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Taming Global Capitalism Anew

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A North American Social Contract

JEFF FAUX

About the Author

Jane D'Arista
Jane D'Arista is an author, lecturer and former Congressional staff economist who writes for the Financial Markets...
Marcellus Andrews
Marcellus Andrews is the author of The Political Economy of Hope and Fear: Capitalism and the Black Condition in...
Joseph E. Stiglitz
Joseph E. Stiglitz is University Professor at Columbia University. He received the Nobel Prize in Economics in 2001...
Will Hutton
Will Hutton's A Declaration of Interdependence: Why America Should Join the World (Norton) was published in May.
Thea M. Lee
Thea M. Lee is policy director of the AFL-CIO.
Jeff Faux
Jeff Faux is the founder and now Distinguished Fellow at the Economic Policy Institute. His latest book is The...
James K. Galbraith
James K. Galbraith is author of The Predator State: How Conservatives Abandoned the Free Market and Why Liberals Should...
Joel Rogers
Joel Rogers, a Nation contributing editor, teaches at the University of Wisconsin, where he directs the Center on...

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Social justice will come to the global economy only when enough people in enough nation-states are organized across borders to demand it. Yet in a world of 6.5 billion people in more than 200 separate countries--representing wide differences in culture, living standards and political consciousness--the idea of a popular transnational politics effective enough to humanize the relentlessly interconnecting markets seems impossibly utopian.

But if we think of establishing a global social contract as a step-by-step process, in which political solidarity is built first among neighboring societies, region by region, it becomes easier to imagine. The ongoing struggle for a "Social Europe" to match the expanded European capitalist market offers the best real-world example of the promise of a regional social contract.

We should open up a second front in this global class war in North America. The North American Free Trade Agreement was the template for the neoliberal global project. In its protection of corporate interests and its undermining of democracy, NAFTA is even more reactionary than the World Trade Organization. Not surprisingly, it has reinforced inequality and insecurity in all three countries--most visibly demonstrated by the daily migration of Mexicans across the border, desperately seeking jobs. NAFTA's failure makes North America a microcosm of globalization's Catch-22: Bringing social justice to global markets requires global institutions to regulate global business, but these institutions are dominated by elites who oppose social justice.

After twelve years, integration among the three North American economies has gone too far to reverse. So it is time for progressives in all three countries to mobilize together to promote a social contract on their own continent. This does not mean merging into one country. Rather, it means the creation of a cross-border political movement to challenge the agenda of elites in all three countries, who established NAFTA precisely to escape democratic constraints on their wealth and power.

The problems of developing political solidarity across North America's national borders are different from but not necessarily more difficult than those encountered among the twenty-five countries that now make up the European Union. A cross-border movement could build on the many organizational and personal relationships that already exist. Early steps to gain experience and trust could include joint actions against corporate abuses that span the continent. A simultaneous strike against a common employer or a protest against a common environmental abuse could dramatize the interests that people in all three countries share. Progressives could develop a common legislative agenda, introducing the same proposals in all three legislatures. This agenda might come to form the basis of a new North American social contract that would include the following elements:

§ A Bill of Rights for citizens of North America, enforceable in all countries, that would reassert the primacy of civil protection of individuals and democratic government over the extraordinary privileges NAFTA gives to corporate investors.

§ A New Continental Deal, in which Canada and the United States commit substantial long-term aid to Mexico in order to nurture higher and sustainable economic growth while Mexico commits to policies (independent trade unions, minimum wages, equitable taxes) that assure a wider distribution of the benefits of growth.

§ A Continental Development Strategy that shifts the economic policy objectives of all three countries from subsidizing pursuit of global profits by corporate investors to support of greater industrial self-sufficiency, resource conservation and increased investment in health and education. Driven by these goals, a progressive North American Customs Union would manage modest levels of balanced trade with the rest of the world.

Creating a politics around such a continental social contract could help inspire progressive activists to develop their own common vision of the future to replace NAFTA's nihilist nightmare of unregulated capitalism. Such a movement would also help reinforce beleaguered progressives in Europe, South America and Southeast Asia (China and India are regions in themselves), who are trying to bring to life regional models of development that respect human life and dignity. Finally, it could help undercut American elites' messianic illusions of their moral right to rule the world--which infects liberals as well as conservatives--and force them to turn to the humbler but more productive task of making their own part of the globe a better place.

Jeff Faux was the founder and is now di stinguished fellow at the Economic Policy Institute. His latest book is The Global Class War.

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