QuestionsWeb LinksClass OutlineClass notes
Question for Discussion: Do you agree with
Cavanagh that reforming both National and
International Governments could democratize
Globalization?

Readings: Cavanagh, pp. 301-332 and skim pp. 347-365
( Skim this lists of groups working towards
Alternatives to Globalization ); Zuckerman, "For a
Fairer America"; Conway, "U.S. could be going
Bankrupt"

Film: Now: U.S. Bankrupt: The Coming Generational Storm (2004)


Go to Top of Page

Changing the Rules of Globalization

Increasing U.S. National Debt

Growing Inequality of Wealth

Global Corporations and the U.S.

Structural Adjustment Programs


Go to Top of Page

Re-Structuring a Globalized World?


Go to Top of Page


Go to Top of Page

The Decline of the American Dream

What is Structural Adjustment?

World Bank: Global Debt -- 1995-2003 (in-class)

Structural adjustment programs are "austerity measures" imposed by international financial institutions on countries with large international debts. These are mainly third world countries, but also include the countries of the former Soviet bloc. Such things may seem quite unconnected to our lives. But these programs are very much connected to the loss of jobs we have experienced. Structural adjustment programs ensure transnational corporations a huge pool of poor and unemployed workers to exploit when they move their factories to third world countries.


In the 1980s, Country after country found that it simply could not make the payments on these loans anymore. Mexico, with $105 billion of this debt (second only to Brazil), was the first to announce its impending default in 1982. It created a crisis in this country because a lot of large U.S. banks were in danger of collapse if the loan payments stopped.

The World Bank, the International Monetary Fund, and the Reagan Administration came up with a plan. We will give you additional loans, they told the debtor countries, and reschedule your payments over a longer period of time. However, you have to allow us to take control of your economies and "re-structure" them so that in the future you are more "efficient" and better able to pay back your debt. This was the beginning of "structural adjustment".


While each country's package was slightly different, the programs included the same common elements:

 

1. Devalue the currency - This has several effects; most importantly, it lowers real wages. Mexican real wages fell 60% from 1982 to 1986 as the country devalued its currency several times under structural adjustment;

·

2. Raise interest rates - This raises costs to small businesses and small farmers, driving many out of business and increasing the number of unemployed;

·

3. Cut back government spending - This increases the number of unemployed as governments lay-off workers; it also increases the desperation of the unemployed by removing "safety-net" programs;

·

4. Privatize government-owned companies - This generally means selling them at bargain basement prices to transnational corporations or the local elite and results in more lay-offs;

·

5. Open the country up to more imports - This helps transnational corporations drive local companies out of business, again increasing unemployment; and

·

6. Focus the economy on producing for export - This involves giving government assistance to transnational corporations to set up maquilas.

You may notice the similarity to "Reaganomics" and the "leaner and meaner" corporate talk we have heard since the 1980s.


Just at the time when transnational corporations seriously began shifting jobs out of this country, and the Reagan Administration was spending hundreds of millions of tax dollars to encourage them to move, structural adjustment programs were creating the perfect environment for them--lots of desperate, unemployed people willing to take any job at any wage.



Does the U.S. needs a Structural
Adjustment Program?

What is Neo-Liberalism?

The main points of neo-liberalism include:

  1. THE RULE OF THE MARKET. Liberating "free" enterprise or private enterprise from any bonds imposed by the government (the state) no matter how much social damage this causes. Greater openness to international trade and investment, as in NAFTA. Reduce wages by de-unionizing workers and eliminating workers' rights that had been won over many years of struggle. No more price controls. All in all, total freedom of movement for capital, goods and services. To convince us this is good for us, they say "an unregulated market is the best way to increase economic growth, which will ultimately benefit everyone." It's like Reagan's "supply-side" and "trickle-down" economics -- but somehow the wealth didn't trickle down very much.

  2. CUTTING PUBLIC EXPENDITURE FOR SOCIAL SERVICES like education and health care. REDUCING THE SAFET-NET FOR THE POOR, and even maintenance of roads, bridges, water supply -- again in the name of reducing government's role. Of course, they don't oppose government subsidies and tax benefits for business.

  3. DEREGULATION. Reduce government regulation of everything that could diminsh profits, including protecting the environmentand safety on the job.

