Global Economic Governance: Strategic Crossroads

The objective of this discussion paper is to examine in broad terms the emergence of a transnational citizen movement opposed to the current forms of global economic governance, while providing sketches of main analytical tendencies within this diverse movement. Although largely a backlash movement—one that mobilizes against the negative manifestations of economic globalization and the associated role of the institutions of global economic governance—the main theorists and organizers have in the past several years taken tentative steps toward formulating alternative paths for the global economy and its governance.

In the interests of fostering constructive debate, various tendencies in the global economy movement are categorized and described, with special attention to the dynamics playing out in the United States. The strengths and weaknesses of the movement and their various prescriptive approaches are evaluated. The conclusion of the report assesses what may be needed to increase the effectiveness of the global economy movement. The underlying assumption is that citizen movements and citizen agendas are playing an increasingly important role in shaping global affairs and U.S. foreign policy. More reflection and strategic planning will ensure that these movements have a positive impact—especially the global economy movement, which is the most visible and influential manifestation of transnational activism. The paper makes the case that the global economy movement should upholdthe principles of multilateral decisionmaking in its pursuit of “fair trade” demands and in its critique of current multilateral institutions.

This discussion paper does not necessarily represent the views of the FPIF staff or of the board of directors of either of the project’s sponsoring institutions. It is one of several FPIF discussion papers on related themes.

What Is a Citizen Agenda?

It is a grassroots agenda, one that arises from citizens’ concerns and becomes part of the policy debate. Under democratic governance, this percolation of grassroots issues into policy debates is a normal part of the political process. Citizen agendas, mediated by politicians can thus be translated into policy. The extent to which this happens depends on the degree of citizen support for these agendas, the strength and political skills of the grassroots organizations promoting these agendas, and the power of affected established interests. Although rarely approaching the ideal—of the people, by the people, for the people—citizen agendas advancing everyday, domestic concerns (gun control, campaign finance reform, gay rights, etc.) routinely shape national political debate.

What’s new is the upsurge of citizen agendas that advance a new vision of global affairs. Foreign policy, even in the most democratic nations, has traditionally been the purview of a narrow policy elite. In the United States, a self-selected core of congressional representatives, high administration officials, and analysts associated with the major think tanks and universities has constituted this foreign policy establishment. With little public input or review, this elite circle set the directions and crafted the implementing legislation for U.S. foreign policy during the cold war era. At both regional and global levels, representatives of national governments functioned as the sole legitimate actors during this same period. The more powerful the government, the more influence its representatives have historically wielded in international negotiations.

However, the emergence of transnational citizen movements and strong nongovernmental organizations (NGOs) concerned with global affairs has altered this framework for foreign policy decisionmaking. Although the traditional foreign policy establishments are still central to foreign policy debates on the national level, their ability to dictate the terms of these debates has markedly diminished. Among the factors contributing to this more complex foreign policy process are an end to the ideological character and security implications of all aspects of foreign policy, and the intersection of domestic and international issues, particularly regarding the global economy and environment. Paralleling the new influence of nontraditional foreign policy actors on a national level is the expanding influence of NGO networks in domains of global governance historically controlled by governments.1 Writing about this “power shift” in global governance, scholars refer to a new global structure of “complex multilateralism,” referring to nongovernmental involvement in affairs heretofore managed by governments alone.2

There is widespread agreement that transnational citizen networks and movements are altering the conduct of international affairs.3 But this is not to conclude that nongovernmental organizations and citizen movements are for the first time making their presence felt in the international arena. Citizen groups, sometimes national and sometimes international, were instrumental in establishing the humanitarian and relief dimensions of global governance. In the U.S., citizen groups were key elements in advancing the idea of establishing the United Nations, and religious and peace groups have long promoted agendas for nuclear nonproliferation and other forms of arms control.

The end of the cold war, the advent of a new era of communications technology, and the integration of corporate marketing and production have given rise to new citizen concerns about the conduct of international relations, while creating new opportunities for citizen action and networking. This is happening on three broad fronts: 1) security/political, 2) environmental, and 3) global economy.

Success in advancing citizen agendas can be noted on all three fronts. Campaigns led by citizens (or with strong citizen involvement) have been instrumental in raising international concern—and in some cases formulating new international norms—regarding deactivating landmines, establishing an international criminal court, and banning the use of child soldiers. Most notable has been the success of such groups as Amnesty International and Human Rights Watch in expanding international monitoring of human rights in the past three decades. Although long-term trends of international environmental deterioration have not been halted, three decades of activism have netted great successes in expanding environmental norms and improving environmental monitoring in multilateral institutions during the 1990s.

The recent insertion of citizen agendas into U.S. foreign policy and international decisionmaking has, however, revealed itself most dramatically in efforts to influence the management of the global economy. It did not emerge full-blown on the streets of Seattle during the WTO protests in November 1999, but rather has deep roots in the citizen movements active on the security/political and environmental fronts.

