John R. MacArthur
The Selling of “Free Trade:” NAFTA, Washington and the Subversion of American Democracy
(Hill &Wang, 2000) $25 hardcover.
Levi’s Children: Coming to Terms With Human Rights in the Global Marketplace
(Atlantic Monthly Press, 2000)
The Selling of “Free Trade” and Levi’s Children are both accounts of what happens and what must happen when a man-made and highly dynamic abstract entity called capital is given God-like powers, and allowed if not encouraged to move from one nation to another with impunity; such freedom seems the inevitable result when all living creatures, along with their values, stated beliefs, and forms of government, are made wholly and pathetically subservient to capital’s whims. Neither story is a traditional twist on the tail that wags the dog but rather describe how the tail beats the dog and the dog’s master into humiliating and grotesque submission and compliance. Both tell tales of political leaders, capitalist as well as communist, who are more than willing to betray their constituencies at the most fundamental levels to obtain and maintain personal power. Both are as one-dimensional a story as can be imagined. Seen another way, they explain a perhaps unparalleled failure of the imagination that by default allows the entity in question to run rampant. They tell stories of near-absolute power and abject powerlessness; of the most perverse and ultimately the most coercive kind of “freedom”; of the most cowardly and base shirking of meaningful responsibility. They chronicle the triumph of corporatism (which MacArthur, for one, associates with “fascism,” as would both Benito Mussolini and Francisco Franco) over both democracy and the remnants of communism. They tell the story of globalization, which is to say they tell the main story of our time, one that in ways great or small, affects us all.
John MacArthur’s The Selling of “Free Trade” begins with the closing of the Swingline Stapler Factory in Long Island City, and ends with its rebirth as a maquiladora in a Dantesque hellhole in Nogales, Mexico, where laborers working 48 hour weeks in disgusting conditions live hand-to-mouth under American bosses who refuse to learn Spanish, and whose wives complain because employees at the local Wal-Mart speak no English. In between, MacArthur, publisher of Harper’s Magazine, and without a question, a man with a vertebra, relates the sad and ethically sordid story of how American politicians, in service to their corporate patrons and behind the backs of their own constituents, rammed the deeply problematic if not outright scandalous North American Free Trade Agreement into a fact. This bipartisan effort occurred with very little support (and in fact overcame enormous opposition) from “the American people.” As the subtitle states, NAFTA’s passage proved to be a short-term triumph of public relations and a long-term subversion of democracy. It was an “agreement” made by those who knew for certain that it is infinitely more difficult to get something changed when it is in place; and an “agreement” that few if any of those affected by it had a chance to ponder and understand, never mind comply with, before it became law. It was an “agreement” utterly contemptuous of the democratic process. The Selling of “Free Trade” is thus a story with literally millions of victims and virtually devoid of heroes.
Within MacArthur’s book ironies abound: the Democrats, traditional party of the dispossessed, dispossessing hundreds of thousands of their own citizens, and policy wonks constructing and defending 21st century policy by appropriating 19th century economic theory. The experts principally consulted David Ricardo, whose notion of “comparative advantage” (which was dubious when first proposed) holds that a duty-free world will automatically cause each nation to produce what it produces best; they also trotted out Adam Smith, author of The Wealth of Nations, whose infamous and mystical “invisible hand” (which apparently has no need for an “invisible head”) would, if only left alone, magically regulate free markets. Imagine a doctor holding forth with 19th century medical theories and you get an inkling of the normalized weirdness of this entire scenario. Somehow, through some kind of economic alchemy beyond the grasp of mere mortal men, all parties were to wind up richer. NAFTA, in the moronic shorthand favored by heroic CEOs, their lobbyists, and Washington servants, was nothing if not a “win-win” proposal. Ever alert to the nuances of language, MacArthur notes how during this period, what was called Big Business became transformed in to the kinder, gentler, “Business Community”—a “community,” mind you, that has neither allegiance nor responsibility to anything or anyone but itself. “Protectionist,” the author also notes, simultaneously acquired the same ominous and treasonous tone formerly reserved for “Communist.”
