Eco-nomics

The Storm Over Globalization

Dispatches from the global trade wars, in the days before and after the WT0, World Bank, and IMF protests

More than 700 organizations and between 40,000 and 60,000 people took part in the protests against the Third Ministerial of the World Trade Organization on November 30. These groups and citizens sense a cascading loss of human, labor, and environmental rights in the world. Seattle was not the beginning but simply the most striking expression of citizens struggling against a worldwide corporate oligarchy - in effect, a plutocracy. Oligarchy and plutocracy are not polite terms. They often are used to describe "other" countries where a small group of wealthy people rule, but not the "first world"the United States, Japan, Germany, or Canada. But already, the world's top 200 companies have twice the assets of 80 percent of the world's people. Global corporations represent a new empire whether they admit it or not. With massive amounts of capital at their disposal, any of which can be used to influence politicians and the public as and when deemed necessary, they threaten and diminish all democratic institutions.

Corporations are using the World Trade Organization, however, to cement into place their plutocracy. When the "Final Act Embodying the Results of the Uruguay Round of Multilateral Trade Negotiations" was enacted on April 15, 1994, in Marrakech, it was recorded as a 550-page document that was then sent to Congress for approval. Ralph Nader offered to donate $10,000 to any charity of a congressman's choice if any of them signed an affidavit saying they had read it and could answer several questions about it. Only one-Senator Hank Brown, a Colorado Republican-took him up on it. After reading the document, Brown changed his opinion and voted against the agreement. There were no public hearings, dialogue, or education. What was approved was an agreement that gives the WTO the ability to overrule or undermine international conventions, acts, treaties, and agreements when it arbitrates trade conflicts between nations. The WTO directly violates "The Universal Declaration of Human Rights" adopted by member nations of the United Nations, not to mention Agenda 21 of the 1992 Earth Summit.

Paul Hawken in The Amicus journal, written shortly after he woke up lying on his back on the pavement in Seattle, after being pepper-sprayed by the Seattle police.

But where globalization is really an asset is in the fact that it is creating "Super-empowered environmentalists," who, acting on their own, can now fight back rather effectively against both the Electronic Herd and governments. Thanks to the Internet, environmentalists in one country are quickly relaying how a multinational behaves in their country to environmentalists in other countries. Therefore, more and more multinationals are realizing that to preserve their global reputation and global brands in the face of Internet activism, they need to be more environmentally responsible.

What happened in the Pantanal [the largest freshwater wetland in the world, along the border between Brazil, Bolivia, and Paraguay, which has been threatened by plans for a giant river dredging project intended to facilitate international commerce], in fact, is that local environmentalists engaged environmentalists in North America to put pressure on the Inter-American Development Bank, which was planning to fund the dredging and straightening of the river system. The Development Bank, sensitive to its global reputation, responded by pressuring the local governments sponsoring the project to scale it back and do a full-blown environmental assessment.... [The] governments involved figured out ways to improve navigation of the rivers in the Pantanal without altering their shape.
Thomas L. Friedman, The Lexus and the Olive Tree: Understanding Globalization

On New Year's Day 1994, a ragtag group of rebels calling themselves the Zapatista National Liberation Army took control of large areas of the impoverished Mexican state of Chiapas. Their armed rebellion was to protest a pattern of economic development that was enriching a few large landowners engaged in coffee production and ranching while denying the state's impoverished majority the land reform once promised by the country's constitution. It was no coincidence that the insurrection occurred on the same day that the North American Free Trade Agreement (NAFTA) entered into force. Among its many other effects, NAFTA was projected to put hundreds of thousands of Mexican peasant farmers out of business by undercutting them with cheaper, subsidized corn from the United States.

The Chiapas uprising was indicative of broader insecurities playing themselves out around the world as a result of sweeping transformations underway in the world's agricultural markets. The last several decades have seen agriculture rapidly transformed in response to both technological change and economic restructuring. As it becomes a globally integrated enterprise, farmers from poor countries find themselves in direct competition with the mechanized agribusiness of the U.S. Corn Belt. In response to these pressures, traditional small farmers on every continent are rapidly being supplanted by large farms linked to the global marketplace.

Hilary French, Vanishing Borders: Protecting the Planet in the Age of Globalization
Economic globalization is shifting power away from governments responsible for the public good and toward a handful of corporations and financial institutions driven by a single imperative-the quest for short-term financial gain. This has concentrated massive economic and political power in the hands of an elite few... Faced with pressures to produce greater short-term returns, the world's largest corporations are downsizing to shed people and functions.... It is becoming increasingly difficult for corporate managers to manage in the public interest, no matter how strong their moral values and commitment.
David Korten, When Corporations Rule the World


Under GATT [the General Agreement on Tariffs and Trade, of which the WTO is a part], the race to the bottom is not only in standard of living, environmental and health safeguards, but in democracy itself. Enactment of the free trade deal virtually guarantees that democratic efforts to make corporations pay their fair share of taxes, provide their employees a decent standard of living, or limit their pollution of the air, water, and land will be met with the refrain, "You can't burden us like that. If you do, we won't be able to compete. We'll have to close down and move to a country that offers us a more hospitable climate."
Ralph Nader and Lori Wallach, in The Case Against the Global Economy, edited by Jerry Mander and Edward Goldsmith


In 1986, Union Carbide Corporation's chemical plant in Bhopal, India accidentally released methyl isocynate into the air, injuring some 200,000 people and killing more than 2,000. Soon after the accident the chairman of the board of Union Carbide, Warren M. Anderson, was so upset at what happened that he informed the media that he would spend the rest of his fife attempting to correct the problems his company had caused and to make amends. Only one year later, however, Mr. Anderson was quoted in Business Week as saying that he had "overreacted," and was now prepared to lead the company in the legal fight against paying damages and reparations.

