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Globalism is one of the most fashionable words in use today. The term implies a movement towards a supranational order and has enormous political, economic, and cultural implications. Globalism is fundamentally a grand homogenizing force that casts a massive and daunting specter that threatens to gobble up individual and national identities. The new world order, as it has become known, has primarily been driven by a revolution in communications and information technology. International diplomatic structures created in the wake of World War II such as the United Nations, Bretton Woods and the IMF also helped to make possible further global economic and cultural integration. Yet it was most likely technological advances that fully allowed the economic integration fueled by capitals resulting ability to go global. Huge Trans-national corporations (TNCs) were able to expand production and exploit new markets with the further liberalization of the protective trade policies of the old nation-states. Big Business and Industry suddenly, through technological advances and a prevailing neo-liberal orthodoxy concerning trade policy, have become increasingly free to invest and divest without regard to national boundaries. Civil societies in industrially advanced countries are more referred to as markets now rather than as political entities, with companies aspiring to take advantage of the economic prospects arising from the borderless world.
However, a truly borderless world would place great limits on the ability both to confine the effects of domestic economic policy within national borders and to insulate countries from foreign economic shocks. The deference of state authority over economic matters to international trade agreements has acted together with the erosion of state powers required by the need to remain competitive in the integrated global economy to weaken the states ability to intervene in the economy. These are two of the main ways that nations such as Canada have, since the rise of trade liberalization to prominence in the 180s, lost a significant amount of governmental policy autonomy. It is this concept of policy autonomy that is so essential in terms of the sovereignty of a nation and its people; it is the freedom of an elected government to implement policies in the public interest according to popular will of those they represent. For it is not simply states that are subverted by the forces of globalism, but also the democratic principles of popular sovereignty upon which most western countries are constituted.
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Nation-states are communities of people that share responsibility for their mutual well-being. The advantage of the nation-state is that it appears to best allow the people the freedom to determine their future to the best of their ability. Different nations have different standards and values; and insofar as democracy functions properly, these standards and values are reflected in the way the society functions. In Canadas case, people of common values and inclinations have built traditions and developed a legal framework for the society that has evolved. For the most part, it seems that the general will of the Canadian body politic is for the preservation of this common heritage that we have built for ourselves our culture, our moral standards, our ethics, and our customs. Yet as Donald Smiley observes,
The Canadian experience has been essentially a political experience and its concrete embodiments, distinctive public policies concerning a wide range of important matters. Modern political history might have been written around the themes of states creating nations and nations striving to become states. To repeat, the Canadian experience has been the former. (445)
One of the ways that the Canadian government attempted to forge a nation out of a mere political entity was to attempt to build a strong, integrated, and industrialized economy. Cultural and Political cohesion would follow in progression and a strong nation would be fostered. Thus, the Canadian state has always played a balanced but active role in the economic development of this country. From the building of railways, to the fostering of industry through tariff protection, to the nationalization of many industries under Crown Corporations, state intervention in the economy has long been a reality in Canada.
In the history of capitalism, the states visible hand has always played a crucial role in facilitating the operation of Adam Smiths invisible hand. The state played an important role in the early stages of the development of capitalism in the West. It contributed to establishment of the general conditions for capitalist accumulation by facilitating the separation of the worker from the means of production (through the enclosure of common lands, for example), by encouraging the free movement of labor and capital through the modification of existing settlement and welfare laws, by eliminating internal obstacles to exchange such as tolls and tariffs, by standardizing currency and exchange, by developing new modes of credit formation, and so on. State intervention in other forms such as subsidization, the underwriting of risk, protection from foreign competition, has been of vital importance in the expansion of western and Canadian capitalism. Socialization of losses, privatization of profits, stabilization of the business environment at home and abroad -- these functions summarize the role of the Canadian state under capitalism. Insofar as these and interventionist types of policies encouraged economic growth in Canada, it could be said that they were a part of the comparative advantage that made doing business in certain sectors, based in this country, a profitable venture. This comparative advantage along with Fordist corporate structures that took advantage of economies of scale combined to spur Canadian economic growth and development in this century.
