April 2004By Thomas Storck
Thomas Storck is a Contributing Editor of the NOR, and author, most recently, of Christendom and the West: Essays on Culture, Society and History.
Alternatives to Economic Globalization: A Report of the International Forum on Globalization. Berrett-Koehler (235 Montgomery St., Ste. 650, San Francisco CA 94104). 268 pages. $15.95.. .
Economic globalization is frequently discussed in our media today, and amidst all the stories and reports on its successes and failures, its good and ill effects, one thing stands out: globalization is inevitable. No single person or group of people, and apparently not even mankind as a whole, will be able to stop globalizations relentless march.
But is this really true? The volume under review here, sponsored by the International Forum on Globalization, argues that globalization of the economy can either be halted or at least significantly modified, so that the people of the world, rather than corporate interests, will benefit.
This work consists of eight collectively written chapters which give a history and critique of organized efforts toward globalization of the economy and suggest various alternative approaches. The authors point out that the mainstream media usually dismiss those protesting against the World Trade Organization (WTO) or the International Monetary Fund (IMF) as, in the words of Thomas Friedman of The New York Times, ignorant protectionists, who have nothing to offer and should be ignored. Yet, say the authors, Anyone who makes even the smallest effort to find out why millions of people from virtually every nation and walk of life have taken to the streets finds these simplistic characterizations to be untrue. And this volume gives enough examples and facts to make anyone who is concerned about the well-being of mankind and the health of the environment wary of the globalization push.
For example, how many of us know that the WTO, toward which this book is especially hostile, has the authority to force sovereign governments to weaken their environmental, labor, or consumer protection laws if another WTO member country, at the behest of one of its corporations, brings an action before a WTO tribunal? Indeed, the very first ruling of the WTO was against the U.S. Clean Air Act, which set high standards against polluting gasoline. The act was found noncompliant with WTO trade rules and had to be softened. The laws not only of the U.S., but of Canada, Japan, and the European Union have run afoul of the WTO, which has decreed that these countries either change their laws or face trade reprisals. And if the WTO can act thus with rich nations, what can it do with poor and helpless ones? Things like this: the government of Guatemala cancelled a public health law that had forbidden infant formula companies, notably Gerber, from advertising their products as being healthier than breast milk because the U.S. threatened a suit in the WTO. This is what free trade and economic globalization mean in practice.
The authors are especially interesting when they detail the history of the organized free-trade movement. This movement began with the Bretton Woods conference in 1944, which established the World Bank and the IMF. The GATT (General Agreement on Tariffs and Trade) was then created as the framework in which international trade would be conducted. The authors aver that the GATT process was fairer to poor countries than the WTO, which was created in 1994 and was given a built-in enforcement system more powerful than that of any previous treaty. This system, with closed tribunals of trade bureaucrats who determined if a countrys laws exceeded the constraints set by the new rules, included automatic, permanent trade sanctions against any country refusing to comply with WTO demands.
The authors argue convincingly that the WTO serves the interest only of large corporations. Since these same corporations largely control the media, whether of the so-called Left or the so-called Right, very little criticism of globalization finds its way into these media organs. This book recites many seemingly unrelated facts which find their nexus in economic globalization, such as the increasing spread of tropical diseases to the Northern Hemisphere and the increase of invasive alien plant and animal species. This happens because of the greatly increased shipping traffic from one continent to another.
In the U.S. many are concerned about immigration. And although we should be thankful that it is Catholic Latin Americans rather than, as in Europe, Muslims, who are entering this country, nevertheless those who do oppose immigration should be aware that often the reason emigrants leave their native lands is the policies of the rich countries themselves, who via the WTO and IMF have devastated the economies of the Southern Hemisphere. The rule of consumer demand means the rule of those consumers who have the most money. In Latin America this means that land which formerly was divided into small farms and produced food for a local market can now more profitably be used to grow export crops. Often with the aid of corrupt or complicit governments, this land is taken from its owners or cultivators and turned into large farms which produce crops meant to be sold in the U.S. market, frequently leaving the former farm families with little choice but to emigrate. Thus, the forces of economic globalization disrupt families and destroy communities.
Of course, the proponents of globalization have arguments aplenty against all this. But the facts do not support them. For example, Senegal experienced large job losses following liberalization in the late 1980s; by the early 1990s, employment cuts had eliminated one-third of all manufacturing jobs. The chemical, textile, shoe, and automobile assembly industries virtually collapsed in the Ivory Coast after tariffs were abruptly lowered by 40 percent in 1986. And, as everyone knows, our own country has not been immune to similar job losses. A shopper does not need statistics to realize that in many cases Chinese goods have pretty much eliminated American-made goods; all he need do is look at the labels.
Some of the most interesting proposals made in this volume are those concerning corporations. In this country, corporations receive charters from a state government, and in the early 19th century the various states put important restrictions on corporate activity. But since the U.S. Supreme Court after the Civil War ruled that corporations are entitled to all the rights of natural persons (but without either the responsibility or liability), corporations have increasingly operated without restrictions. What is the alternative? Since corporations are purely creatures of the law, the authors suggest that the governments that charter them can put important restrictions on their activities or can hold the actual people who run or own them responsible for their actions. Wayne Township in Pennsylvania passed a law stating that any corporation with three or more regulatory violations over seven years is forbidden to establish operations in its jurisdiction. In extreme cases, as in the case of a corporation which engages in activity gravely detrimental to the public welfare e.g., when the explosion of a Union Carbide plant in Bhopal, India, resulted in the deaths of thousands of innocent people the state government here at home could revoke its charter and sell its assets at public auction, effectively administering a corporate death penalty.
The book also suggests closing down the Bretton Woods institutions the World Bank, the IMF, and the WTO and replacing them with others that realize that the aim of trade must be human welfare, not simply corporate profits.
Interestingly, many of the suggestions made in this book parallel those made years ago by G.K. Chesterton, Hilaire Belloc, and the Distributists. Many perceptive thinkers, such as most of the great Catholic minds of the 20th century, while perforce rejecting socialism, saw also that capitalism understood as the separation of ownership from actual work leads inevitably toward gigantic impersonal corporations that care not a whit for the cultural, economic, or environmental welfare of mankind. The alternative to corporate globalization, then, is not some form of socialism or centralized economic planning. Rather, it is local or regional economies, small businesses producing for local markets.
Nor is this sort of economy something merely theoretical. The authors instance many examples of successful small firms in todays world, including small firms that have sometimes formed consortiums to deal with larger projects, such as in Denmark, where a consortium of small furniture makers, woodworkers, and interior designers have undertaken joint bidding on the furnishings of convention centers and other projects that are larger in scale than any one company can handle. And in northern Italy the furniture industry is built on networks of small firms supported by a producers association that helps provide common services such as warehousing, purchasing, and inventory management. (For more examples of small businesses functioning effectively today, see Joseph Pearces Small is Still Beautiful.)
The authors of this book are not socialists. And I did not find any nonsense in it advocating population control. This is a book very much worth reading and acting upon. It should appeal to any Catholic who understands the need for a family economy instead of a corporate economy, and for a society based upon small and widely distributed property. If you have been persuaded that all the protestors against the IMF and WTO are cranks or agitators, please reconsider. Even though many of the protestors are undoubtedly allied to causes that are inimical to human welfare (such as feminism), economic globalization is likewise an enemy to whatever remnants of Christian civilization still exist. This question cannot be reduced to a Left/Right issue. It is important. We must educate ourselves, for otherwise the corporate elite will surely keep us in the dark as long as they can.