The
World Trade Organization:
A Theological Critique
John B.
Cobb, Jr.
From Earth Letter, September 1999
World Government At Last?
Do you favor world
government? If so, you should look closely at the
World Trade Organization (WTO). It is the only
institution that has the power to overturn the laws
of governments all over the world. It is the closest
thing we now have to a world government.
As a nation we are very
resistant to allowing any outsider to have power
over us. Many Americans view the United Nations as a
threat to our sovereignty even though, in fact, it
has functioned more as an instrument of United
States' foreign policy than as a challenge to our
power. We thumb our nose at the World Court when it
tries to exert some authority in relation to us. Yet
very quietly, with little protest, we have given
authority over our laws to the WTO.
This remarkable phenomenon
reflects the global dominance of economic thinking
as well as the dominance of the global market. The
global market is a function of free trade among
nations. Our leaders view this free trade as so
desirable and so important that for its sake they
are willing to sacrifice national sovereignty.
The Case for Free Trade
Clearly such a level of
commitment to free trade calls us to reflection. Is
free trade so desirable and important that it
warrants our sacrifice of sovereignty for its sake?
Do we as Christians have anything to say about this?
Free trade is trade with
which governments do not interfere. That is,
governments do not tax or restrict the importation
of goods or control exports. All the decisions are
made by economic actors.
The opposite of free trade
is usually depicted as protectionism. It is pointed
out that governments sometimes protect particular
businesses from international competition. Often,
the question of whom is to be protected expresses
the political power of particular industries. Their
protection keeps the prices of their products higher
than they would otherwise be and thus adds to the
costs to consumers, including other businesses.
Economists point out that protection always hurts
consumers and, when it favors some businesses over
others, distorts the working of a free market.
Traditional economic theory
gives strong support to free trade. This theory
systematically shows that the market, when left to
itself, provides the best signals to manufacturers
as to what to produce. The market leads to the
lowest prices at which these goods can be sold with
a sufficient return to the manufacturer to warrant
continued manufacturing. The competition the market
engenders constantly improves products. The free
market is seen to increase the quality and
availability of desired goods and thus to raise the
general standard of living.
Economic theory also shows
that a larger market allows for greater economies of
scale without reducing competition. Hence, a
national market leads to faster economic growth than
do local markets. By the same logic, a global market
leads to the most rapid growth. In a world in which
so many needs remain unmet, an organization of the
economy that stimulates the greatest possible growth
would seem to deserve strong support.
The logic of this argument
favors the claim that free trade is so desirable and
so important that national policies should support
it. They do so most effectively when they renounce
the right of the national government to interfere
with trade. Each nation benefits from such
renunciation only as other nations also do so. An
agency is needed to enforce this renunciation of
sovereignty. The WTO is that agency.
As Christians, we agree that
there are many urgent unmet needs for goods and
services in our world. At least a billion people
live in dire poverty. Many others live in degrading
conditions that call for collective effort to
improve the general standard of living. We
Christians have never supported the idea of absolute
national sovereignty. If some sacrifice of such
sovereignty is needed for the promotion of free
trade, and if free trade is the means of meeting the
genuine and critical needs of the poor, then we
might readily celebrate the WTO as its promoter and
enforcer.
A
Christian Critique
There are many Christians
who have accepted the argument for free trade and
celebrate the new globalism. It seems to fit with
the vision of interdependence among all people that
some have long upheld and to replace the narrow goal
of national good with the inclusive human good. If
one points out the costs to Americans of this new
globalism, other Christians respond that we should
be willing to pay this price so that the whole world
may prosper.
Other Christians who observe
the actual consequences of the global economy are
much less enthusiastic about free trade and the
global economy. They notice that the benefits of the
global economy do not often reach the poor. Richer
nations are becoming richer, and within each nation
richer people are becoming richer. But on the whole,
the poor in each nation are barely holding their
own, and in many cases they are becoming poorer.
The gap between rich and poor is growing
rapidly.
Supporters of free trade
cannot deny these facts. But they regard them as
less important than they seem to us. I will explain
two lines of argument and note my objections.