Yet, like death and taxes, NAFTA, according to its adherents, was “inevitable.” Like progress, there was simply no stopping it. And why should any lover of freedom even care to? “Free markets” lead just as inevitably (if mystically) to free societies. (Here one must ignore the unfortunate reality of, say, China, as well as the fact that Pinochet in Chile managed to successfully marry dictatorship with “free trade”). This gunk spewed forth from the very forces that in the name of the “free market” actually “were actively undermining whatever vestiges remain of our own democracy.” If all of this reminds you of equally absurd and mystical claims made not-so-long ago by doctrinaire Marxists—the “withering away of the state,” for example—you are not alone. “Such overarching, bold, almost messianic economic rhetoric,” notes MacArthur, “had not perhaps been heard since Nikita Khrushchev was First Secretary of the Soviet Communist Party. Khrushchev and his ideological mentors, Karl Marx and Vladimir Lenin, were also great believers in [historical] forces…and they too believed their version of progress ‘inevitable.’”
The only problem with NAFTA—other than its claims that everybody would benefit, which remains shameless and baseless nonsense—was that the overwhelming percentage of Americans, especially those who feared (correctly, as it turned out) that their livelihoods would be stripped from them, were against it. Adamantly against it. They knew, beneath the lovely and lofty theories, what NAFTA meant to them. They knew that on a practical level, they would be forced to do the impossible: compete with their impoverished counterparts for companies that by crossing the border were instantly unburdened by standards of child labor protection laws, living wages, or environmental concerns of any kind. Unburdened, that is, from any and all progressive and humane legislation passed in the last nation of the developed world to legalize labor unions. Such protections were instantly, and perhaps irrevocably, gone.
Not that this mattered at all to either the Bush administration, which pushed for NAFTA and failed, nor to the Clinton administration, which cunningly found the solution to this irksome situation in a combination of a tidal wave of lies, distortions, and public relations gimmicks, as well as in a fantasy called and accepted as the art of “spin,” and in a process called “fast track.” “Spin,” we are all sadly familiar with. “Fast tracking,” which we will no doubt see more of, is a euphemism for ramming something into law before those who will be most affected by it even know what you’re talking about. One would like to think that in a democratic society such a massive restructuring of the American economy would proceed, if at all, with extreme caution and at the very least, the knowledge if not the full approval of its constituents. If so, you would think very, very wrong. Though they would have no way of knowing until it was too late. With the nomination of Bill Clinton in 1992, American labor, for all intents and purposes, lost its voice in the American political process. Though it was rarely discussed, the cunning “New Democrat” Clinton “had moved his party so far to the right that there proved to be no substantial difference between Clinton and Bush’s position on (among other things) trade”. With Clinton’s election, there was also nowhere for labor to go and no one to appeal to. “President Clinton,” writes MacArthur, “was embarking on a political trajectory that…culminated in the most convincing impersonation of a Republican ever attempted by a Democrat in Washington.” However, if the door was closing for Labor, it was opening ever more for corporate America. You might call it government by and for the Fortune 500.
“NAFTA will create two hundred thousand jobs in this country by 1995 alone,” claimed President Clinton at the treaty-signing ceremony in December of 1993. By 1997, following the worst economic catastrophe in Mexican history, which resulted in a five billion dollar U.S. bailout, the White House managed to cite “outside studies” that “suggest NAFTA has boosted jobs associated with exports to Mexico between roughly 90,000 and 160,000.” (MacArthur discovered the nature of at least some of the NAFTA-created jobs via an ad for a “seminar” in the Wall Street Journal. “The advertiser was a company called Collection of Arizona, a so-called shelter company that, for a fee, would set up a maquiladora for anyone who wanted to avoid the messy business of incorporating in Mexico, hiring workers and firing them, learning Spanish, and, I assumed, paying bribes.”) Two months later, the labor-funded Economic Policy Institute would claim that NAFTA had actually caused the loss of 394,835 jobs, while Global Trade Watch issued a report citing job losses in the hundreds of thousands, adding: “The U.S. economy has created jobs at a fairly rapid rate in the 1990s but without NAFTA, hundreds of thousands of full-time, high wage, benefit-paying manufacturing jobs would not have been lost. It is important to note that while the U.S. economy is generating substantial numbers of new jobs in absolute terms, the quality of the jobs created is often poor.” Meanwhile, the U.S. Bureau of Labor Statistics optimistically projects the creation of 530,000 cashier jobs in the next five years alone.
