I’m always known as the person who’s opposed to everything: against television, against computers, and now against economic globalization. Today is going to be no exception. It seems as though there are so many things to be against, I can barely keep up. But I am a believer in the idea that the truth is empowering and revolutionary.
The Schumacher Ceneter for a New Economics is of course dedicated to providing small-scale and community-based and decentralized models, strengthening localism, and opposing massification. I think it’s important to be knowledgeable about the effects of massification because it is responsible for ominous trends that we tend not to hear about. If we really believe in the ideals of self-reliance and ecological sanity and social justice, then it is crucial that we be acquainted with the megaforces working against them. That is why I have written so much about technology; it is one of the major problems confronting us that we have not faced. Another major problem we have not faced is economic globalization, and I’m going to concentrate on that today.
I won’t be entirely negative. At the end of my talk I’m going to point out certain recent developments that I think are changing the dynamics of our current situation and give cause for optimism.
The advocates of economic globalization like to describe it as an inevitable process, the result of economic and technological forces that evolved over centuries into their present form, almost as if they were forces of nature. Although global trading activity and concepts of free trade have existed for many centuries, their earlier forms were entirely different from the modern versions in scale, speed, impact, and intent. The modern version of economic globalization did not grow from nature like some kind of weird dominant plant or animal; it is not an accident of evolution but instead emerged directly from a set of institutions and rules created on purpose by human beings for a specific goal: to give primacy to economic—I should say corporate—values above all others.
In fact, the modern globalization era has a birth date and a birthplace: the fateful meetings in Bretton Woods, New Hampshire, in July 1944. That was when the world’s leading economists, politicians, bankers, and corporate figures gathered to figure out what to do to mitigate the terrible devastation of World War II. They decided that a new centralized global economic system was required to accelerate worldwide economic development. Theoretically there would be no more horrible wars, and people would be well-fed and would enjoy the fruits of the technological and consumer revolutions.
Those taking part in the conference certainly saw themselves as do-gooders and altruists, despite their obvious self-interest in the outcome. In their wisdom they decided that the ideal instrument to keep all the pieces together would be the global corporation, supported by new global rules of free trade that would solidify its dominion. I remember well from my days at Columbia Business School in the 1950s that the global corporation was praised as the one instrument that could ensure long-term peace and stability. Out of the Bretton Woods meetings came the World Bank, the International Monetary Fund (IMF), and then later the General Agreement on Tariffs and Trade (GATT), the North American Free Trade Association (NAFTA), the Maastricht Agreement in Europe, and now the World Trade Organization (WTO). As intended, it is through these instruments that corporations have gained extraordinary new powers.
The instruments of economic globalization are causing what is arguably the most fundamental redesign of the planet’s social, political, and economic arrangements since the Industrial Revolution at least. They are producing a power shift of gigantic proportions, moving real economic and political power away from national, state, and local governments and communities toward global corporations, banks, and the global bureaucracies these have created. This brings with it disastrous consequences for community control, democracy, national sovereignty, indigenous culture and economy, and the natural world.
Corporate-driven economic globalization is rooted in an economic philosophy and now also in a process, both of which try to integrate and unify all economic activity on the planet within one single, centralized supersystem. Countries with cultures and economic traditions as different as, for example, India, Brazil, Portugal, Costa Rica, Sweden, Canada, Kenya, China, and the United States are all meant to merge their economic activities within a single conceptual framework, which ultimately is not only economic but political and cultural. The net result is what many of my colleagues call “monoculture”—the global homogenization of culture, lifestyle, economic practice, and ideology with the corresponding sacrifice of local traditions, values, arts, and traditional small-scale economic practices. The days when it was fun to travel to so-called exotic places on the globe are already nearly at an end. Soon every place will look and feel exactly like every place else, with the same restaurant franchises, the same chain hotels, the same clothes and malls and superstores, the same streets crowded with the same cars, the same high-rise architectural expressions, and increasingly the same television programs, music, and art. With every place the same, there will be scarcely a reason ever to leave home. Our lives will be forever deprived.
Economic globalization actively undermines all values except economic values. It enshrines the free market and its principle actors—global corporations—as the engines and benefactors of the process. It places first importance on the achievement of ever more rapid economic growth and on the constant search for new markets, new resources, and cheap labor—which is why there is so much excitement about the idea of China joining in this experiment. To achieve such rapid growth, globalization requires totally unrestricted free trade, privatization of enterprise, and deregulation of corporate activity, which together remove most impediments that might stand in the way of expanded corporate activity. In practice these impediments are usually environmental laws, public health laws, food safety laws, laws that pertain to workers’ rights and opportunities, laws that permit nations to control investment on their soil, and laws that try to retain national controls over local culture. These are now all viewed as obstacles to corporate free trade and are quickly being outlawed by the great new trade agreements. And while corporations are being deregulated and freed, nation-states and states and local governments are being harshly regulated and constrained, thus making it far more difficult to protect local jobs, identity, and tradition as well as national sovereignty and the natural world.
Now, I am aware that many of us in this room may have reservations about the powers of nation-states and don’t mind that they are being diminished. But consider what is replacing them: global bureaucracies effectively run by corporations in their own interests, corporations that do not even pretend to act for the benefit of human beings or nature or the environment.
The true governing bodies in the global economy are the great trade bureaucracies that have been created by GATT, by NAFTA, by the Maastricht Agreement, by the WTO, and—as recently proposed by the Organization for Economic Cooperation and Development (OECD) in Paris—the Multilateral Agreement on Investment (MAI). The powers that nations have sacrificed are being usurped by these institutions. We are entering an era that some are calling the era of corporate rule.
The passage of the Uruguay Round of GATT, the Maastricht Agreement, NAFTA, and the emergence of the WTO within only two years of one another was celebrated by advocates of economic globalization, who claimed these agreements would bring about a global economic order that would quickly produce a $250 billion expansion of world economic activity, with benefits trickling down to all of us. The dominant homily is, “The rising tide will lift all boats.”
But will it? Does this economic arrangement work even on its own terms? Will such a gigantic economic expansion actually occur? If it does, how long can it possibly sustain itself before it has to face the limits of a finite planet? Where will the resources—the minerals, the wood, the water—come from to feed such exponential economic growth? Where will the effluents from this ambitious undertaking—the solids, the toxic wastes—be dumped? Who actually benefits from all this? Will it be working people who throughout the world are already losing jobs to high-tech machines and to corporate flight and who have been placed in a downward wage competition with workers in all other countries? (In England it is being advertised to the global business community that English workers are the lowest paid in Europe. In Asia and some Caribbean and South American countries there has been this kind of advertising for a number of years now). It’s a competition for the lowest pay.
