GIobalization is the Issue
by Bernie Sanders
The Nation magazine, September 28, 1998
For the past decade, through both Republican and Democratic
administrations, Washington has promoted a model of free market
global capitalism that it claimed would benefit the great majority
of people both at home and abroad. This model has failed.
The countries that were the showcase for globalization are
now an economic shambles. In the past two years South Korea's
economy has shrunk by 45 percent and Thailand's by 50 percent.
Indonesia's has shrunk by nearly 80 percent, and gross domestic
product per capita has fallen from $3,500 to under $750. The economic
crisis that began in Asia is now ricocheting around the world.
Russia is in default, Japan in recession and Africa and Latin
America in financial turmoil. The US "bubble economy"
is showing puncture wounds, with a decline in manufacturing, a
sharp contraction in agriculture, a fall in corporate profits
and wild gyrations on Wall Street.
While many Americans are deeply concerned about the speed
and direction of the global economy, the Clinton Administration
and the Republican leadership in Congress-both deeply beholden
to global corporations and financial institutions- seek to accelerate
the globalization juggernaut. This fall Congress faces two linked
struggles on the future of the global economy.
The Return of Fast Track
Last fall, as a result of strong opposition from organized
labor and Democrats in the House, Congress blocked Clinton's fast-track
plan, which would have prevented Congress from amending trade
deals negotiated by the President. Fast track was designed to
clear the way for a NAFTA-style deal for the entire Western Hemisphere,
and the Multilateral Agreement on Investment, to prevent countries-including
the United States-from putting the brakes on the flow of global
The Administration, realizing that political support for its
globalization policy was waning, made a deal with the House Democratic
leadership early in 1998 not to bring fast track back this year
if its opponents would support an $18 billion expansion in funding
for the International Monetary Fund. Now, to embarrass the Administration
and divide it from its labor and progressive allies, Republican
leaders in the Senate are promoting an omnibus trade bill that
tacks fast track onto the African trade bill.
Expanding Funding for the IMF
The International Monetary Fund, established to stabilize
exchange rates, has become the prime architect and enforcer of
corporate globalism. In exchange for rescue loans, it has imposed
ruinous structural adjustment plans that have virtually bled debtor
countries to death. Although the IMF's actual operations have
been little known to most Americans and even to many members of
Congress, the spectacular failures of its recent bailouts in Russia,
Asia and Mexico have finally brought its disastrous policies of
imposed austerity, corporate welfare and deregulation into question.
As the manic boom phase of globalization began to falter with
the outbreak of the Asian crisis a year ago, the Clinton Administration
decided that expanded funding for IMF bailouts was the best hope
for forestalling deflationary contagion-and for protecting the
speculative loans and investments made by its friends in the international
financial community. It therefore promoted the $18 billion "replenishment"-actually
a huge expansion of IMF funding. With strong lobbying from the
Clinton Administration and the House Democratic leadership, most
Democrats signed on, partly in exchange for the withdrawal of
fast track, partly from fear of global meltdown, partly as a sign
of support for an internationalist approach to solving economic
problems and partly because they were offered "reforms"
that seemed to fix some of the IMF's flaws but that turned out
to be toothless. Republicans were split: Corporate types like
Newt Gingrich supported IMF replenishment, while right-wingers
like Dick Armey and "Main Street Republicans" opposed
Meanwhile, right-wing populists like Pat Buchanan are lining
up to ride to power on public fear and anger about globalization.
If corporate globalism continues to result in deteriorating conditions
of life for ordinary Americans, we're likely to see a rise of
scapegoating demagogy and virulent right-wing economic nationalism.
Fortunately, from the debates over NAFTA, fast track, the
World Trade Organization and the IMF-and from the growing links
among popular movements and progressive parliamentarians around
the world-a progressive alternative to corporate globalism and
isolationist xenophobia is emerging. Such a progressive alternative
to corporate globalism-based on global labor rights, environmental
protections, sustainable development, democratization and international
institutions to counter uncontrolled deflations and the race to
the bottom-is the key to blocking the rise of right-wing nationalism.
Elements of this agenda are already being implemented in civil
society-for example, by the anti-sweatshop campaigns that are
forcing companies like Gap and Nike to reconsider some of their
most reprehensible labor practices. Other elements such as the
recently passed Sanders-Harkin amendment banning the import of
products made with child labor-have been written into law. Still
others have been introduced into legislation that would end US
financial support for IMF programs that degrade the environment
and undermine workers' rights, restrict the power of governments
to regulate "hot money" capital flows and give more
bailouts to international bankers and investors.
Progressives have rarely presented these elements as a coherent
alternative-a "new architecture" for the global economy.
I and other progressives in Congress will be introducing legislation
next session to begin laying out such an alternative. The upcoming
debates on fast track and the IMF provide an opportunity to consider
whether the global economy is going in the right direction and
to look at alternatives. If instead we rubber-stamp fast track
and IMF expansion, we will only increase the likelihood that meltdown
will go global.
Bernie Sanders is the Independent US Representative from Vermont.