Political/Security

In the United States, citizen groups in the 1970s and 1980s questioned the political uses of U.S. economic and military aid. This criticism of U.S. foreign policies oftentimes led to solidarity networks with countries and societies adversely impacted by U.S. programs, U.S. corporations, and U.S. military intervention. Largely in this political/security context, campaigns emerged to improve bilateral and multilateral aid, cancel third world debts, and create more equitable North-South terms of trade (mostly concerning commodity exports). Two driving forces of these citizen campaigns were humanitarian/ethical activism (usually with significant involvement by religious communities) and ideological activism (by socialists and anti-imperialists). Outside of the national arena, this strand of political/security activism steadily escalated its critique of multilateralism. In the 1970s this occurred in alliance with countries of the nonaligned movement and supporters of the new international economic order within the United Nations. In the 1980s, the critique was increasingly directed at the policies of international financial institutions (IFIs), principally the World Bank and International Monetary Fund (IMF).

Environment

Today’s citizen movements analyzing globalization also have strong roots in the environmental reform efforts of the 1970s and 1980s. Activists concerned with global environmental deterioration did not overlook the environmental impacts of U.S. aid and other overseas programs, but instead largely and appropriately focused on creating new international environmental norms (usually under the auspices of the UN) and halting the destructive environmental impacts of the IFIs—especially the World Bank and regional multilateral banks. In its evolution from promoting conservation to defining environmentally sustainable development, in the 1980s the environmental community found itself increasingly engaged with the instruments of global economic governance, including the General Agreement on Tariffs and Trade (GATT).

Emergence of Global Economy Activism

International trade and investment relations received little citizen attention until the 1990s. In the 1980s a few prescient NGOs recognized that the most powerful structural feature of international affairs was neither the bipolarism of the cold war nor North-South politics. Rather it was economic globalization facilitated by new communications technology. Religious activists concerned with debt issues and third world development together with environmental, farm, and consumer safety groups began to organize against the efforts to expand free trade during the Uruguay Round of GATT, the main multilateral instrument for restructuring the global economy.

Although formally a trade agreement and not an institution, GATT was nonetheless a powerful instrument of global governance and was the exclusive domain of trade bureaucrats and corporate consultants. In the 1980s, GATT not only doubled its country members but also took decided steps to expand its rules beyond trade in manufactured goods to agricultural trade, services, intellectual property rights, and investment. Moreover, by the end of the Uruguay Round, GATT members had created a new institution of global economic governance. The World Trade Organization (WTO) not only boasted a secretariat and a greatly expanded set of rules but also a dispute-resolution mechanism.

Out from under the shadow of the cold war, the attention of a critical mass of progressive international activists shifted to the perils of globalization. This focus on the global economy had great domestic resonance in Northern countries like the United States, whose industrial base was in turmoil as production transferred to new locations that offered cheaper, nonunionized labor. The main catalyst of the activist upsurge in North America was the proposal launched in 1990 for the North American Free Trade Agreement (NAFTA). Suddenly, American workers felt their country’s main competition was not the Soviet Union or even Japan, but $1-5/day workers on the other side of the border and elsewhere overseas. Even as job productivity increased and the economy boomed, wages remained largely stagnant. Thus a pervasive sense of economic insecurity spread through Northern societies in the 1990s.

The U.S. labor movement also recreated itself, once free from the political imperatives of the cold war. After World War II, organized labor had joined the U.S. government and corporate elites in an alliance perceived to be mutually beneficial. What was good for General Motors was thought to be good for labor (as profits expanded and foreign sales grew, so did wages). With federal government economic assistance, the AFL-CIO spread U.S. cold war politics to workers throughout the “free world” with its promotion of “free trade unionism”—often just another name for business unionism. Although organized labor never endorsed the free trade agenda of the U.S. government and transnational corporations, neither did it offer strong ideological opposition. When U.S. jobs were threatened by foreign imports, two American unions (UNITE and UAW) responded in the 1980s with “Buy America” campaigns and Japan bashing. However, organized labor (AFL-CIO and international trade secretariats) did play a critical role in alerting U.S. activists to the changing rules and structures of the global economy as well as building links to foreign workers, particularly those in export-orientated assembly and manufacturing plants.

The initial wake-up call to the foreign policy establishment in the U.S. that trade and investment relations were for the first time being subjected to close public and congressional scrutiny came during the NAFTA negotiations. A reminder came when citizen opposition played a significant role in halting negotiations for an international investment agreement. As the 1990s ended, what is now called the Seattle Coalition delivered another wake-up message that could not be ignored. It was this: the rapid pace of economic globalization and the new rules of the global economy (NAFTA, Uruguay Round, Maastricht Agreement of the European Union (EU), Structural Adjustment Programs (SAPs) of the IFIs, etc.) have created a citizen backlash that will mount in intensity as corporate-driven globalization deepens.

The “Turtles to Teamsters” movement that manifested itself in Seattle included a wide range of progressive activists and signaled that the long-guarded distance between citizen activists and organized labor was narrowing, at least in the United States. The most prominent voice in this informal coalition was that of the Citizens Trade Campaign (a coalition led by Public Citizen, and housed at Friends of the Earth), whose anti-free trade and anticorporate agenda represented the antithesis of the economic liberalism and business-enhancing agenda of the WTO.

