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Global Economics 201

Five More Things Everyone Should Know About International Economics and "Free Trade"

Eric S. Piotrowski

We rarely hear, it is said, of the combinations of master, though frequently of those of workmen. But whoever imagines, upon this account, that masters rarely combine, is as ignorant of the world as of the subject.

Adam Smith

On 20 April 2001, thousands of working people, environmentalists, human rights advocates, anarchists, and other activists will converge on Quebec City for the monumental Summit of the Americas, a negotiations forum for the Free Trade Area of the Americas (more about the FTAA below). A “festival of resistance” in the tradition of Seattle ‘99 is being organized as I write these words.

Since I can’t make it to Quebec myself (my 8th grade language arts students demand my attention), I’ve taken the opportunity to share some information about recent globalization efforts, their impacts on people around the world, and what’s being done to combat them. I gave up my spring break to write this booklet, firm in the belief that people need and want to know the facts. If you find it interesting or helpful, please send a quick email and let me know. I’ll try to answer questions as time and resources permit.

This essay is a follow-up to my pamphlet Global Economics 101: Five Things Everyone Should Know about the IMF, World Bank, and WTO, released after the Washington DC A16 protests.

Please note that I’ve included parenthetical documentation that refers to Works Cited. I did this thing strictly by the book (MLA Handbook for Writers of Research Papers, Fifth Edition). Special thanks go out to Garrett Crowell for his invaluable comments.


On 1 January 1994, the North American Free Trade Agreement [NAFTA] went into effect. During the pre-ratification debate, it was clear that NAFTA would encourage businesses in the United States to move to Mexico, where environmental standards are relaxed and union-busted workers have no choice but to settle for poverty wages. Because of overwhelming opposition from labor and environmental groups, NAFTA seemed destined for defeat in Congress. But at the last minute, President Clinton made a series of pork-spending deals (including cigarette tax breaks in North Carolina, military cargo plane contracts for Texas, and a license to use the carcinogenic pesticide methyl bromide on farms in Florida), and got the necessary votes in the House of Representatives. George Will said of the event: “votes are for sale and the President is buying” (Dawkins 67).

Three years after NAFTA, the fears of its opponents had been confirmed: companies moved south; the US-Mexico border saw an explosion in pollution; safety regulations were torn apart; and business leaders in the US used the threat of moving to Mexico as a way to crush unions and block wage increases (“Failed”). Meanwhile, Mexican workers suffered from a “lowest common denominator” labor market (the number of Mexicans working for less than the Mexican minimum wage rose by 1.5 million); and the Mexican government, eager to attract businesses from the US and Canada, looked the other way while companies ran roughshod over the health and safety of the Mexican people (“NAFTA at Five”). The agreement included “side deals” to handle concerns of labor exploitation and environmental degradation, but they proved ineffective at best, and useless at worst.

NAFTA is erroneously titled — in reality, it has very little to do with trade that is actually free. In the first place, the corporations that promote agreements like NAFTA (and GATT, its worldwide cousin) receive substantial subsidies, bailouts, and tax credits from their home governments in the guise of “staying competitive.” But the purpose of NAFTA wasn’t even about trade: “the real goal,” Noam Chomsky writes, “was to ‘lock Mexico in’ to the ‘reforms’ that had made it an ‘economic miracle,’ in the technical sense of this term: a ‘miracle’ for US investors and the Mexican rich, while the population sank into misery” (Profit Over People 105). But since companies must conduct trade to achieve this goal, perhaps there is some subtle truth to the idea of NAFTA as a trade agreement.

NAFTA established a secret tribunal that can rule on alleged violations of “free trade.” When a company believes its right to trade freely is being denied, it may appeal to the NAFTA tribunal and receive a ruling (if it wins, a company is usually awarded damages for likely lost revenue). This is how the Ethyl Corporation forced its toxic gasoline additive MMT into Canada. Since the governments of Canada, Mexico and the US have agreed to abide by the rulings of this tribunal, it can effectively overpower local, state, or national laws that get in its way. So for instance: Mexico enacted a zoning law to prevent the Metalclad corporation from dumping toxic waste into the water supply for the state of San Luis Potosi. Metalclad didn’t care for the law, and asked a NAFTA tribunal to give them compensation from the Mexican Treasury. On 25 August 2000, the tribunal ordered Mexico to pay US$16.7 million to Metalclad (Greenfield).

