By Alan Watt
James Goldsmith and his speech at the United States Senate, concerning the General Agreement on Tariffs and Trade. This was on November the 15th, 1994, where he came up in front of the senators to give the negative points of the GATT treaty, after Felix, a well known banker, had pushed the positive side for corporations to do with this treaty.
Now I don’t know if people realize, I think this was the eighth signing of the General Agreement on Tariffs and Trade that happened in 1994. The first one was in Marrakesh in 1947, set up at the conclusion of World War II with the United Nations in charge of it.
He [Sir James Goldsmith] does put in eloquent terms all the negative aspects of this General Agreement on Tariffs and Trade. Now this is all to do with most-favoured nation status, etc., to do with the dropping eventually of import taxes for most-favoured nation status countries, but it’s only for the big international corporations. The GATT set up a star chamber of judges to decide all their internal disputes, it’s not a democratic institution, and these judges hold their meetings in secret and whatever their decisions are, are binding; there’s no recourse, no redress from any complainant or anyone who disagrees with their decisions.
SIR JAMES GOLDSMITH U.S. SENATE SPEECH – NOV. 15, 1994:
“Sir James Goldsmith: Mr. Chairman, thank you for inviting me back. First I want to make clear, like I think you know, Mr. Chairman, that I was in business, I believe in free markets, I believe in free enterprise and I believe the purpose of the economy is not just to improve indices but to improve the state of the nation–yours, mine. So I’m not an anti-free-market man nor an anti-free-enterprise man; quite the contrary. Felix, as you saw, is an old friend of mine, in fact he’s been my banker on-and-off for the past twenty years or more, but I’m in total disagreement with him. What you’ve heard today is the view from big business, of which I was part. And I believe the view from society in general is totally different. I believe it so different that I came out of retirement to start a political party in Europe , to become chairman of one of the nine parliamentary groups in the European Parliament, to fight against what I believe to be one of the most destructive issues, proposals, ever put before your assembly or any other assembly .
“Now I’d like, if I may, to comment on some of the points that my friend Felix made when talking about the loss of manufacturing jobs, all the figures you gave, he put that down largely to productivity. But in the last few months we’ve seen Boeing, IBM, Advanced Microsystems as well as joining all the other companies like Hewlett-Packard going offshore to get cheap labour. That’s nothing to do with productivity , Mr. Chairman; that’s moving to get the cheap labour forty times cheaper . And please don’t think this is unskilled jobs; these are skilled jobs; these are high-tech jobs going there . Of course there are also the unskilled jobs, but the skilled ones are going to highly skilled people and they are moving offshore; and if you think that’s productivity, then I think you would be wrong. Of course there’s an increase in productivity and of course that puts pressure on the job market; but why accentuate that pressure manifold at the very time when you’ve got the pressure by encouraging, by creating a system that forces people to go offshore?
“Then there was the question of foreign investment. There was the question of the words we used, attracting foreign investment in the United States , this apparent in-flow of foreign investment. Well, as business men and you as policy makers, obviously have to take both sides of the equation into account . There’s a massive foreign out-flow of investment–net. Take foreign in-flow, take foreign out-flow, the balance is negative.
“And then we heard Felix’s testimony on the trillions of dollars, his words, that now move around in the global economy. He rightly said the global financial marketplace was totally integrated. In his testimony he talks about 500 billion dollars to be invested in China . We can’t afford a haemorrhage; we can’t increase our rates of savings just to invest them elsewhere and where we bleed to death in terms of capital and we bleed to death in terms of jobs.
“The trans-national corporations, Mr. Chairman, I’ve just brought some figures that came out recently, they now have 4.8 trillion dollars per annum in sales; they account for one-third of global output; the largest one-hundred account for one-third of all foreign direct investment. Now where do you think the bulk of that investment it’s going? It’s going where it earns the most; it’s no other way it can go . What chief executive can invest otherwise, Mr. Chairman?
“So, if as you’ve heard today, you have freedom of movement of capital, freedom of movement of technology, and you can employ people for forty or fifty times cheaper who are skilled, and you can import their products back anywhere in the world–that’s the basis of global free trade –how can those investments, how can these trans-national companies who have 4.8 trillion dollars of sales invest anywhere other than where it’s cheapest and where their return is greatest? Because if they don’t the system that you and your colleagues would be voting for, if you pass it, forces them to do it; otherwise they go bankrupt .
“So we have a system for the moment being proposed–you here, we in Europe . It’s the same system with the same effects on us , which will result in massive unemployment, massive haemorrhaging, rate of jobs and capital, but which will increase corporate profits. And it is believed by economists that you can measure the health of an economy by the size of corporate profits. Now I am for corporate profits. All my business life I’ve worked to increase our profitability; but I believe that when you get to a system whereby so as to get the best corporate profits you have to leave your own country, you have to say to your own sales force, good-bye, we can’t use you anymore, you’re too expensive, you’ve got unions, you want holidays, you want protection, so we’re going offshore; and you destroy your own nation–I think that’s short-term thinking, that’s the real short-term investment because that is like making a profit on the deck of the Titanic, playing cards, and as clever as opposed to a wise way.