  4. PRIVATIZATION. Sell state-owned enterprises, goods and services to private investors. This includes banks, key industries, railroads, toll highways, electricity, schools, hospitals and even fresh water. Although usually done in the name of greater efficiency, which is often needed, privatization has mainly had the effect of concentrating wealth even more in a few hands and making the public pay even more for its needs.

  5. ELIMINATING THE CONCEPT OF "THE PUBLIC GOOD" or "COMMUNITY" and replacing it with "individual responsibility." Pressuring the poorest people in a society to find solutions to their lack of health care, education and social security all by themselves -- then blaming them, if they fail, as "lazy."

Around the world, neo-liberalism has been imposed by powerful financial institutions like the International Monetary Fund (IMF), the World Bank and the Inter-American Development Bank. It is raging all over Latin America. The first clear example of neo-liberalism at work came in Chile (with thanks to University of Chicago economist Milton Friedman), after the CIA-supported coup against the popularly elected Allende regime in 1973. Other countries followed, with some of the worst effects in Mexico where wages declined 40 to 50% in the first year of NAFTA while the cost of living rose by 80%. Over 20,000 small and medium businesses have failed and more than 1,000 state-owned enterprises have been privatized in Mexico. As one scholar said, "Neoliberalism means the neo-colonization of Latin America."

A Primer on Neo-Liberalism

Overlapping the above is also what Richard Robbins, in his book, Global Problems and the Culture of Capitalism (Allyn and Bacon, 1999), summarizes (p.100) about some of the guiding principles behind this ideology of neoliberalism:
  • Sustained economic growth is the way to human progress
  • Free markets without government “interference” would be the most efficient and socially optimal allocation of resources
  • Economic globalization would be beneficial to everyone
  • Privatization removes inefficiencies of public sector
  • Governments should mainly function to provide the infrastructure to advance the rule of law with respect to property rights and contracts.

At the international level then we see that this additionally translates to:

  • Freedom of trade in goods and services
  • Freer circulation of capital
  • Freer ability to invest

The underlying assumption then is that the free markets are a good thing. They may well be, but unfortunately, reality seems different from theory. For many economists who believe in it strongly the ideology almost takes on the form of a theology. However, less discussed is the the issue of power and how that can seriously affect, influence and manipulate trade for certain interests. One would then need to ask if free trade is really possible.

Today then, neoliberal policies are seeing positives and negatives. Under free enterprise, there have been many innovative products. Growth and development for some have been immense. Unfortunately, for most people in the world there has been an increase in poverty and the innovation and growth has not been designed to meet immediate needs for many of the world's people. Global inequalities on various indicators are sharp. See
Global Poverty: Facts and Statistics .

A. Mittal, "Structural Adjustment is
Hitting the U.S. Too"

The `Third Worldization' of America

The double squeeze by corporate America and a U.S. government catering to corporate interest has forced Americans to give back quite a bit. For example:

• Despite glowing media reports on the booming economy, as estimated 46 million Americans, nearly 17 percent of the population, live below the official poverty line.

• The top 2.7 million people have as much income as the bottom 100 million. The richest one percent of Americans are projected to have as much income as the bottom 38 percent. Wealth is even more concentrated, with the wealthiest one percent of households owning nearly 40 percent of the nation's wealth. The bottom 80 percent own just 16 percent of the nation's wealth. Further widening this inequality, CEOs of U.S. corporations pocketed 419 times the average wage of a blue collar worker in 1998. (Mittal, 178)

Indeed, structural adjustment Washington-style is giving the U.S. a Third World appearance: rising poverty, widespread homelessness, greater inequality and social polarization. But perhaps it is the state of children that most starkly captures the `Third Worldization' of America. Today, the United States has the highest rate of child poverty among the industrialized countries, with one in every five children growing up in poverty. (Mittal, 180)
Economic Demands made by TNCs (web)

Reagan's Economic Strategy

Bush's 10 Trillion Borrowing Binge

A Comparison of the U.S. to other Rich Nations
Walden Bello, "Adjusting America"

To the free-market ideologues who came to power with the Reagan administration in 1981, the rollback of the South was part of a broader strategy that involved the defeat of communism globally and the dismantling of the New Deal compromise in the United States....
The basis for the New Deal or neo-New Deal 'social contract,' which reigned roughly from the late 1930s to the late 1970s, was the mutual benefit derived by big labor and big capital from Keynesian policies
imposed by big government. (Bello, 86)