Excited by NAFTA’s triumph, the powers that be began setting their sights on other countries south of the United States. In an attempt to bypass the unpleasant possibility that Congress would object to undemocratic trade agreements (and try to add on protections for the environment or workers), the Clinton administration advocated for Fast Track authority, which would allow the President to sign on to such treaties with only a yes/no vote in Congress (this plan was officially started by Nixon, but its roots go back even further). Congress, naturally, didn’t like the idea, and neither did 61% of the US population, according to a poll conducted by the research firm Hart and Teeter (“What”). Still, trade officials attempted to add Chile to NAFTA’s domain, despite the fact that a poll conducted by Peter D. Hart Research Associates, Inc. showed that 66% of Americans believed that the US should not expand NAFTA to other Latin American countries (“NAFTA Index”).

Recognizing a perfect opportunity when they see one, two corporations in the United States were tickled to hear that Latin America was suffering from a natural disaster in 1998. Hurricane Mitch killed ten thousand people in Central and South America, and left two million people homeless. Fruit of the Loom (which cut 7,700 US jobs in 1997 by moving production to the Caribbean) and Sara Lee (which also owns Hanes), swung into action. They convinced Congress to attach a rider to the Hurricane Mitch bailout package called the Caribbean Basin Initiative [CBI]. This legislation would establish NAFTA-style “free trade” conditions in 26 Latin American and Carribean nations — for Froot of the Loom and Sara Lee. These companies stood to gain US$100 million in tax breaks from passage of the bill. Although it was ultimately separated from Hurricane Mitch relief, CBI was later attached to a “free trade” bill for Africa (see below) and passed (“Caribbean”).

Meanwhile, in 1994, US officials — in cooperation with the Organization of American States [OAS] — convened a Summit of the Americas, where 34 nations from North and South America agreed to begin working on the Free Trade of the Americas [FTAA], a deal that would bring the benefits of “free trade” to everyone from Alaska to Argentina. By 1998, nine working groups were formed to hammer out the details of how this hemispheric version of NAFTA would take shape, and in that year the Second Summit of the Americas in Chile set into motion the work for a draft text of the FTAA agreement. The text was completed in December 2000, but has not been released to the public as of this writing.

The FTAA, like NAFTA, is poised to take power away from local, state, and federal governments and give power to business institutions. The FTAA website [www.ftaa-alca.org] brags about how it will be even more powerful than the World Trade Organization: “the FTAA negotiations will include areas not presently under the WTO such as a common investment regime, government procurement, and competition policy [. . .].” The agreement will work to create a business-friendly “hemispheric infrastructure” to make it easier for companies to hurt workers, destroy the environment, and smash democracy (Nason).

Opposition to the FTAA began as soon as it was born. The Zapatista National Liberation Army [Ejercito Zapatista de Liberacion Nacional, or EZLN] emerged from the jungles of Chiapas, Mexico on 1 January 1994, chanting “First World, Ha ha ha!” in opposition to the neoliberal regime represented by NAFTA and the FTAA. The Mercosur Trade Union Summit, a gathering of trade unions from Argentina, Brazil, Paraguay and Uruguay, demanded in December 2000 that the final version of the FTAA should be voted on by the people of each country involved. In the US, the AFL-CIO called for an end to “the failed NAFTA model of corporate privilege.” In March 2001, the city of Santa Cruz, CA passed a resolution opposing the FTAA and urging US trade representatives to be more democratic in their work (Osava).

The Third Summit of the Americas in Quebec City, Canada, will be held to negotiate the final text of the agreement. This will take place amid much protest and agitation from opponents of a wide variety of backgrounds: environmentalists, feminists, labor unions, democracy advocates and students, from all over both North and South America. Like Washington DC in April and Prague in September 2000, Quebec City has been turned into a militarized zone to prevent a repeat of the Seattle 1999 debacle. A chain-link fence has been erected around all of Quebec’s old Upper Town, and bylaws have gone into effect banning scarves and ski masks (Nickerson).

NAFTA and the FTAA, while encouraging us to “think globally,” do their best to thwart the intentions of those who would “act locally.” Regular people don’t have access to the lobbyists, global communications systems, media departments, public relations firms, and Political Action Committees that multinational corporations use to get what they want. State and local legislation are powerful tools for ordinary people to guarantee freedom, environmental preservation, labor justice, and democratic rights. The soldiers of “free trade” are marching with power against these goals.