What happened? Very simply, Mr. Anderson at first reacted as a human being. Later, he realized (and perhaps was pressed to realize) that this reaction was inappropriate for a chairman of the board of a company whose primary obligations are not to the poor victims of Bhopal, but to shareholders; that is, to its profit picture. If Mr. Anderson had persisted in expressing his personal feelings or acknowledging the company's culpability, he certainly would have been fired.
Jerry Mander, In the Absence of the Sacred


One reason that poor developing countries cannot pay off their debt is that they cannot penetrate major export markets in industrial countries-in part because of the formidable walls of protection that remain. Rich countries continue to protect their farmers, for example, while developing countries are being asked to open up their own agricultural sectors - a measure that threatens to undermine their food security and spread poverty. But such concerns were drowned out at the WTO meeting in Seattle in late 1999. If trade expansion is to benefit the poor, the international rules of the game must be made fairer. A high priority is to eliminate the protectionism that is biased against developing countries. And to do this, the capacity of developing countries to negotiate global and regional trade agreements needs to be strengthened.
United Nations Development Prograrnme, Overcoming Human Poverty


At the present time global interdependence is celebrated as a self-evident good. The royal road to development, peace, and harmony is thought to be the unrelenting conquest of each nation's markets by all other nations. The word "globalist" has politically correct connotations, while the word "nationalist" has come to be pejorative. This is so much the case that it is necessary to remind ourselves that the World Bank exists to serve the interests of its members, which are nation states, nation communitiesnot individuals, not corporations, not even NGOs. It has no charter to serve the one-world without borders cosmopolitan vision of global integration

of converting many relatively independent national economies, loosely dependent on international trade, into one tightly integrated world economic network upon which the weakened nations depend for even basic survival.

Herman E. Daly, Senior Economist in the Environment Department of the World Bank, 1988-94, in his Farewell Lecture to the Bank on January 14, 1995. Daly is currently Senior Research Scholar at the University of Maryland School of Public Affairs, and a member of the boards of Carrying Capacity Network and Worldwatch Institute

So far, the anti-corporate rebellion has been a road show. Five months go, tens of thousands of people descended on Seattle to speak out, march, and shut down the WTO despite tear gas, rubber bullets, pepper spray and arrests. A year earlier, international outreach on the Internet helped crush the Multilateral Agreement on Investment (MAI), a master plan for corporate globalism....

The next front, though, may not be Geneva or Davos or Kuala Lumpur.... "What we're doing is encouraging people to connect the idea of corporate domination to the local level," says Nick Penniman, executive director of the Massachusetts-based Alliance for Democracy.

Penniman says the heat in the streets of Seattle last November 30 had an "eye-popping" effect on public awareness that global trade rules are usurping traditional democratic choice. The result has been a surge in local action against a global system based first and foremost on the needs of the multinational merchant class. Cities like Austin, Texas; Boulder,

Colorado; and Indianapolis, Indiana, have passed "precautionary declarations" on globalizationwarnings to the architects of global trade that they must not pass regulations that override local choices.

"What we're trying to do is to create an immune system against the WTO at a local level," says Penniman. It's a sort of retroactive democracy. National governments never asked their citizens what way to go on trade, so citizens are telling them after the fact ....

A growing number of democracy critics expect that a local government will be the first to stand up to a global trade body. Across the U.S., cities and towns arc challenging corporate freedoms. There are proposals to ban bigbox stores, kick out corporations that abuse regulatory law, and to block corporate ownership of farms, ranches, vineyards, and woodlots.
James MacKinnon in Adbusters, June/July 2000 MATTERS OF SCALE

After a Few Years of Globalization

Percentage of World Bank "structural adjustment" loans to poor nations that included environmental goals as required by World Bank policy, in 1994 = 60 percent

Percentage that included environmental goals in 1999, according to the World Bank's own figures = 20 percent

Amount spent by U.S. teenagers in 1994 = $63 billion

Amount spent by U.S. teenagers in 1999 = over $100 billion

Ratio of the average corporate CEO's pay to the average employee's pay in 1978 = 60 to 1

Ratio in 1997 = 189 to I

Number of people employed by the multinational corporation General Electric in 1981 = 400,000

Number of people employed by GE in 1993, when the company's sales were three times their 1981 level = 230,000

Plywood exports from Indonesia and Malaysia (which contribute heavily to the deforestation of tropical habitats) in 1975 = 0.2 million cubic meters

... and in 1998 = 12.0 million cubic meters

SOURCES:

  • Structural adjustment loans: World Bank;
  • Expenditures by teenagers: Peter Zollo, Wise Up to Teens: Insights Into Marketing and Advertising to Teenagers (New Strategist, 1999);
  • Pay disparities: Ellen Schwartz and Suzanne Stoddard, Taking Back Our Lives in the Age of Corporate Dominance (Berrett-Koel-Aer, 2000);
  • GE downsizing: Jeremy Rifkin, et. al, The End of Work (Putnam, 1995);
  • Plywood exports: Hilary French, Vanishing Borders.Protecting the Planet in the Age of Globalization (W.W. Norton, 2000).

Back to Top

Back to Eco-nomics Directory

Home