Question for Discussion: According to Korten, how
does globalization weaken democracy and undermine
the public interest?

Readings: Korten, "Buying Out Democracy" and
"Eliminating the Public Interest" ; Weisberg,
"Name that Economy"

Video: Now: The 2004 Elections

Global Governance and the Democracy of Wealth

• BBC: The End of the American Dream? (in-class)
  
  
• U.S. Inquality Gap Widest since 1929 (in-class)
  
  
• The Global Rules Makers (in-class)
  
  
• The Democracy of Wealth (in-class)
  
  
• The Democracy of Wealth: Rigging the Game
  (in-class)
  
  
• Korten's View of Globalization and
  the Democracy of Wealth (in-class)
  
  
• The Bretton Woods Institutions as Global Governance (in-class)
  
  
• Squeezing Third World Countries through
  Structrual Adjustment (in-class)
  

• The Race to the Bottom (in-class)
  
  
• Basic Conditions sought by the Electronic Herd
  
  
• Demands Made by TNCs to do Business in
  a Country in the Globalized Economy
  
  
• The Global Cost of Crony Capitalism (in-class)
  
  
• Shaken Markets: The Tech Bubble Burst (in-class)
  
  
• Most Companies Paid No Taxes during the Boom
  
  
• Korten, Buying Out Democracy
  
  
• Korten, Eliminating the Public Interest

• The Bretton Woods Institutions as Global Government
  
  
• The World Trade Organization
  
  
• The International Monetary Fund
  
  
• The World Bank
  
  
• The G-20
  
  
• What is the G-20
  
  
• G8-Information Center
  
  
• Organization of Economic Cooperation and Development (OECD)
  
  
• World Economic Forum - Home
  
  

The Rule-Makers & Global Governance

• The Three Sisters and Other Global Institutions
  
  
• Global Governance and the Three Sisters
  
  
• Global Policy Forum: The World Bank
  
  
• Global Policy Forum: The International
  Monetary Fund
  
  
• Global Policy Forum: The World Trade Organization
  
  
• Global Policy Forum: The Group of 8 (G-8)
  
  
• Internal Critics of the World Bank and the IMF
  
  
• Top Ten Reasons to Oppose the WTO
  
  
• Global Policy Forum: What are We For?
  
  
• Global Policy Forum: International Trade Agreements
  
  
• General Articles on Globalization of the Economy

Global Government Policy Organizations

• Business Rountable
  
  
• The European Roundtable of Industrialists
  
  
• World Economic Forum
  
  
• The International Chamber of Commerce
  
  
• The Bilderberg Group
  
  
• The U.S. Chamber of Commerce
  
  
• The Trilaterial Commission
  
  
• The American Enterprise Institute
  
  
• The Heritage Foundation
  
  
• The Pacific Legal Foundation
  
  
• The Hoover Institute
  
  
• The Competitive Enterprise Institute
  
  
• The Manhattan Institute
  
  
• The CATO Institute
  
  
• The Brookings Institute

What is the role of Global Corporations in Globalization?

• Who Runs the World ? – Network Analysis Reveals ‘Super Entity’ of Global Corporate Control
  (See the Image of the Network):
  
  

  Their results have revealed a core of 737 firms with control of 80% of this network, and a “super entity” comprised of 147 corporations that have a controlling interest in 40% of the network’s TNCs.
  
  
• Map of Global Food System Network (See Larger Image)

• Top 50 Control-Holders Ranking:

  {source: the following is quoted directly from the research paper]

  This is the first time a ranking of economic actors by global control is presented. Notice that many actors belong to the financial sector (NACE codes starting with 65,66,67) and many of the names are well-known global players.

  The interest of this ranking is not that it exposes unsuspected powerful players. Instead, it shows that many of the top actors belong to the core. This means that they do not carry out their business in isolation but, on the contrary, they are tied together in an extremely entangled web of control. This finding is extremely important since there was no prior economic theory or empirical evidence regarding whether and how top players are connected.

