Atelier 17, article 6

© Alfred F. Andersen :
(September 27, 1997)

             A Critique of the MAI: The Proposed Multilateral Agreement on Investments
                        (The most ominous  development yet on the global marketplace)

                                                                         by Alfred F. Anderson

The ostensible purpose of the proposed MAI is to secure commitments from the world's major trading partners to adhere to investment practices to which all parties have agreed, and to contribute to monitoring and enforcement measures. It is argued that this will assure a "level playing field" among the world's investors, and will thus introduce an element of fairness which at the present time is absent in the world of investments. 

What is glaringly absent in draft proposals to date, however, is fairness considerations toward non-investors and, by way of environmental insensitivity, toward future generations of humans and other sentient beings. For instance, a great variety of human-rights considerations are thereby not even addressed. 

Many aspects of such neglect have already been noted, and alarm loudly expressed. I would like to note one which has thus far been overlooked -- primarily, I suspect, because it has been neglected in all other areas of modern society. I refer to the unfairness manifest all over the world in the distribution of that which is the first requirement for any investment program: namely capital itself. 

Unfairness in the distribution of capital becomes increasingly serious as income from investing such capital in the production of goods and services (especially labor-saving production) increases by leaps and bounds in relation to income from applying less-and-less-needed human labor, especially if one includes within the world of capital what has come to be called "intellectual property." And the MAI proposals are clearly designed to give even more wealth-accumulation advantage to those who already have a near-monopoly of investment capital. 

Unless, therefore, the issue of fairness in the distribution of investment-capital is adequately addressed the most important unfairness argument against the MAI will be denied those of us who are committed to economic justice worldwide. 

What we at Tom Paine Institute maintain is this: that in order to have income from capital distributed fairly we must distinguish between two kinds of capital: 
     (1) That capital which is contributed by nature, and which we call our common-heritage capital, and 
     (2) That which is generated by private initiative over and beyond that "natural capital" contributed by nature. Such private-initiative capital, we maintain, should be privately owned, and the income from it privately owned. It includes buildings of all kinds, machinery, personal possessions, and all things physical except land and its resources. It also includes "intellectual property" for the length of a patent (roughly 17 years in the United States). Thereafter, we maintain that royalties should be paid to a common-heritage Trust, and income distributed in some fair way to the inhabitants of the earth. 

We maintain that as long as the most aggressive and acquisitive among us have a near monopoly of our common-heritage natural-capital there is no way to stop the rich from getting richer as the rest get poorer--and not only less and less economically secure but less and less able to influence the political process with either money or time and energy. 

Not only do the super-rich have less and less need for human labor as their facilities become increasingly automated, but governments will continue to encourage their increasingly profitable investments in order to get a few more jobs, the only way those without investment capital can get any income at all. And the fastest way 
to generate jobs at this time is to generate markets for goods and services in the global marketplace, such as by way of agreements like the Multilateral Agreement on Investment. 

That is why we at Tom Paine Institute feel that complaining about the injustices in the MAI will avail little until income from capital is more equitably shared by way of an equitable sharing of the income from our common-heritage natural-capital. 

Let's project some figures. 
We feel that the following figures applying to the United States should be worked out for the whole world, and that this might well require adjusting the following calculations. But, taking the United States as a separate entity for the moment, we feel that the following calculations are sound. 

Using the U.S. Department of Commerce figures as reported in its Statistical Abstracts, the total U.S. income for 1997 is projected to be about seven trillion U.S. dollars ($7,000,000,000,000), or an average of $27,000 per capita, or about $108,000 for the average family of four. 

Those who are getting only about a quarter of that, or less, might well wonder how the average could possibly be that high. The answer, of course, is to be found in the super-high incomes for the upper 1% to 5%. 

Now let's look at where the wealthy get most of their income. They don't get it from a job. They get it in the form of income from capital, and from investing, in turn, that income; and from investing, in turn, that income. One nice thing about income from capital is that one can have hundreds of investments going at once while basking in the sun at some resort beach, something which is much easier than working at even two jobs at once. 

