Global Policy Forum

People Profit from Trade


By Paul Street *

March 19, 2003

As the task of resisting the George Orwell Bush administration's "imminent" attack on Iraq absorbs the lion's share of global peace and justice energies, it becomes easy to forget the contributions and continuing relevance of the "anti-globalization" (really global justice) movement. The issues raised by that movement, which preceded and is now feeding into current peace activism, have hardly disappeared. They remain remarkably germane and inseparably linked to the immediate question at hand - US imperialism.

How interesting, then to see the imperialist-in-chief refer to the global justice movement during last week's rare prime-time presidential press conference, meant to "prepare the American people" for "war" (massacre). The reference came by way of his evasion of a reporter's query as to " many people around the world take a different view of the threat that Saddam Hussein poses than you and your allies." After the by-now standard White House line that Americans and Europeans are fortunate to possess the freedom to "express their stark contrast to Iraq" - as if our free speech and assembly birthrights were more seriously threatened by Saddam Hussein than John Ashcroft - Bush tried to put the recent historic and massive global demonstrations against his militarism into proper irrelevant place by likening them to supposedly past and wrongheaded protests against "trade."

"I've seen all kinds of protests since I've been the President," Bush noted. "I remember the protests against trade. A lot of people didn't feel like free trade was good for the world. I completely disagree. I think free trade is good for both wealthy and impoverished nations." And just as the many millions who marched against US Empire last February will not deter him from bombing Baghdad, those earlier demonstrations "didn't change my opinion about trade."

"Poor People Profit From Trade"

Bush's comments give a simpleton's rendition of the standard American corporate-Orwellian line on globalization. I know no better statement of this line than the Chicago Tribune's editorial response to an already forgotten episode last fall, when maybe two thousand global justice activists marched in downtown Chicago to protest the Boeing-sponsored meetings of the Trans Atlantic Business Dialogue (TABD). The marchers were actually out-numbered by a remarkable assemblage of heavily equipped riot police, deployed by a corporation-friendly Mayor determined to reassure his new patron Boeing that "this is not Seattle" - the city that Boeing's company headquarters fled in the wake of numerous bad labor practices allegation and with the horrifying memories of November 1999, when 50,000 protestors disrupted the World Trade Organization (WTO) meetings in Seattle. The TABD brings together leading European and North American corporations and high-level government officials to help set the WTO's "free trade" agenda.

Two mornings after the march, the Tribune's editorial board published a condescending lecture-as-editorial bearing the title "People Profit From Trade." The Tribune accused the "reactionary" protesters of romanticizing pre-modern "peasant" lifestyles and counseled readers on the progressive nature of global capitalism - summarized by the words "trade," "free trade" and "globalism." "Wherever trade is on the agenda these days," the Tribune claimed, "the protestors want to make sure they're there to get [one] message across: People over profits. They view free trade with suspicion because businesses profit from trade." "Pssst," the Tribune wrote, "so do people. People profit from trade. Poor people profit from trade." Since poor people in developing nations benefit when their societies engage in global "free trade," globalization is good for the poor.

In support of this thesis, the Tribune cited "rising living standards in countries such as China, Mexico, India and Malaysia, which have focused on opening their economies to trade. In China alone," the Tribune claimed, "more than 200 million people have been lifted out of poverty in the last two decades, a time frame that coincides exactly with China's economic liberalization, its decision to hold a coming-out party to the rest of the world." The paper also cited the "economic stagnation" in "vast swaths of Africa and the Middle East," where "governments still try to maintain tight control over their closed economies."

A subsequent Tribune editorial trumpeted the "unparalleled economic and political success" of Chile, where "free market reforms" were introduced by the military dictatorship of Gen. Augusto Pinochet. Pinochet ran what the editorial board called a "schizophrenic" regime - good Pinochet (University of Chicago "free market" economics practiced in "the morning") versus bad Pinochet (killing leftists and trade unionists "in the afternoon") - after he overthrew the democratically elected government of Salvador Allende in a US-supported coup in 1973.

