FTAA: Democracy Under Corporate Control?

by Sebastian Lamb


There are many good reasons why people took to the streets in Quebec City to protest the FTAA. As the Declaration of the People's Summit (April 19 2001) says, "The FTAA project is a charter of investors' rights and freedoms, sanctions the primacy of capital over labour, transforms life and the world into merchandise, [and] negates human rights."

A common argument for why the FTAA should be fought is that "far from being about trade, the FTAA is about placing democracy under corporate control" (Council of Canadians, "The FTAA and the Threat to Democracy"). Many people think that the FTAA gives corporations special rights that will stop "governments from ever again directly serving the public interest." If the FTAA passes, corporations will rule, not citizens.

This kind of argument is popular. Since our society claims to be democratic, the charge that the FTAA destroys democracy makes people pay attention. But there are problems with this argument that global justice supporters need to think about.

What Would the FTAA Do?

It's true that an FTAA with provisions similar to the investment chapter (chapter 11) of NAFTA would give foreign companies the ability to sue governments directly if they feel that their "rights" are violated. Such investors' rights are meant to deter governments from taking measures that might lower corporate profits -especially those of the big US and Canadian companies that will gain the most from the FTAA.

These companies already have ways to protect their interests abroad, and the FTAA would give them more clout. The FTAA would make it less likely that a Latin American government faced with massive protests would give in to demands to seize the property of a Canadian company that was pumping toxins into the local environment. This is one way the FTAA serves capitalist interests.

But saying that the FTAA would put democracy under corporate control rests on a big assumption: that the democracy that exists today is independent of capital. It's this common idea that's wrong.

Capitalist Democracy

Governments elected in capitalist societies have never been free to do as they choose. Those that adopt policies that capitalists dislike suffer the consequences. Capital may flow out of the country. The national currency may plunge in value on international markets. This is what happened when the Socialist Party government elected in France in 1981 tried to implement social and economic reforms. Before long, the Socialists gave up on progressive reforms and began to make cuts.

If capital flight and a weakened currency don't make a government change course, more drastic steps can be taken. Top civil servants can stall changes. The security service can mount "dirty tricks" operations to discredit radical politicians. If the ruling class really feels threatened, the military can overthrow a left-wing government, as happened in Chile in 1973.

Such actions are possible because in capitalist democracies the unelected top civil servants, judges, police chiefs and military officers are part of the ruling class and are committed to the interests of capital. To put it bluntly, the democratic institutions of capitalist society have always been under corporate control and always will be. That's why capitalism can't be uprooted by governments elected to parliaments.

The FTAA would add to the arsenal of laws and regulations with which state power is organized for capital. So when we fight the FTAA, we shouldn't defend the Canadian state as democratic. Instead, we should organize democratic mass movements with the long-term aim of replacing the capitalist state with much more democratic ways of running our workplaces and communities that grow out of struggles to change society.