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Daily news & progressive opinion—funded by the people, not the corporations—delivered straight to your inbox.
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.
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.
As disasters become more frequent and politics destabilizes, it feels more important than ever to live connected to other people.
This spring my husband and I are moving three tenths of a mile and 200 years back in time.
We are moving from our super-energy-efficient, passive solar home built in 2001 to a farmhouse built in 1800. (And looking for someone to buy the cozy green home we raised our family in. Check it out here and spread the word!) We are excited to have more space to share with extended family. And, we will have a project on our hands! Regaining some of the features we are leaving behind—heat pumps, PV, a composting toilet, and more—will take time. A fun and satisfying challenge we hope!
The great news is that we will still be part of the experiment we have participated in for almost 30 years: Cobb Hill Cohousing, a multi-generational community of 23 families in Vermont’s Connecticut River Valley. The house we are moving to is located within Cobb Hill, just a bit further from the cluster of houses we’ve called home.
We will still share 280 acres of farm and forest and participate in community celebrations and decision-making. We’ll still have neighbors to help and to rely on. We’ll still have maple syrup, eggs, flowers, herbs, vegetables, milk, and cheese all produced by our neighbors on our shared land. We’ll have learning companions to navigate alongside in an increasingly destabilized world.
No one knows how to live sustainably and equitably in our current society or how to prepare for coming climate shocks. So we need to learn. And learning is faster with more minds in the mix.
A big move like ours prompts reflection. We had to move, but we didn’t want to go anywhere else. Here are six reasons that came to mind when we paused to ask ourselves why.
Cobb Hill isn’t the only way to find these six things, thank goodness. You’ll find them in smaller groups and larger ones, in cities, in the tropics, on the coast. In this time of transition and reflection in my own family, I hope that knowing they exist in one place might make it easier for you to imagine (or create) them elsewhere, too.
The nearly $4.7 billion in International Finance Corporation trade finance commitments that may have supported fossil fuel-related projects in 2023 is a telltale example.
Since assuming office, World Bank President Ajay Banga has pursued a clear agenda: mobilize vast amounts of private capital in service of the bank’s goal to end poverty on a livable planet. There are many valid criticisms of this approach, but none speaks louder than a deeper look into the World Bank’s own private sector arm, the International Finance Corporation, or IFC, and its dealings.
Urgewald’s research on IFC trade finance in Financial Year (FY) 2022 and FY2023 shows just how slippery the private sector slope can be. Indeed, the IFC trade finance program’s alarming developments exemplify the World Bank’s overall trajectory: throwing good money after bad, neglecting environmental and social standards, and prioritizing private profit over public well-being.
From FY2017 to 2023, the IFC trade finance portfolio saw a hefty 86% increase. In FY2023, trade finance amounted to 58% of the IFC’s total portfolio. (Trade finance refers to a range of financial instruments and services designed to facilitate international trade. It provides liquidity and risk mitigation for exporters and importers, enabling transactions that might otherwise not be viable. Instruments such as letters of credit, guarantees, and working capital loans ensure that buyers and sellers can engage in global trade with reduced financial risks.)
The private sector’s profit orientation is incompatible with the World Bank Group’s public service mandate.
While the sums for trade finance are growing exponentially, the checks and norms for their disbursal are stagnating. The environmental and social standards that apply to trade finance have not been updated for at least a decade, and financial flows are shrouded in mystery.
The stated goal of ending poverty on a livable planet presupposes transparency, accountability and sustainability. And yet the meteoric rise of IFC trade finance transactions in recent years comes with opacity, outright unwillingness to disclose basic information about individual transactions, and the long shadow of fossil fuel favoritism.
So, what’s the number? In FY2023, $4.7 billion, or nearly one-third of total IFC trade finance commitments, may have supported fossil fuel-related projects. This figure represents a 28% increase compared to FY2022.
The Global Trade Finance Program (GTFP) alone accounted for $3.7 billion of possible oil and gas-related financing, 41.7% of its total commitments. Transparency issues persist as the IFC fails to disclose detailed information about specific trade transactions and beneficiaries.
The World Bank Group’s own Independent Evaluation Group (IEG) indicates that in the past, significant shares of IFC trade finance investments went into fossil fuel financing, particularly in Africa (50%) and the Middle East (28%).
The dangerous trend of enabling fossil fuel transactions in fragile countries expands when we look at the IFC Private Sector Window (PSW). It was established in 2017 to encourage private sector investments in high-risk, low-income countries, particularly in IDA-designated regions. The PSW provides risk-sharing mechanisms and facilitates trade finance and other investments that might otherwise be deemed too risky. Between FY2020 and FY2024, $1.03 billion, or about a quarter of PSW approvals, were allocated to trade finance projects. These funds enabled $5.1 billion in trade finance, underscoring the PSW’s leveraged impact.
This fivefold impact, however, remains controversial. Despite its commitment to sustainable development, the PSW lacks exclusion criteria for fossil fuels. Thus, it allows for investments in oil and gas. Transparency remains a significant issue, and information about specific projects and the traded commodities is sparse. PSW-supported trade finance’s environmental and developmental impacts are questionable at best.
Many of these problems precede President Banga’s tenure. However, it is vital to highlight and address them now because his laser focus on mobilizing private capital is likely to exacerbate the issues highlighted above. The private sector’s profit orientation is incompatible with the World Bank Group’s public service mandate. The IFC’s growing trade finance portfolio highlights the organization’s critical role in shaping global trade. The significant share of fossil fuel commitments in that portfolio undermines the World Bank Group’s mission of fostering sustainable development.
To align with international climate objectives, the IFC must adopt urgent reforms to enhance transparency; exclude harmful investments; and prioritize clean, fair, decentralized renewable energy—especially in poor and high-risk regions of the world that need them most. To better align the PSW with its mission, the allocation of Private Sector Window funds should prioritize renewable energy and sustainable development projects. Additionally, stringent exclusion criteria and improved reporting standards should ensure greater accountability and alignment with climate and social goals.
These changes are clearly at odds with President Banga’s agenda, and yet only through them can the World Bank Group stay true to its noble goals.