ABSTRACT. The article considers six standardarguments in favour of an unfettered free market: (1)the freedom to consume; (2) the freedom of the seller;(3) the freedom of the producer; (4) freedom fromgovernment interference; (5) lower costs; (6) promo-tion of democracy. It demonstrates that each of thesearguments turns out to be incoherent on closerexamination. The ground of this incoherence it isshown, is the market doctrine’s systematic omissionof non-business costs and benefits from its analysis,a methodological blindness which can only beovercome by a wider-lensed comprehension ofeconomic value.

Parties in the market should be free to buy andsell at any price at which they can find a partnerto the transaction – free to produce, buy and sellanything that can be produced or sold at all.

Friedrich A. Hayek

The Road to Serfdom

The essential argument for the freemarket: Freedom

As Hayek’s formula emphasizes, the principalargument for the free market is the freedom itgrants producers, buyers and sellers: that is,freedom from any external control in the pro-duction and exchange of goods between buyersand sellers who agree to the transaction. Because

this freedom applies to the basic spheres ofpeople’s lives – what they eat, drink, live in,travel by, read, are entertained by and so on, itis the most important and fundamental realm offreedom there can be.

Or so it seems. But let us examine these argu-ments more carefully. As we do so, let us keep aquestion before us throughout: are any of the fol-lowing problems of the free market ever raised inthe mass media, or even in economics courses?If not, why not?

Part A: Counterarguments to theargument of freedom

1. Freedom to consume

If the consumer does not have the moneyrequired to pay for the good s/he needs or desires(e.g., food or shelter), then the consumer cannotbuy it, and thus cannot have it or consume it.In the free market, therefore, those who do nothave enough money to pay for what they requireto live have no right to food or shelter or anyother required means of life which is producedand sold. To call this freedom for such people –an increasing number of our society and theworld – is self-contradictory. That is, freedomcannot exist for those with no means to act freely.

We may put this matter another way. Underthe rules of the free market, need withouteffective demand (i.e., the purchasing power ofmoney) is not recognized. It counts for nothing.Need with no money to back it has no realityor value for the market. That is why many soci-eties have introduced government interventionsin the free market to provide government assis-

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The Contradictions of Free Market Doctrine:Is There a Solution? John McMurtry

Journal of Business Ethics 16: 645–662, 1997.© 1997 Kluwer Academic Publishers. Printed in the Netherlands.

John McMurtry is a Professor of Philosophy at theUniversity of Guelph. His work in social and politicalphilosophy, political science and sociology has been inter-nationally published in journals, textbooks and publicforums.

tance to those who are without the money theyneed to survive. But such interventions havecome under increasing attack as “governmentinterferences in the free market.” In many places,“structural readjustments” to reduce or to elim-inate food subsidies and social programs aredemanded by lending agencies such as theInternational Monetary Fund and the WorldBank as a condition for loans to governments.Cutting off assistance to those in need is justi-fied as necessary for “survival in the tough newinternational marketplace”.

The “freedom of the consumer” in the freemarket, in other words, is really only the freedomof those who have enough money to demandwhat they need or want. For all those who donot possess this money, there is no freedom ofthe consumer, even to eat. It follows that peoplewithout the money to purchase the goods theyneed, about 20% of the world’s population andincreasing, do not have under the rules of thefree market the right to live.

2. Freedom of the seller

People who must work most of their active hoursto earn enough money to live must normally selltheir work or service to a corporation or otheremployer in exchange for wages and salaries. Thesale of their work is all or almost all of the valuethey have to sell. The employer, in turn, havingpaid for their work or service, has the right togive orders to them regarding everything they do,and how they do it on the job. It is “companytime”. But to be told what to do and how to doit during most of your active waking hourscannot be meaningfully called “freedom”. It isfor this reason that Marx called such a situation“wage slavery”. He meant that one’s active lifeis owned by another.

The lot of sellers of their work or service whocan find no buyer – the unemployed – is moreexternally constrained still. They are left by thefree market with no value. It is because one mustnormally sell oneself to a buyer in the market-place that Henry Thoreau referred to the mar-ketplace as a “site of humiliation”. One isrequired to present oneself as an object for sale,

and may still find no-one with money who iswilling to buy one’s work or service.

In other words the “freedom of the seller” inthe market applies only to those who are notrequired to sell themselves or their work to stayalive, a small minority of society.

3. Freedom of the producer

Because those who must sell their work orservice to live must normally obey the orders oftheir employer most of their active hours, theydo not have freedom as producers. Who, then,is genuinely free as a producer in the free market?Artists of all kinds have a special freedom ofindependence in their work, but they too mustcreate what buyers with enough money willpurchase and, therefore, must shape theirproducts so as to attract and not offend wealthybuyers of what they sell. Their freedom as pro-ducers is limited by what those with money tobuy artistic goods are willing to pay for.

The small minority who have enough capitalto employ others rather than work as employeeshave more freedom than their employees, but inthe free market even they are compelled by itslaws to invest only in production that will netthem money profit at the end of the productionand exchange cycle. This means, for example,that they must relate to other people only as ameans to make profit for themselves and/or theirshareholders. If they treat them otherwise, theyare being unjust according to free market rules.They are not maximizing profits for investors.

Those who produce value for others withouthaving to sell what they make or do are inde-pendent as producers. Professionals of variouskinds – public servants and professors, forexample – are in this way free or self-governingin their work lives, but only because what theydo for others is not for sale on the free market ata profit for private shareholders. We are thusconstrained to face the opposite conclusion ofwhat free market advocates claim. People are onlyfree or autonomous in their work when they arenot bound by the rules of the free market.

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4. Freedom from government interference

Perhaps the strongest conviction of true believersin the free market is that its open competitionensures “freedom from government interfer-ence”.

But let us again examine this argument morecarefully. Free market proponents fail to acknowl-edge that the “free market” continuously requiresvery expensive government interventions toprovide round-the-clock protection and servicesfor its operations and for its owners of privatecapital. These very costly government assistancesto protect and serve private-profit seekers beginwith police forces guarding their assets andexchanges, armed-forces to protect their privateinvestments abroad and government diplomaticoffices and personnel to promote private businessinterests in foreign states. The free market furtherrequires continuous government intervention inthe free market to provide serviced roads andhighways to transport private business goods toproduction and exchange sites, as well as schooltraining and natural resource agencies to supplyprivate business with the human and resourcecapital to produce the commodities it sells. Allof these protections, services and goods areprovided by governments. The idea of the freemarket being “free of government intervention”is an extravagant myth.

Free market proponents really mean “freedomfrom government intervention” that is not neces-sary or profitable to private business. That is whymarket advocates never talk about reducinggovernment interventions that benefit corpora-tions (e.g., police, armies, roads, free employeetraining and public resource giveaways), but onlyabout government interventions that do notdirectly benefit business (e.g., universal socialsecurity and environmental regulations). At thesame time as publicly paid-for governmentservices to business are never challenged so longas they benefit the business sector, governmenttax loop-holes, deferments and subsidies tobusiness and the wealthy are increasinglydemanded and received though they rapidlyescalate the very government deficits businessattacks. So it is not “government interventions”or “costly government programs” that free

market proponents are in truth arguing against,but only those government interventions andprograms that do not directly subsidize privatebusiness.