2. AGOA and HOPE

Despite centuries of colonialism, genocide, and resource theft, Africa still holds many prizes for businesses courageous enough to seek them out. So it was with high spirits that a business coalition was formed for this purpose several years ago, which included Chevron (well known for its partnership with the Australian government to plunder the Timor Gap), Mobil (a close friend of the Nigerian government, which killed labor rights activist Ken Saro-Wiwa and nine others in 1995), Occidental Petroleum (in which Al Gore’s family owns half a million dollars in stock), General Electric (which was fined US$62 million for bribery, fraud and money laundering in its sale of jet engines to Israel), and KMart (whose labor practices in Nicaragua — including starvation wages as low as 10 to 15 cents an hour, body searches, and sexual harassment — have been documented by the National Labor Committee) (“Meet”). This coalition, cleverly calling itself the Africa Growth and Opportunity Act Coalition, Inc., secured the introduction in Congress of the African Growth and Opportunity Act [AGOA] in 1998.

In Africa, one in five children dies before the age of five. 50% of Africans live below the poverty line; 40% live on less than US$1.00 a day. 40% of Africans suffer from malnutrition and hunger (“Survey”). So if there is one area of the world that demands further exploitation by multinational corporations, Africa is it. But although the stated purpose of the AGOA is “to facilitate market-led economic growth in, and thereby the social and economic development of, the countries of sub-Saharan Africa,” many observers are doubtful (United States).

The International Monetary Fund [IMF] and other neoliberal economic institutions don’t have a very good track record in Africa, even by the business community’s biased standards. The World Bank reports that countries in Africa which have accepted IMF Structural Adjustment Programs [SAPs] are experiencing slower economic growth in agricultural production than those African nations not implementing SAPs (which goes against all SAP logic). The IMF told Zambia to cut its public health expenditures, so it experienced a wave of deaths from measles, whooping cough, diptheria, and tuberculosis. A study by the Danish government concluded that IMF/World Bank action played a role of “decisive importance” in the instability which led to the Rwandan genocide in the mid-1990s. In Ghana, which is promoted as a shining example of how great IMF reforms work, half of all deaths in recent years have been of children under the age of five (children five and younger make up a fifth of the population). IMF programs have brought malnutrition to kids in Senegal, food shortages to Tanzania (where 90 out of 1000 children die before their first birthday), and post-war stagnation to Mozambique (“Survey”).

The AGOA, it was said, would continue this “market-led economic growth,” and aid the “social and economic development” of African nations. Dubbed “NAFTA for Africa” by policy analysts, the bill would — as usual — create a zone of “free trade” between the United States and sub-Saharan Africa, making it easier for businesses to move factories, extract resources, and shift investment. The original sponsor of the House version of the bill, Ways and Means Trade Subcommittee Chairman Philip Crane (R-IL), said after the bill was introduced: “Of those countries in sub-Saharan Africa, to be sure, a lot of them are retards” (“Crane”).

For some reason, many Africans and African-Americans reacted negatively to Crane’s comments and his legislation. A coalition of 35 Non-Governmental Organizations [NGOs] in Africa said the AGOA would “extend African nations’ suffering indefinitely” and that it “must be discarded” (AIDC, et al). A group of African-American leaders (including Congressman Jesse Jackson, Jr., Senator Carol Moseley-Braun, and Professor Cornel West), in a 1998 statement, said the bill “would increase the relative power of multinational corporations over African governments. Indeed, analysis of the bill’s specific provisions shows that it would assault the sovereignty of African countries in ways not present in our country’s dealing with other nations.” They went on to say: “A bad bill on Africa is worse than no bill at all” (Berry, et al). And in the June 7, 1998 New York Times, Bob Herbert called the conditions of AGOA negotiation “a situation ripe for wholesale exploitation.” AGOA passed through the house by a vote of 233-186, but was defeated in the Senate. Trade officials re-introduced the bill in 1999.

In an attempt to offer a positive alternative, however, House Representative Jesse Jackson, Jr. (D-IL) introduced the Human Rights, Opportunity, Partnership and Empowerment [HOPE] for Africa Act. It called for binding commitment from the Congress for debt relief in Africa (the AGOA said the Congress supported debt relief, but made no solid commitments); supported guaranteed aid (AGOA agreed in theory, but not in practice); and urged that African development be planned by African nations themselves. Not surprisingly, this didn’t go over well with supporters of the AGOA. In a booklet cleverly titled “The African Growth and Opportunity Act Resource Book,” the office of the US Trade Representative [USTR] attacked Jackson’s bill, stating that HOPE “offers misguided trade initiatives” and “proposes unsound, costly debt cancellation provisions” (“Africa”). What could be more “misguided” than letting African people control their own destiny?

