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globalization
Why Does Trump Really Hate Internationalism? It’s Bad for Billionaires
As he has thrown international rules to the side and tried to strong-arm other countries into concessions, his list of demands has resembled Wall Street’s much more than Wisconsin’s.
Jul 12, 2025
If you take U.S. President Donald Trump’s word, his foreign policy will finally make American workers great again. Where weak-willed attempts to work with other countries hollowed out the American economy, his belligerent nationalism will push the U.S. up and the rest of the world down. The globalists are for them; Donald Trump is for you!
But taking Donald Trump at his word is never a good idea. As he has thrown international rules to the side and tried to strong-arm other countries into concessions, his list of demands has resembled Wall Street’s much more than Wisconsin’s. He has fought Japan’s car safety standards and India’s price cap on coronary stents. He has gotten Canada and India to drop taxes on tech giants. And in perhaps his biggest victory, six major countries recently caved to his escalating threats and hollowed out a global plan to enforce a minimum tax on big corporations.
That Trump has fixed his ire on this international agreement reveals a broader truth: Internationalism is bad for billionaires. The misguided approach of neoliberal globalization opened up a lane for nationalists to claim that they defend the working class. But in reality, Donald Trump and his billionaire buddies would like nothing more than to play governments against each other. Billionaires can take fragmented countries to the bank—only international cooperation can build a united front strong enough to beat them.
Trump’s Revenge on the Global Corporate Minimum Tax
The global corporate minimum tax is a good example of this. (The details are a little complicated, but the super-rich would like to keep it that way, so bear with me as I explain.) In recent decades, major corporations have gotten spectacularly effective at avoiding taxes. Last year, Tesla made a profit of $2.3 billion in the U.S. but paid zero federal income tax. Neither did Merck, Pfizer, and Johnson and Johnson, despite making $45 billion around the world.
Two global dynamics help them achieve this. First, corporations use sophisticated accounting tricks to make their profits show up in countries where they do little actual business, like Ireland and the Cayman Islands—which just so happen to have very low taxes. Second, when countries attempt to raise taxes, corporations threaten to move elsewhere, creating fears of job losses and economic slowdowns that can convince governments to keep taxes low.
Trump’s global bullying successfully beat back two things he hates: international cooperation and taxing the rich.
In 2021, most of the world’s countries agreed to a tax deal that aimed to counter these dynamics. It was highly imperfect, with too many exceptions and rules skewed against developing countries, but it was still an important step forward. One of its key rules was a global minimum corporate tax of 15%. Suppose a Brazilian company paid just 10% in tax for income earned through its Swiss subsidiary. The deal would allow Brazil to apply a top-up tax and collect the remaining 5% itself. This 15% floor meant corporations could no longer drive a race to the bottom in tax rates, as any tax haven with a rate below 15% would just be leaving money on the table—someone else would tax it anyways.
And because congressional Republicans blocked the U.S. from implementing the deal—instead relying on a weaker U.S. version of the minimum tax—that’s what could have happened to American companies. This was how the agreement was supposed to work: If a country like the U.S. was too silly to make sure its companies paid at least 15% in tax, other countries would.
But Donald Trump hated the idea that countries could work together to make sure the likes of Apple, Facebook, and Eli Lilly would pay a fair share of taxes toward schools, hospitals, and roads. In an attempt to spook other countries out of making the corporate minimum tax work, Trump’s tax bill included a “revenge tax” provision that would have hiked taxes on companies from countries that applied it.
In a moment of deep cowardice, Canada, France, Germany, Italy, Japan, and the United Kingdom folded: they agreed to exempt American companies from the minimum tax in exchange for Congress removing the revenge tax provision. While the exact details are not yet clear, it is certain to give a leg up to American corporations avoiding taxes at home and abroad. It will also create a perverse incentive for foreign companies to relocate their headquarters to the U.S. in order to avoid taxes—or at least to hang that fear over countries that consider raising taxes on them. Trump’s global bullying successfully beat back two things he hates: international cooperation and taxing the rich.
Building the International “We” That Can Beat the Super-Rich
The way big corporations have played countries off each other to avoid taxes echoes a tried-and-tested strategy of advancing the interests of the rich. Corporations threaten to move investment out of countries that raise minimum wages or strengthen environmental standards. When countries reject austerity, financial markets often sell off their currency or demand higher interest rates on government bonds.
Rather than falling into this trap, some countries are demonstrating the unity needed to advance a more equitable economy. Last week, Spain, Brazil, and South Africa launched an alliance for wealth taxes on high-net-worth individuals, while eight countries took steps toward taxing first-class plane tickets and private jets. A major United Nations conference led to an initiative that could coordinate developing countries as they borrow funds, rather than leaving them isolated against their lenders.
These efforts model an internationalism different from the form of globalization that dominated the past few decades. Neoliberal globalization advanced a web of agreements that coordinated countries to place a ceiling on taxes and labor standards, not to raise the floor. Developing countries were markets to be opened, not publics to work alongside.
Corporate globalization needed to end—but the problem was that it was corporate, not that it was global. Nationalists promised to reverse this globalization and take back the spoils unjustly taken by others. But Trump has been far more successful int expanding American corporations’ ability to pillage than enabling everyday Americans to prosper. A balkanized world ensures no one is ever powerful or coordinated enough to subordinate the interest of the super-rich to the interests of the public. It doesn’t have to be that way. We can beat the super-rich, but only if that “we” is big enough to include those beyond our borders.
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C. J. Polychroniou on Socialism, Left Internationalism, and the Climate Crisis
The return of Left internationalism inspired by the vision of socialism needs a dramatic turnaround on the global ideological and political landscape.
May 28, 2025
Has neoliberal globalization run its course? Should the Left be on the side of tariffs or protectionism? Can Left internationalism be revived? Political scientist, political economist, author, and journalist C. J. Polychroniou tackles these questions in an interview with the independent French-Greek journalist Alexandra Boutri.
Alexandra Boutri: In a recently published essay, you argue that the Left should endorse a new vision of globalization and fight accordingly for a new world order. Can you briefly spell out the pitfalls of neoliberal globalization and why the current world order is a failure?
C. J. Polychroniou: The first thing that stands out about neoliberal globalization is that it has led to an extremely high degree of economic inequality by altering patterns of income distribution and resource allocation while at the same time undermining economic and social rights. As Miatta Fahnbulleh put it a few years back in an essay that appeared in Foreign Affairs, the system “is not working in the interest of the majority of people.” The actual record of neoliberal globalization on economic growth has also been quite dismal, with postwar “managed capitalism” outperforming the neoliberal model on every count. On top of that, under the form of globalization prescribed by neoliberalism “the average global temperature has risen relentlessly,” as Robert Pollin has pointed out. Neoliberal globalization has been bad for people and the environment alike.
Trump’s domestic agenda is the most neoliberal since the onset of neoliberalism.
As far as the current world order is concerned, it would be hilarious if it weren’t so tragic. We have a world in permanent crisis literally since the end of the Second World War, with the nuclear sword of Damocles hanging over humanity’s head. The Doomsday Clock is now closer than ever to midnight. The current war in Ukraine, the annihilation of Palestinians in Gaza and the seizing of land in the occupied West Bank by violent religious extremists under the protection of the Israeli army speak volumes of the dramatic failure of the United Nations and the so-called international community. There is no lawful world order. International law only applies when it suits the strong.
Alexandra Boutri: Has neoliberalism’s model of globalization run its course?
C. J. Polychroniou: The current system has been in a terminal state since the outbreak of the global financial crisis of 2007-08. The resurgence of right-wing nationalism across the globe is interrelated to the profound contradictions built specifically into the neoliberal version of globalization. The backlash against globalism by the likes of U.S. President Donald Trump and his MAGA faction needs to be understood in connection with the changes that are occurring in the world economy. Trump is using protectionism as a means of altering the global supply chain in favor of U.S. production and imposing tariffs to reduce the U.S. trade deficit but is simultaneously unleashing the most vicious form of neoliberalism inside the country. He is attending to the mythology of American Exceptionalism and Manifest Destiny by trying to reassert the dominance of the United States in the world economy while destroying functioning government as part of a plan to axe safety-net programs and letting corporations run roughshod over labor. Trump’s domestic agenda is the most neoliberal since the onset of neoliberalism. It constitutes an open war against working people and social rights, against the poor and the environment. It’s all about making the rich richer and the poor poorer. It’s a domestic agenda based on the politics of astonishing greed and shocking cruelty. Trump’s election therefore does not mean the end of neoliberalism or of globalism.
Alexandra Boutri: Free trade or protectionism? Is this an actual choice for the Left?
C. J. Polychroniou: It depends on what one means by the “left.” You have left-wing liberals, social democrats, left-wing socialists, communists, and anarchists. Left with capital L tends in some circles to refer to the anti-capitalist, socialist-communist-anarchist camp. Personally, I don’t consider the Democrats in the United States or the Social Democrats in Europe as part of the Left. Their loyalty is to capitalism. Hence, they are not agents of transformational change. They want to maintain the existing socioeconomic system but with some modifications in place to make it less disagreeable. The social democratic tale was about capitalism with a human face. It was a popular political program for the first few decades after the end of the Second World War, and it was of course an improvement over laisses faire capitalism and a bourgeois state that catered exclusively to the interests of the capitalist class. Nonetheless, we should be reminded of an old radical dictum: There cannot be democracy, social justice, and equality as long as power belongs to capital.
It may have taken voters quite a long time to realize that the parties of the establishment left had sold out to global capitalism, but when they did, the consequences were cataclysmic in their impact.
The debate regarding free trade versus protectionism is as old as political economy. For what it’s worth, Karl Marx and Friedrich Engels confronted this issue back in the 1840s, in the struggles over the Corn Laws. Marx saw free trade for what it is—i.e., “freedom of capital,” and mocked the claim of free-traders that the absence of tariff barriers would abolish the antagonism among classes. But this does not mean that Marx took the side of protectionism, which he saw as a system to defend the status quo. Thus, as he put it, “One may declare oneself an enemy of the constitutional regime without declaring oneself a friend of the ancient regime.”
Interestingly enough, though, Marx ends up in the end endorsing free trade but purely on political grounds because he saw the free trade system as accelerating the prospects of radical change.
The goal of the Left is to move beyond capitalism by constructing an equitable and sustainable economy and a just world order. Rudolf Hilferding, in his book Finance Capital, published more than a century ago, wrote: "The proletariat avoids the bourgeois dilemma—protectionism or free trade—with a solution of its own; neither protectionism nor free trade, but socialism, the organization of production, the conscious control of the economy not by and for the benefit of the capitalist magnates but by and for society as a whole."
