The Mouse on "Conservatism" (Part III)
I do not wish to give the impression that the long range effects of NAFTA/CAFTA are “bad” from every perspective. If the proponents of those measures were as idealistic as Friedrich Hayek about the goodness of open market capitalism, and as honest as him in seeking the benevolences of free trade, they would have informed the American people straight out that, even though NAFTA/CAFTA would cost many American jobs, in the long run the world will benefit. If rationally applied capitalist ideas do in fact work as well as Hayek said they would – and I believe they do – and if that form of capitalism were adopted by all the world’s nations, the supplies of goods coming into the market would increase so significantly that the worldwide shortages of life’s necessities would soon be satisfied.
But the corporations who purchased NAFTA/CAFTA from our Congress were not seeking to export rational capitalism. Neither the plight of workers nor the health of the planet were their concern. Performing their magic tricks, just as every dogmatic laissez faire capitalist ought to, they were working to increase the earnings of their companies. If the American people had to be distracted by sleight-of-hand tricksters in order for their objectives to be met, no problem. With the wool firmly in place over the public’s credulous eyes, even pollutions of the earth can be justified. In the long run polluted air and water will provide opportunities for other capitalists to mount profitable cleanup enterprises, and the world's GNP will be higher.
I found laughable the Democrats’ pleas for “a level playing field” during the most recent presidential campaign. They wanted Mexico to enact environmental and fair labor laws similar to those in America. The candidates making those pleas were either ignorant of NAFTA’s true purpose or were merely shedding crocodile tears. The NAFTA/CAFTA laws were enacted precisely to create a tilted playing field.
NAFTA‘s chapter 11, which gives corporations supremacy over American, Mexican, and Canadian laws and courts, clearly indicates that those who crafted those provisions did not have America’s best interest at heart. Chapter 11 was (probably) designed to prevent the three governments – primarily Mexico – from nationalizing capital investments, but the law has, so far, never been used for that purpose.[1] Instead, using NAFTA’s chapter 11 power, foreign companies have entered into litigation against American, Mexican, and Canadian taxpayers, seeking relief from the laws of those nations that inhibit their earnings. (They also seek compensation for the losses those laws have caused them.) The litigants are not suing in a formal American court or any other nation’s court. They are pleading their cases to a special tribunal created by NAFTA in which foreign companies can sue you and me for damages. A company called Methanex, for example, incorporated in Canada, is suing us, claiming that California’s laws prevent the sale of the company’s gasoline additive.[2] They want close to a billion dollars of our money. [Note, not just Californians’ money, but yours and mine, and that includes Californians. The state of California actually has no standing in the NAFTA tribunal, so it has to depend on the Federals to plead its case – and ours.] The fact that California enacted its pollution laws to counter a problem peculiar to California would appear to be irrelevant to the company bringing suit. Their eye is on their bottom line, not on California’s smog. United Parcel Service (UPS, “Brown”), another NAFTA litigant, is suing the Canadian government in the same tribunal, claiming that Canada’s postal service, by delivering packages, is unfairly competing with its service.[3] They want $160 million of Canadian taxpayers’ money.
CAFTA is worse. NAFTA elevated only foreign companies to the same level as sovereign nations. (Actually above them, since the NAFTA/CAFTA tribunal’s rulings supercede and render inoperative the laws of sovereign nations.) CAFTA will broaden that privilege, permitting the foreign subsidiaries of American companies to sue you and me in that same tribunal. Note well, that the NAFTA/CAFTA tribunal is not engaged in the adjudication of American law, or the law of any nation, ruling only upon the appearance that some law of ours (or some other sovereign nation’s) prevents or inhibits corporate profits.[4]
NAFTA/CAFTA, and similar broad-reaching economic measures, enacted by governments to benefit private economic ventures, violate the most fundamental principle of Hayek’s rule of law. They in fact closely resemble the fascist “laws” adopted before the Second World War by Germany and Italy. Those two Axis nations implemented a form of socialism, called corporatism, in which the state enters into partnership with the corporations to assure their partners’ profits. Hayek was writing against precisely those sorts of measures, laws designed to benefit specific economic entities. Coupled with the neoconomics briefly summarized [in an earlier blog], the NAFTA/CAFTA coup clearly demonstrates the intentions of corporate America and its political agents in the Congress. They wish to own the world and are willing to sacrifice America’s sovereignty to reach their goal.
