ALTERNATIVE ECONOMICS 
IN THE NEW WORLD ORDER
by Eugene Teselle
In the era of NAFTA and GATT, multi-national corporations seem intimidating
in their power to dominate the world economy. But during the last fifteen years
we have also see the growth of a counter movement which deserves supportCand
whose success is already demonstrating that there are alternatives to "free
trade" managed from the top for the benefit of wealthy investors. These are
interventions in the world economy which build solidarity among grass-roots
organizations in different countries.
I. Alternative Trading
Over forty years ago SelfHelp Crafts, a Mennonite organization, and SERRV, a
project of the Church of the Brethren, began importing crafts to provide income
opportunities for poor people abroad.
Shopping for the holiday season can be done through a number of these
channels. SERRV distributes a catalog of craft items; contact them at P.O. Box
365, New Windsor, MD 21776-0365, 1-800- 723-3712. The Heifer Project lets you
send livestock to people in the developing world. And Church World Service has a
catalog called "Tools of Hope," everything from chicken coops, fishing
nets, and sewing machines to protective garb for removing the minefields that
infest many areas; contact them at P.O. Box 968, Elkhart, IN 46515,
1-800-297-1516.
There are many other such networks. One of the most persistent is Friends of
the Third World, which imports coffee from cooperatives in Latin America and
Tanzania, as well as other items like tea, chocolate, spices, and wild rice.
Contact them at 611 West Wayne Street, Fort Wayne, IN 46802; (219) 422-6821,
internet fotw@igc.apc.org
In 1983 Jim Goetsch and Marion Waltz of Friends of the Third World convened
the first conference of Alternative Trading Organizations. Now there is the
North American Alternative Trading Organization (NAATO), made up of many groups
marketing crafts on a cooperative basis and bypassing the middleman. For
information on this network, including a listing of fair trade retail stores,
contact the Fair Trade Federation, P.O. Box 126, Barre, MA 01005; (508)
355-0284, fax 355-6542; www.fairtradefederation.com
Why should we engage
in "alternative trading," when it represents only a small portion of
global trade? Well, it's worth doing for a variety of reasons. First, it's a
demonstration of solidarity and support with people in the Third World. And then
it builds up networks of people with experience in non-exploitative forms of
trade and shows that these are viable. Finally, let's remember that economists
and policy makers take notice even of small differences in patterns of trade,
especially when they indicate the preferences of both producers and
consumers.
Co-op America tries to keep track of alternative trading in the U.S. and
globally. In addition to their regular periodical they have an annual National
Green Pages ("a directory of products and services for people and the
planet") and a Financial Planning Handbook with information on socially
responsible funds and financial counselors who can be of help. Contact: Co-op
America, 1612 K Street NW (#600), Washington, DC 20006; (202) 872-5307, fax
331-8166; www.coopamerica.org
Earth Trade works with cooperatives which return the
profits to the workers themselves. The focus is on organic foods because of a
special demand, a fast-growing market, and a higher market price for products
certified through the Organic Crop Improvement Association. Earth-Trade is a
for-profit with social and environmental goals; shares are priced at $4.50 per
share (minimum purchase 200 shares or $800). For an "offering
circular" contact Progressive Asset Management, 1814 Franklin Street
(#710), Oakland, CA 95612; 1-800-786-2998.
Equal Exchange is a gourmet coffee company and an alternative trade
organization, whose goal is to build a sustainable future for farmers in Latin
America. They work with democratic organizations that share profits equitably.
Their above-market price is $1.26 per pound, with additional premiums for
certified organic coffees. Investors earn a maximum dividend of 5%, since the
goal is to maximize benefits to producers and extend the activities of the
company. Several hundred Lutheran congregations have arranged to buy coffee
through Equal Exchange, and a similar policy is being encouraged among
Presbyterians. Contact Equal Exchange, 251 Revere Street, Canton, MA 02021;
(781) 830-0303; << www.equalexchange.com >>
Community-based economic development is a growing movement inside the U.S.,
too. In this era of "footloose factories," there are ways of
developing and keeping jobs in local communities through cooperatives,
worker-owned businesses, and community land trusts. Sustainable America is a
coalition building networks among labor, farming, environmental, and urban
organizations; they are at 350 Fifth Avenue (#3112), New York, NY 10018-3199;
(212) 239-4221, sustamer@sanetwork.org.