Alexandra Boutri: Until recently, antiglobalization was exclusively associated with parties and movements of the Left. However, internationalism has historically been a core component of the Left’s ideological worldview. What happened to Left internationalism but also to social democratic parties whose collapse coincides with the collapse of the antiglobalization movement and the emergence of right-wing antiglobalism?
C. J. Polychroniou: The antiglobalization movement came to life in the 1990s and peaked during the early 2000s. It was inspired mainly by so-called far-left ideologies which saw free trade agreements, multinational corporations, and international economic organizations such as the World Trade Organization (WTO), the International Monetary Fund (IMF), and the World Bank promoting a new version of colonialism. During those years, millions of people turned out across the world to raise their voice against global corporate power. Center-left and reformist left parties in general did not join the protests against global capitalist expansion for the simple reason that they had embraced neoliberalism and were being showered in turn by campaign cash from big corporations and the financial sector. In a word, they had betrayed the working class in the same manner that the socialist parties had betrayed internationalism in 1914 at the start of the First World War.
The history of European social democracy may be summarized as follows: a period of rather impressive achievements on the social, political, and economic fronts during the first few decades following the end of the Second World, which were made possible because of the role of different actors in the emergence of a social democratic consensus, and capitulation to neoliberal capitalism in the latter part of the 20th century, especially after the end of an era where you had leaders like Willy Brandt in Germany, Bruno Kreisky in Austria, and Olof Palme in Sweden who were undeniably dedicated to the struggle for social justice and economic democracy. The leaders that came after them across the European continent took the position that Keynesian economics no longer had applicability in the new world economic order that had emerged following the collapse of the Bretton Woods system and that fiscal orthodoxy was the way to go. In the 1980s, the so-called socialist governments of Francois Mitterrand in France, Bettino Craxi in Italy, Felipe González in Spain, and Andreas Papandreou in Greece not only failed to carry out even the minimal set of promises they had made to voters during the pre-electoral period, but their economic programs followed the neoliberal prescriptions proposed by the IMF and the World Bank.
The antiglobalization movement of the 1990s was associated with far-left politics and was attacked as such by mainstream media and the establishment parties across the political spectrum. In the eyes of many citizens across Europe, the “left” was still represented by social democratic and socialist parties. It may have taken voters quite a long time to realize that the parties of the establishment left had sold out to global capitalism, but when they did, the consequences were cataclysmic in their impact.
In 2000, 10 out of 15 countries in the European Union still had social democratic or socialist parties in government even though they had abandoned all the traditional social democratic ideas and policies. Nearing the end of the second decade of the new millennium, we could find social democratic parties in government in only two countries in Europe. Even the euro crisis did not help the parties of the traditional left to make a comeback. What was happening instead is that far-right parties were gaining ground across Europe and around the world. The far-right was reinventing itself with a backlash against globalism. The European far-right even adapted the language of the left to its own ends. Of course, it succeeded in doing this by taking advantage of the betrayal of center-left parties as well as of the left’s fractiousness and disunity—issues that have long plagued the left worldwide. Defeating the far-right is, of course, of paramount importance for the future of democracy and of the Left.
The history of Left internationalism is too long and complex to discuss here. Suffice to say, though, that it has both positive and negative aspects. The Second International betrayed the cause of socialism. The Third International, which was created by Vladimir Lenin and Leon Trotsky in 1919, was a powerful force toward world revolution, a major step toward world socialism. However, under Josef Stalin, it became purely an instrument of Soviet state policy to advance the Stalinist view of “socialism in one country.” And the Red Lord officially dissolved the Third International in 1943.
It's hard to revive Left internationalism when the left is fractured and there is so much confusion about what the left even represents in today’s world. Of course, there is a plethora of progressive social movements at the forefront for social change, but the return of Left internationalism inspired by the vision of socialism needs a dramatic turnaround on the global ideological and political landscape.
In the postwar era, Cuban internationalism stands virtually alone as an alternative form of globalization. Still, the Left needs a new internationalism that combines solidarity and the quest for social justice and equality with a global climate change policy. The latter is by far the most important issue facing humanity in the 21st century, and nothing would be of greater importance than if the new Left internationalism was built around taking on the greatest challenge of our times—i.e., preventing Earth from becoming unlivable.
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The Left Needs a New Globalization Vision to Counter the Far-Right Surge
The way out of neoliberal globalization is by developing a new globalization that is democratic and free from the destructive tendencies of capitalist accumulation.
May 24, 2025
The left is in shambles everywhere while hard-right and far-right parties are riding high in polls across the world. I contend that globalization is at the heart of these developments, and thus it is critical that the left comes to terms with what has gone wrong with its approach to neoliberal globalization and develops in turn an alternative vision of world order.
Globalization came to be a dominant force in our lives sometime around the 1980s. It coincided with the rise of neoliberalism, although globalization is not a 20th-century phenomenon. The 19th century contained a huge burst of globalization. In fact, between 1850 and 1913, the world economy was probably as open as it became in the late 20th century. Tariffs fell, free trade agreements proliferated, trade flows skyrocketed, information flows accelerated, and migrants flowed to all corners of the globe. Neither Europe nor the U.S. had any restrictions on migration. In the U.S., no visas or passports were even needed to enter the country.
That wave of globalization was interrupted because of World War I, and the next wave of globalization did not occur until the early 1980s. In many ways, the new wave of capitalist globalization was more intense than the one that had preceded it as it was characterized by massive financial deregulation and the acceleration of capital flows while trade integration became more rapid than ever. By the 1990s, the new wave of globalization had reached such heights that the world was increasingly becoming a global village. Let’s call it the neoliberal hyper-globalization wave.
The problem with the reformist left vis-à-vis neoliberal globalization remains. That is, it advances a critique of the consequences of capitalist globalization but seems to accept the phenomenon as inevitable and unalterable.
However, there was one huge qualitative difference between the 19th-century and the late 20th-century waves of globalization. While capital movements exploded during the late 20th-century wave of globalization and multinationals moved across the world in search of cheaper labor, labor migration was severely restricted. In contrast, migration became truly globalized in the late 19th century. And the late 20th-century wave of globalization, which was supposed to produce unrivaled benefits for all, also had another dark side: While it was not openly imperialistic as the 19th-century wave of globalization, it was based nonetheless on highly exploitative structures that were not much different from those of colonialism. After all, capitalism has always nurtured dependence, inequality, and exploitation.
Under the neoliberal hyper-globalization wave, the Global North took advantage of the weakness of the Global South by trapping millions of its workers in a relentless cycle of exploitation while offshoring had dramatic impacts on the standard of living of average citizens back in the Global North as well-paid industrial jobs became few and far in between, wages stagnated, and the social safety net was torn apart, partly because of less government revenues due to neoliberal tax cuts for corporations and the rich and partly on account of simple ideological reasoning. Austerity for the masses but subsidies, tax breaks, and bailouts for industry and the financial sector is a central aspect of the ideological agenda of neoliberalism. And while some developing nations did benefit from the great connectivity in the global economy that has been unleashed since the early 1980s, it is primarily the elites in the Global South, as much as it is in the Global North, that gained the most from the neoliberal hyper-globalization wave.
Enter politics.
By the late 1990s, grievances over the direction of the capitalist world economy united people to demand change and an anti-globalization movement surfaced across the globe, protesting specifically against the neoliberal hyper-globalization wave. Protests and demonstrations against the World Trade Organization, the World Bank, and the International Monetary Fund became a common feature of the anti-globalization movement across a large number of countries from 1995 to 2018. The anti-globalization movement was inspired by left-wing ideologies and was impressively transnational. Latin America’s anti-globalization movement was especially successful, resulting in support and eventually electoral victory for left-wing parties in scores of countries in the region. Indeed, a database on political institutions reveals that in the early 1990s, 64% of Latin American presidents came from a right-wing party. But a decade later, that number had shrunk to half.
The anti-globalization and anti-capitalist movement was no less prominent in Europe. In the summer of 2001, more than 300,000 people from all over Europe gathered in Genoa, Italy to voice their opposition to the G8 Group, while the Italian police unleashed violence of a dimension unknown up to that point in postwar Western Europe. In the spring of 2002, more than half a million people in Barcelona mobilized against the European Union Heads of State and Government under the banner against Capital and War.
The left is historically obligated to advance an alternative vision of a world order beyond capitalism.
The anti-globalization movement had come of age. The prospects for radical change had never looked more promising than they did during the first decade of the new millennium. The winds of change were still in the air in the second decade of the new millennium as the rise to power of the Coalition of the Radical Left (Syriza) party in Greece brought hope to leftist movements worldwide, although it was abundantly clear to anyone willing to pay close attention to Greek politics at the time that the leadership of the party had made a decision to switch its ideological profile from radicalism to pragmatism in anticipation of its coming to power.
There is indeed one impressive thing about the rapid and sweeping changes brought about by the neoliberal hyper-globalization wave, and that is none other than the fact that the world now spins faster. Extraordinary social, political, and ideological changes can happen from one decade to the next. And, lo and behold, by the end of the second decade of the new millennium, not only did the radical left critique of globalization lose its appeal for the working class and huge chunks of youth, but anti-globalism emerged as a major ideological tenet of the extreme right.
However, the backlash against globalism by hard-right and far-right parties was not based on a scathing critique of neoliberal capitalism but was seen instead as a political project advanced by Marxism and the radical left with the double aim of destroying national culture and replacing the nation-state with institutions of global governance. This is of course an evasion of what capitalist globalization is all about, but it would be naïve to think that the backlash against globalism by the far-right does not have socioeconomic roots. The anti-globalist sentiment that brought President Donald Trump to power in the United States and scores of other authoritarian political figures across the world is driven by both cultural and socioeconomic factors and is nurtured by the “us versus them” mentality. The far-right of course is not anti-systemic and in fact enjoys the support of digital moguls like Elon Musk. As such, it is fooling voters on the economy with promises of a new order. The far-right’s anti-globalism stance begins and ends with the imposition of draconian measures against immigration and the creation of a culture of cruelty.
The anti-globalism of the far-right is perverse and irrational, and thus it may speak volumes of the need of a widely and publicly educated citizenry to sustain democracy, but it also calls attention to the gross political failures of the reformist left parties that came to power during the height of the anti-globalization period. Indeed, while the contradictions of neoliberal globalization led to electoral victories of left parties in scores of countries across the world during the last couple of decades, the shift to global neoliberalism was not countered by the parties of the reformist left that came to power. They may have criticized neoliberal hyper-globalization while they were in opposition, but they did very little once they came to power to combat its destructive effects. At the very best, they increased spending on social programs but did not try to diminish the spread of globalization on their economies and societies. Subsequently, by failing to tame, let alone shrink, capitalist globalization, they quickly saw their political fortunes decline and found citizens changing sides. This is the principal factor that has activated a turn to the far-right across the globe, including the United States, although Trumpism also needs to be considered in light of the peculiar social, cultural, and ideological features of the country.