Will it be farmers who benefit? Whether in Asia, Africa, Europe, or the United States, they are being driven off their lands by the World Bank export development model. These new schemes destroy diverse local farm production and local trades that encourage self-reliance, replacing them with giant corporate farms, monocultures, that no longer grow food local people can eat but instead grow coffee, beef, or flowers for export to the global economy. This process is converting millions of the world’s self-sufficient small farmers into homeless, landless refugees. And the environmental consequences are disastrous.
Or will it be city dwellers who benefit? They are now faced with millions of the newly landless refugees roaming the globe in search of a place to live and the rare, poorly paid job.
Can the ever-increasing consumption of commodities be ecologically sustained? How many cars can be built and bought? How many roads can cover the land? When will the forests be gone? Is life better because of all this? Are we as individuals, as families, as communities made more secure, less anxious, more in control of our destinies? How could we possibly benefit from a system that destroys local, regional, and national economies and governments while handing real power to faceless corporate bureaucrats in Geneva? The famous German ecologist Wolfgang Sachs says that the only thing worse than the failure of this massive global experiment would be its success, for even at its optimum level the benefits of a global economy can go to only a small minority of people who sit at its hub while the rest of humanity, increasingly landless and homeless, is left fighting for fewer jobs and living in violent societies on a ravaged planet.
Here in the United States we are already beginning to see how the system really works. While corporate profits are at their highest in history, with many top executives making salaries in the millions of dollars and some as much as $80,000,000 to $100,000,000 a year, the real wages of most ordinary workers are falling and good jobs are being replaced by part-time or temporary work in the service sectors. You know the joke about President Clinton saying we have more jobs now in the United States than ever before, and a worker responds, “That’s right; I have three of those jobs.” Meanwhile, social services are in decline in all countries.
The gap between the wealthy and the poor within countries and among countries is rapidly increasing, and globalization accelerates the problem by separating people from their traditional livelihoods and by creating a terrible downward pressure on wages everywhere—including Third World countries, where low wages comprise the only so-called comparative advantage, meaning that if wages are not kept down, there might be no jobs at all. A study by the United Nations released last month directly blames the inequities of the global trading system for this growing gap.
What is increasing, however, is the power of the largest corporations and the wealthiest people. Such is the degree of concentration of wealth that right now the world’s 475 billionaires are collectively worth the combined incomes of the bottom 50 per cent of humanity. And of the largest one hundred economies in the world, fifty are now corporations. Mitsubishi is the twenty-second largest economy in the world, General Motors the twenty-sixth, Ford the thirty-first. All are larger than those of Denmark, Thailand, Turkey, South Africa, Saudi Arabia, Norway, Finland, Malaysia, Chile, and New Zealand, to name only a few.
Meanwhile, here in the United States, where we are supposedly reaping the greatest benefits of the global economic system, the figures are hardly more impressive. A recent report from the Institute for Policy Studies in Washington, D.C., shows that American CEOs are now paid, on average, 419 times more than assembly-line workers. That’s the highest ratio in the world. The Economic Policy Institute’s 1999 report shows median hourly wages down by 10 per cent in the past twenty-five years. The U.S. Federal Reserve reports that the top 20 per cent of the U.S. population owns 84.6 per cent of the country’s wealth. That makes local self-reliance very difficult to achieve.
If anyone still clings to the idea that big corporations are more likely to employ the world labor force, to the idea that size begets jobs, here’s another shocking statistic from the Institute for Policy Studies: the two hundred largest corporations in the world, and they are getting larger and fewer all the time, account for approximately 30 per cent of global economic activity, but they employ less than 1/2 of 1 per cent of the global work force.Economies of scale! By that I mean that as companies get larger, it becomes more efficient for them to replace thousands of workers with robots and other machines. This is so even in Third World low-wage contexts. And as large companies begin to dominate their industries, they drive out smaller competitors who would have duplicated certain tasks, creating duplicate jobs. Such economies of scale are intrinsic to globalization. They include mergers and consolidations, and they inevitably result in fewer jobs, not more. So much for the rising tide that lifts all boats. Actually it lifts only yachts!
Visible everywhere are many signs of the instability and unfairness of the globalization experiment. Sadly, however, they remain poorly reported in the media. And when the media do report a few crises that globalization has created, they fail to connect them or to help us grasp that these crises are all rooted in the same problem: globalization itself.
The media tend to treat the big players—the Iacoccas or Moritas—mainly as glamorous subjects of gossip, like movie stars or athletes. And the business pages speak respectfully in the new language of downsizing and efficiency, without revealing that such terminology is euphemistic. “Efficiency” usually means replacing workers with machines; “competitiveness” means keeping wages down; “flattening corporate structure” means eliminating middle management jobs, spreading anxiety from the cities to the suburbs.
We read about environmental problems such as changes in the global climate, the melting polar ice cap, or habitat destruction. We read about ozone depletion, ocean pollution, or wars over oil—and soon we will read about wars over water supply. But rarely are these grave matters linked to the imperatives of global economic expansion now accelerated by free trade, the overuse of resources, and the consumer lifestyle that’s being promoted worldwide by television and its parent—advertising.
Take the recent financial crisis in Asia. That story was reported in the media as being caused by Asian countries that are incompetent, inefficient, and driven by corruption and cronyism. The gigantic bailout by the International Monetary Fund—that is, by you and me as taxpayers—was made to seem like a beneficent act of charity toward these underprivileged dysfunctional Asian friends. Rarely is it acknowledged that the money did not really go to those countries as much as to the American, European, and Japanese bankers who caused the problem in the first place by stimulating overexpansion and overspecialization in economic areas that were not traditionally export oriented.
These bankers, who had made very bad loans, found themselves in a desperate panic soon after. Their way out was, in effect, to make the taxpayers pay them for their horrible mistakes. Bankers were rescued, not countries. So much for free-market ideology. What we actually have here is free market for taxpayers, workers, and middle-class consumers but protectionism, socialism, and cronyism for banks and corporations. (Can’t we call it cronyism, U.S.-style, when a former banker and the Secretary of the Treasury at the time, Robert Rubin, led the charge to bail out his banker colleagues? I think so.) What we begin to realize is that economic globalization has more similarity to the central planning of communist regimes than it does to any free-market system, except that now the central planning is not by government but by global corporate bureaucracies.