I do not, however, wish to suggest that no one in America other than the stockholders of America’s multinational corporations benefited from NAFTA. The almost two million American jobs lost because of NAFTA added a large supply of unemployed people to the workforce, effectively lowering (or constraining) the cost of American labor. Companies in the burger-flipping business thus benefited from the increased supply of cheapened labor. I’m sure you understand why this “benefit” was not advertised by those lobbying for NAFTA.
Those same pimps, in defending the esoteric means by which the corporatists have sold their ideas try to put projects like NAFTA/CAFTA on the same footing as Medicare and Social Security, claiming the so-called “trade agreements” are just government programs aimed at promoting the general welfare. They argue that Americans must work in order to raise capital for their own enterprises, and corporate America supplies a large number of jobs. “What’s good for General Motors is good for America.” But NAFTA/CAFTA led to a loss of two-million higher paying manufacturing jobs, with no hope that those jobs will ever be recovered.
In making their case, the defenders of NAFTA/CAFTA will no doubt avoid speaking of those parts of the programs – like NAFTA’s chapter 11 – that by no means relate to the good of the American people. The NAFTA/CAFTA pimps may also avoid discussion of NAFTA’s real good. I spoke of the benefits that might accrue to the poor people of the world if liberal democratic capitalism were broadly adopted. But unlike the other programs I’ve named, even if those benefits were realizable – which is doubtful – NAFTA/CAFTA’s real goodness can only be appreciated from an international perspective.
The damage done by NAFTA/CAFTA goes far deeper than thievery. The nation has, since its founding, been suspicious of government. On the political front, nothing has happened since Vietnam to do anything but deepen that historical distrust. As the saying goes, we need further deceits about as much as we need “a hole in the head.” A few straight shooters, not ashamed of their ideas, would be welcome. If American corporations need cheap labor markets to survive, then why don’t they just say so, and forget this shadowy game of deceit they are playing with the American people.
[1] Some observers believe the provisions of NAFTA’s chapter 11 have been abused by companies who saw a loophole in the law. If that were the case, the loophole could have been closed in CAFTA. It wasn’t. It was made wider.
[2] The details of this proceeding read like a James Bond spy novel, with Methanex accusing the officers of its American competitor, Archer-Daniels-Midland Inc, and California Governor Davis of actions (to put it in the words of the tribunal) “likely to offend any self-respecting person.” [Added note 5/4/06. ADM stock has doubled since this was written. The additive, MBTE, has been declared illegal and ethanol, supplied by ADM, substituted.]
[3] United Parcel Service is, to Canada, a foreign company.
[4] Additional information may be found at www.epi.org and www.tradewatch.org.
[To be continued]
But the corporations who purchased NAFTA/CAFTA from our Congress were not seeking to export rational capitalism. Neither the plight of workers nor the health of the planet were their concern. Performing their magic tricks, just as every dogmatic laissez faire capitalist ought to, they were working to increase the earnings of their companies. If the American people had to be distracted by sleight-of-hand tricksters in order for their objectives to be met, no problem. With the wool firmly in place over the public’s credulous eyes, even pollutions of the earth can be justified. In the long run polluted air and water will provide opportunities for other capitalists to mount profitable cleanup enterprises, and the world's GNP will be higher.
I found laughable the Democrats’ pleas for “a level playing field” during the most recent presidential campaign. They wanted Mexico to enact environmental and fair labor laws similar to those in America. The candidates making those pleas were either ignorant of NAFTA’s true purpose or were merely shedding crocodile tears. The NAFTA/CAFTA laws were enacted precisely to create a tilted playing field.
NAFTA‘s chapter 11, which gives corporations supremacy over American, Mexican, and Canadian laws and courts, clearly indicates that those who crafted those provisions did not have America’s best interest at heart. Chapter 11 was (probably) designed to prevent the three governments – primarily Mexico – from nationalizing capital investments, but the law has, so far, never been used for that purpose.[1] Instead, using NAFTA’s chapter 11 power, foreign companies have entered into litigation against American, Mexican, and Canadian taxpayers, seeking relief from the laws of those nations that inhibit their earnings. (They also seek compensation for the losses those laws have caused them.) The litigants are not suing in a formal American court or any other nation’s court. They are pleading their cases to a special tribunal created by NAFTA in which foreign companies can sue you and me for damages. A company called Methanex, for example, incorporated in Canada, is suing us, claiming that California’s laws prevent the sale of the company’s gasoline additive.[2] They want close to a billion dollars of our money. [Note, not just Californians’ money, but yours and mine, and that includes Californians. The state of California actually has no standing in the NAFTA tribunal, so it has to depend on the Federals to plead its case – and ours.] The fact that California enacted its pollution laws to counter a problem peculiar to California would appear to be irrelevant to the company bringing suit. Their eye is on their bottom line, not on California’s smog. United Parcel Service (UPS, “Brown”), another NAFTA litigant, is suing the Canadian government in the same tribunal, claiming that Canada’s postal service, by delivering packages, is unfairly competing with its service.[3] They want $160 million of Canadian taxpayers’ money.
