The election of President Donald Trump, which followed an indecisive vote by the citizens of the United Kingdom to leave the European Union, evidenced a deep crisis. Among others, this crisis reflects a lack of democratic support to, and appetite for projects that aim to increase economic interdependence. Old and new perspectives on this issue joined forces against a shared, common enemy – the distrust of the process often referred to as globalization.
Perspectives critical of the process of globalization are by no means new. For centuries, groups disfavored by the destabilizing forces that such processes entail, such as competition or new forms of social and business organization, or that see in it the formalization of power structures have attempted sometimes successfully to organize and protect against economic interdependence.Footnote 1 Trade policy has international but also domestic distributional effects that affect interests and prospects. Notably, however, the events of 2016 are qualitatively different as they signaled a deep division and generalized mistrust even in countries that have substantially benefited – at least from a macroeconomic perspective – from the post-World War II consensus and the neoliberal institutions that followed the fall of the Berlin Wall.Footnote 2 The once vibrant middle classes, which were propelled in part by industrialization in many Western countries, frustrated with grim perspectives about their future joined other popular and populist movements. Many of these critics pointed at (neo)economic liberalism as the culprit. In their view, this form of internationalization promotes nothing but a form of regressive redistribution – a way of making the rich even richer. Many of those disaffected chose to vote for candidates with nationalistic tendencies and, in some cases, racist undertones.Footnote 3
To a large extent, this grim perspective that led to our current crisis of trust is not an incorrect perspective of one (among many other) effect of globalization. The interconnection of markets has facilitated the large accumulation of capital for a few with the skills, social networks and political access to participate in the global financing, servicing, trading or investing with limited constraints (compared with prior periods of humanity) – leaving many behind. It has facilitated the underinvestment in key areas that helped to underpin social cohesion, while motivating enormous dislocations of workers. At the same time, in some places more than others, globalization is perceived as the continuation of colonization that exacerbated the existing inequalities between nations. For instance, UN bodies have declared that it is necessary to contribute to the current debate to defend the interest of all and to move away from the hegemony of the major powers. Colonialism has returned under a new guise.Footnote 4 In addition, in many countries, governments have been unable or unwilling to sufficiently address these well-known effects with the adoption of policies to protect the disaffected – for instance, with retraining programs, the expansion of the social safety net or increasing access to affordable healthcare and education. To make things even worse, the volatility of intensely interconnected economies also made traditionally stable societies much more vulnerable to recurrent systemic exogenous shocks and, as seen in recent months, susceptible to epidemics.Footnote 5
More problematically, the responses to the cyclical crises have had – sometimes by design – the effect of benefiting the same sophisticated, wealthy or already empowered actors who can insulate from volatility and take advantage of bailouts and other rescue programs with a tilt. Take, for instance, the effects of the policy responses to the financial crisis of 2008: despite its potentially beneficial effects that may have avoided disastrous consequences of the economic downfall, it also allowed a deeper concentration of economic power by wealthy citizens who disproportionally benefited from the eventual recovery of the markets. Incidentally, no one was made accountable for the reckless behavior of many in the financial services industry who contributed to the crisis. Instead, the blame was directed to exogenous factors.