Governments have also over the last centurycome to serve the interests of society as a whole.These functions for society’s membership as awhole are what private business representativesattack as “interferences in the free market”.Elected governments in Canada and elsewherehave introduced legislation to limit the hours ofthe working day and week; to establish safetystandards and environmental regulations forfactories and businesses; to permit employees toorganize in workers’ unions; to provide unem-ployment insurance and income security forthose without jobs; to institute programmes ofhealth care available to all independent of abilityto pay; to provide public education for everyoneand university education to the qualified at afraction of cost; and to construct publicly acces-sible transit systems, parks and cultural centresfree of cost or at below-cost prices. Go over thislist again to check whether even one of thesebasic social goods can be provided by the marketfree from “government interference”.

All of these “government interferences in thefree market” have been achieved through publicdemocratic process rather than through privatebusiness; none are run for money profit; and allrequire government enforcement and taxation.All of them have been at one time or anotheropposed by business, sometimes violently (e.g.,killing worker and community organizers).“Freedom from government interference” in thefree market, then, entails loss of all of these publicgoods.

In this light, we need to ask who benefits fromthe current intense campaign to “reduce gov-ernment regulations”, “privatize” public-sectorgoods and “cut social programs”. Free marketproponents argue that we “can no longer afford”these high standards and social goods. But if thefree market is really so efficient and productive,why must society be increasingly worse off the“freer” it becomes?

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5. Lower costs

Another argument for the free market is that itreduces the costs of production and distribution.The argument here is that in the free market,producers and sellers must compete to produceand sell their goods at the lowest price. In thisway the market ensures lower costs, and there-fore lower prices, for consumers.

The main problem with this argument is thatit looks only to lower costs for consumers, notto the way these lower costs are achieved. Forexample, private business can lower its costs ofproduction by eliminating or evading pollutioncontrols, minimum wages, workers’ benefits,health and safety standards, and government taxesto pay for the care and support of the sick andunemployed. That is why under new interna-tional free trade agreements private corporationsand businesses relocate to places where they donot have to pay these costs of protecting humanlife and the environment – for example, to theMaquiladora Zone on the border betweenMexico and the United States where wages area small fraction of what they are in Canada andthe U.S., effective pollution controls are non-existent and taxes for public health and educa-tion have been reduced or abolished. With theright under free trade to sell the low-costproducts produced there to consumers inCanadian and U.S. markets, private businessesand corporations are better able to maximizetheir profits by avoiding the costs of protectingpeople and the environment.

Unemployment in the home country is afurther benefit to these businesses and corpora-tions because it lowers the price of labour, and,therefore, the amount private business is requiredto pay workers. With automated and electronicprocesses increasingly replacing workers of allkinds, and with the new free-trade right ofprivate investment capital to move productionto the lowest-wage areas, the price of labour hasno floor. With enough unemployment free tradecan, and has, reduced salaries and wages to everlower levels. What is a disaster for most people,ever more reduction of their real incomes andloss of their jobs, is good for internationalbusiness under free trade. There is not even a

need to worry about workers’ rebellions or upris-ings as unemployment grows and wages andsalaries drop. All that is required is to relocateinvestment to another region of the world wheredesperate people will work for under one dollara day and in disease-causing working conditions.The international free market ensures this libertyof private investment capital. That is why we hearmuch about how we “must adapt to the harshnew reality of the world market”, and how“shock treatments” are necessary for societieswho do not accept the new global regime.

Low-cost “free trade zones” across the world,which have no independent unions or humanrights protections to raise the cost of labour,provide further comparative advantages to busi-nesses seeking to minimize costs and maximizeprofits. It is rational under free market princi-ples for business to relocate their operations tosuch areas, whatever their cost in jobs to thehome country. A home country does not existwithin the rules of the international free market.Nor does a home. A worker is expected to leavehis or her home to wherever he is allowed to goto seek employment. The freedom of privatecapital to move across boundaries to the mostfavourable circumstances, however, is denied tothe worker who, with the exception of theEuropean Economic Community, is required toseek a better exchange for his work withinconfined borders.

Therefore it is only by government or otherintervention in the free market – for example, byinternational minimum standards of rights andenvironmental protection in trade agreements –that societies can prevent their standards of lifefrom falling to the lowest common denominator,which itself can keep falling to ever lower levelsof social poverty and pollution. But such stan-dards are not protected in current free tradeagreements. On the contrary, they are specificallyruled out from review or dispute under the termsof the North American Free Trade Agreement.There are thousands of pages of rules to protectcorporate and business rights, over 20 000 pagesof them in the most recent General Agreementon Tariffs and Trade (GATT), but no rulesprotect human rights or the quality of the envi-ronment.

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A further major way of reducing costs in thefree market is by “economies of scale” where thegreater the investment and purchasing power, thecapital infrastructure of labour-saving machinery,the division of labour and specialization, thevolume of goods produced, and the internationallinkages of production and distribution, thecheaper the per-unit costs of the commoditiesproduced and sold normally are. Since multina-tional corporations have the greatest economiesof scale, they are best able to reduce their costsof production in these ways. Consequently, smallproducers and small businesses without theseeconomies of scale may be unable to competein the price of their goods. It was for this reason,for example, that the small Chiapas producers ofcorn in southern Mexico began a rebellionagainst “the death sentence of NAFTA” on theday of its inception on January 1, 1994.

At the same time, economies of large scalemake for more and more uniformity of methodsand goods – from monocultural farming andseeds to mass homogeneity of media products andbooks. Diversity raises prices. Vandana Shiva hascalled the outcome of this market imperialismprocess a “monoculture of the mind”. With everfewer multinational media conglomerates in theglobal free market monopolizing control of theproduction and distribution of televisionprograms, films, magazines, newspapers and eventextbooks and learned journals, this “monocul-ture of the mind” extends into the control ofpeople’s brain circuits themselves.

But are the lower costs which proceed fromthese competitive advantages and economies ofscale really lower costs for societies as a whole?What about increased poverty, pollution, unem-ployment, illiteracy, ill-health, environmentaldegradation and destruction of natural resourcesby large-scale exploitation which follow fromsuch cost reduction methods? What of the lossof cultural diversity and autonomy of thoughtwhich the central control of media conglomer-ates increasingly imposes on human societies andpeoples? What of the increasingly inescapablepervasion of the globe by ever more motor noise,traffic, commercial interruptions and junk?

These negative consequences of the freemarket are conceived in free-market ideology as

“externalities”. That is, they are not factored intothe costs of doing business, and so are notrecognized as business costs. But it is difficult tothink of more important and drastic costs tothe great majority of society’s membership.Consumer goods for sale in the market may carrya lower price for those who can afford to buythem, but even they must suffer the social costsof increasingly polluted air and water, socialsqualor, insecurity of income and employment,depredated environments and mass mediaviolence, to name a few “externalities”. So theargument for lower costs of the free marketapplies very narrowly. While consumer goodsmay become less expensive, though this is by nomeans assured by the current oligopoly condi-tions of competition, the shared goods of lifesuch as our air and water, social conditions,mutual security and cultural diversity deteriorate,with no limit in free market doctrine to theirdecline.

