Ideological Literature

Dear friends:

Ideological literature

Last month Bill Moyers appeared on television to condemn multinational corporations (MNCs) and NAFTA (the North American Free Trade Agreement). Our local Peace and Justice Center sent a notice urging all peace-loving people to see it, as did other anti- globalization, anti-MNC, and pro-peace groups. So I watched the show, taped it, and invited my students over to my house to see it with me. We then discussed it.

Bill Moyers charged that Canadian MNCs are using Chapter 11 of the NAFTA to demand millions of dollars in redress when an environmental protection law, or other law, is passed that infringes on the their right to do business in the United States. The principal case was that of Methanex, whose profits were reduced because California passed a law forbidding its product, MTBE, to be added to gasoline. California had discovered that MTBE leaked out of the tanks and poisoned the water supply.

NAFTA provides for progress toward free trade among Canada, Mexico, and the United States, so that ultimately the goods from any of the three countries will be treated alike in all three. Economically, it would be like a United States of Mexico, US, and Canada. As part of this effort, Chapter 11 was written to protect foreign investment from expropriation. Thus all investment across the "United States" of Mexico, US, and Canada will be treated alike, no matter in which country it originates.

This is set forth in Article 1102 of Chapter 11: "Each Party [i.e., Canada, United States, and Mexico] shall accord to investments of investors of another Party treatment no less favorable than that it accords, in like circumstances, to investments of its own investors with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of investments."

As I read NAFTA, Methanex would lose its case, because California was applying the same rules to U.S. corporations as to Methanex. It would also lose because of Annex III of the NAFTA agreement, which reserves for the home government the "transportation, storage and distribution up to and including first hand sales of the following goods: crude oil; natural and artificial gas; goods covered by Chapter Six (Energy and Basic Petrochemicals) obtained from the refining or processing of crude oil and natural gas; and basic petrochemicals." If not covered by other clauses, it seems to me that California's right to protect gasoline and other oil products is reserved by this clause.

Case open and shut, it seems to me. But Bill Moyers did not mention that so far, no decision has been reached. He said only that Methanex had filed suit. He also implied that the company could collect millions from the United States government. In fact, only one of the many cases he cited has reached a NAFTA tribunal decision. Now, if you accidentally push me aside, with no harm to me, I can sue you for a million dollars. But I wouldn't win. Likewise, Methanex is widely expected to lose its case. Why would not Bill Moyers say so? Bill Moyers made quite a point of the fact that a NAFTA tribunal decision cannot be appealed to the Supreme Court of the United States. But why would a disagreement between, say, Mexico and the United States, be tried in a court of the United States? He also did not say that any government may ignore a judgment against it. NAFTA has no army; it will not invade us and put George Bush in jail if the US refuses to pay a judgment it deems unfair. All that would happen would be that the plaintiff government would have the right to retaliate with trade or other sanctions, just as if there were no NAFTA to prevent that from happening.

The only case in the Bill Moyers show that has been decided by a NAFTA tribunal was that of a U.S. company that had signed an agreement with the Government of Mexico to clean up and manage a sanitary landfill. But the villagers next to the landfill objected - even rioted - so the Mexican Government broke the contract. Whose fault was it? Clearly, the Mexican government, because they should have known how their own villagers would feel. But they didn't, so they misled the corporation. This case seemed to me to be a simple breach of contract, so the American company should be compensated for its investment. But Bill Moyers made it seem that the big, bad American company was harassing the poor people of Mexico.

Bill Moyers was right in one respect. The NAFTA tribunals should be more open. But this would be easily corrected. It is not necessary to shout down NAFTA.

Much ideological literature surrounds NAFTA, globalization, and multinational corporations. It also surrounds literature from the Christian Right, or others who proclaim "causes." The characteristics of ideological literature are: (1) It does not approach its topic with an open mind. Thinking (though not necessarily writing) starts with a preconceived conclusion. (2) It perceives only information that supports its cause, ignoring any other side. (3) The truth of a proposition seems less important than defeating those who take an opposing belief. (4) Often it makes extreme, emotional statements, exaggerating the ill effects of the opposite cause. (5) Sometimes it contains outright lies. Since all these characteristics can be expressed strongly or weakly, any literature can be more or less ideological.

