SHOULD WE ACCEPT GLOBALIZATION?

In his classic book, Principles of Political Economy and Taxation (1817), English economist David Ricardo (1772-1823) made the first powerful case for free trade between nations. We have now had nearly two centuries of economic experience with free trade and its opposite, protectionism. For the most part, Ricardo's arguments have gradually prevailed in the minds of economists and the public over, for example, the protectionist economics of German economist Georg Friedrich List (1789-1846). (Until recently, List's thought was very important in the thinking of the framers of post-World War II Japan.)

But, though free trade has been popular wherever it has been long instituted, and nearly all economists these days seem to believe the world should free up trade between nations, nevertheless there remains great skepticism about free trade on the part of a segment of the public. Part of this segment is especially concerned about the movement to extend free trade commonly called economic globalization.

Are they right?

Economically, skeptics about globalization seem to me for the most part misguided. But they have demonstrated at recent meetings of the World Trade Organization in Seattle, Washington, Quebec City, and Genoa that they are an influential, an informed, and a determined minority. Indeed, they are clearly a widespread and growing popular movement. And, to an extent, I believe, they have -- indeed, all of us have -- genuine grounds for extreme concern about economic globalization.

We are told by politicians and intellectuals that the rapid advance of global communications has brought all nations on Earth into intense relation with each other, that a global community and a global culture are emerging. We are told that no one can resist these events. We are told that only fools will try.

Well, that's all very fine. Sure. Globalization of communications is here. The Internet and the World Wide Web have suddenly put at least the more affluent part of the world in increasing touch with their counterparts in the farthest reaches. But if an event is certain, is it necessarily a good thing? Even if it is futile to resist something, should we not resist it, for example, if parts of it were deeply evil? Would one be a fool to try to resist an enormous evil?

I think not. More importantly, the determined minority opposing globalization thinks not.

Not that globalization is an enormous evil.

But should we really be passive before globalization, not trying even to influence it at all?

Free trade between nations increases overall advantages. But not everyone benefits in the short term. In the short term some lose their jobs.

In addition, not everything that our neighbours in the Earth do is something that we want to do, or something we will tolerate. Not every law they pass seems suitable for us, or something we choose to institute. We do not wish to be forced to institute laws and reforms; we wish to make our own, suitable to us. We may resist laws and reforms, if they are not of our making, even if eventually they seem beneficial. In your backyard, maybe; but not in mine. Not In My Back Yard, we say. You keep your own ways in your place, I'll keep my ways in mine.

So it is very natural for people to set up barriers between each other, and for nations to set up barriers between nations. When most people buy a property, they put up a fence to increase their privacy, to delimit what is theirs, and to keep their neighbours out. This natural human propensity isn't going to go away.

But globalization isn't about changing people, you say. It doesn't provide for free movement of peoples (except, perhaps, transnational elites). It's about free trade.

Fine, I reply. So why, when these agreements are instituted, don't we get free trade?

For, of course, the dirty little secret of the globalization deals is that free trade never quite gets here. We never quite get to it. What we get instead is, enhanced trade. The trade of some goods and services is freed from restrictions. On others -- notably intellectual property, especially on drugs and films -- the manufacture of the item, and therefore trade in the item -- is increasingly restricted, allegedly for good reasons.

Example.

In the Canada-U.S. "free trade" agreement (FTA) that went into effect on January 1, 1989, what the two countries achieved was not free trade. Once again, it was that lesser light, enhanced trade. In other words, each country had its list of sacred cows that continued to be protected. Each country contrived a number of escape clauses in case it had to get out of various clauses of the deal.

For instance, the United States protected coastal shipping. No Canadians need apply to transport goods along America's coasts. The United States also continued to protect its sugar industry. Canada (weakly) protected the nebulous thing it calls its (high) "culture", by which it seems to mean its domestic magazines, bookstores, television advertising, and book industry. It tried to exempt its fresh-water supply from international trade. (But if it ever starts to sell fresh water, it has to continue.) But it was forced to accept that it would have no special access to its own oil or natural gas supplies; in case of fuel shortages or a crisis, it would have to pay world price.