If MacArthur tells of the undermining of American democracy, Schoenberger writes of its stunted growth elsewhere around the globe. Levi’s Children opens with a scene that gets straight to the heart of where we have arrived in the 21st century. Place: Beijing. Year: 1994, a mere five years after the massacre in Tiananmen Square that revolted the world, establishing beyond question the Chinese government’s opinion of its citizens, and apparently changing nothing. Scene: a meeting of 150 American industrialists, bankers, and techno-merchants who collectively have sunk 1.6 billion dollars in private investments into the Chinese economy and its population of 1.2 billion potential workers and consumers. The businessmen await an address by Secretary of State Warren Christopher at the Chamber of Commerce meeting in Beijing. America’s senior diplomat is there on an urgent mission to persuade Chinese leaders to reform their disgusting human rights practices or risk losing trade privileges with the United States. Result: Christopher is summarily humiliated by his own countrymen and greeted with “the audience’s brazen expression of contempt.” “Christopher,” writes Schoenberger, “came looking for allies in his mission, but instead he encountered fierce criticism that echoed the views of hard-line Chinese officials.” If one picture could crystallize the new relationship of government—any government—to business, as well as the naked, brute power wielded by both over their citizens, this could be it.
Absent from the meeting were Levi Strauss & Co., around whose travails in the brutal world of globalization Schoenberger weaves his book. One year earlier, Levi’s had shocked the business world by announcing its withdrawal from its contract manufacturing base in China. The company’s reasons were ethical—an unheard of and embarrassing consideration in the zero-sum game of the real New World Order. Conversely, the “international business community,” in its never-ending search for the cheapest and most helpless possible labor force, had already joined forces with a government repressive enough to make damned sure it remained so. Child labor? No problem. Barbed-wire compounds? Well, as you know, it’s a different culture. Slave wages? Hey, we’re helping them into the world economy. Besides, you can’t stop progress. And so on.
In startling contrast to the outright shamelessness of other “outsourcing,” “transnational” corporations—the Gap, Nike, Tommy Hilfiger, to name just a few—Levi Strauss, perhaps the last family-run business of its size in the world, had voluntarily produced its own internal code of conduct. It had done so as something other than a Machiavellian PR move and actually attempted to abide by it. (When human rights abuses were finally forced into the media by activists, the initial response by many companies was a barrage of cynical advertisements the industry calls “mood pitches,” designed not to change the reality of the situation, but rather the public perception of it, and to assuage whatever guilt a consumer might feel in his or her part in propping up gross exploitation. E.g.: “Human Rights: Unconditional. Undeniable. Unlimited. Are you feeling it? www.reebok.com”) One of the first companies to integrate their work force in the Deep South, support AIDS education, and offer health benefits to same sex partners, for nearly 150 years, Levi Strauss’s core belief that “success in business involves much more than just seeking profits,” stood in courageous and humane opposition to the grotesque automaton mantra of Milton Friedman & Co., those beloved idols echoed endlessly by tough guy CEOs, who posit that the sole responsibility of any corporation is the maximizing of profits for its shareholders. Period.
That Levi Strauss could stake out such a position, live by it, and still become the world’s largest apparel manufacturer is testament to their family’s character, the quality of their goods, and the best aspects of capitalism. But it is also a position that has found the company ethically floundering and in financial distress under the dictates and internal logic of globalization. Five years after its withdrawal from China, Levi Strauss, citing losing out “in the competitive game of the global apparel business,” reversed its policy and began expanding production and making direct investments in China, where it has remained, struggling both to compete and to impart what Schoenberger calls “ethics by stealth.” To this, Trini Leung of the Hong Kong Federation of Trade Unions and student of the labor movement in China, opines: “For a company that goes into China and talks about free association and collective bargaining, irony is perhaps a better word for this than hypocrisy.”
