A Global Market Isn't as Easy as It Looks

By Robert Kuttner

Globalization turns out to be a double-edged sword. Not only is Yankee capitalism influencing the world; the world is constraining the U.S. Whether you find that result congenial depends on the particulars.

By promoting the idea that the world is one big happy free market, American policymakers assume that other countries will follow U.S. rules. Indeed, a huge amount of diplomatic effort goes to produce that result. What happens when other nations have their own ideas?

Consider three recent cases. President Bush, with one eye on the Religious Right, decided that only very limited stem-cell research will get federal research grants. His allies in Congress would go further and ban not just public funding but most private research using human embryos.

However, as so much else these days, science is global. Indeed, great American research universities and corporations have long been magnets for the world's best and the brightest. But if the U.S. starts restricting research in the name of somebody's idea of theology, the science will just go elsewhere.

SIDE EFFECT. In Britain, for example, there are no restrictions on stem-cell research; public funds are plentiful, and the products of the research will be widely available to scientists. In the U.S., by contrast, a side effect of Bush's edict is that nearly all new research on stem cells will be corporate and proprietary. Researchers seeking access to breakthrough technologies and new colonies of stem cells will have to license them from the patent holders. This process can only slow down research and make it more expensive in the long run.

Guess which climate appeals to most scientists? Even before Bush's decision, several companies were exploring moves to Britain or partnerships with British enterprises. Roger Pedersen, a leading stem-cell researcher at the University of California at San Francisco, had announced plans to relocate to Britain. Bush's decision, based on the religious belief that an embryo in a petri dish is a human being, will not spare a single "life"; it will just drive science offshore.

Or consider the issue of drug pricing. Washington, siding with drugmakers, considers lifesaving drugs to be commercial products; they are intellectual property. Much of the rest of the world considers them social goods. U.S. industry tried, and failed, to hold the line on exorbitant prices for AIDS drugs in Africa and Brazil. Now, battered by global public opinion, political pressure in the U.S., and consumers who can buy drugs more cheaply abroad, drugmakers are under the gun to lower prices at home as well.

Finally, take the controversy over Mexican trucks. The U.S. has stringent standards for long-haul trucking. Under NAFTA, Mexico--despite its weaker standards--may send trucks across the Rio Grande. During the Clinton Administration, U.S. policy ignored NAFTA and restricted Mexican trucks to a narrow border zone. President Bush wants to give the trucks free access to North America. Liberal lawmakers are pressing for border inspections so that Mexican trucks, just like Mexican lettuce, will meet U.S. safety standards. The Administration says that violates free trade.

Well, of course it does, and deservedly. As Americans, we make countless regulatory decisions--about the wages we pay, the air we breathe, the water we drink, the highways we travel, and, if President Bush has his way, the way we treat human embryos. We constantly limit domestic commerce to protect intellectual property rights, to promote cleaner water, and to keep abuses to a minimum in banking and the sale of securities.

SAME BOAT. Globalization of commerce doesn't make these policy issues moot, it just makes them more complicated. We still must choose what kind of society we want. Whether globalization seems a liberation or an assault depends on whose ox is gored.

Liberals may be appalled (and business pleased) when the effect is the erosion of hard-won labor, environmental, or safety standards. Then, however, the corporate or religious community is outraged when globalization undermines cherished notions of intellectual property or human experimentation. Without rules, we import foreign norms along with foreign products.

The particulars of how domestic society will change due to globalization are subtle and intricate. They must be engaged case by case. In some cases, we may need to negotiate new, common global rules. In others, we may insist on U.S. standards as the condition of foreign entry to our market.

The details are as inherently political as they are complex. The real simpletons are those who naively claim that all the U.S. needs to do as a society is sweep the rulemakers aside and let markets make the decisions. Life is that easy only in economics textbooks.

Robert Kuttner is co-editor of The American Prospect and author of Everything for Sale.

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