In the same agreement, the United States also preserved its states' right to interfere in "free" trade. (American states can pass laws, for instance, requiring some product they want to buy to be manufactured within the state or in the United States.) America also preserved its anti-dumping legislation. And, most important, it preserved its natural big brother clout; so that, several times since the signing, it has interfered -- against the explicit wording of the agreement -- to protect its wheat farmers and forest industries from Canadian competition.

[A note on September 16, 2001: This last month the U.S. again acted to shield the profits of its forest industry from Canadian softwood, on the pretext of Canadian so-called "stumpage" fees being too low. A 19% tariff was instituted. But the U.S. has already lost on this identical matter before arbitration committees three times. I guess the squeaking wheel got the grease.]

So free trade in the Canada-U.S. agreement -- the real thing -- was not actually achieved. Always a bridesmaid, never a bride, I guess.

Because of the manner in which the Progressive Conservative Canadian government and its leader Brian Mulroney tried to hurriedly institute free trade, the upcoming Canada-U.S. Free Trade Agreement and its implications for Canada became the major issue of the 1988 Canadian federal election. The government and its corporate allies fought hard to sell the Canadian people on the agreement. Canadians struggled to understand the issues involved. At one point the agreement became in serious trouble. A week later a corporate publicity campaign seemed to turn public opinion around. The government was re-elected and the agreement went into force.

In 1993 the agreement's broader successor, NAFTA, the North American Free Trade Agreement, which included Mexico, was signed. By this time the Canadian public was exhausted. Though many were unenthusiastic about NAFTA, NAFTA is what Canadians got. Hardly anyone in Canada knows what is in NAFTA to this day. Does anyone in the United States -- outside of a few multinationals and the Office of the Trade Representative -- know? NAFTA was sold as a larger free trade agreement between Canada, the United States, and Mexico. Is there anyone naive enough to think that's what it was?

No, dollars to doughnuts it was our old friend "enhanced trade" again. Believe me, the United States kept the same list of exemptions again; probably Canada did as well.

(Interestingly, it became clear recently that the prime minister of Canada doesn't know what's in NAFTA. In the summer of 2001 Jean Chrétien argued that a certain measure was protected under NAFTA. It wasn't. Mr. Chrétien doesn't know what's in NAFTA anymore than you or I.)

So willy-nilly, we have "enhanced" trade.

Well, something's usually better than nothing. It really isn't an awful thing that we didn't get to "free" trade the first time round. In fact, it's very likely that in the medium term some of the exemptions from the agreements might be voluntarily relinquished and we might more closely approach real free trade. Consider the Europeans. Since they began with a few simple coal trade agreements in the 1950s they have made much progress towards not only free trade, but also a customs union, a monetary union, even a political union.

So I am not against free trade. It's a good thing. I am also not against enhanced trade. It is a questionable thing, but probably a good thing (just less good than free trade, and occasionally -- possibly -- a bad deal).

Nor am I against globalization; that is, if we mean allowing corporations to sell their products and services wherever they want and to make them wherever they want. Allowing for a few appropriate exceptions, and if nations are allowed to reserve the right to make appropriate environmental and consumer-safety regulations, to me globalization seems a potential good thing.

No, as I see it there are only three main problems with globalization:

1. The appropriate exceptions I mentioned (but, with good will, this problem can be sensitively handled and minimized);
2. The fact that globalization is not really between ordinary people in the nations concerned or, directly, for the benefit of ordinary people: it is for and between transnational corporations, and is intended primarily for their benefit;
3. And the fact that it is often agitated for and instituted by governments and corporations in the most dishonest, disgraceful, sleazy, greedy, and disgusting way.

I will discuss the appropriate exceptions later.

No, the main problem with the way globalization is coming at the people of the world is that they are being dishonestly manipulated by the transnational corporations and their lackey governments. People know this. Therefore they agitate to see the actual text of the agreements. Governments attempt to hide the text from them (vide the Quebec City conference in spring 2001) while expressly inviting corporations to attend and lobby at the meetings. No one in the public -- in the citizenry, for Christ's sake -- can have confidence in such a disgusting, closed, and corrupt process.