6. The free market as democracy

Another standard argument for the free marketis that the economic competition of the freemarket rules out monopoly of social decision-making by an all-powerful state. This argumentis valid, but is typically confused with a muchstronger, further claim that the democratic rightsof a society increase as the rule of the free marketincreases. This claim is a non-sequitur. It ignoresthe fact that the exercise of individual democ-ratic rights in a free market – the right to a freepress, for example – requires that he or she whoexercises this right has the means to do so. If Ido not own a press, how can I exercise my rightto freedom of it? How can any of us? If we lackthe means to exercise our freedom, this freedomexists as a slogan for free market ideology, butnot as a fact.

An individual may of course submit what s/hewrites to a corporately owned press, but then itis not really s/he who is free to publish, but thecorporation’s employee-editors who operateunder the owner’s policy and control. If what iswritten exposes or criticizes the owner of thepress, or the corporate structure for which the

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press is “a vehicle of advertising messages” (toquote the former publisher of the Globe andMail), then the article will not be published. Ifby exception it is, its exposure will not bereproduced. Are there any counter-examples tothis rule of press censorship? If there are not, thenthe “free press” is in truth not free. It does notpermit criticism of the powers that own andcontrol it. Thus, the right to freedom of the pressin the free market comes to be a paradoxicalclaim – asserting as a fact a democratic freedomwhich does not in fact exist.

We can formulate the law-like principle of thisunfreedom of the press in a general way: Nothingwhich contradicts the value or the necessity of the freemarket system or its aim of money profit for privatecorporations will be re-produced in the mass media.Test this hypothesis against fact. Follow the massmedia in all their pervasive circuits of dissemi-nation to see if this principle of their censorshipis anywhere disproved.

Other claimed democratic rights in a freemarket society can be similarly illusory and con-tradictory to fact. The democratic right of theeligible adult population to elect a governmentof their choice to govern them is clearly notdemocratic when very few members of thatpopulation are in the position to pay very costlyelection expenses (often in the millions of dollarsfor one office), to own or influence the massmedia whose favorable exposure is necessary towin mass elections, or to pay full-time lobbyiststo continuously pressure politicians to theirviewpoint. As with other freedoms asserted byadvocates of the free market, these “democraticfreedoms” in the free market can turn out to bevery undemocratic.

In the world’s most populated free marketsocieties in East Asia, democratic rights do notinclude freedom of personal speech or the rightto oppose the party in power. These are veryimportant freedoms which have developed insome Western free market societies, but do notfollow from the existence of a free market. A freemarket is, in fact, compatible with a murderouspolitical dictatorship – in Chile, Indonesia andChina, for example. The free market may also beimposed by force on societies. Where peopleoppose the reduction of social life to exchanges

for private owners’ money profit, systematicviolence may be the only way to impose it, aswe have seen occur to indigenous peoples acrossthe world over five centuries.

In light of these facts, ever more “deregula-tion”, “privatization” and “public sectorcutbacks” to “develop the free market” cannotbe truthfully called a move towards “moredemocracy”. The more that public goods andregulations are accountable to electorates andopen to public criticism and transferred to “theprivate sector”, the more democratic account-ability is abolished, and the more control istransferred to those with responsibility to no goalbut the money profits of private investors.According to United States Congressional statis-tics, the top 1% of the population controls moreprivate wealth than the bottom 90% in the U.S.So this transfer of responsibility to the “privatesector” is essentially a transfer of power to a verysmall minority with the most power already, thewealthiest 1% of the population. The free market,therefore, reduces democratic process and controlthe more it takes over resources and regulationfrom an electorally responsible and accountablepublic sector and transfers them to the rule ofthe private sector.

But what of the more cost-effective anddiverse choices for consumers which can bespurred by privatization of inefficient govern-ment sectors? This may be an overdone argumentgiven that, for example, health care in the U.S.private health-care system is $1000 per capitamore expensive than the Canadian government-funded system, and fails to provide any healthcare to 38 million Americans. Suppose, however,it is granted that the free market provides con-sumers with superior goods in areas involving themanufacture and delivery of material commodi-ties for personal consumption. Even then, itremains true that the social system will be lessdemocratic the more that universal access topublic goods like health-care, education, clean airand water, environmental resources, cultural sitesand transportation is reduced by the privatizationof these goods and their sale to only those whocan afford to pay for them.

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Part B: Freedoms have limits:Internalizing externalities

1. Traditional limits on the free market

All freedoms have limits. Freedom of speech doesnot include the right to bear false witness againstor slander one’s neighbour, to shout “Fire!” in acrowded theatre, or to pre-empt everyone else’sright to speech by monopolizing the opportuni-ties to speak. In the same way, the free marketneeds to have limits on its operations. As shownabove, the free market’s operations left to them-selves tend to weaken or destroy the resourcesof life and freedom for the majority, to benefitmost the small minority of society whose wealthprovides them with far more to buy and to sellfor their private money profit than they need;and to leave most people with little but their ownwork to live by and increasing tens of millionswithout even that. The more unequal the pos-session of wealth is in a free market, the morepeople there are without the money to buy whatthey need for a decent life, the less freedom thatfree market assures for the society in question.How, then, are we to set the moral limits andresponsibilities for the free market which are notentailed by freedom to produce, buy and sellanything at any price one can get?

Most of this century’s history in Scandinavia,Western Europe, Canada, Australia and NewZealand has given us one answer – a democrat-ically controlled and openly criticizable publicsector. Until recently it has more or less ensureduniversal access to clean water and air, education,income security in unemployment, old agepensions, health care, public broadcasting,libraries and culture centres, parks and someenvironmental preservation, and civil rights tofree speech, association, assembly and protectionof law from violence to person or property. Noneof these more or less universally accessible publicgoods is ensured by a society in which thefreedom to produce, buy and sell anything at anyprice is left to function without any public orgovernment intervention. But this sort of societyis the one towards which we are being increas-ingly driven. The historically developed “mixed”society in which the free market is comple-

mented by a public sector guaranteeing whatthe free market cannot, is now being rapidlydismantled in Canada and across the world byproponents of a “true free market”.

2. The new free trade as the age of disposable humanity

In recent years, globe-girding information tech-nologies and international free trade agreementshave increasingly allowed corporations andinvestment capital to serve their connection withany given community or nation or culture.Industrial and service workers of all kinds cannow be displaced not only by workers elsewherewilling to work more cheaply, but – the otherblade of the pincers – by new labour-replacing,computer-driven systems of production andcommunication. With no democratic input oraccountability required for any step of thisprocess of mass worker displacement and disem-ployment corporations and investment capital cancancel or move their operations across the worldwith the speed of an electronic signal. The vastmajority of the planet’s people have in this waybeen radically disempowered as a political andeconomic force: increasingly transformed into aninternational pool of part-time employees whocan be hired and dismissed at will, with evermore people in the labour market competing forever more replaceable jobs. Globalized free tradehas brought us, we might say, to the age of dis-posable humanity.

It is perhaps for this reason that ethnocentricconflicts and upheavals are on the rise across theworld – desperate reactions to an increasinglyrootless infrastructure of global economic power.The free market cannot in principle solve suchproblems because its logic of profit for privateinvestors as the ruling absolute of global lifeexcludes all other considerations of existence assecondary or “external”. In this situation ofrising social strife, the free market in fact flour-ishes by the dynamic new outlets for investmentwhich social crises provide: producing and sellingarms to the combatants (the largest single itemof international trade); selling ever more narcoticstimulants and violence-entertainment to all;

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producing and selling costly new pharmaceuti-cals to the environmentally diseased who canafford them; mass-marketing security devices andsubstitutes in countless different forms; andgenerally making the rich richer, the poor poorerand the environment more uniform and moredegraded. Which of these patterns, we need toask, is not furthered and deepened by theunfettered operations of the free market?

