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SPP, NAFTA, and Economic Violence
by John Mateyko

At the 4th Leaders Summit of the Security and Prosperity Partnership (SPP) held in April at a still ravaged New Orleans, the National Guard and private, military-style security forces were required, not because of terrorist threats but because of democratic threats: outraged citizens objecting to yet another NAFTA-style trade deal. Anticipating a backlash against the SPP, the "three Amigos"—President Bush and the conservative presidents of Canada and Mexico--met behind police barricades and razor wire with corporate CEOs.

They were cautious because in Mexico some months ago over 200,000 farmers, out of the 2 million driven off their land by NAFTA, descended on Mexico City to protest NAFTA. Mexican families are driven off their land because they cannot compete against the US government-subsidized imported corn from corporate agro-business. Desperate to feed their families, they appear in Lancaster and elsewhere as "migrants" but could be better termed NAFTA-refugees. Since NAFTA was signed in 1994, one quarter of the rural population of Mexico and two million jobs have left the countryside. NAFTA has brought a twenty-fold increase in migration to the US, and destroyed the culture and community of rural Mexico far more.

In the US, NAFTA has contributed to the elimination of 1 in 4 well-paid manufacturing jobs and caused a decline in real wages.

Officially intended to reduce "non-traffic barriers to trade," the SPP is the latest round of secretive trade deals written by corporations at the expense of working people and consumer and environmental protections.

SPP

SPP is an executive-level, tri-national agreement between Canada, Mexico and the US, signed in 2005 to integrate the corporate interests of the three countries. There is no Congressional oversight.

SPP is opposed by a broad cross section of America: the faith community including the United Church of Christ, the US Catholic Mission Association, Disciples of Christ Global Ministries; farm groups like the National Family Farm Coalition, and Washington policy groups like the Institute for Policy Studies, and Quixote Center.

The Structures in Our Minds

This article places SPP in a historical context. It reports on what I have seen and heard about power relationships starting in 1985 as a member of my faith community opposed to President Regan's Central America wars. With the end of hostilities, I expected living conditions there to improve. When they did not —in fact, they got worse— I continued to visit friends there to understand why. Sensing that the power over their future was not in Central America, but in Washington, DC, I added regular meetings at the international economic development institutions —the World Bank (WB) and International Monetary Fund (IMF), both within the shadow of the White House and created and controlled by US interests. What I was told to my face by the senior officials of these institutions and at the US State and Treasury Departments suggested a corrupt system without public accountability.

Over two decades I heard how corporations dictate not only the terms of trade agreements like SPP and NAFTA, but also the economic "laws" at the WB, IMF, and their partner organization in Geneva, the World Trade Organization (WTO).

Linguist George Lakoff has written about how difficult it is to shift the mental frame or paradigm we inherit from our culture to make sense of the world. My journey took decades. Slowly, painfully I let go of cherished beliefs. The idea that the American Dream of 'pulling ourselves up by our boot straps' was available to most of the world slowly died.

Economic Violence

As my paradigm changed, I needed new language to express it. Although it sounded odd in 1997, I ceased calling Washington's institutional behavior "economic injustice" and called it "economic violence"--to underscore that the resulting harm was an intentional, calculated, premeditated act. Like racism and sexism it needed to be named since the official story is designed to obscure it. The United Nations Development Programme (UNDP) 2007 report observes: "There is an African proverb, "Until the lions have their historians, tales of hunting will always glorify the hunter. The same is true about international trade."

The Structures of Corporate Economics

Any adult knows the world is not fair. Women, minorities and hourly workers know there is discrimination. Power and money have their way. There is an old saying: "When money speaks, the law is silent." The rich hire fancy lawyers to own the law. The corporate rich go one better: they hire fancy economists to own the "economic laws." They invest in elected officials (campaign financing) who will deliver access. Today the world's top 200 business corporations own more wealth than the bottom 80% of humanity. They make the rules, and the rules make us—richer or poorer.

The UNDP draws the connection: "Export growth figures [as in SPP or NAFTA claims] do not take into account human costs and environmental externalities that weaken the links between trade and human development. Factoring in these costs and externalities is one of the primary conditions for making trade work for human development."