Completing the political economy of the New Deal or neo-New Deal state was a regime of moderately high taxes, which was channelled both to massive defense spending in order to contain global communism and to social expenditures such as social security and
welfare in order to buy social peace domestically. Cementing this structure was the ideology of containment liberalism that, as noted earlier, combined anti-communism in foreign policy with liberal
domestic social and economic strategies. (Bello, 88)

Indeed, far from deriding the corporate monopolies, the Reaganites saw the concentration of wealth as a positive thing, for only with the incentive of being able
to accumulate and enjoy more wealth would individuals be made to invest more in productive activity, thus keeping the engine of economic growth chugging along. (Bello, 89)

The 'Third Worldization' of America

The double squeeze by corporate America and Republican Washington, in fact, forced Americans to give back quite a bit. The 1980s ended with the top 20 per cent of the population having the largest share of total income, while the bottom 60 per cent had the lowest share of total income ever recorded. Indeed, within the top 20 per cent, the gains of the Reagan-Bush period were concentrated in the top one percent, whose income grew by 63 per cent between 1980 and 1989, capturing over 53 per cent of the total income growth among all families. Meanwhile, the bottom 60 percent of families actually experienced a decline in income. (Bello, 95)

The trends revealed a middle class that was losing ground. Median family incomes for 1990 and 1991 dropped to their levels of the late 19705 when adjusted for taxes and inflation.36 ( Bello, 95)

Indeed, structural adjustment Republican-style was beginning to give the U.S. a Third World appearance: rising poverty, widespread homelessness, greater inequality, and social polarization. (Bello, 97)

For the most part, US corporations are meeting the competitive challenge of the 1990s by continuing the strategy of the 1980s: throwing off workers at home and hiring cheap labor abroad. (Bello, 103)

The 1980s, then, saw a process of corporate-driven global adjustment, which encompassed the US economy. Ideologically trumpeting the free market but in practice advancing the interest of corporate
monopolies, the Reagan and Bush administrations presided over the dismantling of the New Deal state, the depression of living standards, and the destruction of workers' protections.(Bello, 104)

Structural adjustment, liberalization, privtalization, deregulation--these were the key thrusts of corporate America's effort to create a global playing field whose rules would favor its version of capitalism and hobble
the opposition. (Bello, 104)

Lewis, The Decline of the American Dream int the 1980s and 1990s

In addition to the above statistics, look at the economic and social statistics in the "100 Harshest Facts about Your Future" handout. Clearly, the middle-class, children, young families, and the poor have seen their standard of living go down since the 1970s. The only two groups who have seen their standard of living increase since the 1970s is the wealthy and the elderly. The larger question then is this: What is the relationship between government policies and the declining American standard of living?

In his essay, "Reagan's America: A Capital Offense," Kevin Phillips argues the President Reagan's policies in the 1980s helped the wealthy and large corporations at the expense of the majority of Americans. Phillips is right when he argues that "Reaganomics" caused declining standards of living for most Americans. However, Phillips is wrong to argue that this was mainly a Republican economic program designed to benefit the wealthy and large corporations. First of all, both the Republicans and Democrats supported Reagan's economic programs in the 1980s. In fact, even under a Democratic President, President Clinton, these conservative economic policies are still being carried out. I believe Phillips is wrong when he argues that these conservative economic programs to help the wealthy in the 1980s are just like those in the 1880s and 1920s. Unlike these earlier boom eras, when the Republicans help the rich get richer at the expense of the rest of America, in the 1980s and 1990s the United States increasingly found itself participating in a global economy. I will argue many of President Reagan's, Bush's, and Clinton's economic policies are all designed to try to make America more competitive in this global economy. Tragically, however, both Republicans and Democrats alike since the 1980s have been supporting efforts to make America more competitive in this global economy by working to lower Americans' standard of living and quality of life. Needless to say, if the majority of Americans understood what their political leaders were doing they would feel betrayed and angry. So, of course, neither the Republican or Democratic parties dare level with the American people about their efforts to lower our standard of living and quality of life.

