PCDForum Article # 17 Release Date March 10, 1996

by Maude Barlow

Many people know about how the International Monetary Fund and the World Bank force developing countries into the unregulated free-market global economy by a process of structural adjustment. Countries seeking new loans to meet old debt obligations must privatize social security, deregulate their transportation and resource sectors, allow transnational corporations to displace domestic industry, undermine or destroy collective bargaining, and cut public services such as education and health to the bone. In effect, they are told that global capital will call in its debt if they do not acquiesce to its demands.

What is less known is that the same thing is happening in many of the so-called developed countries. The threat is different-global capital threatens to pull investment and manufacturing out of these countries if they do not get their way-and the tools they use-free trade agreements like the North American Free Trade Agreement (NAFTA) and the General Agreement on Tariffs and Trade (GATT)-are different as well. My country, Canada, provides a striking example of how corporate-dominated globalization brought my country to it knees and dismantled a social infrastructure that took a hundred years to create.

A former Mexican Ambassador once said, "Canada is the solution looking for a problem." With a vast land mass, a harsh climate, three founding national identities-Aboriginal, French, and multi-cultural English-speaking-and a sparse population, largely scattered along the border of the biggest superpower in the world, our ancestors knew that they had to be creative in order to survive as a nation-state.

Our ancestors knew that their survival depended on building a culture of interdependence, and so they built ribbons of common purpose-economic, social, and cultural institutions that forged a nation-state out of the wilderness. Most crucially, we built a welfare system not based on individual charity, but on the notion that social security, particularly health care, is a right of citizenship and should be universally accessible to all Canadians. Strong national standards for what we called our "social safety net" promoted equality, worked toward eliminating class and racial differences, and generated a sense of community.

Our modern social legacy was forged in the twin crucibles of the Great Depression and the Second World War. Capitalism was put on trial by the depression, as its massive failures became apparent in the work camps and bread lines of the 1930s. The same government that could not provide even basic care for its people was suddenly able to find all the money it needed to feed, clothe, house and employ them for war. When Canadians came back from that war, they demanded a country worthy of returning heroes, and what I call our "social nation-state" was born. Canadian business was forced to comply with progressive policies in a partnership contract with government and the Canadian people.

That has now changed. Beginning in the mid-1970s and dramatically accelerating during the 1980s, Canadian capital has gone global. Having escaped beyond the borders of nation-state law, it has called off its partnership with Canadian citizens. Led by a corporate lobby group, the Business Council on National Issues-modeled on the U.S. Business Roundtable and largely under the control of foreign corporations-big business in Canada launched an unprecedented assault on social programs, Canadian culture, full employment policies, and the notion of public services. Corporate Canada has government on trial, calling for its "re-invention" by allowing the private sector to take over wholesale in areas of public service.

The first step was to force consecutive governments to lower corporate taxes or face capital flight. Whereas in the 1960s, Canadian citizens and business contributed 50-50 to tax revenues collected, today Canadian citizens account for 92 percent of all tax revenues. Business contributes only 8 percent. As business has withdrawn its tax contribution, the Canadian government has fallen further and further into debt, as have governments all over the world. Corporate Canada has responded with a form of political terrorism, forcing governments to slash public infrastructure across the board. Privatization, deregulation, and decentralization are the rallying cries of big business. Their most important tool for forcing the transition from a social nation-state to a corporate nation-state have been a series of free trade agreements.

The NAFTA, and its predecessor, the Canadian-U.S. Free Trade Agreement, were fiercely contested in Canada. NAFTA is a social and economic constitution that overrides Canadian government law and acts as a charter of rights and freedoms for corporations. It requires the deregulation of the service sector, enshrines the intellectual property rights of corporations, removes virtually all control over foreign investment in Canada, promotes the privatization of public services, such as health and education, and contains no minimum protections for workers, social standards, health and safety measures, or the environment. It has forced Canada to realign its orientation from east-west to north-south, in essence, becoming part of a new borderless North American economy. Several hundred thousand jobs and many hundreds of manufacturing companies have been lost as a result to the low wage states south of our border.