But these very same concerns with globalization predated the election of Trump and Brexit – in fact, if anything these criticisms are recurrent. Back in the 1990s it was suggested that the increase in the gap between rich and poor in wealthy nations due to globalization would motivate protests against the excessive reliance on free market ideas.Footnote 6 More importantly, many poor nations and constituencies within them have long taken issue and criticized the pace and form of globalization, as it gives them increasingly fewer prospects to succeed. What the recurrent criticism of economic integration shows is that rather than one big problem of globalization, there are multiple problematic effects (as well as real benefits). Depending where one stands, globalization can be framed differently.Footnote 7
This book is concerned mainly with one particular frame; that of the groups subjugated and marginalized by the process of globalization. As I explain, Indigenous peoples, whose voices have been until recently excluded in international economic institutions represent an example of how modern economic interconnection can marginalize millions. Their perspective and experience may also provide a path for organizing transformative action. To contextualize the discussion, it is important to situate the perspective on globalization of these groups in opposition to others, or as Anthea Roberts and Nicolas Lamp say, as the different narratives driving debates about who wins and loses in modern times.Footnote 8 Accordingly, the different views of globalization can be organized in six main “narratives” – five of them seek to contest the process, in one form or another, by relying on particular goals as well as tools, standards and metrics to assess success. Each framing reveals and obscures different elements about the relative “winners” and “losers” of economic globalization; each has a particular perspective of how we should respond to the current crises. Nevertheless, without a holistic approach to the different perspectives on the discontents of globalization and given that all of the narratives reveal problematic aspects of globalization, it would be partial and misleading to address the issue of the marginalized without this context as a starting point of reference.
What follows is a summary of the type of orthodoxy that has animated most modern trade and investment frameworks with IP provisions such as the WTO Agreements, ASEAN Free Trade Agreement, NAFTA (or its updated version, the USMCA) and the now uncertain TPP (or CP-TPP) and Trans-Atlantic Trade and Investment Partnership (TTIP) agreements, as well as many other similar deals. After that, I juxtapose the frames identified by Lamp and Roberts, adding commentary to complement this initial picture of where we are in this historical movement.
1.1 Globalization and Absolute Gains
The conventional or mainstream narrative is a perspective widely adopted by economists as well as international economic law scholars and policymakers in developed Western countries such as the United States, Europe and the United Kingdom. In a largely simplified fashion, it argues – based on some often disputed or conflicting empirical evidence – that globalization increases the prospects of both peace and prosperity. First, it increases economic prosperity because measures aimed at restricting trade in goods and services as well as foreign direct investment limit economic efficiency. Hence, contracting at the international level is necessary to avoid inefficiencies. In the long run, this has the effect of increasing absolute gains on at least a national level, even if such benefits are not evenly distributed among the different constituencies of the state. By removing tariffs and other barriers, states can focus on what they do best and improve their economic standing. Specialization plus economies of scale allows the commercial actors of a given state to trade for other products with greater economic returns. This perspective claims that economic liberalization is a path for economic development; it points to the experiences of countries in South East Asia as instructive examples of the virtues of the model.
At the margins, under this narrative there is some degree of disagreement on the effects of economic globalization and, more importantly, what to do about it. On the one side, neoliberal conservatives tend to believe strongly in the market; they often focuses on the state as the culprit of multiple inefficiencies. This is often considered the “right” or conservative wing of the political spectrum in many countries, including the United States and the United Kingdom. On the other side, many accept that markets indeed maximize economic gains in the long term, but view the state as playing a more fundamental role in regulating markets (including short-term opportunism), redistributing those gains and providing an effective safety net. This view is more akin to social democratic perspectives in Continental Europe, where the social welfare state has a stronger tradition and defends broader policy interventions.Footnote 9 While this view also embraces international economic liberalization as a path for economic development, it demands greater redistribution and social services to cushion the negative impacts of economic globalization on the national level.
Second, and regardless of one’s position on its economic effects, interdependence was first and foremost assumed to increase the prospects for peace and security. Peace and security are public goods – perhaps the main and most valuable outcome of international law. This goal was particularly relevant during the foundation of the Bretton Woods institutions, that is, the World Bank, the IMF and the failed International Trade Organization, which eventually emerged in the form of the WTO. The theory is simple and perhaps has even less methodical empirical support than the economic role of the system, but defends greater economic interdependence as a way to promote cooperation and increase the costs of conflict. The focus is on the absolute gains of states, including peace, so that it makes sense for them to engage in free trade on an individual basis, with much less attention paid to the size or proportion of their gains on a relative basis. In other words, overall countries are better off in absolute terms, and therefore less inclined to engage in destructive conflict.