The problem with the reformist left vis-à-vis neoliberal globalization remains. That is, it advances a critique of the consequences of capitalist globalization but seems to accept the phenomenon as inevitable and unalterable. In doing so, it leaves the field open for far-right populists to make inroads with disgruntled voters by appealing to their worst instincts as in the case of immigration.
We also know that pressure “from below” to tame or even reverse neoliberal globalization, a view that was held by the main body of the anti-globalization movement of the 1990s and 2000s, is a flawed strategy. The way out of neoliberal globalization is by developing a new globalization that is free from the destructive tendencies of capitalist accumulation and operates through political processes in which democracy and globalization are in a symbiotic relationship and thus support and reinforce each other.
The left is historically obligated to advance an alternative vision of a world order beyond capitalism. A world order where the rights of labor are at the pinnacle of human society and thus the means of production are collectively owned by workers while the exploitation of nature is seen as injustice.
In sum, systemic change for ending neoliberal hyper-globalization is a prerequisite but such a project mandates anti-systemic consciousness and a comprehensive political program for a new world order. If the left fails to develop the courage to engage itself economically, politically, ideologically, and culturally in the making of an alternative world order, capitalist globalization will continue to reign supreme, and the far-right will be its main political beneficiary.
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The US Leads the Global Race to the Bottom—and Still Pretends to Be the Victim
Trump’s tariffs are not a departure from business as usual; they are an extension of it and will overwhelmingly benefit the world’s financial elite.
Apr 28, 2025
Global trade systems are not free, nor are they neutral. They were built to facilitate capital transfer and to transfer wealth upward—benefiting the rich while harming workers worldwide. This arrangement can feel too big, too abstract, and too disconnected from our experience. For these reasons, and as a sociologist across decades and schools, I have facilitated this race to the bottom activity to help students understand the problems inherent to our complex global reality.
In the Transnational Capital Auction: A Game of Survival simulation, students role play as leaders of countries with less wealth than GDP leading nation states. They are instructed that they rely on trade and economic development from wealthier countries such as the United States and powerful transnational corporations.
Capital flight occurs when transnational corporations move their factory or industry from one geographical area to another in order to seek better conditions for their bottom line, profits, or for shareholders. These moves highlight the antagonism between the working class and the owning class. For example, in the activity, teams gain points when they satisfy corporate demands: being lax on child labor laws and environmental regulations, maintaining a low minimum wage and corporate tax rate, and suppressing unionization of workers. This is not just a game with hypothetical conditions, it is a microcosm which echoes real-world socioeconomic and political dynamics.
Rather than denying our power and privilege in order to justify more bad behavior, we need to do our part to realign around policies that are internationally, socially, and environmentally sustainable.
We have seen this play out domestically and internationally. Sociologists have documented how corporations leave the United States to go to places more favorable to capital. For example, when an area develops unions, industry can flee to what it considers a safer space for business. In this way, capital for transnational corporations can accumulate faster when workers’ rights and environmental policy is lax. These conditions have led to countless deaths, especially among women and people of color, and have fueled global climate destabilization. These corporations are helped by policies and loopholes such as international tax havens like Nauru.
The human cost of this system is staggering. Body-catching nets were installed around Foxconn buildings because workers were unaliving themselves by jumping off their job site. Women, including mothers, leave their families and countries in order to work in other locations where the wages are higher.
The unjust arrangements are often complex by design. There are free trade zones or “special economic zones” in places like Jamaica, which allow companies to operate under a different set of laws than the rest of their country—sometimes with fewer worker protections. Meanwhile, local markets neglect or dispose of their natural resources because of the flux of imported goods dictated by trade agreements.
To be sure, the global working class harmed by these lopsided systems includes American workers who have lost their jobs, houses, and communities through capital flight. And yet, American consumers love the low prices these systems enable. The products we rely on—the food, the technology, the entertainment—these things are not created in a vacuum, and they are also not free. We have access to fast fashion and too soon obsolete technologies because people spend their lives working in conditions and receiving wages that we would consider un-American. Yet they are so very American.
The United States is no one’s victim. It helped create the race to the bottom and continues to benefit from its downward spiral. Trump’s narrative, justification, and chaotic enactment of tariffs are more than problematic. They are not a departure from business as usual, they are an extension of it and will overwhelmingly benefit the world’s financial elite.
Change is needed. The United States needs to reevaluate its relationship with itself and as part of a global community. We need reciprocal, resilient, and renewable structures in place. We will not get there by the same policies of violence, domination, and extraction that got us to the asymmetrical and disproportionate power that we have now. Rather than denying our power and privilege in order to justify more bad behavior, we need to do our part to realign around policies that are internationally, socially, and environmentally sustainable. We can all start by reflecting on our personal commodity chains, which tether us to global enterprise and its bottom rungs.
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How Eco-Localism Differs from Trump’s Tariff Terrorism
Even though both eco-localists and Trump administration officials have at times promoted the use of tariffs, they propose using them for entirely different reasons, and, presumably, would achieve very different results.
Apr 20, 2025
Followers of the Small Is Beautiful school of environmentalism (to which I subscribe) often critique globalization and advocate localism. The controversial new Trump tariffs seem purpose-made to choke off global trade and promote American domestic manufacturing. Am I thrilled?
Let’s unpack the goals and tactics of both eco-localism and the Trump tariffs and see where there’s congruence, and where there’s contradiction.
Where the Eco-localists Are Coming From
Trade makes many folks materially better off by enabling a local abundance of resources or skills to be shared across a wider area. However, increased trade often worsens economic inequality and depletes and pollutes the environment faster than would otherwise happen. Therefore, eco-localists see trade as a mixed benefit whose unintended negative impacts must be carefully managed.
Globalization of trade raises the stakes of both benefits and risks. On the risk side of the leger, taken to the extreme, it leads to a world in which everything is for sale, all resources are depleted, pollution is everywhere, labor is exploited to the maximum degree, and everything is owned by a tiny number of super-rich investors and entrepreneurs.
The scope of globalization that’s happened in the last few decades is unequaled in human history (the spread of the Roman Empire is one of several smaller-scale precursors). Corporations and banks delivered the technology and capital; trade agreements like NAFTA and trade partnerships like the E.U. contributed the legal framework; and fossil fuels provided abundant, concentrated, storable energy for manufacturing and transport. The result is an integrated global market in which a single product, such as a smartphone, may incorporate design elements from skilled workers in the U.S.; raw materials from 20 countries; and assembly by poorly paid workers in China, Vietnam, or India. The phone can then be sold in scores of nations. The intended benefit is that billions of people get to use a technology that, by its very nature, requires global supply chains, internationally shared technological expertise, and stable rules of economic cooperation and investment. The unintended side effects are that a few people become unimaginably rich while nature is poisoned and people’s mental, physical, and social health deteriorates.
Within the deteriorating circumstances of a world seemingly on the verge of environmental ruin and global conflict, eco-localist strategies are looking more and more sensible.
The winners of the globalization game include a growing global billionaire class and a fast-growing middle class in China, India, and other manufacturing hubs. Middle-class consumers around the world win by getting cheap goods. Corporations and investors reap a windfall.
However, society and nature are losers when globalization worsens inequality while speeding up depletion and pollution. Global economic inequality declined during some decades of the 20th century, but it did so mainly because of the Great Depression and two World Wars. Otherwise, the last century saw a relentlessly widening gap between rich and poor—a trend that has accelerated in the past two decades, not just in the U.S., but in China, India, and elsewhere. Indigenous cultures in less-industrialized nations are hardest hit, as globalization uproots people from traditional village life, thrusting them into cities and factories. Meanwhile, forests disappear, carbon accumulates in the atmosphere, wild creatures vanish, and floods and fires devastate more communities.
The United States, the country that invented consumerism, in part to deal with a glut of production, used to be the world’s manufacturing powerhouse. But, with cheaper labor available in Asia and the “productivity” gains from automation and other technologies, the U.S. has instead become the top global consumer, a center of global finance, the primary military superpower, and the trendsetting conductor of international rules of commerce. The share of U.S. jobs in manufacturing has declined by 35% since the 1970s. And that decline has created political and social problems including political polarization, which in turn is undermining democracy in the U.S. and other countries.
Eco-localists argue that globalization is authoritarian by nature: Increasingly, multinational corporations rule the world. Individuals and communities are powerless by comparison.
Eco-localists make the following recommendations to governments and communities:
- Incentivize cooperative, worker-owned businesses;
- Promote the meeting of human needs through non-market means—i.e., the sharing economy;
- Focus on the well-being of people and nature instead of simply aiming to grow GDP;
- Tax the rich and provide more economic security (including education and healthcare) for lower-income people;
- Re-localize production by regulating big corporations so that smaller, local producers and sellers can remain competitive; and
- Strengthen the rights of communities (including the rights of nature) and the fabric of democracy.
Where the Tariff Terrorists Are Coming From
The Trump tariffs are an unfolding story that changes daily. The goals of this astonishing set of new, constantly shifting trade policies are somewhat unclear, as statements by the president and other officials are sometimes contradictory. U.S. President Donald Trump himself has a longstanding fascination with tariffs, which he sees as coercive tools for achieving various international ends, not all of them economic.
Trump often laments the fact that America runs a trade deficit with many nations. In Trump’s mind, any trade deficit is a loss, and he wants America to win. Here is Commerce Secretary Howard Lutnick, speaking on CBS News’ “Face the Nation” on Sunday, April 6:
We’ve got to start to protect ourselves... and we’ve got to stop having all the countries of the world ripping us off. We have a $1.2 trillion trade deficit, and the rest of the world has a surplus with us. They’re earning our money. They’re taking our money, and Donald Trump has seen this, and he’s going to stop it.
Still, trade rebalancing doesn’t seem to be Trump’s only aim. Tariffs could be used either as a weapon to extort concessions from other nations, or as a durable source of income for the government and a way to restructure trade over the long haul, favoring U.S. domestic manufacturers. Trump has cited both purposes. But they are fundamentally incompatible: If successfully used as a bargaining chip, then tariffs will be negotiated away and therefore will provide no long-term income to the government. If they are meant to be held in place to provide long-term income (Trump has even mooted the notion of replacing income taxes with tariffs), then there’s nothing to negotiate. As a side note, there’s one other possible motivation: Tariffs—with carve-outs to specific businesses, industries, or countries—have historically been used as a tool for corruption.
