Globalization and Democracy
by Michael Parenti, Counter Currents
www.zmag,org, May 27, 2007
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 Palmol_ive 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, over_rule, 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 govern_ments. Signatory governments must lower tariffs,
end farm subsidi_es, 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 stan_dards 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.
Cultivat_ed for centuries in India, the tree attracted the attention
of vari_ous 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 in_stance:
the single-payer automobile insurance program proposed by the
province of Ontario, Canada, was declared "unfair competi_tion."
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 conces_sions, more restructuring, deregula_tion, and privat_ization.
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 govern_ments 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.
[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.
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