Under these circumstances and in proportionto the movement in this direction, the freemarket ceases to be morally defensible. The morea social formation increases/decreases its members’access to the goods they need, the better/worse it is asa social formation. Under this criterion, the global freemarket has become an increasingly immoral system.

3. Internalizing externalities: Towards a solution

One “solution” to the increasing immorality anddestruction of a socially lawless internationaleconomy is a world-wide workers’ revolutionagainst it, and the restructuring of society’seconomic and political power so that it isdemocratically owned and controlled. That wasKarl Marx’s solution. A more modest solution hasbeen proposed by an increasing number ofconcerned experts, now even including GATTDirector Peter Sutherland. This is to institute a“rule-based international economy” where therules do not, as now, merely protect businessinterests and trade, but include minimumstandards to protect workers’ wages, health andsafety, to safeguard the environment againstpollution and degradation, and to provide a“social safety net” for the old, the unemployed,the young, the infirm and others left out of thecurrent wage-and-capital international economy.

Most of the serious problems of the anarchicfree-trade economy identified in the analysisabove would be significantly reduced by such aglobal rule-base, assuming that the world’s mostdominant businesses and corporations wouldallow such a balancing to include other rightsthan their own. Unfortunately, the historicalrecord of public health-care, unemploymentinsurance, old-age pensions and social securitysupport-systems has been one in which business

lobbies and representatives have adamantlyattacked such reforms over a century as “toocostly”, “unworkable”, “against private initia-tive”, “communist”, and so on. But these reformsnevertheless came to pass in many jurisdictionsthrough the mass support of social populations.

The difference now is that corporations arenow tied to no community of people, and canleave any society in which effective laws toprotect human rights or the environment increasebusiness costs above competing regions ofinvestment elsewhere in which no such laws existor are enforced. Under current free-trade regimeswhere business has secured the right to invest orto disinvest at will across national boundarieswith no social obligations, rules protectinghuman and environmental life have to be inter-national to be obeyed. If they are not, businessinvestment will move to the lowest-cost, lowest-standard areas to maximize profits. Effectiveinternational rules protecting humans and theenvironment must then be included in transna-tional trade agreements to bind corporations towider interest than their own profits. Onceinternational trade agreements include such life-protective standards, not as now by “side-agree-ments” without legal force, but by specific andenforceable regulations, corporations and busi-nesses would be obliged to comply with theseminimum standards to continue having freeaccess to the national markets covered by theseagreements. Very elaborate and precise mecha-nisms of enforcement are now spelled out overthousands of pages by the NAFTA and GATTAgreements to protect corporate ownership,market and profit rights across national bound-aries. There is no reason why regulative mecha-nisms cannot be incorporated to protect humanlife and environments across national boundaries.

If such a moral and social balancing of inter-national trade agreements were to be instituted,these agreements would not merely be bills ofrights to private corporations to override allother life interests but their own competitivemaximization of ownership and capital wealth.They would provide for a genuine “level playingfield” or common framework of environmentaland human-rights rules within which all privatecorporations would be required to play to

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continue having free access to others’ markets.The current comparative advantage of avoiding,violating or rejecting all standards which protectthe lives of people and the environment wouldno longer be available. Instead of contriving therules as now to maximize the social and moralirresponsibility of international business seekingto reduce its costs to the lowest possible level atthe expense of human and environmental survivaland well-being, there would be limits set on thislife-destructive process by trade-agreementstandards reducing free access to markets tocorporations not abiding by these commonstandards.

Two benefits would flow from such a regula-tory balancing. First of all the current corporateagenda of reducing or eliminating the achievedsocial standards of civilization “to compete in thetough new international marketplace” would bediminished in its capacity to extort social sacri-fices for lower business costs. Secondly, thestandard appeal to “national sovereignty” byvarious dictatorships and oligarchies abroad toresist international pressure for the developmentof human rights and environmental standardsgoverning business within their borders wouldcease to be a viable defence. Equal market accessof such nations and their corporate producers tothe wealth and infrastructures of other societieswould be conditional on their compliance withinternational social and environmental standards.The “level playing field” proclaimed by free-trade advocates would in such a situation becomemore than an Orwellian slogan.

A rule-based international economy could inthis way achieve a minimum, progressivecommon framework of protection of human andenvironmental life in places where there has sofar been no effective protection by trade agree-ments of either. A rule-based internationaleconomy, that is, could introduce an historicallyunprecedented lever of actual global developmentby rules of civilized behaviour which privatecorporations have so far been permitted to rollback or avoid. Access to other countries’ marketswould no longer be granted as an absolute rightto international corporations to exploit in onlytheir own interests, playing societies against oneanother to cut back their social fabrics for the

benefit of lower costs to business. It would notbe a question here, as the currently fashionablepropaganda would have it, of “government inter-ference in the marketplace,” but an issue ofmaking a socially lawless situation lawful. Thenormal human obligation to comply with lawsprotecting life against destruction by unlimitedlyself-seeking behaviour would simply be appliedto private business interests as well as toindividual citizens. The dogma of free trade,however, has yet to rise to this level of concep-tion we know as civilization.

4. Is a rule-based international economy enough?

Unfortunately, it is not easy to be serene aboutthe chances of educating adherents to the free-trade dogma to the most elementary require-ments of social existence. Private corporationsand governments have so far imposed againstmajority will a series of undebated, secretlynegotiated business-only trade agreements whichhave disemployed millions, ruined communitiesand cut back social legislation across the devel-oped world without a noticeable dissenting voicefrom a single party to the process. A world coupd’état, one might say, has already occurred. Self-maximizing owners of international capital havebeen accorded well-defined transnational rightsto rule the world’s production and distribution,uncontrolled by a single effective human right orenvironmental limit to their private profit-seeking for themselves.

In such circumstances, pessimism might inclineus to acquiesce in a growing sense that thisregime will destroy the world by its sociallylawless behaviour. Indeed, a critic of a rule-basedinternational economy might argue, even ifinternational standards of human and environ-mental life protection were to be instituted intothese trade agreements now, the long-term effectsof anarchic world capitalism have advanced toofar to correct. Such a critic could point to:

(1) an exploding world consumer populationloading the already over-stressed resourcesand eco-fabric of the globe;

(2) an ever growing gap between job-seekersand jobs;

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(3) the irreversible destruction of alternativeways of life, first peoples and environ-ments by the unlimited demands ofindustrial and commercial development;

(4) the escalating reduction of the world’sdiversity of life to ever more homogenousmonocultures of human and non-humanfunctions in a globe-girding system ofcapital-circuits; and

(5) an increasing majority of people who haveno meaningfully productive life and whoare ever more pervasively conditioned bycommercial propaganda, toxic effluents,motor noise and trash. There is much toour current world economic condition,such a critic could argue, that goes beyondthe capacity of even a rule-based interna-tional economy to improve.