Beneath these general arguments, however, different positions have been gaining force among different sectors of the population, especially in Western democracies. What separates these positions from the mainstream perspective is a different understanding on how to assess the effects of globalization. These positions mainly focus on the relative effects: Some individuals or collectivities win, and others lose. Before explaining other, more radical positions that argue that perhaps everyone loses from the relentless quest for economic growth, I explain four different challenges to conventional economic thought and how each is different from the others.
1.2 Discontents Based on Relative Gains
For many years, the conventional view of globalization has had different pushback from scholars, advocates and civil society organizations. Relying on different perspectives and metrics, these actors have contested globalization not necessarily challenging the paradigm of absolute gains, but by highlighting the relative gains that globalization often enables. In this sense, depending on the perspective, actors have framed the conversation as a matter of relative gains: who has won at the expense of whom. Because of the temporal effects of economic liberalization, many of the claims are hard to evaluate empirically.
Certainly, as these narratives care about relative gains, the important issue here is what each reveals about globalization. No narrative is infallible or completely accurate, but there is some level of truth in all of them. Nevertheless, the narratives are often presented in a decontextualized fashion and weaponize the more intuitive or salient aspects of each narrative for political gains. Not surprisingly, the use of the relative effects of globalization to animate different political causes has been a constant, as I now explain with reference to Lamp and Roberts’ topology.
1.2.1 The Populist Discontent
Globalization has been challenged from a populist perspective for many years, but such challenges intensified in the United States after the Global Financial Crisis of 2008 and the bailout provided by the federal government to “Wall Street” – banks and financial institutions which failed to assess, or decided to ignore, the systemic risks that their activities entailed.Footnote 10 In Europe it coincided with the Greek crisis and the debate about its mismanagement and the role of Germany and its banks. The economic “system,” according to this perspective, is “rigged” and mostly benefits the top 1 percent. This 1 percent represents millionaires and billionaires who have a disproportionate influence in the local domestic political process and routinely meet in places like Davos or Dubai to find ways to increase their wealth, including by avoiding a fair contribution to domestic economies and paying taxes.
The disproportionate gains by a concentrated group raise concerns about fairness. For example, left-to-center politicians like senators Bernie Sanders or Elizabeth Warren, utilize the effects (whether real or perceived) of globalization on income distribution to advocate its retrenchment or transformation.Footnote 11 As it is, and in coordination with domestic political processes, globalization reflects another instance of how the rules of the game have been rigged to benefit the wealthy few at the expense of the many poor. The evidence, including a compelling and detailed description of the relative gains that have resulted in the last few decades provided by Thomas Piketty, a Nobel Prize-winning economist, has helped to reposition versions of this view at the center of policy discussions, including among academicians.
The conventional counterargument to this perspective is that it is for national governments to address the adverse consequences of globalization, which enables a temporal process … sectors and facilitates the accumulation … (winner takes all). Hence, fair taxation, social programs and well-regulated markets can address issues like stagnant wages or wealth concentration. Moreover, it behoves governments to address the rising cost of the essentials for the middle class like education, healthcare and housing. Globalization can do little to address these problems – although governments have defended conditioning trade deals to a commitment to such policies as I explain in the next section. Not surprisingly, these arguments have done little to ease the concerns espoused by the populist frame.
1.2.2 The Corporate Power Discontent
Similarly, some believe that the gains from globalization flow disproportionately to the richest individuals who control transnational corporations. This view stresses the role of corporate (or capital) power versus “Main Street” (or labor) interests and has a transnational dimension. It sees international economic treaties combined with a suboptimal international tax, competition and regulatory regimes as the cause or as an enabler of international corporate power.Footnote 12 By doing so, corporations can take advantage of a global marketplace to produce cheaply, sell everywhere and avoid paying their fair share of taxes without much competition.