Nor can anyone ignore the fact that this is becoming typical in the conferences to enhance globalization. Real people that will be affected by the agreements seem to be excluded; they are suitable only for gassing outside a barrier fence. Only corporations seem to have the right to lobby for what is to occur.

This is my definition of a corrupt, undemocratic process.

No. This will not do. The people of the world demand to sit at the table.

Nor is it enough to say that their representatives, the politicians, are sitting at the table for them. For it is plain for all to see that many of the politicians have little idea what is in the agreements before them, and that many of them, if not bought and paid for by the transnationals, are nonetheless too much lobbied and influenced by them, in the absence of the public.

Therefore each of us must be skeptical about the possible motives for, the terms of, and the eventual results of globalization. We can not forget that corporate goals for profits may not be identical with our own. That imposing increased periods of protection for patent monopolies may not be in the best interests of the public. That increased protection for drug patents, in particular, and the prevention of generic drugs may not be in the best interests of the public. That private medical systems may resent and try to eliminate publicly funded single-payer healthcare systems, perhaps by eliminating their universality. That, to boost their profits, pharmaceutical companies may try to prevent the institution of public pharmacare. That the shareholders of corporations, already protected from bankruptcy by limited liability, may try to use their corporations against the public good by contributing to, lobbying or bribing legislators, or perhaps the negotiators of globalization treaties, for the benefit of their profits.

Therefore we must all do what we can to inform ourselves, and to skeptically and carefully examine and to oppose if necessary the treaties that multinationals are trying to institute between nations, to institute globalization.

Possible Appropriate Exceptions to Globalization

Governments exist. Most people feel some loyalty to their local governments. Many people are even willing to die to save the national way of life that their government may exist to preserve.

Governments were originally created -- nearly always -- to preserve or extend the interests of those who created them. Think in terms of a robber gang that captures a country or people. Attila or another king grabs Hungary and tries to exploit it by force for the benefit of himself and his close cronies. This is how most countries start out.

But over time we have witnessed ordinary people gradually having more and more influence over the governments over them. Rights gradually are established downwards. Control gradually reaches upwards. Governments that treated ordinary people as peons and peasants are gradually captured by the people.

An example is Britain.

In Britain the Normans successfully invaded in 1066. King William I and his knights defeated the local Saxon king at the battle of Hastings, then proceeded over the country reducing enemy forces and castles until no opposition remained. The Normans proceeded to inventory the land (the Doomsday Book), and then loot it.

For several hundred years the Normans were in charge as a ruling class.

But gradually they were captured by the locals. English gradually became the official tongue even at court, instead of Norman French. Anglo-Saxons gradually mixed with the Normans, and wormed their way into the government. The powers of the king were gradually reduced, first for the benefit of his lords, as at Runnymede with the Magna Carta in 1214, then through concessions later kings had to make.

By the time of Elizabeth and James I, Parliament was a real force. It was dominated by landowners, but they showed increasing restiveness. They demanded increasing control over the monarch's finances and religious policy.

Parliament gave James I increasing trouble, and rebelled against his son Charles I. Charles was overthrown and executed for defying the will of Parliament. After Cromwell's dictatorship the monarchy was restored in 1660, but Parliament's power continued. James II was overthrown at the behest of Parliament when it invited the invasion of William of Orange. To become king William had to agree to a number of concessions.

Over time the powers of Parliament continued to grow, and the king's power to diminish. In the 19th century industrialization and the growth of an educated class of ordinary people brought about agitations to expand the franchise. Parliament was forced to allow more and more classes of ordinary people to vote in the reform bills of 1832 and 1867. It gradually brought in compulsory public education, then the expansion of the franchise to women.

In the 20th century the vote in Western countries has gradually been given even to 18 year olds. In Canada it was extended some decades ago to the First Nations (aboriginal peoples). It now seems likely to be extended to convicted prisoners.