Does this mean that only a revolutionary trans-formation of our world economic structure canpossibly solve the deepening problems of whatis called “globalization”? Is Marx right after all,for more reasons than he imagined, that we arefaced with a choice between world capitalism andworld survival? On the basis of what evidenceor structural tendency can his prognosis now befalsified? But both Marx and others since havefallen short in designing or implementing a viablehistorical alternative, even if one takes intoaccount that capitalist states have waged more orless total military and ideological war on anysocial alternative that has emerged, typically inviolation of international law (e.g., by armedinvasions). A rule-based international economyseems in these circumstances to be the onlyoption available to us.

Considered in the light of its possibilities, therule-based option is not so narrow or fore-closing as it may appear in the context of thesedeepening problems. Conscious rules or agree-ments can, in principle, be constructed andimplemented to protect all values, even thosevalues which seem irreversibly forfeited by theout-of-control operations of the current inter-national economy. It is true that job seekersincreasingly out-number jobs available, due toboth labour-replacing technologies and worldpopulation growth. And it seems true that the

current international economy both engendersand promotes this problem. But rule-governedagreements can lead to population restraints (e.g.,by voluntary birth-control), job-sharing (e.g., bywork contracts) and laws limiting corporaterights to ruin lives by mass disemployment. Thevalue of each individual having work whichprovides her or him with an independentlivelihood and occasion to realize some humancapacities for the benefit of others need notnecessarily be abandoned in an internationalcapitalist economy.

Similarly, the reduction of ever more of theworld to corporate waste products seemsinevitable under the current global economy. Forno effective environmental controls on produc-tion processes or sales are specified in suchinternational trade agreements as NAFTA. Yetconscious regulation of environmentallydamaging practices has at the same time becomea more viable international possibility by theincreasing requirement of corporate producers tosell their products in international markets.Selling a product in other nations’ markets is not,as producing it is, a job-creating enterprise or avaluable investment in those markets. On thecontrary, its production elsewhere deprives thosemarkets of those jobs and that investment whichare located in a foreign country. So it is not costlyin either jobs or investment for a home countryto impose tariffs on environmentally destructiveproducts produced elsewhere which do notcomply with specified environmental standards.No blackmailing of societies with threats of “lossof jobs” or “loss of investment” would be plau-sible in such a situation because the environ-mental standards would be applied at the marketend where jobs and investment are not atrisk.

At the same time, market-end tariffs onenvironmentally damaging products would putthose corporations and businesses producing andselling these products at a competitive disadvan-tage instead of at a competitive advantage. Underpresent free-trade regimes, environmental irre-sponsibility pays because the costs saved on nothaving to reduce pollution or to limit resourcedestruction allows the producers and the vendorsof such products to sell at a lower price.

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Environmental accountability by tariffs onenvironmentally damaging products reverses thisdestructive pattern. Rather than polluters beingrewarded by a competitive advantage of lowercosts, environmental tariffs would put theirnon-polluting competitors at a cost-competitiveadvantage, thereby encouraging pollution-freeproduction by market means.

Requiring corporate producers to confront theexternal costs of their production by increasedprices for their goods in international markets isa generalizable strategy. It is not only applicableto destruction of the environment which iscurrently cost-free and a competitive advantageunder current trade agreements, but it can bemade applicable to other socially destructivepractices by private corporations. The dollarcosts, for example, of supporting workers whohave lost long-term jobs by corporate plant-closures to invest in low-standard economieselsewhere are immense in developed societies –not only in social assistance payments, but inincreased health-care and other social expendi-tures, not to mention personal damages. Butthese vast costs are now loaded wholly on othereconomic agents than the private businesseswhich have caused them. Tariffs on the incomingproducts of such job-eliminating exporters by thesociety suffering “unfair” losses from theirdislocations could be defined and assessed ininternational trade agreements just as “unfairtrade practices” protecting private profits aredefined and assessed by these trade agreementsnow. Again it is a question of these agreementsprotecting interests beyond those of private cor-porations. In the present international economy,however, corporations are permitted to degradeenvironments, to pollute and to damage otherswith no limit, while victimized local populationsare required to pay the price for these damagesinflicted upon them by this unaccountableregime.

5. The incoherent assumptions of the current free trade dogma

There are three logically incoherent assumptionsupon which the destructive absolutism of the

current corporate agenda is based which needto be clearly recognized.

(i) The first is that the right of access tomarkets across regional and national boundariesis assumed to belong to private corporations cost-free with no obligation to pay any of the director indirect costs of this market entry into othersocieties. All that is required is that corporateagents agree among themselves through mecha-nisms of government co-ordination to a systemof self-protective rules not infringing each others’rights to this access.

Yet market access to what is owned andexchanged in another society has in factenormous costs for that society which are borneby its citizens’ past, present and future taxes andgovernment deficits. The benefits of these tax-supported goods are under present trade agree-ments now received cost-free by foreigncorporations who buy and sell in other societies’markets without having to contribute to themany costs of their ownership and trade inthese societies. Their goods are produced else-where, and provide no jobs in the markets towhich they sell. The home society providesarmed-force and police protection across its ter-ritory, developed laws to protect its agents andgoods, publicly paid-for roads, subsidized utili-ties, sewage systems, water supplies, and manyother domestically financed and highly expensiveprotections and infrastructures. To these expenseshave been added still further major public costsof protecting foreign-owned corporations’patents (e.g., in medicines) and enforcing intel-lectual property rights (e.g., over farmers’ seedsand authors’ texts, even against their owngrowers and writers).

Foreign corporations or domestic corporationspaying no taxes for the protection and utiliza-tion of these publicly financed supports andservices are, thus, free-riders on public expendi-tures which increasingly disemployed populationsare required to pay for. Current trade agreementsgrant this free-rider status to all non-domesticcorporations within the international territoriescovered by them, and increasingly to domesticcorporations as well by reductions, exemptionsand subsidies to keep them from investing else-where. (Corporate taxes in Canada, for example,

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have shrunk from nearly 50% of federal revenuesin 1950 to under 10% today.)

All private corporations are nicely served bythis free-rider status in other societies, and bycompetitively falling tax-rates in their own. Thisis why there has been the extraordinary una-nimity of private corporations’ supporting thesetrade agreements. As free-riders on public pursesand deficits, it is in their self-interest to institutefree trade regimes which grant them this evermore extended right to free-riding. Under thissystem societies must compete against oneanother in granting private corporations everlower domestic tax-rates and favorable treatmentto keep them from taking capital produced inhome societies and investing it elsewhere. To payfor this competitive subsidization of corporations,societies must reduce more and more of theirsocial spending for public needs. In this way aspiral of bankrupting public sectors to subsidizeprivate corporations has been set in motion withno apparent limit to its special-interest demandsand to government concessions.

Since private corporations are the first to insistthat there is “no free lunch” for others, theirassumption of the right to ever more publicsubsidization of their own operations – includingthe public funding of negotiation and imple-mentation of these trade agreements themselves– is self-contradictory. But this self-contradictoryassumption of a right to cost-free access to verycostly market infrastructures and services in othersocieties’ markets, and increasingly domesticmarkets as well, is a basic premise of internationalfree trade agreements which has so far beenrepressed from public view.

(ii) The second logically incoherent premiseof current international trade agreements is thatdamages and losses by corporations and corpo-rate trade sectors are to be recognized andregulated by international trade agreements, butdamages and losses to workers, governments,publicly owned resources, environments, com-munities and any other economic sectors are notto be recognized or effectively regulated at all.There are three main levels of incoherence atwork here.