How did the growth of the global economy in the 1970s and 1980s force American political leaders to conclude that the only way for the American economy to be competitive was to lower our standard of living? Beginning in the 1960s and 1970s, American companies began to move some of their operations overseas both in order to be closer to global markets they were serving and to take advantage of lower wages in other countries. In addition, beginning in the 1970s European and Japanese companies began to challenge American companies for dominance both in the United States and throughout the world. Throughout the 1970s, the industrial economies were burdened with a massive increase in the price of oil. Faced with declining profits because of increasing energy costs at all levels of production and sales, American, European, and Japanese companies began to look for ways to cut their costs and restore their huge profit margins. In the 1960s and 1970s, throughout the industrial world, but especially in the United States and Europe, national and state government created all sorts of strict laws protecting the environment, worker's safety, and the consumer. Faced with the increasing costs of meeting these environmental and safety regulations, the dominant industrial companies began to look for ways to cut their costs and shore-up their sagging profits. Finally, faced with increasing inflation in the 1970s, industrial workers in the United States, Europe, and Japan demanded higher wages just to keep up with inflation. Burdened with workers' increasing demands for higher wages, these industrial companies were again faced with increasing costs and lower profits. As a result of these economic changes in the 1970s, many of the dominant industrial companies that did business in the United States, Europe, and Japan were faced with a growing crisis; their costs were increasing and their profits were flat and even declining. What could these companies do to shore up their profits and reduce their costs?

In the 1970s and 1980s, many of the industrial giants in the United States, Europe, and Japan became global companies; they no longer wanted to claim allegiance to any country in the world. By becoming global companies they could force nations to compete with each other to attract their companies to build factories in their countries. By the 1980s, these global companies, now often called Transnational corporations (TNCs) were aggressively using this strategy of globalization to blackmail countries into reducing their costs and increasing their profits. I believe that President Reagan's economic program, which Phillips and others have called Reaganomics, reflect the increasing reality of the global industrial economy and the power of TNCs to blackmail even the biggest and strongest countries and force them to create economic, political, and social conditions that will reduce their companies' costs and increase their profits. Let's now look at some of the major demands these TNCs imposed on industrial countries in the 1980s and 1990s:
Demands Made by Transnational Corporations to do Business in a Country under the Global Economy

1. Greatly reduce Corporate taxes and taxes on the rich.

2. Greatly reduce government spending in order to cut taxes.

3. Increase taxes on the middle-class and poor to pay for the necessary government services, such as support for TNCs.

4. Reduce environmental, work-safety, and product-safety regulations.

5. Provide millions and millions of dollars in tax incentives and subsidies to TNCs in order to convince them to locate in your country.

6. Build and support modern industrial factories for TNCs to use rent-free.

7. Create tax-free export processing zones so that TNCs can produce products without paying any taxes at all.

8. Reduce and lower worker's wages by keeping the minimum wage low or eliminating the minimum wage altogether.

9. Reduce the costs of hiring workers by reducing or eliminating workers' compensation taxes, social security taxes,and health insurance taxes.

10. Allow child-labor at almost any age and under any conditions.

11. Do not enforce maximum work-day hours, such as the eight hour day or the 40 hour week.

12. Use government power to crush and weaken labor unions. Allow companies to hire security firms to harass and intimidate workers and unions.

13. Allow TNCs to freely take their money and profits out of your country.

14. Reduce government support for health-care, education, and anti-poverty and anti-hunger programs, forcing workers to work for any wage just to take care of and feed their families.

15. Support global free trade and work to prevent countries from denying companies the right to sell their products despite the brutal conditions, environmental destruction, and exploitation of their workers.

16. Don't restrict or limit immigration and encourage high levels of unemployment in order to force workers to compete by working for lower and lower wages.

17. Limit and restrict local and national government control over their economies. Encourage global bodies to set economic standards that will benefit TNCs.

18. Limit the ability of workers and citizens to challenge the TNCs and their own government's economic programs which help the TNCs at their expense.

19. Create massive national debts in order to bankrupt governments and force them to be even more at the mercy of the TNCs. Governments can thus say they have no choice but to accept these conditions.

20. Force your citizens to accept lower standards of living and quality of life in order to guarantee higher profits for TNCs.