In the election of 1993, Canadians took their rage out against former Conservative Prime Minister Brian Mulroney's wholesale endorsement of free trade and the corporate agenda, by reducing his party to just two members in the House of Commons. Jean Chretien's Liberals campaigned passionately against NAFTA and were elected on a progressive platform. However, in a distressing betrayal of democracy, one of their first acts upon taking office two years ago was to sign NAFTA.

They then proceeded to gut Canada's world-class social programs, break the collective bargaining agreement with their public sector workers, introduce legislation allowing industry to negotiate around environmental legislation, strip natural resource protection programs, enforce interprovincial free trade on the NAFTA model, severe trade from human rights, privatize the transportation sector, commercialize the cultural sector, and endorse world-wide free trade. No Canadian voted for this platform, but we got it anyway.

The accumulated effect of living in an unprotected global economy has had devastating results for most Canadians. We are creating a high unemployment, contingency workforce dependent on part-time, low-wage jobs with no security and few benefits. We are changing our class profile from an egg-with a large middle class-to a pear, with fewer Canadians controlling more of the wealth, and more and more of us falling out at the bottom. We now have an entrenched underclass and our middle class is shrinking. Child poverty hit a three-decade record in Canada-there are 51 percent more poor children living in Canada today than in 1989-the year the free trade deal between Canada and the United States was signed. Corporate profits, however, are soaring; a 360 percent increase in last year's fourth-quarter profits alone.

A neo-conservative government has just taken power in Ontario, my home province. They are closing battered women's shelters and half-way homes for prisoners, throwing welfare mothers unto the streets, and slashing funding to children's aid societies-behavior that would have been unheard of in our country a decade ago. When the previous Premier of the province was sworn in, he invited the public to hear him play the piano and participate in a sing-a-long. The Premier before that held his swearing-in on the front lawn of the Ontario legislature, where he personally served the public hot dogs and lemonade. It was a different story the day the current Premier, Mike Harris, was sworn in. A very small, select sea of suits, triple-security passes clutched in hand, were carefully screened for admission by the riot police who encircled the legislature, complete with billy clubs, mace, and attack dogs.

And so Canadians have entered the global economy, as have peoples all over the world; a global economy so divided by rich and poor that, as the Institute for Policy Studies has documented, 358 billionaires now hold a combined wealth equal to the annual income of nearly half of humanity; a global economy ruled by global corporations with more economic power than most nation-states; a global economy where powerful trade agreements protect the corporate abuse of 200 million child laborers; a global economy where corporations train Third World police forces to protect their property from disenfranchised local peasants, farmers, and workers, and call for laws making it illegal to criticize corporate behavior.

Canadian citizens are fighting back. My organization, a national, non-partisan, non-profit grass-roots movement of 55,000 members has launched a Citizens' Agenda for Canada movement. We believe that every person in this world has the right to productive and fulfilling employment, food, shelter, education, pensions, unemployment insurance, health care, universally accessible public services, a safe and clean environment, protected wilderness spaces; a right to the integrity of his or her culture, and the right to communicate freely. If governments will not recognize and defend these rights, we must act as citizens to restore them. No one of us acting alone can overcome the forces aligned against us. Together, however, we can create a moral vision and reclaim the power to give reality to our dreams.

To rebuild democracy we must start back at the roots-in our communities. The only way to fight is together. Across sectors, across countries, across race, gender and age lines, employed and unemployed, city and rural, we must find one another and realize that the movement we are creating is the only thing that comes between us and the global feudalism of the new economy. We must not accept the prevailing propaganda that globalization and corporate rule are inevitable. To say we have no choice is intellectual terrorism. Fair trade, full employment, co-operation, cultural diversity, democratic control, fair taxation, environmental stewardship, community, public accountability, equality, social justice: these are the touchstones of our vision and it is within our means-it is our right-to chose them.


Maude Barlow is national chairperson of the Council of Canadians, 904-251 Laurier Ave. W., Ottawa, Ontario K1P 5J6, Canada and a contributing editor of the PCDForum. This article was prepared and distributed by the PCDForum based on her presentation to the globalization teach-in convened by the International Forum on Globalization in Riverside Church, New York City November 10, 1995.

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