  Shareholders are ranked by network control (according to the threshold model, TM). Columns indicate country, NACE industrial sector code, actor’s position in the bow-tie sections, cumulative network control. Notice that NACE codes starting with 65,66, or 67 belong to the financial sector.

  Rank , Economic actor name, Country, NACE code, Network Cumul. Network position, control (TM, %)

  1 BARCLAYS PLC  GB 6512  SCC 4.05

  2 CAPITAL GROUP COMPANIES INC, THE  US  6713  IN  6.66

  3 FMR CORP  US  6713  IN  8.94

  4 AXA  FR  6712  SCC  11.21

  5 STATE STREET CORPORATION US 6713 SCC 13.02

  6 JP MORGAN CHASE & CO. US 6512 SCC 14.55

  7 LEGAL & GENERAL GROUP PLC GB 6603  SCC 16.02

  8 VANGUARD GROUP, INC., THE  US 7415 IN 17.25

  9 UBS AG  CH 6512  SCC 18.46

  10 MERRILL LYNCH & CO., INC. US 6712  SCC 19.45

  11 WELLINGTON MANAGEMENT CO. L.L.P. US 6713  IN 20.33

  12 DEUTSCHE BANK AG DE 6512  SCC 21.17

  13 FRANKLIN RESOURCES, INC. US 6512  SCC 21.99

  14 CREDIT SUISSE GROUP  CH 6512 SCC 22.81

  15 WALTON ENTERPRISES LLC US 2923 T&T 23.56

  16 BANK OF NEWYORKMELLON CORP. US 6512 IN 24.28

  17 NATIXIS   FR 6512 SCC 24.98

  18  GOLDMAN SACHS GROUP, INC., THE US 6712 SCC 25.64

  19 T. ROWEPRICE GROUP, INC. US 6713 SCC 26.29

  20 LEGG MASON, INC. US 6712 SCC 26.92

  21 MORGAN STANLEY US 6712 SCC 27.56

  22 MITSUBISHI UFJ FINANCIAL GROUP, INC. JP 6512 SCC 28.16

  23 NORTHERN TRUST CORPORATION US 6512 SCC 28.72

  24 SOCIÉTÉ GÉNÉRALE FR 6512 SCC 29.26

  25 BANK OF AMERICA CORPORATION US 6512 SCC 29.79

  26 LLOYDS TSB GROUPPLCGB 6512 SCC 30.30

  27 INVESCOPLCGB 6523 SCC 30.82

  28 ALLIANZSE DE 7415 SCC 31.32

  29 TIAA US 6601 IN 32.24

  30 OLD MUTUAL PUBLIC LIMITED COMPANY GB 6601 SCC 32.69

  31 AVIVAPLC GB 6601 SCC 33.14

  32 SCHRODERSPLC GB 6712 SCC 33.57

  33 DODGE & COX US 7415 IN 34.00

  34 LEHMAN BROTHERS HOLDINGS, INC. US 6712 SCC 34.43

  35 SUN LIFE FINANCIAL, INC. CA 6601 SCC 34.82

  36 STANDARDLIFEPLCGB 6601 SCC 35.2

  37 CNCE FR 6512 SCC 35.57

  38 NOMURA HOLDINGS, INC. JP 6512 SCC 35.92

  39 THE DEPOSITORY TRUST COMPANY US 6512 IN 36.28

  40 MASSACHUSETTS MUTUAL LIFE INSUR. US 6601 IN 36.63

  41 INGGROEP N.V.  NL 6603  SCC 36.96

  42 BRANDES INVESTMENT PARTNERS, L.P. US 6713 IN 37.29

  43 UNICREDITO ITALIANO SPA IT 6512 SCC 37.61

  44 DEPOSIT INSURANCE CORPORATION OF JP JP 6511 IN 37.93

  45 VERENIGING AEGON  NL 6512 IN 38.25

  46 BNPPARIBAS  FR 6512 SCC 38.56

  47 AFFILIATED MANAGERS GROUP, INC. US 6713  SCC 38.88

  48 RESONA HOLDINGS, INC.  JP 6512  SCC 39.18

  49 CAPITAL GROUP INTERNATIONAL, INC.  US 7414 IN 39.48

  50 CHINA PETROCHEMICAL GROUP CO.  CN 6511 T&T 39.78

  Source: Planetsave (http://s.tt/138oe)
  
