Globalization
And Democracy:
Some Basics
By Michael Parenti
26 May, 2007
Michaelparenti.org
The goal of the transnational
corporation is to become truly transnational, poised above the sovereign
power of any particular nation, while being served by the sovereign
powers of all nations. Cyril Siewert, chief financial officer of Colgate
Palmolive Company, could have been speaking for all transnationals
when he remarked, “The United States doesn’t have an automatic
call on our [corporation’s] resources. There is no mindset that
puts this country first.”[i]
With international “free
trade” agreements such as NAFTA, GATT, and FTAA, the giant transnationals
have been elevated above the sovereign powers of nation states. These
agreements endow anonymous international trade committees with the authority
to prevent, overrule, or dilute any laws of any nation deemed to
burden the investment and market prerogatives of transnational corporations.
These trade committees–of which the World Trade Organization (WTO)
is a prime example—set up panels composed of “trade specialists”
who act as judges over economic issues, placing themselves above the
rule and popular control of any nation, thereby insuring the supremacy
of international finance capital. This process, called globalization,
is treated as an inevitable natural “growth” development
beneficial to all. It is in fact a global coup d’état by
the giant business interests of the world.
Elected by no one and drawn
from the corporate world, these panelists meet in secret and often have
investment stakes in the very issues they adjudicate, being bound by
no conflict-of-interest provisions. Not one of GATT’s five
hundred pages of rules and restrictions are directed against private
corporations; all are against governments. Signatory governments
must lower tariffs, end farm subsidies, treat foreign companies
the same as domestic ones, honor all corporate patent claims, and obey
the rulings of a permanent elite bureaucracy, the WTO. Should a country
refuse to change its laws when a WTO panel so dictates, the WTO can
impose fines or international trade sanctions, depriving the resistant
country of needed markets and materials.[ii]
Acting as the supreme global
adjudicator, the WTO has ruled against laws deemed “barriers to
free trade.” It has forced Japan to accept greater pesticide residues
in imported food. It has kept Guatemala from outlawing deceptive advertising
of baby food. It has eliminated the ban in various countries on asbestos,
and on fuel-economy and emission standards for motor vehicles.
And it has ruled against marine-life protection laws and the ban on
endangered-species products. The European Union’s prohibition
on the importation of hormone-ridden U.S. beef had overwhelming popular
support throughout Europe, but a three-member WTO panel decided the
ban was an illegal restraint on trade. The decision on beef put in jeopardy
a host of other food import regulations based on health concerns. The
WTO overturned a portion of the U.S. Clean Air Act banning certain additives
in gasoline because it interfered with imports from foreign refineries.
And the WTO overturned that portion of the U.S. Endangered Species Act
forbidding the import of shrimp caught with nets that failed to protect
sea turtles.[iii]
Free trade is not fair trade;
it benefits strong nations at the expense of weaker ones, and rich interests
at the expense of the rest of us. Globalization means turning the clock
back on many twentieth-century reforms: no freedom to boycott products,
no prohibitions against child labor, no guaranteed living wage or benefits,
no public services that might conceivably compete with private services,
no health and safety protections that might cut into corporate profits.[iv]
GATT and subsequent free
trade agreements allow multinationals to impose monopoly property rights
on indigenous and communal agriculture. In this way agribusiness can
better penetrate locally self-sufficient communities and monopolize
their resources. Ralph Nader gives the example of the neem tree, whose
extracts contain natural pesticidal and medicinal properties.
Cultivated for centuries in India, the tree attracted the attention
of various pharmaceutical companies, who filed monopoly patents,
causing mass protests by Indian farmers. As dictated by the WTO, the
pharmaceuticals now have exclusive control over the marketing of neem
tree products, a ruling that is being reluctantly enforced in India.
Tens of thousands of erstwhile independent farmers must now work for
the powerful pharmaceuticals on profit-gorging terms set by the companies.
