As January turned into February, the most important people in the world gathered themselves together in midtown Manhattan for the annual World Economic Forum. Normally held in Davos--the Swiss ski resort previously famous for being the site of Thomas Mann's The Magic Mountain--the meeting was shifted to New York this year as an act of solidarity with a city wounded on September 11.
Healing, though, wasn't much in evidence. To protect the 3,000 delegates--businesspeople, academics, journalists and random celebrities--the area around the Waldorf-Astoria was sealed off with metal fences, dump trucks filled with sand and 4,000 members of the NYPD. Of course, the intention was to keep out the thousands of activists who'd come to protest them, not to mention terrorists who might dream of taking out a good chunk of the global elite in one deadly action.
Thankfully, no mad bombers showed up. And though the protesters were kept well away from what was dubbed the Walled-Off-Astoria, their influence was nonetheless clearly felt. One attendee, Bill Gates, the richest person on earth, actually welcomed them, saying: "It's a healthy thing there are demonstrators in the streets. We need a discussion about whether the rich world is giving back what it should in the developing world. I think there is a legitimate question whether we are."
That Gates said something like that--leaving aside for a moment just what it means--is one sign of how the political environment has changed over the past few years. Another is the evolution of the WEF itself. The forum was founded in 1971 by Klaus Schwab, a Swiss professor of business, policy entrepreneur and social climber. At first it was a quiet and mostly European affair, with executives and a few intellectuals discussing the challenges of what was not yet called "globalization." But it grew over time, gaining visitors from North America and Asia, and by the 1990s had emerged as a de rigueur gathering of a global elite. In fact, it's been one of the ways by which that elite has constituted itself, learning to think, feel and act in common.
Corporate and financial bigwigs--who pay some $25,000 to come--dominate the guest list, but they also invite people who think for them, entertain them and publicize them, for whom the entrance fee is waived. Star academic economists were also on the list of invitees (bizarrely marked "confidential," so I had to swipe a copy), alongside some unexpected names: cultural theorist Homi Bhabha, columnist Arianna Huffington and model Naomi Campbell. And lots of religious figures, NGO officials and union leaders--who, to judge from their press conferences, didn't feel very well listened to. It seems not much communication goes on across the vocational lines; Berkeley economist Brad DeLong, a first-timer, theorized that "one reason that the princes of the corporate and political worlds are where they are is that they are very good at staying quiet when baited by intellectuals."
And DeLong was in the same room with them. Most journalists covering the event weren't so lucky. The WEF designated a handful of clubbable correspondents from places like the New York Times and CNBC as "participating press" and allowed them to mingle with the delegates at the Waldorf. But several hundred others, dubbed "the reporting press," were penned up in a couple of cramped "media centres" in a neighboring hotel. The terms are fascinating. Clearly the participating press participates in the inner workings of power and helps create its mystique. But the reporting press couldn't really report at all: We got to watch some of the sessions on closed-circuit TV (only the big, more formal ones--the intimate brainstorming sessions were strictly private), to read sanitized summaries distributed by the WEF staff and to view a few dignitaries at press conferences, which were generally too short to allow more than a few perfunctory questions.
Not only were we barred from newsworthy events--we weren't even told they were happening. In one of them, Treasury Secretary Paul O'Neill explained bluntly that the Bush Administration let Argentina sink into total crisis rather than engineer a bailout because "they just didn't reform," apparently forgetting that the country was once praised as a model of economic orthodoxy. In another, Colin Powell asserted the right of the United States to go after "evil regimes" as it sees fit--harsh language from the Administration's resident dove. Neither speech went down well with a good bit of the audience; anxiety at Washington's unilateralism was one of the recurrent themes among non-US delegates.
The gathering's mood was clearly troubled. Back in the 1990s, when the US economy was booming, trade barriers were falling and the New Economy was still new, the temper of the gatherings was reportedly pretty giddy. Now, the headlines are full of bad news--Enron, Argentina, recession, terrorism, protest. And the conference reflected it.
Businesspeople and academics mused on how to deal with new risks--you can't hedge against bioterrorism in the futures markets. Economists debated which letter would best describe the US economy--a V (sharp fall followed by a quick recovery), a U with a saggy right tail (long stagnation, weak recovery) or, most appropriate, a W (false recovery followed by a fresh downdraft). The consensus leaned away from the V toward the saggy U, with the W not to be ruled out.
