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The Free-Trade Regime: Oligarchy in Action

For Related Articles and More Information, Please Visit OCA's Fair Trade & Social Justice Page and our Politics and Democracy Page.

The United States is not really a democracy. That's the (simplified) conclusion of a recent study from Princeton University. Instead, economic elites and special interest groups enjoy tremendous sway in Washington, while "the preferences of the average American appear to have only a minuscule, near-zero, statistically non-significant impact upon public policy."

Let's put this assertion to the test by looking at the concrete example of free trade agreements and their relation to democracy and national sovereignty.

"Democracy" typically refers to a system of government in which people decide on the rules of their sovereign nation. In the true spirit of democracy and sovereignty, all spheres of policy - including the environment, trade, finance, intellectual property, and culture - must be subject to a fair political process and self-determination.

In the modern, globalized world, the institutions of democracy and sovereignty exist in tension with another powerful institution: the global market and its free trade regimes.

In one sense, the free-market system sustains democracy. It generates wealth and tempers the centralization of power - two preconditions for democracy. But in another sense, global free-market capitalism conflicts with democracy and sovereignty. This is particularly true for the "neoliberal" variety of capitalism, which has been on the rise since the 1980s. It one-sidedly promotes the principles of global deregulation, liberalization, privatization, and the rollback of the welfare state - all of which increase inequality and redistribute economic and political power to corporations and wealthy individuals.

The Trans-Pacific Partnership

One of the most vivid recent examples of the conflict among democracy, sovereignty, and global capitalism is the Trans-Pacific Partnership (TPP) - the so-called "free-trade" agreement among 12 states bordering the Pacific Ocean. They include the United States, Chile, Vietnam, Malaysia, and Japan, among others.

According to U.S. president Barack Obama, who strongly supports the agreement, "the TPP will boost our economies, lowering barriers to trade and investment, increasing exports, and creating more jobs for our people." From this perspective, the TPP is a win-win situation, in which workers, businesses, and the nation at large will benefit.    


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