Confronting Davos: The Class Politics of Global Governance
I’ll start with the anecdote that inspired my book, The Global Class War. During the 1993 fight over Congressional approval of the North American Free Trade Agreement, a corporate lobbyist, exasperated with my opposition to NAFTA, collared me in a corridor of the Capitol. “Don’t you understand?” she sputtered. “We have to help Salinas [Carlos Salinas, then Mexico’s president]. He’s been to Harvard. He’s one of us.”
True, I once had a fellowship to the Kennedy Institute of Politics, but I hardly considered myself a “Harvard Man”. She hadn’t gone there at all. But despite the considerable social distance between the president of Mexico and both of us, she was appealing to a sense of class solidarity among educated elites and global movers and shakers who have more in common with each other than with ordinary people who just happen to share their nationality.
All markets generate class politics –conflict among groups over, as Harold Lasswell once famously put it, “Who Gets What.” So it’s no surprise that a cross-border class politics has developed in the wake of the globalizing economy. At this point it is pretty much a one-party system. Call it the Party of Davos, after the annual elite bash in the Swiss Alps that resembles the big-donor receptions at a political convention –corporate CEOs and world class investors, the people who carry their bags, and the politicians, pundits and policy intellectuals who carry their water.
The political role of Davos is obscured by the confused language of the public debate. Citizens are told that the global economy has obliterated borders. At the same time, economic competition is mostly described as a Westphalian rivalry of nation-state against nation-state. Thus, it’s “China” versus the “US.” But the economic challenge to Americans is not from China, per se, but from a business partnership between Chinese commissars who provide the cheap labor and American and other transnationals who provide the technology and financing – and whose lobbyists in Washington provided access to the US market.
Among politicians and pundits, the US economic “national interest” is constantly equated with the profitability of “our” companies. But as the people who own and manage “American” corporations increasingly find their workers, production sites, partners and customers in various parts of the globe, they are systematically disconnecting their future from the fate of Americans who work and invest in America. The process is far from complete, but its direction is clear. The chairman of Ford noted over a decade ago that his firm “isn’t even an American Company…Our managers are multinational. We teach them to think and act globally.” The CEO of Cisco Systems – poster company for the information economy – announced last year that “What we are trying to do is outline an entire strategy for becoming a Chinese company.”
Transnational companies do not just “think and act globally” about products and marketing, but about their common political interests as well. Because capital is organized across borders and labor is not, globalization gives those who own and control capital the leverage to set up the rules. They have naturally used it to pre-empt and undercut the national social contracts that had constrained their freedom in both developed, and less developed, societies.
This is not some dark “conspiracy theory”. In our domestic economy, bankers, bakers, and other businesses compete against each other, and at the same time regularly collaborate politically to advance their group interests. It would be odd if they stopped doing that when they went global.
Yet this reality is rarely if ever part of the mainstream discussion of globalization. It discomforts advertisers and campaign contributors. Better to define the issues with the abstract homilies of economics 101 -- “free-trade vs. protectionism.”
But, leaving aside the theoretical disputes (“comparative advantage” is not an unchallenged dictum) freer trade among autonomous economies no more adequately describes the current global integration of production, finance and marketing than it would have described the continental consolidation of the US economy in the 19th century. As Renato Ruggiero, the first director-general of the World Trade Organization, noted in a rare moment of candor, "We are no longer writing the rules of interaction among separate national economies. We are writing the constitution of a single global economy."
This “constitution’ (whose parts include the WTO, NAFTA, the policies of the IMF and World Bank, etc.) recognizes, protects, and promotes the interests of one category of citizen – the transnational corporate investor. It even gives global investors rights they would not have gained in their home economies – such as extraordinary intellectual property protections, power to force governments to privatize, secret dispute tribunals. Yet labor rights and other social protections – won within nation-states after decades of struggle – are excluded, and the capacity of the public to regulate business is systematically undercut. The effect is to undercut the bargaining position of labor virtually everywhere.