Non-ideological literature, on the other hand, perceives all the information that intelligent observers would agree pertains to a question, states arguments pro and con, and explains why, on balance, it arrives at its conclusion. Although my own books often open with their conclusion (to alert the reader), my thinking did not start that way - it built up as I have gathered facts about international economics and history, over the past fifty years.

Nevertheless, one of the biggest problems for me is to define my ideology (for everyone has an ideology). I must constantly test my conclusions and try to prove myself wrong. Even with that, I can never be sure. So, if you find a CLQ that tends to be ideological, please admonish me (at [email protected]). Ideological literature emanating from CEOs of multinational corporations usually neglects the ways in which they have tried to bribe or overthrow foreign governments, how they have falsified their accounts to deceive stockholders and banks, and how they have bargained, cajoled, or threatened governments to influence political decisions. It neglects the ways MNCs have deceived their employees while catering to the interests of their management elites (See CLQ #34 on Enron.) It also neglects the attempts of MNCs to damage the environment, such as by promoting oil wells in the primeval forests of Alaska. Nor does it always tell the truth about the quality of its products or their effects on human health.

The literature condemning MNCs, on the other hand, usually neglects that, on average, they pay higher wages than their domestic counterparts in any country or that they provide safer working conditions and better health care, and education and housing where it would otherwise be unavailable. All the above has been shown by different researchers, including the International Labor Organization.

The anti-MNC literature usually "forgets" that the United States and Europe have signed agreements to make bribery a criminal act, and that American MNCs have supported these agreements (to bring the Europeans in line). This literature also "forgets" that multinational corporations bring capital, technology, and training that would otherwise be unavailable to many countries in which they invest. Especially in less developed countries, jobs with MNCs are a plum, widely sought.

Literature opposing profits - calling them "greed" - usually neglects that many firms operate on the margin of loss; that often bosses are not greedy, or that usually a firm finds that profits are enhanced by good working relations with staff, workers, and community. Mostly, this literature neglects the economic theories that show how profits determine which goods will be produced in response to consumer demand, as well as how the technology to produce them will be selected to consume a minimum of resources. It neglects that every other system - socialism, dictatorship, feudalism, etc. - has failed to create a viable economy.

Ideological literature supporting globalization often neglects the job losses as industries move from country to country, the towns that suffer deeply when the principal employer moves away, and how whole industries become lost, as would be the future for shipbuilding, steel, textiles, and maybe even farming, in the United States.

On the other hand, the literature opposing globalization usually neglects that trade barriers infringe on the liberties of producers to seek the most profitable markets, and, above all, trade barriers slow job formation in poorer countries where jobs are most needed. Indeed, some of the literature argues that globalization harms the poor, even though both history and economics show overwhelmingly that globalization leads the poor out of their penury. (See my book, Centuries of Economic Endeavor, for case study after case study). Ideological lies are told even in the highest circles. A few years ago the Pentagon opened the Office of Strategic influence. "to provide news items, possibly even false ones, to unwitting foreign journalists to influence public sentiment abroad" (New York Times, 2/27/02). To his credit, the President asked that it be closed, rightly fearing for the credibility of the U.S. government.

As readers of CLQ know, my ideology lies in favor of globalization and MNCs which, I believe, will together be the major forces lifting the poor from their poverty the world over. By insisting that the full story - both sides - be told in each controversy, I recognize the problems that my positions engender. In each case, however, the question is: do we overthrow the system, or seek corrections in it?

One final comment: I have often said that in CLQ I set forth only my position and do not try to persuade. I have been told there is a very thin line between the two. Perhaps. But I find that if I try to persuade, I tend to be ideological. If I just set forth my position, I can be objective. The thin line broadens into one between ideology and objectivity.

What do you think? Tell me at [email protected].

Thank you, and Peace, Jack