Reagan's Economic Strategy to make
America Competitive

If we look at Presiden Reagan's economic policies in terms of the above efforts by the TNCs to blackmail countries in order to reduce their costs and increase their profits, Reaganomics makes a whole lot of sense. Let's look for a moment at some of Reagan's major economic policies:

1. To cut taxes on the wealthy and large corporations

2. To reduce government regulations on the environment, worker-safety, and product-safety

3. To provide billions of dollars in tax incentives and subsidies to TNCs

4. To crush labor unions and keep the minimum wage low

5. To support massive increases in immigration to the United States

6. To support American companies in moving their factories to Mexico and China

7. To bankrupt the government by creating a massive national debt

8. To reduce government support for healthcare, children, the poor, and the disabled

9. To work closely with TNCs to create "global free trade" and weaken national governments' ability to manage their economies

10. To reduce the standard of living and quality of life of most Americans

But the larger conclusion isn't that it was President Reagan or President Bush or the Republicans that are responsible for these disastrous policies. Clearly, both the Democrats and the Republicans have supported these policies that have caused the standard of living and the quality of life for most Americans to decline. We can't blame Reagan or the Republicans or even Clinton and the Democrats for what both American political parties are responsible for. As a result of these policies, as Phillips argues, the wealthy and large corporations got richer. With this increasing wealth and success, large corporations, the wealthy, and TNCs are in an even stronger position to blackmail countries into supporting their continued success and profits at the expense of their peoples' standard of living, the health and safety of their environments, and their quality of life.

Many students after listening to this depressing argument about the impact of the global economy on their lives demanded an answer: What can we or should we do about the growing power of TNCs and the wealthy to blackmail countries into reducing their standards of living and quality of life? The answer to this question will determine the future of "globalization" in both the First and Third Worlds.

Cavanaugh, New International Structures

"THOSE OF US who have contributed to this volume have all faced variations on a nagging question from journalists, pundits, and government officials as we debate economic globalization around the world. "Isn ' t economic globalization, along with the key global institutions that underlie it, inevitable?" That this question persists for institutions that have existed from merely a decade (the World Trade Organization) to a half-century (the World Bank and the IMF) is a tribute to the power of the forces that have backed and benefited from economic globalization during this period." (301)

"Unpayable debts accumulated under the World Bank programs until the IMF stepped in to protect the interests of creditors. Domestic economies were reoriented to produce for export to earn the foreign exchange to repay the debts. Whether from ignorance or malice, the World Bank and the IMF favored policies that stripped governments of their ability to manage the movement of goods and money across their borders. When import controls were relaxed, many countries experienced a dramatic increase in imports but no increase in their ability to pay for them." (302)

"Because many countries lacked the capacity to produce manufactured or service exports, they came under strong pressure from the World Bank and the IMF to devote still more of their national resources to producing shrimp, cotton, timber, coffee, and other primary commodities for export. The World Bank and the regional development banks commonly financed such expansion with loans to pay for the infrastructure that subsidized the projects of foreign corporate investors....
Foreign debt continued to grow as a result of new borrowing, but falling export earnings reduced capacity to repay. Falling commodity prices also resulted in downward pressure on wages in the commodity-producing sectors."
(303)

"The World Bank and IMF are leading advocates of markets unfettered by the distortions of subsidies and government intervention-except when the distortions favor corporate interests. The artificial depression of commodity prices is a market distortion that in turn artificially depresses wages in both the South and the North, creates the illusion that environmental resources are abundant at a time of growing scarcity and encourages their wasteful consumption, undermines the South's terms of trade with the North, and favors returns to investors at the expense of labor and the public treasury. That corporate profits are enhanced at the expense of equity and environmental security is not a random inevitability; like all of today's globalization rules, it is based on a set of subjective policy choices." (303)

"Global corporations are driven by stock markets to maximize short-term financial profits without regard for the health of individuals, the social fabric, or the environment, even though these are all essential to the well-being of people and communities. Global corporations maximize profit by employing the smallest possible number of people at the lowest possible wage; in contrast, the healthy community seeks living-wage jobs for all who need employment. A global corporation can obtain a quick return by clear-cutting a forest and then moving on to another; in contrast, communities prosper by sustaining productive yield of their natural resource base." (304)

"Yet public interests are real, and it is an essential responsibility of governments to protect them. Just as corporations demand the right to manage trade among themselves in the defense of private interests, communities and nations must manage trade and investment relationships among themselves in defense of the public interest." (305)