- In economics there is a
principle called Pareto Optimality. According to
this principle, the goal of policy is to improve the
lot of some without harming others. This principle
does not support worsening the lot of the poor, but
as long as their condition remains unchanged as
measured by average income, believers in this
principle will celebrate global economic growth,
since some people are, without question, growing
richer.
This principle expresses the
desire of economists not to be swayed by values
other than the quantitative increase of economic
production. They label arguments based on other
values "theology." They are correct in
doing so. Concerns for justice and especially for
the poor and oppressed are deeply Biblical and thus,
also, theological.
- As Christians we value the
health of communities, including national
communities. One measure of health is the extent to
which the whole community is concerned that the
basic needs of all are met. Another measure is the
lack of extreme difference in economic condition
between richer and poorer people. Economic theory
does not interest itself in such matters, but
Christian theology must. If free trade makes the
rich richer while not benefiting the poor, economic
theory may continue to support it, but Christian
theology cannot.
Many supporters of free
trade do care about the poor. They argue that the
widening gap between rich and poor is a phase of
economic growth that does not last. In time, the
greater wealth of the society as a whole trickles
down to the poor.
This is an important
argument. It depicts the present suffering of the
world's poor as temporary. It asks for patience, so
that the market can work its magic and there can be
a great future for humanity as a whole. It appeals
especially to the poor to tighten their belts so
that their children and grandchildren will enjoy a
prosperity that is far beyond their present reach.
The question is, will this method of dealing with
the problem of poverty work?
The strength of the argument
comes from the histories of the now industrialized
nations. Most of them went through a period in which
the conditions of the poor in general and workers in
particular were miserable. Today they are far better
off, taking for granted such luxuries as motor
transportation, refrigerators, and television sets,
unimaginable to their ancestors. If the global
economy will deliver to all the benefits it has
provided in the First World, billions of people in
the Third World (the so-called developing countries)
should be willing to make sacrifices now so that
this dream will come true.
However, the proposition
that increased prosperity will reach the world’s
poor is a matter of faith, not evidence. Since faith
here is not placed in God but in the market,
Christians may suspect that idolatry is at work. Is
this perhaps a call for the world to serve Mammon or
wealth rather than God? In any case, there are
several reasons for being skeptical. In all the
nations in which workers eventually shared in the
benefits of economic growth, labor unions and
governments played a strong hand. Yet, the global
economy drastically weakens labor unions and greatly
reduces the role of governments. The only agency
that has global power with regard to the economy is
the WTO, whose mission is to promote free trade, not
to seek the well-being of the poor.
In the free market the only
other force that can raise wages is a labor
shortage. Currently, it is very difficult to foresee
the time when labor will be short globally. This is
not only because of the enormous unemployment and
underemployment around the world but also because
technology reduces the need for workers. It seems
likely that for several generations, indeed, for the
foreseeable future, the global economy will continue
the current "race to the bottom," moving
production to those places where labor is cheapest
and most docile. International competition for
capital investment does not support sharing the
benefits of increased production with workers. Thus,
the evidence of what is now happening does not
support the faith that the poor will benefit.
- We must ask, furthermore,
about the Earth. Free trade and the resultant global
economy are celebrated because they speed the growth
of production. But is that growth itself to be
celebrated? Growth of production means the more
rapid use of fossil fuels, the more rapid
exploitation of forests, soils, and oceans, the
greater pollution of the atmosphere. If, as many of
us believe, the present pressure on our natural
environment is unsustainable, does it make sense to
undertake to solve our problems by increasing
production manyfold?
The answer of those who call
for this vast increase of economic activity is
technology. Technology will enable us to produce
more with less and in ways that are less polluting.
Faith in the market must be combined with faith in
technology.
The argument must be taken
seriously. Vast reductions in waste are possible for
us with current technology. It is difficult to place
a limit on what future technological developments
may accomplish. Perhaps in some abstractly possible
world there could be almost unlimited economic
growth without further damage to the environment.