For all that, while fully aware of the enormity of the forces arrayed against any kind of moral justice or human behavior under the new global dictate—a powerless United Nations, indifferent or hostile governments, pathetically unconscious consumers—Schoenberger is not without hope, however small and however hedged. Whereas in The Selling of “Free Trade” there are virtually no heroes, Levi’s Children, aside from the noble failures of the Levi Strauss Company itself, is replete with the actions of the anonymous activists of organizations such as Global Exchange and Social Accountability 8000, who through sheer tenacity at the very least bring some awareness to a disgrace that would be kept hidden forever if it were up to the companies. Each time we buy a shirt, shoes, trousers—whatever—we may well be propping up child or de facto slave labor in exchange for a relatively inexpensive item of clothing or a new gadget. That it is near impossible or (for all but the wealthy) cost-prohibitive to buy such items that are not manufactured under such conditions is both the tragedy and reflects the diabolical genius of globalization. One is seduced into tacitly supporting and profiting by that which should appall and thereby ever and ever closer to accepting it or simply blocking it out of one’s mind, inducing, at least among the decent, a new kind of spiritual schizophrenia which we ignore at our own peril. “I tremble for my country,” wrote Thomas Jefferson on slavery, “when I reflect that God is just, for justice doesn’t sleep for ever.”
In the struggle of Levi Strauss & Co. may be seen both the struggle and the truth of our time. The company attempted to do what has been its practice for 150 years: exist ethically, be fair to its employees, make good and do good at the same time, only to discover that the global system will simply not allow it. Official America never tires of proclaiming its love of freedom, ever careful never to define what kind of freedom it is. The coming of globalization has offered a certain kind of freedom to a certain kind of person or a certain kind of entity and it is a freedom of a kind that has not been seen for many a year and never been seen before on such an enormous scale. It is the freedom to move billions of dollars across the globe in seconds, not by a “treasonous” or “criminal” but instead by a “crafty” businessman. It is the freedom to lay off 10, 20, 30 thousand employees and “out source” their jobs to the Third World and still be thought of as responsible. It is the freedom to exploit the most defenseless people of the most despotic countries and still be seen, somehow, as people of honor and principle. It is the freedom to impose one’s will and ways upon any nation, uproot or undermine any culture, force any people to adapt to your ways, or perish and claim, if you claim anything at all, that “that’s the way it is” or babble about some “inevitable” process as if globalization, nature and God are one. It is the freedom to impose a parallel universe wherein any abomination is rationalized as long as it turns a profit and all aspects of life are reduced to two categories: those that make a profit and those that do not.
Given that we are not free to live ethically and survive, the question, of business or individual, is of what kind of freedom do we speak? What are we talking about? And what on earth has happened to us that this is acceptable? It is altogether fitting that one week before the swearing in of our new presidential appointee, The New York Times Magazine could run, without irony, disgust, or protest, several articles on the un-elected boy-man under the rubric “America Inc.” Not surprisingly, there is no mention of the vast and continuing abdication of responsibility and power on the part of the government, nor the corresponding usurpation of power with no responsibility save unto themselves on the part of corporations. Another article entitled “CEO, U.S.A.” makes it clear, at least to “the paper of record,” that it is now perfectly natural, admirable, perhaps even “inevitable,” that the United States of America, self-proclaimed beacon of freedom and light, and without question the most powerful nation in the history of the world, should conduct itself as a business with the president acting as a CEO—or at least pretending to be one. One must admit that within its own perverse, a-human logic, all this makes perfect sense. What’s more, is it not one of the hidden goals of the World Trade Organization to make all politics simply ceremonial? Reading these two books one can only conclude that such a world is well on its way. The price will be and must be an intellectual, political, and spiritual retardation of an unprecedented scope and level; the idea of freedom measured exclusively by the Dow Jones Industrial Average and NASDAQ; the Cult of Efficiency absolutely triumphant. The payoff will be cheap jeans and televisions—the “consumer’s paradise” sung of by prophet/monopolizer Bill Gates. Strange, is it not, that even as we make such tremendous strides in technology, our view of the world everyday becomes increasingly barbaric.
Patrick Walsh is a writer and contributor for the Brooklyn Rail.