And the Grassroots Economic Organizing Newsletter has been drawing lessons from
networks of cooperatives in the Basque country in Spain, Emilia Romagna in
Italy, and the Maritime Provinces in Canada; their address is R.R. 1, Box 124A,
Stillwater, PA 17878; 1-800-240-9721, e-mail wadew@epix.net
II. Loan Funds
You have doubtless heard about the Grameen Bank in Bangladesh, developed
thirty years ago by Dr. Muhammad Yunus. Small loansCenough
to plant a crop or buy basic toolsCare
made at a low rate of interest through peer lending groups which continue to
share experiences offer each other advice. Check with the Grameen Foundation,
1709 New York Avenue NW (Suite 101), Washington, DC 20006; (202) 628-3560; www.grameenfoundation.org
Accion International is similar to Grameen but has a slightly different
approach to decision making on loans. They can be reached at 120 Beacon Street,
Somerville, MA 02143; (617) 492-4930; www.accion.org
The Ecumenical Development Cooperation Society, now nicknamed Oikocredit, is
related to the World Council of Churches and is based in Holland. Loans are
offered to church-related cooperatives or other grass-roots organizations, not
to individuals, for projects to which the borrowers have a long-term commitment
and which will lead to sustainable, income-generating activities. Community
investment notes can be purchased in amounts of at least $1000 for one, two, or
five years, at below-market interest rates; investors may add amounts of $250 or
more. (The fund is now managed by the Calvert Social Investment Foundation, one
of the oldest socially responsible companies.) For information you can contact
EDCS, 475 Riverside Drive (16th Floor), New York, NY 10115; (212) 870-2725;
e-mail edcusa@erols.com, www.world-investments.org
The Nicaraguan Community Development Loan Fund was started in 1991 in
cooperation with CEPAD, the Nicaraguan Council of Protestant Churches. Investors
in the U.S.Creligious congregations,
investment funds, or individualsCmake
deposits (a minimum of $3000, at a chosen interest rate between 0 to 6%). In a
country with overwhelming unemployment, loans are made by CEPAD to cooperatives,
home-based businesses, and women's organizations. Many millions of dollars of
loans have been made and paid back. Contact: Wisconsin Coordinating Council on
Nicaragua, P.O. Box 1534, Madison, WI 53701; (608) 257-7230; fax 257-7904.
In the U.S., the closest parallel is the growth of programs to encourage
Individual Development Accounts (IDAs). Their purpose is to help poor people
build not only income but "assets" (a house, a small business, a
savings account). After pilot projects in a number of states, it has become a
federal "demonstration project" with the passage of the Assets for
Independence Act, signed into law in October, 1998. IDAs are special savings
accounts for low- income persons. Money deposited by individuals is often
matched by a bank and by a religious congregation, potentially tripling in
value. Withdrawals can be made only for "asset-building" investments
such as home purchase, education, or a small business. Programs are administered
by local non-profits, usually in a peer group setting. For information contact
the Corporation for Enterprise Development, 777 North Capitol Street NE (#410),
Washington, DC 20002; (202) 408-9788; www.cfed.org
We are also seeing the growth of community-based economic development
organizations and "community development financial institutions" (CDFIs).
They include non-profits, credit unions, and banks. Some are financed by their
own members and depositors. But now there is a new generation of non-profits
funded by "community development investments" from large banks, which
get credit for meeting the credit needs of their communities as required by the
Community Reinvestment Act. Contact the Coalition of Community Development
Financial Institutions, 924 Cherry Street (Second Floor), Philadelphia, PA
19107; (215) 923-5363, fax 923- 4755, e-mail cdfi@cdfi.org,
www.cdfi.org.
III. Corporate Codes of Conduct
Fierce competition among retail chains encourages suppliers to cut costs in
any way they can. In recent years we have seen the migration of factories from
the SouthCwhich had been attractive to
corporations for many decades because of its cheap labor and "disciplined
work force"Cto Mexico and Central
America and the Caribbean. And as the globalization of the economy continues, we
find more and more companies buying garments and electronic goods from the Asian
countries, too. It's bad enough when companies intentionally seek out the
poorest countries with the lowest wage scales. It gets worse when their
suppliers operate sweatshops with minimal concern for human rights, labor
standards, or ordinary decency.
1. Sweatshops Abroad
Codes of conduct are not essentially new. Governmental trade and loan
agreements often include "social clauses" which spell out the
procedures that are to be followed and the groups which are to benefit. NAFTA,
as we remember, was adopted only after the Clinton administration added
"side agreements" with supposed protections for labor rights and the
environment. Corporate codes of conduct are a private version of the same thingCcommitments
made by corporations or a group of corporations in an industry, usually in
response to consumer demands. Rugmark, for example, is generally recognized to
be a reliable indication that hand-knotted carpets were not made with child
labor.
