Many have warned of the “race to the bottom,” businesses crossing borders in search of cheap labor and lower costs, leaving empty husks of local economies while siphoning wealth back into the hands of the investors.

How can sovereign nations corral a global market? Must we create a global sovereign? (More)

America Consumed, Part III – Reclaiming Citizenship (Non-Cynical Saturday)

This week Morning Feature considers Benjamin Barber’s 2007 book Consumed: How Markets Corrupt Children, Infantilize Adults, and Swallow Citizens Whole. Written before the 2008 economic crisis, it foreshadows and explains the failure of consumer capitalism. Thursday we considered why consumerism encourages us to set aside adult, public values in favor of childish, private demands. Yesterday we explored how consumerism undermines democracy and threatens our species’ survival. Today we’ll discuss how to challenge consumerism and restore our values.

As Dr. Barber notes, this is not only an American issue. Consumer capitalism has a global reach as it seeks to create more demand for more products for fewer people: those who can afford to spend. Among those who can afford to spend, the basic needs are already met and consumer capitalism pushes new needs to match new products. Those who cannot afford to spend and whose basic needs often go unmet – most of the world’s people – are exploited as cheap labor or dismissed as human surplus.

This is mass-marketed in a frame of private sovereignty that urges us to be childlike consumers pursuing private desires (“I want”) without intrusion by government . The marketing deluge subsumes the frame of popular sovereignty, adult citizens pursuing shared values (“We need”) by participating in government. The “freedom” of private sovereignty is the freedom you can afford; in real terms: more wealth and privilege for the wealthy and privileged.

On the global stage where sovereignty ends at an national borders, if it exists within them, corporations hop from place to place in search of cheaper labor, often lured with privileges – tax breaks, subsidies, immunity from regulation – that externalize their costs onto local governments and their people. We saw private sovereignty play out most blatantly in Iraq, with corporations contracted by the U.S., based in Dubai, operating in Iraq, and answering only to their bottom lines.

A government which cannot regulate markets leaves its people regulated by markets: consumers if they can afford it, but not citizens in any meaningful sense. Yet how can national governments regulate a global market?

Taming E.Rex: private resistance, global sovereign?

Dr. Barber first considers whether consumer capitalism can be tamed from within. He describes three strategies: (1) creolization, where global businesses find they must adopt parts of local cultures; (2) carnivalization, which paints childlike consumption as resisting rather than embracing cultural hegemony; and (3) cultural jamming, with individuals and groups act as (usually legal) counter-market agents, throwing sand in the wheels of commerce.

He finds merit in each, but concludes that they are insufficient to counter the sheer power of huge corporations and mass marketing. As I noted last March, economies of scale enable corporate persons to grow into Econosaurus Rex, the ultimate and only true Rational Economic Actors. Individual persons make decisions for many reasons, often with inadequate information, and the same is true (albeit differently) for local cultures and counter-market agents. E.Rex has only one motive – maximize profit – and experts to gather (and conceal) information. I agree with Dr. Barber: in a contest that uses only market rules, E.Rex will eat individuals, local cultures, and counter-market agents with barely a pause to belch.

Dr. Barber’s solution is global citizenship and a global sovereign. Only that, he says, can create and enforce non-market rules that can tame E.Rex. While his analysis makes sense, I’m reminded of the joke about the weight lifter, the physicist, and the economist on a desert island with a can of beans and no way to open it. The weight lifter and physicist each offer solutions based on their abilities, but each is overruled by the other two. Then the economist says: “Let’s assume we have a can opener.”

A global sovereign is an obvious idea – Dr. Barber quotes Thomas Jefferson: “The cure for the ills of democracy is more democracy” – and equally obvious is its absence. No such sovereign exists, nor does Dr. Barber offer any plan by which to create one. It’s the economist’s assumed can opener … a clear solution, if only we had one.

Starving E.Rex: reasserting national sovereignty.

As I prefer solutions based in things that exist, I’ll offer a different approach. I agree with Dr. Barber that the fundamental problem is the sheer economic power of E.Rex, and in fact we do have global actors with the power to confront E.Rex. Or rather, to starve him to a size that no longer consumes individuals, small businesses, and local cultures.

Who are those global actors? American (and European) consumers acting as citizens through our sovereign governments.

While national governments have no direct sovereignty outside their borders, the U.S. and most European governments do have sovereignty within their borders. And every major corporation – no matter where it is based – wants to reach consumers in America and Europe, because those consumers have money to spend. I propose we put that consumer leverage to work by acting as citizens, through our governments, with sensible regulations that require businesses who sell within our borders to pay the full cost of doing business … wherever they do business.

Again, as noted last March, the economies of scale on which E.Rex relies for growth only exist if businesses can externalize unwanted costs. If we force businesses to pay the environmental, public policy, public safety, and social fabric costs of how they do business, we encourage businesses that are clean, need little policy support, operate safely, and strengthen the social fabric where they operate. The rest must stay small, or drown under those formerly externalized costs.

We can starve E.Rex – or at least the E.Rexes that harm us – if we as citizens exercise popular sovereignty through government. But if we act only as consumers, E.Rex will consume us. The choice is ours.

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Happy Saturday!