Yet state interventionism is constantly under attack from foreign countries who want to allow their firms equal access to domestic markets; and from domestic capital eager to expand beyond the domestic market but stifled in doing so by foreign governments retaliatory measures against the domestic states interventionism and protectionism. It is these combined forces who spurred on greater trade policy liberalization and the greater international economic integration that came as a result. Canada, rich in the natural resources that constitute a large part of her economy, has always been disproportionately dependent on exports and thus extremely vulnerable to international price fluctuations and volatility. The professed reason why Canada has been among the major nations pushing for increased trade liberalization, has traditionally been to protect natural resources firms from threats of countervailing tariffs and trade action coming from our main trading partner, the U.S. Ironically, the resources sector has been the one where foreign countries have most complained about unfair Canadian subsidies and other policies (regional development grants, low stumpage fees, low lease rates for crown land, etc.) giving Canada a comparative advantage that would conceivably be eliminated under a normal trade liberalization scheme.
Trade Liberalization obviously takes away the right of individual states to set broad range macroeconomic policies to determine the shape of their internal economies. Ostensibly, this is to protect countries that enter into such agreements with each other from the protectionist whims of any certain country. However, it is much more likely that these trade agreements are more specifically firm-based in that they compose what amounts to a bill of "inalienable"
rights for firms trading internationally that governments cannot violate. Therefore a great deal of popular sovereignty has been ceded both to the interpretation of multilateral trade agreements such as NAFTA and the WTO, but also to trans-national corporations who are now able to use the trade liberalization agreements to play countries off against each other to compete for investment and jobs.
Globalization and the push towards increased trade liberalization clearly sets forth an agenda that further tightens the grip of capital over every aspect of peoples lives. It is intended to help the markets invisible hand to further commodify and commercialize all essential needs science, technology, education, health care, use of natural and environmental resources, etc. In addition, it further undermines the right of people, at the local, regional, and national level, to determine democratically their priorities, values, and visions. In short, it is a weapon in the hands of big business when it opposes any humane social program. Attempts to set environmental standards for firms are met with the threat of either moving production elsewhere, or taking the concerned community to the NAFTA court -- the supranational dispute-resolution panel of corporate lawyers -- and claiming compensation for lost opportunities. Higher taxes to improve the schools? Again, the same threat. Better health and safety standards? The same response, or blackmailing strategy.
The recent case in Canada involving the U.S.-based Ethyl Corporation and the gasoline additive MMT could be very telling in this regard. Fueled initially by concerns from both auto manufacturers who complained that MMT was too hard on engines, and from environmentalists and health researchers who argued that MMT contained carcinogens that put the health of Canadians at risk, the Canadian government initially banned the substance. Ethyl then launched a trade challenge to the Canadian policy under the National Treatment provisions of NAFTA demanding compensation for potential profit losses due to the "discriminatory" action taken by the Canadian government in banning MMT on health and safety grounds. The Canadian government backed down and not only compensated Ethyl but also lifted the ban, allowing the corporation to use the Canadian example as leverage with other governments contemplated a similar exercise. Whether or not MMT will ultimately, through medical research, be proven to be as extremely hazardous to health as many, including the European union and many U.S. states, believe is perhaps not as relevant as the trade issue. What is more potently learned from this case is that, in the new global order, a government elected through popular sovereignty was unable to ban a substance that it felt would harmful to the health of its citizenry.
The power of firms, in the new regime of free trade agreements as substitute for global governance, to influence a sway governments even more powerfully than the people who elect them strikes a serious blow to the notion of popular sovereignty. What has occurred as a result of these international trade regimes is what Robert Cox calls "the internationalizing of the state." In other words
Its common feature is to convert the state into an agency for adjusting national economic practices and policies to the perceived exigencies of the global economy. The state becomes a transmission belt from the global to the national economy, where heretofore it had acted as the bulwark defending domestic welfare from external disturbances. (Cox, 4)
Indeed this appears to be the case as we are being constantly told that we need to adapt our ways to the new rules of the global economy by our political and business elites. The major turning point in Canada's new relationship to the global economy was the debate leading up to the signing of the Canada-U.S. Free trade Agreement in 18.