“Two developed countries, U.K. and France: let me remind you in France since we progressively moved towards this global free trade the economy rose by 80–eight-zero–percent during the twenty-year period, fine performance, and unemployment went from 420,000 people to 5.1 million . Let me give you, if I may, Mr. Chairman, for the United Kingdom: between 1971 and 1991 gross national product rose by 49.5 percent, but the number of people living in poverty has risen from 6.6 million to 13.6 million ; the number of children being brought up in poverty–this is a developed country, one of the great old economies and nations–4.1 million, 32 percent of children in the land officially designated as living in poverty .
“Now what good, Mr. Chairman, is it to have an economy that grows wealth, where everybody and all the economists can say how fantastic, where the politicians can say we’re going to get extra growth, where business men can say our profits are up, if the number of people [inaudible]…
“Now I’m not here as a bleeding heart liberal; I’m a hard-headed realist and it is my view that if we try and make profits and at the same time destroy our nations, no one will benefit from it–even those who make the profits.
“Chairman: We’ve got the same thing going here. I’ve made the comment that they were told about this service economy, service economy, don’t worry
“I’m making computers; I got digital down there; I’ve got [inaudible] Japanese plants, Fuji ; I’m in pharmaceuticals with [Hoffman-LaRoche]. Don’t tell me about I need more training; it’s the people with training who are losing their jobs .
“Sir James Goldsmith: The question of inflation was brought up. The whole philosophy is we can keep inflation down by keeping wages down; and we have forgotten the purpose of the economy, which is to enrich, to create a stable society, and to include the population, the vast number of people in active life; and instead we believe that if we can reduce salaries we can keep inflation down. That’s the wrong way around; we just forgotten what the economy is about, what its purpose is.
“Senator: Mr. Chairman, thank you very much sir. Sir James Goldsmith, welcome to the Commerce Committee. I’ve listened with great interest to your opening statement. I don’t know whether you remember or not, but there was a time when you were attempting to take over the Goodyear corporation. And since Goodyear was very much, very prominent in our economy, on a parochial matter I opposed you very much; but I have always done some study of you and I have always admired your freewheeling spirit with regard to getting things done, creating jobs. One of the concerns that I have on this matter, and I have not made up my mind, is the part of the World Trade Organization that I am afraid gives up the sovereignty of the United States of America. I would simply say that I suspect that your country of Great Britain and the United States would not be in United Nations had they not had veto powers. Particularly I am concerned about the fact that ‘one man, one vote’ i f Bangladesh, one of the 113 nations, and the United States had a trade dispute, as I understand it, if they couldn’t reconcile this through the usual procedures it goes to a three-member commission appointed by the [?GATT] called the World Trade Organization who meet in secret and take testimony in secret and make their decision and if the decision would be against the United States of America in this instance, the only way that the United States of America could overturn that would be to go to the 113 nation total agreement and get unanimous support to override whatever the decision was made by that three-member panel including Bangladesh who brought the action . Is that a fair interpretation of a concern that I state?
“Sir James Goldsmith: Senator, there’s absolutely no doubt whatsoever that the World Trade Organization is a major diminution of sovereignty . Now the exact mechanisms, I believe in fact the Director General can try and settle the problem beforehand. For the same reasons as Felix Rohatyn would not wish to get into the exact mechanisms, I will not either. I have also read a lot about it; I’m on the foreign relation committee in the European Parliament and I’ve tried to study the issues. But the one thing which is certain, is bottom line, this is giving up national sovereignty; it can’t be otherwise; otherwise why would it exist? What is its purpose? Its only purpose is to impose discipline on all the nations to accept a trading system , and that that discipline should be under the control of all the nations that participate on a ‘one vote, one nation’ basis. Full stop. That’s diminution, dilution of sovereignty . The exact technical mechanisms, legal mechanisms, I would rather avoid because they are too technical.
“Senator: Thank you. Explain to me why people in whom we have had a great deal of confidence over the years: I started out with President Carter, President Reagan, President Bush and now President Clinton, and all of their key advisors; I mean that’s pretty impressive list of people who think this is a good proposition for the world and particularly America: how do you explain what I assume you think is the wrong opinion by all those individuals that I just mentioned?
“Sir James Goldsmith: Senator, the Uruguay Round, the negotiations for the Uruguay Round started eight years ago; the world has changed totally. GATT of course started after the war, ’49 I think it was; the world has changed totally. Now what, for reasons which the chairman mentioned, we haven’t focused on–I think you did, as well, Senator–which is the alternatives. The alternatives are not just closing the market, becoming protectionist ; the alternatives are not saying we are now going into protection and we’re going to isolate ourselves from the world, each one of them. The alternative is to have regional trading blocs which have similar economies so we’re not trying to make our labour forces compete with people whose labour costs 2 percent of theirs and thereby destroying them –but–and reducing their salaries and eliminating their jobs–but having negotiated bilateral agreements between trading blocs so that each region, each nation, imports those products that it needs, not those products that destroy its jobs .