Never have the media explained the role of currency speculators in the Asian crisis. Under the new rules of global free trade and deregulation, there are no controls over the massive movement of funds across borders, into countries, and back out of them. With the technologies of global computer networks, currency speculators are now able to move unimaginably huge amounts of money, instantaneously and invisibly, from one part of the globe to another , destabilizing currencies and countries, forcing nations to seek the radical solutions of an IMF bailout. John Cavanagh calls it a “casino economy” when countries cannot control the rapid entry and exit of billions of speculators’ dollars. If countries do make rules to slow down the process—as has been done in Malaysia, Chile, China, and Russia—they are ridiculed by the economic establishment and by the media as well.
The media do tell us a bit about the immigration crisis as people flee across borders searching for jobs, only to be met sometimes with xenophobia, violence, and demagoguery, whether from a Pat Buchanan in the United States or a Jean-Marie Le Pen in France. But the role of the international trade agreements in making life impossible at home for the immigrants is not discussed. NAFTA, for example, was a terrible blow to the remaining self-sufficient corn-farming economy of Mexico’s Mayan people, making native lands suddenly vulnerable to corporate buyouts and foreign competition. Meanwhile, in India, Africa, and South America megadevelopment schemes continue to displace millions of indigenous people and small farmers to make way for gigantic dams and other development projects. The result is that more people join the landless, jobless urban masses.
We see reports of food shortages, but rarely is the connection drawn between hunger and the central control of much of the world food supply or seed supply by giant corporations like Cargill that effectively determine where food will be grown, by whom, and what price consumers will ultimately pay. Food formerly eaten by the people who grew it is now exported—shipped thousands of miles across oceans at great environmental cost—to be eaten by the already well fed.
We have read about hundreds of thousands of workers in France and Germany going on strike. The media reported on these workers as “protectionist,” selfishly trying to preserve their privileges, benefits, and jobs. What the reports did not point out is that workers are trying to keep from being sacrificed to the efforts of France and Germany (and other countries) to maintain the harsh conditions imposed on workers by the single-currency agreement meant to smooth the way for transnational corporations. Joblessness in France and Germany was already over 12 per cent the last I heard.
Outbreaks of horrible new diseases such as Ebola, mad cow disease, e-coli, and lately the East Nile virus in New York are thoroughly reported in our press, but the connection between those outbreaks and the new mobility that disease vectors are provided by global transport and development is not even mentioned. In the case of e-coli and mad cow disease the news stories leave out the role of the industrialization of agriculture for mass export production to serve global economies.
We also read sad stories about the assaults on the last indigenous tribes in the Amazon, Borneo, or the Philippines. Insufficiently reported are the root causes: the need on the part of the globalization process for more water or forests or genetic resources in areas where the Indians have lived for millennia and the equally desperate need to convert self-sufficient people into consumers. This too is part of the globalization process: the homogenization of conceptual frameworks, the monoculturalization of peoples and lands, the utter uniformity of the development model everywhere on earth.
You may have heard the story last year about 200,000 marchers in England trying to preserve “rural life.” Most of the reports misleadingly portrayed the prime motive of the marchers as preserving fox hunting! I happen to know personally some of the organizers of that event. While it is true that some fox hunters joined the crowd, focusing on them ignored the people who had been working for years to publicize the tremendous negative pressures now being exerted on rural England by the vast new road-building and road-widening schemes and by the expanded transport infrastructure with more high-speed traffic. These in turn are caused by the growing emphasis on export and import as part of the new global system. The anti-road-building movement in England is actually very powerful and dead set against the homogenizing drives of both the single-currency scheme in Europe and the excesses of global trade. They are fighting for preservation of a quality of rural life that is rapidly disappearing in England, France, Germany, and throughout Europe. It’s a disgrace that the media have not reported this properly.
The point is this: all of these subjects are treated by the media as if they were unrelated. This is a disservice to an insecure public trying to figure out what is going on. We are not being helped to understand that all of these issues—overcrowded cities, unusual new weather patterns, the growth of global poverty, the spread of new diseases, the lowering of wages as profits and stock prices are soaring, the elimination of social services, the destruction of the environment—are part of the same global process. They are of one piece, a fabric of connections resulting from the world’s new economic arrangement, all in the cause of an economic ideology that cannot serve social or ecological sustainability, as the evidence is already showing.
Here’s the anomaly. Faced with the growing problems and obvious defects of the experiment, advocates continue to speak of globalization as if it were inevitable—like a force of nature, like evolution or gravity. And they call it utopianism to oppose it. This so-called inevitability factor has, until now, had the desired effect, which is to keep most people from even thinking about it or opposing it and instead simply trying to find some kind of survival niche. But the aura of inevitability needs to be challenged.
The first obvious thing to say is that something becomes inevitable when everyone accepts it as such. This produces passivity. But if we decide, with the remnants of our democratic instincts, that we would rather not proceed in this direction, that it is doing far more harm than good, that we would rather opt for, say, diverse local economies that use local resources for local consumption whenever possible and thus keep capital rooted, then globalization becomes less inevitable than it was the moment before. Options begin to appear. But that crucial mental step is only step one.
Step two is this: Never let anyone get away with saying that globalization is somehow a natural process like gravity. We have already seen that it is definitely not a rational process, since it doesn’t perform as advertised, except for its perpetrators, but neither is it inevitable like evolution. Economic globalization is a system that has been thought up by human beings. It is a designed system, an experiment, a creation of corporate people that benefits them but destroys community and democracy. Above all, it’s a system of rules that puts certain governing mechanisms in place and tries to sustain them. It is not a mysterious spiritual force. It has structures, ruling bodies, political and economic powers. These can all be changed.