“Sorry about that,” says Davos. “The iron laws of economics are beyond our control.” Meanwhile, their apparatchiks dictate the rules to trade negotiators and high-level international bureaucrats, whose own career paths typically lead in and out of the government-business revolving door. Carla Hills, George H. W. Bush’s Trade Representative, and Mickey Kantor and Charlene Barshefsky, who were Clinton’s, are now high-priced trade lawyers serving transnational corporations. Robert Zoellick, who was George W. Bush’s, now works at Goldman-Sachs. And so it goes.
Jorge Castañeda – who later became Mexico’s foreign minister – observed that NAFTA was “an agreement for the rich and powerful in the United States, Mexico and Canada, an agreement effectively excluding ordinary people in all three societies.”
So no one should be shocked that NAFTA failed to deliver on its promoters’ promises to the working people of all three countries – particularly in Mexico. Thirteen years later, desperate jobless Mexicans risk their lives crossing the border at twice the pre-NAFTA rate.
American workers’ living standards, although eroding, have thus far been cushioned by our unique capacity to borrow in order to finance consumption in excess of production and saving. This clearly cannot go on. When the debt binge ends --whether in a hard landing or a soft one -- the adjustments will drive living standards for the majority of Americans to the levels of the dog-eat-dog global labor market.
So one would think that re-balancing trade would be close to the top of the economic agenda in Washington. But the influence of de-Americanizing corporations and their financiers – who want to keep shifting productive assets overseas for as long as they can – dominates. Official Washington’s occasional complaints about China’s mercantilist trade policies are primarily theater. In the end, Bush’s treasury secretary Henry Paulson (who came from Goldman Sachs, which is heavily invested in China) tells us we have to be patient. Clinton’s treasury secretary Robert Rubin (also from Goldman Sachs, and now at Citigroup, also invested in China) agrees.
Don’t think of your job, they tell anxious workers, think of the benefits of cheap prices. How great? Researchers at the Carnegie Endowment for Peace calculate the benefits of the Doha Round of trade negotiations at $15 annually per American. Tufts University economists estimate the impact on the world’s poor at less than a penny a day.
In any event, whatever numbers you want to believe, neither economic theory nor statistical calculation can determine whether the benefits of cheaper sneakers are worth the costs of lost jobs, disrupted lives and increased economic security. It is essentially a values question. In the context of the domestic economy, Progressives rightly reject the argument, even where true, that lower prices and greater employment generated by cheaper labor would justify the elimination of social protections and safety nets. Yet intimidated by the prospect of being labeled a “protectionist,” many support international trade regimes that are based on the same argument.
(Those interested in an alternative set of policies for US competitiveness that gives priority to the creation of decent jobs might check out my recent paper, Globalization that Works for Working Americans)
Of course, changes in information, communication and transportation technology have made global economic integration inevitable. Just as railroads, telegraph and steam-engines drove the integration of the US economy in the 19th century. But 19th century America had a constitutional framework, which eventually democratized the expansion with a New Deal. Ruggiero’s global constitution is far beyond the reach of the world’s working citizens.
The central problem of governance is not that we don’t know what are the elements of a social contract. The problem is creating global politics to support it.
A global capitalist class of course, implies a global working class. Over the last decade, trade unionists in different parts of the world have begun to see that their shared interests in a global economy. It’s promising, but creating an international labor movement is an agonizingly slow process. Given the pressures of globalization, most unions have their hands full at home. Neither is what might be called the Party of Porto Alegre – from the Brazilian city that inspired the annual conferences of grass-roots dissidents – any match for Davos.
So, for now, we are left mostly with the platform of the nation-state, which is not quite yet obsolete. Indeed, with no army of its own, Davos depends on national governments to protect and enforce its property rights and privileges. As citizens of the most influential nation-state, and still the presumed super military power, American progressives have a particular responsibility to lead.
