1. Clinton’s Bottom Line
November 17 was a grand day in the career of Bill Clinton, the day when he proved that he is a man of firm principle, and that his “vision” — the term has become a journalistic reflex — has real substance. “President Emerges As a Tough Fighter,” the New York Times announced on the front page the next day. Washington correspondent R.W. Apple wrote that Clinton had now silenced his detractors, who had scorned him for his apparent willingness to back down on everything he claimed to stand for:
“Mr. Clinton retreated early on Bosnia, on Haiti, on homosexuals in the military, on important elements of his economic plan [namely, the minuscule stimulative package]; he seemed ready to compromise on all but the most basic elements of his health-care reforms. Critics asked whether he had a bottom line on anything.
On NAFTA, he did, and that question won’t be asked much for a while.”1
In short, on unimportant matters, involving nothing more than millions of lives, Clinton is a “pragmatist,” ready to retreat. But when it comes to responding to the calls of the big money, our hero showed that he has backbone after all.
The importance that the corporate world saw in the NAFTA issue was revealed with some clarity in the final stages. Usually, both the President and the media try to keep their class loyalties somewhat in the background. This time, all bars were down. Particularly striking was the bitter attack on labor for daring to interfere in the political process, understood to be the domain of business power in a well-ordered democracy.
The logic is familiar. When ordinary people enter the political arena, we have a “crisis of democracy”; things are OK, however, when the President is able to “govern the country with the cooperation of a relatively small number of Wall Street lawyers and bankers,” as the Eaton Professor of the Science of Government at Harvard (Samuel Huntington) has explained, articulating the vision of democracy propounded by elite opinion for hundreds of years.
Accordingly, corporate lobbying was considered unworthy of mention — a reasonable decision; one also doesn’t report the air we breathe.
President Clinton denounced the “naked pressure” and “real roughshod, muscle-bound tactics” of organized labor, “the raw muscle, the sort of naked pressure that the labor forces have put on.” They even resorted to “pleading…based on friendship” and “threatening…based on money and work in the campaign” when they approached their elected representatives. Never would a corporate lobbyist sink that low; those who believe otherwise merely reveal themselves to be “Marxists” or “conspiracy theorists,” terms that are the cultivated equivalent of four-letter words or a punch in the nose, a last resort when you can’t think of an argument. Front-page stories featured the President’s call to Congress “to resist the hardball politics” of the “powerful labor interests.” Business was reeling from the onslaught, unable to face the terror of the mob. At the outer limits of dissent, Anthony Lewis berated the “backward, unenlightened” labor movement for the “crude threatening tactics” it employed to influence Congress, motivated by “fear of change and fear of foreigners.”
In a lead editorial the day before the vote, the Times courageously confronted the “raw muscle,” denouncing local Democrats who oppose NAFTA in fear of “the wrath of organized labor” with its powerful political action committees that “contribute handsomely to their election campaigns.” A box within the editorial headed “Labor’s Money” records labor contributions to NAFTA opponents in the New York City area — “an unsettling pattern,” the editors observe ominously.2
As some aggrieved representatives and others noted, the Times did not run a box listing corporate contributions. Nor did it list Times advertisers and owners who support NAFTA, raising ominous questions about their editorial support for the bill, perhaps an instance of an “unsettling pattern.” Such reactions are not to the point, however, for several reasons. First, information about corporate lobbyists, owners and advertisers would be irrelevant, since conformity of government and editorial policy to their views is the natural order. And if the hysteria about the improprieties of working people was a bit crass, it is after all understandable in a moment of panic, when the mob is practically at the gates. Furthermore, after endless wailing about the terrifying power of labor and the unfair uses to which it was put, the Times did run a front-page story revealing the truth: Michael Wines, “Off Stage, Trade Pact Lobby Had a Star’s Dressing Room.”
The corporate lobbyists, Wines reported, were “Chamber of Commerce types, accountants, trade consultants,” who “occupied a stately conference room on the first floor of the Capitol, barely an elevator ride away from the action in the House chamber,” with TV sets, cellular telephones, and other appurtenances in abundance, and celebrities everywhere. The picture was enough to convince a former Carter official, now a lobbyist, that “It’s going to be a blowout.” A look at labor’s “raw muscle” only reinforced the conclusion: “The boiler room for the forces opposed to the pact, by contrast, was more of, well, a boiler room,” a “barren hearing room” far from the House debate, with only one telephone, “basic black.” “The dress was union-label, inexpensive suits and nylon jackets inscribed with numbers and insignias of various locals.” Wines even spoke the usually forbidden words “class lines,” referring to the “nastier and more divisive battle” over NAFTA, unlike the “previous two battles,” which left no scars: the battle over the $19 billion stimulus (quickly lost) and the tax and spending cuts.3
True, the story that finally set things right was published the day after the vote. But the newsroom is a busy place, media savants explain, and sometimes things fall through the cracks — in an oddly systematic way.
Before the vote, it wasn’t only labor, with its awesome power, that was pummelling Congress while the business world looked on in helpless dismay. The morning of the vote, a front-page story in the Wall Street Journal denounced “the muscle-flexing by the broad antitrade coalition,” which extends beyond labor bureaucrats to “upscale environmentalists, suburban Perot supporters and thousands of local activists nationwide.” These extremists believe that NAFTA is designed “for the benefit of multinational corporations. Their rhetoric is pure down-with-the-rich populism,” laced with “conspiratorial, antielitist arguments.” A pretty scary crowd.4
The news columns of the Journal usually try to keep a dispassionate tone, leaving Maoist-style ranting to the editorial and opinion pages. But in this case, the pain was too much to bear.