After the announcement of dramatically high tariffs on all nations on April 2 (dubbed “liberation day” by the administration in an Orwellian turn), the U.S. bond market immediately saw a dramatic sell-off, causing the interest rate the government pays on its debt to soar. Trump relented, delaying most tariffs for 90 days while leaving a 10% tariff in place on all nations except China, which he targeted with a 145% tariff. China has responded with its own 125% tariff on all U.S. imports. China has also cut off exports of strategic raw materials. It seems that the trade war Trump has initiated is almost entirely directed toward Beijing; much lower tariffs on other countries could conceivably be used to coerce those countries to stop doing business with China.
A possible outcome would be the commercial isolation of China and the end of its rise as a global superpower capable of eclipsing the U.S. However, if this is indeed Trump’s goal, his strategy seems to ignore the fact that China already has a broad sphere of influence, including trade alliances with Brazil, India, Russia, South Africa, Egypt, Ethiopia, Indonesia, Iran, and the United Arab Emirates (i.e., the BRICs countries). Further, engineering a clash between the U.S. and its European allies on one side and BRICs nations on the other might not end well, given the fact that Trump has already torched his country’s leadership of the Western alliance through his authoritarian posturing, his undermining of NATO, and his threatening of friendly nations with enormous tariffs. We’re already seeing the European Union negotiating with China to lower trade barriers to Chinese electric vehicles. Prospects for driving a wedge between Asian nations and China might be even worse.
Trump’s strategy does have its cheerleaders. Here’s influencer Ken Rutkowski’s breathless paean:
[Tariffs represent]... a new economic philosophy that restructures the global trade system, repositions the American worker at the core of the system, and challenges the 30 years of offshoring conventions. [They are] a decades-in-the-making strategy to restore industrial self-reliance, real wage growth, and economic security. The new playbook views tariffs as versatile tools. This regime sees them not only as revenue generators but also as negotiation triggers and economic equalizers. Protection? Yes. Leverage? Absolutely. Alignment? Finally. FromWall Street to Main Street. The endgame? A more balanced global economy where America consumes less and produces more, while China consumes more and exports less. It’s a forced rebalancing—one tariff at a time.
Trump’s tariffs are often said to benefit U.S. workers in the long run. Yet this ostensible objective seems contradicted by the administration’s fascination with AI—which, according to Bill Gates, will eliminate all but three kinds of jobs. Further, our supposed worker-centric future is being designed by billionaires, whose interests rarely coincide with those of workers.
If the Trump tariff goal is a world dominated by America, it’s an America that is itself dominated by super-wealthy elites, an America that is no longer a fully functioning democracy, an America with no checks or balances on executive power, an America with no law that its top officials are required to obey, and an America where noncitizens and potentially citizens as well can be whisked off the streets without warning and deported to foreign prisons. New York Congressman Ritchie Torres summed up the situation well:
If a superpower were intent on engineering its own decline, it would antagonize its allies, paralyze its economy with the certainty of uncertainty, erode confidence in the world’s reserve currency, discard due process, defund medical and scientific research, sabotage the most critical form of critical manufacturing—domestic chipmaking—and grow its deficit until debt service devours the largest share of its budget.
Meanwhile, the Trump administration, steeped in hostility toward environmental protection, will not use tariffs to avert environmental catastrophe. Not only has Trump abandoned the Paris climate agreement, but his domestic policies include promoting coal mining and oil drilling, softening pollution regulations, expanding logging on federal lands, and weakening if not killing the Endangered Species Act.
Is There Any Overlap? And What Direction Should We Embrace?
Tariffs could reduce global trade, which seemingly would align with eco-localists’ aims. Perhaps tariffs could be used to protect communities and livelihoods, and as a form of economic defense against globalization. However, eco-localists tend to see tariffs as a tool of last resort, one that often has nasty unintended consequences, such as increased international hostility and higher prices for essential goods. The word “tariff” rarely shows up in books on ecological economics. However, in Beyond Growth, pioneer ecological economist Herman Daly did discuss tariffs briefly:
Nearly all policies for sustainability involve internalizing external environmental and social costs at the national level. This makes prices higher. Therefore free trade with countries that do not internalize these costs, or do it to a much lesser extent, is not feasible. In such cases there is every reason for protective tariffs.
Tariffs, used protectively, could slow or even reverse globalization, providing time and wherewithal for societies to deal with the unintended side effects of recent decades of corporate-led trade expansion. However, this hinges on using tariffs explicitly and consistently to promote policies that reduce pollution, resource depletion, and unfair treatment of workers. There is nothing in the Trump team’s statements to suggest these are significant aims.
Many eco-localists advocate deliberately shrinking the industrial economy to reduce its impact on nature. Shrinking the U.S. economy is not Trump’s explicit goal, but it is an almost certain result of his tariff policies. Liberal and conservative analysts agree that trade barriers will, in David Frum’s words, “make U.S. goods more expensive to produce, costlier to buy, and inferior to the foreign competition.” But rather than reining in trade for the purpose of reducing pollution and exploitation of workers, Trump and his team seem to be intent on accelerating environmental degradation (fossil fuel products are exempt from U.S. tariffs) and increasing economic inequality by weakening government health and safety programs and doling out lavish tax cuts to the rich.
So, even though both eco-localists and Trump administration officials have at times promoted the use of tariffs, they propose using them for entirely different reasons, and, presumably, would achieve very different results. One group is concerned with protecting nature and minimizing economic inequality so that humans and other species can persist. For Trump and his team, the environment is irrelevant, and workers are chumps useful merely for gaining national power. Once achieved, that power can then be leveraged internationally through belligerent tariffs, with the goal of bludgeoning the entire world into submission.
The Trump team’s maximalist power grab is certain to provoke reactions. The world has been plunged into a trade war, but trade wars have a nasty tendency to turn into shooting wars. Within the deteriorating circumstances of a world seemingly on the verge of environmental ruin and global conflict, eco-localist strategies are looking more and more sensible. While there is no likelihood of their national adoption in the U.S. anytime soon, they are perhaps most applicable and effective at the community scale.
Indeed, this is the moment when eco-localism is most desperately needed. As soaring consumer prices, supply chain disruptions, and reductions in government-provided funding and services threaten communities, localists can help bolster local markets and inspire mutual aid efforts, helping mobilize folks to take more responsibility for their own collective resilience and well-being.
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If DOGE Wants a Worthy Target, It Should Look at the World Bank and IMF
These are two of the most questionable and controversial institutions directly or indirectly funded with U.S. taxpayers’ money.
Feb 25, 2025
I think that Elon Musk and his Department of Government Efficiency, or DOGE, have been misinformed. I don’t disagree with their shutting down USAID, but I think it’s rather small fry. There are much, much bigger fish to fry if you want to really save U.S. government money that is being wasted in programs that are mischievously justified as aid to the poor people of the world.
Elon, hear me out: if you walk northwest from your headquarters at the Eisenhower Executive Building along Pennsylvania Avenue, you’ll come after one long block upon two ugly buildings squatting beside each other. One is the World Bank. The other is the International Monetary Fund (IMF). You can actually just walk in and demand to look at their books since they are extensions of the U.S. government. And you would have a very good reason to do so, since these are two of the most questionable and controversial institutions directly or indirectly funded with U.S. taxpayers’ money.
The IMF and the World Bank are monuments to misguided economic thinking and policies that have brought much misery to the peoples of the Global South.
Let me start with the World Bank, which is located at 1818 H St NW. This institution has so-called development projects throughout the Global South, otherwise known as developing countries. This agency says that its mission is to end poverty in the developing world. To fulfill this goal, its lending has risen from nearly $55 billion in 2015 to $117.5 billion in 2024. Yet, despite this massive increase, the bank admits that global poverty reduction “has slowed to a near standstill, with 2020-2030 set to be a lost decade.” Some 3.5 billion people, or 44% of the globe, remain poor, after decades of massive World Bank lending. And a major part of the reason is that World Bank programs have created poverty instead of alleviating it.
Living in Luxury While “Fighting Poverty”
To manage its operations, the Bank’s full-time staff rose from nearly 12,000 in 2015 to over 13,000 in 2023. These figures are just the tip of the iceberg. If one includes all employees—permanent, non-permanent, contractual, part-time—throughout the world, the bank employs close to 41,000 people. The vast majority, 26,000, or 63%, work out of the World Bank headquarters in Washington, D.C., and only 3,200 are located in Africa, where most people in extreme poverty live.
The Bank’s economists and top administrators are among the highest paid financial functionaries in the world, which explains the reason why the bank is a major cause of the brain drain from developing countries: a great number of highly trained economists from developing countries prefer to work at the bank instead of their home countries, with some going straight from Ivy League or British graduate schools to Washington, D.C. Many within the bank and the International Monetary Fund complain about the “South Asian Mafia” that they claim controls employment opportunities for economists and higher-level staff in the two organizations.
The World Bank has come under fire for the billions it has spent supporting fossil-fuel projects throughout the Third World that have contributed to global warming and to mega-dam projects that have displaced millions. The bank, along with the fund, has also gained notoriety for imposing “structural adjustment” programs guided by the radical principles of the “Washington Consensus” that are designed to promote globalization but have, instead, increased poverty and deepened inequality. The reason World Bank projects and programs don’t work or create exactly the opposite of their intended goals is because they are based on questionable propositions built on little or no empirical evidence. An assessment made a few years ago by an all-star team of renowned economists led by Princeton’s Angus Deaton, a recipient of the Nobel Prize for Economics, was damning:
[The] panel had substantial criticisms of the way that the research was used to proselytize on behalf of bank policy, often without taking a balanced view, and without expressing appropriate skepticism. Internal research that is favorable to bank positions was given great prominence, and unfavorable research ignored. In these cases, we believe that there was a serious failure of checks and balances that should have separated advocacy and research. The panel endorses the right of the bank to strongly defend and advocate its own policies. But when the bank leadership selectively appeals to relatively new and untested research as hard evidence that these preferred policies work, it lends unwarranted confidence to the bank’s prescriptions. Placing fragile selected new research results on a pedestal invites later recrimination that undermines the credibility and usefulness of all bank research.
The bank’s refusal to acknowledge real-world refutations of its pro-globalization advocacy and its unbalanced, one-sided research led to justifiable rejection of its advice by the people who were suffering from the policies it was implementing, confessed Paul Collier, head of the Research Development Department of the Bank from 1998 to 2003:
The profession has been unprofessional, fearful that any criticism would strengthen populism, so that little work has been done on the downsides of these different processes [of globalization]. Yet the downsides were apparent to ordinary citizens, and the effect of economists appearing to dismiss them has resulted in widespread refusal of people to listen to “experts.” For my profession to reestablish credibility we must provide a more balanced analysis, in which the downsides are acknowledged and properly evaluated with a view to designing policy responses that address them. The profession may be better served by mea culpa than by further indignant defenses of globalization.