"A responsible national trade policy depends on calibrating national trade rules to achieve a balance between imports and exports. Many Southern countries are unable to increase imports because of production constraints on their ability to increase export earnings. Moreover, the main exports of many developing countries are primarily commodities, the prices of which have declined significantly over time. Also, the products exported by Southern countries face trade barriers imposed by Northern countries." (307)

"The democratic right of all people to establish their own economic priorities and policies must be protected as long as their actions do not infringe on the rights and freedoms of those in other localities and nations. This means that people, communities, and nations should own the productive assets on which their livelihoods depend, be free from illegitimate foreign debts, and have the right and ability to manage the flow of goods and money across their borders that is essential to setting their own economic priorities and to maintaining high social and environmental standards consistent with community well-being. In a just and sustainable system, stronger and more affluent countries would not be able to demand access to the markets or resources of weaker and less affluent countries against their will and interests. Nor would any corporation have such rights."
(309)

"Every country, both Northern and Southern, has a responsibility to its international neighbors to maintain a balance between imports and exports..... When a country's trade is balanced it has no reason to accumulate foreign debts, eliminating a major potential source of economic instability, domination, and exploitation." (310)

"As we elaborated earlier, there is a need for international commodity agreements and mechanisms among countries to maintain fair and stable commodity prices that reflect the full costs of production, including a living wage and all environmental costs. There should be institutional mechanisms at the international level through which nations can coordinate their policies to achieve fairness and stability in international market prices. The appropriate international concern here is to insulate international markets from the consequences of domestic subsidies or price supports that may artificially depress international market prices at the expense of efficient producers in other countries." (310)

"OPEN ACCESS TO INFORMATION AND KNOWLEDGE

Intellectual property rights should be limited to measures necessary to stimulate innovation and creativity. Restrictions undermine the public interest when used to enforce corporate monopolies over information and technology Information and technical knowledge are among the few resources that can be infinitely reproduced and freely shared without negative environmental impacts or depriving anyone of their use. Open access to information and beneficial technology is a key to a just and sustainable human future." (311)

"Give poor countries a fair say in the policies and processes of international institutions Iike the WTO and IMF by increasing the transparency of decision processes and increasing their voting shares." (312)

"The Bretton Woods institutions have their own governing boards and budgets and acknowledge no accountability or sub-ordination to the United Nations or its governing bodies.) The U.N. system has by far the broader mandate, and despite its considerable flaws, is more open and democratic. In practice, it has given much greater weight to human, social, and environmental priorities than have the more secretive Bretton Woods institutions." (314)

"Dividing governance of the global affairs of one world between two competing governmental systems is not wise policy. The complexity of labor, health, food, human rights, environmental, trade, and investment issues is now much greater than in 1945, and the need for coherent global-level policies is far more urgent.

A choice must now be made either to expand the power and mandate of the Bretton Woods system to provide the leadership at the global level or to reaffirm the mandate of the United Nations and build its capacity to fulfill its intended function." (315)

"Clearly, there is a need for international rules. To serve the whole of humanity, however, they must be based on the consent of the governed, and enforcement must be left primarily to democratically elected local and national governments. The decision processes of the United Nations largely align with these principles. Limiting the powers and mandates of the IMF, the World Bank, and the WTO will create a greater space for a reformed United Nations to fulfill its intended functions and for people to act through their national and local governments to establish a policy framework con­ sistent with the healthy, authentic development of people and communities." (316)

"We believe that the time has come to reshape the system of global economic governance under the auspices of the United Nations, providing it with the human and financial resources to fulfill its original mandate and introducing reforms intended to strengthen its function as a democratic governing body." (317)

"DECOMMISSION THE BRETTON WOODS INSTITUTIONS

The larger goal is to replace a governing system that serves the needs of global financiers and transnational corporations with one that serves the needs of people and communities. The Bretton Woods institutions, the cornerstones of the former system, thus need to be dismantled." (317)

"It is a tragic truth that much of the work ahead centers on repairing the enormous damage caused by the Bretton Woods institutions. Debts must be canceled, commodity prices stabilized, control established over the goods and money flowing across borders, anti-trust measures implemented to break up concentrations of corporate power, corporations with repeat criminal convictions dechartered, national economies rebuilt and redirected with proper regulatory regimes to meet local needs, the environment healed, the power of corporations curbed, financial speculation brought under control, wealth redistributed to create a semblance of equity, and the democratic accountability of governments established." (318)