The main targets of the backlash movement are the triad of global economic governance institutions: the World Bank, IMF, and WTO.4 In fall 2001, the global economy movement will aim its sights on the annual meetings of the World Bank and IMF, and on the WTO ministerial meeting. Such a focus faces the risk of fostering populist and nationalist critiques against all forms of global governance and all multilateral institutions. Another related risk is that, at least in the public mind, the antiglobalization critique will be more associated with concerns about multilateral management than with those about the dominant private forces in the global economy, namely the transnational corporations, investment houses, and bond markets. Although there is much talk in academic and think tank circles about the influence of the Washington Consensus and the key role of the U.S. government in setting the directions for the global economy, such leading U.S. actors as the Treasury Department and the Federal Reserve have not been targeted.

The Diffuse Politics of Backlash

Like other social movements, the transnational social movement driving the backlash against globalization has both reformist and radical tendencies. But unlike most other progressive social movements (national or international), the tendencies and ideological bearings of the global economy movement are only rarely self-articulated.5 One can only speculate why this is the case.

One factor could be the disenchantment with ideology that came with the implosion of state socialism and the deepening recognition (based on their own experiences and those of leftist movements internationally) among progressives that dogma leads to authoritarianism. Another reason might be the tactical consideration that any attempt to define clear positions would lead to the fracturing of the loose coalition. Global Exchange’s Kevin Danaher, alluding to the amorphous character of the Seattle coalition, called the citizen global economy movement a “coalition of coalitions.” Although concentrated in the progressive community, these coalitions were not restricted to self-described progressives, but in some cases extended to overtly nationalist groups such as the America Firsters of the Reform Party. A related factor that may be contributing to the absence of an ideological definition to this movement is a recognition that there exist deep fissures on such related issues as improved market access for Southern exporters, WTO membership for China, and the need for social clauses in trade agreements.

Another contributing factor might be the movement’s deep roots in the advocacy community, which is more inclined toward tactical and short-term considerations than to strategic or historical analysis. Finally, the originality of this powerful, transnational social movement confronting an array of new economic and political forces that are not clearly understood could be contributing to the movement’s lack of direction and definition. For the most part, it is a backlash movement, although there are multiple efforts to move beyond criticism toward formulating an agenda for the future.

Even without a coherent agenda, the worth of global economy activism as a backlash movement is widely accepted. It’s a wake-up call that has been appreciated by broad sectors of the prevailing camp of free traders who recognize that global economic liberalization needs to be better managed. Many global leaders, from Bill Clinton to Kofi Annan to George Soros, have—as a result of citizen activism—pointed to the urgent need to put a “human face on the global economy.” The movement has also sparked an upsurge in interest about global economic conditions among masses of otherwise disaffected youth in the United States, Europe, and Australia. By drawing media attention, the militancy of sectors of this citizen movement has thrust the issues of global economic governance and corporate power into the public policy debate.

Now that it has gained the world’s attention, what does this activist coalition want? Most of the demands regard the state and the future of global economic governance. However, there are sectors of the global economy movement whose efforts are directed not at the institutions and norms of governance but more toward creating alternative economies, fighting the ills of globalization on a local level, or empowering consumers.

A Liberal World Order

To better understand the context for the converging, diverging, intersecting citizen agendas with respect to global economic governance, it may help to first discuss the existing governance framework—both ideological and structural. In the midst of World War II, political leaders and economists from the Allied nations, particularly Great Britain and the United States, began laying the foundation for a new system of global economic governance. In these discussions, there existed two chief operative assumptions:

  1. Multilateral institutions were needed to monitor and regulate economic relations among nations to ensure that there was not a repetition of the beggar-thy-neighbor trade and protectionist practices (including competitive devaluation of national currencies) that characterized the interwar period, and which contributed to that period’s deflationary economic conditions.
  2. Capitalism was the only viable system, and the best way to extend the benefits of capitalism was through liberalized international trade or free trade.

A year before the United Nations was established, two new entities of global economic governance were created, namely the Bretton Woods institutions—the World Bank and the International Monetary Fund (IMF). Soon thereafter the General Agreement on Tariffs and Trade (GATT) was established.6 As in the negotiations to establish them, each of these entities began with what one scholar termed an “embedded liberalism”—meaning that they existed to promote and strengthen a global system of economic liberalism.7

Also underlying the creation in the mid-1940s of this system of global economic governance were several other assumptions. It was assumed that the U.S., as the strongest capitalist nation, would function as the main source of capital for postwar reconstruction and development. Furthermore, the U.S. dollar (linked to gold reserves) was the currency against which all other currencies would be measured. Moreover, there was wide agreement that national governments had an important role to play in ensuring full employment and in managing the stability of their own national economies. Although this general understanding existed, there were also differences around the edges. As the least vulnerable economy, the U.S. was generally the country pushing the hardest to liberalize the rules of international trade. It was also the least wedded to macroeconomic policies that would promote full employment and the least willing to consider trade rules that would alter the terms of trade (one of the reasons why the proposed International Trade Organization was never established, and the less intrusive GATT was created as an alternative).

