The Political Economy of NAFTA: Economics, Ideology, and the Media

Thea M. Lee
Economic Policy Institue
1730 Rhode Island Avenue, NW #200
Washington, DC 20036
(202) 775-8810

Mark Weisbrot
The American University
4400 Massachusetts Avenue, NW
Washington, DC 20016-8029
(202) 885-3762; 965-6257

DRAFT: Not for quotation or citation without permission of the authors.

Introduction

The recent battle over ratification of the North American Free Trade Agreement (NAFTA) was unprecedented in U.S. politics in at least two respects: first, an international commercial agreement that is normally the province of a small group of specialists became a mass issue that was thrust into the consciousness of millions; second, the agreement came close to failing in the U.S. House of Representatives. These two occurrences are not unrelated: President Clinton's troubles began in earnest last August when unsuspecting representatives returned to their districts and discovered a groundswell of popular opposition to the pact. Prior to that time even opponents of the treaty did not anticipate that the President would have to spend 56 days at full-time lobbying prior to the vote, as well as billions for "incentives" to reluctant members of Congress, in order to secure passage of NAFTA.¹ Although his efforts (and those of corporate lobbyists) ultimately prevailed, the unprecedented level of public debate on the issue may be seen as a first step toward "the democratization of U.S. foreign economic policy."²

In such circumstances, it is worth examining the way in which this debate was framed for the eyes and ears of the general public. This paper will examine some of the arguments that were made, the ways in which they were mediated through the corporate media, and the role of economists, economic research, economic theory and ideology in the debate. We will also briefly try to evaluate what was lost and won in this battle, and look at some of the implications for future confrontations over economic policy.

I

One of the most striking, almost comical features of the debate over NAFTA was the wide gulf that separated elite and "educated" opinion from popular opinion on the issue. If we look at support for NAFTA by educational status, we find that the non-college-educated opposed NAFTA 43 to 34 percent, while the college-educated supported NAFTA by 54 to 34 percent. This is perhaps not surprising, since the non-college-educated (whom economists and journalists frequently equate with "unskilled") are the ones more likely to be directly hurt by the movement of capital to Mexico. But even among the public at large, respondents to a Washington Post/ABC poll taken on the eve of the vote believed by wide margins that NAFTA would encourage U.S. companies to move to Mexico, hold down wages in the U.S., and eliminate jobs.³ Contrast these sentiments to what they were being told by the experts as quoted by the media, that NAFTA "will add jobs, wealth, and economic activity throughout the continent, economists say."⁴ Or, "virtually every serious effort by economists to model NAFTA's effects has concluded that freer trade between the U.S., Mexico, and Canada will lift all three economies."⁵ Over 300 economists, including Nobel prize winners from Milton Friedman to James Tobin, signed a letter to President Clinton in support of NAFTA.

Is it possible that the average citizen, and particularly the "less-educated," had a more accurate understanding of the nature and likely effects of this agreement, than the typical economist? If so, this ought to be cause for concern, as well as something that cries out for some explanation. Yet there is much to support the "common sense" view of the public that the agreement was a rotten deal from the point of view of anyone other than the shareholders of particular corporations poised to benefit from it (and even for them, their long run interests may not be completely congruent with anticipated short-term gains).

The logic behind the popular perception of NAFTA is simple enough: by making it easier for U.S. transnational corporations to locate production in Mexico, where daily wages in manufacturing are less than hourly wages in the United States, the agreement encourages such movement, and puts downward pressure on wages in the United States. Top corporate executives apparently understand this as much as their less well-situated compatriots: a poll of 455 senior executives at U.S. manufacturing firms found that 40% had plans to move some production to Mexico if NAFTA were ratified. Twenty-five percent admitted that they plan to use the threat of moving as a bargaining chip to cut wages and benefits in the United States.⁶