Suppressing Core Issues and Eternalizing the Existing Regime

Contrary to President Bush last Thursday and the Chicago Tribune last November, the global justice ("Seattle") movement did not and does not protest "trade" or "globalism" as such. Its cores issues focus on really existing and historically specific contemporary globalization - involving a range of social relations including but not restricted to "trade" - under the authoritarian command of capital. It opposes not globalization per se but a historically specific and hardly "free market" form of globalization that:

· Generates waste and destroys natural habitat at a rate that exceeds the earth's capacity to regenerate and heal itself.
· Pillages and commandeers that which formerly belonged to the human and ecological "commons" for private and usually corporate profit.
· Turns everything - water, land, air, animals, vegetation, health care, science, knowledge, academia, culture, public space, human labor power, love, law and order, crime, politics - into a commodity and/or private investment opportunity.
· Soaks every last crevice of human society in what Karl Marx called "the icy waters of egotistical calculation" - the competitive ethos and possessive individualism of marketplace capitalism.
· Contributes to the creation of a world wherein the richest 20 percent of the world's people receive at least 150 times more income than the poorest 20 percent.
· Increases inequality both within and between states, "concentrating," in the words of the United Nation's 1999 Human Development Report, "power and wealth in a small and privileged group of people, nations and corporations and marginalizing the others."
· Kicks away the ladder of development from peripheral nations in the world system, preventing them from using the same policy methods that produced "successful" internationally competitive development in core states and "late-industrializing" semi-peripheral states. These policies include import restrictions, industrial policy, state-owned industries and extensive controls on foreign capital and exchange rates.
· Pits unfairly over-indebted "developing" nations against each other in an orgy of export competition while denying then (in the name of "free markets") the right to protect their own domestic economies from the heavily subsidized exports of more "advanced" nations and the incursions of heavily state-subsidized multinational corporations.
· Requires poor nations to sacrifice their own food security and ecological balance and divert scarce funds away from education, health care, social services and environmental protection and into the hands of wealthy bondholders and corporations as the price of admission to the world economy.
· Drains tens of billions of dollars out of developing nations through the intellectual-property protectionism of the richest states - the costly, inefficient and often life-threatening patent monopolies enjoyed by corporations based chiefly in Europe and North America.
· Deregulates global currency and capital flows, leaving nations and governments hostage to rapidly shifting market sentiments and creating financial crises that cause suffering for millions.
· Saturates the world with a flood of weapons, adding fuel to fires of violence that are fed by the destabilizing consequences of corporate and financial globalization and that provide self-fulfilling pretext for massive state subsidy of high-tech military corporations in the West.
· Favors authoritarian states over democracies since wages tend be lower and environmental laws and social protections weaker in the former than in the latter, giving businesses in dictatorships an advantage in exploiting human and natural resources and selling exports abroad.
· Generates warfare while deepening and relying on the unilateral power of an unchallenged rogue militarist empire - the United States.
· Reflects and reinforces massive socioeconomic and related policymaking, racial and other inequalities and escalating state repression at home, in the United States - the industrialized world's most unequal nation and the planet's number one incarceration state.

The falsely labeled "anti-globalization" protesters advocated not the end of "globalism" but rather its transformation into a movement for democracy, social justice, ecologically sustainable development and equality within and between states. Rather than deal with this complexity, Bush, the Tribune's editorial board and the American ruling-class understandably prefer to employ a standard authoritarian ideological device. Reflecting the privileged "elite's" desire to portray its dominant position as an eternal fact of life (no more deserving of opposition than the positioning of the planets), this device maintains that radical critics of existing hierarchical social structures are actually opposed to social structures as such. Following such slipshod ruling-class "reasoning," one might absurdly argue that criticism of corporate media ownership is really criticism of media per se or that opposition to the manufacture of murderous military planes and helicopters by Chicago's TABD-sponsor Boeing is actually opposition to aviation as such.

"The System Isn't Working At the Level of People"

In pronouncing it a simple uncontested fact that modern globalization is reducing poverty in "developing nations," Bush, the Tribune's editorial board and their many plutocratic allies brazenly ignore a significant body of research demonstrating precisely the opposite. This research shows that the particular de-regulatory or neo-liberal "free-trade/free-capital" global trade and investment system enforced by the West and especially the United States over the last three decades has actually slowed growth and increased the vulnerability of poor countries. "In 1980," economists Christian Weller and Adam Hersh note, "the world's poorest 10 percent, or 400 million people, lived on the equivalent of 79 cents a day or less. The same number of had 79 cents per day in 1990 and 78 cents in 1999. The income of the world's poorest did not even keep up with inflation." Thanks to numbers like these, a small portion of what could be cited, even World Bank president James Wolfensohn had to acknowledge three years ago that the global "system isn't working" at what he called "the level of people" - a rather significant level, one hopes.