  

• Bloomberg's Billionaire Index
  
  
• New Billionaire Index Reflects Competing Social Forces:
  
  The data tell us that this group -- which, according to Bloomberg's definition, covers twenty individuals with $677 billion in wealth -- is not just an American affair. Just over half come from other countries, including Brazil, China, France, India, Mexico, Spain, and Sweden.
  
  Thanks to the efforts of many, a growing number of politically and financially influential people are recognizing that, in today's highly interconnected world that is trying to overcome anemic growth and an unemployment crisis, the well-being of the rich cannot (and should not) be viewed in isolation. To use one of my favorite real estate analogies, it is hard to be a great house in a weakening neighborhood -- which leads to the upside of the new data releases.
  
  
• Forbes: The World's Billionaires
  
  
• Forbes: The World's biggest Companies
  
  
• Money's Ranking of the World's Largest Corporations (2011)
  
  
• Richest 1 Percent take 93 percent of Recovery Gains (2012):
  
  In 2010 -- the first full year since the end of the Great Recession -- virtually all of the income growth in America took place among the country's very wealthiest people, says an economist at the University of California, Berkeley. The top 1 percent of earners took in a full 93 percent of all the income gains that year, leaving the other 7 percent of gains to be sprinkled among the vast majority of society.
  
  Income for most workers has barely risen in the last 30 years, but the top 1 percent of earners have seen their income almost triple in the same amount of time. Economists and other experts say that could be the result of any number of factors, including the decline of labor unions, the explosion in capital gains during the middle part of the aughts, and tax policies put in place in recent years that favor the wealthy.
  
  
• Real Wages Fell In 2011 Amid Record Corporate Profits:
  

  A new report out Tuesday shows that working Americans made less money last year, as real wages fell about two percent in 2011, when accounting for inflation, according to the Bureau of Labor Statistics.
  
  The problem is largely tied to unemployment. Even as the jobless rate falls from recession highs -- dropping to 8.5 percent in December -- the large number of unemployed people willing to work for less has pushed down wages, said Gary Burtless, a labor economist at the Brookings Institution.

  "There's never been a postwar era in which unemployment has been this high for this long," Burtless said. "Workers are in a very weak bargaining position."
  
  

• U.S. Corporate Tax Rate Hit Ten-Year Low At End of 2011: Report:
  
  
• Corporate Taxes As Percentage Of Profits Now Lowest In Decades:
  
  As a percentage of ever-growing profits, corporations are paying less in taxes than they have in decades.Thanks in part to federal tax breaks, corporations paid out just 12.1 percent of their 2011 profits in taxes, according to the Congressional Budget Office. That's well below the country's top marginal corporate tax rate of 35 percent -- and as The Wall Street Journal notes, it's the lowest percentage corporations have paid since 1972. During the two previous decades, a period that included the economic prosperity of the 1990s and the housing boom of the George W. Bush administration, corporations were paying an average percentage almost twice as high.
  
  
• What to do When Corporations Rule the World -- Sarah van Gelder (2001)
  
  
• Should Corporations Rule The World? —Noreena Hertz (2010)
  
  
• Bankers Rule the World: "The Network of Global Corporate Control":
  
  

  "We find that transnational corporations from a giant bow-tie structure and that a large portion of control flows to a small tightly-knit core of financial institutions. This core can be seen as an economic 'super-entity' that raises new important issues both for researches and policy makers."

  The study says 147 powerful companies control an inordinate amount of economic activity - about 40%. Among the top 50, 45 are financial firms. They include Barclays PLC (called most influential), JPMorgan Chase, UBS, and other familiar and less known names.

  Twenty-four companies are US-based, followed by eight in Britain, five in France, four in Japan, and Germany, Switzerland, and the Netherlands with two each. Canada has one.