Labor, environmental and religious organizations have insisted that U.S.
companies take responsibility for working conditions at worksites that produce
goods sold to U.S. consumers. The garment trades unions, while they have been
unable to stop the shifting of work to cheaper areas in Latin America and Asia,
have gained public support and persuaded many retail chains to adopt
"sourcing codes"- -agreements to pay a living wage, abide by minimum
health and safety standards, and respect workers' rights. STITCH (Support Team
International for Textileras) defends the rights of working women in both North
America and Central America; you can contact them at 4933 S. Dorchester St.,
Chicago, IL 60615; (773) 924-5057; e-mail HF52@aol.com
The problem, of course, is to enforce these codes. Unions in the U.S.
maintain close contacts with independent unions in the Latin American countries,
and unfortunately they must often give whatever support they can when labor
leaders are killed or strikers are fired.
In 1997 President Bill Clinton stood in the Rose Garden with Kathie Lee
Gifford to announce the formation of a White House Task Force to End Sweatshops.
Soon renamed the Apparel Industry Partnership, it included major apparel
companies, all under pressure to clean up abuses. Human rights, labor, and
religious organizations were invited to the table. They wanted an agreement that
covered forced labor, child labor, working conditions, wages and hours,
environment, freedom of association, monitoring, and "country of
origin" certifications. When the AIP announced its document in November
1998 it fell far short. Companies are not required to pay a living wage or
support workers' rights to join unions. Companies can decide which workplaces
will be monitored, and a five percent sample is regarded as sufficient. No labor
or religious organization endorsed the agreement. Anti-sweatshop activists are not looking
chiefly to the U.S. government, heavily influenced by lobbyists and campaign
contributors, for significant help.
One major achievement came in the summer of 1998, when United Students
Against Sweatshops forced a number of schools to adopt sourcing codes for
sweatshirts, sneakers, and other equipment bearing the names of their athletic
teams. If colleges can do it, the retail industry could do it, too.
The most visible organization in monitoring and publicizing sweatshops is the
National Labor Committee. Along with its regular newsletter it publishes larger
profiles on particular issues. The NLC is also distributing a model
"procurement policy" which can be adopted by any public or private
institution which purchases textiles or apparel products, declaring that it will
not do business with companies that exploit their workers or refuse to disclose
the names and addresses of factories which make their products. Contact:
National Labor Committee, 275 Seventh Avenue (l5th Floor), New York, NY 10001;
(212) 242-3002; fax 242-3821; www.nlcnet.org.
Each year the Holiday Season of Conscience to End Child Labor and Sweatshop
Abuses is promoted by People of Faith. Human Rights Day, December 9, is a time
for candlelight vigils and marches to demand corporate disclosure, a living
wage, respect for human and worker rights. Contact People of Faith Network,
Lafayette Avenue Presbyterian Church, 85 S. Oxford St., Brooklyn, NY 11217;
(718) 625-2819; fax 625-3491; e-mail pofnetwork@aol.com
To keep up
with sweatshops, you can check the following web sites:
www.sweatshops.org
www.uniteunion.org
www.sweatshopwatch.org
www.verite.org
www.americanapparel.org
www.nlcnet.org
2. Sweatshops Here at Home
Sweatshops are not just a foreign problem. In the summer of 1995 Katie Quan,
a leader in UNITE, the new garment workers' union, discovered that seventy
illegal Thai workers were kept in virtual slavery in Los Angeles, forced to work
17-hour shifts for as long as seven years, and threatened with rape or murder if
they tried to flee. They were supposedly paid $1.60 an hour, but most of this
was taken back as payment to the employers who had smuggled them into the U.S.
Several times the Labor Department has taken legal action to require payment
of back wages to workers, some of them children; if the subcontractors do not
pay, large retail chains can be held responsible for back wages, under the
"hot goods" provision of the Fair Labor Standards Act. California law
also holds garment companies liable if their contractors are unregistered.
In the summer of 1999 four retail chains settled a federal lawsuit filed
under the RICO act, claiming sweatshop abuses in the U.S. territory of Saipan.
The suit said that 32 contractors ran shops with barbed wire and armed guards,
where workers lived in vermin- infested quarters and were subjected to beatings
and forced abortions. The lure of Saipan is that it is close to China, Thailand,
and other sources of immigrant labor, while as a U.S. territory, clothing made
there can be labeled "Made in the U.S.A." UNITE continues to put
pressure on The Gap, the company doing the most business with the islands, and
urging federal legislation to bring labor laws up to U.S. standards.
3. Sourcing Codes for Agricultural Products
Sourcing codes were pioneered in the needle trades, but there is a move to
extend them to agricultural products, where monitoring can be even more
complicated. For the time being, it's a much better bet to make use of
"alternative trading" networks than to rely on the corporate world.
