Global Policy Forum

By Hector Rogelio Torres

An international organization's birthday would not normally attract much attention. However, since the WTO is commonly regarded as the main temple of globalization, the occasion was seized upon by a wide and colorful range of Non-Governmental Organizations, NGOs, as an opportunity to show their discontent and mistrust for the party's host. They had little impact but made two things evident: the obscurity of their criticisms and their lack of understanding of the benefits of globalization.

Uneasiness and distrust for this global process of enlarging markets can be witnessed all over the planet. Globalization is frequently perceived as serving exclusively to open national markets to foreign competition. However, beneficial political consequences flow from its dynamic. For instance, globalization requires the enforcement of individual rights and liberties. Globalization also promotes the spontaneous gathering of people with common interests. The amazing expansion of NGOs that defend interests other than free trade (such as protection of human rights, environment, social standards) has undoubtedly benefited.

Globalization is also seen as a threat to employment. Yet the fact that globalization is no better regarded in countries from which capital "emigrates" than in those countries to which it flows suggests that it cannot be viewed solely through the prism of unemployment. Consider a hypothetical example. If government "A'' announces it will give priority to public expenditure in education, health, and social security, all good news for citizens, markets will probably give a chilly if not openly negative response. Conversely, if government "B'' announces it will trim public expenditure in social security, raise taxes that impinge on consumption, and lower fiscal pressure on profits, the markets will surely be enthusiastic while citizens will see grim times ahead.

Clearly, markets and citizens differ in their assessments of the governmental announcements. But more important, they do not express themselves in the same way, nor with the same tools. It is quite probable that a political party would make an announcement of kind "A'' in the run-up to elections but would be forced to implement announcement "B'' once running a government. Notwithstanding the obvious ethical consequences that this pattern of political conduct might have on democratic credibility, it is important to notice that this contradiction is rooted in the differences in the decision- making processes from which the two policies stem. Democracies are based on the equality of rights of their citizens. Announcement "A'' is in line with the democratic paradigm, namely that all citizens are equal under the law and, in any election, one citizen is one vote. Announcement "B'' adheres to a different paradigm. In markets, each citizen participates according to his purchasing capacity. We do not all have the same weight, and accordingly our "voting'' rights are far away from even. Markets institute a sort of qualified democracy in which one dollar is one vote.

Therefore, if the global society we are currently shaping is to be based on the democratic paradigm, the starting point should be to accept that contradictions inevitably arise between formal power ("one citizen is one vote'') and real economic power ("one dollar is one vote''). These contradictions should neither be ignored nor wiped off. They should be articulated in transparency. The end of the cold war and the virtually global expansion of capitalism have facilitated astonishing political and economic changes. Today we have more free elections and also more free markets. But while democracies have expanded horizontally, free markets have so done in every possible direction. Markets have not grown just geographically but also qualitatively. They have increasingly crept into aspects of our social life that had been sheltered from the rationale of "maximizing benefits.'' The global market needs a set of global minimum standards in order to promote investor confidence and establish the ground rules concerning the ways states are allowed to compete in attracting capital.

The search for these common standards has given rise to complex negotiations in the WTO. The executive branches of governments are responsible for these negotiations. The results are subsequently sent to parliaments, but since the results normally are packages of linked concessions, legislators have very little chance of disentangling them. This virtual migration of legislative power to the international arena has evident consequences for the equilibrium of powers on which democracies rely. Furthermore, following the practice of the old GATT, negotiations are not transparent to civil society. This was once justified because negotiations mainly concerned tariffs and actual trade obstacles, but the situation today is quite different. Matters related to intellectual property rights, investment, sanitary standards, environment and competition policies are now being considered in the WTO.

Articulation of frictions between free markets and democracies is not aided by conceiving of globalization as a planetary scenario in which countries are markets and the scope of national policies is limited to decisions that do not hurt the competitiveness of local producers. On the contrary, it just extrapolates the market paradigm to the political and social realm. This induces a dramatic error: identification of democracy with the social inequalities stemming from markets out of control. No wonder reactions against ""free markets'' can take totalitarian trends and the criticism of globalization borrows nationalistic and protectionist slogans.

Summing up, globalization is an unstoppable process, but we ought to make it work for democracy. It could help to unify people, and this should be good news for those who believe in the existence of common values for the human being. Our task should be preventing globalization from working for the exclusive sake of market forces that have virtually succeeded in getting rid of governments. It is now utterly necessary to avoid trivializing democracy as market's political expression. The social realm should be preserved for the paradigm of human equality and we should find an expression for democracy in the WTO.

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