In the early 1970s, as the United States faced a trade and capital deficit for the first time in the postwar period, the system of global economic governance was shaken by President Nixon’s decision to detach the dollar from its gold reserve standard. This decision, an inevitable but nonetheless shocking one, greatly undermined the International Monetary Fund’s mission—to provide currency stability—and signaled that new mechanisms were needed to ensure global economic stability. In the United States, the roots of today’s prevalent economic insecurity began to take hold. For the first time, wage levels started to fall when measured against the cost of living—a condition characterizing the past quarter-century in America. At the same time, the economic scene was being shaped by the rising power and global character of U.S. corporations.

But global economic governance did recover from the currency shock, and the world’s wealthiest nations formed the G7 to coordinate macroeconomic policies, among other things. By the late 1970s, the IMF redefined itself (with nudging from the U.S. Treasury Department) to focus almost exclusively on furthering stabilization and structural adjustment policies in third world economies. With many developing countries facing unpayable debt burdens (largely as a result of reckless private lending by foreign banks), the IMF and subsequently the World Bank gained the leverage they needed to advance economic liberalization policies.

Meanwhile, GATT was slowly moving forward and consolidating its negotiating process. In the 1980s, GATT gained new prominence as Great Britain, Australia, Canada, and the United States moved at various paces to embrace more ideologically driven polices regarding economic liberalism—neoliberalism and monetarism—and gave new emphasis to the private sector as the motor of development. Many developing countries were recognizing the limitations and pitfalls of socialist and import-substitution approaches to national economic development, and were being coerced by the World Bank and IMF into abandoning inward-looking development strategies. Not wanting to risk being left out of whatever benefits liberalized trade could bring, scores of nations joined GATT before the conclusion of the Uruguay Round.

By the mid-1990s—the half-century mark for GATT, the IMF, and the World Bank—these institutions and other manifestations of global economic governance, such as the G7, were giving themselves high marks. The cold war had given way to a world penetrated to virtually every corner by market economies. Although it is difficult to prove a causal relationship, free trade advocates make a strong case that the “embedded liberalism” of these expressions of global economic governance was largely responsible for obviating trade wars, associated international conflict, and drastic downturns in the global economy. Moreover, at least in terms of global per capita income growth, there appeared to be clear evidence that increased trading relations resulted in increased overall growth. Under the watch of these institutions, the kind of economic retributions that had followed World War I were avoided, and vanquished nations soon became valued trading partners and economic powerhouses. Not only did the devastated economies recover, but also under this system of global economic governance a new set of industrial competitors emerged in the Asia Pacific and Latin America (albeit with economic development policies that violated many of the tenets of today’s free trade dogma).

A triumphal spirit spread through the global economy and its institutions of governance. This spirit was most evident in the newly created World Trade Organization, which was ready to extend the rules of economic liberalization to all types of trade and to investment policies. This triumphalism was aptly expressed in Margaret Thatcher’s phrase: “There is no alternative,” or TINA, as this conviction came to be known.

By the end of the decade, however, the triumphalism of economic liberalism had diminished. This was mostly the result of the scare triggered by the Asian financial crisis in 1997-98, which gave new credibility and prominence to critics of free marketeerism, especially when extended to capital markets. The failed economic prescriptions of the IMF and World Bank were revealed, as many critics—including those firmly in the camp of economic liberalization—charged that IFI policies contributed to the crisis and that IFI rescue packages compounded it. Both institutions were beset with identity crises and sought frantically to retool and reformulate their missions, to improve their public images, and to ensure continued government support. Although the global economic growth figures related to increased trade were impressive, they could no longer hide another set of statistics showing widening gaps between rich and poor in most countries, and the marginalization of many countries and entire regions from the “integrated global economy.” Corroborating this more sobering picture of global economic liberalization was the declining quality of life in many transitional states, and the damning social and environmental critiques that rose from the ranks of the citizen movements.

Symbolizing the “business as usual” approach to global economic governance in this new era of globalization was the World Trade Organization. Confident that there was indeed no other alternative, the WTO began to move rapidly to apply the old formulas of economic liberalism to all aspects of the integrating global economy. In Seattle, the WTO leadership got its comeuppance. Although it was differences among groups of member nations that prevented the establishment of a new round of trade/investment organizations, the underlying crisis of global economic governance was highlighted by the Turtles to Teamsters coalition.

Before the forces of globalization had pushed their way into national economies and national systems of governance, it seemed that there had been more room for domestic policies promoting general welfare, fostering full employment, creating welfare nets, boosting local economic development, protecting the environment, and recognizing the value of labor unions. In the global arena, where the rules of globalization were being formulated, there was now less room for noneconomic considerations. Instead, the clean logic of profits and efficiency shaped rulemaking. In reaction, a clamorous social critique of globalization was heard around the world. At the onset of the new century, globalization and its governance structures were in crisis. But the citizen agenda was unclear. Did the world need more or less global governance?

Reform or Abolition

Those who took to the streets of Davos, Seattle, DC, Melbourne, Prague, and Genoa represented the public face of widespread citizen concerns about the dangers and impacts of globalization. They were self-described as a transnational backlash movement. They demanded that rulemaking about the global economy not go forward until there was more consideration of globalization’s social and environmental consequences. Theorists within this movement advocate “deglobalization” and “halting the globalization of capital.”

