Source: By Cliff DuRand, Truthout
A world without democracy, ruled by a technocratic elite serving the
interests of US and global capital - protecting "investor rights"
against national laws and regulations - is now being created in secret
negotiations over free-trade treaties, one of which, the TransPacific
Parnership (TPP), may be sewn up this fall. Can popular will stop it?
For four decades now, we have seen corporate-led neoliberal
globalization transforming nation-states into globalized states that
serve the interests of transnational capital above the interests of
national populations. This tendency has been strong in states both of
the global North and of the global South. Everywhere sovereignty is
being compromised.
The ideal political system most suitable for such globalized states is
polyarchy, since it legitimates relatively autonomous elite rule.
However, even in such a managed "democracy," there are moments when
elites can be made accountable to national populations through the
struggles of social movements. Occupy Wall Street was the beginning of
such a social movement.
As philosopher Milton Fisk
has argued in The State and Justice: An Essay in Political Theory,
in the class-divided societies of capitalist countries, the function of
the state is to maintain the social order. This means the political
elite promotes the interests of the economically dominant class. This is
due to what István Mészáros calls "the metabolic reproductive process"
of capitalist society. However, to maintain governability, it is
sometimes necessary to limit the benefits going to capital and to
increase the benefits going to the popular classes. How far the elite
moves in the direction of social justice depends on the level of the
subject classes' political activity. The elite's default position is to
favor the interests of capital, if only because the interests of the
dominated classes depend on them.
A state is a democratic nation-state insofar as it represents the
interests of the peoples it governs. That nation includes both the
dominant class of capitalists and the dependent popular classes. The
constellation of class forces within the nation at any given time
directs the nation-state. The state mediates class relations, as, for
instance, in constructing the class compromise of the capital-labor
accord represented in the Fordist regime of production, a model of
economic expansion named after Henry Ford.
Popular Sovereignty Gone with Globalization
However, with globalization, transnational corporate capital has
leaped over the territorial and legal boundaries of the nation, and the
state is following it. In so doing, the nation-state is morphing into a
globalized state that serves the interests of transnational capital
rather than any "own" national population. Contrary to what some have
claimed, globalization has not weakened the state. In some respects, it
has even strengthened it, particularly the executive branch. But
globalization has weakened the state's connection with its own citizens
as the state follows capital into a new global economic system.
Following William I.
Robinson's seminal critique of US "democracy promotion" programs,
Promoting Polyarchy: Globalization, US Intervention and Hegemony,
we argue that polyarchy is the ideal political form for globalized
states. Contested elections are an effective way to periodically renew
the perceived legitimacy of elite rule. That is the genius of the US
political system that has made it so stable. However, in times of
extreme systemic crisis, as in the Great Depression of the 1930s,
electoral politics was supplemented by the more genuine democracy of
social movements. It was this popular pressure from outside the formal
established political process that saved capitalism from itself by
forcing the elite to accept changes otherwise resisted by capital. It
was democracy that saved capitalism.
Normally, the state is able to function as a kind of Central
Committee for the capitalist class, attending to the systemic needs of
the capitalist system as a whole. This at least was the case during the
era of national capitalism. The unrestrained individual interests of
capitalists could destroy the system. States regulate and moderate in
the interests of capital as a whole. Popular pressures often pushed
states in this direction. Each capitalist, for example, seeks to pay low
wages so as to increase profits and wishes his competitors will pay
high wages so there will be consumers to buy his commodities. Popular
pressure and state action are needed to sustain capitalism.
Karl Polanyi pointed out in his classic 1944 work,
The Great Transformation, that
"capitalism would be an unsustainable and chaotic social order if the
state played the minimalist role specified in the libertarian fantasy."
According to Eric Olin Wright in,
Envisioning Real Utopias
(p.124), it is just such a minimalist role that neoliberalism demands.
Neoliberalism is the default position of capitalism in the absence of
countervailing pressure on capital from popular forces pressing for
greater social justice. That pressure usually acts through the
instrumentality of the state as the rule-making body for society. As we
have said, the function of the state is to maintain the social order,
which means the capitalist relations, but it must sometimes modify these
in the face of popular pressure to maintain governability. In those
circumstances, a liberal sector of the political elite may modify
neoliberalism in the direction of a social liberalism of the sort seen
in the New Deal. Absent that, the state reverts to neoliberal policies
that support the supremacy of capital.