Despite the high rate of failure of its lending programs acknowledged in internal World Bank assessments, the World Bank administrative budget that supports the high salaries of its economists and other high-level staff just keeps growing. The World Bank (IBRD/IDA) administrative budget was approved at $3.5 billion for FY25, a sizable rise from the $3.1 billion authorized for FY 2024, with no convincing reason at all.
The IMF and the Art of Worsening Financial Crises
The International Monetary Fund, whose address is 700 19th St NW, is the World Bank’s sister agency. It has a full-time staff of 3,100, supported by a budget of $1.5 billion. The IMF’s economists are paid even higher than those at the World Bank, and they evoke more fear, hatred, and contempt than the Bank.
The IMF has an equally controversial history. It has a record of coming in to supposedly assist developing economies in crisis, only to make things worse. Its greatest debacle and scandal was its performance during the Asian Financial Crisis of 1997-98, when the so-called “tiger economies “of the East and Southeast Asia were destabilized by the massive inflows and outflows of foreign portfolio investment.
The fund was heavily criticized on three counts. First, it had encouraged the governments of the region to eliminate capital controls, thus provoking uncontrolled capital flows. Second, it assembled multi-billion dollar “rescue packages” that went to rescue not the people suffering from the crisis but to compensate the foreign financial speculators that had lost millions in dubious speculative ventures, thus encouraging “moral hazard,” or irresponsible investing. Third, its measures to stabilize the damaged economies intensified the crisis, since instead of encouraging government spending to counteract the collapse of private sector, it told the governments to radically cut spending, leading to a “procyclical” negative synergy that ended in deep recession.
So long as the IMF is there, the big international banks will assume that they will be bailed out for making irresponsible loans.
In just a few weeks, 1 million people in Thailand and 22 million in Indonesia fell below the poverty line. The only country that contained the crisis was Malaysia, which refused to follow the fund’s dictates and imposed capital and currency controls
So disastrous were the IMF’s interventions that George Schultz, President Ronald Reagan’s secretary of the Treasury, called for its abolition for encouraging moral hazard, and prominent economists like Jagdish Bhagwati and Jeffrey Sachs accused it of provoking global macroeconomic instability. Indeed, a rare conservative-liberal alliance in the U.S. Congress came within a hair’s breath of denying the IMF a $14.5 billion replenishment.
Eventually, the fund was forced to admit that the “thrust of fiscal policy… turned out to be substantially different… because the original assumptions for economic growth, capital flows, and exchange rates… were proved drastically wrong.” But things were never the same again. The IMF was so reviled for its performance that Asian governments developed IMF-phobia, swearing never again to ask the IMF for rescue even in the most dire circumstances. For instance, after paying off what Thailand owed the IMF, Prime Minister Thaksin Shinawatra declared the country “liberated” from the fund in 2004.
Instead of learning from its debacle during the Asian Financial Crisis, the IMF stumbled into another fiasco more than a decade later, during the Global Financial Crisis. It allowed itself to be hijacked by Germany, the European Commission, and the European Central Bank to provide billions of public money to rescue German financial institutions and investors that had engaged in an orgy of irresponsible lending to Greece to the tune of 25 billion euros. To get the so-called rescue funds, the Greek government, like the Asian governments previously, was forced to adopt severe austerity measures that drove unemployment up to 28% and condemned the Greek economy to permanent stagnation, only to turn the money it was ostensibly receiving over to the German banks.
Not surprisingly, so long as the IMF is there, the big international banks will assume that they will be bailed out for making irresponsible loans.
The U.S. and the Bretton Woods Twins: Fiction and Fact
There is a fiction that the IMF and World Bank are multilateral institutions that are owned by their many member governments. The reality is that the United States controls both institutions, with a 17.4% share of total quotas at the fund and 15.8% share of voting power at the bank. These shares give the U.S. government a veto power over any policy change. But the truth is that U.S. power is not limited to its being able to veto policy decisions it does not like. No country would dare oppose a move by the United States to radically cut the administrative budgets (by, say, 75% initially) and the number of personnel in the two organizations (to 600 personnel each, as in the case of USAID) if it wanted to do so. All it needs to do to get its way is to threaten to withhold its contributions to the two organizations. I can guarantee that immediately the interest rate at which the bank borrows in international capital markets would leap upward, paralyzing its lending operations.
The IMF and the World Bank are monuments to misguided economic thinking and policies that have brought much misery to the peoples of the Global South. They are institutions that no longer serve any purpose except to perpetuate and enlarge themselves. If Elon Musk and Donald Trump are really serious about radically downsizing bloated bureaucracies, they could not have better targets than the Bretton Woods twins.
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Trump, Biden, and the Crisis of the Neoliberal International Order
A hegemonic stalemate or a hegemonic vacuum opens up the path to a world where power could be more decentralized.
Jul 18, 2024
Whether we call it “polycrisis,” like Columbia University Professor Adam Tooze, or “the age of catastrophe,” like the distinguished Marxist Alex Callinicos, there is no doubt that we are living in a period where the very foundations of the contemporary world order are cracking. There is that enigmatic line Gramsci used to describe his era that is also appropriate for ours: “The old world is dying, and the new world struggles to be born: now is the time of monsters.”
This short essay will focus on a key dimension of the polycrisis: the unravelling of the global hegemony of the United States.
The downspin of the U.S. empire has had a number of causes, but key among them are military overextension, neoliberal globalization, and the crisis of the liberal political and ideological order. Let us discuss each in turn.
Overextension and Osama
Overextension refers to the gap between the ambitions of a hegemon and its capacity to achieve those ambitions. It is almost synonymous with the concept of overreach as used by the historian Paul Kennedy, the slight difference being that overextension as I use it is principally a military phenomenon. The struggling empire the United States is today is a far cry from the unipolar power it was a quarter of a century ago, in 2000. If we ask ourselves what led to this situation, it inevitably comes down to one individual: Osama bin Laden.
The aim of bin Laden’s attack on the Twin Towers on September 11, 2001 was precisely to provoke the overextension of the empire by forcing it to fight on several fronts in the Muslim world that would be inspired to revolt by his dramatic action. But instead of igniting revolt, Osama’s act ignited revulsion and disapproval among most Muslims. September 11 would have been a big failure had not George W. Bush seen it as an opportunity to use American power to reshape the world to reflect the Washington’s unipolar status. He took Osama’s bait and launched the United States into two unwinnable wars in Afghanistan and Iraq. The results have been devastating for America’s power and prestige.
During the June 7, 2024, debate between Donald Trump and Joe Biden, Trump referred to the defeat in Afghanistan as the worst humiliation ever inflicted on the United States. Now Trump, as we all know, is prone to exaggeration, but there was strong element of truth in his statement.
September 11 would have been a big failure had not George W. Bush seen it as an opportunity to use American power to reshape the world to reflect the Washington’s unipolar status.
According to CIA analyst Nelly Lahoud, “Though the 9/11 attacks turned out to be a Pyrrhic victory for al Qaeda, bin Laden still changed the world and continued to influence global politics of nearly a decade after.” If the United States is the confused and groping global power it is today—one that has been, moreover, reduced to a dog being wagged by the Zionist tail—that is to a not-insignificant degree due to bin Laden.
To acknowledge the significance of 9/11 is not, of course, to endorse it. Indeed, for most of us, the attack on civilians was morally repelling. But one must give the devil his due, as they say, that is, point out the objective, world-historic impact of the deed of an individual, be this person a saint or a villain.
Trading Places
Let us turn to the second major cause of the unravelling of the hegemonic U.S. status: neoliberal globalization. Thirty years ago, U.S. corporate capital, along with the Clinton administration, envisioned globalization, achieved through trade, investment, and financial liberalization, as the spearhead of its greater domination of the global economy. Wall Street and Washington were wrong. It was China that was the biggest beneficiary of globalization and the United States one of its main victims.
Investment liberalization meant billions of dollars worth of U.S. corporate capital flowed to China to take advantage of labor that could be paid at fraction of the wages paid labor in the United States in exchange for technology transfer, voluntary or forced, that helped China comprehensively develop its economy. Trade liberalization made China the manufacturer of the world supplying mainly the U.S. market with cheap products. Both investment and trade liberalization contributed to the deindustrialization of the U.S. and the loss of millions of manufacturing jobs, which declined from 17.3 million jobs in 2000 to around 13 million today. Compounding the deleterious effects of deindustrialization have been the financialization of the U.S. economy, that is, making the super-profitable financial sector the leading edge of the economy, and regressive taxation, which led to an extremely inequitable distribution of income and wealth.
China’s crises are crises of growth, compared to the U.S. crises, which are crises of decline.
China has traded places with the United States in the global economy. China is now the center of global capital accumulation or, in the popular image, the “locomotive of the world economy.” According to IMF calculations, China accounted for 28% of all growth worldwide from 2013 to 2018, which is more than twice the share of the United States. What must be underlined is that while the United States followed neoliberal policies of giving full play to market forces, China selectively liberalized, with the powerful Chinese state guiding the process, protecting strategic sectors from foreign control, and aggressively demanding advanced technology from Western corporations in exchange for cheap labor.
Although in dollar terms, the United States is still the biggest economy, by some other measures, like the World Bank’s Purchasing Power Parity (PPP), China is now the world’s largest. In the United States, 11.5% of people now live in poverty, whereas, according to the World Bank, only 2% of China’s population is poor.
Of course, China has faced challenges in its rise to the world’s economic summit, but development, as the economist Albert Hirschman point out, is a necessarily unbalanced process. China’s crises are crises of growth, compared to the U.S. crises, which are crises of decline.
From De Facto to Armed Civil War?
Military overextension and the effects of neoliberal economics have contributed not simply to political disaffection but to political turmoil in the United States, with one of the two major parties, the Republican Party, becoming the spearhead of far-right or fascist politics fueled by racism, anti-immigrant sentiment, fear, and decline in economic status among white people. Politics has become severely polarized, and some warn that there is now a state of de facto civil war. In short, the political and ideological regime of liberal democracy is now in grave danger, with many liberals and progressives warning that Trump’s Plan 2025 will amount to the establishment of a fascist dictatorship. They are not wrong.
Here is what Steve Bannon, the ideological chief of the U.S. far right, says,
The historical left is in full meltdown. They always focus on noise, never on signal. They don’t understand that the MAGA movement, as it gets momentum and builds, is moving much farther to the right than President Trump… We’re not reasonable. We’re unreasonable because we’re fighting for a republic. And we’re never going to be reasonable until we get what we achieve. We’re not looking to compromise. We’re looking to win.
A second Trump presidency is now a certainty, with the strong possibility that the de facto civil war could turn into an armed civil war. Indeed, the assassination attempt on Trump on July 13 may well be a major step towards the unrestrained violence depicted in Alex Garland’s Civil War.
