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#568 - The Nature Of World War III -- Part 2, 15-Oct-1997

We saw last week (REHW #567) that the U.S. economy is no longer working
for the benefit of most people. Although business is booming (stock
prices, corporate profits and executive salaries have never been
higher) --the average worker's wage has declined 19% during the past 25
years, family income has fallen 6% since 1989, good jobs with benefits
are disappearing (being replaced by part-time, temporary jobs without
benefits), while the tax burden has increasingly been shifted from the
wealthy and from corporations onto the middle class and the working

We are told that these changes are the result of "globalization" of the
economy. And we are told that "globalization" is a natural phenomenon,
like continental drift, impossible to resist or control.[1]

But globalization is the result of intentional laws and policies
devised by corporate elites. Their goal is to further insulate
corporations from control by governments, to enable corporations to
continue consolidating wealth and power in the hands of a few people.

Most politicians are on board. Because TV is essential for election
campaigns and because TV ads are very expensive, private wealth is now
essential for election or re-election. This means politicians are
beholden to the wealthy from the day they take office, and in recent
years they have behaved accordingly: passing laws to reduce taxes on
the rich and on corporations, helping corporations evade democratic
control by enmeshing the U.S. in "free trade" agreements.

Take the GATT (General Agreement on Tariffs and Trade). The GATT was
passed by Congress and signed by President Clinton in December 1994.
The GATT agreement established the World Trade Organization (WTO). The
WTO makes and adjudicates rules governing international trade but WTO
officers and judges are not elected, so they are not democratically

WTO rules make a subtle legal distinction between traded products and
"processing and production methods." Governments are allowed to use
trade restrictions (import bans, for example) against products on
scientifically-established health grounds, but they cannot limit
imports because of social or environmental concerns over the way
products are produced. For example, the European Union (EU) is trying
to keep out milk produced by cows treated with Monsanto's bovine growth
hormone (RBGH, or BST). Monsanto insists there are no health effects
from drinking such milk (and there certainly is not worldwide
scientific agreement on the matter), so WTO rules will eventually force
the EU to accept milk from hormone-treated cows. Governments have lost
their power to control products in ways that their citizens see fit.
Through "free trade" agreements, corporations have gained immense power
over government regulators.

A new "free trade" agreement is being debated at this moment --the
Multilateral Agreement on Investment or MAI (sometimes called MIA). The
MAI has been called a "corporate bill of rights" because it will
greatly diminish the power of governments over corporations. As Scott
Nova and Michelle Sforza-Roderick of the Preamble Collaborative in
Washington, D.C. [phone: (202) 265-3263] have pointed out,[1]

"As proposed, the MAI would force countries to treat foreign investors
as favorably as domestic companies; laws violating this principle would
be prohibited. Under these conditions, transnational corporations would
find it easier and more profitable to move investments, including
production facilities, to low-wage countries. At the same time, these
countries would be denied the tools necessary to wrest benefits from
such investment --like laws mandating the employment of local managers.

"Efforts to promote local development by earmarking subsidies for home-
grown businesses and limiting foreign ownership of local resources
would also be barred. If adopted, the MAI will mean foreclosure of
Third World development strategies, increased job flight from
industrial nations, and new pressures on countries, rich and poor, to
compete for increasingly mobile investment capital by lowering
environmental and labor standards.

"A key MAI provision could also threaten corporate accountability laws
championed by progressives in the U.S. The MAI takes aim at statutes in
any nation that link subsidies, tax breaks and other public benefits to
corporate behavior. This ban could be used to challenge a host of
local, state and federal measures, including laws requiring subsidized
firms to meet job-creation goals, community reinvestment rules that
require banks to invest in underserved areas, and the 'living wage'
laws that are the focus of activist campaigns across the country.

"Perhaps most disturbing, the MAI would preempt strategies for
restricting corporate flight to low-wage areas --a major cause of job
loss and income stagnation in the industrialized world. On top of the
damage done by plant closings and layoffs, corporations use the THREAT
of flight to undermine the bargaining power of unions and scare
policymakers away from the tough regulation and strong public
investment necessary to raise living standards. Though remote from
today's policy agenda, rules limiting the capacity of corporations to
flee are essential to restoring the ability of government and labor to
deal with corporations on a level playing field. The MAI would bar such
rules in any country that is a party to the agreement.

"In its scope and enforcement mechanisms, the MAI represents a
dangerous leap over past international agreements. It grants any
corporation with a regulatory gripe the right to sue a city, state or
national government before an international tribunal --with a binding
outcome. Governments would enjoy no reciprocal right to sue
corporations on the public's behalf. And the MAI ignores most of the
exceptions in previous agreements allowing governments leeway in
critical areas like public health and resource conservation. The full
extent of the drafters' ambitions is reflected in WTO Director General
Renato Ruggerio's recent characterization of the MAI negotiations: 'We
are writing the constitution of a single global economy...'"[1]

(To enlist in the fight to stop Congress from approving the MAI,
contact the Public Citizen Global Trade Watch; telephone (202) 588-7777
or (202) 547-4996; or: http://www.citizen.org/pctrade/tradehome.html.
You can find the full text of the MAI at that web site as well.)