"As the Bretton Woods institutions are dismantled, the countervailing institutional power required to reform the global trade and financial systems and end global corporate rule can come from strengthened states and a reformed United Nations. We hasten to note that though we believe the United Nations should be strengthened in its mandate and resources, we continue to believe that international institutions should have responsibility and authority for only those functions that cannot be reasonably carried out at national and local levels." (321)

"An agreement on economic self-determination. Such an agreement would accord Southern countries " special and differential treatment " in global trade, investment, and finance. It would acknowledge the perils posed for Southern countries from indiscriminate liberalization and guarantee their right to give priority to their domestic development needs in their economic relationships with the North, including their right to establish controls over financial flows across their borders, set the terms of foreign investment, give preference to domestic finance and ownership, place limits on resource extraction, and favor local value-added processing of export commodities. It would also establish a framework for creating an international system of commodity price supports." (323)

"The proposed International Finance Organization (IFO) would work with U.N. member countries to achieve and maintain balance and stability in international financial relationships, free national and global finance from the distortions of international debt and debt-based money, promote productive domestic investment and domestic ownership of productive resources, and take necessary actions at the international level to support nations and localities in creating equitable, productive, sustainable livelihoods for all. The IFO would replace the IMF but with full accountability to the United Nations." (326)

"Steps toward the localization of production and consumption recommended in this volume would lead to a reduction in the movement of goods between countries. Even so, the world will continue to need a system of rules to maintain the stability and fairness of the international trading system, because so long as there is trade among nations there will be disputes and the potential for abuse and coercion of the weak by the strong. The world has no need, however, for a World Trade Organization that regulates democratic governments to prevent them from setting and enforcing rules and standards to protect the public interest." (328)

"Second only to financial speculation, the greatest economic threat to the well-being of people and planet is the growth and abuse of unchecked corporate power. There are virtually no mechanisms in place at the international level for dealing with this threat, and the Bretton Woods institutions regularly seek to block corrective actions at national levels. Giant corporations move freely around the world, buying off politicians and playing states, communities, and people against one another in competition for the jobs, finance, and access to technology that corporations control." (330)

"The primary function of the proposed U.N. Organization for Corporate Accountability would be to support national initiatives on corporate accountability through the provision of information and advisory services, facilitating negotiation of relevant bilateral and multilateral agreements and coordinated bilateral and multilateral implementing actions. Although enforcement authority would lie entirely at the national and local levels, the OCA would provide both governments and the general public with comprehensive and authoritative information on corporate practices." (331)

"Coordinate the negotiation of a recommended uniform code of standards for corporations operating in more than one country. This code would serve as a recommended model for use by governments in framing national and local laws regulating the activities of global corporations operating within their jurisdiction. Such standards should ensure a consistent bias in favor of smaller, locally owned enterprises. For example, corporations with operations in more than one country should be expected to adhere to the highest of international, local, or home country standards on human rights, labor, environment, health, and safety wherever they operate; decline any special concessions, subsidies, or tax breaks not generally available on equal or more attractive terms to local businesses; obey all national and international laws; provide no payments or gifts to public officials or politicians and refrain from any attempt to influence elections and public policies; deal in good faith with unions; provide at least a living wage to all employees; provide full and accurate labeling of products; and publicly disclose all toxic releases." (332)

"Convene an international panel to recommend national legislation to limit the political influence of global corporations on government policymaking, including limits or prohibitions on corporate financial contributions to political parties and candidates, and corporate spending on advertising and public relations campaigns related to legislation and public issues." (332)

 

 


| Home Page  | Readings | Web Resources | Ecology links  |Top of Page |

Number of Visitors to this site:  8011       by Chris H. Lewis, Ph.D.

© 1997 by Chris H.  Lewis, Ph.D.
Sewall Academic Program; University of Colorado at Boulder
Created 20 Jan. 1997:  Last Modified: 13 November, 2008
E-mail: cclewis@spot.colorado.edu
URL:    http://www.colorado.edu/AmStudies/ecology/struct.htm

America, the Environment, and the Global Economy