In the mix of backlash there also emerged elements of different agendas for global economic governance. Broadly characterized, these agendas fall into two camps: reform and abolition. While useful for discussing the dominant tendencies, the abolitionist and reformist categories are not absolute. Critics may take an abolitionist stand with regard to one institution like the World Trade Organization but may believe that the World Bank plays an essential role, albeit in need of serious reform.

When looking at the citizen demands, it should also be remembered that the citizen demands for altered global economic governance are not the only agendas being discussed. Within the scholarly, think tank, and policy communities, as well as within the multilateral institutions and forums themselves, there are vibrant discussions of the future of global economic governance. These discussions are certainly influenced by the concerns and demands of citizen movements, but there is little intersection between the main actors of the antiglobalization movement (increasingly in the past year self-described as a “global justice” movement) and these other traditional venues for agenda setting.8

Abolitionists are the leading voices in the backlash politics of globalization movement. They believe that the absence of global economic governance would be better than the existing corporate-led and corporate-serving system. To some, like Walden Bello of Focus on the Global South, the absence or dramatic downsizing of global economic institutions would be especially beneficial to the developing world, creating new opportunities to pursue country and regional development plans that depend on expanding local markets and production. Among abolitionists from the South, there is an assumption that global economic governance, even if reformed, would still represent the interests of the world’s most powerful nations and corporations. Far preferable to them would be more anarchic economic relations among nations and a devolution of governance functions to the regional and national levels.9 This devolution would create more freedom to develop, since nations would regain their sovereignty. Other Southern analysts whose statements are more abolitionist than reformist, like those of the International South Group Network, stress the structural impediments to equitable and sustainable development. In large part, the structuralists within the global economy movement are declared or undeclared marxists/socialists who regard the fight against global economic governance as another dimension—and the most critical one at this moment in history—in the struggle against capital. They have not abandoned the center-periphery framework of dependency theory, and analysts like Samir Amin of World Forum of Alternatives advocate a “delinking” of the periphery from the center as an essential precondition for development.

In the North, too, the abolitionists dominate activism around global economic governance, and they also apply a strong admixture of anarchist, radical, environmental, and socialist critiques of the existing system. The intellectual centers of analysis often foster, or at least rationalize, the violent backlash on the streets. In his new book, American University professor Robin Hahnel, a frequent contributor to Z Magazine, writes: “We must act like Lilliputian Luddites first, and stop corporate-sponsored globalization by any means necessary.” To this camp, the campaign against globalization is the defining struggle of our era—a life and death struggle that requires all means necessary to oppose current forms of global economic governance and to stop corporate forces.

The reformers pose their agendas within a system (actual or proposed) of global governance. Among the reformist forces are radicals and moderates. The moderates within the citizen movements are often indistinguishable from the political liberals in the Democratic Party, think tanks, and universities. They believe that mechanisms of global economic governance are urgently needed to protect the environment and to guarantee that development is equitable (or at least not polarizing). Whereas the liberal political community believes that the effort to humanize and naturalize globalization can be pursued effectively in the halls of Congress and through intellectual engagement, the moderate reformers within citizen movements say these efforts, though worthy and necessary, are not enough. Citizen action is also necessary, ranging from consumer activism to street protests (although nonviolent).

There is also an ideological divergence. Whereas the liberals are generally firm believers in the capitalist economic system, the moderate reformers of the citizen movements are more ambivalent. Liberal think-tank analysts, opinion leaders, and scholars openly argue that reforms are needed to maintain a stable capitalist system, but the citizen reformers are generally more focused on the sectors they represent (consumers, farmers, workers, environment, etc.) rather than on system-based reform and maintenance.

The radicals within the reform camp are frequently abolitionists in disguise. Rather than presenting an abolitionist agenda, they advocate reforms that, if implemented, would effectively shut down global governance with respect to maintaining an international system of trade and investment rules. Appeals to national sovereignty and human security would always be allowed to supplant global rules. Controls on capital would be so severe that they would effectively socialize capital. “The fix it or nix it” agenda is driven by a belief that the targeted institutions do more harm than good. If the problems of process and impact are not quickly fixed, it would be better to dissolve the institutions—either starting over again with a new institution or leaving nations free to develop their own systems of trade, investment, and financial stability outside a global framework of rules for trade and investment.

Radicals within the reform camp and declared abolitionists believe that liberal reformists are not addressing the structural inequities and power dynamics of global economic governance but rather are only tinkering with structural problems at the edges. As the reformist agenda is implemented, they fear that corporate rule and the underlying capitalist system would be stabilized and consolidated. A middle ground between the abolitionist and liberal reform camp is occupied by radical reformers, who see the necessity of some form of global economic governance and advocate for reforms that would place the Bretton Woods institutions and the WTO under the UN flag—thereby establishing a platform for a more democratic system of governance and one less controlled by the transnational corporations. Strong support for a reformed system of global economic governance is also found among the environmentalists, who regard reformed multilateral institutions as the only effective safeguard against further international environmental deterioration.

