Globalization Must Work for Everyone

Let me be absolutely clear about this. The labor movement and its allies do not believe that higher trade barriers are the solution to poverty and oppression. Increased trade can and has created new wealth and raised living standards for many people around the world. We do not believe that the industrialized countries can turn our backs on the struggle of developing nations to raise the living standards of their most destitute citizens. We do not believe that globalization is the new Evil Empire.

So when we speak of those in danger of being left behind, we are talking about those who have not shared in the benefits of globalization. But we are not talking about a few stragglers in an otherwise orderly march of humanity toward a bright future. We are talking about multitudes who do not believe the system is working for them. They have been left behind, and they know it: workers who have seen their real incomes stagnate or decline over the past decade, which is what most workers have experienced in both developed and developing nations; the nearly 2 billion people who live on less than a dollar a day; the hundreds of millions who are illiterate and malnourished; the 2.6 billion people who lack even basic sanitation.

We understand that these problems cannot be solved overnight, that there has been some progress. But there is one indisputable fact about globalization that I believe holds the key to this discussion: Globalization has created spectacular concentrations of wealth. Some of this wealth has inevitably trickled down, but this process should not be confused with social development or even economic growth. Whatever else we may say about globalization, the rich are getting richer and the poor are getting poorer. Even some of the most ardent proponents of globalization have come to acknowledge what I suggest to you is this potentially fatal failure of the current system.

Globalization increases income and social disparities within and among nations. Globalization has left many people behind. It is wrong to protect only those who invest for a living and not those who work for a living. If globalization is to work, it must work for everyone. When the assets of the two hundred richest people in the world are greater than the combined income of the two billion people at the other end of the economic ladder, there is something wrong. The sheer size, and with it the power, of multinational corporations is overwhelming national states. Of the one hundred largest economies in the world, fifty-one are corporations—the other forty-nine are countries. I would venture to say that never before have so few benefited so much from the labor of so many.

These inequalities impact not only people and nations of the developing world. There are many millions of working people within the Trilateral countries themselves who believe, and have reason to believe, that they have been left behind. A recent Business Week poll found that only 10 percent of Americans supported free trade; 37 percent called themselves “protectionists.” And fully half said they favored the kind of fair trade that the labor movement and its allies have long advocated. It is often suggested that the way to address the discontent arising from this situation is by enhancing the social safety net, providing more effective and comprehensive job retraining, upgrading educational and health care systems, providing adequate unemployment and retirement insurance, and so on and so forth. This, of course, is an excellent idea, but unfortunately one that flies in the face of current political realities. For it is those very same unregulated competitive forces of globalization that have relentlessly pushed corporations and governments to cut back on labor costs and social programs. By all means, let us work at providing better safety nets, as a few companies and governments have, but let us have no illusions about what we must do to get at the heart of the matter. It is one of those moments in history that require systemic changes, of underlying attitudes and overarching architecture.

We Need a Global New Deal
An essential point of departure is to remind ourselves that labor is not just another commodity, not just another factor of production, however accustomed we might have become to describing it that way. Labor is an expression of unique human value. Its rights are incorporated into the Universal Declaration of Human Rights alongside the other rights we hold to be fundamental and essential to human dignity and political democracy—noble sentiments with which I trust everyone in this room agrees. But in most of the world today the rights of labor are indifferently enforced, blatantly suppressed, or violently denied. This not only offends our sense of decency, but it is also extremely short-sighted from an economic point of view. More than anything else, what the global economy needs are consumers with money to spend, workers who can buy the goods they produce.

So when we talk about workers rights, how do we get from agreement in principle to application in practice? It is no longer acceptable to say that today we will have free trade and tomorrow we will figure out how to enforce labor rights and environmental standards. It is no longer acceptable that we vigorously sanction the violation of patents, intellectual property rights, and investor rights, but are unable or unwilling to design appropriate sanctions for the violation of worker rights. Even Charlene Barshefsky, the former U.S. Trade Representative, has called the notion that labor rights should be disconnected from trade “intellectually indefensible.” The elements of the system must be linked if the system is to function properly. Universal rights must be enforced universally and simultaneously, not sequentially. When the enforcement of rights is taken seriously, as in the case of property rights, that is the way the system works. We can do no less for the dignity of human labor or the physical health of the planet.

