Opinion pieces and speeches by EPI staff and associates.
[ THIS IS AN EXCERPT FROM “DO THE SEATTLE PROTESTORS HAVE A POINT?” ORIGINALLY APPEARING IN THE JULY/AUGUST 2000 ISSUE OF THE INTERNATIONAL ECONOMY ]
Do the ‘Seattle protesters’ have a point?
The protestors raised some hard questions that deserve better answers
by Jeff Faux
Every economic system develops a set of political issues around itself. The economic system now being created by the merging of world markets is no exception. The protesters in Seattle represent the beginning stage of a mass global-politics made possible by the same Internet technologies, declining travel costs, and rising education levels that expand the reach of global capitalism beyond the capacity of individual governments to regulate it.
In the nineteenth century, technology and business organizations in the United States created continental corporations that outgrew the ability of state governments to regulate their markets. Fortunately, the political struggle over rules for the new continental marketplace could take place safely within the context of a democratic U.S. constitution. Over time, the power of corporate capital was balanced by protections for small business, labor, and the environment. The result was a sustained, broadly-shared prosperity.
The global economy has no such constitution. Instead, its promoters insist that it be ruled by “free trade.” This is disingenuous. If the WTO or NAFTA agreements were free trade contracts, they could have been written on one page calling for elimination or reductions in tariffs and quotas. But they contain hundreds of pages protecting the property of global investors and supporting policies that undercut social standards. Add IMF conditionality which reduces the power of labor and democratic decision-making, and a global economic regime is created which runs roughshod over ordinary people in both developing and developed nations. And the regime is clearly trying to extend its reach. Last year, the outgoing director-general of the WTO was explicit: “We are no longer writing the rules of interaction among separate national economies. We are writing the constitution of a single global economy.”
The question being raised in the streets is: “Where in this constitution are the rules that protect the rest of us?”
So far the global policy elite has simply dismissed those who pose this question as marginal – isolationist unionists and overzealous environmentalists who do not understand Economics 101. The benefits of expanded trade are said to be so great they should overwhelm concerns over exploited labor and land. Yet during the last two decades of trade and finance liberalization, global growth has slowed, inequality has gotten worse, and the world economy is less stable. People might have reasonable differences about the meaning of these facts, but the facts do not lead to an airtight case for continuing the present pattern of globalization.
If those who manage the global institutions of the twenty-first century do not want international politics to turn into a global version of late nineteenth-century class conflict, they will have to find better answers to the tough questions which have been posed.
[ POSTED TO VIEWPOINTS ON JULY 27, 2000 ]
Jeff Faux is president of the Economic Policy Institute, in Washington, D.C., founded in 1986 “to broaden the discussion about economic policy to include the interests of low-and middle-income workers.” He has written and lectured widely on global economic issues, and his most recent book is The Party’s Not Over.