If we look at the agreement itself, there is more than ample support for what the pundits liked to portray as irrational "fears" on the part of public. If NAFTA were really about "free trade," one would not need five chapters specifying and securing the rights of foreign investors and owners of intellectual property. But opponents have argued that these chapters were in fact the main goals of the transnational corporate negotiators. The Mexican government has in the last decade vastly opened their economy to foreign investment and ownership, as part of a restructuring that emerged from its debt crisis of the early 80s. The negotiators of NAFTA, representing primarily the Business Roundtable in the U.S., sought to lock in and expand upon these gains. Thus an International Trade Commission report noted that, "By codifying liberal trade and investment policies in an international agreement, ... a United States-Mexico FTA would increase the confidence of investors in Mexico's economy."⁷

How, then, did the soothsayers of the economics profession in the U.S. predict such sanguine results from an agreement constructed primarily to facilitate the transfer of direct investment in manufacturing from the U.S. to Mexico? The answer to this question varies greatly with the degree of advocacy of the agreement, the forums in which they conducted their research or advocacy, and their knowledge of the agreement itself. Those of us who were involved in the public debate were often startled by how innocent our opponents were of the major provisions of the pact, and how little it mattered to their arguments. For some it was sufficient to simply recite the platitudes of comparative advantage and the gains from trade, or to offer even vaguer generalities about supposed connections between "free markets," "reform," and "democracy" in Mexico. And if their audience was sufficiently "educated," needing only affirmation of mystified beliefs, such arguments were actually effective.

Even among those advocates whose knowledge of the agreement was more extensive, there was a tendency to appeal to the authority of neoclassical principles to ward off the intrusion of inconvenient facts. Thus U.S. Trade Representative Carla Hills relied on the marginal productivity theory of factor pricing to argue that lower Mexican wages are either reflective of correspondingly lower productivity, and hence nothing to worry about; or that Mexican wages would soon rise with the increased productivity brought about by TNC investment. Once again the common sense of the "uneducated" is more persuasive, and borne out by the facts: productivity in TNC transplants is remarkably close to the levels of their U.S. counterparts,⁸ despite wages of less than one-seventh of the latter. Add to this the unwillingness of the negotiators to offer anything more than a non-binding pledge by Mexican President Carlos Salinas to allow wages to rise in step with productivity, as well as the toothless side agreements on labor, which even in their practically unenforceable form still do not concede the right of Mexican workers to organize independent unions or strike⁹ — all this simply highlights the real purpose of NAFTA as improving access by TNCs to a large supply of cheap labor, and not the tiny consumer market that the NAFTA's advocates (including economists) pretend is the prize. There was actually a kind of "hardball" pro-NAFTA argument that openly acknowledged this purpose, but it was rarely made in forums intended for wide audiences.¹⁰ In this version the emphasis was on the international competitiveness of U.S.-based corporations: if "we" did not have access to very cheap labor in manufacturing, foreign competition would win out. This argument was quite effective for business audiences and others for whom the identity of "we" and the transnational corporation is unambiguous.

Economists who knew better were not averse to proclaiming that NAFTA would increase employment in the U.S. in proportion to the amount of exports, neglecting to subtract off the increased imports that were also anticipated. But for the most part, and especially as time passed, the media spotlight intensified, and tales of net job gains acquired an air of unreality, most economists in the public eye emphasized the smallness of NAFTA's likely impact — a safer position and one that is not so easy to disprove. For the direct impact of NAFTA on U.S. employment is very difficult to measure, since it depends to a large extent on how much how much corporate decision makers believe it adds to their sense of security about direct investment in Mexico — a very subjective judgement even for the professionals who must gamble large amounts of money on the basis of such evaluations. Thus Paul Krugman could state with authority that the agreement is "economically trivial," supporting it however, on the grounds that "it will help to keep free-market reformers in power in Mexico."¹¹ James Tobin, Rudi Dornbusch, and other prominent economists have made similar arguments.¹² This sits well with the media's general equation of "free markets" — the quotes are necessary because it is not clear whether the 2000 page document, on balance, actually provides for freer markets than would prevail in its absence — and "democracy," "reform," etc., in spite of the 242 opposition (PRD) members who have been murdered since the "reform" government of Salinas stole the national elections in 1988.¹³