But in our real world the
actual forms of economic growth that are taking
place continue to be destructive. Fisheries are
crashing, deforestation causes a whole complex of
problems, the weather is less favorable because of
global warming, fresh water is becoming scarce, many
species have become extinct or are threatened with
extinction, arable land deteriorates. The litany
goes on and on. Until technology and political will
have reversed these trends, we should be suspicious
of policies designed simply to speed growth. We
reduce the power of governments to deal with
environmental issues if we give the WTO the power to
overrule environmental legislation thought to
restrain free trade. This hardly seems to be an
expression of rationality.
The
Role of Power
Christians are called to be
realists about power. What has occurred, especially
since 1980, is a massive transfer of power from the
political order to the economic one. We may ask why
governments have systematically disempowered
themselves. The answer is in part that they are
impressed by the cogency of economic arguments and
are genuinely concerned for the well-being of all
people. But the answer is also that decision makers
are beholden to those who finance their political
campaigns. The political moves made in the past two
decades have been prompted by the interests of
transnational corporations (TNCs) and those who
profit from their gains. TNCs have systematically
increased their power at the expense of governments.
Actually, this is what free
trade is all about. It is the freedom of TNCs to
move capital and goods freely around the world. As
trade has become freer, these corporations have
become larger and larger. They have sought
systematically to reduce the possible danger that
governments, which now come to them, hat in hand,
seeking their investments, might later apply to them
laws unfavorable to their operations. Present
arrangements, including the WTO, make legal
restrictions of TNCs much less likely.
Through the governments they
so largely control, TNCs are pressing for the
Multilateral Agreement on Investments. This will
guarantee that the laws of a nation cannot be
enforced on an outside corporate investor against
its will. Although there has been considerable
resistance to this agreement in First World
countries, its provisions are likely to be forced on
Third World countries through Structural Adjustment
Policies. For the sake of free trade, neocolonialism
will become complete. TNCs will have fully replaced
imperial powers as the colonial controllers and
exploiters.
On the basic issue of where
power is to be located, Christians should be able to
speak clearly. The economic order should be
subordinated to the political one. The present
reversal is unacceptable. The economic order, for
all its importance, aims at a narrow goal, that of
producing and improving goods and services. The
political order includes this value, but it adds
others, such as the general well-being of the body
politic, fairness, and also the well-being of the
environment in which human life is lived. When
pursuit of narrowly economic goals conflicts with
the realization of broader human ones, the political
order should subordinate the former to the latter.
One may object that
governments are so corrupt that they do not in fact
pursue the wider goals for which they are intended.
This certainly can happen. But even when
corporations function with no corruption at all,
they serve a much smaller constituency, namely,
their stockholders. Despite all the problems,
governments are more subject to influence by the
real needs of ordinary citizens than are
corporations. The task is not only to restore power
over corporations to political agencies but also to
make those agencies work for the common good.
If government is to be
primary, there are two directions in which change
might go. The best system would probably
combine elements of both. One direction is to place
national economies under the control of national
governments. The economies would, of course, trade
with one another as they always have. But this trade
would be restricted and promoted by governments for
the common good of their people.
The second possibility is to
accept the global market and to seek a global
government to direct it to the common good of all.
The United Nations could become such a government.
In principle, and to some extent in fact, it
represents the peoples of the world in terms of
their multiple interests and values.
The WTO is exactly the wrong
kind of organization to function as a global
government. It is designed to be insulated from
public opinion so as to single-mindedly pursue the
narrow goal of free trade, which in effect means
increasing the power of transnational corporations.
Christian responsibility includes awareness of the
facts and failures of global economic realities.
John B. Cobb, Jr. is at the
Center for Process Studies at Claremont. He is a
well-known Christian theologian and a Contributing
Editor for Earth Letter. His For the Common Good:
Redirecting the Economy Toward Community, the
Environment, and a Sustainable Future (with Herman
E. Daly, 1989) is a groundbreaking analysis of
"mainstream" economics, which offers a new
paradigm for economics, public policy, and social
ethics.. In Sustainability: Economics, Ecology, and
Justice (1992) Cobb explores Christian theology,
ethics, and social justice as these bear on
ecological issues. Sustaining the Common Good: A
Christian Perspective on the Global Economy (1994)
shows how sustainable development rather than
mainstream economic growth best represents Christian
values.
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