2. Winners and Losers
The Wines story on lobbyists was one of several interesting post-vote contributions. In another Times story, also curiously delayed, Thomas Lueck reviewed the expected economic impact of NAFTA, which had elicited such enthusiasm in the weeks before, rising to virtual hysteria as the day of decision dawned. Leading gainers would be those sectors “based in and around finance,” Lueck reported: “the region’s banking, telecommunications and service firms” — that is, insurance companies, investment houses, corporate law firms, the PR industry, and the like. “A vast assortment of professional service firms, from management consultants and public relations to law and marketing, are poised to seek new businesses in Mexico,” while “Banks and Wall Street securities firms, which would probably draw more benefit from the pact than any other businesses, say that they are itching to buy Mexican businesses or invest in them.” There will be some gainers among manufacturers too, primarily in high technology industry and pharmaceuticals, which will benefit from one of the many protectionist features that made NAFTA so attractive to corporate leaders: the increased protection for patents and “intellectual property” generally, provisions designed to ensure that major corporations, some of which dwarf many governments in scale, will control the technology and products of the future. Other potential gainers include “the region’s two largest manufacturing industries,” the capital-intensive chemical industry and publishing — more ominous signals about the Times editorial policy, by the logic of the editors.
Alongside this impressive array of beneficiaries, there will also unfortunately be a few losers, “predominantly women, blacks and Hispanics,” and “semi-skilled production workers” generally. But that was inevitable anyway, and not important enough to merit more than a few side comments in this upbeat analysis of the “Free Trade Accord” — the part that is “free” being “the amount of money passed around Washington to pass it, said Representative James Traficant,” cited at the tail end of the column that belatedly discovered the truth about corporate and labor power. “Change can indeed be painful,” as Anthony Lewis admonished the labor movement — for some, at least.5
Noted economists supporting NAFTA made similar points about winners and losers, observing that the only negative consequences of NAFTA would be “a slight fall in the real wages of unskilled U.S. workers” (Paul Krugman) and ridiculing talk about job loss because “only union leaders and Ross Perot would be surprised to hear that the productivity ratio between U.S. and Mexican workers…is higher than the ratio of hourly compensation” (Gary Hufbauer). These scornful rebuttals forgot to add, however, that 70% of the work force is categorized as “unskilled,” and that at comparable productivity levels Mexican wages are a fraction of US wages, kept that way by harsh repression, destruction of unions, and a huge army of unemployed.6
Reports from Mexico also compared winners and losers. “Economists predict that several million Mexicans will probably lose their jobs in the first five years after the accord takes effect,” Tim Golden reported from Mexico in the Times after the House vote; the effect on wages is predictable. “Business leaders like deal; others see rich getting richer,” a Boston Globe headline read the day after the vote, reporting that “Mexico’s business classes reacted with glee” while “environmental, human rights and labor activists in Mexico continue to criticize the accord.” Previously, such voices had been largely unheard, while journalists and economists informed us confidently of the opinions and goals of “the Mexicans” — who regularly turn out on inspection to be corporate executives, bankers, political leaders, American investors, and the like. Some of them go on to condemn the jingoist “national perspective” of critics of NAFTA who depart from convention by explicitly focussing attention on concerns of Mexican workers and farmers — not “the Mexicans” — and thus “implicitly assume that Mexican issues and interests are secondary” (James Galbraith, “What Mexico — and the United States — Wants,” World Policy Journal); it takes some skill to thread one’s way through the ideological contortions. Readers of the Newsletter of the Society for Historians of American Foreign Relations could learn that there were huge demonstrations against NAFTA in Mexico, “well articulated, if too-little-noticed in the United States, cries of frustration against government policies — involving repeal of constitutional labor, agrarian and education rights stipulated in the nation’s popularly revered 1917 constitution — that appear to many Mexicans as the real meaning of NAFTA and U.S. foreign policy here,” realistically enough (historian Seth Fein, writing from Mexico City). Readers of the major media and journals heard little of this.
