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Article Artículo

Ban Ki-moon Explains to Congress Why the UN Won’t be Held Accountable for Cholera in Haiti

In December, Rep. John Conyers and 76 other members of congress wrote to United Nations Secretary General Ban Ki-moon, urging the U.N. to provide a settlement mechanism for cholera victims and their families and lays out the reasons why the UN should be legally obliged to provide such a mechanism.  The members of Congress add that, “while we applaud the UN’s efforts to secure more funding for cholera treatment….we wish to respectfully remind you that these efforts do not absolve the UN of its obligation to receive legal claims from victims of the epidemic and provide remediation for the affected communities.” 2 months later, Ban Ki-moon has finally sent the members of Congress a lengthy response which the defenders of Haiti’s cholera victims have characterized as “untenable as a matter of law and logic.”

In a letter, dated February 19, 2015, Ban Ki-moon responds to the 76 members of congress. Most of the letter is dedicated to outlining all the work the U.N. has done to combat cholera in Haiti.  The U.N. has indeed issued calls for cholera funding, but the Haitian government’s 10-year cholera eradication plan remains woefully underfunded. Just 18 percent of the $2.2 billion required has thus far been pledged, with less than 13 percent actually disbursed, according to the most recent data [PDF]. A donor conference in October failed to secure significant additional pledges of support.

Only at the end of the letter does Ban actually respond to the members of Congress’ request for a settlement mechanism for the victims of cholera.  After initially rejecting the claims of the victims in a terse statement with little explanation, Ban provides perhaps the most thorough explanation to date for why the U.N. will not hear the claims:

Claimants invoked Section 29 of the Convention on the Privileges and Immunities of the United Nations of 1946 (the "General Convention") and paragraph 55 of the Status of Forces Agreement (SOFA) with the Government of Haiti, which implements Section 29(a) of the General Convention in the agreement with Haiti.

Section 29(a) is limited by its terms to the consideration of private law claims.  In the practice of the Organization, disputes of a private law character have been understood to be disputes of the type that arise between private parties, such as, claims arising under contracts, claims relating to the use of private  property in peacekeeping contexts or claims arising from motor vehicle accidents. The Organization has regularly received and provided compensation for such claims arising out of acts attributable to its peacekeeping missions and personnel.

I wish to assure you that, in the present case, the claims were thoroughly and carefully considered. After a review of the claims and the history and implementation of Section 29(a) of the General Convention, the claimants were informed that the claims were not receivable pursuant to Section 29 of the General Convention. As the claims in question raised broad issues of policy that arose out of the functions of the United Nations as an international organization, they could not form the basis of a claim of a private law character and, consequently, the claims did not fall within the scope of Section 29(a) of the General Convention. For the same reason, it was determined that these claims were not of the type for which a claims commission is provided under the SOFA, since the relevant provision of the SOFA also relates to claims of a private law character.

To read Ban’s full response, click here. Unfortunately, while this may be the most words a U.N. official has said about the legal case, it leaves much to be desired. Bruce Rashkow, a former high-ranking official in the U.N.’s Office of Legal Affairs wrote last year that the U.N. stance that cholera claims were “not receivable” was unprecedented. “Indeed, as the head of the UN legal office that routinely handled claims against the Organization for some ten years, I did not recall any previous instance where such a formulation was utilized in regard to such claims,” Rashkow wrote.

The Institute for Justice and Democracy in Haiti, which is representing Haitian cholera victims in their legal battle, provided the following response to Ban’s letter:

The Secretary-General’s assertion that the claims of Haiti’s cholera victims are an exception to the UN’s legal obligation to compensate people harmed by its negligence is untenable as a matter of law and of logic.  The Secretary-General fails to cite a single authority supporting the view that the cholera claims are not “disputes of a private law character.”  To the contrary, dozens of the world's leading experts in international law -- including many who have held positions in the UN -- have reviewed the cholera victims’ claims against the UN in conjunction with the UN's legal obligations. These experts agree that the cholera claims are private law claims, and that the UN had an obligation to settle them. The experts’ findings have been presented in a vast number of legal blogs, court briefs, and media articles, and are as applicable today as they were when the UN first dismissed the claims.

Jake Johnston / February 27, 2015

Article Artículo

Would Doctors Benefit from Globalization that Lowered Their Pay and the Cost of Health Care?