Gradually, that is, control over government expanded downwards to more and more people, who gained real and effective measures of control over the laws that affected them.

Capitalist libertarians often complain about governments that they are gangs of looters in a conspiracy to control a given area. Well, that is how historically governments began.

But we can see that the process I have described has given real power in the advanced democracies ultimately to the will of the majority. The majority's real interests have gradually been advanced. The question for the future of government is whether the world should now march on to globalization and, perhaps, complete laissez-faire capitalism, or whether the interest of most people will be best advanced by continued democracy.

Should we continue to try to expand compulsory public education and enfranchisement, with increasing democracy; or should we try to encourage and expand people's consumer power, and have them choose directly as global consumers more and more of their products and services?

Or should we somehow do both at once?

This seems to me the question that is ultimately at stake with globalization. Are we marching toward reduced barriers and a totally consumerist future? This doesn't seem too bad to me, though anti-globalists lament the diminution that they fear of the "national space," the "public sphere." If private, non-governmental organizations -- voluntary organizations -- can provide justice services and other services now provided by government more efficiently and fairly than government, I think I can bear that.

But I do wonder whether all services should be provided non-governmentally.

As I have argued elsewhere, there may be some evidence that health care can best be provided with some kind of compulsory universal single-payer government system, such as we have in Canada. The efforts of transnational corporations to increase their property rights, including intellectual property rights, through multinational treaties such as the North American Free Trade Agreement (NAFTA) must be watched with extreme suspicion. If healthcare systems such as Canada's prove ultimately to be inefficient and counter-productive, and can't be reformed, then of course they will have to be scrapped and some more privately financed system substituted.

But this is a matter for the world's citizenry to decide, not the transnational corporations. They, who are not even people at all, but artificial privileged creations of government, must not be allowed to capture whole governments and countries of people and control them. I do not think that they can be allowed to be the real power ruling the world.

[To Be Continued and Revised]

A postscript as of November 3, 2002. In recent months the issue of genetically-altered foods has grown large. Transnational corporations centered in the United States wish to preserve the American public's ignorance of which of the foods they eat have been altered genetically. The corporations wish to retain their freedom to alter any foodstuff without having to reveal by labelling what they have done. They wish to secretly patent their "new" creations, and prevent their rivals from duplicating them. They wish to export their products to other nations, especially Europe, without revealing the genetic alteration.

It has been learned that genes from genetically altered crops in the field often mingle promiscuously with genes from other crops -- even at some distance. Thus one genetically altered crop affects others.

Europe has forbidden the sale of at least some genetically altered foods. It is demanding labelling. The United States is resisting, and a trade conflict on behalf of American transnationals looms.

One senses that the transnationals wish to write into any new trade agreements their rights to trade genetically modified foods internationally without hindrance.

Books About Globalization

Barber, Benjamin R. Jihad vs. McWorld: How Globalism and Tribalism are
    Reshaping the World. New York: Times Books (Random House), 1995.

Friedman, Thomas L. The Lexus and the Olive Tree: Understanding Globalization. New York: Farrar, Strauss Giroux, 1999.

An excellent, very rational book about globalization and how it is constrained and opposed by local and parochial loyalties.

Klein, Naomi. No Logo: Taking Aim at the Brand Bullies. Alfred A. Knopf Canada,
   2000.

This book is perhaps the most significant examination of recent trends in international capitalism. Klein explores the influence of transnational corporations like Nike and Coca-Cola and their marketing strategy of branding (i.e., labelling products with brands and trademarks, and advertising these as stylish necessities). She discusses the history and creation of brand-name goods, global displacement of manufacturing from the First to the Third World, and the capitalist search for ever cheaper international sourcing of products. She also discusses recent anti-globalization protests and the problem of sweatshops. While deeply concerned about these trends, Klein seems uncertain what should be done.

-------. Fences and Windows.

Stiglitz, Joesph E. Globalization and its Discontents. New York: W.W. Norton &
   Company, 2003.

The Nobel Memorial Prize in Economics winner ruminates on globalization.

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Last modified: 3:48 PM 03/11/2002