Consequently, the more SPP and NAFTA and the rest of the "rigged" corporate economic model signals people to abandon their traditional culture, livelihood and sustainable local economies —the hallmarks of "independent development"— and jump into the strictly monetized, long-distance globalization model, the more the value of their work is undervalued. Their natural and human resources are consumed without fair-market, full-cost compensation. Their inequality grows —and has under the so-called "development" model (which is control over the future). The richest 20% of the world's population have seen their share of global income rise over the past thirty years from 70% to 85%.

SPP and NAFTA, devastating as they are, constitute a relatively minor part of what the UNPD calls "structural inequities" and a "rigged…tilted playing field" with "hypocrisy and double standards" all "rooted in unequal power relationships." Corporate interests have also captured foreign aid (70% never leaves US shores) and "development" policy and related military doctrines.

Market Forces, Armed Forces

In Central America I found that market forces were intertwined with armed forces. I saw a pattern: all too often, when impoverished people overthrew a repressive regime —but one friendly to US business— US forces restored "order." That is, a corrupt, anti-development order with a "friendly investment climate", dictators with Swiss bank accounts, and a repressed, impoverished population.

I found the following three kinds of foreign intervention used as tools of strategic control:

1. Intervention with a Handshake: Rules

From 1939 to 1945, the New York-based Council on Foreign Relations (CFR), which represents the bankers and corporations of Wall Street, convened their War & Peace Studies Project. Anticipating the end of the international colonial model, they called for a new international economic institution model. They called for creation of a World Bank, IMF, and what is today the WTO. In their classified memo of April 1941 they listed as their #1 purpose the prevention or control of "economic nationalism" or "independent economic development" of the formerly colonized world of Asia, Africa and Latin America.

MIT scholar Noam Chomsky has written widely on the constant drumbeat in declassified US national security documents to control "independent development": "In one high-level document after another, US planners stated their view that the primary threat to the new US-led world order was Third World [economic] nationalism…The planner's basic goal, repeated over and over again, were to prevent such 'ultra nationalistic regimes' [any leaders who put the interests of their own people first] from ever taking power —or, if by some fluke, they did take power, to remove them and install governments that favor private investment of domestic and foreign capital, production for export and the right to bring profits out of the country."

The intellectual authors of power exercised by armed forces and power exercised by market forces are the same national security managers. Typically, they move in a revolving door between the White House National Security Council and Wall Street boardrooms. They identify the "US national interest" with the corporate interest. Policy begins in the boardroom, it ends in government. All this is out of the public eye.

2. Intervention with a Fist: Guns

NY Times economics columnist, Thomas Friedman, says, "The hidden hand of the market will never work without the hidden fist. And the hidden fist …is called the US Army, Air Force, Navy and Marine Corps."

The "hidden fist" is the ultimate tool to prevent "independent development" (and the least desirable one because it is so obviously in the public eye). It is also a restraint on truly free trade: no trade, no economy, no economic "law" is free to exist if it bucks those in control. The "fist" puts the lie to the myth, "Let the market decide", or that there is a free marketplace of alternative ideas—as the assassinations of the Salvadoran Jesuits and Archbishop Romero shows.

3. Intervention with a Smile: Foreign Aid

As long ago as the 60's, Defense Secretary Robert McNamara testified to Congress that "Foreign aid has become the most critical element of our national security effort."

I visited the US State Department's Agency for International Development (USAID), the prime foreign aid agency, and I asked the Director for Central America why USAID persisted in forcing the top-down "free trade" paradigm upon small farmers in Central America when the evidence shows that it failed? The record shows production for local basic needs worked but is rarely funded. The unusually candid Clinton-era director told me this: "Your right. But we all tell these stories and it just does not track with our foreign policies; there are problems. You see, development policy is derived from, and dependent upon, US foreign policy. Every year I'm given two big, black binders from the political division and my job is to formulate a development policy that advances the political interests of the US. If you start at what ought to be done, development policy would start at the bottom-- the way you saw it —but that's not how the system works."

And again, at the World Bank I asked the same question of Ian Banner, then Lead Economist for Central America: "You're right, the current model does not make sense but there is nothing I can do to change it. That's the policy I have to follow. I know that. I stay in my job because I really do care about these people: I feel I may try to get them just a little better deal than someone else who didn't care as much. So I stay."