This means making the rules of global integration a domestic political issue here. For starters, we should oppose any further trade agreements in which the rights of workers, the public sector and the environment are not given the same enforceable protections that corporate investors now enjoy. Right now, for example, it means rejecting the pending deals with Peru, Columbia and Panama negotiated by the Bush Administration, and denying the renewal of this president’s authority to put his cronies’ trade agreements on a fast track. It also would means suspending any further WTO trade negotiations until that organizations agrees to adapt and enforce labor standards.
But ultimately a political base to support a global contract has to be, well, global. And in a world of 6.5 billion people in some 200 separate countries— many of whom are at each others’ throats -- the prospect of seeing political unity across borders, seems hopelessly utopian.
But if we think of it as a step-by-step process, in which political solidarity is built first among populist and progressive forces in neighboring societies, region by region, rather than one generated by some universal blueprint, there may yet be light at the end of this dark global tunnel.
We should start in our own continental neighborhood, by nurturing cross-border labor and social movements to challenge the reactionary policies embedded in NAFTA. Early steps to gain experience and trust could include joint actions that span the continent. A simultaneous strike against a common employer or a boycott against a tri-national environmental abuser could dramatize the interests that people in all three countries share. Progressives could develop a common legislative agenda, introducing the same proposals in all three legislatures, that would eventually replace NAFTA with a new agreement including:
§ A enforceable North American Bill of Rights for citizens of all three countries.
§ A continental grand bargain, in which Canada and the United States commit substantial long-term aid to Mexico to accelerate economic growth while Mexico commits to policies that assure a wider distribution of its benefits.
§ A North American development strategy, together with a shared customs union, to support of continental industrial efficiency, resource conservation and increased social investment.
Such a movement in North America could also reinforce progressives in Europe, and inspire beleaguered activists elsewhere who are trying to bring to life models of development that respect human life and dignity. Finally, it could help undercut American elites' messianic obsession with imposing Milton Friedman’s vision of America on the rest of the world. A focus closer to home might push us all toward the humbler but more productive task of making our own part of the globe a model of how economic integration might work for those whom Castañeda called the “ordinary people” – by definition, a majority in every society in the world.
Comments (35)
Have you listenedto Lou Dobbs lately?
If the goal is to turn North America in to something more resembling the EU so that the richer countries the U.S. and Canada effective subsidize Mexico that would would make a lot of sense.
However, it is a bit dishonest to say that NAFTA wasn't about ordinary people. Mexico had improve its infrastructure and has to do that anyway. Second how was NAFTA supposed to deal with the rise of China and China drawing away jobs from Mexico?
Joseph Stiglitz' complaints about globalization is yours. The rich nations open up poorer countries to their goods while keeping their own economies closed to what poorer nations have to trade. Howver, if you listen to most Americans on the Left and the Right that is not their take at all. Their is a widespread belief that the store is being given away to the world's poor. Also you do not seem to address the enormous savings for American poor brought about the importation of foreign goods.
Daniel A. Greenbaum
February 26, 2007 8:04 AM | Reply | Permalink
she was appealing to a sense of class solidarity among educated elites and global movers and shakers who have more in common with each other than with ordinary people who just happen to share their nationality.
You make her sound like she was sterile and unintelligent if she couldn't connect with her neighbors.
February 26, 2007 8:24 AM | Reply | Permalink
Progressives could develop a common legislative agenda, introducing the same proposals in all three legislatures, that would eventually replace NAFTA with a new agreement including...
Looks good on paper but do you really think that the robber barrons who reap the benefits would even give up a penny?
February 26, 2007 9:00 AM | Reply | Permalink
"you do not seem to address the enormous savings for American poor brought about the importation of foreign goods."
Yeah. Thank goodness for that. When you lose your job and blow your retirement on doctor bills because you also lost your health coverage so that your employer can move the factory about one-tenth of a mile across the Mexican border for five-dollar-per-day wages and no environmental or labor protections, those cheap goods really come in handy.