Mexican concerns about job loss had sometimes been reported before the vote, framed as “worries [that] would seem to rebut critics in the United States who have described Mexico as the clear beneficiary of the accord” (Golden); so we should proceed on course. Occasional more serious commentary reported the great anxiety of Mexican workers not only about job loss but about the erosion of their “hard-won labor rights,” likely to “be sacrificed as companies, trying to compete with foreign companies, look for ways to cut costs” (Juanita Darling, Los Angeles Times) — a prime reason why the corporate version of NAFTA and other trade agreements, carefully crafted to protect investor but not labor rights, are so appealing to business leaders.7
A study carried out by Mexico’s leading business journal, El Financiero, which strongly supported NAFTA, predicted that Mexico would lose almost a quarter of its manufacturing industry and 14% of its jobs in the first two years. Other analysts have predicted that millions of peasants will be driven from the land by cheap US agribusiness exports, enhancing the impact of repression and neoliberal policies that have helped to drive down wages and reduce labor’s share in the economy from 36% in the mid-1970s to 23% by 1992, a crucial component of the “economic miracle” that NAFTA advocates hope to “lock in place.” Stagnation or perhaps reduction of Mexican wages will then facilitate new pressures to reduce wages of US and Canadian workers, contributing still further to the “welcome development of transcendent importance” that the Wall Street Journal hailed in mid-September: the reduction of US hourly pay below any major industrial country apart from England. Profits will accordingly increase, at least, as long as the social policy designed to enhance the welfare of investors can be sustained.8
The economists who preach about the merits of “free trade,” knowing the term to be largely fraud, also know the likely consequences of the corporate-executive version of NAFTA. “Many economists think NAFTA could drag down pay,” Steven Pearlstein reported in the Washington Post, expecting that “lower Mexican wages could have a gravitational effect on the wages of Americans.” A study by one leading specialist, Edward Leamer of UCLA, concludes that the kind of globalization that is enhanced by this NAFTA “would add about $3000 a year to the earnings of professional and technical workers by the end of the decade while reducing the income of everyone else by $750 — a loss of about $200 a year for the average American,” sufficient reason to explain the overwhelming enthusiasm for the Bush-Clinton NAFTA on the part of corporate power and their spokespersons.9 The reasons for the gravitational effect do not lie in “free trade principles,” which have only limited relevance to an international economy of a corporate mercantilist character with vast state intervention, but are an inherent part of the social policies that are implemented by the powerful, and built into their version of “trade agreements.”
Commentary on the impact of NAFTA on “Mexico,” “the United States,” and “Canada,” or what these entities “want,” is at best meaningless, at worst vulgar propaganda. The “class lines” that the Times detected after the fray tell a truer story. The version of NAFTA rammed through by state-corporate power is designed to carry forward the internationalization of the economy in a particular form, which includes the extension to the industrial societies of the Third World pattern of sharply two-tiered societies.
The primary stakes are not the impact on jobs, about which little is understood with any confidence, the economic models being so remote from reality. Or even wages, though the conclusions here are more persuasive. A more far-reaching issue, as critics of the executive version of NAFTA have stressed from the outset, is the erosion of freedom and democracy, both process and culture, as parliamentary institutions are increasingly displaced by decision-makers and investors who operate within their own totalitarian institutions or in the quasi-governmental structures that have taken shape to serve the needs of transnational corporations and finance. The “transcendent importance” of removing the annoyances of democracy is revealed in a vulgar way by the hysteria about labor’s “raw muscle,” but in fact lies far deeper.10
The conclusion holds for Mexico as well. Advocates here speak of the compelling need to “lock Mexico into its pro-market reforms” as the primary motivation for NAFTA (editorial, New York Times). They are expressing once again the abiding fear that a “`democracy opening’ in Mexico could test the special relationship by bringing into office a government more interested in challenging the U.S. on economic and nationalist grounds,” the dark cloud on the far horizon that a Latin America Strategy Workshop in Washington saw in September 1990. Perhaps a “democracy opening” cannot be forestalled forever, but at least an agreement with near-treaty status may block the grim effects of policies directed to some interests beyond those of investors. Mexican political scientist Jorge Casta$eda may exaggerate when he writes that “the whole purpose of NAFTA” was to strengthen the “authoritarian regime” of the always-ruling party, the PRI, but there is little doubt that a major purpose was to “lock in” the benefits that repression and violence offer for profit-making.11
3. “Wooing, and Pleasing, Big Business”
It was not only the pose of media objectivity and independence of class interests that was cast aside as the day of the crucial House vote neared. The pretense that the executive NAFTA was a “free trade” pact also became too inconvenient to maintain. “In Twist, Protectionism Is Used to Sell Trade Pact,” the Times proclaimed with wonder, discovering what both critics and advocates of the “Trade Pact” had been shouting from the rooftops for a year. The protectionist features of NAFTA had been “negotiated by the Bush Administration out of political necessity to drum up corporate support,” economic correspondent Keith Bradsher reported, but “went largely unnoticed until recently, when they began to attract criticism from abroad, notably from Japan.”
The example illustrates the power of ideological institutions to shield themselves, and their audiences, from unwanted ideas and discussion. The task of the day has been to laud the US for its dedication to the free market — “the wave of the future — a future for which America is both the gatekeeper and the model,” as ideologues exuberantly proclaim. The executive version of NAFTA was therefore a “free trade” agreement by ideological necessity, independently of the fact that it went far beyond trade and was anything but free, not as a matter of negotiation out of political necessity but in its essential design, and was attractive to domestic business power in large part for these reasons. One cannot expect the Free Press to attend to critical commentary from the Third World, or to anything beyond the very narrow spectrum of respectability at home. But it takes some discipline not to hear corporate executives lauding NAFTA for its protectionist features, or the voices of eminently respectable specialists, ranging from supporters of trade regulation like Clyde Prestowicz, who came to support NAFTA in part because its provisions favoring North American (effectively, US) firms “will let us better compete with Asians,” to leading advocates of free trade such as economist Jagdish Bhagwati, who wrote in Foreign Affairs that NAFTA is “dressed up as a great free trade move” though “it is evident that the main motivation is protectionist: Mexico becomes America’s preferential market, with Japan and the EC at a disadvantage.” Hence the “passionate support” in business circles for NAFTA as compared to GATT, where “any advantages America [i.e., US business] gains…are equally doled out to rivals.” All this is aside from such protectionist features as the intellectual property rights provisions on which US state-corporate power insists.12
The Clinton Administration “has resorted to the odd tactic of selling a free-trade pact by highlighting its protectionist provisions,” Bradsher reports. Translating to English, Clinton resorted to the quite understandable tactic of highlighting the protectionist provisions that are at the heart of the agreement and that account for the “passionate support” of business, while the pose that this is “a free-trade pact” cannot be sustained under duress, even by the doctrinal institutions.13
Clinton’s advisers understood that well. In his “11th-Hour Bid for NAFTA,” the Wall Street Journal reported, Clinton stressed that if the US did not succeed in locking Mexico into its protectionist sphere, the Japanese would do so; hardly a likely contingency, though the rhetoric is enlightening. Clinton’s key point, the Journal observed, is “that Japan and Europe will capture the Mexican market if the U.S. doesn’t”; we’d better establish protectionist barriers quickly, or someone will beat us to it.