Interestingly enough, corporate globalization enthusiasts could get a clue on the consequences of really existing globalization by reading senior Chicago Tribune correspondent R.C. Longworth. Longworth welcomed the new millenium by noting that the world's "surging economy enriches a few" but "bypasses the rest." In Longworth's view, "the 21st century, like the 20th, began as a belle époque for those lucky enough to enjoy it." Those "lucky" people were a distinct minority for whom the new global era was "a golden age of peace, great wealth, booming markets. Easy travel. Instant communications, fabulous comfort and, with it, an innocence and confidence that this good fortune is not only deserved but permanent." Life is "very different," Longworth noted, for the world's "majority [who] in shantytowns on the outskirts of the global village." He described the dire situation faced by the "rest of humanity" beneath the opulent minority represented in the halls of the TABD, the WTO, and the International Monetary Fund, and the White House - the "millions of unemployed nomads in China, street people in Calcutta, European workers without jobs, the 28 percent of Americans whose jobs pay poverty-level wages, semi-educated young men in Morocco begging in four languages, the hopeless poor of Africa, child laborers in Bangladesh, the pensioners of Poland, the Russians wondering what happened to their lives."

Confusing Cause and Effect

At the same time, the nations held up by the World Bank, the Chicago Tribune, The Wall Street Journal and the rest as shining examples of unregulated free-trade/free-capital globalization's positive impact (China and India) actually "undermine the case for a connection between greater de-regulation and falling poverty." Both nations, Weller and Hersh note, "have sheltered their currencies from global speculative pressures (a serious sin, according to the IMF). Both have been highly protectionist (India has been a leader of the bloc of developing nations resisting WTL pressure for laissez-faire openness). And both have relied heavily on state-led development and have opened to foreign capital only with negotiated conditions. By letting in foreign capital [only] in a limited and negotiated way, India and China have benefited from investment without totally sacrificing economic sovereignty."

As Mark Weisbrot notes, "the World Bank's favorite globalizers" - China, India and Vietnam - do not fit the neo-liberal prescription. "China and India have two of the most protected domestic markets in the world. China does not even have a convertible currency, and India retains strict capital controls. So does Vietnam, where the majority of investment in recent years has been undertaken by the state." The Tribune's other "free-trade" poster child (Chile) owes much of its development "success" to its insistence on closely regulating foreign investment flows - another anomaly for the neo-liberal wisdom.

Corporate neo-liberals confuse correlation with causation when they claim to prove the benefits of "free-trade" globalization by showing that foreign trade makes up a significantly larger share of national Gross Domestic Product in relatively "successful" developing nations. What this argument misses, notes Harvard economist Dani Rodrik, is that foreign trade's share of a nation's economy tends to rise with economic development. All neo-liberals really illustrate with their correlation is that faster-developing societies tend to increase the proportion of their economies devoted to trade. Rising trade-share is a consequence of development, Weisbrot shows, not a policy path producing development

Missing the Meaningful Comparison and Deleting Democracy, Justice, Ecology Concerns

By framing the globalization debate around the question of how the poorest people are doing and misrepresenting the central issue as a conflict between modern global-economic relations ("trade") and reactionary non-engagement in such relations ("peasant" autarky), privileged "trade" advocates avoid the fundamental issues at the heart of the global justice movement. They eliminate in advance the possibility that anyone might be advocating a more democratic and egalitarian model of modern globalization.

That possibility, however, is precisely what the movement is about. Beyond complex empirical arguments over whether really existing globalization is making the poor marginally better or worse off, "the real issue" for social justice activists is what Nobel-prize-winning economist Amartya Sen calls "the distribution of globalization's benefits." Even if the poor could be shown to be getting "just a little richer" under the neo-liberal regime, Sen reminds us, "this would not necessarily imply that the poor were getting a fair share of the potentially vast benefits of global economic interrelations." The "principal challenge" posed by modern globalism, he argues, "relates to inequality - international and well as intranational. The troubling inequalities include disparities in affluence" but also "gross asymmetries in political, social and economic opportunities and power."

The meaningful comparison, Sen argues, is not between what the worst off get under the existing hierarchical global system and what they would get with no global system at all. It is between the distributional outcomes of the currently existing hierarchical system and the potential outcomes of a more democratic and egalitarian world system. Many different global arrangements - when compared with the absence of any world system - could certainly be shown to be at least beneficial to poor people as well as rich. The deeper question is how fairly benefits associated with these different arrangements are distributed.

