Trade, Democracy, and the Politics of Backlash

Delegates protesting against the Trans Pacific Partnership (TPP) trade agreement hold up signs during the first sesssion of the Democratic National Convention in Philadelphia, Pennsylvania, July 25, 2016. (Credit: Mark Kauzlarich/Reuters)

Trade, Democracy, and the Politics of Backlash

On why there has never been a greater need to quash the global corporate agenda.

One bit of good news came across my computer screen in the days leading up to the termination of this repellant campaign.

It appeared that the Comprehensive Economic and Trade Agreement between Canada and Europe (CETA) was headed for defeat. That good news was soon reversed as treaty advocates made a deal with Belgium on the labeling of feta cheese. However disappointing this setback, it did serve to reignite debate about the corporate trade agreements that have played so large a role in the world economy. CETA is a model for other pending agreements and any critical scrutiny is to the good. CETA itself is not out of the woods as it must be approved by parliamentary votes in the individual European nations before it can take full effect.

There has never been a greater need to quash the global corporate agenda. Government regulation is necessary in order to keep the remaining hydrocarbons below ground. That regulation should include not only the extractive corporations themselves but also the banks that have financed so many of these projects. Movements against the most notorious projects are vital and have been a source of inspiration, but every time one is blocked other options pop up elsewhere. As Naomi Klein puts it, it is like a game of whack a mole.

If agreements like CETA are enacted, adequate regulation will surely have become an occasion for suits under the dispute resolution features. These suits would not directly knock out the regulations but would make regulation prohibitively expensive. And the expense would become even greater were banks subject to the proper regulation. The ability to regulate the banks is crucial not only because it denies them much of the funding for further exploration and exploitation but also because their financial "innovation" produces economic instability and makes environmental planning more difficult. Just as importantly it deprives alternative energy of adequate financing.

Advocates of CETA advance the typical claim that markets possess a super information processing capacity or are ideal self-organizing systems. There are both theoretical and historic reasons to doubt that markets have such capacity. The claim for super rationality rests on very dubious assumptions about financial events following a typical bell shaped distribution curve. As for markets as good long term self-organizing systems one problem is that markets are only one of many self-organizing systems. Climate systems, ocean currents, social movements, financial and labor markets, all display characteristics of self -organizing systems. They have multiple feedback loops occasioning results that are more and different from the sum of the parts. And each is a partially open system interacting with other systems.

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If neoliberalism had been true to the theories of one of its key founders, Friedrich Hayek, it would have allowed all the big banks and auto companies to go bankrupt, figuring if they scraped along the bottom long enough a vigorous rebound would be certain. Such logic elicited the famous quip--in the long run we are all dead. An even more sobering thought is the ways political extremism, another potent self-organizing system, would interact with a plunging economy.

Such systems, especially as they increasingly interact, require attention and at the very least the availability of regulatory tools, fiscal stabilizers, and prudential safeguards of one sort or another. Defeating corporate trade agreements is one step toward seeing these tools remain available.

The struggle to enact these agreements has been part of a broad assault on democracy. It is also part of an effort to strengthen an authoritarian state. Neoliberals have understood for many years that they needed one doctrine, classic laissez faire, to preach in public even as they acknowledged in private the need for a strong state to impose market discipline on the rest of us. Neoliberals proclaim the era of big government is over, but they do not hesitate to use government to fund an immense military establishment and arms "modernization," crush labor unions, spy on and disrupt public demonstrations, criminalize those who cannot survive the corporate economy's volatility, enforce intellectual property's requirements. Big government has ended only for those who might need its assistance to survive the travails of corporate capitalism, for whom "welfare as we know it" has been ended.

Of course a government accountable to the people might be reluctant to perform these functions. Not surprisingly leading neoliberal thinkers like Hayek expressed antagonism toward democracy. A number of recent political initiatives, self-reinforcing in nature, should still this concern. That disposition has manifested itself in the processes by which these deals are negotiated, in their secret trials, in court rulings that say money equals speech, in efforts to disenfranchise poor and minority voters, in felony disfranchisement laws, in an "independent" central bank controlled by finance capital, and in the gerrymandering of Congressional districts. All of these agendas become a self-reinforcing machine that in turn strengthens the power and wealth of the corporate players.

Having turned to government to enforce its version of market discipline, neoliberals and those influenced by its practice (if not its public doctrine) turned to government for bailout when the financial crisis hit. Neoliberalism in practice has made our government both more powerful and less accountable. Defeat of these corporate trade treaties is a good step toward restoring our democracy.

One hopes that activists will keep the pressure on an out-going President Obama and (the likely) President-elect Clinton. They should keep in mind the false promises of enhancing labor rights and environmental protection made by another Clinton to steer NAFTA through a reluctant Congress.

Although many candidates have promised they will vote against the new Trans Pacific Partnership, few have offered a positive vision of international trade regulation. Some form of protectionism appears to be Donald Trump's position, but protectionism is a non-starter. Economic self-sufficiency, even for such advanced economies as the U.S. or Great Britain, is impossible. Supply chains are complex and international. Establishing high tariff barriers would drive up the price of most manufactured goods.

While the campaign has thus far done little to illuminate these issues, the recent Verizon strike may offer a preliminary model of alternatives to corporate globalization. An excellent article by Michelle Chen in the May 25 issue of The Nation raises some points that both better explain the fallacies of the corporate globalization model and suggest some contours of a grassroots and rank-and-file model of global trade and development.

Chen's piece counters the contention that some particular skill or aptitude of the Philippine workers led to Verizon's decision to outsource these call center jobs. Workers received $1.78 an hour. More importantly, the company counted on the willingness of the government to ruthlessly repress any effort to unionize in behalf of higher wages. Rather than seeking an optimal distribution of skills, company policy was to drive both wages and government enforcement mechanisms into a race to the bottom. Verizon management imposed the worst features of early twentieth century industrial supervision: "To match US customers' time zones, the delegation learned, workers run on an eternal graveyard shift, regimented by strict call-time performance targets. "

Most heartening in Chen's story is the role of Philippine workers in the successful strike. Forced to handle service calls from disgruntled Verizon customers, their already long hours were stretched whereas the overtime pay for those hours never arrived.

Philippine activists imagine a more ecological and egalitarian form of globalization. They envision " the alternative as a more ethical trade structure, in which the Philippines would invest in sustainable modernization and internal industrialization. To the extent that outside investment is used to foster development, he adds, it should be accompanied by transnational organizing efforts (pdf) in tandem with US unions. "If they have rights to unionize," Concepcion argues, "we should have too." Through these initial online contacts, Concepcion suggested a more durable organizing network could emerge, like "a call center workers of the world alliance...that could bring all those workers with similar jobs in the fight for better conditions." Just as significantly, union activists are invoking larger community concerns, stressing how better worker training, compensation, and working hours can give workers the opportunity to become problem solvers rather than mindless automatons. Customers as well as workers become the beneficiaries.

Ultimately trade needs to become both more free and more local. By this I mean that not only tariff barriers but intellectual property barriers copyrights and patents) need to come down. Ideas should be allowed to flow freely both within and across borders. Capital and natural resources are another matter. For ecological and environmental reasons, the real cost of transit needs to be included in the price of goods.

The communications revolution is something that can and has spread world- wide. The consequences of that spread remain yet to be determined. The very modes of communication that Verizon disseminates and employs to outsource its work can also aid grass roots collaboration to advance these goals. Absent practices and bodies to curb global capital and the relentless fall in global living standards, protectionism may be the least of our worries.

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