The President also addressed a plea to US corporations to make a public pledge not to move jobs to Mexico, assurances that “would be particularly timely as the highly charged NAFTA debate winds down,” the Journal observed. Of course, if NAFTA advocates believed what they publicly proclaim, such a call would be absurd: after all, the agreement is supposed to provide a flow of “jobs, jobs, jobs.” But anything goes, in the desperate effort to ram through an agreement on investor rights that locks the door, one hopes, on a potential democratic threat.14
The business community is naturally pleased by Clinton’s firmness in defending the “bottom line,” and understands well just how far that line reaches. A lead Wall Street Journal article on November 19 was headed: “Unlikely Allies: President Is Wooing, And Mostly Pleasing, Big-Business Leaders.” The article does not explain why it is so “unlikely” that a conservative and outspokenly pro-business “New Democrat” should have kept to his consistent course; his “affinity for the business establishment continues a pattern begun when he was governor of Arkansas,” the Journal observes, recalling his “close working relationship with the group of top corporate executives nicknamed the Good Suit Club” — all in pursuit of “jobs,” the report hastens to assure us, using the conventional paraphrase for the forbidden “P-word.” Unlikeness aside, the Journal report accurately describes the President’s continuing “affinity.” He is “aggressively wooing big business, inviting small groups of top corporate executives…to lunch. On issue after issue, Mr. Clinton and his administration come down on the same side as corporate America,” NAFTA being “only the most conspicuous example.” Others include the big government initiatives that corporate America admires, among them the proposal that “the government pick up the health-insurance tab for big companies’ early retirees” and the plan “to alter U.S. foreign aid to force recipients to buy more U.S. goods” while suppressing human rights concerns. Clinton has also wisely “avoided the extremes of environmental regulation and is moving toward compromise on such contentious matters as reform of the Superfund dump-cleaning program.” “`We’re getting along much better with this administration than we did with previous ones,” confides Harold `Red’ Poling, the recently retired chairman of Ford Motor Company.” Others agree. The Chairman of Bethlehem Steel ranks Clinton as “good for American business” on issue after issue: trade, health, the economic plan, etc.
Clinton’s pro-business attitudes are fine-tuned, the Journal continues: “Democratic presidents do tend to appeal more to big corporations than to the legions of small-business owners,” and Clinton is no exception. His health care plan “is far kinder to big companies than to small ones,” also favoring “major insurers” over smaller ones; “and big companies are the big winners” on other health-related issues. Business is also generally pleased with Clinton on fiscal and environmental policies. In the latter domain, the report continues, the only lapse of the Clinton-Gore team that troubles executives is an order to the government to use more recycled paper. On trade, beyond NAFTA, business is pleased with Clinton initiatives to strongarm competitors and “his plan to link about $150 million in foreign aid to purchases of US goods,” another proper form of state intervention to protect business from market forces. The “activist Clinton presidency has revived the Business Roundtable, which consists of 200 big-company CEOs.” Formerly a major business advocacy group, the Roundtable “was nearly irrelevant” under the Republicans (self-lobbying being unnecessary) but has now again become a “major player” thanks to Clinton’s activist presidency, forming the core of the NAFTA lobby among other tasks. The big government New Democrat is a man of principle across the board, the business community is pleased to see.15
As these developments again illustrate, it is a calumny to claim that politics in the world’s leading democracy is limited to two factions of the business party. On the contrary, there is a spectrum ranging from the party of big business all the way to the party that “aggressively woos and pleases” it, marginalizing other concerns. It is that model that we must proudly defend, and make sure that others understand and adopt for themselves.
4. The Summit Triumph
Particularly gratifying to Clinton’s Business Roundtable friends is the decision to maintain China’s “favorable trade status.” The issue reached the front pages right after the NAFTA victory, as Clinton took off to lead the Asia-Pacific Economic Cooperation group (APEC) summit in Seattle. The events posed a number of problems for government-media doctrinal management. One was to portray the events with sufficient grandeur while conceding that nothing had happened. A second was the usual problem of presenting massive state intervention in economic affairs in the interests of corporate power as dedication to the free market. A narrower problem was to reconcile our deep commitment to democracy and human rights with the open courting of China, overlooking its record and its role in missile and nuclear proliferation, a problem rendered even more difficult by Clinton’s decision to provide China with means to pursue these policies more effectively. Let’s have a look at how these onerous tasks were handled.