Many Africans and African-Americans supported HOPE as the possible dawn of a new era in US-Africa relations. A group of 67 African NGOs (many of the same groups that opposed AGOA) came out in favor of HOPE, calling it “a promising effort to respond to the development priorities identified by African civil society” (Third World Network Africa Regional Secretariat, et al). 54 US religious leaders sent a letter to members of the US House of Representatives supporting the bill, saying it was “best suited to meeting the needs of African people” (Warner, et al). And a coalition of more than 70 environmental, labor, human rights, religious, consumer and anti-hunger organizations in the US sent a similar letter (Sierra Club, et al).

Another organization that supported HOPE was a gathering of 43 community groups fighting against AIDS and HIV, including The ACT-UP Network; The HIV Human Rights Project; and The Latino Commission on AIDS. “HIV and AIDS are rampaging throughout sub-Saharan Africa,” the coalition wrote in a letter to US Representatives in 1999. “While sub-Saharan nations comprise only 10% of the world’s population, they are bearing the tragic burden of 70% of the world’s new AIDS cases. The World Health Organization reports that of the 14 million people who have died of AIDS to date, 12 million have come from this region.” Whereas AGOA didn’t even mention AIDS or HIV, the HOPE bill made AIDS and HIV in Africa a top priority. For example, it would have made HIV/AIDS drugs more easily accessible to sub-Saharan Africa through the use of compulsory licensing and parallel importing (ACT-UP Network, et al).

With a substantial profit hanging in the balance, business leaders did what they had to do. The AGOA was given Fast Track authority for its second pass through Congress, defeated HOPE, and became law on May 18, 2000.

3. GATS 2000

For the past 20 years, multinational corporations based in the United States have been working toward an international agreement that would allow them to make money by providing services like health care, education, child care, libraries, water delivery, electric utilities, prisons, insurance, and postal service. Many governments prefer to keep these services public, so as to better regulate them and ensure efficient delivery to those who need it. The United States currently delivers public services in the areas of education (elementary and secondary), libraries, and postal delivery, among others. But business groups — most notably the US Coalition of Service Industries [USCSI] — want the ability to privatize and deregulate these services.

In 1994, they got their wish. As part of the Uruguay Round that founded the WTO, representatives from governments around the world signed the General Agreement on Trade in Services [GATS]. American Express and Citicorp were instrumental in getting the agreement signed. It began as a small-scale plan to promote “liberalisation of trade in services,” starting with only some services; more would be added later. And even though it suffered a stinging defeat at the hands of “hordes of vigilantes” in Seattle in 1999, the WTO bounced back in February 2000 with a complete set of guidelines for expanding GATS (Clarke; Chomsky, Profit Over People 162).

Under GATS 2000, WTO member nations are required to open the door for privatization of all services, including education, health care, energy utilities, prisons, and water delivery. Private companies would be able to unleash massive privatization and deregulation campaigns targeting Canada’s health care, India’s water, and schools in the United States.

Naturally, multinational corporations are ecstatic. “Business will have to set the agenda,” said David Kearns, the US Chair of Xerox. He advocates for education “a complete restructure driven by competition and market discipline, unfamiliar grounds for educators” (Caplan). A wide range of service-sector corporations have supported the new GATS guidelines, including AOL/Time-Warner, AT&T, IBM, BankAmerica, J.P. Morgan Chase, the Chubb Group, Price-Waterhouse Coopers, United Parcel Service and Federal Express. Furthermore, service businesses overseas are doing all they can, in the form of the European Services Forum and the Japan Services Network (Clarke). GATS is, as the European Commission website on services states, “first and foremost for the betterment of business” (Sinclair).

But there are always some people who refuse to go with the flow. Some complain that GATS 2000 is in danger of “absolutely diminishing democratic governmental authority” (Sinclair). Others whine about how the changes “threaten some of the key mechanisms that allow governments to guarantee health care for their populations [. . .]” (Pollock). The city of Vancouver, British Columbia passed a motion on 2 May 2000 opposing GATS expansion and urging the Canadian government to “consult widely and in depth with the people of Canada” before taking further action on the agreement (Vancouver). And responding to the possibility that GATS 2000 would lead to widespread privatization of water-delivery systems, Vandana Shiva said: “Privatization and commodification of water are a threat to the right to life” (Caplan).