In case you feel that everything I’ve said so far is abstract or merely theoretical, let me provide you with an example that is relevant right now. Only last year, in Paris, the twenty-nine wealthiest industrial nations that make up the Organization for Economic Cooperation and Development tried to complete work on what is called the Multilateral Agreement on Investment. I am pleased to tell you that the OECD finally withdrew the MAI last year after some 50,000 protesters appeared on the streets of Paris and hundreds of organizations including my own International Forum on Globalization were able to expose in the media a few of the details of this agreement to a public that knew nothing about it. Like many of these trade agreements, its elements were so unbelievably draconian, as you’ll see, that the slightest amount of public light shed upon it horrified so many people that its proponents in the OECD had to flee out the back door like so many burglars in the night.
David Brower once said that when you’re fighting corporations there are no clear victories—only holding actions. Like Dracula, this thing is rising again from its grave. There is too much money to be made by global corporations to simply let it die. It is reappearing in disguised form, carved up into smaller elements with new names, as part of the proposed new “Millennium Round” of the World Trade Organization. It will be thoroughly discussed at the Seattle ministerial meetings that begin November 30. If these resuscitated elements of the MAI—let’s call it Son of MAI—are put into effect, it will have a devastating impact on the ability of every county in the world to control the type or quality of foreign investment on its soil; it will undermine most remaining environmental and social protections, and it will be the greatest blow to sovereignty and constitutional democracy in history. Arguably the Multilateral Agreement on Investment is more momentous than any of the previous agreements leading up to it, and yet I am sure that not every person in this room, maybe only a few of you, are aware of it. Why is this so? Well, for one thing the media have not written about it. In fact, when the new foreign editor of The New York Times recently spoke at the New School in New York, he was asked his opinion of the MAI by someone in the audience. He had to say, “Sorry, I’ve not heard of it.” That’s the degree of unawareness in the American media. Like most of the global trade agreements, discussions about the MAI are held in secret, and only the ability of a few people to steal an occasional draft document makes it possible for us to know what is in the document.
Let me describe just a few of the MAI’s proposed features. It would place severe restrictions on the abilities of all levels of government—national, state, provincial, regional, city, and local—changing the rules by which these jurisdictions may regulate foreign investment. It would essentially eliminate the regulations of corporations but impose new regulations and controls upon governments! According to Renato Ruggeiro, Director General of the World Trade Organization, the new Multilateral Agreement on Investment is designed to “become the governing constitution for a single global economy.” But we thought we already had a constitution in the United States. We may soon find it has been superseded by the Multilateral Agreement on Investment.
Under the Multilateral Agreement on Investment, governments would no longer be permitted to make choices about who may invest or trade across their borders. For example, no government, whether national or local, could say, “You may invest here but only if you hire local workers or if you make joint ventures with local partners so as to preserve some national or regional character.” This even applies to such crucial industries as education, health care, film, radio, television, the arts, and public broadcasting. Under the MAI no country or community would be able to favor local enterprise for any contract: constructing roads, building stadiums, providing lunches in schools, or running health delivery systems. You may yet have Mitsubishi running your national health care.
No country or city would be allowed to say that permits for fishing or farming or forestry or wood processing must first be issued to national or local residents. Or that zoning laws regarding the kinds of commercial operations that may take place must be observed. European countries have already lost the right to have control over issuing farming and fishing licenses in order to keep them in local hands. The state of Maine now has a rule saying that lobstering licenses can be issued only to Maine residents, and a number of Midwestern states have rules saying that only residents of the state can own farms. These rules would be eliminated by the Son of MAI, permitting foreign corporations to enter.
If a country placed new restrictions on mining or forestry to protect dwindling resources or to preserve the environment, foreign investors could challenge such rules as favoring local companies that previously were not restricted. In other words these investors would regard it as discrimination because local companies had been free to cut down forests before foreign companies even thought of entering that market! On the airplane yesterday I read in The New York Times about a proposal by the city of New York to stop imports of wood from British Columbia to avoid diminishing one of the planet’s last great stands of pristine forests. Such a restriction would be illegal under Son of MAI. In fact, it may already be illegal under current WTO rules that prevent discrimination against nations.
No country could demand that foreign investors use a certain percentage of local goods and services in making their products for the sake of keeping people in that country employed or that some of the profit be reinvested into the community before being removed from the country. The Community Re-investment Act would surely be illegal.
No country could make rules that control the entry and exit of massive amounts of speculator funds or that place “speed bumps” in the way of investment. Speed bumps are rules that require investors to keep their investment for a minimum amount of time rather than buying and trading in days or minutes or seconds through the use of instantaneous computer connections. These speed bumps would go a long way toward slowing down future currency crises and capital flight.
Another important feature of the MAI is that no country could discriminate against foreign investors based on their environmental or human rights or political practices. Corporations could sue to recover so-called lost profits caused by public protest, boycotts, or strikes. Had the MAI been in force during South Africa’s apartheid regime, all government boycotts and sanctions against South Africa would have been illegal. Apartheid might still be the policy, and Nelson Mandela might still be in jail.
Amazingly, under the MAI the rules of expropriation would be expanded to the absurd. Corporations would have the right to sue nation states in order to recover lost profits from investments they could have made had not a new law made it unprofitable to do so. This is called expropriation! For example, if a city or country passed a new public health law to protect people against toxic waste or pollution, new investors could sue in offshorevenues—not in domestic courts—claiming that the new law deprived them of future profits. These offshore-venue decisions would be binding on countries. Taxpayers might have to pay for potential profits on investments that were never even made. Now this rule will be presented in Seattle by the WTO as part of MAI reforms. It would then become a global rule, providing governments with ample incentive to restrict free expression.
Such a suit has already been brought in Canada, where the Ethyl Corporation sued the government under the three-country North American Free Trade Agreement, which already has this rule, for banning MMT, a known carcinogen, as an additive in gasoline that Ethyl was producing. Ethyl said, That ban wasn’t on before; it’s a new restriction on our ability to make profits. Canada investigated the case and found that under NAFTA Ethyl was right, and so Canada withdrew the ban and had to pay Ethyl something like $20 million. Now another corporation, I don’t think it’s Ethyl, has just sued the state of California on the same grounds. California has a new law banning the carcinogen MBTE from gasoline, and the manufacturer is suing California for a staggering amount on grounds of no longer being able to profit from its investment.