The first two were not too demanding. There was much hullabaloo about Clinton’s “grand vision for Asia,” while only on the back pages was it conceded quietly that the Summit achieved nothing. “The unusual combination of energy and ambiguity” — meaning PR and reality — “that surrounded this meeting was captured in a `vision statement’ issued by the leaders at the close of their session,” Thomas Friedman reported toward the end of an upbeat lead story: “It was long on vision and short on specifics.” One achievement, however, was that the Asian leaders picked up the favored rhetorical styles, learning how to scatter the word “vision” profusely through their pronouncements and interviews.
It was the “grand vision,” not the missing specifics, that was in the forefront. “Clinton Preaches Open Markets at Summit,” the headline of the lead Times news story read. “We have agreed that our economic policies should be open, not closed,” the President declared. Clinton is undertaking “what may be the biggest rethinking of American policy toward Asia” in the past half century, David Sanger wrote in the lead story of the Times Week in Review, stressing “the breadth of Clinton’s vision of a Pacific Community” dedicated to free trade and open markets as he spoke “inside a giant airplane hangar at the Boeing company.” Boeing is the country’s largest exporter, Sanger noted.
More generally, civilian aircraft constitute the leading US export, running a net trade surplus of $17.8 billion in 1991. Furthermore, US comparative advantage in the international economy increasingly lies in services, not manufacture, and “by far the largest export of U.S. services is travel and tourism, which accounts for a third of the service surplus,” the Wall Street Journal reports; travel and tourism means aircraft. Accordingly, it is natural for Clinton to tout the marvels of the free market at the Boeing Company, telling “a cheering throng” that Boeing “is a model for companies across America” and the prime example of the “new vision of American relations with Asia,” where “China alone now buys one of every six of [Boeing’s] planes”; the other prime example is the Cray supercomputer corporation, given a boost by Clinton’s decision to sell its advanced computers to China in violation of congressional legislation, announced at the same time.16
Or is it natural? Hidden in the crevices is the embarrassing fact that Boeing, Cray supercomputers, and the aircraft and computer industry generally are the prime modern examples of the dramatic departures from the free market that created and sustained a viable economy in the United States (as elsewhere). These industries were founded and survive thanks to enormous taxpayer subsidies. They have always been funded through the Pentagon funnel, a system devised in the late 1940s with exactly that purpose in mind as even the public record demonstrates, one of several major government programs to impose a particular kind of state capitalist social and economic order. Another was the program of “suburbanizing America” which, under the cover of defense, established the modern motor and air transport industries as core elements of the economy, with a cost to the public that goes far beyond the tens of billions of taxpayer dollars used in this massive government social engineering project.
In the case of aircraft, hence the tourism industry as well, the facts are too obvious to require discussion. As for computers, their development was fully funded by the public in the 1950s, before they became marketable and therefore handed over to “private enterprise”; in electronics generally, government funding covered 85% of all R&D in 1958. The public subsidy continued, mounting again under Reagan-Bush in the guise of Star Wars and through the initiatives of DARPA (the Pentagon research funding agency) which “became a pivotal market force” in high-performance computing from the early 1980s, Science magazine reports, “boosting massively parallel computing from the laboratory into a nascent industry,” now to be extended through a multi-agency government supercomputing agency that will aim for speeds of a trillion operations per second, focusing more on “the crowded field of young supercomputer companies it had played a role in creating” than on university teams.17
A few problems might arise, then, in offering aircraft and supercomputers as the “model” for the “grand free market vision.” They might arise, that is, if the self-image that the ideological institutions portray with such awe had any resemblance to reality. In any event, the problems did not arise.
Sanger also observes that Boeing is involved in co-production with Mitsubishi in Nagoya, Japan, one element of “multi-million dollar, job-creating investments outside the United States on a scale that would terrify NAFTA’s opponents.” This, he notes, is another aspect of the Clinton “vision that implies tradeoffs and job displacements far more wrenching than any posed by” NAFTA. Adding the forbidden fact that Boeing is a publicly-funded private corporation, we conclude that US workers are providing funds to Boeing executives for them to use in “job-creating investments” abroad on a massive scale. Boeing executives, not workers in the plants or communities, have the unrestricted right to make such decisions about disbursal of public funds under the “free market” assumptions that permit totalitarian control within huge publicly-funded corporate institutions that increasingly dominate cross-border commercial interchanges — hardly “trade,” in any serious sense. The model for the free market future is the kind of absolute unaccountable power and taxation without representation that outraged 18th century libertarians.
Economists will surely be at hand to explain with proper scorn that in the long run the job-displacements arranged by Boeing executives will benefit all, at least in the universe of their abstract models. The real world and major human concerns are another matter. The question “who decides,” and by what right, is not a topic in an intellectual culture that excludes any concern over functioning democracy and its contemporary erosion.
The same is true of more technical matters, for example, the market distortions from internal pricing policies of transnational corporations, which may be quite substantial in scale, political economist Ian Robinson observes, but, unlike governmental tariff and non-tariff barriers, do not fall within the purview of the “trade agreements.” Yet another footnote to the odes to the new world order of free trade and open markets is added by a 1992 OECD study, which concludes that “Oligopolistic competition and strategic interaction among firms and governments rather than the invisible hand of market forces condition today’s competitive advantage and international division of labor in high-technology industries.”18
The question of supercomputers brings us to the third problem for doctrinal managers: China. That proved a harder nut to crack, and the conflicting versions are almost as bewildering as White House leaks of its health plan.