In the spring of 2000, the Bolivian government privatized its water supply for Cochabamba, the third largest city in the nation. Bechtel, a US-based company, took over the water service and raised prices drastically. Suddenly, peasant families found themselves having to pay a third of their wages for water. In an attempt to guarantee cooperation with the privatization scheme, the collection of rainwater was made illegal. People protested, but the company took no notice. Eventually, massive protests brought the city to a standstill. In service to their business partners, the Bolivian government sent in the military to wound organizers, jail journalists, and smash the standoff. A 17-year-old boy was shot in the face. Eventually, Bechtel had to back down; the people refused to give up and held their ground. The town’s water supplies were returned to public control.

A statement endorsed by 430 organizations from 53 countries calls for a moratorium on GATS negotiations, and for a radical redirection of the deliberations, toward policy that ensures the satisfaction basic human needs. It also urges governments “to end all IMF, World Bank and Multilateral Development Bank pressure on developing countries to privatize public services, especially in the area of education, health and water” (“Stop”). Doing so, however, would get in the way of the USCSI’s profit margin.

In the frenzied profit-hungry climate of today’s global marketplace, governments are strongly discouraged from making laws that get in the way of “free trade,” and GATS 2000 is no exception. Once a service is privatized, attempts to regulate it are frowned upon by the new guidelines. The WTO admits that “GATS imposes constraints [. . .] on the use of unnecessarily restrictive or discriminatory requirements” for service providers. In other words, don’t get in the way of the money makers by trying to protect your citizens, your lands, your workers, your children, or your health (Gould, “In Their Own Words”).

As in NAFTA and the stillborn Multilateral Agreement on Investment [MAI], the GATS 2000 would establish trade tribunals in each country to rule on alleged violations of “free trade.” Operating largely in secret, these tribunals would strike down laws that stand in the way of privatized services, as well as “restrictive” regulations imposed on them. Indeed, the Constitution of the state of Florida could potentially be declared illegal by such a tribunal, insofar as it clearly mandates a system of “public schools” (Hallifax).

On 26-28 March 2001, representatives to the GATS discussion met in Geneva to finalize the negotiating guidelines that will inform the remainder of the process. In response to growing public anger over the changes that GATS 2000 might bring, the WTO Secretariat issued a pamphlet entitled GATS: Fact and Fiction. It includes a section called “Six benefits of services liberalization,” which lists — among other benefits — “More competition,” “Lower Prices,” “Faster innovation,” and “Higher employment.” The booklet also contains a chapter promising that “The WTO is not after your water” (“GATS”).

That the WTO is spending the time and expense to respond to specific claims made by anti-GATS activists (even if it does so in the manner of a Sharper Image salesperson) shows beyond a shadow of a doubt that ordinary people can make an extraordinary impact on the way our world is run. Whether GATS 2000 becomes the reality it threatens to be or not — and the extent to which it will hurt and kill people around the world — depends on how active we are in the fight against it.

4. Women in the “Free Market”

Despite modern fantasies about gender equality and a harmonious sharing of power, women are being disproportionately injured by the ravages of globalization. This partly comes from the fact that the production and services being liberalized often contain large female workforces. In Sri Lanka, for example, 86% of the workers in factories that fall into “free trade zones” are women (Kvarnstrom 6). The influx of women into the workforce over the last forty years has led to an increase in women’s income, but a host of factors has offset this progress. When women become major players in a profession or industry, for instance, it will often become viewed as less valuable than it was when dominated by men; this happened with bank tellers (Hacker 196). In his book Money: Who Has How Much and Why, Andrew Hacker points out that “an increased presence in many occupations and professions does not necessarily lead to greater equity in earnings for women” (189). Corporate globalization contributes to this paradox, since jobs which have recently seen a rise in female employment are often made obsolete through the liberalization of trade (Sandrasagra). Indeed, despite the massive implosion of women into the workforce, 70% of the world’s poor are women (Kvarnstrom 10).