A trade agreement between
India and the United States, the Knowledge Initiative on Agriculture
(KIA), backed by Monsanto and other transnational corporate giants,
allows for the grab of India’s seed sector by Monsanto, its trade
sector by Archer Daniels Midland and Cargill, and its retail sector
by Wal-Mart. (Wal-Mart announced plans to open 500 stores in India,
starting in August 2007.) This amounts to a war against India’s
independent farmers and small businesses, and a threat to India’s
food security. Farmers are organizing to protect themselves against
this economic invasion by maintaining traditional seed-banks and setting
up systems of communal agrarian support. One farmer says, “We
do not buy seeds from the market because we suspect they may be contaminated
with genetically engineered or terminator seeds.”[v]
In a similar vein, the WTO
ruled that the U.S. corporation RiceTec has the patent rights to all
the many varieties of basmati rice, grown for centuries by India’s
farmers. It also ruled that a Japanese corporation had exclusive rights
in the world to grow and produce curry powder. As these instances demonstrate,
what is called “free trade” amounts to international corporate
monopoly control. Such developments caused Malaysian prime minister
Mahathir Mohamad to observe:
We now have a situation where
theft of genetic resources by western biotech TNCs [transnational corporations]
enables them to make huge profits by producing patented genetic mutations
of these same materials. What depths have we sunk to in the global marketplace
when nature’s gifts to the poor may not be protected but their
modifications by the rich become exclusive property?
If the current behavior of
the rich countries is anything to go by, globalization simply means
the breaking down of the borders of countries so that those with the
capital and the goods will be free to dominate the markets.[vi]
Under free-trade agreements
like General Agreements on Trade and Services (GATS) and Free Trade
Area of the Americas (FTAA), all public services are put at risk. A
public service can be charged with causing “lost market opportunities”
for business, or creating an unfair subsidy. To offer one instance:
the single-payer automobile insurance program proposed by the province
of Ontario, Canada, was declared “unfair competition.”
Ontario could have its public auto insurance only if it paid U.S. insurance
companies what they estimated would be their present and future losses
in Ontario auto insurance sales, a prohibitive cost for the province.
Thus the citizens of Ontario were not allowed to exercise their democratic
sovereign right to institute an alternative not-for-profit auto
insurance system. In another case, United Postal Service charged the
Canadian Post Office for “lost market opportunities,” which
means that under free trade accords, the Canadian Post Office would
have to compensate UPS for all the business that UPS thinks it would
have had if there were no public postal service. The Canadian postal
workers union has challenged the case in court, arguing that the agreement
violates the Canadian Constitution.
Under NAFTA, the U.S.-based
Ethyl Corporation sued the Canadian government for $250 million in “lost
business opportunities” and “interference with trade”
because Canada banned MMT, an Ethyl-produced gasoline additive considered
carcinogenic by Canadian officials. Fearing they would lose the case,
Canadian officials caved in, agreeing to lift the ban on MMT, pay Ethyl
$10 million compensation, and issue a public statement calling MMT “safe,”
even though they had scientific findings showing otherwise. California
also banned the unhealthy additive; this time a Canadian based Ethyl
company sued California under NAFTA for placing an unfair burden on
free trade.[vii]
International free trade
agreements like GATT and NAFTA have hastened the corporate acquisition
of local markets, squeezing out smaller businesses and worker collectives.
Under NAFTA better-paying U.S. jobs were lost as firms closed shop and
contracted out to the cheaper Mexican labor market. At the same time
thousands of Mexican small companies were forced out of business. Mexico
was flooded with cheap, high-tech, mass produced corn and dairy products
from giant U.S. agribusiness firms (themselves heavily subsidized by
the U.S. government), driving small Mexican farmers and distributors
into bankruptcy, displacing large numbers of poor peasants. The lately
arrived U.S. companies in Mexico have offered extremely low-paying jobs,
and unsafe work conditions. Generally free trade has brought a dramatic
increase in poverty south of the border.[viii]
We North Americans are told
that to remain competitive in the new era of globalization, we will
have to increase our output while reducing our labor and production
costs, in other words, work harder for less. This in fact is happening
as the work-week has lengthened by as much as twenty percent (from forty
hours to forty-six and even forty-eight hours) and real wages have flattened
or declined during the reign of George W. Bush. Less is being spent
on social services, and we are enduring more wage concessions,
more restructuring, deregulation, and privatization. Only
with such “adjustments,” one hears, can we hope to cope
with the impersonal forces of globalization that are sweeping us along.