  Moreover, "top ranked" companies "hold a control ten times bigger than what could be expected based on their wealth."

  As a result, they have enormous influence over political, financial, and economic activity
  
  

• Study: The Network of Global Corporate Control (2011)
  
  
• Of the the 200 largest economies in the World, half are corporations
  
  Of the top 50 economies: 37 are countries, 13 are companies
  Of the top 100 economies: 53 are countries, 47 are companies
  Of the top 200 economies: 62 are countries, 138 are companies
  
  The top 50 in case anyone cares (amounts are in millions)
  United States: Country $13,201,820
  Japan: Country $4,340,133
  Germany: Country $2,906,681
  China: Country $2,668,071
  United Kingdom: Country $2,345,015
  France: Country $2,230,721
  Italy: Country $1,844,749
  Canada: Country $1,251,463
  Spain: Country $1,223,988
  Brazil: Country $1,067,962
  Russia: Country $986,940
  India: Country $906,268
  Korea, South: Country $888,024
  Mexico: Country $839,182
  Australia: Country $768,178
  Netherlands: Country $657,590
  Taiwan: Country $528,600
  Royal Dutch Shell Company $458,361
  Exxon Mobil Company $442,851
  Wal-Mart Stores Company $405,607
  Turkey: Country $402,710
  Belgium: Country $392,001
  Sweden: Country $384,927
  Switzerland: Country $379,758
  BP Company $367,053
  Indonesia: Country $364,459
  Poland: Country $338,733
  Austria: Country $322,444
  Norway: Country $310,960
  Saudi Arabia: Country $309,779
  Denmark: Country $275,237
  Chevron Company $263,159
  South Africa: Country $254,992
  Greece: Country $244,951
  Total Company $234,674
  ConocoPhillips Company $230,764
  ING Group Company $226,577
  Iran: Country $222,890
  Ireland: Country $222,650
  Argentina: Country $214,058
  Finland: Country $209,445
  Sinopec Company $207,814
  Thailand: Country $206,247
  Toyota Motor Company $204,352
  Japan Post Holdings Company $198,700
  Portugal: Country $192,572
  Hong Kong: Country $189,798
  General Electric Company $183,207
  Venezuela: Country $181,862
  China National Petroleum Company $181,123
  
  
• Corporate Clout: The Influence of the World's Largest 100 Economic Entities (2009):
  
  The sheer size of major global corporations which operate across multiple countries and regions means their combined influence and impact is huge, on many aspects of how we live and work.   Their economic and employment contributions sustain nations, regions and local communities – in many cases exceeding the influence of the nations that host them – allowing them to influence nations’ policies and actions, both economically and politically.
  
  
• Roach, Corporate Power in a Global Economy

The Democracy of Wealth vs. Democracy of Citizens

• One in Four Mammals Face Extinctions
  
  
• Farrell, Reagan Insider: GOP Destroyed U.S. Economy
  
  
• Stockman, GOP Bankrupted the United States
  
  
• Obama's Job-creation Panel includes Job-cutting Executives
  
  
• Klein, Occupy Wall Street: Take the Bull by the Horns
  
  
• Paul, Wall Street Traders Threaten the Future of the
  Industrialized World
  
  
• Krugman, Wall Street Protests offer Obama a Second Chance
  
  
• Krugman, Panic of the Plutocrats
  
  
• It's the Inequality, Stupid: Graphs on Inequality
  
  
• Taibbi, Attorney General Settlement, the next big Wall Street Bailout
  
  
• Obama, Geitner, and the Next Financial Crisis
  
  
• Reich, Follow the Money: Behind Europe's Debt Crisis
  Lurks another Bailout of Wall Street
  
  
• Weisberg, "Name that Economy: What do
  we call it --LIfeboat Captialism? ";
  
  A better name for our new system might be life jacket capitalism. The role of the watchdogs isn't just to enforce seat-belt and helmet laws for the financial sector. Market misjudgments have produced systemic risk with growing intensity and alarming frequency, requiring rescues in 1988 (the savings-and-loan crisis), 1994 (the Mexican collapse), 1997 (the Asian meltdown), 1998 (the Long Term Capital Management debacle), and 2008 (the subprime catastrophe). In an age of globalization, threats to the financial system can arise unexpectedly from almost any place. What's scary about such an arrangement is how much power it vests in our economic guardians and how vigilant, wise, and adroit those guardians need to be. One dud call like letting Lehman go and the whole world can blow up.
  