In October of 2000, a group of delegates from the so-called “third world” spoke to the United Nations [UN] Social, Humanitarian and Cultural Committee of the General Assembly. India’s Ramachandra Reddy said: “Despite new initiatives and commitments, the sad reality is that the situation of the world’s women is progressively deteriorating due to Globalisation.” Ilham Ibrahim Mohamed Ahmed of Sudan pointed out that debt is crippling many “third world” nations, with undue effects for women. Andres Franco of Colombia, speaking on behalf of the Rio Group of Latin American and Caribbean Nations, noted that “the opportunities created by the process of globalisation have opened clear avenues for development, but in some cases its benefits have not been equitably distributed, thereby impeding efforts to promote the advancement of women, particularly those living in poverty” (Sandrasagra). By now it’s clear that the conditions of women’s empowerment and issues of global poverty are inseparable.

One business model that has been touted as a partial cure to women’s poverty is the expansion of “micro-credit” programs for small women-owned companies. In this system, governments set aside money for small-scale, low-interest loans specifically for women-owned businesses. While such programs have helped many women become economically stable, they are a business solution and therefore carry business complications. First, any small business in today’s economic jungle is liable to be engulfed by a larger company. So even if a woman or group of women can use micro-credit to create a sustainable textile business in Guatemala, for example, the FTAA presents the threat of some large multinational corporation coming along and sucking it up. The other problem with micro-credit in this climate is the influx of cheap goods from overseas. So for instance, women-owned businesses saw a significant increase recently in Zimbabwe. But when trade was liberalized in a series of post-war reforms, foreign businesses swamped the country with cheap textiles. As a result, “women micro-entrepreneurs were unable to compete with the flood of cheap goods entering their country” (Women’s EDGE).

Then there is the matter of child care and family maintenance. Because families can no longer be sustained on traditional systems of work (one breadwinner in the workforce, subsistence farming, etc), women have had to enter the global job market. But — although there has been a nominal rise in men’s participation — women still continue to carry out most of the duties of child rearing and home care. “This means that womyn who once worked full time caring for and educating children now work full time in the market economy as well,” says Aurita Withers. “Many women in the ‘Third World’ are working two or more working days in a single day as a result of the spread of capitalist globalization.” The same could be said for many women in relatively developed countries. And because of women’s large role in raising kids and providing for families, they are overwhelmingly affected by corporate attacks on public health, environmental preservation, and product safety.

On the whole, the liberalization of trade benefits businesses and those who own property. And while women have been making steady progress into the business world, most women still live and work far from the corridors of power. According to the UN, women own less than one percent of the world’s property (Withers). And while trade agreements often include “working groups” and “side deals” that recognize and promise to fight women’s poverty, they are usually weak afterthoughts; a way for business leaders to soothe citizen groups with empty promises. This is partly because women do not partake in the decision-making process of the agreements. The WTO, the IMF, World Bank, and US trade offices are overwhelmingly dominated by men from North America and Europe. Therefore the needs and interests of women are, in large part, unrepresented until after the main text of the agreement has been decided upon.

The current trend in global trade is toward privatization, profit (for businesses), and poverty (for most of the world’s population). Despite recent advances made for the equality and economic strength of women, corporate globalization is doing more harm than good. In 2000, the UN Development Fund for Women [UNIFEM] released a report stating that “globalisation must be reshaped so that it is more people-centred instead of profit-centred and more accountable to women” (Sandrasagra).

5. The Business of America

Advocates of “free trade” and business supremacy frequently point to a quote from US President Calvin Coolidge, who said in 1925 in a speech to the American Society of Newspaper Editors: “the business of America is business.” They usually ignore the rest of that comment: “Of course the accumulation of wealth cannot be justified as the chief end of existence.” For many individuals and organizations In the modern era, the accumulation of wealth is not the chief end of existence — it is the only end.

In a special report for ABC News that aired in February 1998, John Stossel explained at length how wonderful greed is and how we all benefit from it. “While the rich are raking in the profits,” he said, “you may be profiting, too.” Stossel cited numerous examples of how the profit motive leads to public good; how businesses create wealth that “trickle down” to the population; and even how charitable giving is a bad thing. Of course, Stossel didn’t interview many Bolivians from Cochabamba to explain how great Bechtel’s greed was; and he didn’t talk much about people suffering and dying prematurely from AIDS in Africa because of pharmeceutical companies’ greed. (He’d tell you that greed is what gave us those drugs in the first place, but he’d be wrong — they came about largely as a result of government subsidy.)