February 26, 2007 9:02 AM | Reply | Permalink
I don't know all that much about international trade. I'm trying to learn, but I'm no expert. Nonetheless, it is my understanding that the WTO has worked to significantly lower tariffs and thus the costs of bringing goods from less developed countries to developed markets. The point is that it might simply be untrue that the rich nations force poor nations to open up while refusing to open their own markets. In fact, it is my understanding that the WTO allows less developed countries to use protective tariffs so that they can develop local industry, and in such a way that developed countries cannot retaliate.
February 26, 2007 9:08 AM | Reply | Permalink
Not willingly they won't. But if the center and the left operate one nation at a time, the right will win everywhere as they have for 20+ years.
I concur with the original post generally -- it is not protectionist (and I am not) to put a collective floor on wages and environmental degradation. Trade agreements are global governance, for capital only. We need to find ways to move in that direction on other fronts (without getting bogged down with some kind of giant global bureaucracy -- it is doable).
global citizen
February 26, 2007 9:34 AM | Reply | Permalink
In the hilarious but also disquieting book, Them, Jon Ronson recounts how he took some American extremists, KKK types, and conspiracy theorists to such places as meetings of the Bilderberg Group ("The declared purpose of the Bilderberg Group was to make a common political line tie between the United States of America and Europe in their opposition to the USSR and the global communist danger."--Wikipedia, Wolfowitz and Rumsfeld are members)
Ronson and his companions were not allowed to enter the Bilderberg meeting, but they did walk right into Bohemian Grove (I was there myself for a cousin-in-law's wedding -- I guess anyone can rent it).
When Ronson later interviewed one of the Bilderbergers and asked mildly if there wasn't some truth to the charge that they had a significant impact on policy decisions and the selection of future political leaders with little or no input from ordinary people, the person whom he was interviewing became extremely upset, abruptly cut off the interview and asked him to leave.
I guess this is a form of "corporatism" in the original (pre-fascist) sense of the time of Metternich, when influential (but unelected) groups of people ("the notables") got together to influence policy. It is certainly not a negative thing when people, especially those with expertise, consult with and learn from one another -- but it does omit crucial, potentially very valuable input from the people who will be affected by these decisions.
February 26, 2007 9:38 AM | Reply | Permalink
Basically they are the surface of a liquidity bubble that will continue to expand until it pops. After the crash of '29, the one thing Roosevelt had to work with was the solid foundation of a strong currency. This time the paper will be quicksand. We will need to rethink from the foundation up. One point to keep in mind is that the monetary system is a government entity and as such, is a form of public commons, just like the highway system. This doesn't undercut the concept of private property, but admits what is the reality. The problem with the conservative movement of the last generation is by dismissing government, it was a coalition of economic and social conservatives, with no civil philosophy. Government is a fundamentally conservative process to which libertarianism was the Ebola virus. Resonsible people need to regain control of the government from those currently looting it. George Bush is the result of these people seriously overstepping their bounds and they are regretting it. The problem with treating the economy as a game of Monopoly is that when one person controls everything, the game is over. In the real world this stage is revolutiion.
February 26, 2007 9:52 AM | Reply | Permalink
The supersized glut of cheap goods is becoming an overwhelming burden for middle-class Americans.
February 26, 2007 9:57 AM | Reply | Permalink
You favor an enormous cost increase for American working poor?
Mexicans are competing with American workers they are competing with Chinese and Vietnamese workers. The comparison of their wages is not with Americans and Western European but what they were making before they exported goods to wealthier countries.
The United States has unemployment below 5% so we are not near a depression. Mexico's stock and real state markets seem to be doing great.
Why is there a need to insist the sky is always falling at the expense of consumers?
Daniel A. Greenbaum
February 26, 2007 10:20 AM | Reply | Permalink
Mexicans only suffer when they follow the advice of utopian ideologues like you arguing for more socialism. I can say from personal experience that Mexicans are doing better now than when they lived under the leftist policies of the 60s and 70s. Now we have a Hugo Chavez wannabe having just run for President trying to divide the country, and your article has the same effect.
