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Moral Authority in Globalization

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I took part in a "fair trade" study session at a synagogue recently, looking at moral authority in the global economy. We considered four historical examples.

In Exodus, Moses leads the children of Israel out of Egypt, creating a new nation in the midst of established tribes and nations. After finding food and water, Moses gets excellent advice from his father in-law, Jethro: Appoint judges.

"... thou shalt provide, out of all the people, able men such as fear God, men of truth, hating unjust gain, and place such over them to be rulers of thousands, rulers of hundreds, rulers of fifties, and rulers of tens. And let them judge the people at all seasons."

This judicial system was a foundational institution of civil society, giving legitimacy and credibility to Moses' leadership. The Old Testament served as a moral, social and civil document. It determined how life would be organized for many generations.

The study group discussed a second example of moral authority: the American Revolution. Our Constitution expressed moral values, which were extraordinary for their time. It established individual rights and freedoms, separation of powers, checks and balances, and a nominally classless society -- no divinely inspired King, and no aristocracy.

These moral principles defined our Social Contract regarding government. Individual rights and democratic government offset the moral authority of the King and British aristocratic traditions.

The Constitution established courts -- a foundational institution of democratic society. The moral, social and political values in the Constitution would determine how life was organized for centuries.

The third historical example was the East India Company, which administered British Imperial rule in India for about a century, overlapping with the time Americans were organizing our lives under the Constitution. This global corporation ran its own private court system, favoring colonialists. Corporate administration of global empire had very weak moral authority, and suffered problems with legitimacy.

Ultimately, Mahatma Gandhi's extraordinary moral authority challenged British Imperial rule in India. Life in India is no longer organized around corporate administration of Empire.

The study group considered a fourth example: our current experience with globalization, defined by NAFTA-style trade agreements. These trade deals are economic, political, social and moral documents, extending well beyond tariffs.

NAFTA-style agreements derive their shaky moral authority from free market orthodoxy. We hear about efficiency, utility, deregulation, privatization and globalization. These are corporate values with notoriously weak appeal to human interests.

"Free trade" demonstrates one consistent value: Make global businesses succeed. That priority drives social norms, political decisions and economic outcomes regarding the environment, labor rights, human rights, public health, internet free speech and financial regulations.

Two huge new NAFTA-style trade agreements, known as TPP and TTIP, will effectively consolidate those norms at a global level. They would determine how life is organized in 2050.

An excellent question came up in the synagogue discussion: "Yeah, but that isn't really happening, is it? Corporate interests wouldn't really do that, right?"

The question contains a presumption of trust. We trust that interests of powerful global investors will serve a larger public good. We trust in a moral counterweight to corporate power and self-interest.

Let's consider that. First, I know many moral, caring, honorable business people.

At the same time, most of us reject the idea that corporations are people. Corporations don't care, and they don't feel. They are shameless. They have no souls. The bigger they are, the more they exhibit qualities of sociopaths:

"... callous disregard for the feelings of other people, the incapacity to maintain human relationships, reckless disregard for the safety of others, deceitfulness (continual lying to deceive for profit), the incapacity to experience guilt, and the failure to conform to social norms and respect the law."

Markets are powerful and efficient, but markets fail -- spectacularly -- when power becomes unbalanced. Society must apply effective moral, social and political counterbalances to prevent market failure. When those counterweights are weak, failure is inescapable. Consumers, taxpayers, workers and communities pay the price.

NAFTA-style trade agreements have two fatal shortcomings. First their "dispute settlement" system -- their foundational institution of global behavior -- is actually a private justice system designed from the ground up to benefit global corporations. Corporations and global investors are the only plaintiffs, and nations are the only defendants. Claims are settled in private tribunals, run by corporate lawyers with no public accountability. They make decisions based on corporate interests, as written into the trade agreements.

Jethro had good reason to seek judges "out of all the people, able men such as fear God, men of truth, hating unjust gain." Jethro and Moses urgently needed legitimacy and political stability.

Trade tribunals weaken democracy and undermine legitimacy.

By design, NAFTA-style trade deals consolidate corporate global governance without any offsetting democratic process. This is a system designed to amplify privilege and self-gratification among a global elite.

Where the Constitution has checks and balances, NAFTA-style trade agreements explicitly favor corporate power. Our lived experience of this is growing inequality, weakened social cohesion, declining economic security for the majority of workers, erosion of democracy, loss of legitimacy and growing political instability.

In our current muddled morality, many admire the 1 percent for their glittering wealth, envy those with a secure job and a pension, and disparage those with the least bargaining power and fewest opportunities. This is not the way to counterbalance corporate power.

So, do we trust global corporations? No. They are losing public trust. The burden of proof now lies squarely on advocates for these new trade agreements. They must prove they are not on the wrong side of globalization.

Perhaps developing countries have a point, when they mistrust our free-market values and prefer their traditional values.

The America Revolution introduced an era where stable democracies displaced empire and aristocracy. Britain's empire gave way to its Commonwealth -- a term that speaks to shared prosperity.

In the post-World War II period, we lived in the moral afterglow of "making the world safe for Democracy (again)." We reached a peak of shared prosperity, where work had dignity, and workers earned a share of the gains they created. Our personal well-being was connected to the well-being of those in our community. And business succeeded!

About 30 years ago, shared prosperity began to fade. Today it is a distant memory for too many workers stuck in low-wage or temporary jobs. Globalization, as we've managed it, has failed.

We know the basics of balanced, accountable, legitimate, sustainable, democratic governance, with a strong moral footing. We can do globalization right.

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