In opposition to "globalization" is a growing grass-roots movement,
worldwide, to assert the importance of place, to insist that the local
economy, based on local materials, local skills, local capital, and
local markets is the only economy that can serve the needs of people
while preserving the resources that will be needed by our
grandchildren. Because few places can provide all of the energy, food,
water, and materials required by the local economy, it is really
REGIONAL economies that are being developed. Regional trade, not global
trade. The goal is to keep supply lines and transportation routes as
short as possible, to keep money circulating in the local economy, and
to keep the economy and local entrepreneurs (even if they are organized
in the form of corporations) under some semblance of democratic
control. The issue is not "corporate accountability" --a concept that
does not go far enough to curb corporate abuses --the issue is
democratic control of corporate behavior so that corporations serve
human needs (and the needs of the environment), not merely the needs of
financial elites.[2] The issue is democratic control of the local
(regional) economy to serve the needs of people without wrecking the

Most of the elements of this "other" economic vision would be made
illegal by the MAI. As we have seen, some of the elements of this
vision have already been made illegal by the GATT agreement.

Basically, it boils down to a struggle between corporate rights and
human rights. Next year will be the 50th anniversary of the adoption of
the Universal Declaration on Human Rights by the United Nations (and
signed by the U.S. in December, 1948). (The text of the Declaration can
be found at http://www.ngo.org/UDHR.html.) It is worth recalling some
of the rights guaranteed to all humans --rights that are currently
being eroded by grasping corporations and their "globalization"

Article 3 says "Everyone has the right to life, liberty and security."
But if your environment is poisoned do you have security?

Article 16 says, "The family is the natural and fundamental group unit
of society and is entitled to protection by society and the state." But
how seriously is this being taken in the U.S. (or, for that matter in a
country like Mexico where families are broken up as corporate-style
agriculture forces people off their traditional lands)?[3]

Article 22 says, "Everyone, as a member of society, has the right to
social security...."

Article 23 says, "(1) Everyone has the right to work, to free choice of
employment, to just and favourable conditions of work and to protection
against unemployment.

"(2) Everyone, without any discrimination, has the right to equal pay
for equal work....." Women in the U.S. don't receive equal pay for
equal work.

Article 25 says, "Everyone has the right to a standard of living
adequate for the health and well-being of himself and of his family,
including food, clothing, housing, and medical care and necessary
social services, and the right to security in the event of
unemployment, sickness, disability, widowhood, old age, or other lack
of livelihood in circumstances beyond his control." These and other
international covenants[4] need to be dusted off and brought into our
struggles for an economy that works and an environment that can
sustain. Internationally-recognized human rights include more than
protections against arbitrary imprisonment and torture, as important as
those rights are.

One organization that is seeking to rebuild regional economies, and do
so within the constraints of the natural environment, is Sustainable
America in New York. It's time to roll up our sleeves and take back our
economy and our environment. To contact them, telephone Elaine Gross at
(212) 239-4221 or E-mail them: sustamer@sanetwork.org or
http://www.sanetwork.org (omit the hyphen).

More next week.

--Peter Montague (National Writers Union, UAW Local 1981/AFL-CIO)


[1] Scott Nova and Michelle Sforza-Roderick, "Worse Than NAFTA" in
Trent Schroyer, editor, A WORLD THAT WORKS (New York: Bootstrap Press,
1997), pgs. 32-34. An earlier version of this essay appeared in THE
NATION Vol. 264, No. 2, (January 13-20, 1997), pgs. 5-6. The
extraordinarily interesting book, A WORLD THAT WORKS is available for
$19.50 plus $3.50 shipping from: Bootstrap Press, Suite 3C, 777 United
Nations Plaza, New York, NY 10017. Telephone and fax: 1-800-316-2739.

[2] For a discussion of the distinction between "accountability" and
"democratic control," see Jeffrey Barber, "The Role of Corporate
Accountability in Sustainable Development," and Richard Grossman, "Only
the People Can Be Socially Responsible," in Trent Schroyer, editor, A
WORLD THAT WORKS, cited above, pgs. 160-184.

[3] See for example, Tom Barry, ZAPATA'S REVENGE; FREE TRADE AND THE
FARM CRISIS IN MEXICO (Boston: South End Press, 1995).

University Center for the Study of Human Rights, 1994). Available for
$10 from: Center for the Study of Human Rights, Columbia University,
420 West 118th Street, 1108 International Affairs Building, New York,
NY 10027. Phone: (212) 854-2479; fax: (212) 864-4847 or (212) 316-4578.

Descriptor terms: human rights; corporations; economy; economic
development; united nations' universal declaration of huiman rights;
sustainable america; sa; globalization; economic redevelopment;
sustainable development; multilateral agreement on investment; mai;
gatt; wto; world trade organization; preamble collaborative; scott
nova; michelle sforza-roderick; regulation;