Stossel also didn’t say much about how powerful business interests combine their power to put their greed into action. One such combination is the Trans-Atlantic Business Dialogue [TABD], a coalition of business leaders from the US and Europe, including Monsanto, BASF, Motorola, Proctor & Gamble, Chiquita, and AOL/Time Warner. Brought together by former US Commerce Secretary Ron Brown in 1995, the main goal of the TABD is to eliminate any policy that gets in the way of business. According to a report issued by the TABD in May 2000, “The new obstacles to trade are now domestic regulations.” So far, the Dialogue has done good work in taking a seat at the table of power. Stuart Eizenstat, the Department of State’s Under Secretary for Economic Affairs, said: “The TABD has become deeply enmeshed and embedded into the US government decision-making process on a whole range of regulatory, trade and commercial issues. The TABD has had truly remarkable impact in our country, in the Transatlantic dialogue, and multilaterally” (“More”).

In November 2000, the TABD held a conference in Cincinnati, where it was met by furious protests not unlike those in Seattle ‘99. Still, the business community claimed victory. “We expected and embraced the protests,” said TABD spokesman Jeff Werner. “It was good. It created good dialogue. The people were noticed, and their concerns were acknowledged.” Whether a simple acknowledgement of concerns is enough to keep the world’s population happy remains to be seen (D’Agostino).

Another individual who is eager to do the bidding of business (while offering “acknowledgement” to public concerns) is newly-“elected” US President George W. Bush. Bush’s cabinet is packed with people who have lifelong partnerships with huge corporations. His Medicare plan was written by senior adviser Gail R. Wilensky, who has over US$10 million in shares and stock options in health care companies; she stands to gain a great deal of money from Bush’s prescription drug reforms (“Top”). Individuals and companies from the oil and gas industries contributed over US$2 million to Bush’s presidential campaign fund (“Oppose”). During the campaign, Bush promised environmentalists that he would work to limit corporate emissions of carbon dioxide, a leading cause of ozone depletion. As soon as he took office, he was assaulted by “ferocious lobbying” from energy industry groups, and reversed his position. “I want to reevaluate” the promise, he said on March 5 (“Intensive”).

Four years before Bush took office, US Vice President Al Gore agreed for the US to sign onto the Kyoto Protocol, reached in Japan, which was aimed at reducing global warming. Bush has decided that the guidelines in Kyoto would be bad for business in the US. It may be true that “lethal droughts and hurricanes have made global warming ‘a killing factor,’ and bacteria and viruses that cause diseases such as influenza are likely to multiply as temperatures rise,” according to Yuan-Yuan Lee, who runs the Global Warming International Center, a research institute based in Woodridge, Ill. But doing something about this would interfere with “the chief end of existence.” Fortunately, Bush has acknowledged the concerns of those worried about global warming (Stanley).

Of course, Bush’s actions are nothing new. US government officials have a long and proud history of changing policy — especially foreign policy — to suit the needs of business. When a company moves into a foreign country to extract resources, overpower smaller local businesses, and exploit the workforce, people tend to revolt. They demand that their government take action to protect their resources and labor. Often, they will form unions to demand fair treatment. But with support from the US, violent regimes around the world have succeeded in crushing these uprisings and making sure that “the business of America” can become “the chief end of existence” for everyone else, too. Haiti is a prime example.

For most of the 20th century, the US government has carried out invasions of Haiti and supported a series of bloodthirsty dictators there. “Woodrow Wilson launched murderous counterinsurgency wars in Haiti and the Dominican Republic (Hispaniola),” writes Noam Chomsky, “leaving the countries shattered and demoralized, the constitutional structure reduced to mere farce, and American corporations able to ‘work their will’ without local impediments” (Deterring Democracy 279). This continued with the installation of the Duvalier family, which continued until the mid-1980s. Meanwhile, large transnational corporations like Disney took advantage of the weak labor force and made millions. There are dozens of similar stories.

What all of this had led to is a vast — and growing — gap between those who benefit from global trade and those who suffer because of it. The US is last among industrialized nations in its “inequality index,” meaning that America’s wealthy receive a much larger share of the wealth than do the poor (Hacker 54). From 1975-1995, the income for the richest 20% of the US population rose 35.4%, while the income for the poorest 20% rose only 1.5% (10). As usual, the rich got richer and the poor got poorer.