The first is that private corporate economicinterests are to be protected in fine detail by

government agreements, but no other economicinterest is to be so protected.

The second is less obvious. It is that the publicinterest which governments are supposed torepresent is abandoned as “too costly”, while theprivate interests governments are intended toregulate are one-sidedly protected. This contra-diction is further deepened by the fact that theprivate economic interests being protected bythese inter-government trade agreements are verynarrow in base (the interests of transnationalcorporations and wealthy investors in privateprofits for themselves), and are also alreadyinstitutionally more powerful than the widersocial interests which public governments areassisting them to override.

(iii) The third and perhaps most perniciouslevel of incoherence here is that the damages andlosses inflicted by private corporate interests onother economic interests by free trade agreementsare never to be borne or paid for by the corpo-rations who inflict them, but only by theirvictims or by taxpayers who had no responsibilityfor the losses and damages. Trade agreements andtheir very restricted class of significant benefi-ciaries not only assume that they have a rightacross boundaries and nations to be free-riderson costly public infrastructures and services paidfor by the citizens of these societies, but theyfurther assume that whatever costs and damagesthey then cause to others by their publiclysupported and protected operations across inter-national boundaries are not to be paid for bythem at all. They assume, that is, legal immunityfrom and non-liability for the harms they do toothers by the operations of these agreements, andthereby assume in corollary that only those whoare not responsible for these costs and damagesare to bear and to pay for them.

In a normal context, we would call suchassumptions psychopathic. Nonetheless their self-serving incoherence and vicious consequencesare now assumed as givens by international tradeagreements, by their corporate beneficiaries, bymajor international investors, and by theeconomic theory that is their propagandist.Environmental resources tens-of-millions of yearsold may be polluted, degraded and exhausted byprivate corporate exploitation across the globe

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with no requirement at all to pay for the damagesor their prevention by the trade agreementspermitting this destruction. Working people andwhole communities across the globe may bedeprived of their livelihoods, security and ances-tral homes by rootless corporations who take overtheir lives and abandon them at will, but no costof this destructive process is either recognized ordeterred by current trade agreement, least of allpaid for by the corporations who inflict thesedamages by their actions. This second mainassumption of current international trade agree-ments – that private corporations have noresponsibility or liability for any and all of thecosts and damages they inflict on human andenvironmental life by their actions under theseagreements – is certainly incoherent in itscontent, but outside the span of considerationof these agreements. Such an assumption isbeyond that of the free-rider. It is alike in itsstructure to the reasoning of the criminallyinsane. Reflect carefully on this claim. In whatrespect is it over-arched?

The absolute refusal of responsibility forpaying for what one receives, or for causingdamages to others without limit is most explic-itly prescribed by legislation for the world’smultiplying Free Trade Zones (e.g., theMaquiladora zones on the border of Mexico andthe U.S.). Characteristically, such zones grant theprivate foreign corporations who produce inthem the freedom not to pay taxes, not to re-invest capital, not to allow workers unions, notto be subject to national pollution laws, not topay minimum wages, not to have maximumwork days or weeks, not to obey establishedhealth and occupational safety laws and not, ingeneral, to be bound by any rule to pay for whatthey receive in public infrastructure and servicesor to be held responsible for the environmental,health and social damages their regime imposeson the human and other life ruled by them.NAFTA, for example, not only provides for theindefinite perpetuation of this free trade zonestructure in Mexico, but business lobbies havefurther called for its extension into such placesas Halifax and Vancouver.

Having assumed that private corporate inter-ests, and only private capital interests, have a right

to be free-riders on public infrastructures andservices, across national boundaries, and increas-ingly free-riders on domestic public infrastruc-tures and services too, and having furtherassumed that any cost or damages inflicted onother economic interests in the operation offree-trade agreements do not exist for theseagreements’ protection or regulation, and cannotbe charged in any form to those responsible forthe damages, a final assumption follows easily intrain. It is that there is no way to prevent the“harsh” consequences of these harms becausefree trade agreements in this one-sided form are“inevitable”, and their costs to publics, workersand environments are “necessary adjustments”to the “tough new reality of the global work-place”.

6. Free trade as an absolutist religion

The inevitability doctrine of the current marketideology is typical of fundamentalist religioussects. There is “an invisible hand” that governshuman events with an omniscient logic which“cannot be interfered with.” Followers of the truefaith will be rewarded in some certain but neverdefined realm of future prosperity, while thosewho deviate from its strict necessity will beconsigned to the hell-fires of “shock treatment”and “painful cuts.” No amount of human suf-fering or natural destruction exacted by thedoctrine’s implementation can alter its prescrip-tions or prove it false because its truths are eternaland not subject to falsifying evidence. Salvationcan only be won by obedience to its “iron laws,”though life in fact grows only more desperate forthe majority under its rule.

No fundamentalist theology has ever been sodominant in the world, or so widely diffused bypropaganda organs. Its unifying assumption of“inevitability” to the absolutist program itimposes on the globe’s peoples is, however, instriking contradiction to its pretenses of repre-senting “democracy” and “freedom” in theworld. Because it has been everywhere contrivedby secret negotiations without or against theexpressed majority will of social populations, andbecause it rules out any social alternative or

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public participation in its implementation, it is“democratic” only in that non-factual realmwhich fundamentalist religious ideology occupies.

Conclusion

In the context of the many-levelled incoherenceof the “free trade” dogma, a rule-based interna-tional economy which accords rights and pro-tections to broader human and environmentalinterests than those of private international capitalis compelled by elementary logic as well asrequirements of global survival. Resolution of theproblems of the absolutist doctrine expressed incurrent trade agreements admits of ascendinglevels of understanding and life-responsibility.The more widely human and environmental life-interests are taken into account and safeguardedby rule-based international agreements, the lessincoherent and destructive in reasoning and effectthese agreements become. There are manydegrees of realization possible here, especiallysince the base-line from which they are requiredto begin in current trade agreements now accordsno effective protection to any other life-interestbut self-serving rights in investment capital andprofit. But the extent to which broader intereststhan these are taken into account and effectivelyprotected by the rules of international tradeagreements marks the extent to which theseagreements become rationally coherent and life-responsible.

Appendix

“1.2 billion of the planet’s people remain inabsolute poverty. In the last 30 years, the richestfifth of the world has doubled its share of incomein comparison with the poorest fifth.” AnnualReview Oxfam Canada, Toronto, 1993.

“NAFTA (North American Free TradeAgreement) has no minimum labour standards –no health and safety regulations – no workerrights [for] collective bargaining [or against] childlabour and forced labour.

“NAFTA has no environmental standards, noconservationist standards – allows no subsidies for

environmental cleansing, conservation or renew-able energy.”

“NAFTA rules punish people in definite wayswho deny expected trade profits to corporations,but there are no rules punishing corporations forviolating worker rights. The only recognizedunfair trade practices are those that destroyexpected or real profits, not those that destroypeople’s lives, the quality of people’s lives or evenwhole communities.” Alex Michalos, Ph.D.,FRSC, unpublished paper, 1994.

“For Latin America as for other areas of theSouth, the past two decades have broughtdeclines in living standards, per capita incomes,urban wages, state expenditures on health, mor-bidity rates and food consumption.” Frans J.Schuurman, “Modernity, Post-Modernity andthe New Social Movements” in Schuurman(ed.), Beyond the Impasse: New Directions inDevelopment Theory. London: 2ed., 1993, Chapter9.

