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Trading Away Our Own Freedom – Sunday column, April 10, 2011

Posted on Apr 11, 2011

We already have plenty of reasons to send the Harper government packing. Its policies on crime, war, energy and the environment would make a brontosaurus blush. While preaching austerity to its citizens, it blows billions on planes, prisons and corporate handouts. It is the only government in the Commonwealth ever to be held in contempt of Parliament. It prefers ideology to information, ignores the rulings of the Supreme Court, and would rather crush or smear its critics than debate their ideas.

Once an apostle of openness, Stephen Harper has created the most secretive, sly government in our history. Elected by a minority of Canadians, Harper is re-engineering the country in a way that most Canadians don’t like.

And there’s worse to come.

This government is overseeing negotiations that will allow its corporate friends to reach deep into the affairs of provinces and municipalities, forcing all levels of government to obey the dictates of international corporations.

To understand this, go to Chapter 11 of the North American Free Trade Agreement, which allows foreign corporations to sue national governments for purely imaginary losses as a result of perfectly legal government actions, including provincial actions. Such suits are heard not by the courts but by trade tribunals completely separate from any nation’s legal system.

Recently, for instance, AbitibiBowater sued Canada because the government of Newfoundland expropriated the bankrupt corporation’s local assets after the closure of its last Newfoundland mill. The province paid compensation for the mills, mines and other property – but not for the company’s rights to the Crown’s water and timber. Nor should they have.

“Such natural resources are the property of the people of Newfoundland and Labrador,” explains Scott Sinclair of the Canadian Centre for Policy Alternatives. The company didn’t own those resources; it had been given access to them on the understanding that the company would “develop the resources productively, in a manner that benefits the public. After it closed its last mill in the province, AbitibiBowater could no longer fulfill its part of that social contract.”

So the company sued, and the Harper government didn’t defend Newfoundland’s decision before the  NAFTA tribunal. Instead it settled, ponied up $130 million, and served notice that in future, it would seek to recover such costs from the offending provinces. This is no small threat, since six of the seven pending claims against Canada result from provincial actions, including Nova Scotia’s well-considered rejection of the basalt quarry on Digby Neck. The Harper government evidently intends to settle the claim without a fight, and send the bill to Nova Scotia. We could be forced to compensate the owners of the imaginary quarry and perhaps even to allow it to proceed.

Rarely have we seen a government so openly colluding with corporations against their own people. Worse yet, this government is eagerly pursuing a whole series of such free trade agreements, including CETA, a massive agreement with the European Union which is due to be signed by the end of this year.

CETA, say its opponents, will allow foreign corporations to block local environmental and economic initiatives. A provincial local-purchasing policy would be unfair competition, for instance. CETA could be used to prevent farmers from saving their own seeds, and it could force cities to sell their water systems to multinational water companies. Indeed, any kind of public service could be attacked as an illegitimate intrusion in the market, including healthcare, transit, childcare, and education.

The provinces will not easily accept the loss of much of their power to legislate in areas that are clearly in provincial jurisdiction. What the Harperites are setting up, says Scott Sinclair, is “a constitutional train wreck in slow motion.” They are not doing it reluctantly, either; they are enthusiastically seeking to impose an appalling level of corporate control over all of our lives.

This is one world, and yes, there should be rules to govern trade. But this is free trade only in the sense of trading away our freedom. The ultimate goal of these agreements is to re-fashion the whole world to serve corporations and enrich the handful of people that own them.

The Harperites are eagerly advancing that agenda. Shouldn’t that be an issue in this election?

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  • enviroguy

    In 1995, David Korten wrote a book, When Corporations Rule the World, outlining, essentially and unfortunately, what is coming to pass in our society. It has been a number of years since I read that book but I still remember, internalized, a number of key concepts that form the basis of my thoughts here.

    We live in a democracy, not a pure one where we all vote on every issue, but one where we are given the opportunity to select a representative through a vote, who then, supposedly, represents our public and civic interests while in office. This process establishes the power of the representative as the voice for the people.