Once more at the IMF, Mark, his counterpart replied: "Look, of course the current model doesn't work. But an alternative would mean vast changes in the outcomes of winners and losers among nations. I can't do that myself. That's determined by the Board of Executive Directors and I can't change my work until they say so."

I admire their honesty. The true professionals are forced to follow policies dictated at the political level.

This is economic politics, not economic science.

Not Poverty, Impoverishment

Structural thwarting of real development continues today. The UNDP in its 2005 report notes: "Many of the policy measures that underpinned the rapid East Asian industrial development are now prohibited by WTO rules."

The World Bank rules do also. Joseph Stiglitz, the former World Bank chief economist, former chief of President Clinton's Council of Economic Advisors, and Nobel Prize winner, says the Bank refuses to adopt, or even analyze, the Asian Miracle-model. Stiglitz says, "that model is the exact opposite of the current Bank policies." Stiglitz wrote of his experience at the Bank: "What I saw radically changed my views of both globalization and development." The NY Times summarized one of his resulting books this way: "Stiglitz argues that special interests have distorted the world economic order and the institutions that run it."

But it gets even more cynical: The Asian Miracle-model for development of impoverished peoples (a strong government role, direct planning of land reform, investment, trade and growth of human capital in public heath care and education) —what the US piously insists is plain wrong-headed, and uses the Bank and IMF to absolutely prohibit other countries from adopting— was done by the US government itself! The Asian Miracle, if the truth be told, is really "the US Miracle." Japan, Korea and Taiwan were rebuilt after WWII under US military occupation, under US planners. In Taiwan, for instance, the US plan was called "Land to the Tiller" but when I asked the State Department about it they replied: "We have no record of it in our computers."

And most cynically of all, it was the same Wall Street committee of the CFR calling for new institutions to thwart "independent economic development" generally, that made an exception for US strategic reasons and explicitly called for immediate reconstruction of Japan, Korea and Taiwan as a "strategic counterbalance to a growing China." The US national security managers, led by the corporate planners of Wall Street, selected certain Asian nations for development, and thwarted development elsewhere—in the "national interest."

The Cycle of Military & Economic Violence

This amounts to the intentional denial of economic science to the two billion impoverished peoples of the world. This is the moral measure of economic violence.

But there is more. When impoverished peoples buck "how the system works", in the State Department phrase, and try to implement "the US Miracle-model" for their own people, Thomas Friedman's "hidden fist" (the US military/CIA) intervenes to stop it. Often, it is dismissed as "Communism." This too, is a part of economic violence: killing hope, killing any alternative. I call this the cycle of military and economic violence.

Change Is Possible

From what I have seen and heard, our world is built upon this cycle of violence: people are not poor, they have been made poor, impoverished, and are often beaten down again at gunpoint when they seek development. SPP is part of this story.

In history institutionalized oppression, like racism, sexism and economic violence, is often legitimized as something "natural", inevitable, beyond anyone's power to change. And greed, the Bible reminds us, is as old as the hills. However, institutionalized greed can be outlawed--just as institutionalized racism and sexism have been outlawed. The institutions (and their so-called economic "laws") of economic violence can be outlawed—starting with NAFTA and SPP. All social constructions are subject to social change, democratic majorities, and moral claims.

As Stiglitz found, the great power of the WB, IMF, WTO is their monopoly hold on ideological power to define reality, direct "development", rationalize the haves and have-nots, and disarm critical thinking and social change. When we name economic violence we expose their power over our minds and pocketbooks —and disarm them.

Election Issues

The concept of economic violence is a prism of change through which to see the election issues of our day: oil wars, growing inequality, trade and labor migration, climate change, water and food scarcity, the role of lobbyists and corporations in the Washington game.

This election is the time to speak up. The end of the cheap oil era and rise of CO2 costs means curtains for the competitive advantage of long-distance, jet transport-dependent globalization. NAFTA, SPP and the other long-distance trade agreements no longer make sense amid concern for sustainable development. Obama has promised to re-open NAFTA talks. He should abolish SPP by executive order. Obama and every candidate for Congress should be pressed to take a bold stand and roll-back corporate control over our lives.

John Mateyko, is an architect based in Lancaster, PA and Lewes, DE.
To join the free economic violence workshop planned for Lancaster contact him at 302-645-2657.