The contradictions of unbridled neoliberalism are the contradictions
of unrestrained capitalism. It is a system that tends toward
self-destruction. Capitalism IS crisis, says David Harvey,
The Enigma of Capital: and the Crises of Capitalism. To survive, it needs the restraining hand of the state, frequently brought into play by demands of the popular classes.
Capital Escapes Regulatory Reach of Nation-States
With the globalization of capital in its corporate form, capital is
escaping the regulatory reach of nation-states. Transnational capital is
constructing its own governance structure (World Trade Organization and
multilateral free trade agreements) with the assistance of globalized
states. Just as neoliberal structural adjustment programs required what
the World Bank called "macroeconomic management by an insulated
technocratic elite" for their implementation (World Development Report
1997:
The State in a Changing World,
p. 152.), now a global governance structure is being built on the same
political principle, a corporate elite insulated from popular pressures,
beholden to transnational corporations only. What is emerging is an
unbridled neoliberal regime in which states are only the administrative
agents that protect capital against the popular classes. As Renato
Ruggiero, director-general of the WTO put it in 1995, "We are no longer
writing the rules of interaction among separate national economies. We
are writing the constitution of a single global economy."
This is what has been institutionalized in trade dispute adjudication
panels established under the WTO and through free-trade treaties like
NAFTA and the pending TransPacific Partnership (TPP). These are secret
panels that protect "investor rights" against national laws and
regulations that adversely affect corporate profits, no matter how
democratically those laws and regulations may have been established. The
rationale for investor rights is protection of capital against
nationalization. This rationale has been extended to so-called
"regulatory takings" as well, which are considered as tantamount to out
and out expropriation even though what is usually "taken" is a
hypothetical opportunity. Consequently, state actions that protect
public health and the environment, such as the Quebec moratorium on
fracking in the St. Lawrence River valley, are seen as a "taking" of
profits due to the US-chartered corporation that holds a permit for this
mining activity that has undetermined adverse effects on the
environment. So the corporation is now suing the state for compensation.
A NAFTA panel is now considering whether to award the corporation $250
million of taxpayer money to keep them from endangering the health of
the people of Quebec.
Closed Courts Determine When "Rights" to Profit Violated
Such "investor-to-state" cases are litigated in special arbitration
bodies of the World Bank and the United Nations, which are closed to
public participation, observation and input. They have the power to
award unlimited amounts of taxpayer dollars to corporations whose rights
to make a profit they judge have been violated. By latest count, some
450 investor-to-state cases have been filed against 89 governments by
transnational corporations, which have been awarded $700 million to
date.
The protection of profits over people has become a standard feature
of so-called free trade agreements. Actually, they are more about
ensuring corporate profits than trade in any normal sense of the word.
It is the protection of free movement of capital across borders more
than the free movement of goods that is at stake. It was the Nixon
administration that included investor rights in its trade negotiations
under the
fast track authorization
it initiated. It has since become a standard feature of all trade
agreements. The 11 countries in TPP already have free-trade agreements.
So why this new one? It has the enhanced investor rights transnational
corporations have long dreamed of. It is likely that this will also be
the case with the new initiative with the European Union proposed by the
Obama administration. At least that agreement is being advertised with a
more honest name: Transatlantic Trade and
Investment Partnership (TTIP). It is likely to privilege transnational corporations in the same way as TPP.
Since rejection of the Free Trade Agreement of the Americas at the
hemispheric summit in 2005 by the countries of Latin America and the
collapse of the Doha round of WTO negotiations in 2008, transnational
capital has sought to embed protection of Trade Related Intellectual
Property (TRIP) and other investor rights in new free trade agreements.
TPP is the latest such power grab by transnational corporations. TPP has
been described as "NAFTA on steroids" by those who have seen some of
its leaked provisions. Negotiations began under the Bush administration
and the Obama administration is continuing them in secret in hope of
completing the agreement by this October. The discussions include trade
representatives of the United States and Australia, Brunei, Canada,
Chile, Mexico, New Zealand, Peru, Singapore, Malaysia and Vietnam. Japan
has just joined. But the public, members of Congress, journalists, and
civil society are excluded. Not even Congressional committees have been
able to see the draft text, but 600 corporate advisors have. They are
writing the rules for trade in their own interests without any
democratic input from the people whose lives will be profoundly
affected. If adopted, TPP will deny citizens their democratic rights to
shape public policies on a host of domestic issues, conceding those
decisions to the
large corporations.