  
• The Onion: American People Hire High-Powered Lobbyist To Push
  Interests In Congress
  
  
• The Onion: Nervous American Voters Worried about Botching
  another American Election
  
  
• The Political Industrial Complex: Buying Elections
  
  
• U.S. vote in 2012 will be record, $6 billion election | Reuters
  
  
• Friedman, Who will Rule the Electronic Herd (in-class)
  
  
• Government as Countervailing Power and Market Referee (in-class)
  
  
• Shaken Markets: The Tech Bubble Burst;
  Cost of 2002-2003 Financial Crisis(in-class)
  
  
• Most Companies Paid No Taxes during the Boom(in-class)
  
  
• The Global Cost of Crony Capitalism (in-class)
  
  
• Regulating Financial Markets after the 2002 Crash:
  The Sarbanes-Oxley Act (in-class)
  
  
• Lou Dobbs: Lobbying Against America
  
  
• Chamber Argued That Public Skepticism Was Proper Price
  To Pay For Donor Secrecy
  
  
• Rove Denies GOP Taking Foreign Money
  

• REVEALED: List Of Foreign Corporations Funding
  The Chamber Of Commerce
  
  
• Can we limit Corporate Domination of our Political System?
  
  
• Global Corporations and Political Power
  
  
• Corporations buying Political Influence
  
  
• OpenSecrets.org: Money in Politics
  
  
• Whitehouse for Sale.org
  
  
• Bush Administration Stalls Major Corporate Reform to Please Donors
  
  
• BBC: The End of the American Dream? (in-class)
  
  
• U.S. Inquality Gap Widest since 1929 (in-class)
  
  
• The Race to the Bottom (in-class)
  
  
• Basic Conditions sought by the Electronic Herd
  
  
• Demands Made by TNCs to do Business in
  a Country in the Globalized Economy
  
  
• Korten, Buying Out Democracy (in-class)
  
  
• The Democracy of Wealth
  
  
• The Democracy of Wealth: Rigging the Game
  (in-class)
  
  
• The Global Rules Makers (in-class)
  Global Institutions that Make the Rules (in-class)
  
  
• The Rules Makers and Global Governance (in-class)
  
  
• Global Government Policy Organizations (in-class)
  
  
• Korten, Eliminating the Public Interest (in-class)
  
  
• The Global Rules Makers;
  Global Institutions that Make the Rules (in-class)
  
  
• The Corporate Welfare Budget Bigger than Ever
  
  
• Corporate Welfare Information Center
  
  
• Ending Corporate Welfare as we Know It
  
  
• Korten's View of Globalization and the Democracy of Wealth (in-class)
  
  
• Challenging the Democracy of Wealth with the Democracy of Citizens (in-class)
  
  
• The Bretton Woods Institutions as Global Governance (in-class)
  
  
• Squeezing Third World Countries through Structrual Adjustment
  (in-class)
  
  
• The New Global Rules and the Failure of Structural Adjustment Programs (in-class)
  
  
• Double Whammy for College Grads
  
  
• The Onion: American People Hire High-Powered Lobbyist To Push
  Interests In Congress
  
  
• The Onion: Nervous American Voters Worried about Botching
  another American Election
  
  
  

Korten, Buying Out Democracy

"U.S. CORPORATIONS ENTERED THE 1970s besieged
by a rebellious anti-consumerist youth culture, a mushrooming environmental and product safety movement, and a serious economic challenge from Asia. Not only was their dream of global hegemony in tatters, they even risked losing control of their own home turf.
In response, they mobilized their collective political
resources to regain control of the political and cultural agenda. "

"In 1971, the U.S. Chamber of Commerce sought the advice of Virginia attorney and future Supreme Court justice Lewis Powell about the problems facing the business community. Powell produced a memorandum, "Attack on American Free Enterprise System," that warned of an assault by environmentalists, consumer activists, and others who "propagandize against the system, seeking insidiously and constantly to sabotage it." He argued that it was time for the wisdom, ingenuity, and resources of American business to be marshaled against those who would destroy it." 2 This set the stage for an organized effort by a powerful coalition for business groups and ideologically compatible foundations to align the U.S. political and legal system with their ideological vision."