Internationally, conditions are similar. A report released on 18 December 2000 by the Institute for Policy Studies noted that of the world’s 100 largest economic entities, 51 are now corporations and 49 are countries. “Between 1983 and 1999, the profits of the Top 200 firms grew 362.4%,” the report said, “while the number of people they employ grew by only 14.4%.” Indeed, these corporations account for over a quarter of economic activity on the globe while employing less than one percent of its workforce. Not surprisingly, US corporations dominate the Top 200, with 82 slots — 41% of the total (Anderson). The considerable power of multinational corporations as exercised through the FTAA, AGOA, GATS and WTO will certainly continue this trend.

Yet there is reason for hope. The MAI was derailed several years ago by the commitment and hard work of grassroots activists. The huge protests that spring up whenever these neoliberal institutions meet — in Seattle, Washington DC, Cincinnati, Prague, Ontario, and elsewhere — have become forums of solidarity between environmentalists, labor unions, indigenous people, community organizations, student groups, and many others. The Zapatista rebellion in Chiapas, Mexico has been going on for seven years and recently won a major victory when Zapatista representatives addressed a governmental assembly in Mexico City. In 1999, the people of East Timor finally won their quarter-century struggle for independence from Indonesia, who had been occupying East Timor with the blessing of the United States. On 31 May 2000, tens of thousands of people took to the streets of Buenos Aires to protest austerity measures imposed by the IMF on Argentina. Wherever there is a threat to democracy, to justice, to true freedom, people have been willing to stand up and fight — usually against overwhelming odds and often paying a tremendous price. Business is getting mad. In an attempt to avoid a repeat of their defeat in Seattle, the WTO has chosen the nation of Qatar — whose repressive government allows no freedom of assembly or freedom for workers to organize — as the location for their next Ministerial.

Throughout the Cold War, this fight was presented as a choice between two opposing worldviews — capitalism and communism. Each side was demonized by the other and each promised that its enemy would perish. Now that the Cold War is over, we are told that capitalism won, that the capitalist ideology was right, and that it is the fate of humanity to accept a capitalist framework. Naturally, not everyone accepts this; many people believe that capitalism is an unjust economic system.

I happen to be one of those people. Because trade reigns supreme in a capitalist economy, everything else is pushed into the background. In theory, the “invisible hand” of the market is supposed to take care of things like human rights and the needs of the population. But recent history has proven that attention to these matters are an impediment to business, not a necessary part of it. And yet, it’s clear that communism has severe institutional problems of its own.

Is this either/or setup really the only way to view the matter? In 1967, Dr. Martin Luther King, Jr. wrote: “We must honestly admit that capitalism has often left a gulf between superfluous wealth and abject poverty [. . .]. The profit motive, when it is the sole basis of an economic system, encourages a cutthroat competition and selfish ambition that inspire men to be more I-centered than thou-centered. Equally, communism reduces men to a cog in the wheel of the state. [. . .] The good and just society is neither the thesis of capitalism nor the antithesis of communism, but a socially conscious democracy which reconciles the truths of individualism and collectivism” (629-630).

Among those resisting the “free trade” institutions, there is a split between those who believe that capitalism is basically okay (it just needs adjusting), and those who do not. Each side critiques and mocks the other, and there is a real fear that this division (among others) could hurt the potential impact of the grassroots resistance. Cold War debates and debacles could be revived, aiding business interests who seek to divide and conquer.

Howard Zinn notes that this “may be the right time for people all over the world to discard old orthodoxies, frozen dogmas, simple definitions. It may be a time to welcome thinking outside the customary boundaries; to look with fresh eyes at communism, socialism, capitalism, liberalism, and anarchism; and to seek out good ideas wherever they are, because we desperately need them” (277).

Regardless of one’s personal feelings about the nature of our economic institutions, there is an undeniable attack being waged against democracy, against our environment, against workers’ rights, against the future of our civilization. As I said in part one of this work, those of us who are a part of the grassroots resistance are not confused kids with nothing better to do. We do not take to the streets to have a good time (although we often do). We raise our voices — we block traffic, we stage hunger strikes, we wear silly costumes, we hang banners on buildings, we protest, we march, we chant, we yell, and yes, sometimes we destroy property — because the policies of financial power are hurting, maiming, and killing people all over the world.

We speak out because we want to live in a world based not on greed and profit, but on human needs, equality, and economic justice. We want everyone to have food, housing, medical care, and a decent standard of living. In a world as wealthy and bountiful as ours, there is no reason for caring people to accept the suffering that exists all around us.

The struggle goes on.

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(All links verified July 2013)

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