Reposted from the Huffington Post
Stan Socscher | November 29, 2012 | Huffington Post
Everyone I know is in favor of trade done right.
Recently, I heard a congressman explain how investors interpret that.
From that perspective, trade is done right when the investor’s property is protected from capricious foreign governments who might snatch property. I think he meant Hugo Chavez or Fidel Castro — China, or maybe Peru. I got the impression that in 1917, Bolsheviks left a deep, traumatic scar on the collective investor psyche. But let’s walk through this, because I think it has a strong streak of truth.
Our congressman put this into context, saying it took America 200 years to act in the public interest while protecting business and property rights. When we build a freeway, we seize private property for the public good, then pay owners fair compensation. We regulate cigarettes, set emissions standards for automobiles and power generating stations, and we want assurance that drugs are safe and effective.
Our 200-year process found a balance between public and private interests. How? We had a strong civil society — an active free press, public advocacy, and political power in the hands of organized workers, environmental groups, and public health advocates. Our political process held elected officials accountable, at least from time to time.
Since we did it in our domestic society, the logical leap was that our trade agreements would produce a similar outcome. Done right, we could have clean air, clean water, good schools and roads, a strong middle class, stable political institutions, and investors could make lots of money. Globalization would be fine indeed, if we follow our domestic history.
Except we’re not.
Instead, global trade agreements go overboard in protecting investor rights. “Free trade” deals largely exclude public interest, devaluing the environment, labor rights, human rights, public health and financial regulation. The interests of global investors are elevated to top priority, and effectively decoupled from the public interests in every country where trade agreements operate.