“[The Latin American state] has become theexecutor and debt collector of a bankrupteconomy on behalf of transnational creditors. Infact, its central role has manifestly changed fromthat of promoting development and – at least intheory – protecting political and economicsovereignty, to that of facilitating surplus extrac-tion and international subordination.” Jorge Nefand Remonda Bensabat, “ ‘Governability’ andthe Receiver State in Latin America: Analysis andProspects” in A. R .M. Ritter, M. A. Cameronand D. H. Pollock, Latin America to the Year 2000: Reactivating Growth, Improving Equity,Sustaining Democracy. New York: Praeger, 1992,p. 168.

After 10 years of “market reforms” and“restructurings” in New Zealand the results havebeen:

• In the two years after cuts were introduced(1990–92), the Department of Statisticsreported a 40% increase in poverty.

• The youth suicide rate has doubled – it isnow the highest in the world.

• The child poverty rate has reached 26%.• Almost crime-free a decade ago, New

Zealand has the highest overall crime rateof twelve industrial countries. Violence

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against women has increased by 50% in thepast year, against children by 39.6% andinfant murders have tripled.

• By every standard of measurement – exceptinflation – the reforms have been a com-plete failure. Deep cuts to social programswere supposed to lower New Zealand’sdebt, but it more than doubled from $22billion to $46 billion – and that’s after thegovernment used $16 billion from the saleof crown corporations to fight the debt.

• The unemployment rate, 4% in 1984,hovered around 10% throughout most ofthe decade.

• Taxes on corporations and the wealthy werecut by 50%.

• From 1985–93, whole other developedcountries grew by 25%, the OECDrecorded New Zealand’s growth rate at3.9% Murray Dobbin, Canadian PerspectivesWinter: 1995, p. 7.

“In the American experience [from 1989 to1992] the combined total income of the top 1%of all earners increased sensationally, and thecombined total of the bottom 80% declinedsharply.” Edward N. Luttwak, Director of theInstitute for Policy Studies Washington in “WhyFascism is the Wave of the Future”, LondonReview of Books April 7, 1994, pp. 3–5.

“In the May 1992 issue of the AmericanEconomic Review, there was ‘A Plea for Pluralisticand Rigorous Economics’ signed by 44 leadingeconomists from North America, the U.K. andWestern Europe in which they signal theirprofound concern with the drift toward ideo-logical conformity in economics as demonstratedby a near monopoly of one viewpoint in theacademic journals.” Bernice Shrank, “Blindreviewing the other way round,” CanadianAssociation of University Teachers Bulletin, March1994, p. 11.

“Between 1978 and 1991, there was a sixfoldincrease in the number of households [in theU.S.] which declared incomes of $1 million ormore in constant dollars [cash] and an absolutedecline in income for most families.” Edward N.Luttwak, “The poor get poorer”, Times LiterarySupplement, June 10, 1994, p. 17.

“[Canada is] clearly in the transitional businessof reapportioning national income so that a largershare goes to corporations and less to wageearners – this is a fundamentally necessaryprocess.” Peter Cook, Globe and Mail Report onBusiness, August 19/94, p. B2.

“Popular organizations in Nicaragua arestruggling to find solutions to their worseningeconomic and social situation [since the intro-duction of market-driven policies]. Poverty hasincreased dramatically, and now affects over 70%of the population. Unemployment stands at 60%,while 80% of children do not finish primaryschool, and deaths from malnutrition haveskyrocketed. Hunger, practically unknownthroughout the 1980’s, is widespread.” Tools forPeace, Toronto, June 27, 1994.

“Total less developed country debt has doubledfrom approximately U.S. $819 billion in 1982 toU.S. $1712 billion in 1993 despite their havingrepaid over U.S. $14 trillion in debt service.”Ecumenical Coalition for Economic Justice,Economic Justice Report Volume 5: Number 2(1994), p. 7.

“In the first three years of the U.S.-CanadaFree Trade Agreement, Canada lost 1.4 millionjobs, including 500 000 manufacturing jobs, over25% of the entire manufacturing sector. InMexico, the [current] average hourly wage paidby U.S. corporations is 63 cents. In the last tenyears, as American and other foreign corpora-tions moved into Mexico [and into Free TradeZones], Mexican wages have been driven downby 60%.” Citizens Concerned About Free Trade,Saskatoon, Summer 1994.

“Throughout history, the 18th century econ-omist Adam Smith observed, we find theworkings of ‘the vile maxim of the masters ofmankind. All for ourselves and nothing for otherpeople’.”

“The invisible hand of the market, he wrote,will destroy the possibility of a decent humanexistence ‘unless government takes pains toprevent’ this outcome as must be assured in‘every improved and civilized society’. It willdestroy community, the environment and humanvalues generally.” Noam Chomsky, The Nationand The Toronto Star, April 13, 1993, p. A15.

“Researchers are faced with a new reality.

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They can’t expect to receive funds to do theirresearch just because it is good research. . . . Wehave to accept that the new reality is everywhere.We have to relate research to [the demands] ofthe marketplace.” Keith Bezanson, President ofthe International Development Research Centre(IDRC), “International Researchers Must FaceNew Realities,” At Guelph, November 30, 1994,p. 5.

“Despite rising productivity, real U.S. wagesfor non-supervisory, private-sector employeespeaked in 1972 and have dropped ever since –20 per cent in 20 years.” Walker Russell Mead“Essay”, Harper’s Magazine, September 1992, p.41.

“[We see today] the new totalitarianism ofconsumption, commerce and money.” NobelPrize winner and former President ofCzechoslovakia, Vaclav Havel, “The VelvetHangover”, Harper’s Magazine, 1993.

“The strategy of ‘economic competition’which subjects itself to this narrow standardmeasurement [of per capita income increase] isthe most fundamental madness of our epoch.”Rudolf Bahro, “The decline of the world”, TheNew Left Review, 1978, p. 263.

“The Guatemalans had been organizing co-operatives and protesting their terrible poverty.When their ancestral lands were turned into hugecoffee and sugar plantations [for internationalexport and trade], they could no longer growenough food to survive. The army responded totheir resistance by killing hundreds of thousandsin the 1980’s, and a struggle for land grew intogenocide.” Ted Hyland, Jesuit Centre for SocialFaith and Justice, Sept. 30, 1993.

“In the World Competitiveness Reportprepared by the Swiss-based World EconomicForum . . . there were no measures of environ-mental degradation, resource depletion, occupa-tional health and safety or human rightsprotection.” Alex Michalos, Action Canada Dossier#32, July/August 1991, p. 15.

“NAFTA was negotiated in great secrecy. It’s2000 pages long. In addition there’s the imple-menting legislation: more than 4000 pages,which shows how many laws will have to changebecause of NAFTA. You now have to pay $150plus GST for this public document. How will

NAFTA affect democracy? Agreements likeNAFTA have begun to create what the FinancialTimes of London called ‘a de facto worldgovernment’ in place of those silly old electedones. Their backers say these deals will ‘lock in’countries so they’ll never be able to back out ortry other policies.” Rick Salutin, “What’s it gotto do with democracy?” Globe and Mail, April9, 1993, p. D1.