It is shocking that some advocates of the MAI have the nerve to argue that its goal is to help the poor in Third World countries, to help ” feed a hungry world.” We just heard this from Michael Moore, the head of the World Trade Organization. This is deeply cynical because exactly the opposite is the case. The MAI sanctifies the ability of rich investors to dominate poor countries. Yet these countries need to have control over investments on their own soil in order to encourage local businesses and workers and to build a self-reliant base for the future. They must be able to regulate entry of investments that could overpower and destroy local businesses. Small countries use tools such as tax breaks for domestic industry, preferences for local banks over foreign banks or local farmers over agribusiness, and requirements that foreign investors must accept local partners. All such controls would end under the MAI, and individual countries would have to bear the brunt of the new freedoms of international capital. So how does the MAI feed a hungry world? Just who does get fed? The only people who will ultimately get fed are hungry investment bankers.
Such rules as I’ve just described in the new MAI—and many of them already exist in NAFTA and GATT and other trade agreements—did not come about because they were a force a nature. They have been created because people in power (corporations, bankers, and the elected government officials whose campaigns they fund) get together in secret—let’s call them conspiratorial—meetings and redesign the workings of economic systems and the exercise of political power according to what will work best for them. They want to replace nation-state power and local power with corporate power, and they do it by making rules that establish policies we barely hear about until it’s too late. Ralph Nader once said, when talking with me about NAFTA and GATT, that if corporations could be sure no one was watching them and they thought it would make them competitive to bring back slavery, they would do so.
In the end it comes down to this: Who should make the rules we live by? Should it be democratic governments, influenced by local communities concerned about what is good for people and the environment? Or should it be the global community of transnational bankers, corporations, and speculators? The new rules of globalization are actively undermining our ability to control our own fate. Once we grasp this fact and demand recovery of our powers, then things can change.
Now I would like to turn to the role of technology in this story and particularly to the role of computers in globalization.
Last May at the International Forum on Globalization’s teach-in in Washington, D.C., we sponsored a debate about the global economy, pitting our side—Maude Barlow, John Cavanagh, and Vandana Shiva—against the side of some of this country’s elite free-trade advocates. Among them was Dr. Joe Cobb of the Heritage Foundation. Our side won the debate, but Cobb made a telling point. He was speaking about globalization being inevitable, and what he said was, “Globalization could have been stopped, but now the new technologies have made it inevitable.” I heard the same thing on the radio from Dr. Claude Smadja, head of the World Economic Forum in Davos, Switzerland, who said, “Globalization is inevitable because of technology.” In other words, even if globalization itself is not inevitable, the evolution of technology, which takes on the force of natural evolution, is inevitable and leads directly to globalization. When technological evolution is given the character of natural evolution, our role can only be to sit back, mesmerized by television and the other toys “they” provide for us, and let it all happen. We have nothing to say or do about it, and there certainly are no public forums or systems to help us start turning things around.
Joe Cobb and Claude Smadja were speaking about the new communications technologies in particular: global satellite link-ups, the internet, the ability to move financial resources globally at the touch of a key, and the globalization of television imagery, which now places 75 per cent of the world population directly under the influence of Western corporate images, from those on CNN news to a series like ‘Dallas’? And by the way, Western corporate interests are communicated by only four or five giant media corporations, headed by people like Rupert Murdoch, Conrad Black, and Ted Turner.
Cobb and Smadja might also have included high-speed travel and shipping, new technical infrastructures of dams and roads, new technical forms of agriculture from the Green Revolution to monoculture, automation and robotics, and biotechnology—all of which have changed the nature of work and production as well as who it is that controls them. They might also have spoken of the private car, which has had the effect of paving over the landscapes of the world, homogenizing lifestyles—whether in Asia or South America or North America—in service to the needs of the car, focusing global corporations on their desperate need for more and more resources to build more cars. Meanwhile, the rest of us are left to deal with the resulting pollution and the waste disposal problems and the violence of the roads. Because of cars, we now also have oil wars and a never-ending search for expanding markets to justify building still more cars. Ergo, the growing corporate interest in China.
The evolution of technology leads to a revolutionary change in social, political, economic, and cultural arrangements that just so happens to benefit corporate interests. Now, that is a political process, political in that the consequences of technology directly affect the global power structure. Why is it that most of us do not grasp this? Why is it that Joe Cobb and Claude Smadja and the biggest corporations in the world have figured out the political ramifications of technology but we have not? Is it because we love our toys too much?
In the time remaining I want to address the question of the computer revolution more closely. Almost everyone agrees that it is a Good Thing. They all like it! The corporations and the activists, the artists and engineers, the conservatives and the liberals—the Al Gores, Newt Gingriches, Bill Bradleys, and George W. Bushes—are all filled with utopian visions of the fabulous benefits of computers. Most of my friends agree. Writers among them wonder how it’s even possible for me to write books without using a computer, although I can think of quite a few throughout history who have, from Shakespeare to Molière to Ivan Illich. Some people, even today, still write in longhand. Let’s remember that 400,000 generations of humans somehow got through the day without computers. It can be done.
“You miss the point,” say my friends, who tell me how empowering computers can be, how they help us organize against these very corporations we are raging against. Computers bring real power back to the individual, they say, and through the cybernet they help us find new alliances with like-minded radicals sitting at their computers, using e-mail to mobilize battles.
Kevin Kelly, the editor of Wired magazine, which is the bible of the computer age, likes to argue that the computer revolution has created an entirely new political structure on the planet. The symbol of today should no longer be the atom, he says; it’s the web or the net. In his view the political center has been eliminated and an entirely new web structure has emerged that “elevates the power of the small player” while promoting heterogeneity and a new kind of pure democracy in which we can be equal players in the global information game. It will also bring a new “incipient techno-spiritualism.”
Kelly is right on the last point, techno-spiritualism, although I prefer the older kind of spiritualism that didn’t require mediation through machines. But as for his point that the old political center has now been eliminated by our personal computers, e-mail, and web sites and that our new web politics has brought us a computer-enhanced democracy through cyberspace, let me ask you this: Shouldn’t we call that “virtual democracy?” I think so, because somebody forgot to tell the transnational corporations in Tokyo, New York, Brussels, and Geneva that the real power was no longer in the center, that it was now out of their control. They think it is still in their control.
Judging by all the evidence, centralized corporate and political power has never accelerated more rapidly than now, and the computer has played a key role in this, as have the trade agreements, which have deregulated all controls on international banking and global investment. As a result, corporations and banks and currency speculators are now free to use the new technologies to move their assets around the world without any outside control. Because of the global computer networks, these institutions are able to move unmeasurable billions of dollars around the globe at the touch of a key. And they are doing so daily—buying and selling resources and currencies in blips of time. That has been the root cause of many of the terrible financial crises we now see in Asia and elsewhere. There are no controls of any kind over this computer-based activity, and it has left the whole world vulnerable to the whims of currency and commodity price traders.