Citizen Global Economy Movement: A Quilt of Many Textures

Separating the tendencies within the global economy movement into abolitionist and reformist offers only a glimpse at the complexity and diversity of the global economy movement. Other tendencies within this broad movement include those categorized below, but these categorizations are generally not self-defined and are largely overlapping. Reformers and abolitionists are found in most but not all of these tendencies.

Localists

There are two distinct strains of localism, one from the South and the other from the North. Southern localist thought is more traditional, with strong roots in the import-substitution school of thought. There are also strong nationalist and Ghandian sentiments that fuel a populist opposition to the flood of foreign merchandise and the undermining of traditional economic sectors. Globalization has largely undermined the industrialization component of strategies that advocated protected national development. Currently dominant within localist thinking in the South, are concerns about the international competition rural sectors are increasingly facing—and the threats to their cultures. The delinking school (neomarxist) that calls for “peripheral” countries and regions to “delink” from the center of the global capitalist economy (in Africa, Latin America, and Asia Pacific—but with little resonance among governments) could also be categorized as localist.

Localism in the North is promoted by “new protectionists” like Colin Hines, proponents of cooperatives and barter economies, municipal development advocates, and people-centered development advocates like David Korten.10 Basically, the concept is that development should originate with and be controlled by communities, businesses should be small, and capital flows should be controlled by government regulation. There are socialist and capitalist tendencies within Northern localism. On the left, the emphasis is on the social control of capital, markets, and production; while on the right the emphasis is on supporting local and small businesses. Utopianism runs through both approaches.

In the United States, localism appeals to anarchist youth, back-to-the-earth proponents, cooperativists, anticorporate activists, and “new age” sectors. Localism also appeals to doomsday believers, and, given that scenario, localism would indeed be a rational survival option. In the South, resource, technology, financing, and skills constraints limit the type of goods that can be produced, but Northern localists see the potential for producing most of their needs within their small communities. In this regard, localism appeals mostly to highly privileged communities. This is not to say that localist and self-reliant development strategies that enhance the quality of life on the local level are not worthy of support, but merely that they should not be regarded as models for the global economy. The large degree to which global economy activists have embraced localism illustrates the degree to which this influential tendency is distanced from the realities of workaday Americans and from the complexities of international development.

Anarchists

It is not by chance that the antiglobalization movement has attracted anarchist tendencies, since so much of its rhetoric is abolitionist and fundamentally anti-global governance. The current institutions are typified as being undemocratic, as constituting assaults on national sovereignty and local control, and as governing in the interests of elites. In Seattle, the anarchists helped make the WTO and the Seattle Coalition the top news story around the world. In the wake of Seattle, global economy activists encouraged an increased street response to business-as-usual global governance. Following the DC demonstrations in the spring, the Melbourne, DC, Prague, and Genoa protests turned increasingly violent, as small groups of anarchists and other street-fighting activists retained the media spotlight.

There does exist an influential intellectual core to the part of the antiglobalization movement that, although not explicitly anarachist, does advance an anti-governance position. This argument holds that under the current conditions of corporate and U.S. power there can be no beneficial system of governance. Convincingly supported, this principled position is essentially that no global economic governance is better than corporate and U.S.-dominated governance, and activists should therefore increase their efforts to undermine the credibility and legitimacy of the existing institutions.11 On the whole, though, the anarchism of the global economy movement is less an expression of intellectual reflection but more a reaction among youth to the dehumanization and denaturalization of modern life by corporations and undemocratic global bureaucracies.

Socialists

Outside of academia, marxist groups, and communist parties, the socialist critique of globalization and global economic governance is seldom aired. However, the antiglobalization message of many citizen groups and their leaders has socialist implications. The critique is at heart a critique of capitalism. Rather than calling for increased regulations on capitalist practices, socialists tend to point to the underlying structural character of the economic system that exploits poor, weak, and disadvantaged sectors, while privileging the advantaged sector. This structuralist critique is seldom accompanied by concrete proposals for structural transformation. The strength of the socialist critique is its focus on capitalism as the engine of globalization. If indeed globalization is to be controlled, then a credible and practical agenda must propose either a new form of economic relations (socialism, barter, feudalism, cooperatives, state ownership, etc.) or regulations that constrain and guide capitalism (social democracy, a third way). An interesting development in today’s post-state socialist world is that the socialist critique is often framed in moral and ethical terms, such as justice and retribution, rather than in the traditional class analysis. There is a strong socialist tendency among localists who advocate that private capital should essentially be converted to social capital through strict regulation of company size, siting decisions, profit levels, etc.

Social Democrats

The social democrats within the global economy movement are mostly policy advocates who work to advance reforms in the sectors they promote: labor, environmental, human rights, corporate accountability, etc. They are not ideologues, rather they are reformers who may be lobbyists but who have close connections to the grassroots, often internationally. They are not foreign policy analysts or political economists but rather pragmatists. They strongly believe in governance, although they may believe that the present institutions are beyond hope or reform (and therefore propose new institutions and mechanisms). Though part of the global economy movement, they generally do not focus on the theoretical questions of shaping a political economy. They are generally not proponents of capitalism, but they see no viable alternatives and are therefore focused on reforms that can be realized in the short and medium terms.