"In the United States, the 170,000 public-relations employees engaged in manipulating news, public opinion, and public policy to serve the interests of paying clients now outnumber actual news reporters by about 40,000--and the gap is growing. These firms will organize citizen letter-writing campaigns, provide paid operatives posing as "housewives" to present corporate views in public meetings, and place favorable news items and op-ed pieces in the press. A 1990 study found that almost 40 percent of the news content in a typical U.S. newspaper originates from public-relations press releases, story memos, and suggestions."

"American democracy isn't for sale only to America 's transnational corporations. The Mexican government spent upwards of $25 million and hired many of the leading Washington lobbyists to support its campaign for NAFTA. In the late 1980s, Japanese corporations were spending an estimated $100 million a year on political lobbying in the United States and another $300 million building a nationwide grassroots political network to influence public opinion. Together, the Japanese government and Japanese companies employed ninety-two Washington law, public-relations, and lobbying firms on their be half. "

"Corporate libertarianism--an ideology whose claims and promises are as false and self-serving as the claims of cigarette companies that nicotine is non-addictive and cigarette smoke poses no health hazard--has become the dominant philosophy of our political culture and of our most powerful institutions. This is the accomplishment of a persistent campaign that uses the most sophisticated techniques yet developed by the masters of mass marketing and media manipulation. It is one element of a larger campaign to globalize markets and to embed corporate libertarianism and consumerism as defining values of a homogenized global culture. "

Korten, Eliminating the Public Interest

"To attract companies like yours . .. we have felled mountains, razed jungles, filled swamps, moved rivers, relocated towns ... all to make it easier for you and your business to do business here.

-Philippine government ad in Fortune "

"The public purpose of what became known as the Bretton Woods system was to unite the world in a web of economic prosperity and interdependence that would preclude nations taking up arms. Another purpose in the eyes of its architects was to create an open world economy unified under U.S. leadership that would ensure unchallenged U.S. access to the world's markets and raw materials. Two of the Bretton Woods institutions--the IMF and the World Bank--were actually created at the Bretton Woods meeting. The GATT was created at a subsequent international meeting."

"Although formally designated as "special agencies" of the UN, the Bretton Woods institutions function autonomously from it. Their governance and administrative processes are secret, carefully shielded from public scrutiny and democratic debate. Indeed, the internal operating processes of the World Bank are so secretive that access to many of its most important documents relating to country plans, strategies, and priorities is denied to even its own governing executive directors. In the World Bank and the IMF the big national powers have both veto power over certain decisions and voting shares in proportion to their shares of the subscribed capital--ensuring their ability to set and control the agenda."

"In their capacity as international receivers, the World Bank and the IMF imposed packages of policy prescriptions on indebted nations under the rubric of structural adjustment. Each structural adjustment package called for sweeping economic policy reforms intended to channel more of the adjusted country's resources and productive activity toward debt repayment, privatize public assets and services, and further open national economies to the global economy. Restrictions and tariffs on both imports and exports were reduced, and subsidies were offered to attract foreign investors. "

"To attract foreign investors, adjusted governments suppress union organizing to hold down wages, benefits, and labor standards. They give special tax breaks and subsidies to foreign corporations and cut corners on environmental regulations. The fact that dozens of countries seek to increase foreign exchange earnings by increasing the export of natural resources and agricultural commodities drives down the prices of their export goods in international markets, creating pressures to extract and export even more to maintain foreign exchange earnings. Falling prices for export commodities, profit repatriation by foreign investors, and increased demand for manufactured imports stimulated by the reduction of tariff barriers result in continuing trade deficits for most countries."