So what kind of revolution do we have here? To use terms like “empowerment” to summarize the benefits of computers to us is to thoroughly misunderstand what power is about in a real political and economic context. Computers may help individuals feel powerful or competent, and I don’t deny that they are useful in many ways. But they do nothing to counterbalance the corporate centralization of power via these very instruments. Quite the opposite. In my view computer technology will turn out to be the single most centralizing technology ever invented. For while we sit at our personal computers editing our copy and sending our e-mails, transnational corporations, bankers, and speculators are using their global networks, spread out everywhere on the planet, using them twenty-four hours a day with far greater resources and with faster and better machines at a scale and speed that makes our level of empowerment pathetic by comparison.
In fact, the giant transnational corporations of today simply could not exist without the global computer networks to keep their thousand-armed enterprises in touch and their myriad parts working together. And whenthey push their computer buttons, they are not just sending out letters or information. Their messages result in hundreds of billions of dollars in resources being transferred instantly from banks in Geneva to Delhi or Sarawak with concrete results: forests are cut down, dams are built, countries are destabilized.
Information is for the disempowered. So truly, what kind of revolution is this? Why do we fail to see who the big winners are? Despite the considerable usefulness of the electronic revolution to us as individuals and activists, it nonetheless has far more to offer the multinational enterprises than it ever will to you and me. So as you use your computers for your good works—and I do not suggest you stop doing so—just keep in mind who else is using them. And let’s stop calling them “empowering.”
There are many more points to be made about the systemic effects of computers, the new technologies they make possible, their use in surveillance and in military technology, which is introducing a whole new generation of horrifying weapons, but you can read about all that in my books.
The final aspect of computers I will mention today is the way they combine with other technologies to create something entirely new—megatechnology: the global web of technologies, the technosphere that is trying to replace the old biosphere. Many individual technologies have specific roles to play in this new global arrangement in which corporations are the philosophers, the brains, and the controllers. Computers are the nervous system, keeping all the global parts in touch and enabling the acceleration of global resource exploitation. Television serves as the delivery system for the global corporate vision, transferring its imagery into the brains of everyone everywhere. It is the means by which the head speaks to the body, as it were, and by which it homogenizes formerly diverse consciousness. Trade agreements, also a manifestation of high technology, are designed to put down resistance and any attempts to usurp control on the part of workers, environmentalists, or grass-roots organizations. Genetics and space technologies expand the world’s markets by opening the formerly uncharted areas of genetic structures and space. This new technosphere is, of course, anathema to democracy, diversity, community control, and ecological survival.
That’s the end of the bad news. I promised you good news too, and I believe it’s considerable. I even go so far as to say that the next three to five years will see a powerful reversal of much of the trend I have outlined today.
There are important developments in the technological arena. The first is the threat of the Y2K virus, the potential chaos that might erupt over the inability of computers to adjust to the change to the year 2000, with “00” being mistaken for “1900.” I believe that whether this results in global catastrophe or only minor inconveniences, a lesson will have been learned: Dependency on global technological systems—and computers are one of these—for our survival and sustenance is precarious, unreliable, and dangerous. We have all become like the astronaut adrift in space, floating in a manufactured universe and dependent upon distant technology systems that must work perfectly at all times or sudden catastrophe looms. I do believe that enough people have received this message to be able to create an entirely new kind of technology virus that will slowly change behavior as it has begun to change consciousness.
Another important development is a new mass movement against biotechnology that will, I believe, rival the anti-nuclear movement of the 1960s and 1970s and may ultimately prove more effective—because once you begin to become educated about biotechnology, you must argue matters even more deeply and philosophically than we did in the anti-nuclear movement.
Biotechnology is about the invasion of the last wilderness on earth, the last territory that has not yet been fully commodified: the genetic structures of life—human, animal, and plant life, including our food. Global corporate patenting of life forms and indigenous seeds are having profoundly disrupting effects on Third World agriculture, ecology, and human rights. Half a million farmers in India have mobilized to fight U.S.-style intellectual property-rights laws. People everywhere are upset about biotech food, and they are beginning to realize that much of what we’re eating has been genetically engineered, that it is not nature’s food but corporate food and may cause grave harm. The chances of apocalypse as a result of biotechnology—especially the kind of genetic roulette we are now playing by intermixing genes and viruses and bacteria in the creation of new life forms that cannot be controlled—are on a scale with the nuclear threat. Europe and Asia are already experiencing mass protests, with 50,000 to 100,000 people taking to the streets on several occasions on both continents and the subsequent banning of a lot of biotech activity. It’s going to happen here too and soon. I have never seen such a rapid and focused burst of energy and activity in any movement in my life.
And then there’s good news on the globalization front too. I don’t know how many of you have been following developments in anticipation of the ministerial meetings of the World Trade Organization in Seattle in late November and early December. The WTO, as I have been describing, is the organization that will house the Multilateral Agreement on Investment under a different name. It is already the primary rule-making body of the globalization process. Its 134 member countries have ceded to it vast authorities, powers, and enforcement ability that once resided within their own bodies politic. In only five years of existence the WTO has come to rival the International Monetary Fund as the most powerful, secretive, and anti-democratic international body on earth. It is rapidly assuming the mantle of a bona fide global government for the “free trade era,” and in Seattle it will actively seek to broaden its power and reach.
But the most amazing thing is happening! People are coming from all over the world to protest this event. This is not an organized movement, yet predictions are that 50,000 people will be in the streets, including farmers from India, immigration-rights activists from Europe, Indians from Chiapas and Chile, labor unionists from everywhere, environmentalists from everywhere, small-business people coming in groups, religious groups, and conservatives too—all angry about globalization. There will be seven days of non-stop educational and protest activity. My own organization will be doing a teach-in for two days. The protest has been widely covered in Europe and Asia, and it’s beginning to be covered even in this country.
What’s so important about this protest is that only five years ago the term “globalization” was unknown, and now there is suddenly a spontaneous outburst of pain and anger against it. Resistance is growing, and the media are beginning to notice. WTO activity will no longer take place in the dark where it thrives. Now, I’m not sure how many of the protesters are arguing for localization as the antidote to globalization and domination by centralized systems, but they all have noticed that this system is about to go over the cliff, in which case the first thing to do is stop the car and seek an alternative direction.
