The Party of Davos (Page 2)

In the absence of global democracy, the forces that act as counterweights to the power of the investor class in national economies--labor, civil society and progressive political parties--are too weak and unorganized to create a global social contract. What might be called the "Party of Porto Alegre"--the NGO activists of the World Social Forum, who also meet annually (usually in Brazil, this year in Venezuela, Mali and Pakistan) in January--is hardly a match for Davos. It is therefore no surprise that the constitution of the world economy protects just one class of global citizen--the corporate investor.

Given the influence of American elites, the model for this constitution is the North American Free Trade Agreement, conceived under Ronald Reagan, nurtured by George H.W. Bush and delivered by Bill Clinton. Among other things, NAFTA's 1,000-plus pages give international investors extraordinary rights to override government protections of workers and the environment. It sets up secret panels, rife with conflicts of interest, to judge disputes from which there is no appeal. It makes virtually all nonmilitary government services subject to privatization and systematically undercuts the public sector's ability to regulate business. Jorge Castañeda, later Mexico's foreign secretary, observed that NAFTA was "an agreement for the rich and powerful in the United States, Mexico and Canada, an agreement effectively excluding ordinary people in all three societies."

In the fall of 1993 a corporate lobbyist, exasperated by my opposition to NAFTA, stopped me in the corridor of the Capitol. "Don't you understand?" she demanded. "We have to help [then-Mexican President Carlos] Salinas. He's been to Harvard. He's one of us."

Her reference to "us" seemed odd. Neither she nor I was a Harvard graduate. So it took me a while to get her point: "We" internationally mobile professionals had a shared interest in liberating similarly mobile global investors from regulations imposed by national governments on behalf of people who were, well, not like "us." Despite the considerable social distance between Salinas and both of us, she was appealing to class solidarity.

It's impossible to understand why Democratic Party leaders collaborated with Republicans to establish NAFTA unless reference is made to cross-border class interests. There was no compelling economic or political reason for Bill Clinton to make NAFTA a priority in his first year as President. In economic terms, nothing was broken that needed fixing. Politically, NAFTA and the WTO that followed traded away the interests of the Democratic Party's blue-collar electoral base while creating a bonanza for Republican constituencies on Wall Street and in red-state agribusiness.

But Clinton was more Davos than Democrat. Tutored by financier Robert Rubin, a prodigious fundraiser who became his Treasury Secretary, Clinton embraced a reactionary, pre-New Deal vision of a global future in which corporate investors were unregulated and the social contract was history. Indeed, in all three countries it was the leaders of the political parties that had historically claimed to represent ordinary people--the Democrats' Clinton, the Liberal Party's Jean Chrétien and the Institutional Revolutionary Party's Salinas--who delivered NAFTA to their global corporate clients, undercutting their own constituencies. "NAFTA happened," said the then-chairman of American Express, "because of the drive Bill Clinton gave it. He stood up against his two prime constituents, labor and environment, to drive it home over their dead bodies."

A year later, in November 1994, enough angry Democratic voters stayed away from the polls to give the Republicans control of the House. Since then, many working-class Americans, feeling abandoned by the Democrats, have responded to the Republican definition of class struggle as a fight over gun control, school prayer and abortion. The Democrats have still not recovered.

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