Why is it that capital is generating so much income while income from jobs concurrently decreases? The answer is, of course, the seemingly endless productive capacity of natural capital, which increasingly is in the form of nature reformed by way of nature's very own technology. True, humans have to discover nature's laws, but once discovered, and applied, it is still nature that does the work in the form of automated production of goods and services. Thus, an automated factory is just as much nature working as the growing taking place in yonder tree or the biological processes taking place in our bodies. 

In short, it is nature that produces the bulk of all our goods and services, and human labor is contributing less and less. No wonder "the market" is paying less and less for human labor and more and more for nature reformed into automated facilities. No wonder that those who have private ownership of the bulk of nature, whether in the form of land and its mineral and energy resources of in the form of nature's automated ways, are getting richer by geometrical progression whereas those who must get all their income from a job find themselves fighting with each other for the decreasing number of jobs at decreasing market-value pay! 

That "fighting with each other" takes many forms. A common one is that of a country's marginalized people fighting with immigrants whom they say are "taking our jobs." Another is those in the "middle class" fighting with those on welfare, without realizing that both groups are victimized by an elite which is largely hidden from view because they travel in different circles, are often vacationing in the Bahamas or someplace else, and aren't competing with anyone for a job because they don't get their incomes from a job. Again, they get their income from investing in nature and in transforming nature to where it produces without the need for human labor, and thus with less and less need to hire people in jobs. 

More specifically, they get their income by joining together in corporations and conglomerates which increasingly become multinational and transnational. It really is true that the corporate world is either bypassing governmental  regulations or influencing them with their overwhelming financial leverage. 

In view of the dominant role of nature in the production of goods and services of all kinds, I suggest that at least 35% of all income in the United States should be attributed to nature, which is our common heritage. Assuming that is the case, I suggest, further, that this 35% should be distributed equally among the population. 
Dividing the population into fifths (quintiles), each fifth (lowest, next highest, middle, next higher, and highest-income fifth) should get about a fifth of that 35%, or about 7% of total national income, as an entitlement, in addition to income from other sources. 

This isn't what is happening, however. The lowest fifth is getting only about 3% of total national income, including income from jobs, whereas the uppermost fifth is getting about 53% of the total without having to work at a job! So, if we are to take out of total income that 35% which we are attributing to common-heritage nature, it obviously can't come from the 3% which the lowest fifth is getting. It must be that a large part of that 53% going to the upper fifth is coming from income from our common-heritage nature. Not all of it, but the bulk of it. Let's assume that little or none is going to the fifth next to the lowest. That means that it is mostly going to the upper three fifths. As a guess, let's assume that about 5% is going to the middle fifth, 10% to the next-to-highest fifth, and the remaining 20% is going to the upper fifth. 

Taking these figures, and realizing that each fifth of the population would get back a fifth of the 35% attributed to nature, or 7%, the middle fifth would have a gain of 2%, the next-to-highest fifth would lose about 3%, and the upper fifth would lose 13%, or be reduced from 53% to 40% of total income, and the lowest fifth would be raised from about 3% to about 10% of total income. 

Ten percent of total income would be about seven hundred million dollars. Dividing by a fifth of the total U.S. population, the average income for a family of four in the lowest fifth would become about $54,000 per year. Even the poorest family of four would have its share of the 7% allowed for each fifth, or about $38,000 per year, as an entitlement and a nature-given "natural right." In short, it would be the end of poverty "as we know it"! 

The average income for those in the upper fifth would be about four times that of the lowest, or about $208,000 per year. And since this is an average, we can assume that the upper 1% would still be getting annual incomes in the millions of dollars. So, private initiative could still generate enormous fortunes, but not on the backs of others, and not at the expense of economic insecurity for others. 

Note that we are not here talking about "welfare." There would be no prying into personal "need" and "worthiness." We are talking about economic rights. We are talking about "a level playing field" provided by our common-heritage nature. 