Of course, advocates of globalization and technological society argue that there is no viable alternative, that it’s utopian to speak about turning back to decentralized self-reliant models. But what is truly utopian, corporate utopianism, is to believe that a system which marginalizes so many millions of people and assumes it can grow endlessly on a finite planet, bringing the planet to the brink of environmental catastrophe, can possibly be sustained for long.
Far better to do exactly the opposite of what has brought us to the brink. There is evidence that thousands—maybe millions—are beginning to understand this. And the Schumacher Center is surely foremost among them.
Excerpts from the Question & Answer Period
Q: There’s some good news about computers that you didn’t mention. They require an inordinate amount of energy. In terms of the manufacture, the hardware, and the processing and maintenance of the systems, computers account for 13 percent of electricity use in the United States, and the percentage is growing rapidly. Within a decade or two computer systems worldwide will use as much electricity as the total amount being used in the United States today. This is clearly not feasible. I think that even without a change in public attitude, the result will be that computer use is going to be self-limiting.
A: I think computers have been overrated in terms of their performance, and there are other negative effects of computers I didn’t have time to go into besides the crucial one you mentioned. Surveillance is an area that hasn’t received the attention it deserves, but people are beginning to become aware of it and are reacting against it. Computer systems have increased the level of police surveillance, and there are sophisticated new ways of keeping track of us as consumers. For example, a corporation like TRW knows everything you bought this year and what your income is and what kind of objects you like, and so on—and knows how to process it all.
I learned only a few weeks ago that computer manufacture is one of the biggest users of fresh water in the world and is bringing about the globalization of fresh water. Corporations want to take fresh water from rivers and lakes in Canada and the United States and ship it across the ocean in giant bladders pulled by super tankers—and the new rules of trade are beginning to make this possible. They can sell it because there’s not enough fresh water in the world, but little of what they sell goes to people to drink. The water is being used by industrial agriculture and by high-tech manufacturers to keep computer chips clean.
Then there’s toxic waste. Most of the superfund sites in the United States are the result of computer manufacture. There’s also some evidence that working with computers is dangerous to your health because of radiation.
Computers in schools. What effect do they have on children’s development? What is the effect on people’s mental processes when they are trained to use computers for their primary source of information, and what kind of society is created as a result. An extremely important subject that hasn’t been given much attention. But five or six months ago an organization of physicians (it may have been the American Society of Pediatricians) recommended—on the basis of children’s mental development alone, aside from program content—that children under the age of two not be permitted to watch television because it adversely affects the development of the synapses in the brain. Even though the evidence showed that development of the synapses continues until the age of eleven and is negatively affected by television and movies as well as by computers, these doctors made a compromise and limited their recommendation to television only and to the first two years of life.
Q: In your book In the Absence of the Sacred you told a story about the Union Carbide CEO who found that if he wanted to keep his job, he would not be able to do anything to remedy the Bhopal tragedy in India. The Future Does Not Compute by Stephen Talbott, someone in the computer industry for fifteen years, describes computer technology as “running on automatic.” Talbott warns us of our inability to maintain control of our machines, saying that computers seem to have developed a life of their own and corporations have lost the ability to control where they’re going. I think it was a Shell CEO who compared running a corporation to riding a brontosaurus. This aspect of corporations running on automatic is something I’d like to ask you about.
A: Corporations like to say that the technology drives their decisions, and I won’t say it doesn’t drive a lot of decisions, but what really drives corporate decisions are the structural rules of corporate activity in capitalist societies and increasingly in other ones too, to the degree that they have corporations.
The Union Carbide explosion in Bhopal caused tremendous damage, killing and injuring many people. In the same series of stories in my book I also told about the Exxon Valdez oil spill in Alaska, which caused an enormous amount of pollution and killed many animals. In both cases the heads of those corporations made announcements the day after the accidents occurred; they said they were horrified at what had happened. One of them said he was going to devote the rest of his life to correcting the damage his company had caused and he was taking personal responsibility for it. Within two weeks time he’d been told not to say that again. The board of directors pointed out that taking responsibility for what happened would affect the company’s bank loans and their stock prices and would put them in a bad position in terms of having to compensate for losses, and so on. Both men were obliged to defend their corporation as not being responsible for what happened. It was either do that or resign, which of course would have been the honorable thing to do. What had happened was that the essential rules of corporate behavior came into play.
A publicly held corporation in particular is a creature with a technological form that has to follow certain rules: It has to grow; it has to make profits. If it doesn’t do those two things, then its shareholders can take action, bankers won’t lend to them, and the stock price will go down. This is what can happen to corporations that every once in a while try to do something on purely altruistic grounds. It’s not that a corporation can never do that, but the basic rules it has to follow are to preserve the corporate role in the economy and preserve the corporate place in the competition. Privately held corporations can do things a little bit differently; they’re not so dependent on banks and stock prices. They have more freedom, but if it’s a publicly held corporation, they’re immediately locked into a set of rules that there’s no avoiding. They either follow those rules or get thrown off the machine—or the brontosaurus. They won’t admit it, but I think the fact of the matter is that corporations have a technological form that follows a system of rules and the people in the corporations are not able to reverse that system.
Q: Some people argue that economic globalization and the movement of capital by computers improve access to capital in poor communities throughout the world, and thus banks are doing good things with their money. Would you please speak to this?
A: The role of banks in working with poor communities has not for the most part been a computer-based kind of activity. We have the example of the Grameen Bank in Bangladesh, and there are a number of other banks that lend small amounts of money to help people in terms of sustaining their livelihood or even to help them start small businesses locally. Sometimes these banks will lend as little as $500, not using the normal standards of judgment for the feasibility of a loan. They have had very good results, including an excellent pay-back rate on loans. I don’t see how global financial movement, which is an intrinsic part of the globalization and centralization process and by definition is not in touch with the situation in local communities, can do much in the way of improving things on that level. Probably it’s bound to have the opposite kind of result.
Q: An instance of unfairness in the international system is that while we as consumers pay taxes when we buy gasoline, big corporations don’t pay taxes on fuel. Think of the amount of fuel used by airplanes flying across the country or across the ocean. An even greater source of lost taxes for society is the international money changers, who are not being taxed. I’m wondering if anybody in the anti-globalization community has figured out a way to change that.