Under this view, the network of international trade, tax, investment and IP treaties facilitate the free flow of goods, services and capital but make footloose and flexible multinational companies hardly accountable. Because of the lack of commitment to social inclusion – critics argue – these treaties allow governments and workers to play off each other, leading to what is often referred to as social dumping.Footnote 13 If workers in Michigan do not lower their wage demands, the automaker can move production to San Luis Potosi in Mexico. It also may lead to regulatory and tax arbitrage – if taxes are too high, or regulations too onerous, companies may relocate headquarters or production.
The counterargument to this framing of globalization is similar to that against the populist critique, with some caveats. Globalization depends on a responsible center-right partner to succeed. Policies that underpin a functioning liberal system are premised on the understanding that at least a faction of policymakers would be willing to support market-friendly ideas that address the negative consequences of globalization, including job loss, temporal shocks and a rise in inequality. Yet, the role of money in politics, not globalization, is directly to blame for the lack of action in making corporations more accountable (although the two can be connected). In this sense, corporate power has disproportionate effects on political discourse and has helped to polarize it. Some might also argue that overall, global interconnectedness improves the labor and regulatory conditions and the overall distribution of wealth as measured by objective indicators such as the Gini index. Accordingly, looking at corporate accumulation misses the point without a clearer picture of how globalization affects more concrete metrics such as inequality and social mobility, especially compared with other forms of organization.
1.2.3 The Protectionist Discontent
The protectionist view focuses on the relative gains but differs in a fundamental way from the previous narratives. Like the populist view, this perspective challenges globalization from the perspective of a particular set of “losers” of the process, that is, individual citizens.Footnote 14 However, unlike the populist view, this is not necessarily the poor or the middle class, but rather those workers from post-industrial communities who have lost their jobs to newly developed manufacturing centers, with sometimes devastating consequences for their communities. Because in countries such as the United States or the United Kingdom these workers resemble traditionally economic dominant groups such as white males, in some instances the narrative has adopted a xenophobic and/or racist undertone. Think, for instance, of the United Kingdom and the Brexit vote or the United States and the election of President Trump.
Under the protectionist narrative, workers in developing countries such as China, Vietnam or Mexico – just to mention a few – or immigrants, who may be willing to work harder for less money, are the main beneficiaries of globalization. They fault developing countries for using unfair trade practices to “steal” jobs or accuse governments of not enforcing harsh immigration laws. Like the populist narrative, for the protectionist the “elites” are complicit in allowing imbalanced trade and investment deals that result in job losses.
Several counterarguments are advanced against this view of globalization. Most prominently, defenders of globalization point to a different cause of job losses: the efficiency gains resulting from better integrated supply chains as well as automatization. It is the robots, not Mexican or Polish workers who are the ones to blame. In addition, a standard response puts the blame on the lack of mechanisms of redistribution such as retraining programs, or safety nets or healthcare expansions as the culprits of the negative effects of globalization. Perhaps one benefit of this protectionist view is that it has opened space to question strict economic considerations and for perspectives that pay greater heed to the social consequences of globalization.Footnote 15
1.2.4 The Geoeconomic Discontent
A fourth perspective similarly challenges the relative gains that seem to flow to different countries. However, this narrative is less concerned with the fate of individual workers, like the protectionist view, but instead focuses on the unequal gains that different countries have made through economic globalization. Under this focus, the gains of some countries, especially China, are considered a threat to national security. Therefore, trade policies demand measures that seek to expand flexibility, policy space or discretion to implement trade measures to protect the industrial and manufacturing base on national security grounds. Investment policies require increased screening of foreign investment in critical infrastructure, and to impose new export constraints with respect to key, cutting-edge technologies.
This “geoeconomic” narrative is rapidly emerging as the economic emergence of China is perceived as a threat to an American-led world. This can result in a more autonomous (though still competitive) “spheres of influence” approach, in which trade policy is deployed to further strategic goals and to force other nations to pick a side similar to the Cold War era. The perspective from absolute to relative gains is particularly marked. Advocates for this view do not question that most countries have gained from economic globalization; instead, the concern seems to be with the disproportionate gains of China compared to the United States, Europe and others. In particular, the concern is that the strength of China might endanger other countries’ access to vital resources and control over critical infrastructure, resulting in the undermining of “Western” power and “liberal” values.
