Archive for September/2007

J.Pozuelo-Monfort, MPA candidate at Columbia University

The maintenance of a welfare state requires the accumulation of economic resources from the taxation of wealth, income and purchase and sale of goods and services, applying the principle of redistribution through a taxation regime known as progressive.
The attainment of a society driven by the principles of global justice and equity implies the penalty of excess, in a market economy that operates in a democratic regime that by definition must consider an individual’s freedom of consumption as a function of his purchasing power.
It is not obvious to determine what is and what is not a luxury good or service. Nor is it clear whether an additional taxation on a luxury good or service will diminish its demand. It is necessary to reach a consensus as to what goods or services are considered luxury, to then establish a subset which demand does not decrease significantly with additional taxation. From a point of view of efficiency, it is logic to tax more heavily goods that do not experience big drops in demand when the price increases, so that tax collection increases and consumption does not suffer.
Excess is harmful for society as a whole. Excess does not only manifest in aspects such as pollution or abuse of power. The wealthy have the opportunity and the duty of investing and spending their money ethically. The wealthy should set the standard and become the reference to follow, for a bad spending of money is irresponsible, for a bad administration of money is not admissible in a global society that needs socially responsible investors, that needs consumers that spend efficiently. The penalty of excess is as a result necessary and leads to the gradual increase of development aid in the poor world.
A tax on luxury is not only a way to apply the principle of redistribution between rich and poor countries. It is also a way to redistribute between the rich and the poor within each developing country, a concept of local redistribution that perhaps today does not hold in developing countries with the rigor of the industrialized nations, developing countries with an almost non-existent middle class.
Mi casa es su casa. My world is your world. My actions, my attitudes, are no longer independent from the rest of the surrounding world. They are part of a global mechanism that must turn sustainable.

J.Pozuelo-Monfort, MPA candidate at Columbia University

The West has been able to establish a definition of welfare that guarantees universal access to basic services defined as rights in the universal declaration of human rights, a definition of welfare that incorporates the concept of minimum income, underneath of which the human dignity no longer holds. This minimum income is translated in a majority of countries into a definition of minimum wage and maximum number of working hours that allow to earn sufficient income to fulfill a person’s basic needs.
It is time to extrapolate the concept of welfare to a level beyond that considers the welfare of all and each of the citizens of the planet. The extremes that we live today are opposing poles with no attraction. The extremes we live are shameful, weak and can be avoided, in a society that is proud to be solidary and incapable of facing the do-nothing policy of a political and economic class anchored in ideas of the past, a political and economic class that has not shown to be prepared for the challenges at the beginning of the twenty-first century.
The world is a same place. In a same place there should not coexist the capricious and unnecessary expense with the extreme lack leading to the acute suffering and the premature death. We have to bring the suffering of the poor world to the first world, so that the consumer is aware of the necessity of taxing luxury. We are unable to accept that there exists extreme suffering because we are incapable of bearing it, because we would die in life and would live dying, were we aware that we could save a life, and however we did not.
An involuntary genocide that demonstrates our inability to react. An involuntary genocide penalized in the West, which mention scandalizes the welfare society, that does not assume responsibilities, that gives excuses on a footnote and justifies its lack of resources based upon the principles of economic theory, based upon financial architectures with no ethics. We cannot continue a dynamics leading to the destruction based upon the principle of ignorance, a weak virtue, an inconsistent kindness.

Max Oliva, Associate Director, Social Impact Management
The UN has recently released the 2007 progress chart and report on the Millennium Development Goals (MDGs) – which range from halving extreme poverty to halting the spread of HIV/AIDS and providing universal primary education, all by the target date of 2015.

As the report highlights, although progress has been achieved (as an example, the proportion of people living in extreme poverty fell from nearly a third to less than one fifth between 1990 and 2004); yet, if continuing with this success rate, only one of the eight goals is to be achieved by the established deadline.
The goals are highly ambitious and it is clear that there is still much to be done if it is really intended to reach all the goals set for 2015. Lets work so that world leaders abide to what they’ve committed, which is “…to spare no effort to free our fellow men, women and children from the abject and dehumanizing conditions of extreme poverty”.

J.Pozuelo-Monfort, MPA candidate at Columbia University

La sociedad del siglo veintiuno debe basarse en la sostenibilidad, alejandose del consumo innecesario y penalizando el exceso. En una sociedad de mercado el exceso debe convivir con otros habitos de consumo mas saludables, pero debe ser penalizado para compensar el efecto colateral producido por un consumo mal repartido.
Una sociedad sostenible basada en el consumo debe guiarse por los principios de justicia y equidad globales, que garanticen el riguroso cumplimiento de un orden global de prioridades. En una sociedad global somos todos parte de una gran familia denominada humanidad. Una gran familia en la que un miembro no deberia, por principios, zampar con gula diaria manjar sobre su mesa cual bestia hambrienta, mientras que simultaneamente otro miembro perece de hambre en la extrema delgadez y sufrimiento pronunciado. Unos padres nunca permitirian un desiquilibrio tan extremo. Nuestra clase politica, nuestra clase economica son los dirigentes de la sociedad y tienen la responsabilidad de legislar y gobernar para y por la justicia global. Los miembros de esa gran familia deben exigir unos dirigentes responsables, unos dirigentes sin trato de favor hacia uno u otro miembro de la familia, capaces de establecer reglas de operación globales que aseguren la transicion hacia una sociedad global basada en la justicia y la equidad.
El lujo es a menudo innecesario y contraproducente, conducente a un sobregasto y a un reparto desigual del consumo que merece una profunda reflexion en el primer mundo. A veces concebido como necesario, el lujo debe ser tasado apropriadamente en modo de un impuesto sobre ventas progresivo que tase mas pronunciadamente aquellos bienes y servicios susceptibles de ser adquiridos por la clase pudiente.