Monday, April 19, 2004


It's about radical social re-egineering that empowers international investors with unprecedented powers that usurp national sovereignty and privilege the rights of investors over the rights of workers, consumers, and citizens who wish to set high public health or environmental standards.

Take NAFTA's Chapter 11. Yesterday'sNew York Times describes how Chapter 11 threatens to undo the most basic principles of our legal system: the sanctity of trial by jury and the ultimate authority of the US Supreme Court on legal rulings:

Abner Mikva, a former chief judge of the federal appeals court in Washington and a former congressman, is one of the three Nafta judges considering the Mississippi case. He declined to discuss it but did offer his perspective on Chapter 11... "If Congress had known that there was anything like this in Nafta," he said, "they would never have voted for it."

The satandard blind-faith globalization rhetoric focuses purposely distracts from such issues that are necessarily at the core of international trade liberalization by fixating on (1) trade agreements increase trade (incidentally, this may not be so true accoring to an article in the latest American Economic Review); and (2) trade is an economic panacea. If you are anti-globalization, you are a luddite, you are impoverishing the world's yearning multitudes, and you hate puppies.

Step off the economic reservation, and you are labeled "anti-globalization," as I wrongly have been by some in the past. I think this is rather silly. You can stop globalization of trade about as effectively as you can stop the moon revolving around the Earth. What NAFTA's Chapter 11 (and its manifestation in a plethora of subsequent trade agreeements) teaches us, though, is that it is the rules of globalization--set in secret, closed door negotiations, without democratic accountability--which is the real issue with global trade liberalization, not trade itself.

There is no such thing as a free market. Markets are social constructions (see Maxspeak's favorite Franklin quote): the nexus of cultural custom and legal rights and regulations, which define how economic forces interact. Control the rules, and you control the economic outcomes: who wins, who loses; who is empowered with rights and who has rights stripped out from underneath them...and how the priviliges and adjustment costs are distributed between and also within countries.


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