"The World Bank and the IMF responded with more loans to cover the growing trade deficits as a reward for carrying out structural adjustment. As a result , the international indebtedness of low-income countries increased from $134 billion in 1980 to $473 billion in 1992. Annual interest payments on this debt increased from $6.4 billion to $18.3 billion." Rather than increasing their self-reliance, the world's low-income countries, under the guidance of the World Bank and the IMF, mortgage yet more of their futures to the international system each year."

"Foreign aid, even grant aid, becomes actively anti-developmental when the proceeds are used to build dependence on imported technology and experts, encourage import-dependent consumer lifestyles, fund waste and corruption, displace domestically produced products with imports, and drive millions of people from the lands and waters on which they depend for their livelihoods-- -all of which are common outcomes of World Bank projects and structural adjustment programs. "

"Together, the Bank and the IMF have helped build powerful political constituencies aligned with corporate libertarianism, weakened the democratic accountability of Southern governments, usurped the functions of democratically elected officials, and removed most consequential legal and institutional barriers to the recolonization of Southern economies by transnational corporations."

"The third institution called for by the Bretton Woods meeting--the International Trade Organization--was stillborn because of concerns in the U.S. Congress that its powers would infringe on U.S. sovereignty. The General Agreement on Tariffs and Trade (GATT) served in its stead, with a somewhat ambiguous status, as the body through which multilateral trade agreements were fashioned for nearly fifty years, until the Uruguay round of GATT negotiations quietly gave birth to the World Trade Organization (WTO) on January 1, 1995 . It was a landmark triumph for corporate libertarianism. What the World Bank and the IMF had accomplished in institutionalizing the doctrines of corporate libertarianism in low-income countries, the WTO now had a mandate and enforcement powers to carry forward in both high- and low-income countries."

"The key provision in the 2,000-page agreement creating the WTO is buried in paragraph 4 of Article XVI: "Each member shall ensure the conformity of its laws, regulations and administrative procedures with its obligations as provided in the annexed Agreements." The "annexed Agreements " include all the substantive multilateral agreements relating to trade in goods and services and intellectual property rights. This provision allows a WTO member country to challenge any law of another member country that it believes deprives it of benefits it expected to receive from the new trade rules. This includes virtually any law that requires imported goods to meet local or national health, safety, labor, or environmental standards that exceed WTO-accepted international standards. Unless the government against which the complaint is lodged can prove to the WTO panel that a number of restrictive provisions have been satisfied, it must bring its own laws into line with the lower international standard or be subject to perpetual fines or trade sanctions. "

"Challenges may also be brought against the laws of state and local governments located within the jurisdiction of a member country, even though these governments are not signatories to the new agreement. The national government under whose jurisdiction they fall becomes obligated to take all reasonable measures to ensure the compliance of these state or local administra­ tions. Such "reasonable measures" include preemptive Iegislation, litigation, and withdrawal of financial support."

"When a challenge to a national or local law is brought before the WTO, the contending parties present their case in a secret hearing before a panel of three trade experts, generally lawyers who have made careers of representing corporate clients on trade issues. There is no provision for the presentation of alternative perspectives, such as amicus briefs from non-governmental organizations, unless a given panel chooses to solicit them. Documents presented to the panels are secret, except that a government may choose to release its own documents. The identification of the panelists who supported a position or conclusion is explicitly forbidden. The burden of proof is on the defendant to prove that the law in question is not a restriction of trade as defined by the WTO."

"Under the proposed rules, the recommendations of the review panel are automatically adopted by the WTO sixty days after presentation unless there is a unanimous vote of WTO members to reject them. This means that over 100 countries, including the country that won the decision, must vote against a panel decision to overturn it--rendering the appeals process virtually meaningless.