In fact, there is nothing
impersonal about these forces. Free trade agreements, including new
ones that have not yet been submitted to the U.S. Congress have been
consciously planned by big business and its government minions over
a period of years in pursuit of a deregulated world economy that undermines
all democratic checks upon business practices. The people of any one
province, state, or nation are now finding it increasingly difficult
to get their governments to impose protective regulations or develop
new forms of public sector production out of fear of being overruled
by some self-appointed international free-trade panel.[ix]
Usually it is large nations
demanding that poorer smaller ones relinquish the protections and subsidies
they provide for their local producers. But occasionally things may
take a different turn. Thus in late 2006 Canada launched a dispute at
the World Trade Organization over the use of “trade-distorting”
agricultural subsidies by the United States, specifically the enormous
sums dished out by the federal government to U.S. agribusiness corn
farmers. The case also challenged the entire multibillion-dollar structure
of U.S. agricultural subsidies. It followed the landmark WTO ruling
of 2005 which condemned “trade-distorting” aid to U.S. cotton
farmers. A report by Oxfam International revealed that at least thirty-eight
developing countries were suffering severely as a result of trade distorting
subsidies by both the United States and the European Union. Meanwhile,
the U.S. government was maneuvering to insert a special clause into
trade negotiations that would place its illegal use of farm subsidies
above challenge by WTO member countries and make the subsidies immune
from adjudication through the WTO dispute settlement process.[x]
What is seldom remarked upon
is that NAFTA and GATT are in violation of the U.S. Constitution, the
preamble of which makes clear that sovereign power rests with the people:
“We the People of the United States . . . do ordain and establish
this Constitution for the United States of America.” Article I,
Section 1 of the Constitution reads, “All legislative Powers herein
granted shall be vested in a Congress of the United States.” Article
I, Section 7 gives the president (not some trade council) the power
to veto a law, subject to being overridden by a two-thirds vote in Congress.
And Article III gives adjudication and review powers to a Supreme Court
and other federal courts as ordained by Congress. The Tenth Amendment
to the Constitution states: “The powers not delegated to the United
States by the Constitution, nor prohibited by it to the States, are
reserved to the States respectively, or to the people.” There
is nothing in the entire Constitution that allows an international trade
panel to preside as final arbiter exercising supreme review powers undermining
the constitutionally mandated decisions of the legislative, executive,
and judicial branches.
True, Article VII says that
the Constitution, federal laws, and treaties “shall be the supreme
Law of the land,” but certainly this was not intended to include
treaties that overrode the laws themselves and the sovereign democratic
power of the people and their representatives.
To exclude the Senate from
deliberations, NAFTA and GATT were called “agreements” instead
of treaties, a semantic ploy that enabled President Clinton to bypass
the two-third treaty ratification vote in the Senate and avoid any treaty
amendment process. The World Trade Organization was approved by a lame-duck
session of Congress held after the 1994 elections. No one running in
that election uttered a word to voters about putting the U.S. government
under a perpetual obligation to insure that national laws do not conflict
with international free trade rulings.
What is being undermined
is not only a lot of good laws dealing with environment, public services,
labor standards, and consumer protection, but also the very right to
legislate such laws. Our democratic sovereignty itself is being surrendered
to a secretive plutocratic trade organization that presumes to exercise
a power greater than that of the people and their courts and legislatures.
What we have is an international coup d’état by big capital
over the nations of the world.
Globalization is a logical
extension of imperialism, a victory of empire over republic, international
finance capital over local productivity and nation-state democracy (such
as it is). In recent times however, given popular protests, several
multilateral trade agreements have been stalled or voted down. In 1999,
militant protests against free trade took place in forty-one nations
from Britain and France to Thailand and India.[xi] In 2000-01, there
were demonstrations in Seattle, Washington, Sydney, Prague, Genoa, and
various other locales. In 2003-04 we saw the poorer nations catching
wise to the free trade scams and refusing to sign away what shreds of
sovereignty they still had. Along with the popular resistance, more
national leaders are thinking twice before signing on to new trade agreements.
The discussion of globalization
by some Marxists (but not all) has focused on the question of whether
the new “internationalization” of capital will undermine
national sovereignty and the nation state. They dwell on this question
while leaving unmentioned such things as free trade agreements and the
WTO. Invariably these observers (for instance Ellen Wood and William
Taab in Monthly Review, Ian Jasper in Nature, Society and Thought, Erwin
Marquit in Political Affairs) conclude that the nation state still plays
a key role in capitalist imperialism, that capital-while global in its
scope–is not international but bound to particular nations, and
that globalization is little more than another name for overseas monopoly
capital investment.
They repeatedly remind us
that Marx had described globalization, this process of international
financial expansion, as early as 1848, when he and Engels in the Communist
Manifesto wrote about how capitalism moves into all corners of the world,
reshaping all things into its own image. Therefore, there is no cause
for the present uproar. Globalization, these writers conclude, is not
a new development but a longstanding one that Marxist theory uncovered
long ago.