    Into this relationship is thrown the corporation a very specific business entity. Make no mistake, a corporation is not a democracy. It is an autocratic, top down rule, organization. With good leadership and vision it can accomplish many tasks efficiently, and it can effectively produce disaster if that leadership is mistaken. It is somewhat like the military service which is also an autocracy within a democracy.

    By default, because corporations have been recognized as entities for quite some time, but mostly since the late 1800’s, we have developed a relationship of the people, the representative government, and the corporation. It is the nature of this relationship that is significant.

    David Korten’s point is that it is the role of government to mediate the role of the autocratic corporation as it relates to the civil society that it represents. That is, government says to the corporation, “We recognize the efficiency of your autocracy to provide a service to society, so, we will license you do do a specific task that will be of service to our people, but that is all you will do.” Corporations were licensed to build railroads, canals, and roads; make and distribute food; provide savings and loans; manufacture cars, clothes and whatever. And, they were restricted to providing the agreed upon service.

    The nature of the relationship is therefore clear. The public elects the representatives who then carry out the functions of government, one of which is to license and regulate the role of the autocratic corporations, much as the civilian side of government in a democracy regulates its necessary, but autocratic, military. It is only by this understanding that military entities in democracies refrain from taking over the complete control of government of which they are certainly capable and which we see too often in other parts of the world.

    Which brings us back to the corporation. Corporations are, by their nature, able to exert pressure through lobbyists, through campaign contributions, through control of media to do what the military refrains from doing, which is to take over the government. It is a more subtle form of take over that a coup, but in the long run, the elected representatives lose the essential focus as the protector of public interest and become the hand maidens of the corporation, even though is not a central function of government to protect corporate investments by use of public funds.

    If I remember my college Economics 101 course (1950’s) correctly, corporations raised money by developing a business plan and issuing stock. If investors liked the plan they bought the stock, the corporation followed the prospectus, and if all went well the corporation paid dividends to the stock holders. If not, the stockholders lost their money as I did when I bought Studebaker automobile stock. The government had nothing to do with the deal. (Sour grapes, I should have bought General Motors and got that subsidy.)

    Governments raised money through taxes as they do now. If a school or other community improvement was needed they ‘floated a bond issue’ on which the people voted. If the bond issue passed, the government borrowed the money and build what was specified in the issue. It got paid back over 30 or 40 years, like old time mortgages, providing a sound, rated, investment opportunity to pension funds and others. Governments would also buy competitively tendered services and products to conduct their business from corporations but that was the only exchange.

    What happened? I must have missed the class on the part where tax payer money is used to provide funding for corporations to start a business, to pump funds into businesses that are having problems, and to bail them out when they go bankrupt. We frequently hear, “Government should not be in business.” I agree. So, why is government involved in convention centres (a bond issue), skating ovals (a bond issue), grants to furniture manufacturers (business plan and stock issue), subsidies to activities to numerous to mention, and all of the other “corporate deals” we see in the daily news?

    Because, as David Korten predicted, corporations rule the world. They have convinced our elected representatives that following their direction is more important than mediating the ground between democracy and autocracy, plutocracy, kleptocracy which all work counter to democratic principles. In raw terms it is privatization of profit and public assumption of loss. If you are a corporation, that is the best business plan you can have. If you are a taxpaying citizen, in commonly understood terminology, it sucks.

    • Silver Donald Cameron

      What a lovely, clear analysis. David Korten is on my very long wish-list of potential interviewees. He lives in Bainbridget Island, WA, which is really a suburb of Seattle, and I would have gone to see him last summer, if I had had time, when I was in BC. (I did interview Ronald Wright, Brian Brett, Bill Rees and Robert Bateman — not a bad harvest. 🙂

      I’ve also written at length about these issues in my Vancouver Institute lecture "Energy, Environment and the Left," which is available in the Green Pieces section of this site. You might enjoy a look at that, Dan.