A: There is in fact a movement addressing that situation. Have any of you read the work of David Korten? He and others like Herman Daly, Hazel Henderson, Michael Shuman, and I think Amory Lovins have been advocating that there be a tax—sometimes called the Tobin tax, named after the man who suggested it—on every investment transaction that’s made. It would be a very small tax, but in aggregate it would add up to a great deal. Every time a foreign investor put foreign money into Brazil, say, a tiny percent of that would go into a fund for environmental or social purposes. The principle is that the present mode of export-oriented globalized economic activity frees most corporations who are coming in from outside the country from responsibility for the environmental and social costs of their activity. Under the new global rules I’ve been talking about, they don’t have to pay for the repair of the environmental damage they cause, and they are free to leave whenever it’s convenient for them.
A final point I want to mention about taxes is that global computer corporations, led by Bill Gates among others, are fighting for new rules they want to see incorporated into the WTO. They want global rules that will exclude nation-states from regulating e-commerce transactions. One of the rules would prohibit a tax on e-commerce activities: if you bought a book from Amazon.com, there’d be no tax on it. There’s no tax on it now, but they want a global international agreement so that a tax can’t be introduced in the future. This rule will be coming up for negotiation at the Millennium Round in Seattle, and I think it has a strong chance of passing because there’s so much economic power behind that desire. The Clinton administration is very visibly influenced by the high-tech, biotech, computer industries and is eager to do whatever they want. So I think the United States will be strongly in favor of it, and so will most of the Western industrial nations.
What a rule like that does is create a gigantic handicap for community self-reliance because it favors megacorporations selling things through the internet. This directly hurts small local bookstores and local retailers and any local enterprises that do pay taxes, making it more difficult for them to survive when they are already suffering from all this e-commerce activity.
I hope I have succeeded in showing that there’s no dealing with microproblems without dealing with megaproblems. We all have to operate on both levels simultaneously. I agree that we have to work where we are, and that’s possibly the most effective way of becoming active here and now, but the metaphor of David rising up against Goliath that Chellis Glendinning and Bill Schambra referred to is not going to work out as a solution. Not if we say that it’s up to people in dire straits to get themselves organized and lift themselves out of their situation when we know that the megasystems are weighing them down mightily, making it extremely difficult for them to do what they intend to do and denying the kind of supports that others already have access to. So it’s essential to deal with megasystems. How do you dismantle a global economic process that is located someplace else? It’s a huge challenge, but we can find ways to go about it.
Chellis told me about a town in New Mexico that tried to stop a Wal-Mart from coming in. You know that Wal-Mart will very quickly drive out local retailers, will destroy the downtown area, and will change the entire economic structure of community in small towns. There are, however, numerous cases of people successfully keeping them out. When Graham Davidson drove me here from the airport last night, I was hungry and on the lookout for a franchise place to stop for something to eat. There was only one McDonald’s on that entire ride, only that one franchise, but it wasn’t open. And I thought to myself, I’m willing to be hungry in exchange for there not being franchises here.
Mr. Davidson told me that he’s the chairman of the Berkshire Litchfield Environmental Council. At the first sign of a franchise wanting to come in or a development scheme that’s going to destroy the environment or a water diversion being planned or new power lines, they’re ready. They are set up to deal with a local situation. That’s a great model in itself.
Next month I’m going to be in Seattle with 50,000 other people to oppose the World Trade Organization. We’re going to hold public events to educate people about it, and believe me, if the word gets out about the Multilateral Agreement on Investments and what it would do, it will not proceed. In Europe those same conditions were proposed, and when the people heard about it, there was enough opposition to stop it.
Of course, it’s another matter to dismantle an entire economic system when there are tremendous amounts of money at stake and tremendous economic gain to be achieved. We’ve seen that the political process is not very effective in this regard because most of the politicians are themselves part of that system. But it helps to understand the creature. Once you recognize what it is that’s causing people in the inner city to be having such a difficult time and realize it’s part of a larger problem that’s appearing everywhere all the time in a lot of different forms, then you can start to deal with it. It’s much easier and more effective to address the problem on a local level—in an inner city, in the Berkshires—but it’s also important to attempt to address it on a macrolevel in any way you can.
I agree with Bill Schambra that we need to deal with concrete reality. The macrosystem I’ve been talking about today does have concrete manifestations. I referred to the tremendous changes that have taken place in agriculture that are reflected in the inner city, for example the new emphasis on export-oriented economies. All the rules of trade are oriented toward the free-trade ideological model. In South America and Asia and Africa and the United States, people were formerly engaged in community-based farming. They were able to grow their own food, help feed their communities, exchange food, grow staples in order to survive. The new economy emphasizes large-scale entry by transnational corporate agribusiness, which converts what used to be diverse local agriculture for local consumption, for local communities, into mass-scale monocultures creating luxury items to send to countries that are already wealthy.
Meanwhile these global corporations buy enormous amounts of land while the people who used to grow their own food no longer have land. They can’t find jobs because this is a highly mechanized chemical-intensive agriculture with very few people actually on the land any more. No land, no job, no money. That’s concrete reality. They don’t have anything left, so they have to leave. They become refugees, and when they go across borders, then we call them immigrants and try to keep them out. Or else they go into cities and try to survive somehow, competing with others who have been driven off the land. The whole conversion to that new model has increased poverty, has caused food to be unhealthful because of the large amount of pesticides used, and has caused terrible problems in cities because there’s not enough capacity to take care of all those people.
The point is that there’s cause and effect involved. It’s not something displaced small farmers decided to do on their own. Economic forces that were encouraged by the new rules of trade, by global agreements, affected them concretely where they lived and broke down a formerly self-reliant community-based diverse agricultural system. What you get from that is poverty and sometimes violence and disorientation. A lot of us complain about all the Mexicans coming across the border to the United States, yet many of them are coming because American corporations have bought up the land of formerly self-sufficient farmers. Those people have to go someplace. And then we’re angry at them for coming here.
It’s difficult to summarize an event like this except to say that I was struck by the similarity in goals among the three of us. I think there was enough of an overlap of intent that I can understand why we were put on the same panel together, and I think it made for an interesting array of perspectives on a desire to seek decentralist and empowering and community-based solutions.