Rudi Dornbusch assured us that Mexico's economy is so small relative to the U.S. that "if Mexico had 1% of the success in taking away U.S. jobs that NAFTA's opponents predict, it would explode in growth and burst at the seams with prosperity. Fat chance!" Yet if we use, e.g., Glickman and Woodward's¹⁴ figure of 20,800 jobs lost per billion dollars of outward foreign direct investment, even Mexico's relatively small $300 billion economy could easily absorb enough direct investment to displace a million workers over rest of the decade. And of course this ignores the lost income due to downward pressure on wages in the U.S. Economist Edward Leamer (1992) has estimated the impact of low-wage international competition at $1000 per year for "low-skilled" workers, i.e. the 72 percent of the labor force without a college degree.

The economic models constructed to examine the likely impact of NAFTA show more than anything else that one can get the desired results by making the appropriate assumptions. The most cited research on NAFTA is the work of Gary Huffbauer and Jeffrey Schott (1992, 1993) of the Institute for International Economics. Their model eliminates the problem of an outward flow of foreign direct investment by assuming that any such investment is matched by Mexican imports of goods and services from the U.S. Their net job gains for the U.S. are driven by a predicted persistent trade surplus with Mexico (which has recently evaporated).

Most of the computable general equilibrium (CGE) models simply assume away the problem of investment diversion by assuming that none of the increased investment in Mexico comes at the expense of any investment in the U.S.¹⁵ The distinction between foreign direct investment and portfolio investment is also lost, thus allowing e.g. the International Trade Commission to conclude that any capital flows would be too small "to have much impact on the U.S. economy, given the relative sizes of the Mexican and U.S. capital markets."¹⁶ But in the real U.S. economy, there is a vital distinction between a shift of $1 billion dollars in portfolio investment from U.S. to Mexican bonds, and the closing of a manufacturing plant that is subsequently re-opened in Mexico. Most of CGE models are also full employment models and thus cannot measure the effects on aggregate employment. There are many other problems, some of them severe, with the economic models designed to measure the impact of NAFTA that have been reviewed by others,¹⁷ and it is worth noting that they also do not present the kind of consensus that the media represented as the weight of expert opinion.

Those studies that made more realistic assumptions to allow for the diversion of foreign direct investment or downward pressure on wages, such as Koechlin, Larudee, Bowles, and Epstein (1992) and Koechlin and Larudee (1992) were mostly ignored by the media.¹⁸ The one in-depth news article that actually attempted to compare some of the models was a disaster. "When economists of every stripe agree on anything, it is noteworthy," it began. After a passing reference to "[s]ome radical economists — like Samuel Bowles" — who "predict large and negative effects from the agreement," the reader is informed by Paul Krugman that "[t]he anti-Nafta people are telling malicious whoppers. The pro-Nafta side is telling little white lies." The Koechlin-Larudee and Leamer studies are passed over quickly (with errors grossly understating their results). So much for economists without stripes. The author concludes that the agreement will have almost no impact on the U.S., and so the answer to the headlined question, "Why Economists Favor Free-Trade Agreement," is that they believe it will be good for Mexico, "strengthen[ing] the hand of a pro-American, pro-free market Government in Mexico, and help[ing] Mexico's citizens."¹⁹