If you really cared about Mexicans, you would give them the opportunity to participate in the Milton Friedman model that you mock. They love their country, They are proud of their country, and if we can help them through friendship to earn a better life for their families, it will be in spite of your class warfare rhetoric, not because of it.
February 26, 2007 10:33 AM | Reply | Permalink
So where does Chavez get his appeal?
From elite dominated societies that shaft the working class.
Nafta was an example. An agreement crafted by and for elites, the result is millions of subsistence corn farmers who have illegally entered the US because Nafta destroyed their livelihoods.
You may say Mexicans are doing better now, hah. It's a characteristic of elite dominated societies that elites believe their prosperity at the expense of others lives and health is a social good. IT'S NOT.
February 26, 2007 11:11 AM | Reply | Permalink
I agree with the goals above, but I think they are unattainable.
Perhaps a world wide Depression would create the willingness to enter into such agreements. But now there is no incentive.
I think working Americans have heard for a decade about the advantages of opening up to the world market and helping to develop the underdeveloped, and what we've gotten is shafted.
I think politically the appetite is for protectionism.
Let the 'globalized' corporations raise their own militias and stop sucking on the America's tit. Let them defend their own interests.
February 26, 2007 11:15 AM | Reply | Permalink
Daniel,
Kindly re-read the post. Faux directly addresses the specious notion that low prices are better than jobs.
I'm hearing you speak in cliches, and when you say things that show you didn't bother reading the post you oppose - that can't enhance your credibility.
February 26, 2007 11:59 AM | Reply | Permalink
So fair trade policies are 'socialism?' That strikes me as about as facile it gets. Gimme a break.
Tell me something I don't know, not Limbaurf talking points.
February 26, 2007 12:06 PM | Reply | Permalink
Maybe Mexico is better off...probably all those remittances sent from illegal workers in the US. These are precisely the same people the rabid right wants to round up and deport.
February 26, 2007 12:08 PM | Reply | Permalink
Faux is part of an increasingly large groups of critics of "globalization". He mentions Stiglitz, but we can include William Easterly ('The White Man's Burden') as well. Interestingly they both worked for the World Bank during a period when it was shelling out lots of cash and not seeing much in return.
All three lay out what's wrong, and how things should work, but fail to discuss how to accomplish this. We live in a world where "might makes right", especially at the international level.
One or more of them needs to tell us who (or how) anyone is going to make the US change whatever policies it wishes to set. Ignore nuclear non-proliferation - done. Ignore the world court - done. Ignore prohibitions on land mines and cluster bombs - done. Ignore the Kyoto accord - done. Ignore fair trade and foreign ecological and labor requirements - done.
How do you stop a super power, self-centered bully (especially one which has the implicit backing of much of the US population)? I don't see anyone volunteering to cut back on driving or pay a $5 per gallon gas tax, or even require automakers to sell only high efficiency vehicles.
As Pogo said: "We have met the enemy and he is us."
--- Policies not Politics
Daily Landscape
February 26, 2007 12:24 PM | Reply | Permalink
Mr. Faux,
Thank you for sharing a backstage, behind the curtain view of, I guess you would call it 'chauvinist elite solidarity?'
This kind of candor is exceedingly rare.
As the years pass by, I've seen more and more that ostensible, official rationales are - lets face it - double talk.
For elites 'capitalism' means you get to make up phrases like "freedom to fail." Of course this glorious 'freedom' is written into code by the people who will acrue fabulous wealth because of the rules. They are literally writing rules that can ONLY benefit themselves and ONLY strip workers of rights they thought they'd won.
Then they have the temerity to throw a guilt trip at the lower/middle classes of the industrial nations - as if freedom from fear and want is some Mercedes Benz that is and SHOULD be beyond our reach. We're told job security is some grand 'privilege' "we" have to throw away to grant poor workers abroad the privilege to be chained to a machine 16 hours a day.