It was hard to overlook the fact that “Mr. Clinton is touchingly ardent in his efforts to get along” with China, R.W. Apple reported from the Seattle APEC summit, seeing “trade with China as the magic elixir that can cure many of the ills of the American economy.” Secretary of State Warren Christopher, “defending the decision to sell a supercomputer to the Chinese for the first time since the Tiananmen Square killings in 1989, said…that the United States had to close a $19 billion trade deficit with China,…human rights symbolism notwithstanding…,” Sanger reports. The supercomputer sale reflects the fact that the Administration is “eager to give a lift to the financially troubled” Cray corporation, Elaine Sciolino added from Washington, noting that “Even more significant for American business, the Administration has also decided to lift the ban on important components for China’s nuclear power plants, like generators,” which “could mean billions of dollars in sales” for GE. Christopher also assured China that the Clinton Administration “would be prepared to interpret an American law governing the export of high technology to allow the export of two of the seven sophisticated American-made satellites banned by sanctions imposed on China in August , senior Administration officials said,” referring to the legislation passed by Congress after US intelligence provided “conclusive proof” that China was exporting missile technology and equipment in violation of international agreements (Sciolino); a Pentagon official, questioning the wisdom of sending China equipment for nuclear power plants, added that China had “disregarded American appeals to end its nuclear cooperation with Iran.”
The Chinese leaders did not make Clinton’s task easy: they “gave no ground at all on human rights” and “provided no fig-leaf to cover President Clinton’s nakedness,” Apple reports, noting however that it was only “a relatively unsophisticated Cray supercomputer,” so the “grand vision” remains unsullied, just as it survived the effective exclusion of human rights issues, even the right of workers to organize, from NAFTA. Two days earlier, Sciolino had cited “senior American officials” as saying that it was “a sophisticated $8 million dollar supercomputer” that the US was selling to China — as “a good will gesture toward China,” “part of the Administration’s strategy to embrace, rather than isolate, China despite disagreements over human rights, weapons proliferation and trade.” At the tail end of impressive oratory on the “vision,” brief news clips reported that 81 workers died in a factory fire in southeastern China, most of them locked in “to keep people inside during working hours,” a factory spokesman said. This China-Hong Kong joint venture makes dolls, probably for sale to American children as Christmas presents; let’s hope any dried blood was washed off. Two people had been killed by toxic fumes at another toy factory a week earlier, and on August 5, an explosion and fire at a chemical depot killed 18 people and injured dozens more. The deadly accidents “have drawn attention to industrial safety conditions in southern China,” widely hailed as the site of an “economic miracle.” The attention apparently did not reach as far as Seattle, where Clinton was “embracing” the Chinese rulers and proclaiming his “grand vision,” to much applause.
Squaring the circle becomes still more difficult as we proceed. Clinton’s new “notion of national security,” Thomas Friedman explains, rests on two principles: “promoting free trade and stemming missile proliferation.” Sciolino’s adjacent column describes the sale of a sophisticated supercomputer and nuclear power equipment to China, all produced in radical violation of free trade doctrines and easily adaptable for missile and nuclear weapons proliferation. Further proliferation should hardly come as a surprise to the Administration that “decided to allow the sale despite clear evidence that China has broken its promises to Washington by exporting M-11 missile components and technology to Pakistan” in violation of an international missile control accord. The supercomputer is for weather prediction, the Administration assures us, and will be used “under strict conditions, including substantial American monitoring that will prevent its diversion for military uses.” A Pentagon official involved in proliferation issues added the obvious: “if the Chinese manage to use the supercomputer in a weapons program, no one’s going to go in there and pull the plug.” Other Asian and US sources said that the “advanced supercomputer…would be useful in China’s strategic weapons programs, particularly in simulated tests of new missiles,” Paul Quinn-Judge reported, quoting US specialists who say that China is engaged in “the world’s most comprehensive program of transfer of missile technology,” providing missiles to Pakistan, Iran, and Iraq, and possibly having helped North Korea in the development of a 600-mile range missile.19
Summarizing, Clinton’s “grand vision” for free trade, ending weapons proliferation, and promoting human rights rests on the following principles. The model is state-subsidized corporations that use taxpayer dollars to maximize their profits, investing where they choose whatever the effects on their workers and communities, those who pay the bills generally, and workers and communities abroad. High technology and other exports will be provided to leading human rights violators who may use them freely for missile and nuclear weapons proliferation in violation of international agreements. Labor rights and human rights concerns generally — say, the right not to be burned to death when you are locked into a factory — are off the agenda, except, of course, for those who do not offer commercial advantage for US corporations, and official enemies who get in the way.
In short, the powerful do what they want, leaving it to the educated classes to construct the proper imagery.
