Vol. IX, Bulletin No. 9.                                                                          October 2, 2004

Probing Questions for Presidential and Congressional Candidates

A Tough Test for Politicians, and Voters

Global concerns are at the heart of an election-year guide produced by a Catholic society of missioners, Maryknoll, whose priests, brothers, sisters, and lay people serve in 39 countries throughout the world.

"We see great danger in a superpower United States that lacks a commitment to the global common good," the guide states, and outlines a series of issues to test candidates for the Presidency and for Congress on their commitment to sound policies.

The guide, titled "2004 U.S. Elections: Impact on peace, social justice and the integrity of creation," covers issues in 16 specific areas. In one of them, on corporate accountability, it notes that multinational corporations "are major players in the global economy (51 of the world's largest economies are corporations)," and goes on to suggest four specific questions on corporate accountability that should be posed to this year's candidates for national elective office:

• Would you support an enforceable code of conduct for U.S. corporations, whether they are doing business in the U.S. or overseas?

• Do you believe transnational corporations should be bound by international human rights law and subject to sanctions in U.S. courts?

• Do you support legislation that would require U.S.-based corporations to report publicly on their environmental, human rights and labor rights practices overseas?

• Do you support the “publish what you pay” campaign, which would require corporations to disclose aggregate information about tax payments, royalty and license fees and revenue sharing payments with government and public sector entities?


One overall lament expressed in the eight-page document, produced by the Maryknoll Office for Global Concerns, deals with the trend toward centralized of decision-making:  "Around the world we have witnessed the disastrous impact on local communities of economic decisions made in distant or disconnected places and see it happening once again as people in increasingly centralized positions of power shape the global economy, placing profit and growth before human and ecological well-being."

A Painful Personal Reflection on Holocaust

As a physician dedicated to the ethical principles of his profession, Dr. Sherwin B. Nuland always felt certain that if he had been practicing in Germany during the Third Reich, he would in no way have cooperated with the Nazi regime in carrying out the Holocaust. That was his assumption before a recent visit to the U.S. Holocaust Museum in Washington, D.C.  Now he is not so sure.

Nuland calls the Holocaust Museum "a place to learn, to look within oneself, and to ponder the nature of our humanity," and he holds that especially true for the Museum's special exhibition on "Deadly Medicine: Creating the Master Race."  There his own pondering led him to imagine himself as someone in the German medical establishment during the 1930s and 1940s.  His self-examination was not reassuring.  It shook him deeply.

"To my startled dismay," he writes in a magazine article, "I found myself understanding why much of the German medical establishment acted as it did. I realized that, given the circumstances, I might have done the same." 

His explanation takes eight pages of the New Republic's September 13/20 issue. Like the "Deadly Medicine" exhibit, Nuland traces the dedication of international eugenics movement to improving the "purity of the human race by better breeding."  It was so successful in Germany that "who but a few visionaries would see any danger in the promotion of purity?"

Better Breeding Goal of Eugenics Ultimately Led to Nazi Gas Chambers

"It is hardly surprises that National Socialism in Germany would embrace the concept of eugenics," he observes, and painfully recounts how Hitler and his regime expanded the concept step by step toward the Final Solution, the program of "ridding Germany and eventually Europe of the pestilential disease of Judaism."

Nuland dwells on the shocking truth that his own medical profession cooperated in Hitler's program of a Judenfrei Europe. "Physicians again and again participated in ways that were as murderous as though they had themselves been officers in Himmler's SS (as in fact so many of them were)," he points out. "Among [those ways] was the eugenically justified euthanasia program that was the forerunner of the gas chambers."

How could the medical profession so degrade itself?  One reason he gives is this: "The German medical establishment was heir to a grand tradition of accomplishment and international respect.  When it took on eugenics as a worthy goal, it was convinced of the righteousness of its intent.  Even when some of its own members began to voice concerns about the direction which the research and its application were going, many authoritative voices drowned out the relatively few protests." 

In other words, professional arrogance and a reluctance to question collective policy.

"No association or guild," Nuland writes, "was more complicit in the rise of Nazism and the desecration committed by its leaders and followers than the profession of medicine, in the form both of its organizations and its individual members.  This needs to be more widely known, and not only by today's doctors. In our shame, great lessons are to be learned."
From the imprimatur that medical science in the United States, the Britain, and Germany gave to eugenics, and the tragic consequences in Europe, Nuland draws this lesson: the importance of recognizing that "scientific enterprise" has limitations. He insists that scientific findings arise in a setting that is political and social.  "Not only that, but its directions and even its conclusions are influenced by the personal motivations, needs, and strivings of those who practice it, some of which may not be apparent to these men and women themselves.  The danger in this lies...in the inability of society and the community of scientists to recognize the pervading influence of such an unpalatable reality, which flies in the face of the claims [of detached objectivity] that form the groundwork for our worship of the scientific enterprise."

What Would You or I Have Done as a Citizen of Hitler's Germany?