I'm coming to see that the greatest threat to 'ordinary people' is really vampiric elite classes from their own countries. This 'Davos' nation gets all the benefits of cosmopolitanism, yet they get all the benefits of nationalist wars (Halliburton).
"Nations rarely lose wars, people rarely win them."
This is what absolutely kills me though.
When confronted, these masters of the universe suddenly shift into "I'm just 'repsonding to global forces'" mode. Then in the next sentence they tell you to cowboy-up and be a man about it and accept "personal responsibility" for Mercedes selling Chrysler, which means you lose your job.
February 26, 2007 1:01 PM | Reply | Permalink
"Perhaps a world wide Depression would create the willingness to enter into such agreements. But now there is no incentive."
I agree. Unfortunately, that is precisely what we are going to get. The Davos elite types have concocted one "John Law" type bubble, scam and looting operation after another to ward off a financial meltdown - the looting of the Soviet sector, the dotcom bubble, the Y2K scam, the derivatives bubble, the real estate bubble, the Japanese carry trade, the on-going looting of the U.S. industrial sector and infrastructure by Hedge Funds and the like, the looting of pension plans, ad nauseam. And the Fed provides a wall of money to finance the predators. Plus, this is a global phenomenon. Hedge funds are buying up and asset-stripping public infrastructure and middle sized industrial firms in Germany especially, here and elsewhere at an accelerating rate. This cannibalization delays the final reckoning that inevitably is coming, but will only make the collapse worse.
"Let the 'globalized' corporations raise their own militias and stop sucking on the America's tit. Let them defend their own interests."
Well, but that is what they are doing and planning to increase doing. What are the mercenary outfits operating in Iraq but the nascent infrastructure for a "private" military for the global financial oligarchy? They are using (and using up) the U.S. military to destroy the nation state system worldwide. Having accomplished that task on a much wider scale (Iran, Syria, then on to the real targets, the Eurasia powers of Russia, China and India), they will have exhausted the U.S. economically and militarily. Then, a post-Westphalian neofeudal world order can be imposed - the end of national sovereignty, all military and economic levers in private hands. Or so the thinking goes. Since they don't understand real economics or human motivation, they don't understand that they will cause another great(er) depression, global asymmetrical warfare and a new dark age. The world will suffer from massive depopulation and civilizational breakdown until future generations can finally learn the lessons from imperial folly of the last 2500 years. Letting greed and private interest have reign over the common good always and will always lead to a civilization (whether national or global) destroying itself. That is what we are witnessing now and there doesn't seem to be an opposing humanist elite in existence to stop it. The 2 political parties and their leaders all either enthusiastically support globalization (the neofeudal imperium) or at best suppose to "reform" its worst aspects. That will be woefully inadequate to stop the arc of collapse that is over the cliff and gaining speed.
UA
February 26, 2007 1:06 PM | Reply | Permalink
Fair?
February 26, 2007 1:18 PM | Reply | Permalink
Free? For whom?
February 26, 2007 2:11 PM | Reply | Permalink
They've been under Fox and Calderon and the last time that I looked at Mexico, there was a "tortilla crisis" and the average person couldn't afford to eat, so why do you say NAFTA, unconditionally, has been great?
Usually I find, after studying history, that one bad policy usually replaces another in an effort to redistribute the wealth to a different set of elites...
February 26, 2007 3:44 PM | Reply | Permalink
camilleRoy, your argument is logically flawed.
Namely, Subsistence farmers cannot afford to stop farming because if they stopped farming, they or their families would starve. This means they could not stop farming to pick up and move to the US. Secondly, if you want to argue that these subsistence farmers had enough savings to get them through the indeterminate amount of time between crossing the border, paying for that crossing, finding a job, and begin sending money back to Mexico to support their family, then you are not really talking about subsistence farmers, are you? A large part of the point of subsistence farming is that you don't build up savings of that nature.