Another slight problem is that Clinton had “accused Mr. Bush during the presidential campaign of not doing enough to halt the spread of nuclear, chemical, biological and ballistic missile technology” (Sciolino). But having taken over the reins, “in effect, [Clinton] said that abuses of civil liberties in China must not be ignored but must not be permitted to dominate the relationship — a formulation remarkably like that which guided the Bush Administration and which Mr. Clinton roundly criticized during the 1992 campaign,” adopting it now as part of his “continuing effort to loosen the linkage between human rights and commercial relations” (Apple). These, however, are just more of the unimportant issues that don’t bear on Clinton’s “bottom line,” which he firmly held, silencing his critics, as Apple had explained two days earlier. They fall in the same category as Clinton’s first decision: to modify the Bush policy of turning back Haitian refugees, which he had bitterly condemned during the campaign, by harshening it further with a total blockade — a blockade which, somehow, seems to miss the boats that sustain the military rulers by ferrying drugs in and out.
“There was no linkage” in the supercomputer sale to China, a senior Administration official said. Not too much of a surprise, after all. As well-known, Clinton drew much of his top staff from the Carter Administration, which opened its human rights crusade by confronting the issue of arms sales to Iran, the world’s leading purchaser of US arms and ranking high (perhaps first) in torture of political prisoners and other human rights violations. In April 1977, the Carter Administration addressed the problem forthrightly by imposing pressures on Iran — to purchase advanced armaments that it had not requested and probably could not use, sophisticated surveillance planes to monitor and control air battles, at a cost of $850 million. US Air Force personnel would operate the system, reports from Washington indicated. Visiting Teheran a month later, Secretary of State Cyrus Vance stated that “no…linkage has been discussed” between arms sales and human rights, also clarifying to reporters that his talks with the Shah had “laid no particular stress” on human rights issues. “Each country has a responsibility to itself to deal with terrorist problems,” Vance told the press, and the new Human Rights Administration had little to say to the Shah about such matters.
Reporting the April 1977 efforts to sell Iran advanced armaments, the New York Times observed that “one of the principal reasons behind the Pentagon pressure for the offer to Iran was to keep the Boeing production line open.” More generally, sale of arms to oil producers was one of the devices employed to sustain the publicly-subsidized privately-run corporations that are the “model” for the free market vision, and to ensure that the huge profits from oil production would continue to flow to the US (and its British client), not to the people of the region, the central doctrine of US Middle East policy. In pursuit of the same goals, James Baker and George Bush intervened in a secret meeting in October 1989 to ensure that their friend Saddam Hussein would receive another $1 billion in loan guarantees, overcoming Treasury and Commerce department objections that Iraq was not creditworthy. Gassing of Kurds and torture of dissidents were not issues, linkage with human rights concerns having been properly loosened. The additional $1 billion for Saddam was justified, the State Department explained, because Iraq was “very important to US interests in the Middle East,” being “influential in the peace process” and “a key to maintaining stability in the region, offering great trade opportunities for US companies.”20
Interesting to see how much changes over the years, as one vision replaces another.
5. The Broader Vision
Meanwhile, other elements of the vision fell into place. While linkage to human rights and proliferation was being loosened at the Seattle Summit, USAID announced that 21 missions serving 35 countries and territories would be terminated as Washington reduced its aid program, one of the most miserly in the industrial world, still further. The announcement was “criticized by David Beckman, president of Bread for the World, a Christian organization dedicated to alleviating hunger,” AP reported. “Mr. Beckman said most of the cutbacks affect very poor countries. The problems of hunger, poverty and environmental degradation are not priorities for the Clinton Administration, he asserted.” They too fall below the “bottom line.”
On the front page the same day, Times correspondent Clifford Krauss reported that the Senate passed “a broad and expensive anticrime package whose leading provisions would add 100,000 police officers to the nation’s streets, build a network of high-security regional prisons and create more boot camps for young offenders,” also extending the death penalty to 52 Federal crimes and requiring states that receive Federal money for the construction of the new regional prisons to adopt harsher sentencing rules. This $23 billion package over 5 years “would amount to a sixfold increase in the annual subsidy that Washington now gives to state and local governments to fight crime.” An amendment, passed unanimously, allows for secret deportation trials for “alien terrorists,” though “it couldn’t even get to the floor during the Reagan-Bush years,” the Nation editors observe. Another makes membership in a street gang a crime. Another, passed by 91-1, requires automatic life imprisonment without parole for a third felony, whatever the offense.
It is “the finest anticrime package in history,” Senator Orrin Hatch remarked, observing the proceedings with pleasure from the far right. “Mr. Clinton did not have to engage in much lobbying on behalf of the bill,” Krauss added, though he presumably would have done so if necessary, having always taken pains to show that he is one tough hombre. Writing in the London Sunday Telegraph several months earlier, American TV correspondent Charles Glass had asked “what is the connection between an Iraqi artist named Layla al-Attar, and Rickey Ray Rector, a black man executed in 1992 for murder in Arkansas?” The answer, he pointed out, is Bill Clinton’s need to improve his ratings, in one case, by sending missiles to bomb Baghdad, killing al-Attar among others; in the other, by returning to Arkansas in the midst of his presidential campaign to supervise the execution of a mentally incapacitated prisoner, proving “that a Democrat could be tough on crime.” Alexander Cockburn drew the same connection here in a Wall Street Journal Op-ed, a jarring note in the general enthusiasm for Clinton’s war crime. The new legislation merely updates it.