Some sections have been leaked. And what they reveal is "an agreement
that actually formalizes the priority of corporate power over
government," according to Lori Wallach of Public Citizen’s Global
Trade Watch. Only 5 of the 29 chapters have to do with trade. Wallach says the rest of the draft:
"include[s] new rights for the big pharmaceutical companies to
expand, to raise medical prices, expand monopoly patents; [there are]
limits on Internet freedom, penalties for inadvertent noncommercial
copying, [like] sending something to a friend. There are the same rules
that promote off-shoring of jobs that were in NAFTA that are more robust
[and] that literally give privileges and protections if you leave.
There is a ban on "buy American" and "buy local" or "green" or
sweat-free procurement. There are limits on domestic financial stability
regulations. There are limits on imported food safety standards and
product standards. There are limits on how we can regulate energy
towards a more green future - all of these things are what they call
"Behind the Borders" agenda. And the operating clause of TPP is: "Each country shall ensure the conformity of its domestic laws, regulations and administrative procedures with these agreements."
That's to say, that we're told to conform all of our domestics laws -
including all the important public interest laws fought for so hard by
people around the country - for these corporate dictates, and it's
strongly enforceable. If we do not conform our laws, another country can
challenge us and impose trade sanctions until we do, but this one is
even privately enforceable by the corporations themselves.
What is being constructed secretly, bit by bit, is a global
governance structure in which corporations are the citizens and
globalized states are the local administrative structures that enforce
corporate dictates and maintain order. This is a world without popular
sovereignty and without democracy. It is a world ruled by an insulated
technocratic elite serving the interests of global capital.
What are progressives to do in the face of all of this? Those with a
cosmopolitan consciousness may dream of a future democratic global
governance structure. But that is a long-term project, and we are faced
with a more immediate prospect of the consolidation of a very
undemocratic global governance structure serving the interests of
transnational corporations under a neoliberal regime that will roll back
all of the hard-won progressive gains of the last century. Our
immediate task is then to block this corporate end-run around domestic
policy making processes.
Who can do this? In the United States, working class consciousness is
very low, and unions are weak. The left is also weak. Nevertheless,
there is a growing anticapitalist, or at least anticorporate, sentiment
in the popular classes. Rather expansively, Occupy Wall Street called
this the 99%. The challenge Occupy presented to itself was to mobilize a
broad multiclass popular movement against the plutocracy. I view this
as a call for a social movement based on shared national interests that
have been betrayed by transnational capital and the political elite
beholden to it.
In the final chapter of
Recreating Democracy in a Globalized State,
I argue that in a polyarchic political system like the United States',
it takes social movements to bend the political elite away from its
corporate-friendly agenda. With sufficient street heat, to maintain
governability, it will need to adopt in some measure the form of justice
demanded by the popular classes. This is our democratic moment.
We can defeat TPP. Polls show an overwhelming opposition to free trade.
*
In fact, across the political spectrum, from the left, to the Tea
Party, and the John Birch Society on the Right and everywhere in
between, the one thing there is agreement on in the current highly
polarized political climate is opposition to free-trade treaties. That,
combined with the partisan gridlock in Washington, tells me we can win
this one.
This may be our last best chance to stop the consolidation of the
corporate global governance structure. It makes crystal clear the
contradiction between the national interest, i.e. the interest of the
people of the nation, and the interest of global capital. There is no
longer the convergence between the interests of capital and those of the
popular classes that there was in the era of national capital. The
divergence of interests that globalization has brought us enables us to
build a broad social movement based on shared national interests,
drawing on a national identity that can be a powerful motivator of
collective action. We should follow Mao Zedong's strategic principle:
Unite the many to defeat the few.
As I said at the beginning, capitalism has needed a guiding hand from
the state to protect it from its own self-destructive tendencies. And
it has been popular struggles that have often compelled the state in
that direction. But now that capitalism has become a global system,
there is no state able to do that. In fact, the global governance
structure being constructed by transnational capital is dedicated to the
very neoliberal ideology that now threatens to be its nemesis. If we
can stop that, not only can we save ourselves and the possibility for
democratic politics, as ironic as it may be, we might even save
capitalism from itself.
* A major NBC News-Wall Street Journal poll from
September of 2010 revealed that "the impact of trade and outsourcing is
one of the only issues on which Americans of different classes,
occupations and political persuasions agree, with 86 percent saying that
outsourcing jobs by US companies to poor countries was "a top cause of
our economic woes," and 69 percent thinking that "free-trade agreements
between the United States and other countries cost the United States
jobs." Only 17 percent of Americans in 2010 felt that "free-trade
agreements" benefit the United States - compared to 28 percent in 2007.