February 26, 2007 6:11 PM | Reply | Permalink
It is patently false that there is a tortilla crisis in Mexico preventing the average person from eating.
The article that came out about such a thing was false.
Further it is false that any such tortilla crisis is caused by NAFTA or american farmers as the types of corn used to make masa from which tortillas come is a different type of corn than what most american farms grow. Specifically, Mexican tortilla corn is not sweet yellow corn.
February 26, 2007 6:13 PM | Reply | Permalink
Chavez isn't in Mexico, nor does he have much appeal there.
Also, Mexico is doing better now. Per capita GDP is up, wages have been rising, Oportunidades is helping to keep more kids in school, GDP over all has been rising, the Mexican Government has instituted fiscal policies allowing it to issue long term bonds in the Peso which is crucial for macroeconomic strength. Further Mexican bonds are no longer considered high risk on global bond markets.
February 26, 2007 7:21 PM | Reply | Permalink
...with liberty and justice for all
February 26, 2007 8:15 PM | Reply | Permalink
Even if one argues that the shortage of corn is caused by NAFTA or from a price increase based on shortages in Ethanol supplying american corn farmers, it ignores the government intervention that pushes corn towards ethanol production and the price fixing in Mexico that sets prices of tortillas. Even without NAFTA, Mexicans buy corn from the US, so arguing that NAFTA causes this or that is a stretch.
It would be easier to blame Al Gore for problems with tortillas.
February 26, 2007 8:27 PM | Reply | Permalink
Resonsible people need to regain control of the government from those currently looting it.
hmmm, do you really think people will change that much? Humans have looted for centuries... remember the vikings? the spanish invasion of south america? the british and french invading north america?
George Bush is the result of these people seriously overstepping their bounds and they are regretting it.
I thought GW was the result of Barbara and George Sr. spending the night together... ;-)
The problem with treating the economy as a game of Monopoly is that when one person controls everything, the game is over.
Doesn't that oddly mean we've reached parity? We came into this world with nothing and we leave this world with nothing... Chomsky, in Hegemony or Survival, keeps saying that the rank and file still have control-- if they assert it.
For example, people say that Carter did something magic in Egypt but there are about 80 million people in Egypt so you have to have peace with that many people...
February 27, 2007 12:06 AM | Reply | Permalink
You may find this interesting:
What about NAFTA? If it were truly a free trade agreement, one would have to remove any items that were subsidized from the trade list. Mexico’s corn market would not have be affected by the influx of cheap corn, which ran farmers out of business, nor by the removal of that corn, which caused the price of corn products to skyrocket. Free trade should mean trading of products free of government subsidies and other government interference.
[Read Posting at Liberty For All]
Unfortunately, the small, poor, non-corporate farmers get caught in the middle and, if I remember correctly, NAFTA used non-binding side agreements to ease this problem but they aren't enforced.
February 27, 2007 12:57 AM | Reply | Permalink
Further it is false that any such tortilla crisis is caused by NAFTA or american farmers as the types of corn used to make masa from which tortillas come is a different type of corn than what most american farms grow.
If there is a market for White Corn, then NAFTA is failing the Mexican people because it allows (hasn't stopped) US Ethanol subsidizes that, perhaps, persuade American farmers not to grow white corn even though, in my opinion, Corn Ethanol production is immoral.
February 27, 2007 1:05 AM | Reply | Permalink
If this is any indication of the direction of progressive thinking on globalization than we can look forward to hearing even more blather from the labor supported Democrats (Levin, Sherrod Brown, Clinton, etc., etc.) about slapping 19th Century style tariffs on Chinese products (thereby giving Americans hidden inflation) and further weakening the currency and so and on. All the glossy talk about creating a North American version of the EU to help save our manufacturing is nice but look at realities. Why is it that it's Toyota making the $billion plus investment to build trucks in Tijuana, right on the border? I live on the border and I can tell you their is ZERO constructive engagement between Republican controlled San Diego and the Democratic controlled Congressional districts and Baja Norte. Worse, the new Israel-style wall only gets higher.
