In part one I wrote,
” …in every country the people who run the State have largely decided they no longer wish to serve the people but prefer instead to serve the interests of a Global Over-Class”.
I believe we are in the midst of an historic shift in the alignment of loyalty and political power, away from democracy. I want to make it clear I do not believe the new arrangement of political and economic power was the clear goal of some hidden cabal. I think each change had an ideological drive behind it but, to begin with at least, each change was largely opportunistic and piecemeal. These pieces have, however, added up. And as time has gone by and the different pieces have accumulated, I think some wealthy and powerful people as well as some who were ideologically driven, have seen the chance to make something they desired out of the pieces. I think those who never liked democracy-for-the-masses, but preferred something that was more like the Roman senate – a place for the sons and daughters of the already wealthy and powerful families to ensure they remained wealthy and powerful – I think those people have seen an historic chance to further their vision of the future they desire and, particularly in the last twenty or so years, have actively schemed and pushed for it. Some of them have lobbied for it from Wall Street and the City, others of the same elite have written laws for it when they were in Congress and Parliament. And always they have found affordable lackeys among our political class.
Of course no one is going to admit to this. No one wants it to be clear that this is what is happening. So what our leaders have needed for some time, is a way of serving their new masters, while claiming to be still serving us; a way of saying,”The best, if not the only, way for the State to help you, the nation/people, is for us to first help these other people.”
The Trickle Down ‘theory’ was an early attempt . But Trickle Down was always too clearly a political sound-bite rather than a grand theory. What was really needed was a new vision of what the ‘Greater Good’ should look like and a theory of how to get there. And critically it had to be something that, it could be claimed, Nations could not deliver. Not only not deliver but were actively standing in the way of. There had to be a shining future which the old order of Nation States was preventing us from reaching. And this idea has, I think, surfaced again and again in different guises, certainly since WW1, but more and more prominently in the last three decades. The idea that Nations and nationalism are standing in the way of the progress and prosperity that only a free and unfettered global market can offer, and that the State must remedy this, by limiting the power and sovereignty of their Nations is, I suggest, one of the most powerful ideas of our age and is now maturing into the ideology and politics the Global Over-class has been seeking.
A brief history of how the State sold out the Nation
In the aftermath of WW1 the League of Nations was created because, it was said, nations left to their own nationalistic devices could not keep the peace. The League’s stated goals were nearly all political and very little mention was made of finance or trade. Perhaps if the League had prospered it might have been adopted by the then rising power of global finance and history might have been very different. Instead the Great Depression happened and the power of global finance was set back. The regulations brought in to prevent another systemic Banking Crisis held back the unfettered growth of finance for two generations. Only finally undone at the end of the century.
After WW2, however, the idea of supra-national governance, and the inadaquacy of nationalistic governments, rose again this time with the creation of, among other things, the IMF, World Bank, and the United Nations. This time the agenda of the supra-national powers was much more focussed on finance and trade. As US Secretary of State from 1933-44, Cordel Hull put it,
[U]nhampered trade dovetailed with peace; high tariffs, trade barriers, and unfair economic competition, with war….
Trade barriers and ‘unfair economic competition’ were the creations of national governments, free trade was, therefore, the remedy and was to be championed by the supra-national, impartial IMF and World Bank. Of course in reality the IMF and WB were not impartial. Whatever their stated purpose, the IMF and WB were tools of one ideology only , the freemarket , and were the post-war means by which the powerful nations crow-barred open the economy of any poorer nation that fell into their grasp. The attack on sovereignty had begun.
But it was little noticed in the West. In part because people were too busy being comfortable and in part because the UN was the part of Bretton Woods we saw most of in the West. The UN didn’t have an ideology – so the publicity went – other than universal declarations of human rights. It was all about aid for the starving and the rule of law. Sheltered behind this public face, however, the IMF, in particular was in every way different. It was completey ideological. And its ideology was narrowly free-market. It had the mandate and the power to force governments to alter their policies in favour of open markets and international western companies.
While the UN rushed aid to the starving, the IMF forced poor nations to get rid of tariffs that tried to nurture local farmers paving the way for global agribusiness. Local economies were laid bare on every hillside where global capital picked their carcasses clean. But because it was happening over there, few of us over here gave a damn. And if anyone was tempted to see any of it as an attack on sovereignty, it was given other names, such as ‘liberalization’. We weren’t attacking the sovereignty of poor peoples, we were helping them.