Dr. Nuland teaches surgery and the history of medicine at Yale, and is the author of How We Die and Doctors: the Biography of Medicine, among other books.  His New Republic article, "The Death of Hippocrates: When Medicine Turns Evil," is worth reading not only as a reminder of the Holocaust's horrors but also as a model of self-reflection, useful for persons in other professions and occupations. 

What would I have done had I been a German citizen in Hitler's time?  Think of the millions of Germans who lined his many parade routes and packed his massive rallies. Would I have joined them, saluting and cheering?   Today, are there no widely accepted policies crying to be challenged?

Economist on 'Complacencies' of Economists

You can't accuse Paul Samuelson of being anti-trade.  In book after book, article after article, lecture after lecture, this Nobel Prize-winning economist has defended free trade and its esoteric foundation, the economic "laws of comparative advantage."  But now Samuelson, the modern-day incarnation of Adam Smith, David Ricardo, Alfred Marshall, and other great economists, has joined the fray over globalization and outsourcing by challenging some prevailing views of his mainstream colleagues, including those making U.S. policy.

In a long article currently published in a leading academic journal, Samuelson, professor of economics at MIT, reveals his sharp disagreement with what he calls the "oversimple complacencies about globalization" of economists.  He specifically disputes the following central claim of theirs (as Samuelson has paraphrased it):
"Yes [they say], good jobs may be lost here in the short run.  But still total U.S. net national product must, by the economic laws of comparative advantage, be raised in the long run [the italics are Samuelson's]....The gains of the winners from free trade, properly measured, work out to exceed the losses of the losers....Some American groups can be hurt by dynamic free trade.  But...the gains of the American winners are big enough to more than compensate the losers."

That's wrong, according to Samuelson.  "It is dead wrong about necessary surplus of winnings over losings," he writes, and devotes 19 pages of the current issue of the Journal of Economic Perspectives to expose what he calls this "popular polemical untruth."

Defenses of Globalization Oversimplified, Samuelson Says

In an interview published in the September 9 issue of the New York Times, Samuelson said that he wrote the Journal article to "set the record straight" because "the mainstream defenses of globalization were much too simple a statement of the problem."  But, Times Reporter Steve Lohr asked, doesn't outsourcing reduce costs, delivering a net benefit to the economy?  Not necessarily, Samuelson replied; for example, "being able to purchase groceries cheaper at Wal-Mart does not necessarily make up for the wage losses."

Samuelson's dissent from conventional theory is especially sharp because at the very start of his article he names the "prominent and competent mainstream economists" who have entered the outsourcing or globalization debate with claims he denounces as false.  Heading his list is Alan Greenspan, chief of the Federal Reserve Bank, followed by N. Gregory Mankiw, chairman of the White House Council of Economic Advisors, and two noted professors of economics who are also prolific writers on free trade, Jagdish Bhagwati of Columbia and Douglas A. Irwin of Dartmouth -- plus "John or Jane Doe spread widely throughout academia."

After lambasting the belief that "the gains of the American winners [from free trade] are big enough to more than compensate the losers," Samuelson touches on the issue of how fairly the gains from free trade are distributed in the United States.  He explores a scenario in which outsourcing would harm a much larger share of the U.S. population but improve the welfare of the winners to the point of justifying that "the winners could be made to transfer some of their gains and thereby leave no substantial U.S. group net losers from free trade." 

Could Alan Greenspan Be Playing Role of Marie Antoinette?

He then asks: "Should [people] accept this as a cogent rebuttal if there is no evidence that compensating fiscal transfers have been made or will be made?  Marie Antoinette said, 'Let them eat cake.'  But history records no transfer of sugar and flour to her peasant subjects. Even the sage Dr. Greenspan sometimes sounds Antoinette-ish."

In perhaps his most serious charge against his colleagues, Samuelson writes that, leaving aside their policy and ethical judgments, "mainstream trade economists have insufficiently noticed the drastic change in mean U.S. incomes and in inequalities among different U.S. classes."  In other words, theirs is a failure to live up fully to their basic responsibilities as scientists. 

"This [outsourcing] is a hot issue now," Samuelson writes, "and in the coming decade, it will not go away."  True.  Professor Bhagwati, for one, will make sure of that.  He and two colleagues have already written an article for the next issue of the Journal of Economic Perspectives.  Its title: "The Muddles over Outsourcing." 
 
Mercantilism Disguised as Free Trade

Meanwhile, in the tight little world occupied by trade negotiators....

At a Washington ceremony recently, Robert B. Zoellick, the U.S. trade representative, praised the new trade agreement that he had just signed as historic because it "will put the U.S. relationship with Central America on a more solid mutual foundation, firmly grounded in our shared commitment to democracy, free markets, free people, and hope."  The euphoria was typical for Zoellick as he charges forward in negotiating bilateral (country-to-country) and regional free trade agreements outside the framework of the World Trade Organization, where so far he has run into a brick wall. 