The role of economists in the debate was not so important in their capacity as direct advocates (e.g. Huffbauer and Schott) as it was to provide assurance to the media, whose participation in the manufacture of consent is much more direct and powerful, that the weight of expert opinion was behind them. Only thus could they dismiss the common sense apprehension of the unbrainwashed masses as motivated by irrational fears, stoked by self-serving demagogues (Ross Perot), and pandering to "special interests" like organized labor. It is a fascinating testimony to the abnormality of popular participation in debates over economic policy that the opponents of NAFTA were for a time perceived as having undue influence in the media. Thus the New York Times could report that pro-NAFTA forces were increasing their efforts "after months of letting unions and environmental groups dominate the debate." The corporate lobbying groups did indeed increase their efforts after labor day; yet a look at the preceding four months of coverage reveals that of 201 sources quoted in the Washington Post and New York Times new articles, less than 3 percent represented environmentalists, and zero were from organized labor. Not surprisingly, 68 percent of quoted sources (mostly government officials) were pro-Nafta, with 20 percent opposed.²⁰ The editorial count is of course even more one-sided, the Washington Post setting new records with their "Veterans Day Special," which contained no less than ten pro-Nafta opinion pieces in one daily edition.

"From George Will and Rush Limbaugh on the right to Anthony Lewis and Michael Kinsley on the left, most of the nation's brand-name commentators led the cheerleading for NAFTA in a way that clearly helped President Clinton achieve what yesterday's headlines widely described as an impressive victory," reported Howard Kurtz in a remarkably candid Washington Post article after the vote. Meg Greenfield, the Post's editorial page editor, didn't see a problem with that. "On this rare occasion when columnists of the left, right, and middle are all in agreement ... I don't believe it is right to create an artifical balance where none exists." And so she didn't, with the Post publishing 63 feet of pro-NAFTA editorials to 11 feet against.²¹

Of course none of this comes as much of a surprise to any critical reader of the mainstream media, but it is worth taking a closer look at how the media perceived and portrayed the arguments, because the filters through which they sift the news will present similar obstacles in the future. It is here also that we can explore the relations between the ideology of neoclassical economic theory and its representation in the mass media. It is also of interest to see what slips through these filtering mechanisms, and under what conditions, because the NAFTA debate did constitute a bit of a breakdown in the "propaganda model," as measured by the size of the chasm between punditry and populace.

II

What should have been a central organizing theme of the debate, but the media was incapable of even comprehending, let alone digesting for its readers, was the concept of alternative forms of economic integration. It was a fundamental principle of the opposition to NAFTA that they were not opposed to economic integration per se, but only to the kind of integration that would tend to harmonize downward the wages, working conditions, and environmental standards of the participating national economies. It is clear from the text of NAFTA and the conditions of its negotiation that this agreement is a blueprint for downward harmonization, and insofar as its intent is provide cheap labor and lax environmental standards for U.S. and Canadian-based TNCs, it could hardly be otherwise. There were numerous attempts to put forth the notion that economic integration could be accomplished in a way that harmonized standards upward: with development assistance and debt relief for Mexico, minimum wages, labor rights, and enforcement of environmental standards, etc. Yet such arguments almost never made it into the public discourse; rather the divide was formed between pro and anti-NAFTA stances, and the best media representation of the latter was limited to occasional sympathy with the inevitable casualties, among "unskilled" workers, of "progress". In their worst representation, the opposition was simply defending the undeservedly high wages of these "special interests," trying to "stop the clock." (Economists contribute to this construction by conceptualizing the $13 per hour received by auto workers as bulging with "rents," while corporate lawyers pulling down ten times this amount are earning "returns to human capital.")