“The North American Commission forEnvironmental Protection (NACEC) which wasestablished by the NAFTA’s Environmental SideAgreement [provides a] review process [which is]complicated, lengthy and secretive – permits onlyNAFTA Parties (not provincial governments orcitizens or environmental groups) to participate.It is to be conducted in the absence of properlegal procedures and without adequate opportu-nities to collect evidence or call expert witnesses.The evidentiary requirements which must be metin order to penalize a government [not privatecorporations who inflict the damage] for notenforcing its environmental laws appear to beinsurmountable. The resource exclusion [in theAgreement] embraces an untenable definition ofenvironmental law. The environmental side dealwill not redress NAFTA’s erosion of environ-mental standards and resource conservation. Inmany ways, it represents a significant step back-wards.” The Development GAP, Nafta thoughts,Volume 4, pp. 3–4.

“The majority of the nation is invited to lowerits standard of living so that ‘we’ can becomemore ‘efficient’. But who is ‘we’, and efficientat what?” True efficiency lies in the protectionof these hard-won community standards[regarding wages, welfare, population control,environmental protection and conservation] fromthe degenerative competition of individualisticfree trade which comes only to rest at thelowest common denominator.” Population andEnvironment: A Journal of Interdisciplinary Studies,Vol. 11: No. 3 (Spring 1980), pp. 190–191.

Today an estimated “U.S. $900 billion worthof currencies are traded every day. Only one ofevery seventy dollars that changes hands on worldcurrency markets actually pays for trade in goodsor services.” Ecumenical Coalition for EconomicJustice, “Cooling hot money” Economic Justice

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Report Volume 5: Number 2 (1994), p. 2. “In1994, for example, the dollar value trading onthe Chicago Mercantile Exchange will exceedU.S. $200 trillion . . . six times the aggregate ofall the world’s gross national products.” TedFishman, “Our Currency in Cyberspace”,Harper’s Magazine, December 1994, p. 54.

“A 1991 study by Statistics Canada revealedthe following components of the federal debt:50% due to compounding interest, 44% due totax breaks to corporations and wealthyCanadians, less than 3% due to governmentspending on social programs.” National Party ofCanada on basis of H. Mimoto and P. Cross,“The Growth of the Federal Debt”, CanadianEconomic Observer, June 1991.

“The U.S. Congress estimates that the U.S.would save $44 billion a year if it moved likeCanada to a single-payer [government] health-care system.” The New Statesman, February 7,1993, p. 13. “As would be expected frominternational economic restructuring, Britain,France and the U.S.A. have undergone similarchanges in employment and income structures.More jobs became more insecure . . . organizedlabour declined in membership . . . unemploy-ment, income inequality and poverty all rose.”Hilary Silver, “National Conceptions of the NewUrban Poverty”, Free Trade and Global Trends,Oxford: Basil Blackwell, 1993, p. 339.

“Since the Maquiladora free-trade zones wereintroduced along Mexican-U.S. border in 1980,Mexicans have experienced a net job loss . . . a50% reduction in wages . . . a rise of unem-ployment from 8.5 to 17.9 percent of the workforce . . . The American Medical Association hascharacterized the health situation there as a‘virtual cesspot and breeding ground for infec-tious diseases’.” Citizens Concerned About FreeTrade, op. cit. and Globe and Mail, July 16, 1993,B13.

“Establishing holidays, work-day limits andovertime pay is passing laws making low pro-ductivity compulsory.” Asia Week, April 14,1993, p. 23.

“Since he became CEO in 1981, G. E. hasshed over 200 000 employees while its netincome nearly tripled and its market valueincreased by $67.6 billion.” John F. Welch, “A

Master Class in Radical Change”, FortuneMagazine, December 13, 1993, p. 82.

“[The European Community’s] constitution –the Treaty of Rome – is the only one in theworld that is committed to capitalism. . . . It isentirely undemocratic. It is run largely bycommissioners who are not elected and cannotbe removed. Its Council of Ministers is the onlylegislative body in what’s called the ‘free world’that meets in secret.” Former British Minister ofTechnology and Trade, Tony Benn, “Europe’sDemocratic Deficit.” World Policy Journal, Vol.VIII: No. 4 (Fall 1991), p. 741.

“The characteristics of the stateless corpora-tion [are] . . . very mobile across internationalborders . . . no allegiance to country or region. . . will locate anywhere where profits can bemaximized . . . seeks areas with minimumenvironmental legislation and minimum sociallegislation . . . overall behaviour is amoral.”Kimon Valaskakis, “A prescription for CanadaInc,”, Globe and Mail, October 31, 1992, p. D4.

“In 1989, the richest 1 percent of families [inthe U.S.] owned 36.2 percent of America’sprivate wealth. . . . The remaining 89.9 percentof families owned . . . less than the richest 1percent alone.” Geoffrey Hawthorn, “Capitalismwithout Capital”, London Review of Books, 26May, 1994, p. 12.

“In Chile, the much touted ‘success’ of theneo-liberal model, approximately 30% of thepopulation lives (apparently permanently) on themargin of the ‘miracle’. In Peru’s capital, Lima,it is estimated that only 18% of the economi-cally active population has adequate employ-ment.” José Burneo, Americas Update, May/June,1994, p. 8.

“Kerala, which has one of the lower grossnational products of the country (India), has highliteracy rates for both sexes. Despite extremepoverty, public commitment to education andhealth as well as to improving the status ofwomen has in general made the population ofKerala literate and long-lived. That fact illustratesthat certain measures of economic success, suchas GNP, can be incomplete.” Amartya Sen, “TheEconomics of Life and Death”, Scientific American,May 1993, p. 40.

“The [new NAFTA] Commission for

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Environmental Co-operation will be able to acton environmental complaints from Canada overalleged violations of Mexican or U.S. environ-mental laws only if the laws in question fall underfederal jurisdiction in Canada. [But] mostCanadian industries are regulated provincially.”Giles Gherson, “Shame may be Watchdog’sweapon”, Globe and Mail, July 23, 1994, p.A4.

“60 percent of international trade is intra-company, and the great organizers of this globalvertical integration of production are ‘statelesscorporations’ . . . with no attachment to any onecountry. The intensification of internationalcompetition and the high mobility of capitalleads then to what some have called a frenetic‘race for the bottom’. Those countries that offerthe most lax environmental conditions, thelowest wages and the least generous social safety-nets attract international investment.” KimonValaskakis, “Wanted: a GATT agreement thatcovers workers”, Globe and Mail, April 22, 1994,A11.

“Every country and every industry will have

to learn that the first question is not Is thismeasure desirable? but what will be the impacton the country’s, or the industry’s competitiveposition in the world economy?” Peter F.Drucker, “The Age of Social Transformation”,Atlantic Monthly, September 1994, p. 77.

“Four years ago, when the Berlin Wall cametumbling down, we were promised a bright newfuture [under free-market rule]. But far fromprosperity, we see even more people plunged intopoverty and despair and a quarter of the worldstarving. One in nine people live as refugees.. . . In every region of the world, it seems thathuman rights are being rolled back . . . fuelledby economic policies which make the rich richerand the poor poorer.” Secretary-General ofAmnesty International, Pierre Sané, “Amnesty’sreport card from hell”, Globe and Mail, Dec. 10,1993, p. A21.

University of Guelph,Department of Philosophy,

N1G 2W1 Guelph,Ontario 401, Canada

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