But there were things more profound than the business cycle to worry about. As the Washington Post noted with apparent surprise, "The titles of workshops read like headlines in The Nation: 'Understanding Global Anger,' 'Bridging the Digital Divide' and 'The Politics of Apology.'" Most prominent among those concerned with poverty were the duo of Gates and his new friend Bono, the lead singer of U2. Bono--who identified himself on opening day as a "spoiled-rotten rock star" who loves cake, champagne and the world's poor--hammered at the need for debt relief. (It's easy to make fun of him, but activists are quick to point out that his influence is much to the good.) Gates kept reminding everyone that about 2 billion people live in miserable poverty. Of course, no one was rude enough to point out that Gates's personal fortune alone could retire the debts of about ten African countries.
It's hard to believe this is much more than talk, however. Addressing poverty and exclusion would require WEF attendees to surrender some of their wealth and power, and they're hardly prepared to do that. Stanley Fischer, formerly the second in command at the IMF and now a vice chairman of Citigroup, expressed "profound sympathy" for the people of Argentina but then worried about "political contagion"--the risk that other countries, seeing the crisis there, might reject economic orthodoxy.
Further insight into the WEF mindset was provided by Fischer's panelmate, South African Finance Minister Trevor Manuel. According to Manuel, during the (private) WEF discussions, "poverty was defined...as the absence of access to information," which would be news for anyone struggling to pay the rent. More urgently, he pointed out that "uprisings occur because ordinary people don't feel that they have voice and representation." To ward off that danger, policy-makers must worry about "equity"--which he carefully distinguished from "equality." When I asked him to expand on this distinction, Manuel said, "There are different conceptions of equality to start with. There's equality of opportunity and equality of outcome. But equity is about creating stakeholders. For example, both employers and employees have a stake in good labor practices." When I said that that sounded like it was more about changing perceptions rather than material reality, he said, "It's all those things. It's all those things." Manuel also revealed that the participants had "interesting, interesting debates on whether we should ask business, in the conduct of business, to act ethically or whether it's OK for business to be unethical in the conduct of business and then have some spare cash to do good with." No wonder people pay $25,000 to play this game.
And it's no wonder that on the closing day, a panel of union leaders--five out of some forty who were there, including AFL-CIO president John Sweeney--gave a very downbeat assessment of the forum's dedication to a real adjustment of policy. Sweeney, the most moderate of the group, said that the world economy doesn't have an image problem--its problems are structural. Others spoke of CEOs being "in denial," of hearing but not listening.
Unfortunately, though, there were very few union people--leaders or rank-and-filers--demonstrating in the streets that weekend. That would have made quite an impression on the great and good. But Gates's appreciation of the protesters points to what was doubtless the best thing about this year's forum: The 12,000 who marched through midtown Manhattan on February 2 proved that the so-called antiglobalization movement, a global movement if there ever was one, was not put out of business by September 11. It's alive and well--so alive and well that it set much of the WEF's agenda.
The Texas company has been a scandal in other countries for a long time.
(A Houston version of the Irish folk song)
Oh, Kenny Boy, your friends are disappearing.
They don't know you, much less your kvetchy wife.
Yes, it's sad when pols that you've been shmeering
Now hope that you'll get twenty years to life.
They sang your song: They passed deregulation.
They passed your laws. They bent the regs your way.
But now they track your every obfuscation.
Old Kenny Boy, their Kenny Boy's now Mr. Lay.
Enron, maker of big promises and big donations, stands revealed as a four-flusher.
Is the Enron story one of outrageous mendacity or stupefying ignorance?
This letter was originally published on January 29, 2002 at www.michaelmoore.com
Pôrto Alegre, Brazil--In US living rooms, talk about such policy measures as the White House's proposed Free Trade Area of the Americas (FTAA) is likely to elicit clueless shrugs.
Having simmered on the back burner through the aftermath of September
11, Congress's effort to obtain records from Vice President Dick
Cheney's energy task force has now reached the boiling p
Right till the end of January, Dita Sari, an Indonesian in her late 20s, was preparing to fly from her home near Jakarta to Salt Lake City to bask in the admiration of assorted do-gooders and celebrities mustered by the public relations department of Reebok for its thirteenth annual Human Rights Awards, overseen by a board including Jimmy Carter and Kerry Kennedy Cuomo. Make no mistake, the folks--usually somewhere between four and six--getting these annual Reebok awards have all been fine organizers and activists, committed to working for minorities, the disfranchised, the disabled, the underdogs in our wicked world.