At the same time, the global justice movement is distinctly green and democratic. Rejecting the more equal division of a poisoned pie, it is not interested in closing global socioeconomic gaps while deepening humanity's self-defeating and capital-led assault on world ecosystems. The movement also rejects authoritarian power - concentrated public/state as well as concentrated private/corporate power and notes a positive relationship between democracy and more egalitarian outcomes that has been documented by professor Rudrik. For a given level of manufacturing productivity, his research on 93 nations has determined, factory workers in relatively "free" countries (those with rudimentary parliamentary institutions and political rights) like India make 30 percent more money than their counterparts in "partly free" countries and 60 percent more than workers in "unfree" nations like Western investment favorite China.

It is a great capitalist myth, Rudrik's work suggests, that wages are simply set by the global "free market": governmental authoritarianism pays out a significant profit dividend to local and international capital. Democracy pays out an equally significant wage dividend to workers fortunate enough to live in states with comparatively minimal repression. Contrary to the editors at the Tribune, there is nothing "schizophrenic" about post Allende Chile's simultaneous use of capitalist economics and savage anti-left/anti-labor state repression: the latter makes eminent sense for those who sit atop "private" economic power structures.

Anti-"Trade"/Anti-Empire: Two Sides of the Same Doha

Of special retrospective interest, given the recent Bush-mobilized explosion of peace activism, the Tribune also deleted the anti-militarist message that was clearly evident at the "anti-trade" TABD protests. In Chicago as in other settings, the global justice movement last fall was already making the connections between global inequality, militarism and American Empire. They were catching up with something openly acknowledged nearly four years ago by the explicitly imperialist corporate-globalization enthusiast and leading New York Times foreign-affairs columnist Thomas Friedman. "The hidden hand of the market," Friedman wrote as the US prepared to bomb Serbia, "will never work without a hidden fist. McDonald's," he argued, "cannot flourish without McDonnell Douglas, the designer of the F-15. And the hidden fist that keeps the world safe for Silicon Valley technologies is called the US Army, Air Force, Navy and Marine Corps."

Corporate neo-liberal globalization relies, we are learning with special urgency since 9-11, on American imperial state power (see Street, "Anti-Empire," ZNet, February 19, 2004). There is nothing "schizophrenic" about Doha (Qatar)'s dual status as (1) the home for recent world "trade" talks and (2) a major US military encampment in preparation for the War on Iraq. 1 and 2 are dialectically inseparable. They are two sides of the same world state-capitalist coin.

Also missing from the Tribune's analysis last fall was any sense of the anti-TABD protestors' opposition to social and related racial inequality in Chicago and throughout the American "homeland." There was no mention in its coverage of an excellent speech given prior to the aforementioned march by African-American housing activist standing at the steps of the Boeing Corporation. This speaker contrasted the massive expenditures made to conduct the imperial "War on Terrorism" with the pittance spent to help the very disproportionately black inner-city victims of a gentrification, homelessness and other forms of heavily racialized socioeconomic homeland insecurity experienced by America's millions of truly disadvantaged.

In Chicago as in other settings, the global justice movement today is making the connections between world inequality, militarism, American empire and domestic social, urban and racial injustice - something that is very evident in recent actions (see my forthcoming Z Net Commentary, "Making Connections: Confronting Hierarchy At Home and Abroad," March 14th). In the process, the falsely-labeled anti-"trade" movement has fed quite naturally into an anti-imperialist peace and justice movement that is connecting the dots between inequality, repression, thought control, racism, regressive state authoritarianism and ruling-class arrogance at home and abroad.

Public Dismissal, Private Concern

The president can publicly dismiss the significance and deny the core concerns of global peace justice movements past and present. Privately, however, Bush and his allies certainly know and acknowledge that they have reason to worry and to pay attention to the real issues. Like the "anti-globalization" movement it has partly subsumed, the new anti-imperialist movement defies arrogant elitist stereotypes portraying it as a stupid and reactionary effort to resist "progressive" change on the road to a better, more "modern" "civilization." It is a smart, modern, and democratically progressive force seeking to stop a barbarian, regressive, authoritarian and top-down assault on standard civil rules of decent behavior at home and abroad.

*Paul Street ( This e-mail address is being protected from spambots. You need JavaScript enabled to view it ) is the author of "Color Bind," a chapter in Tara Herivel and Paul Wright, Prison Nation: The Warehousing of America's Poor (London: Routledge, 2002).

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