About 15 years ago, my life partner, Dorothy N. Andersen, and I founded the Tom Paine Institute in order to address this issue. Click on the "Sustainable Justice" link, below, to access various aspects of our proposed solution at the level of  structural change, rather than only of change in policy. Then click on "Tom Paine Institute Philosophy" for the most comprehensive proposal short of  my full-length book, information about which can be found by clicking on its link. Both the link to Tom Paine Institute Philosophy and to the book  include a suggestion for political, as well as economic, structural change. 


Recently, a Quaker committee in which we are active reached unanimous agreement on a statement which incorporates the essence of what we propose as regards economic structural change. It took about two years of what is called "seasoning" and editing to achieve what follows. All who have participated in its formulation welcome comments, and assistance in its distribution. I quote the major parts of it below (with some emphasis added) because I can do no better in the space available in stating the argument for economic justice which it addresses: 

*  *  *  *  *  *  *
Worldwide, the super-rich and their multinational corporate empires are inflicting a devastating impact on the rest of the earth's residents, and on their environment. So, while an elite few live in luxury, increasing millions are either homeless in their "home" countries or unwanted refugees in foreign countries, often under life-threatening conditions. 
      All human wealth and power is built on the foundation of natural wealth and power: such as land, natural resources, and the operation of natural laws. Realizing this, the most aggressive and acquisitive down through the ages have accumulated for themselves the bulk of this natural wealth even though it is rightly our common heritage. 
      Historically, outright military seizure has been the initial means of monopolizing our common heritage, both within and among nations. Colonialism extended this practice globally. Efforts at truly fair distribution, such as through land reform, have been rare, and the results typically temporary. Powerful people have been able to re-acquire the bulk of the best land by either political manipulation or, if that failed, by again employing "outright military seizure." Moral responsibility for making compensation to victims of past seizures has been all but entirely ignored! 
      Even if some fair and sustainable way could be found to divide up the land-part of our common heritage into private parcels, it clearly is not practical to distribute energy and mineral resources in this way. And even less practical would be any effort to parcel out the most potent part of our common heritage: namely, technology inherited from previous generations. Yet, our common- 
heritage technology is the indispensable foundation for all additional technology, and for responsibly stewarding the land, mineral, and energy parts of our common heritage. So, we are especially challenged to include the financial and other benefits from technology among those to which every present and future earthly resident has a natural, common-heritage right, and by way of a sustainable alternative to the private-parcels approach. 

We therefore urge all persons and corporate bodies to work for the day 
        when all parts of our Common Heritage of Economic Wealth -- all land and other natural resources of this earth, plus all technology ("intellectual property") 
inherited from previous generations, are held in democratically-controlled local, 
regional, and global Trusts; 
        when the income from leasing such resources--for socially and environ- mentally responsible uses only--is used to assure environmentally healthy habitats for all sentient beings (including non-humans) in both current and future generations; 
      when most of such lease-income is distributed among all humans as common-heritage dividends, thus virtually ending world poverty and releasing time and energy for undreamed of creative pursuits, for enjoying life to the full, and for the kind of participatory democracy which could weave such ideals into reality; 
      when, essential for rewarding individual initiative, everyone retains private- 
property rights to all wealth generated by socially and environmentally responsible means over and beyond the "level playing field" provided by our common-heritage wealth--i.e., to private ownership (including cooperative and corporate) of all tools, factories, houses, time-limited patents, consumer goods, etc. 
      And, because establishing full common-heritage dividends will take many years, we urge all governments, in the meantime, to retain, and add, financial-aid programs designed to provide adequate temporary compensa- tion to all who suffer from being denied such common-heritage dividends. 

Suggestions to The Environmental and Social Concerns Committee of Eugene Friends Meeting; 2274 Onyx St., Eugene, OR 97403. 

Again, I suggest that this vision of economic justice in the distribution of capital can serve as a basis for arguing not only for the continuation (and expansion) of social welfare programs throughout the world, but for arguing against any MAI proposals which do not incoporate this and related justice-considerations in their formulations. 

Alfred F. Andersen, <>