Crisis of the Liberal International Order
Washington has been the guardian of the international order, and with the economic and political crisis of the United States, that order has also entered into a deep crisis. What are the key aspects of what has been characterized as the liberal international order? First, of all, global leadership of the United States and the West underpinned by U.S. military power. Second, a multilateral order that serves as a political canopy for Western capital, whose mainstays are the World Bank, the International Monetary Fund, and the World Trade Organization. Third, an ideology that promotes Western-style democracy as the only legitimate political regime.
This liberal order is now in trouble on two fronts: on the international front, it has lost legitimacy among the Global South, which sees the multilateral system as designed mainly to keep it down; internally, the liberal democracy that is its guiding ideology is under assault from the far right. If the far right comes to power in the United States and in key states in Europe—and it may come to power soon in France and soon after that, in Germany—the international order they would favor would probably continue to assert Western economic supremacy but adopt a much more unilateralist, protectionist approach of securing it instead of using the IMF-World Bank-WTO complex. Certainly, the far right will abandon the hypocritical appeal to liberal democracy as a model for the rest of the world.
Headed for War?
China says it is not out to displace the United States as global hegemon. To the U.S. elite, however, China is a revisionist power determined to dislodge it as the global hegemon. Especially in the Biden years, the United States has become more and more determined to use that dimension of hegemony where it enjoys absolute superiority over China, military power, to protect its status as number one.
This is why the danger of war between the United States and China is not to be underestimated, and this is the reason the Western Pacific is such a powder keg, far more than Ukraine. In Ukraine, the United States and China confront each other through proxies, Russia and NATO, while in the Pacific they confront each other directly.
The United States has scores of bases surrounding China from Japan to the Philippines, including the massive floating base that is the Seventh Fleet. The South China Sea is now filled with rival warships performing naval “exercises.” Among the latest visitors are vessels from France and Germany, U.S. allies that have been dragooned far from NATO’s traditional area of coverage to contain China. U.S. and Chinese warships have been known to play games of chicken—heading at each other and then swerving at the last minute. A miscalculation of a few feet could result in a collision, with unpredictable consequences. Fears that the South China Sea will be the next site of armed conflict are not alarmist.
In the absence of any rules of conflict resolution, the only thing preventing conflict is the balance of power. But balance-of-power regimes are prone to breakdown, often with catastrophic results—as was the case in 1914, when the collapse of the European balance of power led to World War I. With Washington aggressively marshaling Japan, South Korea, the Philippines, five carrier task forces of the U.S. Navy, NATO, and the newly created AUKUS (Australia, United Kingdom, United States) alliance into a confrontational stance against China, the chances of a rupture in the East Asian balance of power are becoming more and more likely—perhaps just a collision or away.
Hegemonic Transition or Hegemonic Stalemate?
So what does the future hold? Some say a hegemonic transition, whether peaceful or not is inevitable.
But let us pose another possibility. Perhaps, we should be looking not so much at a hegemonic transition but at the emergence of a hegemonic vacuum akin to but not exactly the same as that which followed the First World War, when the weakened Western European states had ceased to have the capacity of restore their pre-war global hegemony while the United States did not follow through on Woodrow Wilson’s push for Washington to assert hegemonic political and ideological leadership.
Within such a vacuum or stalemate, the U.S.-China relationship would continue to be critical, but with neither actor able to decisively manage trends, such as extreme weather events, growing protectionism, the decay of the multilateral system that the United States put in place during its apogee, the resurgence of progressive movements in Latin America, the rise of authoritarian states, the likely emergence of an alliance among them to displace a faltering liberal international order, and increasingly uncontrolled tensions between radical Islamist regimes in the Middle East and Israel.
Yes, the crisis of U.S. hegemony may lead to an even deeper crisis, but it may also lead to opportunity for us.
Both conservative and liberal policymakers paint this scenario to underline why the world needs a hegemon, with the former advocating a unilateral Goliath who does not hesitate to use threat and force to enforce order and the latter preferring a liberal Goliath who, to slightly revise Teddy Roosevelt’s famous saying, speaks sweetly but carries a big stick.
There are, however, those, and I am one of them, who view the current crisis of U.S. hegemony as offering not so much anarchy but opportunity. Although there are risks and great dangers involved, a hegemonic stalemate or a hegemonic vacuum opens up the path to a world where power could be more decentralized, where there could be greater freedom of political and economic maneuver for smaller, traditionally less privileged actors from the Global South playing the two superpowers against one another, where a truly multilateral order could be constructed through cooperation rather than be imposed through either unilateral or liberal hegemony.
Yes, the crisis of U.S. hegemony may lead to an even deeper crisis, but it may also lead to opportunity for us. To use Gramsci’s image that I began this essay with, we may be entering an age of monsters, but like Ulysses, we cannot avoid going through the dangerous passage between Scylla and Charybdis if we are to get to the promised safe harbor.
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Khanna: Rise of AI Must Center 'Dignity and Economic Security of Working Class'
"The Democratic Party cannot claim to be the party of the working class if we allow AI to erode the earnings and security of the working class."
Jan 04, 2024
Democratic Congressman Ro Khanna, whose California district includes Silicon Valley, warned Thursday that to avoid catastrophic impacts of the artificial intelligence revolution, lawmakers and regulators must learn from "how unfettered globalization hollowed out the working class" in the United States, leaving "shuttered factories and rural communities that never saw the promised jobs materialize."
"Like globalization, AI will undoubtedly bring benefits—tremendous benefits—to our economy, with higher productivity, personalized medicine and education, and more efficient energy use," the congressman wrote in a New York Times opinion piece.
"Generative AI has the potential to help those with fewer resources or experience quickly learn and develop new skills," he noted. "The real challenge, though, is how to center the dignity and economic security of working-class Americans during the changes to come. And unlike the Industrial Revolution, which spanned half a century at least, the AI revolution is unfolding at lightning speed."
"Our generational task is to ensure that AI is a tool for lessening the vast disparities of wealth and opportunity that plague us, not exacerbating them."
Khanna stressed that "today the Democratic Party is at a crossroads, as it was in the 1990s, when the dominant wing in the party argued for prioritizing private sector growth and letting the chips fall where they may," ignoring prescient criticism from former Democratic Sens. Paul Wellstone (Minn.) and Russ Feingold (Wis.), as well as Independent Sen. Bernie Sanders (Vt.), who then served in the House.
After failing to heed their warnings, he argued, "the Democratic Party cannot claim to be the party of the working class if we allow AI to erode the earnings and security of the working class. The party can be forgiven once for the mistake of abetting globalization to run amok, just not twice."
"Technologies—our technologies—are meant to complement and enhance human initiative, not subordinate or exploit it," he asserted. "We must push for workers to have a decision-making role in how and when to adopt technologies, and we must insist on workers' profiting from the implementation of these technologies. Our generational task is to ensure that AI is a tool for lessening the vast disparities of wealth and opportunity that plague us, not exacerbating them."
Underscoring the urgency of his message, Khanna pointed out that in September, "tech's biggest names trekked to Capitol Hill for a forum on artificial intelligence" that "was reminiscent of Davos conferences in the 1990s and early 2000s," and this year alone, tens of thousands of workers at hundreds of companies could be laid off and replaced with AI.
Already, AI is factoring into labor negotiations and legislative battles. After California legislators last year overwhelmingly approved Assembly Bill 316, which would have required a human driver on self-driving trucks weighing over 10,000 pounds that are transporting goods or passengers for at least five years, Democratic Gov. Gavin Newsom vetoed it.
"Tech companies argue that replacing human drivers with AI is feasible, will reduce labor costs, and will therefore make it cheaper to transport goods and services. They lobbied heavily against the bill," explained Khanna. "I supported A.B. 316 because drivers say it's currently an unnecessary risk to have large trucks on public roads without a human on board. This is especially true if there is extreme weather, hazardous conditions, or heavy cargo on board. No one understands the safety risks at play here better than the drivers themselves, and it's both foolish and insulting to suggest they would make up such concerns to keep jobs that do not add value."
"It's not just the AI concerns of truck drivers that are causing divides in the Democratic coalition," the congressman continued, highlighting that the monthslong strikes of unionized writers and actors in Hollywood last year ended with deals that include provisions about artificial intelligence.
The California Democrat—who joined striking writers on the picket line—wrote that "even though writers' jobs are very different from truck drivers' jobs, labor solidarity is one of the few countervailing forces that can blunt the dehumanization of work motivated by short-term profit maximization in a world where AI is capable of suddenly disrupting both blue- and white-collar work."
Khanna—author of the 2022 book Dignity in a Digital Age: Making Tech Work for All of Us—published the Times piece amid fears about how AI will impact everything from mass surveillance and misinformation to healthcare and war, not only in the United States but around the world.
His Thursday column won praise from progressives across the country. Lorena Gonzalez Fletcher, head of the California Labor Federation, said that his piece is "truly a must-read for any policymaker" while Katrina vanden Heuvel, The Nation's editorial director and publisher, called it an "important read and issue for now and in '28."
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Can the Global North Transition its Energy System Without Green Colonialism?
The moment is right for Global South activists to influence European policy and the agenda of European civil society when it comes to climate and the environment.
Aug 29, 2023
It was a dream team of activists and scholars who conducted a whirlwind advocacy tour of Europe at the end of May. They visited Germany, Belgium, and the U.K. to challenge the conventional notion that Europe’s energy transition is “clean” and to tell stories about the impact of Europe’s transition on people living in “sacrifice zones” in the Global South. Toward that end, they met with European Parliament members, NGO and social movement representatives, and journalists on their four-day tour. They participated in five public events in three cities. And they were part of an unusual art exhibition in London.
Sponsored by the Ecosocial and Intercultural Pact of the South and the Global Just Transition project of the Institute for Policy Studies, this advocacy and lobbying tour was a follow-up from the “Manifesto for an Ecosocial Energy Transition from the Peoples of the Global South” published earlier this year.
The delegation members, who were all part of the drafting of the manifesto, represented different regions of the Global South. Nigerian activist Nnimmo Bassey heads up the Heart of Mother Earth Foundation, Indian activist-researcher Madhuresh Kumar represents the Global Tapestry of Alternatives, and Fijian international human rights lawyer Kavita Naidu works with the Climate Action Network in Australia, while Brazilian-Spanish activist-scholar Breno Bringel, Venezuelan linguist and ecofeminist Liliana Buitrago, and Argentine sociologist and philosopher Maristella Svampa are all affiliated with the Ecosocial and Intercultural Pact.
The Global South absorbs carbon from Europe while sending the raw materials that Europe uses to further reduce its own carbon footprint.