CAFTA is worse. NAFTA elevated only foreign companies to the same level as sovereign nations. (Actually above them, since the NAFTA/CAFTA tribunal’s rulings supercede and render inoperative the laws of sovereign nations.) CAFTA will broaden that privilege, permitting the foreign subsidiaries of American companies to sue you and me in that same tribunal. Note well, that the NAFTA/CAFTA tribunal is not engaged in the adjudication of American law, or the law of any nation, ruling only upon the appearance that some law of ours (or some other sovereign nation’s) prevents or inhibits corporate profits.[4]
NAFTA/CAFTA, and similar broad-reaching economic measures, enacted by governments to benefit private economic ventures, violate the most fundamental principle of Hayek’s rule of law. They in fact closely resemble the fascist “laws” adopted before the Second World War by Germany and Italy. Those two Axis nations implemented a form of socialism, called corporatism, in which the state enters into partnership with the corporations to assure their partners’ profits. Hayek was writing against precisely those sorts of measures, laws designed to benefit specific economic entities. Coupled with the neoconomics briefly summarized [in an earlier blog], the NAFTA/CAFTA coup clearly demonstrates the intentions of corporate America and its political agents in the Congress. They wish to own the world and are willing to sacrifice America’s sovereignty to reach their goal.
I do not, however, wish to suggest that no one in America other than the stockholders of America’s multinational corporations benefited from NAFTA. The almost two million American jobs lost because of NAFTA added a large supply of unemployed people to the workforce, effectively lowering (or constraining) the cost of American labor. Companies in the burger-flipping business thus benefited from the increased supply of cheapened labor. I’m sure you understand why this “benefit” was not advertised by those lobbying for NAFTA.
Those same pimps, in defending the esoteric means by which the corporatists have sold their ideas try to put projects like NAFTA/CAFTA on the same footing as Medicare and Social Security, claiming the so-called “trade agreements” are just government programs aimed at promoting the general welfare. They argue that Americans must work in order to raise capital for their own enterprises, and corporate America supplies a large number of jobs. “What’s good for General Motors is good for America.” But NAFTA/CAFTA led to a loss of two-million higher paying manufacturing jobs, with no hope that those jobs will ever be recovered.
In making their case, the defenders of NAFTA/CAFTA will no doubt avoid speaking of those parts of the programs – like NAFTA’s chapter 11 – that by no means relate to the good of the American people. The NAFTA/CAFTA pimps may also avoid discussion of NAFTA’s real good. I spoke of the benefits that might accrue to the poor people of the world if liberal democratic capitalism were broadly adopted. But unlike the other programs I’ve named, even if those benefits were realizable – which is doubtful – NAFTA/CAFTA’s real goodness can only be appreciated from an international perspective.
The damage done by NAFTA/CAFTA goes far deeper than thievery. The nation has, since its founding, been suspicious of government. On the political front, nothing has happened since Vietnam to do anything but deepen that historical distrust. As the saying goes, we need further deceits about as much as we need “a hole in the head.” A few straight shooters, not ashamed of their ideas, would be welcome. If American corporations need cheap labor markets to survive, then why don’t they just say so, and forget this shadowy game of deceit they are playing with the American people.
[1] Some observers believe the provisions of NAFTA’s chapter 11 have been abused by companies who saw a loophole in the law. If that were the case, the loophole could have been closed in CAFTA. It wasn’t. It was made wider.
[2] The details of this proceeding read like a James Bond spy novel, with Methanex accusing the officers of its American competitor, Archer-Daniels-Midland Inc, and California Governor Davis of actions (to put it in the words of the tribunal) “likely to offend any self-respecting person.” [Added note 5/4/06. ADM stock has doubled since this was written. The additive, MBTE, has been declared illegal and ethanol, supplied by ADM, substituted.]
[3] United Parcel Service is, to Canada, a foreign company.
[4] Additional information may be found at www.epi.org and www.tradewatch.org.
[To be continued]
posted by Benedict S. at 9:35 AM
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