In October 1995 the Starbucks gourmet coffee chain was acclaimed for
promising the first "code of conduct" in the coffee industry, setting
minimum standards for the growers from whom it purchases coffee. The Council on
Economic Priorities gave Starbucks a corporate responsibility award, and CARE
gave the company its International Humanitarian Award. But a year later there
was little indication that Starbucks was taking any steps toward implementing
its code; it hadn't even translated the code into Spanish. The Catholic Church
offered to develop a monitoring program, but Starbucks failed to respond. The
question, then, is whether sourcing codes will be anything more than
image-makers for U.S. corporations and balm for U.S. consumers. For updates
contact: U.S./Labor Education in the Americas Project (US/LEAP), formerly
U.S./Guatemala Labor Education Project, P.O. Box 268-290, Chicago, IL 60626;
(773) 262-6502; fax 262-6602; usglep@igc.apc.org.
4. Stockholder Resolutions
Don't forget the work of the Interfaith Center on Corporate Responsibility,
which is supported by 275 Catholic, Protestant, and Jewish organizations. It
monitors corporate performance and files stockholder resolutions at annual
meetings. Assets under its influence total $90 billion. Offices are at 475
Riverside Drive (#566), New York, NY 10115; (212) 870-2293.
The Presbyterian Church (U.S.A.) cooperates with the ICCR, since it is aware
that the vast amounts of money in the pension fund and the Presbyterian
Foundation need to be used in a responsible way, as an instrument of the
church's mission, witness, and stewardship. Mission Responsibility Through
Investment (MRTI) is the body which implements the policies set by the General
AssemblyCchiefly peace, justice,
environmental responsibility, and human rights. It constantly reviews the
investments that have been made and makes specific recommendations about
shareholder resolutions, voting of proxies, or initiation of litigation. For
information contact the Rev. William Somplatsky-Jarman, 100 Witherspoon Street,
Louisville, KY 40202-1396; (502) 569-5809.
IV. Economic Justice at Home
We have been considering the global marketplace, but there are many homegrown
issues, too. Religious, community, and labor organizations have been working to
fight factory closings, improve occupational health and safety, and prevent
environmental degradation. Several years ago the National Interfaith Committee
for Worker Justice was formed; in addition to dealing with national issues it
has several dozen local affiliates, and their number is growing. NICWJ has
joined in a number of "living wage" campaigns and annual Memorial Days
for workers killed on the job. It has devoted major attention to justice for
poultry workers across the South and for strawberry workers in California.
Contact Kim Bobo at NICWJ, 1607 West Howard (#218), Chicago, IL 60626; (773)
381- 2832, fax 381-3345, e-mail nicwj@igc.apc.org,
on the web: www.igc.org/nicwj.
Cities, counties, and states have often made strategic judgments about the
investment of money in their pension funds. They also are beginning to establish
their own policies about participating in the world market. There is even an
International Council for Local Environmental Initiatives, an international
agency of local governments founded in 1990, with more than 330 members at
present. The U.S. office of ICLEI is at 15 Shattuck Square (Suite 215),
Berkeley, CA 94704, e-mail iclei_usa@iclei.org
For example, localities often formulate "procurement policies"
which set restrictions on purchases using public funds; most recently the
emphasis has been against purchasing any goods made in sweatshops, domestic or
foreign. Multinational corporations don't like this, of course, and they got
language in the Multilateral Agreement on Investments which declared any such
regulations a "restraint on trade." Their strategy, in other words, is
to "preempt" any local actions which run counter to their own
interests. So much for "local responsibility" and the "new
federalism"!
There is even a movement toward local currency in order to keep dollars from
flowing to distant corporate headquartersCor
to the worldwide network of stockholders. The generic term is Local Exchange
Trading Systems (LETS). These operate like the babysitting cooperatives with
which many of us are familiar, in which a secretary keeps track of hours worked.
A further stage is the development of some kind of paper money, which is
perfectly legal as long as it doesn't look like U.S. currency. You can get
information on these many local projects from the E.F. Schumacher Society, 140
Jug End Road, Great Barrington, MA 01230; ()413) 528- 1737; e-mail efssociety@aol.com, www.schumachersociety.org. The most famous example is Ithaca Hours, which sells a "hometown
money starter kit." Contact Paul Glover, P.O. Box 6578, Ithaca, NY 14851;
(607) 272-4330.
The basic issue in the world economy is not "protectionism." It is
not "cheap Third World labor" or "lack of environmental concern
in the Third World." The global economy is a fact, and all nations must
learn to deal with it. The basic issue is that many Third World governments,
aided and abetted by multi-national corporations and the U.S. government, let
trade interests take priority over human rights (we have seen this in recent
controversies over China and Thailand and Indonesia and the Central American
countries).
International wage competition is largely an economic matter. But when human
rights are degraded in order to "steal a comparative advantage" in the
world marketplace, it also becomes a political issue. The defense of human
rights requires, therefore, a combination of international solidarity, strong
labor legislation here at home, and opposition to any "delinking" of
trade from human rights.