I am reminded of a remark made by the former Secretary General of the World Trade Organization, Renato Ruggiero, who said, “We are no longer writing the rules of interaction among separate national economies. We are writing the constitution of a single global economy.” To the extent that this is true—and I believe there is a great deal of truth to this statement—we must remember that a constitution is a political document. A constitution of the global economy must reflect and embody our democratic principles. It must respond to the legitimate needs of the majority while protecting the rights of the minority. It must be clear that our economic system and the markets that drive it are not ends in themselves.

I believe there is a lesson to be learned in the historical experiences of our own nations. We have learned that the market, by itself, could create havoc as well as wealth, famine as well as feast, oppression as well as opportunity. We learned that some degree of regulation was necessary if markets were to reflect our values and meet our needs as a society. Laws were passed to temper the social distortions shaped by unrestrained capital and markets. Mechanisms were created to enforce these laws. Countervailing institutions were developed to moderate the power of capital in the workplace and the broader political discourse. There was resistance—sometimes a lot of resistance—to these changes. But business leaders who saw beyond the immediate heat of the battle, who looked to the long-term interests of their shareholders, who were willing to think and act anew, played a pivotal role in harnessing the wild energy of our economic system toward the greater good of our peoples.

We need such leadership today, particularly from the Trilateral countries. The global economy of today is like an economic Wild West, with speculative capital flying around the world at well over a trillion dollars a day and goods and services increasingly free to move wherever a dollar can be made. I do not believe that these profound structural problems are going to be fixed by tinkering at the margins. There must be changes in our way of thinking as profound as the problems themselves. I stated at the outset of my remarks that I believe there has been a shift in the focus of the debate on globalization. We are approaching a new consensus that there need to be new rules for the global economy, not only to address the immediate problems of those who have been left behind, but also to stabilize a crisis-prone financial system and to fill the institutional vacuum created by an international economy that has overwhelmed our national political systems.

But what are these rules? Who makes them? And how are they enforced? We need a pragmatic leap of imagination. I don’t claim to have all the answers, but I know we need a bold new approach, a new vision, a Global New Deal:

• The rights of workers, and the protection of the environment, must be given equal consideration with the rights of capital and property and the regulation of trade. Whether this is done primarily through the WTO or by strengthening the ILO, or some combination of the two, is an open question. But there must be a commitment to make this happen and to assure that these rules are built into the global trade and investment system with sanctions to enforce them just as property rights are enforced.
• Debt forgiveness for impoverished nations cannot continue to be a carrot offered only after disastrous cuts in social and educational programs. These countries desperately need relief, and the funds saved can be targeted on basic needs like health care and schooling.
• Something must be done to bring global financial speculation under control. I leave it to the technicians to determine the best way to do this, but serious consideration should be given to the kind of tax proposed by Nobel Laureate James Tobin on the movement of speculative capital. This would not only lower the speculative fever but also raise significant funds that could be dedicated to improving the prospects of those in danger of being left behind.

Toward a New Internationalism
Let me say one last word about those who have been left behind. They have begun to react, to organize, and to protest, as I am sure you have noticed. They are in the streets and at the factory gates. They are on the net and the web and in the offices of lawmakers and other elected officials. They are workers and students, churches and women’s groups, environmentalists and human rights activists. This is a truly grass-roots, international movement, linking North and South, East and West. The din you hear may sound confused and confusing at times, some of the ideas may be foolish and the behavior excessive, but this is a social movement that is growing stronger and more coherent around a New Internationalism.

It is a movement that is not going away until there are fundamental changes in the system. While the WTO can convene on an island, the protest can’t be put out to sea. This is not a public relations problem; it is a performance problem. The global economy just isn’t working very well for working people. They and their allies refuse to accept the dictates of the market as the final arbiter of the condition of the human family. They do not believe that undirected growth and open markets alone will lift them out of poverty or give their children the opportunities they did not have themselves. They want the freedom to speak their minds and a fair share of the fruits of their labor.

There is only one way this can happen. The laws and political institutions that were developed to protect people against the “creative destruction” of markets at a national level must now be boldly and imaginatively extended and adapted to the new international realities. Victor Hugo once said that there is nothing more powerful than an idea whose time has come. It is not uncommon for such ideas to originate and gather force outside traditional institutions. I believe this movement toward a New Internationalism reflects and articulates just such an idea, and for the billions of people who have been left behind, it has come not a moment too soon.