“The regions we are talking about now, NAFTA or Europe , are vast areas; we’ve never experienced trading blocs of these sizes, free trade regions. Nobody thought when these negotiations started that communism would collapse before the negotiations were signed; that China and Vietnam and all the Soviet nations would be part of it, and all the other countries that were [blocked] with their socialist ideas . It’s all happened. You’ve had a massive, total, historic shift–and you’re on the same track, as though it never existed? And you’re being told to sign it now because if you read the document it’s going to be too late ? I mean this is the greatest, as Moynihan, your Senator Moynihan said, the most important piece of legislation. How can there be anything more important than creating a free trade area, not with Mexico and Canada, which is already important, but creating a free trade area with China and India and Vietnam and Bangladesh and all the others, four billion new people? All this has suddenly happened and the negotiations are going on as though nothing has occurred . That is why, Senator, people who were entirely reputable and wise were for global free trade before, as I was, but who have to open their eyes to reality today
“Senator: It is interesting that this same Congress that passed a massive crime bill and the next Congress will consider welfare reform. It is often said that there are a few of our local social ills that would not be solved with good jobs.
“Do you agree with that? What will the GATT agreement do to those families barely getting on, by both mom and dad working full-time in relatively low-skill jobs or medium-skill jobs that I suspect will be even a more effect on what we generally refer to as Middle America ? Aren’t they at grave risk here?
“Sir James Goldsmith: Senator, when I was young I was taught , as we all were, that if we managed to create extraordinary material prosperity we would solve our problems . And we were brought up in the belief that there was an inevitability of progress: progress of wealth, progress of stability, progress of civilisation. Well during the last fifty years , since I’ve been more or less an adult , we’ve had the greatest period of economic prosperity, economic growth in history. We have succeeded beyond our wildest dreams. The economy of the United States has soared, in real terms, four or five times up. And throughout the Western world, in England a bit less but still fantastic, and France [up] just as much. And what has happened? Have we solved our problems? Are our towns more stable? Are our families more stable? Is there less crime, less people in prisons? Less people in–are there more people in permanent and noble employment? What have we done? We have profoundly destabilised our communities. We have done everything that was wrong in social terms; we’ve deracinated, we’ve uprooted people from the countrysides, we’ve shoved them into towns, we haven’t given them jobs; we’ve created ghettoes and underclasses; we’ve increased crime and drug addiction and family break-down–all this in a period of maximum prosperity. Why? Because we were only interested in economic indices. We forgot that the purpose of the economy is not just to improve the index; it is to improve prosperity along with social stability and social contentment. And GATT is typical of the economic instrument , whose purpose is to increase corporate profits; whose purpose is to increase gross national activity; and whose result will be the destruction of the stability of our society, a continued break-down in family life, a continued increase in crime, impoverishment and all the other ills that we are now suffering.
“Senator: Sir James Goldsmith, I thank you very, very much. Mr. Chairman, I would hope and congratulate you once again for hearing, having these hearings, because these are some of the concerns so adequately expressed by Sir James Goldsmith and others that you had before the committee that I’m not sure that American people fully understand and I think that the American people had better have a fuller understanding than they do now.“
The first one [General Agreement on Tariffs and Trade] was in Marrakesh in 1947, set up at the conclusion of World War II with the United Nations in charge of it; but really, beyond the United Nations, it was the Royal Institute for International Affairs and CFR that drafted up the proposals for this. It’s always the same group of intellectuals and financiers that draft up these proposals.
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A Predictable But Influential Idea
Three-time New York City Teacher of the Year, John Taylor Gatto: “The idea came about partially by Charles Darwin’s first cousin, a famous intellectual named Francis Galton. The idea would be that the attitudes, the values forged by the British upper classes and kind of society that they had tempered and designed could be come the clothing for the entire globe. But it would take time. One of the big things would be a common currency and a common language but they knew that would be a long way off. So they began by setting up 23 bases all over the planet. All of those bases are still in business. The one in the United States is right up on 68 street [New York], it’s called the Council on Foreign Relations. And they have different names in different places. But the idea was to draw into that club the best, the brightest and the most influential people from the entire country, from all races and all walks of life and to use those people as the resonator of the idea of globalisation. And in some generation, not impossibly far in the future, everyone would live pretty much the same, think pretty much the same, eat pretty much the same. There would be colourful differences between Swedes and Americans and you’d save those for folk festivals once a year or at international food festivals. But essentially you could predict people, whether they were Swedes, Italians or Americans.”