However, Canada has traditionally and historically suffered a sovereignty deficit as a result of our close relationship to the United States, the most politically, economically and culturally dominant nation on the planet. Pierre Trudeau once described the Canadian-American relationship as being akin to "sleeping with the elephant." Geographic proximity is one obvious feature that binds us to the Americans. Greater distances between markets mean larger costs of transporting goods and services between them, encumbering trade and the development of close economic ties. But the United States and Canada share a long border, much of which is easily negotiated by land or water. Moreover, some Canadian cities are closer to urban centers in the United States than they are to other major Canadian cities. Indeed, over three-fourths of Canadas population lives within 100 miles of the U.S. border. The nearness of the two countries extends beyond mere physical proximity Canada and the United States share a number of social, political, and cultural traditions, and a majority of people in both countries speak the same language. Over 80% of out trade is with the United States, most of which is either intrafirm trade between subsidiaries or natural resources. For Canadians, the global economy generally means the Canada-U.S. economy. And because we live in such an export dependent economy, Canadian governments have generally had to bow to American whim or else risk the catastrophic results of a major trade war. Already the country with the largest amount of Foreign (mostly American) ownership and control of our economy, trade liberalization further encourages American takeovers of Canadian firms. To the extent that certain firms do favour operations within the country they are based and carry great influence over the political processes there, this can only mean further losses of sovereignty with more foreign corporations having greater say over the policies of domestic governance.
Popular sovereignty represented by democratic forms of government are under attack all over the globe but especially so in Canada where our relationship with the United States has pushed the point home even more so. The meaning of popular sovereignty has shifted severely away from the democratic to the consumption-based market concept of sovereignty. Robert Cox argues that
Ideological Mystification has obscured the fact that a stronger case can probably be made for the pairing of political authoritarianism with market economics. . . Democracy has been quietly redefined in the centres of world capitalism. The new definition is grounded in the 1th century separation of economy and politics. Key aspects of economic management are therefore to be shielded from politics, that is, from popular pressures. (50)
The neo-liberal shift in prevailing sensibilities has helped to facilitate this shift in the notion of democracy. The interesting thing about this fact is that, though neo-liberal political groups advocate completely laissez-faire and libertarian styles of political economy, they often combine these efforts with more populist efforts at promoting "grassroots democracy." These more superficial efforts include such as advocating referenda, and latching on to hot-button, conservative, social issues such as pro-life movements, crime control, and "protection of the taxpayer."
Yet there is little doubt that individual citizens, not only in Canada but all over the world, have lost a great deal of the sovereignty they once enjoyed in terms of determining their own political, economic and cultural futures. Increased trade liberalization has lead to several problems for the popular sovereignty of individuals in society. First, international trade agreements have weakened the power of elected governments to intervene in their economies. Second, the nation state has been transformed from an advocate for domestic interests against external pressures to an unquestioning facilitator of the "realities of the global economy" onto the internal institutional structures of their countries. Third, the growth and prominence of firms on a global, trans-national scale has forced countries to adopt neo-liberal economic policies to lure firms to locate and invest in their national economies. Since ordinary individual citizens are almost completely alienated from any sort of control neither over these trade agreements nor over trans-national firms who hold so much control over the political and economic structures of society, a severe democratic deficit can be said to exist. Those who advocate continued neo-liberal freer trade policies might argue that the market is a supremely democratic structure in itself and if you do not like a particular firm, do not support it with your hard-earned money. To paraphrase George Grant, globalism is the view of those who do not see what all the fuss is about -- the purpose of life is consumption, and therefore borders are an anachronism. Yet this overestimates the power of groups (such as environmentalist, NGOs, the media) that could rally to oppose a certain firm's arbitrary actions. The nation-state is a structure that is already in place to provide this type of action for the public interest. It is a relatively democratic institution, unlike the market or a firm, and we already know that it can be a reasonably effective manager of all the interests at play in a society. Canada itself, is a relatively unimportant institution that, upon reflection, is probably doomed to dissolve into its various provincial components eventually. What is more important than the survival of Canada as a nation is the survival of individuals grouped into a political society to be able to maintain any semblance of self-determination in the face of the authoritarian, market-based, global economy.
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