legal science -as Physics- had to become experimental, and as such alive with an animation that was not in the codes, written texts or abstract doctrines. The Law (Right) was then for me as interesting and attractive as the most wonderful phenomena in nature." Juan Bautista Alberdi “Preliminary Fragments of Law”

To enjoy freedom meant that the citizens had to obey their own will and conform to the behavior of codes of abstract content, mostly prohibitions, including those which prohibited to interfere in the sphere of others. The law should comply with Rights.

The legal contemporary paradigm is the radical reversal of that ancient principle. It argues that Right (Law) is what has been sanctioned by the political power (positive law).

2- The economic paradigm is supported by the pseudo, neo-classical and tax experts’ science which has replaced the Classical Economic and Rent Science.

The classics called wealth to all the material things produced by men annually. It was the result of three factors: job (human effort of all types), assisted by the capital (saving to produce more wealth), both on Earth (Nature, place of life .) In algorithmic formula:

(1) Wealth (produced) = Labor + Capital + Nature

Wealth is produced to satisfy human needs, therefore producing wealth only makes sense if it is properly distributed. Classics expressed this by the following formula:

(2) Wealth (a share) = S (Salary) + I (Interest) + LR (land rent)

The "neoliberal economics" trying to defend the position of the owners of the land changed this paradigm. They wiped out the factor N (Nature) or the LR (land rent) expressed in the value of the Earth which had been derived from the classical formula of distribution. N disappeared magically as well as the LR (land rent) i.e. the value of the land, as a consequence of the rising demand.
The Land rent (LR) should not be distributed; it was kept by the owners of the land. This altered the general social consciousness, especially that of the working classes. With the acceptance of the new formula, wealth went into dispute with Labor and Capital. The landowners were concealed from the view of those without land and finally, in order to complete the masking, the word Wealth became Production. The initial formula was disfigured, the triangle became a figure of two sides.

(3) Production = Labor + Capital

The source of life- The Earth- without which no economy is possible was gone!! Good!! According to the Neoclassicals, the neoliberals and the world today, it is possible to "create wealth" with no land!!!!

This masking changed naturally the distribution formula. For all the world today – educated, journalists, ordinary people and workers - the annual wealth should be distributed only among two:

(4) P (to be shared) = Wages + Interest

This bizarre formula generates the social conflicts today. Nobody asks for the part of the wealth that corresponds to the Earth and that it is taken away by the land owners, because in this formula there are no landowners or Earth. How ridiculous!!!
The result?
Businessmen, workers, capital investors and consumers pay the LR to the landowners!! Some when they buy or rent a place to live in or produce, but all of us in the price of the goods we consume.
The social consequences of the replacement of the classical paradigm for the new paradigm are many and they are all very dramatic:

To begin with, many landowners can live without working as they have taken hold of the value of the land which is constantly increasing through demand (open speculation).

Secondly, many landowners choose to keep their land away from the production circuit (latent speculation), as they know that the "sleeping land" does not cause them any damage and that in the future they or their descendants may get better profits. Thus the Earth which is "geographically" so rich is economically scarce.

Third, the State produces poor people. As Governments cannot collect land rent (LR), it uses "taxes” punishing in this way the productive process and consumers. While rural and urban land owners, can live without working, those who produce (businessmen, employers, employees and investors of real capital) suffer, from above as they are punished with taxes and from below as they are pressed by the price of the land. These real workers live at the edge of bankruptcy or near poverty or in the mud of misery.

Fourth, the society becomes "contentious" as conflicts arise everywhere. In this constant estate of permanent conflict and as our view of reality has been veiled by the neoclassical paradigm, we all try to improve "our position" with the charity of the State, the Benefactor. But nothing gets better and everything goes worse, because "Statism" is installed as the dominant ideology in individuals, social sectors and political parties. The economy is stuck, democracy staggers and institutions collapse.

3- The historic/communicational paradigm has been reinstated by the Germanic school of historiography of Ernest Renan. With the ideas of nationalism, a new history/ story was invented so as to strengthen positive feelings to the new political entity: the Nation. But the real history was hidden as the truth is dangerous to the Nation (E. Renan, 1880 “What is a Nation?”). This pseudo-historical science manipulated and is still manipulating the public opinion using mass media, giving way to what in 1980 was called "The invented reality."

George Orwell summed it up in this way, “whoever controls the past, controls the future, but whoever controls the present, he also controls the past." . Manipulation is proportional to monopoly power- let’s remember Churchill’s words: "The earth is the mother of all monopolies"

If "civilization (is) learning from history" (David Hume), the new school of historiography launched the world into barbarism, as we see it in every day’s news.

This design continues today, with variations provided by technical progress and the growth of circumstantial crisis. Due to the circumstantial crisis and due to the help of progress a new historiography was developed, this new historiography is functional to the canonical neoclassical system -in the same way a secular religion is supported by school ceremonies, patriotic marches, textbooks, university departments, colleges and the domain of mechanisms of prestige and funding, this historiography is imposed on us by the status quo interests and sustained by ignorance and fear to disagree. We are all afraid of marginalization, exclusion from the academic high society, of not being considered for academic stalls, of not appearing in bibliography, of not getting jobs, scholarships or grants. It is easy to understand why young historians consciously or unconsciously choose not to deviate from the cultural establishment if they want to professionalize their vocation. It is a general phenomenon in the social sciences, but it is stronger in the field of Law and Economics.

Mason Gaffney and Fred Harrison (1994) in “The Corruption of Economic Science” documented how American landowners took over the boards of universities in the United States of America so as to get out of those places the classical economists and rentists who were replaced by neo classical economists. In this way, the american landowners succeeded in propagating a system whicht allows them to get hold of the public revenue, create monopolies, control banks, currency and increase their incomes with taxes to the producers and consumers.

In Europe there are also examples, although Leon Wallras was an authority on classical economic science he could never lecture in France. In Argentina, Juan Bautista Alberdi -alma mater of the Constitution- could never lecture in his own country

Conclusion: The land and the privatization of its income is the reason of the actual system, a system that annihilates work and social justice. Another reason, is the historical and communicative paradigm

How to change the status quo for the benefit of humanity.

14) The above mentioned process is possible with a culture that nurtures and provides a positive right which is present in the current economic order (private and public). Changing this state of affairs requires going back the other way by recreating a new culture, generating a new law in order to enable a new economic order (social and public). This paper and the Barcelona Consensus are justified because their authors recognize that this is the way for modern change.

15) The first steps to follow include paying special attention to Fraternity, Equality and Freedom -we have deliberately changed the usual order in which these ideals are normally evoked-. The three constitute an indivisible triptych. But in light of historical experience, we are convinced that, without fraternity as the basis of a moral ground it will not be possible to develop equal treatment or freedom among individuals.

16) It isn’t easy to explain how to promote real fraternity in society. "There are reasons of the heart that the reason does not understand" (Pascal). But, it is relatively easy to find out what laws or institutions prevent fraternity to reign. For many years till its eradication, it was slavery; in 1918, the world agreed that work was not a commodity. Today, if we really wanted fraternity in every single society and in the whole globe, all men should have the right to possess land and be the recipients of the public goods that society should offer, sustained by the incomes of the land rent (LR).

17) But in order to get out of this difficult situation, we have to fight with ourselves because, as Saint John says "men cannot see more than what he has learnt."

18) The Consensus of Barcelona is a wonderful opportunity to show humanity what can be done to remove the obstacles to fraternity, for individuals to grow in equality and freedom. If not, total destruction is possible.

This is the challenge of our time.

Guillermo ANDREAU, Hector SANDLER

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