The response to this narrative is only emerging but is similar to economic arguments against claims taken based on “national security” or national interest. In essence, the response argues that interconnected nations tend to engage in less (not more) conflict, as the mutual losses become increasingly costly. This view stresses that national security aspects of interconnection are the main reasons for more (not less) globalization. In part, the arguments for the The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (TPP or CPTPP), and many FTAs signed by the United States included a strong national security component. When advancing these arguments, the public is often reminded of the success of endeavors, such as the EU, that have a national security perspective and have worked well to prevent a repetition of conflicts such as World War II.
All these forms of contestation to the standard narrative are used to advance different causes – and with that economic and political interests. For example, in the United States, Senators Sanders and Warren used the populist and corporate power narratives to create a coalition of voters (ultimately unsuccessful) and to appeal to labor organizations. Similarly, President Trump used and continues to rely on the geoeconomic and protectionist views to expand national security powers.Footnote 16 Different economic actors also espouse these views – more traditional industries like coal or steel use the protectionist view to benefit from subsidization or tariffs, and newer industries like high tech rely on the geoeconomic narrative to undermine their foreign competitors. The targeting of Huawei Technologies Co., China’s largest tech company, by the United States is instructive because it benefits other Western companies interested in dominating a new generation of wireless systems.
It is also interesting to note that none of these perspectives directly espouses the interests of groups that suffer from political marginalization and economic vulnerability such as indigenous groups. Even the most populist views seem to be distant from the perspective of groups left out by the dynamics of globalization, who are politically unable to advance their concerns and are marginalized from participating economically. This has led some indigenous movements to align more directly with radical perspectives, including the sustainability and ‘Third World’ perspectives. In Chapter 7, I come back to this issue to explain a perspective of globalization that is more consistent with the rights, interests and grievances of Indigenous peoples. First however, I explain this sustainability narrative and why indigenous advocates have not completely embraced this perspective.
1.3 Discontents Based on Absolute Losses
1.3.1 The Sustainability Perspective
For many years different perspectives have challenged the market-driven, consumption-based and economic growth paradigms that underpin the current model of globalization, especially as understood by orthodox neoliberals.Footnote 17 These more fundamental challenges do not focus on the relative effects, but on the absolute ones. There are two related arguments. First, the main focus of globalization should be sustainability of the planet and the well-being of all planetary living forms and the development of human capabilities, not just economic growth. Instead, the current model puts the planet at peril for it rewards commoditization and unsustainable exploitation of natural resources and disregards the perilous consequences of excessive pollution. Second, the model also incentivizes unreasonable accumulation as well as a “winner takes all” logic that tends to exacerbate inequality – for example, today, eight people have the same wealth as the billions in the poorest half of the world’s population. In the long run, this increased inequality means that everyone loses as it tends to make society worse off, not just those who are relatively worse off in economic terms. Without a middle class, social mobility and basic social safety nets, societal connections breakdown, potentially dissipating the fabrics of society that prevent conflict. This dynamic – in the long run – affects most, if not all members of society.
This position is often adopted by environmental and social and economic justice movements. Instead of prioritizing economic growth, this lens often argues for different metrics of individual and societal well-being. It advocates measures that focus on equality, healthier (mental and physical) lives and an optimal use of resources, expressing an expansive (and perhaps more realistic) idea of externalities that impact the balance of the planet. It pushes back against the most unsustainable forms of international interconnectedness that disregard the long-term effects on the planet, even in cases that show positive effects.
The most effective counterargument is that perhaps in no other time in history have more people been taken out of poverty than in the last forty years or so. Despite the deep problems, we are living in a time of remarkable progress and achievements in combating poverty, especially in the developing world. China alone has been responsible for a large number of these people who now have much better options in terms of health, education and well-being. While the world is at peril because of environmental practices, they have improved substantially and societies have also become more productive and efficient, especially compared with any other time in history. One example is that despite the climate change challenge, the carbon emissions per unit of global GDP improves daily and we are learning to resolve challenges that used to be fatal for societies. These challenges can only be resolved with global interconnected action, where markets can be part of the solution, and not in isolation and excluding efficient forms of organization.