The mission of the trip was to inject Global South perspectives into current European policy discussions around energy and environment, with special emphasis on critical minerals, the Carbon Border Adjustment Mechanism, climate debt and the new Loss and Damage Fund, due diligence legislation, and ongoing trade negotiations. The delegates wanted to hear how best to work in solidarity with European allies to advance mutual climate justice goals and to combat a rising tide of far-right sentiment.
The delegation also aimed to publicize the manifesto and elevate its demands within Europe. It explained the Global South critiques of the hegemonic green transition, while also supporting the advocacy of European networks in raising the Global South demands. In this way, the delegation aspired to help reshape the narrative of climate justice in Europe to reflect the perspectives and concrete needs of the Global South.
The primary concern of the delegation was to highlight the problem of “Green colonialism.” The “clean energy” transition in Europe depends on raw materials like lithium and cobalt from the Global South. And the race to reduce carbon emissions has led to the “offshoring” of carbon-heavy industry and agriculture to poorer countries followed by a tax on imports that don’t meet strict E.U. regulations on carbon content (the Carbon Border Adjustment Mechanism). The Global South, in other words, absorbs carbon from Europe while sending the raw materials that Europe uses to further reduce its own carbon footprint.
The trip coincided with Europe’s ongoing scramble to find alternative sources of energy to substitute for Russian natural gas imports. That has meant not only a return to coal production at home but the securing of new fossil fuel imports from abroad. Europe had banked on using natural gas in its transition from oil and gas to renewable energy. The war has complicated that strategy, forcing Europe to source its gas from the United States and the Gulf region. Meanwhile, Europe is also looking to identify new sources of critical materials to replace those originating in China. This has pushed the E.U. to secure new partnerships in the Global South and boost mining at home.
The focus of policy discussion at the end of May in Europe, particularly in the European Parliament in Brussels, was indeed on these critical minerals. The MEPs were debating a proposed Critical Raw Materials Act, which aims to make Europe more self-reliant around 34 critical minerals. Some aspects of the act are commendable—particularly the emphasis on recycling and home-shoring the mining and processing in a way that reduces extractivism in the Global South.
But when combined with provisions in new E.U. trade agreements to ensure access to critical minerals, the European approach becomes more ominous. The E.U.’s recently concluded free trade agreement with Chile, for instance, limits the latter’s ability to supply local producers with critical materials like lithium at cheaper prices in order to build up its own clean-energy industries. This becomes an obstacle to the equally-needed energy transition in the Global South.
Reform vs. Transformation
Progressive European parties and NGOs, like their counterparts elsewhere in the world, are arrayed on a spectrum from championing modest reforms at one end to making radical demands at the other.
Many environmental activists are focused on reductions in fossil fuel use as part of an emphasis on reducing overall carbon emissions. So, for instance, we had a conversation with the German special envoy on climate that centered on cutting off the German financing of fossil fuel infrastructure abroad. This is not a straightforward issue given that some governments in the Global South, eager to secure energy resources for economic development, accuse European governments of “colonialism” if they don’t supply this kind of financing (which China is happy to step in and provide). Whether it’s fossil fuel financing or Green financing, the result is often contracts for European (or U.S.) manufacturers—as with the U.S. Ex-Im Bank’s nearly billion dollars of financing for two solar projects in Angola—rather than opportunities for the countries in the Global South to nurture community-based initiatives to generate renewable energy.
Those European policymakers and civil society activists committed to more radical change are calling for an equitable clean energy transition at the global level and not just for the Global North at the expense of the Global South. They are also demanding that the Global North reduce not only carbon emissions but overall energy consumption in the context of paying reparations as part of a longstanding climate debt to the Global South.
Green industrialism is committed to the same old approach of high consumption of goods, services, and energy that has brought the world to its current crisis.
Although some spoke of a kind of transformation fatigue in Europe, with citizens unnerved by the multiple transformations needed across the economy, there also seems to be new opportunities for radical change. Neoliberalism, for example, has sustained considerable shocks from a combination of Covid-19, the obvious and longstanding problems with economic globalization, and the ongoing failure to address climate change.
Two paths lead out of this dying neoliberalism. The first is a renewed emphasis on industrial policy—more conscious state intervention into the economy—but this time with a Green hue. Europe is investing heavily into its Green New Deal, the United States is implementing the closest thing to a Green industrial policy with the Inflation Reduction Act funding, and other countries too are feeling the pressure to come up with their own matching Green industrialism.
The challenge here is twofold. The countries of the Global North believe that they are permitted such Green industrial policies, but countries of the Global South must still adhere to the old neoliberal model (via extraction and free-trade treaties). The second problem is that Green industrialism is committed to the same old approach of high consumption of goods, services, and energy that has brought the world to its current crisis.
The second path heads in nearly the opposite direction: toward post-growth options. These post-growth options were, until recently, on the margins of the debate in Europe. But 20 members of the European Parliament, from five different parties, sponsored a Beyond Growth conference in May that attracted large audiences and considerable media coverage. It was particularly popular among young people and produced a manifesto for an intergenerationally just post-growth European economy. “The popularity of this event meant that mainstream politicians had to take post-growth seriously,” one interviewee said.
The tension between the ameliorative and the more transformative can be seen in something as concrete as… concrete. The current process of making concrete, cement, and other industrial materials is heavily dependent on fossil fuels. On the ameliorative side, industries are looking into carbon capture technologies or using other energy sources, such as hydrogen, for processes that require high temperatures and switching to electricity for lower temperature processes. They’re also looking into recycling, such as “secondary steel.”
On the more transformative side, there is talk of the circular economy, of using less concrete, fertilizer, and so on. “But it’s harder to push this,” said another interviewee. “It’s not as sexy.”
Inside vs. Outside Strategies
In some countries, climate policies are not high on the national agenda or there are few opportunities for civil society to have a say in government.
In Europe, however, climate is very much at the center of policymaking. According to one interviewee, 70% of laws debated in the European parliament cover climate, environment, or energy. And European civil society have multiple opportunities to engage with policymaking at the national and regional levels.
This inside game, however, can be frustrating, given the slowness of the process, the often-narrow field of operations, and the power of the corporate sector. After our delegates presented to the Left Party delegates at their plenary session in the European Parliament, for instance, the MEPs were hustled out of the assembly hall to prepare the room for the next event: a luncheon sponsored by the cruise ship industry, a notorious consumer of fossil fuels.
The Global South remains an outside player in European politics.
The inside-outside dynamic does not entirely map onto the reform-transformation dichotomy. The event on post-growth alternatives, for instance, was an initiative of parties in the European Parliament. Moreover, the MEPs are addressing climate justice through a number of initiatives on supply chain due diligence—on conflict minerals, deforestation, and corporate conduct on human rights and environment.
The European Commission, effectively the European Union’s executive body, is currently controlled by center-right parties because they received the largest vote share in the last elections. There are no Left or Green Party representatives. But there are also no far-right commissioners.
Energy and environment are currently the focus of European policy, under the combined guidance of President Ursula von der Leyen (Christian Democrats in Germany) and Executive Vice President Frans Timmermans (Labor Party in the Netherlands). But that could shift after the next elections, scheduled for June 2024. Public opinion polls currently suggest that the center-right European People’s Party, the Social Democrats, the liberal Renew Party, and the Greens will all lose seats. The Left would gain some seats, but the biggest winners so far are parties on the far right. As a result, the political center on the Commission is likely to shift to the right.
Such a shift would translate into a change of focus—away from climate and toward “security.” Consequently, the nature of the inside-outside game would change, with less access for environmental groups and considerably less openness to input from progressive Global South voices.
The Global South remains an outside player in European politics. Various countries or blocs can negotiate access or privileged relationships. But the playing field is not level. For some NGOs, the question then is how can the Global South acquire more power in negotiations. This can take the form of cartel-like politics: Those countries in the Global South that have critical resources can leverage their near-monopoly in exchange for more money, more access, or a higher status in the global supply chain (as Botswana did with “beneficiation” in the diamond industry). Or it can take the form of leveraging the protection of natural resources, such as the preservation of the Amazon rainforest or leaving the oil beneath the Yasuni National Park in Ecuador.
Partnerships
To build its competitive advantage vis-à-vis the United States and China, the E.U. is all about “partnerships.” First among those are trade agreements.
One of the trade agreements currently under discussion is with Mercosur, the South American trade bloc that includes Argentina, Brazil, Paraguay, and Uruguay. The updated agreement has been delayed but Commission President von der Leyen has pledged to conclude negotiations by year’s end. The Commission is reflecting environmental concerns, for instance by proposing a sustainability clause that addresses deforestation in the Amazon. But progressives have still criticized the agreement for not sufficiently addressing environmental issues or the concerns of Indigenous communities. European agricultural lobbies have also been lukewarm about the agreement.
But there is pressure on MEPs to get behind FTAs like the one with Mercosur. “If we don’t say yes to FTAs, we won’t have partnerships—and China will take it up,” one MEP told us.
The absence of prior and informed consent from communities in the new “sacrifice zones” in the Global South means that resource extraction takes precedence over democratic decision-making.
Other MEPs see the negotiations as an opportunity. “The Mercosur agreement was originally negotiated in the 1990s, so it’s not up to the standards of current trade agreements,” another MEP said. “So, this gives us an opportunity to talk about the Global South, about deforestation, environmental destruction, and the rights of minorities, Indigenous communities, and landless farmers. It allows us to ask the question: What kind of trade is fit for the 21st century?”
This, too, is the approach of Mia Mottley’s Bridgetown Initiative. Though the first version focused on financing, the 2.0 version of the framework presented by Barbadian Prime Minister Mottley in April also identifies trade as one of six key action areas: “Create an international trade system that supports global green and just transformations.” The Global South, in its negotiations with European partners, can lead the way in defining what such an international trade system looks like.
The flip side of this more equitable trade system is one dominated by corporations. There is considerable concern among European NGOs that the Energy Charter Treaty, which gives investors the right to sue governments over policies that adversely affect their investments, is making headway in the Global South even as European governments announce their withdrawal from the treaty and begin to remove corporate-friendly provisions, like Investor-State Dispute Settlement clauses, from trade treaties.
The E.U., along with the United States and several European governments, is also exploring what it calls “just energy transition partnerships” (JETP) with key countries like South Africa and Indonesia. These partnerships, focused on decarbonization, are a kind of Green structural adjustment program that pushes for reform of the economies of the target countries. But these JETPs differ from country to country and offer a possible opportunity for civil society in the Global South to critique Green colonialism and offer alternatives.
One mechanism gaining ground in recent years are debt-for-climate swaps. For countries in the Global South struggling with unsustainable debt repayments, the idea of reducing the burden through the protection of nature or the implementation of adaptation policies will be attractive. International financial institutions are quite bullish on these swaps. But most analyses suggest that they won’t substantially reduce either global carbon emissions or the debt burden of heavily indebted countries.