In this case, the agreement is between the United States and the five Central American countries of Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua. It's called CAFTA in the acronym-heavy language of trade.  Zoellick expects it to sail through Congress after the November election.  Who could be against democracy, free markets, free people, and hope?

Bishops Ask CAFTA Ratification To Be Delayed

Well, some people do look behind labels, and they find much that is wrong with CAFTA.  The AFL-CIO, like sister unions in Latin America, warns that CAFTA, if approved by Congress, will make workers, family farmers, and the environment "more vulnerable while enriching and empowering corporate elites."  But, to many of CAFTA's supporters, that's not a minus.

Moreover, in a joint statement issued in July, the Catholic Bishops of Central America and the United States called upon Congress and the other five legislative bodies to defer ratification of CAFTA to allow sufficient time to have a "broad debate about the content and impact" of this FTA.  The statement found fault specifically with the agreement's agricultural, labor, environmental, and intellectual property right provisions (the latter "could jeopardize the right of Central American countries to exercise proper stewardship of their natural resources").  The lack of debate in our countries about CAFTA, the Bishops said,

"...troubles us deeply, given the obvious imbalance in power and influence that exists between the United States and the Central American countries and the impact the agreement will have on our peoples, especially in Central America.  This lack of dialogue and consensus regarding the treaty is also leading to growing discontent.  In Central America, this could lead to violence and civic unrest, which would further hinder true democratic reforms and respect for the rule of law."

The most piercing criticism of Zoellick's free trade agreements is that they are more about old-fashioned mercantilism than about free trade.  In a paper titled "Pitfalls in Asymmetric Negotiations," issued in November last year, the Center for Global Development charged that "in bilateral  (and regional) negotiations up to now, the United States is taking a largely traditional mercantilist stance...."  That stance still dominates U.S. trade policy. 

How Lop-Sided Power of U.S. Forces Countries to Make Large Concessions

How does mercantilism overshadow free trade in the current crop of  U.S. free trade agreements?  Kimberly Elliott, author of he "Pitfalls" report, writes that, thanks its lop-sided power, the U.S. is able to demand and get "far-reaching concessions in agricultural, high tech, and services sectors where [the United States] is competitive" and to resist "concessions where it is not."   For example, "U.S. negotiators are refusing to discuss agricultural subsidies and anti-dumping, key areas of interest to many developing countries...."

Elliott, a research fellow at the Center for Global Development and the Institute for International Economics, criticizes other key items on the U.S. trade agenda that respond to U.S. business interests, such as:
 Even when criticizing elements of trade policy (see "Fading Faith in 'Free Trade'"), economists generally do not call them mercantilist.  But Don Rodrik, professor of international politicial economy at Harvard's Kennedy School of Government, is not shy.  In an article in the March/April 2001 Foreign Policy magazine, "Trading in Illusions," he wrote that global trade rules often "lack any economic rationale beyond the mercantilist interests of a narrow set of powerful groups in advanced industrial countries."

Holding International Banks Accountable

Four years ago, while on a research trip through southeast Asia, I had the good fortune to accompany a delegation of five Filipino worker rights advocates in their visit to the headquarters of the Asian Development Bank in Manila.  It was the first-ever meeting between Bank staffers and people representing working men and women from the country in which the ADB has its headquarters. As I wrote in a magazine article afterwards (see "Global Awakening"), I was impressed with how the delegation was able to score points and to get an agreement on the need to have a continuing dialogue.

Lest I overburden that article with organizational details, I did not fully explain the delegation's organizational standing.  It represented the Philippine branch of the Asian Labor Network on International Financial Institutions, or ALNI for short, made up of members from trade unions, non-governmental organizations, and academics brought together by the AFL-CIO Solidarity Center.  The idea inspiring ALNI was this: to hold powerful inter-governmental financial institutions (IFIs) like the Asian Development Bank accountable by "engaging" them directly instead of just lambasting their policies from the outside.  In addition to the Philippines, ALNI had established branches in Indonesia and Thailand with the same purpose.

Without any news about ALNI in the past four years, I suspected that like many good ideas, this one probably had died in infancy. But I was wrong. This infant is still alive and kicking, as another international financial institution, the World Bank, learned recently in Jakarta. There the ALNI branch launched a  investigation of labor practices at a large-scale World Bank construction project on the island of Bali, and found a range of violations that included child labor, gender discrimination, wages below the legal minimum, and the absence of legally required accident insurance.

The Solidarity Center reports that the Indonesia study has "paved the way for improved workplace conditions in World Bank-funded projects," and quotes a World Bank spokesman's commitment to observing core labor standards in its operations in Indonesia.  (For more details, see the Solidarity Center's Website at <http://www.solidaritycenter.org>.)

Human Rights for Workers: Bulletin No. IX-9     October 2, 2004
http://www.senser.com
Robert A. Senser, editor
Copyright 2004
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