1.3.2 TWAIL and Other Perspectives
There are many other perspectives that resemble the sustainability approach. An important one may be expressed by critical globalization studies, law and development scholars, as well as scholars under the umbrella of Third World approaches to international law (TWAIL).Footnote 18 Unlike others, they emphasize continuity between colonial times and the current wave of globalization; they do not see a radical rupture with past forms of economic integration but a continuation that has formalized preexisting relationships and forms of oppressions existent during prior historical Eras such as mercantilism, colonialism and feudalism.
While these perspectives emphasize the struggle between social classes, they also identify globalization as a way of perpetuating the power of North Atlantic countries by empowering unaccountable transnational business entities, and a global “super class.” The result is the alienation of communities that do not abide by a culture of individual choice; one that glorifies the efficiency of markets or the role of privately held property, including communities in the “Third World” or “Global South.” Some of these perspectives also adopt a racially charged undertone, but fail to define which groups are the subjugated communities. Accordingly, modern international economic frameworks only serve to maintain a racialized system, privileging white, North Atlantic communities.
One problem is that some of these perspectives tend to be pessimistic and rarely engage with traditional measures, empiricism or indicators of the impact of globalization. At the rhetoric level, some scholars tend to see such indicators as biased or as technologies of governance that ignore the realities and perspectives of communities outside traditional power structures. For instance, law and development scholars contest the meaning of “development” as a politically charged term that dismisses the preferences and practices of poor countries.Footnote 19 To some degree, the emphasis of politics make these approaches less effective to perform objective, empirical evaluations. The response, however, is similar to the sustainability narrative but given the lack of engagement with more specific metrics they are also more readily dismissed, often for lacking concrete proposals of change.
As I elaborate in Chapter 7, the main criticisms of globalization fail to capture fully the interests of Indigenous peoples. On the one hand, the challenges based on relative gains rarely include the perspective of Indigenous peoples or take into account the experiences of these communities in their arguments. In general, these perspectives completely ignore both the specific protections of Indigenous peoples and the ways in which these groups can effectively participate by integrating into a cosmopolitan community more welcoming of these experiences – often assuming that, as the relative losers, they are uninterested in incremental change and participation. This needs not be true for all indigenous groups.
On the other hand, perspectives based on absolute losses have been adopted by indigenous advocates who argue for systemic change, but fail to grasp fully this group’s interests. The sustainability perspective often disregards the interest of indigenous groups of participating in the gradual exploitation of their territories and resources. For instance, a large percentage of the remaining (yet, rapidly disappearing) healthy ecosystems in the world are indigenous lands, and the sustainability perspective sees indigenous communities as bearers of the responsibility to keep them protected from economic activity and generally untouched. This approach effectively advocates for the conservation of indigenous resources, without regard to the autonomy, priorities, desires or aspirations of such communities. Indigenous people, the argument seems to imply, should not be aspiring to be economic participants and bargain with these resources to set some of the terms, but instead should act as the protectors of the ecosystems for the benefit of all of us (especially tourists) – no matter if this means their continuous marginalization.
Finally, the sustainability perspective assumes certain level of political participation and influence. In most cases such political participation is nonexistent or, if any, very limited. Conversely, the critical perspective tends to ignore the special protections of Indigenous peoples reflected in human rights instruments. In fact, Indigenous peoples have had, not without sharp resistance, extensive opportunities to participate in shaping the development of the modern human rights system that has emerged along with this new wave of globalization. By completely ignoring these victories, the critical perspective fails to bring into the fold the special protections that apply to them as marginalized groups. In Chapter 3, I discuss how these protections operate after systematically explaining the negative effects of globalization on marginalized groups such as Indigenous peoples.