The global economy is well governed in the interest of the elite.
CRITICS OF THE GLOBAL ECONOMY OFTEN SEE IT AS anarchic, a mad market that has burst national bounds and floats free, unrestrained by the laws and rules that made the nation-based social market a decent place to live and do business. It is "wild capitalism," Benjamin R. Barber wrote last year in The American Prospect ["Globalizing Democracy," September 11, 2000]. He asked: "Can globalism be governed?"
Well, it is governed, but not in a way that soothes its critics or gives hope for democratic control of the global economy. In dozens of forums, from Montreal to Paris to Basel, effective laws, rules, and standards are being written in order to guide and channel global commerce. Government officials and international experts--often helped by the very industries and corporations they seek to regulate--are weaving a legal and supervisory web around the global economy. Nonbinding standards to promote uniformity in banking, accounting, and corporate behavior become templates of good conduct and take on the force of law.
Most insidiously, this governance grows by the day, even without new rules and laws. Often, old national rules and laws are interpreted or bent by regulators, to the point that differences between national codes are shaded or even erased. In the process, a new global law comes into being, to be enforced by the same people who created it. These new global rule-makers are well on their way to legislating the twenty-first century. And they are seldom subject to the same cross-pressures and democratic constraints that limit their domestic counterparts. This reality of governance, and not the dislocations of crossborder trade, is the real threat of globalism to democracy.
EFFICIENCY ABOVE EQUITY
This is not black-helicopter stuff, the evil handiwork of conspirators bent on seizing global power and overriding the people's will. Instead, it's the product of dedicated, hardworking men and women doing what they're paid to do, which is to find ways to make the global economy work better. These people come from many different countries, but they share a faith in markets and a distaste for the messier aspects of democracy. They are members of small fraternities of global experts (often graduates of the same American universities), old pals from past seminars and negotiations: They admit that they may have more in common with one another than with other parts of their own government. Their mandate is a narrow one: efficiency rather than equity. If the world is made safer for bankers or investors or corporations, then they have done their job. They aren't under orders to look out for labor or communities or the environment, which have no voice.
The best-publicized negotiations are those likely to produce treaties that must be debated and ratified by Congress, like the North American Free Trade Agreement (NAFTA). In contrast, Paris talks on the Multilateral Agreement on Investment, which would have overridden innumerable domestic regulations of participating nations, proceeded in secret for two years until nongovernmental organizations (NGOs) such as Global Trade Watch got wind of the endeavor, blew its cover, and helped kill it.
More common are the many new rules and regulations that nations agree upon but that have no chance for debate and no need for ratification. In Basel, the Bank for International Settlements has produced nonbinding but potent standards for bank inspectors. The International Accounting Standards Board in London is moving toward global rules for judging corporate value. In Montreal, the International Organization of Securities Commissions is overseeing regulations for stock markets around the world. The Financial Stability Forum, set up by the Group of Seven (the richest Western democracies) in the wake of the Asian financial crisis in 1997 and 1998, has a mandate to frame a "global financial architecture," although much of the steam went out of its work as the crisis eased. …