The problem with this position
is that it misses the whole central point of the current struggle. It
is not only national sovereignty that is at stake, it is democratic
sovereignty. Millions, of people all over the world have taken to the
streets to protest free trade agreements. Among them are farmers, workers,
students and intellectuals (including many Marxists who see things more
clearly than the aforementioned ones), all of whom are keenly aware
that something new is afoot and they want no part of it. As used today,
the term globalization refers to a new stage of international expropriation,
designed not to put an end to the nation-state but to undermine whatever
democratic right exists to protect the social wage and restrain the
power of transnational corporations.
The free trade agreements,
in effect, make unlawful all statutes and regulations that restrict
private capital in any way. Carried to full realization, this means
the end of whatever imperfect democratic protections the populace has
been able to muster after generations of struggle in the realm of public
policy. Under the free trade agreements any and all public services
can be ruled out of existence because they cause “lost market
opportunities” for private capital. So too public hospitals can
be charged with taking away markets from private hospitals; and public
water supply systems, public schools, public libraries, public housing
and public transportation are guilty of depriving their private counterparts
of market opportunities, likewise public health insurance, public mail
delivery, and public auto insurance systems. Laws that try to protect
the environment or labor standards or consumer health already have been
overthrown for “creating barriers” to free trade.
What also is overthrown is
the right to have such laws. This is the most important point of all
and the one most frequently overlooked by persons from across the political
spectrum. Under the free trade accords, property rights have been elevated
to international supremacy, able to take precedent over all other rights,
including the right to a clean livable environment, the right to affordable
public services, and the right to any morsel of economic democracy.
Instead a new right has been accorded absolutist status, the right to
corporate private profit. It has been used to stifle the voice of working
people and their ability to develop a public sector that serves their
interests. Free speech itself is undermined as when “product disparagement”
is treated as an interference with free trade. And nature itself is
being monopolized and privatized by transnational corporations.
So the fight against free
trade is a fight for the right to politico-economic democracy, public
services, and a social wage, the right not to be completely at the mercy
of big capital. It is a new and drastic phase of the class struggle
that some Marxists–so immersed in classical theory and so ill-informed
about present-day public policy–seem to have missed. As embodied
in the free trade accords, globalization has little to do with trade
and is anything but free. It benefits the rich nations over poor ones,
and the rich classes within all nations at the expense of ordinary citizens.
It is the new specter that haunts the same old world.
Michael Parenti’s
recent books include
The Assassination of Julius Caesar (New Press),
Superpatriotism (City Lights), and The
Culture Struggle (Seven Stories Press). For more information
visit: www.michaelparenti.org.
© 2007 Michael Parenti
[i] Quoted in New York Times,
May 21, 1989.[ii] See Lori Wallach and Michelle Sforza, The WTO (New
York: Seven Stories Press, 2000); and John R. MacArthur, The Selling
of Free Trade: Nafta, Washington, and the Subversion of American Democracy
(New York: Hill and Wang, 2000).
[iii] New York Times, April
30, 1996 and May 9, 1997;Washington Post, October 13, 1998.
[iv] See the report by the
United Nations Development Program referenced in New York Times, July
13, 1999.
[v] Project Censored, “Real
News,” April 2007; also Arun Shrivastava, “Genetically Modified
Seeds: Women in India take on Monsanto,” Global Research, October
9, 2006.
[vi] Quoted in People’s
Weekly World, December 7, 1996.
[vii] John R. MacArthur, The Selling of “Free Trade”: NAFTA,
Washington, and the Subversion of American Democracy (New York: Hill
& Wang, 2000; and Sarah Anderson and John Cavanagh, “Nafta’s
Unhappy Anniversary,” New York Times, February 7, 1995.
[viii] John Ross, “Tortilla
Wars,” Progressive, June 1999
[ix] For a concise but thorough
treatment, see Steven Shrybman, A Citizen’s Guide
to the World Trade Organization
(Ottawa/Toronto: Canadian Center for Policy
Alternatives and James Lorimer
& Co., 1999).
[x] “US seeks “get-out
clause” for illegal farm payments” Oxfam, June 29, 2006,
http://www.oxfam.org/en/news/
pressreleases2006/pr060629_wto_geneva
[xi] San Francisco Chronicle, June 19, 1999.
Digg
it! And spread the word!
Here is a unique chance to help this article to be read by thousands
of people more. You just Digg it, and it will appear in the home page
of Digg.com and thousands more will read it. Digg is nothing but an
vote, the article with most votes will go to the top of the page. So,
as you read just give a digg and help thousands more to read this article.
Click
here to comment
on this article