Better yet, would economists say they had benefited? The reason for the question is that this is essentially the question that the University of Chicago's Initiative on Global Markets (IGM) asked its group of elite economists about trade with China. It asked:

"Trade with China makes most Americans better off because, among other advantages, they can buy goods that are made or assembled more cheaply in China."

This question could be taken to be saying that most Americans are better off because they can get cheaper goods from China. It's a bit difficult to imagine how that could not be true, taken in isolation. In other words, are we better off because we have the opportunity to buy some goods at lower prices?

Other things equal, we certainly would be better off. Hence the question about having the country flooded with foreign educated doctors so that their pay is cut in half. With around 900,000 doctors in the country averaging paychecks of well over $200k a year, this would save the country more than $90 billion a year on health care costs (@ $700 per household per year -- how does that compare to your tax cut?). If we asked our elite economists whether doctors were benefited by lower cost health care, how would they answer? Aren't doctors benefited by paying less rather than more for their health care?

If this seems like a strange question it would not be the first time that IGM stumped the experts. It previously posed a question on whether Piketty's views on growing inequality were correct. The overwhelming majority answered "no," so did Thomas Piketty.

Dean Baker / February 25, 2015

Article Artículo

The Patent Theory of Knowledge

For thousands of years we have seen people develop knowledge and skills, make discoveries, and advance science. The overwhelming majority of this work was not motivated by the hope of getting a patent monopoly. Yet somehow, the ostensibly serious people at the Association of University Technology Managers think that patent monopolies are the only way to support the development of new drugs, or so it would seem from a speech to them by Joseph Allen.

Mr. Allen took issue with my suggestion that if the government funds research that the findings and any associated patents should be placed in the public domain. He pointed to the period before the Bayh-Dole Act when there were:

"28,000 inventions wasting away on the shelves in Washington because there was no patent incentive for anyone to develop them."

Okay, let's try to get this straight. Suppose that the government made its funding partly contingent on developing a usable product approved by the Food and Drug Administration (FDA). Would all the inventions still sit on the shelf because people are too dumb to make a usable product without the motivation of a patent monopoly?

Suppose that the funding even went to private companies who would see their payments increase 50 percent, 100 percent, or even 200 percent if they get a usable product approved by the FDA. Even in that case the inventions would just sit on the shelf because there are no patent monopolies?

One has to wonder what it is about developing drugs that require patent monopolies when people in so many other areas can be motivated simply by money. It's a great mystery.

Dean Baker / February 24, 2015

Article Artículo

Robert Samuelson on History, Inequality, and Productivity

Robert Samuelson was inspired by a graph in the new Economic Report of the President to tell readers that the real problem for the middle class is not inequality but rather productivity growth. His point is that if we had kept up the Golden Age (1943-1973) rates of productivity growth it would have mattered much more to middle income families living standards than the rise in inequality since 1980.

This is true in the sense of if I were six feet five inches, I would be taller than I am, but it's not clear what we should make of the point. We don't know how to have more rapid productivity growth (at least not Golden Age rates), so saying that we should want more rapid productivity growth is sort of like hoping for the second coming. As Samuelson notes, we do have policies that would likely improve growth, more spending on infrastructure, education, and research and development, but no one seriously thinks such policies would get us back to the golden age growth rates of 3.0 percent a year. (Samuelson includes tax reform on his list. While a cleaner tax code probably would boost growth, it's worth noting that tax rates were much higher and the tax code contained more loopholes in the golden age.)

As a practical matter we may not be able to boost productivity growth, but we can change the policies driving inequality. At the top of this list, if we maintain low levels of unemployment as we did in the late 1990s, then middle income and lower income wages will rise in step with productivity growth. This would require generating demand through fiscal policy and lower trade deficits from a lower valued dollar. It also means not having the Fed cut off growth with higher interest rates.

If we also structured labor laws so that it was possible for workers to organize unions, had a minimum wage that kept pace with productivity growth (as it did in the golden age), and didn't protect high-end professionals (e.g. doctors, dentists, and lawyers) from domestic and international competition, then it would be reasonable to expect middle class incomes to keep pace with the economy's productivity growth. If we can only sustain the 1.5 percent annual productivity growth of the slowdown years (1973-1995) this would still imply income gains of almost 60 percent over three decades. While it would of course be better to have golden age productivity growth, since we don't know how to get back such rapid growth, why not pursue the policies that we know will be effective in restoring middle class income growth?

Dean Baker / February 23, 2015