You argue in terms of nationalism, bemoaning the global nature of capital but that is the way it has always been unless we turn to a different (communist?) or new (utopian "Union Now"?) system. It took 500 years to drain the riches of China and capital is flowing back there again. Round and round, so it goes. Why criticize the Davos group for trying to see that some of it is used for practical purposes?
"Where the bulk of the population cannot read, true democracy is impossible." -- Bertrand Russell
February 27, 2007 9:16 AM | Reply | Permalink
I read it, I think it is specious. Faux throws out some numbers and then presumes that a collapse in jobs are coming. Given that unemployment is below 5% it is hard to take this too seriously.
There is nothing cliche about the fact that items from around the world have kept prices down in the United States. If they did not the Fed would have interest rates a lot higher and that would cost more jobs than any amount of imported good and also cost a lot of American's their homes.
Also unless you are going to keep people outside the U.S. impoverished the largest consumer nation in the world, America, has to continue to buy. This is Brad Delong's point above and Joseph Stiglitz' problem with globalization. What this calls for is more imported goods from poorer goods not less.
You did not address the facts that being able to go to Wal-Mart allows Americans to have a better quality of life. Also you would think that there is only the U.S. and everyone else. Jobs lost to Mexico won't comeback to the U.S. and neither will jobs lost to China. They will go to Vietnam and Malaysia or elsewhere. What do you say to those people?
If you want to bring prices down to the poor and improve their standard of living you would support the overthrow of OPEC and the reduction of oil prices to market levels. I would not be suprised if Faux' numbers aren't skewed by the price of oil.
By the way Sandra Polaski from the Carnegie Endowment For Peace calls for the United States to give up its position on agriculture to allow an agreement to go forward.[http://www.carnegieendowment.org/publications/index.cfm?fa=view&id=18946&prog=zgp&proj=zted
What you repeat is the ideology of the Left that finds people liking consuming offensive. That is the real cliche.
Daniel A. Greenbaum
February 27, 2007 9:26 AM | Reply | Permalink
DG,
You would pack more punch without reference to 'the left' as including this broad ideology that is 'anti consumption.'
This response is full of falsehoods.
1.The biggest one is that nations grow and develop through free trade. It's not true of industrialized nations. The US funded itself largely on tariffs up to the 20th Century - there was no income tax. Japan developed into an industrialized nation as a nationalist project.
2.I'm from a small town, and Wal Mart absolutely killed small business owners. Gosh now they can buy something for $90 instead of $100, and that $100 would have been spent in my home town, for another small business owner rather than being vacuumed back into the vaults of the most fabulously wealthy people on earth.
February 27, 2007 10:22 AM | Reply | Permalink
It was an interesting link. I may not agree with all of it, but the basic premise that NAFTA is not completely free trade is true. The basic argument that I hear often is Corn is subsidized and is corporate welfare. If you consider that it is subsidized to make ethanol, then we realize it is global warming that is to blame not NAFTA. Then cheap corn ran Mexican farmers out of business because their corn was more expensive. So the net price of corn tortillas should have gone down. Then the price of corn has now gone up because of Ethanol. So in order to get tortilla prices back down, Mexican farmers should be able to rush out into their field and start planting corn.
In order to meet current goals for ethanol production by 2017, the entire US corn crop will not be able to supply the demand at current yields. So Mexican farmers should be shopping for new tractors, because the US will need to import corn from their neighbors.
I assume you are arguing for more free trade and less government subsidies. If so the global warming inspired subsidies will be eliminated.
Maybe ignoring Al Gore, building Nuclear plants, and letting corn become unregulated might be bad for the future of Mexican farmers, but Nachos would be cheaper than ever for the average Mexican.
February 27, 2007 11:19 AM | Reply | Permalink
They took Rrrr Jobs!!!111
February 27, 2007 1:53 PM | Reply | Permalink