There does exist discussion within the global economy movement about the degree to which the reforms advocated by the social democrats strengthen or weaken corporate control. If the institutions of global governance are reformed, they become more legitimate, so the argument goes; they create an international framework that is more conducive to stable corporate operations around the globe. This perception marks the division between the abolitionists and reformers.

Because the social democrats within citizen movements are generally advocates rather than analysts, they are not the most articulate voices of social democratic global governance. These are found in the think tank and academic world. Many of them are diehard Keynesians; others are more free-form political economists. Also at the core of the social democratic response are the AFL-CIO and other union federations.

Protectionists

Protectionism is the antithesis of free trade, and the dominant sectors in the citizen movements against globalization are protectionists. They reject the argument that liberalizing international trade rules promotes productivity, efficiency, and prosperity. They believe that when international trade threatens vulnerable industries and workers, these industries and workers should be protected with higher tariffs, quotas, and retaliatory measures (countervailing tariffs, antidumping measures, nontariff barriers, etc.) Although certain industries may promote freer trade as a general good, they are protectionist when their own industries are threatened. Labor unions, bound to protect the jobs of workers, are consistently and understandably protectionist. In recent years, however, the union movement in the United States has made important strides to defining a “new internationalism” that would be built largely on an international movement against “downward harmonization” of labor standards and the insertion of enforceable social clauses in trade agreements.

Within the citizen movements, protectionism is approached in two slightly different ways: One, it is rejected as a label for the global economy movement, because it implies opposition to international trade. They accept the necessity of some international trade, but insist that trade should always serve people and never threaten public welfare. Two, protectionism is embraced under the name of national sovereignty and human values. Rather than just protecting jobs and industries, the “new protectionists” believe that nations should protect consumers, communities, and the environment against incursions of foreign trade. The self-labeled new protectionists represent a “protectionism plus” approach to international trade: all imports deemed to affect “human security” elicit protectionist responses.

Protectionism also differs from North to South. In the developing world, protectionism has been regarded as a development and industrialization strategy called import-substitution. As enthusiasm for import-substitution has waned, protectionism in developing countries is mostly found in the agricultural sector. Rather than a theory of development, this protectionism is geared to defend large rural sectors from the inroads of cheaper agricultural production, particularly in basic grains. Developing country governments and activists are unified in their demand that Northern countries end the protectionism that has guarded vulnerable sectors from developing country exports: mostly textiles and agricultural commodities (sugar, tobacco, cotton, wool, etc.).

In the political battles against globalization and free trade agreements, a narrow protectionism frequently unites disparate sectors. Labor may unite with the industries it organizes (especially true for national industries like steel, less so for transnational industries like autos), citizen activists who may embrace internationalism in other political arenas oppose increased market access for developing countries, and right-wing xenophobes join with leftists concerned about trade deficits. Among citizen groups in the U.S., there is no acceptance that certain vulnerable industries should pass to developing countries. All sectors are protected against trade threats: from high-tech steel industries to low-tech textile industries. In the political battle against globalization, such a strategy of broadening alliances makes good organizing sense. However, the tactics of opposing free trade do not translate into coherent agendas for managing international trade and investment. Instead they often fall into traditional protectionism. (The proposal for social clauses and social charters forwarded by organized labor and other sectors in the global economy movement represents a positive step away from traditional protectionism toward a more internationalist approach, although this too has been criticized in the South as a Northern protectionism in disguise.)

Protectionism, as both citizen agendas and scholarly analyses point out, should have a place in international trade rules. The debate is really over how extensive this place should be. Most free traders will accept a degree of protectionism, particularly for less developed nations, if it is phased out over time. (In practice, developed countries continue to protect vulnerable industries, although this is meeting increased challenges.) Fair traders, as citizen activists sometimes call themselves, believe that all sectors are worthy of protection if jobs are threatened. Oftentimes, the support for protectionist responses is posed as a response to unfair trade. This was the case when, during the years 1997-99, citizen groups supported the Steelworkers Union’s demands that the U.S. government block foreign steel imports. In the case of its campaign to halt Mexican trucking in the United States, the Teamsters focused not on job losses in its own ranks but on the purported safety dangers of allowing Mexican drivers and trucks on U.S. roads.

A challenge facing citizen activists in wealthy nations, if they are to advance persuasive agendas, is to address the issue of protectionism with intellectual and political consistency. They need to respond to the consensus opinion that the protectionism of the interwar period exacerbated the global economic downturn in the interwar period and renewed international tensions that led to the second world war.12 Are they calling only for restricted protectionism (offering time-limited protection to vulnerable economic sectors or in response to grossly unfair trade practices) or for a protectionism of all workers and all industries at all times? There is an emerging consensus that trade and investment should be managed in accord with international social norms. In the United States, which enjoys advantages in infrastructure, skills, and technology, should citizens respond to trade threats to vulnerable workers with protectionism or with stronger calls for national policies that provide training, education, and economic security to affected workers?