The WTO has legislative as well as judicial powers. GATT allows the WTO to change certain trade rules by a two-thirds vote of WTO member representatives. The new rules become binding on all members. The WTO becomes, in effect, an unelected global parliament of trade lawyers with the power to amend its own charter without referral to national legislative bodies. "

"The world's major transnational corporations have had a highly influential insider role in GATT negotiations and are similarly active in the WTO. They are especially well represented in the U.S. delegation, which has had a pivotal role in shaping the GATT agreements. The key to this corporate access is the U.S. Trade Act of 1974, which provides for a system of trade advisory committees to bring a public perspective to U.S. trade negotiations."

"The U.S. trade representative's office has chosen to define this requirement to mean only that the advisory committee membership must represent the business community with regard to "balance among sectors, product lines, between small and large firms, among geographical areas, and among demographic groups."' A study by public Citizen's Congress Watch released in December 1991 found that of 111 members of the three main trade advisory committees, only two represented labor unions. An approved seat for an environmental advocacy organization had not been filled, and there were no consumer representatives. The trade panels rarely announced their meetings to the public and never allowed the public to attend.

The corporate interest, however, was well represented. The study found that ninety-two members of the three committees represented individual companies, and sixteen represented trade industry associations, ten of them from the chemical industry."

"Clayton Yeutter, in his capacity as U.S. secretary of agriculture under George Bush, stated publicly that one of his main goals was to use GATT to overturn strict local and state food safety regulations. He rationalized,"If the rest of the world can agree on what the standard ought to be on a given product, maybe the U.S. or EC will have to admit that they are wrong when their standards differ."'

"Governmental delegations to Codex routinely include non-governmental representatives, but they are chosen almost exclusively from industry. One hundred forty of the world's largest multinational food and agrochemical companies participated in Codex meetings held between 1989 and 1991. Of a total of 2,587 individual participants, only twenty-six came from public-interest groups."

"A review of the accomplishments of the three Bretton Woods institutions brings their actual functions into sharp focus. The World Bank has served as an export-financing facility for large Northern-based corporations. The IMF has served as the debt collector for Northern-based financial institutions. The GATT has served to create and enforce a corporate bill of rights protecting the world's largest corporations against intrusion in their affairs by people, communities, and democratically elected governments."

"World War II did not end the global domination of the weak by strong states. It simply cloaked colonialism in a less obvious, more beguiling form. The new corporate colonialism is no more a consequence of immutable historical forces than was the old state colonialism. It is a consequence of conscious choices based on the pursuit of elite interest. This elite interest has been closely aligned with the corporate interest in advancing deregulation and economic globalization. As a consequence, the largest transnational corporations and the global financial system have assumed increasing power over the conduct of human affairs in the pursuit of interests increasingly at odds with the human interest. It is not possible to have healthy, equitable, and democratic societies."

The Race to the Bottom

• What is Neo-Liberalism?
  
  
• What is Neo-ism?
  
  
• What is the Race to the Bottom? (in-class)
  
  
  "The Race to the Bottom" is competition by countries and economic regions to reduce workers' wages, environmental regulations, work-safety regulations, public-safety and public-health regulations and to limit corporate taxes, union membership, and rules preventing the movement of profits out of the country. Right now, Vietnam and China are at the bottom of the bottom, with little to no environmental regulations, low wages, no unions, no work-safety, low corporate taxes, and no rules on taking profits out of the country. If other countries want to be competitive with Vietnam and China, they have to lower their standards to the very bottom in order to be competitive.
  
  Countries like Ireland are doing well today because they are competitive; they have lower wager, lower taxes on corporations and the wealthy, more government support for transnational corporations, and less government regulation on the environment, work safety, and public health. In order to compete with Ireland, countries like Indonesia and Vietnam most offer TNCs an even
  better deal. There is no guarantee that these TNCs won't leave Ireland and go to other countries in the future. The larger dilemma for countries like Ireland is how to protect their standard of living and future society in an increasingly competitive world. The "Race to the Bottom" forces countries to keep lowering their standards in order to attract and keep transnational corporations. The problem is that this competition keeps causing the bottom to fall out, forcing countries to reduce their standard of livng and quality of life in order to attractTNCs and global investment.