Law-enforcement experts doubt that “even legislation this vast” will have a significant effect on crime unless it deals with the “causes of social disintegration that produce violent criminals,” Krauss continues. The social disintegration is an integral part of the “vision,” as policy is crafted to entrench more deeply the Third World model of a two-tiered society, with a surplus population that is increasingly useless for profit-making, the value to which all else must be subordinated.21
Reviewing “Clinton’s accomplishments” as the Seattle summit ended, the liberal Boston Globe detected real progress, even signs of “a potential transformation” in American politics. “Even a majority of Republican voters think Clinton has a vision,” a GOP pollster says. True, “much of Clinton’s `vision’ has yet to become law,” and his “record at transforming his ideas into reality is not perfect.” But it is impressive nonetheless, with real successes: raising taxes on the wealthy, protecting the right of abortion and guaranteed parental leave, and the “motor voter” bill that allows people to register when they get a driver’s license. They forgot to mention the environmental initiative that marred the record otherwise applauded by the business community: the order to government offices to use more recycled paper.22
A closer look at Clinton’s accomplishments suggest that the business leaders sampled in the Wall Street Journal have a sharper eye.
1 Apple, NYT, Nov. 18, 1993.
2 Gwen Ifill, NYT; John Aloysius Farrell, BG, Nov 8. Lewis, Nov. 5. Editorial, NYT, Nov. 16, 1993.
3 Wines, NYT, Nov. 18.
4 Bob Davis and Jackie Calmes, WSJ, Nov. 17, 1993.
5 Thomas Lueck, NYT, Nov. 18; Wines, Lewis, op. cit.
6 Krugman, Foreign Affairs, Nov./Dec. 1993; Hufbauer, NYT, Nov. 15. Samuel Bowles and Mehrene Larudee, ibid., on productivity; labor economist Harley Shaiken, cited by Steven Pearlstein, WP weekly, Nov. 8, 1993; Shaiken has done extensive studies on this issue. On the category of “unskilled workers,” see Ian Robinson, North American Trade as If Democracy Mattered (Canadian Centre for Policy Alternatives, Ottawa and International Labor Rights Education and Research Fund, Washington, 1993), n. 224.
7 Golden, NYT, Nov. 19, 5; Diego Ribadeneira, BG, Nov. 18; Darling, LAT-Chicago Sun-Times, Oct. 17, 1993. Fein, Newsletter, SHAFR, March 1993. Galbraith, WPJ, Fall 1993. Galbraith condemns the “nationalist perspective” of the US labor movement, basing himself on an irrelevant phrase from its critique of NAFTA, which devoted much attention to the problems of Mexicans (though not his “Mexicans”); he took the phrase from a quote in an article of mine that takes the same point of view with no departure from a strictly internationalist position, so that I am selected as spokesperson for the “nationalist perspective,” in standard scholarly style.
8 El Financiero, Robinson, op. cit., n. 183. David Barkin, “Salinastroika and Other Novel Ideas,” Aug. 10, 1992; SourceMex, U. of New Mexico, Latin America Data Base, to appear in new edition of Barkin, Distorted Development, Westview, forthcoming.
9 Pearlstein, op. cit.
10 For useful recent discussion, see Robinson, op. cit.
11 Editorial, NYT, Oct. 30, 1993; Latin America Strategy Development Workshop, Sept. 26 & 27, 1990, minutes, 3. Casta$eda, WP Nov. 19, 1993.
12 Bob Davis, WSJ, Sept. 17, 1993; Foreign Affairs, Spring 1993.
13 Bradsher, NYT, Nov. 7, 1993.
14 Michael Frisby, WSJ, Nov. 2; Asra Nomani, WSJ, Nov. 1, 1993.
15 Jeffrey Birnbaum and David Wessel, WSJ, Nov. 19.
16 R.W. Apple, Friedman, NYT, Nov. 21; Sanger, NYT week in review, Nov. 21; Lucinda Harper, WSJ, Nov. 22, 1993. Laura Tyson, Who’s Bashing Whom? (Institute for International Economics, 1992), 155, on aircraft export.
17 See, among others, my Turning the Tide (South End, 1985), chap. 4. For a valuable recent study of the origins of the system, see Frank Kofsky, Harry Truman and the War Scare of 1948 (St. Martin’s Press, 1993). On the social engineering project, see Richard Du Boff, Accumulation and Power (M.E. Sharpe, 1989), reviewed in my Year 501 (South End, 1993). Science, April 2, 1993. Tyson, op. cit.
18 Robinson, op. cit., 63. Dieter Ernst and David O’Connor, Competing in the Electronics Industry (Pinter, 1992), cited in Tyson, op. cit.
19 Sanger, Apple, op. cit. Sciolino, Friedman, NYT, Nov. 19; Quinn-Judge, BG. Nov. 20. Industrial accidents, Reuters, NYT, Nov. 20; special, NYT, Nov. 21, 1993.
20 Sciolino, op. cit.; Apple, NYT, Nov. 20, 1993. NYT, April 27, 1977; Joe Alex Morris, Los Angeles Times, May 1977. See my `Human Rights’ and American Foreign Policy (Spokesman, 1978), 72f. Iraq, Lionel Barber and Alan Friedman, FT, May 3, 1991; see Year 501, chap. 3.5.
21 AP; Krauss, NYT, Nov. 20. Editorial, Nation, Dec. 6, 1993. Glass, ST, July 4; Cockburn, WSJ, July 1, 1993.
22 BG, Nov. 21, 1993.