Another question facing Northern trade activists concerns the wisdom and ethics of agendas that are undifferentiated between developing and developed countries. In a world marked by grave economic divisions between the North and South, fair trade may entail different measures depending on a country’s level of development. As it is, citizen agendas are largely undifferentiated. Both North and South assert the right to protect vulnerable sectors. It may be, however, wealthy and poor nations should be subject to different international rules regulating the extent of permissible protectionism (and such related issues as the differentiated imposition of performance requirements and the different stipulations on the use of local inputs) make both good economic and social sense.

Critics of Corporate Rule

This camp spans the entire citizen movement, and its critique of unregulated corporate operations is perhaps the movement’s most persuasive and valuable contribution. When the existing institutions of global economic governance were created, the phenomenon of transnational corporations (TNCs) did not exist. Today, the power of these corporations is such that they constitute a form of global governance themselves. There is little doubt that they are the prime (although not only) beneficiaries of the systems of global economic governance.

Although the condemnation of corporate-led globalization is universal in citizen global economy coalitions, there are different agendas. Among leading sectors of the movement, such as those associated with the International Forum on Globalization, the extent of corporate rule is perceived to be so deep that reform of the present institutions is next to impossible. Others believe that the institutions of global governance, especially the UN, are the only entities that could possibly put the brakes on corporate rule—and that is precisely why their radical overhaul reform is such a pressing concern.

For many in the anticorporate movement, targeting transnational corporations is the best way to organize citizen opposition to the capitalist system. Others have a more moralistic approach, arguing that corporations are undemocratic and unjust. Many see the fight against corporations mostly as a convenient and constructive way to mount citizen resistance to the destructive impacts of globalization. With respect to “free trade,” most anticorporate activists would contend that you cannot have free trade when at least a third of international trade occurs in the form of intrafirm transfers.

The agendas with respect to corporate rule extend, as they should, beyond the reform or abolition of institutions and forums of global economic governance to the creation of new institutions and regulations focused on corporate regulation and to proposed measures to downsize and even eliminate transnational corporations. The citizen movement is not alone in its recognition that new mechanisms of governance are needed to tax and otherwise regulate corporate operations.13 The radicals (from localists to socialists) advance proposals to rid the planet of TNCs, while the social democrats and reformers debate the merits of corporate codes and regulation (both national and multilateral). The UN’s recent initiative to establish a Global Compact coalescing labor, NGOs, and corporations to advance labor and environment standards and to encourage dialogue, exposed new divisions within the citizen movements. Labor and more established environmental and human rights groups agreed to enter this UN-hosted dialogue while an array of antiglobalization groups led by the Transnational Resource and Action Center (TRAC) condemned the UN initiative as a sellout to corporate rule.

Developmentalists

In the new framework of globalization, developmentalism has been shunted aside in the debate about the inequities of the global economy.14 Earlier policy discussions often revolved around the competing benefits of trade and aid. Aid was criticized by radicals (analysts, governments, and intellectuals) as serving the political and economic interests of the donor nations, while it was posited that true development could only occur if the terms of trade were more equitable. Reformers have long advocated increased economic aid flows from the North, but the failures of many development paradigms (infrastructure development, protected industrialism, agrarian reform, integrated rural development, cooperative production, private sector support, etc.) have created persistent questions about the possible contribution of foreign aid to domestic economic development. Strong cases are now being made for major increases in economic aid for public health and educational services, technology transfer, and communications infrastructure (bridging the digital divide, and in doing so, allowing developing nations to leapfrog over the development stages followed by industrialized nations).

Developmentalists within the global economy movement focus on the following issues: the failures of standard structural adjustment programs (SAPs), debt relief, social investment among communities and sectors marginalized by new economic forces and rules, gender issues, and greater attention by the IFIs to poverty alleviation. A common concern among developmentalists (groups such as Oxfam, Bread for the World, Bank Information Center) is that free trade has become the new development paradigm. Some applaud (with a healthy dose of skepticism) the new poverty alleviation measures adopted by the World Bank and to a much lesser extent by the IMF, but they express grave concerns about the new “integrated framework” in which the WTO, IMF, and World Bank coordinate programs for developing countries.15 While the developmentalists offer strong arguments for increased aid to the South, against SAPs, and for debt relief, they do not offer a compelling vision of how economic development can be furthered in the age of globalization. This lack of a cohesive prescriptive approach is shared among reformers within the multilateral development banks, leaving free market and “third way” strategies to dominate development thinking, in both North and South.

The dominant anticorporate focus shared by the leading elements—North and South—of the citizen movements has left little room to advance new thinking about development within the movement. The largely undifferentiated global thrust of their critique helps to explain this failure to present economic analysis and prescription reflective of the differing states of development among nations. Under the prevailing description of globalization, corporate operations polarize both Northern and Southern societies and create widespread economic insecurity (downward harmonization). Working together with a common anticorporate agenda, Northern and Southern activists believe they can halt the reigning forces of economic globalization. There is little differentiation among their expressed concerns and demands. Whereas Northern activists, who emphasize international economic disparities, strove in the 1970s and 1980s to advance preferential and nonreciprocal measures to benefit developing nations, this development focus has now largely been abandoned.

The developmentalism (aside from the common demands for the termination of SAPs and for deb

Tom Barry is a senior analyst at the Interhemispheric Resource Center and former codirector of Foreign Policy In Focus.