Dita Sari's plan was to proceed to the podium in the Capitol Theater in downtown Salt Lake City, on February 7, and then, when offered the human rights award, reject it.
Now, this annual Reebok ceremony isn't up there with the Nobels, or the genius grants from MacArthur. Despite Reebok's best efforts, it's definitely a second-tier event. Nonetheless, it has paid off for Reebok. Says Jeff Ballinger, an antisweatshop activist who's organized with shoe workers in Indonesia for the past thirteen years, "With this kind of ceremony, Reebok gets its name into respectable company. When they give a prize to someone like Julie Su, a lawyer for immigrant workers in California, people who wouldn't be seen dead in Nikes are impressed."
Dita Sari got picked by Reebok's judges because she defied her government on the issue of independent trade unions. In her own words: "In 1995, I was arrested and tortured by the police, after leading a strike of 5,000 workers of Indoshoes Inti Industry. They demanded an increase of their wages (they were paid only US $1 for working eight hours a day), and maternity leave as well. This company operated in West Java, and produced shoes of Reebok and Adidas."
She got out of prison in 1999. Since then she's been building a union in plants across Java. It was there that she got a good look at Reebok's contractors, the underbosses of all the apparel, footwear, computer and toy companies. These contractors run their plants in a notoriously harsh manner.
Reebok's flacks can brandish armloads of studies, codes, monitoring reports, guidelines and kindred matter, all attesting to the company's dedication to fair treatment of anyone making consumer items with the name Reebok printed on them. But nothing has really changed. "We've created a cottage industry of monitors and inspectors and drafters of codes," Ballinger says, "but all these workers ever wanted was to sit down in dignity and negotiate with their bosses, and this has never happened."
Due in large part to the efforts of the workers and Western allies like Ballinger's Press for Change, the daily wage in Indonesia actually went up more than 300 percent between 1990 and 1997, at which point the Asian economic crisis struck. Inflation wiped out all those gains. Workers' daily pay is now half what it was before the crisis hit.
These were the points Dita Sari was going to make when she got to Salt Lake City. Then she learned that Reebok intended to schedule her and other recipients for some public events before the actual award ceremony. Rather than let Reebok benefit in any way from her presence, Dita Sari pulled the plug and at last word is in Jakarta trying to raise relief money for workers left destitute by the worst flooding in decades. She's sent the speech she was planning to give at the awards:
I have taken this award into very deep consideration. We finally decide not to accept this....
In Indonesia, there are five Reebok companies. Eighty percent of the workers are women. All companies are sub-contracted, often by South Korean companies such as Dung Jo and Tong Yang. Since the workers can only get around $1.50 a day, they then have to live in a slum area, surrounded by poor and unhealthy conditions, especially for their children. At the same time, Reebok collected millions of dollars of profit every year, directly contributed by these workers. The low pay and exploitation of the workers of Indonesia, Mexico and Vietnam are the main reasons why we will not accept this award.
But isn't Reebok at least trying to do something decent? The way Dita Sari sees things, the attempt is phony. All the awards in the world--all the window dressing with Desmond Tutu, Carly Simon, Sting, Robert Redford--doesn't alter the basic fact that workers in the Third World are being paid the absolute minimum to make a very profitable product. The labor cost of a $70 pair of sneakers made in China, Vietnam or Indonesia is $1 or less.
Is there such a thing as a virtuous sneaker? Ballinger cites Bata, a Toronto-based company that runs its own factory in Jakarta. Its executives sat down with the union and worked out a contract with significant improvements on issues that employees care about greatly, like seniority. Though the margin has fallen recently, wage scales are better than minimum. Instances of bullying and intimidation are far fewer. Bata's shoes are sold in Indonesia for what an Indonesian can afford: $10 or less.
Ten years ago another courageous Indonesian, Teten Masduki, was asked by the Levi Strauss company to broker a clinic to be built near a contractor's factory. Teten, uncompromising labor advocate that he is, refused, even though the assignment would have made him a local hero. His reason: a clinic wouldn't give the workers what they need, a voice, the power to bargain.
Teten Masduki and Dita Sari see the world clearly, a lot more clearly than the celebrities and activists massed at such events as the one organized by Reebok in Salt Lake City, which is already awash with Olympian bunkum about human brotherhood. Dita Sari turned down $50,000 from Reebok. Teten Masduki turned down a tempting position with Levi Strauss. These days he's been responsible for chasing out a corrupt attorney general from his post as head of Indonesia's Corruption Watch. Do-gooders should study these fine examples and stiffen their spines.