Another form of partnership is with local communities. Given the frequently undemocratic and corrupt nature of national governments in the Global South, the E.U. is exploring more direct relationships with affected communities. On the one hand, these partnerships would increase transparency through greater consultation with local communities (for instance in the formulation of trade agreements). On the other hand, funds for loss and damage could be channeled directly to most-impacted areas rather than to national governments, and grassroots movements could be part of the process of identifying and quantifying the damage as well as encouraging local, bottom-up approaches.
The influx of money at the local level, however, could serve to divide communities. Moreover, these “partnerships” with local communities rarely encourage sufficient public consultation. The absence of prior and informed consent from communities in the new “sacrifice zones” in the Global South means that resource extraction takes precedence over democratic decision-making.
Follow-up
The moment is right for Global South activists to influence European policy and the agenda of European civil society. The E.U. is considering far-reaching climate, environment, and energy policies, and the current leadership is eager to push through as much of its platform as possible before new leaders assume power after the elections next June. European civil society, meanwhile, has been reaching out for partnerships in the Global South around specific campaigns (supply chains, loss and damage, trade, critical raw materials).
Progressive MEPs asked us to supply texts and videos of Global South activists opposing the Mercosur agreement as it is currently proposed. They wanted to hear about opposition to fossil fuel infrastructure but also to the extraction of critical minerals.
They also wanted to hear about how they could collaborate on preventing Amazon deforestation. Indeed, Europeans who have difficulty locating Peru or Ecuador on the map nevertheless identify with the Amazon. In this way, the Amazon could be the “polar bear” for the nature preservation movement: a highly visible and popular icon. MEPs who otherwise have difficulty persuading voters of the importance of the Global South can “sell” the Amazon as the anchor for a climate justice platform that prioritizes the rights of nature.
There was interest in research partnerships between Europe and the Global South, for instance on the question of loss and damage and the role of grassroots organizations in ensuring fair and just compensation.
NGOs in Brussels emphasized that there was an opportunity for Global South activists and their European partners to advocate for positions through commission consultations and through the legislative process via amendments. Right now, for instance, the new Critical Raw Materials coalition is organizing a letter from Global South organizations to communicate to the European Union the specific environmental, labor, and other concerns related to the extraction of lithium, cobalt, and other strategic minerals.
The Carbon Border Adjustment Mechanism has passed. It will hit the Global South with a double whammy. Exporting countries dependent on European markets—like Senegal’s fertilizer producers—will suddenly find that their carbon-heavy products are no longer competitive. And the money raised by the border tax will go to help European industries—not industries in the Global South—to reduce their carbon footprint.
The CBAM now enters a stage of impact assessment. This is where Global South actors could push for technology transfer to help industries “clean up” their facilities to maintain access to European markets.
There was interest in research partnerships between Europe and the Global South, for instance on the question of loss and damage and the role of grassroots organizations in ensuring fair and just compensation. Equally important will be the expansion of focus to include not just natural disasters but the cleanup of old mines, extractivist infrastructure, and even large-scale “clean energy” projects.
Future follow-up might include another delegation to Europe (perhaps to southern Europe) and to countries like India. The art event in London was an exciting new way of spreading the manifesto, and the delegation organizers are hard at work turning the manifesto into a short music video. Plans are underway to explore the manifesto’s implications in various sectors, like labor and the women’s movement. And the newly popular discussion on post-growth alternatives in Europe could also prove to be a way to expand the conversation of decarbonization to include biodiversity loss, the impact of climate debt and other forms of debt, and other aspects of the polycrisis affecting the planet.
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Warren Leads Call to End Dispute System 'Weaponized' by Corporations Amid Honduras Case
"The broken ISDS system has time and time again worked in favor of big business interests while infringing on the rights and sovereignty of our trading partners and their people."
May 03, 2023
U.S. Sen. Elizabeth Warren and Rep. Lloyd Doggett on Wednesday led nearly three dozen progressive members of Congress in demanding an end to the Investor-State Dispute Settlement system, a key feature of corporate-managed trade agreements signed, and often initiated, by the United States.
"Large corporations have weaponized, and continue to weaponize, this faulty and undemocratic dispute settlement regime to benefit their own interests at the expense of workers, consumers, and small businesses globally," says Warren (D-Mass.) and Doggett's (D-Texas) letter to U.S. Trade Representative Katherine Tai and Secretary of State Antony Blinken.
After praising President Joe Biden's 2020 campaign pledge to exclude ISDS from future trade deals—such as the Americas Partnership for Economic Prosperity and the Indo-Pacific Economic Framework the White House has been negotiating—along with Tai's indication that she "will pursue a trade agenda in line with that commitment," the letter asks Tai's office and Blinken's department to "investigate any and all options at your disposal to eliminate ISDS liability from existing trade and investment agreements."
ISDS mechanisms enable multinational corporations to sue the governments of foreign trading partners for profits they claim have been forfeited as a result of domestic policies designed to protect workers, consumers, and ecosystems. Such lawsuits challenge meaningful labor, product safety, and environmental standards, and the mere threat of them can even preempt the enactment of robust regulations, placing ISDS at the heart of what critics have called neoliberal globalization's "race to the bottom."
The ISDS measures that corporations "successfully lobbied" to include in past trade deals grant them "special rights and privileges that ordinary citizens do not receive," the letter points out. "Under ISDS, disputes are handled not through the judicial system but by industry-friendly arbitration tribunals that can require taxpayers to shell out massive sums to big corporations, with no opportunity to appeal."
"Unlike the courts, 'tribunals have no set procedures or precedents. Standards of evidence are nonexistent, and mistruths or exaggerations go unpunished,'" the letter continues, citing journalist Sarah Lazare. "These provisions tilt the playing field even further in favor of large corporations, incentivizing offshoring and undermining the sovereignty of the United States and other governments."
A pending ISDS case launched recently by a Delaware-based company upset because Honduras' democratically elected government overturned a law that allowed corporations to establish self-regulated private cities inside the impoverished Central American nation exemplifies why the Biden administration needs "to take action to remove this problematic corporate handout from existing agreements," the letter says.
"Late last year," the members of Congress explained, "U.S. company Honduras Próspera launched an ISDS claim under the Dominican Republic-Central America Free Trade Agreement (CAFTA-DR) against the newly elected government of Honduras, seeking nearly $11 billion, equal to roughly two-thirds of the country's entire national budget this year."
They continued:
The jaw-dropping sum sought by Próspera is not the only reason that this case raises serious concerns. Honduran President Xiomara Castro secured a major victory for democracy last year when the National Congress of Honduras repealed the country's Zonas de Empleo y Desarrollo Económico law (ZEDE, or "Economic Development and Employment Zones"). The legal name misleadingly implies that ZEDEs constitute standard special economic zones, areas within a country's borders that, while politically and fiscally part of the host nation, are governed by separate economic regulations as "a mechanism for attracting foreign direct investment, accelerating industrialization, and creating jobs." However, the legislation enabled the creation of far more radical private governance zones, which have "functional and administrative autonomy" from the national government.
The zones allowed investors to create their own governance systems and regulations and establish separate courts. And investors have used the law to create jurisdictions where companies can propose their own regulations and where most Hondurans cannot enter without authorization. In the case of Próspera, a ZEDE located largely on the Honduran island of Roatán, investors have created a governing council where 44% of members are appointed by the private company and 22% are elected by landowners in a system where their number of votes is proportional to the size of their property.
This anti-democratic policy, approved under the leadership of previous officials, including former president Juan Orlando Hernández, who have since been indicted on drug trafficking and firearms charges, was highly controversial. Honduran labor unions, small farmers, Indigenous organizations, and even the nation's largest business groups expressed vehement opposition. According to the U.S. State Department, the zones "were broadly unpopular, and viewed as a vector for corruption." The Honduran Congress unanimously approved President Castro's proposal abolishing this policy.
Próspera has repeatedly threatened to initiate ISDS arbitration under CAFTA-DR to bully the Honduran government into allowing them to continue operating under the abolished ZEDE framework. In December 2022, the company announced that it filed a CAFTA-DR claim with the International Center for Settlement of Investment Disputes (ICSID), which will force the government of Honduras to potentially spend millions of dollars defending itself for responding to the will of its people and asserting its sovereignty over these special governance jurisdictions operating in its territory.
The lawmakers asked Tai and Blinken to "intervene—through a statement of support, amicus brief, and any other means at your disposal—in support of Honduras' defense in the Próspera ISDS case and to ensure that such egregious cases can no longer disrupt democratic policymaking by working to eliminate ISDS liability in preexisting agreements in our hemisphere."
Notably, the suit against Honduras "is just the most recent example of the worrying trend of increased ISDS use in the Americas, both in the number of cases and the sky-high value of the claims," the letter observes. "Governments throughout Latin America have paid billions of dollars in compensation to foreign companies at their taxpayers' expense, simply for putting in place sound public policy to protect the environment and the health and economic well-being of their communities. Governments—and therefore taxpayers—throughout the region have been ordered by ISDS tribunals to pay close to $28 billion to corporations, with far more in pending ISDS claims."
Decrying how "the broken ISDS system has time and time again worked in favor of big business interests while infringing on the rights and sovereignty of our trading partners and their people," the lawmakers urged the Biden administration to "refrain from negotiating new trade agreements with ISDS, and also to address the existing ISDS mechanisms that corporations continue to exploit."
Melinda St. Louis, director of Public Citizen's Global Trade Watch, said in a statement that her group has been keeping a close eye on the "truly shocking" case against Honduras, "as well as the explosion of ISDS cases in the region."
Public Citizen "is coordinating with civil society groups across the hemisphere working to remove these increasingly unpopular ISDS provisions from trade agreements and investment treaties," said St. Louis. "President Biden's commitment to exclude ISDS in new agreements must be matched by immediate action to dismantle ISDS in existing agreements—or else shameful cases like the $11 billion one against Honduras will continue."
Warren and Doggett's letter was signed by Independent Sen. Bernie Sanders (Vermont) and 30 Democratic lawmakers, including Sens. Sherrod Brown (Ohio) and Sheldon Whitehouse (R.I.), as well as Reps. Jamaal Bowman (N.Y.), Cori Bush (Mo.), Greg Casar (Texas), Jesús G. "Chuy" García (Ill.), Pramila Jayapal (Wash.), Ro Khanna (Calif.), Barbara Lee (Calif.), Summer Lee (Pa.), Donald Norcross (N.J.), Ilhan Omar (Minn.), Mark Pocan (Wis.), and Rashida Tlaib (Mich.).
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