Their governments, we told ourselves, were corrupt and had no vision beyond a tribal nationalism. We, on the other hand, being wealthy white people, could save them. Let our companies in and we’ll lend you the money to save yourselves from nationalism and poverty. Above the entrance to the freemarket future we may as well have put a sign which read, “Shuld Macht Frei”. But we still did not think this was ever going to be our future.
We might have been less sanguine had we been more aware of what the poor relation of the Bretton Woods era, the GATT, would one day bring us.The General Agreement on Trade and Tariffs (GATT) was created in 1947 with the purpose of regulating international trade mainly by reducing “tariffs and other trade barriers”. Those other trade barriers were anything from subsidies for local industries, to environmental requirements and labour laws. In 1995 the GATT hatched the World Trade Organization (WTO). What made the GATT and WTO quite different from the IMF and WB is that it was no longer just a matter of policy as it had been with the IMF, it was now about rolling back specific laws and tariffs. AND you didn’t have to fall into debt to find yourself subject to their rule. Your government simply had to sign away some sovereignties and “voila”, your government had made you subject to rules and a world governing body you had not elected and had no power over at all. The power in the WTO very obvioulsy and clearly lay with the corporations, their lobbyists and their experts.
Thus while the IMF and WB trampled mainly on poor nations the WTO had power over any nation including the wealthy. And it was no longer purely at the level of trade policy and politics, it now opened to corporations an avenue for them to object to and challenge specific sovereign laws and tariffs. The rules of the GATT and the WTO were specifically created in order to supercede any nation’s and region’s laws where they concerned trade.
While the Conservative (Tory) party here in Britain, would rail about Europe ‘stealing away our sovereignty’, the truth was that those same Tory politicians had been delighted, in 1995, to sign away far more sovereignty to GATT. The difference for them was that Europe was seen as still harbouring some vaguely Socialist ideas about environment and employment rights, while the WTO very specifically did not recognize such things and in fact regarded them as exactly the sort of barriers to trade it was there to get rid of. Such was and is the hypocrisy of the Tories, and now UKIP (UK Independence Party), about sovereignty and Europe. Labour was at least consistent in happily handing over soverignty to anyone and everyone. And the faithful western main-stream media never bothered to say a word nor to offer even an analysis let alone a critique.
Throughout the 90’s and noughties the GATT and the WTO were the primary means whereby corporate interests in one country were able to stop or roll back any rules and regulations they didn’t like, in any other country. Suddenly westerners who had never before felt threatened by international capitslism, woke up. There were suddenly ‘anti capitalist’ protests in rich nations. People who had never bothered about what capitalism did in poor nations were suddenly outraged. Now things were being done to them in their country and that was wrong! Of course there had always been those who had fought against what was done in the developing world. I don’t meant to suggest there weren’t. I am just noting how suddenly their numbers were swelled when they realized it could happen here, to them.
BUT it was still the case under the WTO rules that corporate interests could only roll back sovereign national rules and laws via their own national governments. The companies of a country could complain to their government about a foreign law or tariff but it had to be their own government, their State, which went to the WTO and filed a complaint. Thus although more corporate than the earlier IMF and WB, the WTO is still tied to the power of the State.
Which bring us nearly up to date. The last and by far the most dangerous part of the State’s dismantling of national sovereignty, although it has its roots back in the 1970’s, has really only taken off in the last 5 years and has only in the last few months received much attention in the main stream media.
Bilateral Investment Treaties (BITs)
If the WTO is the State acting on behalf of corporations, then Bilateral Investment Treaties and their rules for “Investor-State Dispute Settlement” give corporations the power to challenge and over-rule nations directly. They are entirely non-democratic and stand completely outside of national based law and even outside of most of international law. They are therefore a major crystalization of the shift in power from the Nation to the Corporation and of course it has been the State which has facilitated this transfer of power.
I apologize that the preceeding history took so long and that I have therefore still not written about BITs. I just felt the context of what came before and what still today makes up a large part of the over-ruling of the Nation was important enough to do properly. I promise I will write about BITs in part 3. I hope you’ll bear with me .