How are we to account for this failure to comprehend an issue that is so crucial to any honest policy discussion? We think there are several factors which get to the heart of some of the most powerful ideological obstacles to real social progress. The first is the reification of technology, by which most of the decisions made by national or supra-national authorities that establish the rules of international commerce are perceived as technologically driven, or in most cases, not seen at all — that is, the economic changes (e.g. increasing internationalization of capital) are perceived not as changes in social relations but as technology pure and simple. This contributes to the widespread perception of the global economy as a "natural" force, one that individuals and nations can only adapt to but cannot alter so as to serve the needs of the majority (as opposed to the needs of those who wield the power of rapidly changing technology, i.e. the owners of supra-national capital). This form of reification predominates even in some of the more sophisticated treatments of the global economy — e.g. Robert Reich (1992), who argues for greatly increased levels of government activity in such areas as infrastructure, research, and education, but cannot conceive of the need for any restrictions the unfettered power of TNC's to move goods and capital in accordance with their privately determined priorities. The contradictions in this reification of technology become apparent when one considers that a major corporate objective in both NAFTA and GATT is the strengthening of international enforcement for intellectual property rights — patents, royalties, copyrights, etc. Thus the proponents of this supra-national policy agenda are in effect arguing that technology dictates that the global auto company will produce wherever costs are lowest and export to its markets, but governments can mobilize their economic and political power to impose their copyright and patent laws on distant nations; in other words technology prevents us from stopping things as big as cars at the border, but we can somehow create a worldwide enforcement mechanism for something as difficult to monitor as the flow of information, in order to collect the proper returns to the ownership of intellectual property.

This effort to secure returns to the owners of intellectual property, in the manner to which they have become accustomed, illustrates another constraint on the media's representation of the debate, having to do with the concept of class. To anyone examining the agreement with an eye to its disparate impact on the concerns of differing social classes, the lopsidedness of the document is striking.²² The five chapters spelling out the rights of investors and owners of intellectual property, and the prescribed methods of enforcement, contrast sharply with the side agreements pertaining to labor. Holders of intellectual property rights, for example, can sue for damages and legal costs, and the judicial authorities can order the destruction or disposal of the offending goods or of the materials used to produce them, without compensation. Governments are prevented from infringing on the rights of international investors by requiring repatriation of some portion of profits or restricting currency conversions. Requirements that TNCs hire local managers or scientists, buy from domestic suppliers, or export to match their imports are also forbidden. By contrast, labor is not even guaranteed the right to organize independent unions or strike. There are no provisions to allow wages to rise with productivity increases. And both the labor and environmental side agreements are of dubious enforceability. A "persistent pattern of nonenforcement," vaguely defined, must be shown in the case of environmental violations. There is a whole layer of enforcement delays added to the side agreements that is not included in the agreement itself. As Mexico's top trade negotiator Jaime Serra Puche expressed it, "The time frame of the process makes it very improbable that the stage of sanctions could be reached."²³

The media was occasionally able to make the connection between the differing apprehensions and attitudes toward NAFTA and their differing class positions, but again within a context that allowed for the interpretation that the victims were inevitable casualties of a natural process of economic integration. What the media could not perceive was the one-sided class character of the agreement itself, and hence it was unable portray its real intent and purposes — and most importantly, its fundamental unfairness to groups not represented in the Business Roundable. NAFTA remained, for all the regrets one might have about some of the "losers," the "free trade agreement" that its sponsors had so cleverly named it, and no aggregation of facts about the treaty itself could alter this conception. Even the most moderate, subdued portrayal of its overwhelming bias would have raised questions about the naturalness and inevitability of the project, and perhaps rescued its opponents from their relegation to the futile and foolish category of those who would oppose nature and progress.

Another related ideological barrier concerns the conception of the market itself, as manifested in such notions as "free" markets and "free trade." Of course there is no such thing as a "free" market, since the very existence of a market presupposes legal and other institutions which will affect prices, factor returns, risk, etc. Nonetheless this fictional construct has been ideologically very useful to proponents of regressive forms of economic integration such as NAFTA, insofar as the latter can be portrayed as instruments by which "freedom" is enhanced, while attempts to defend labor or the environment in this process are assigned the pejorative "protectionist." Although this particular aspect of classical liberal ideology has been with us for about two centuries, it is especially problematic at this particular historic juncture. The resurgence of laissez-faire in the last fifteen years in the process of "globalization," (again reified as a technological or natural process), with the attendant destruction and delegitimization of the social achievements of the mixed economies of the OECD countries, as well as the collapse of "socialism" in the east, have made it difficult to even explain such concepts as a social dimension for economic integration. This is of course true at the level of the media, where even Richard Gephardt's reminders that the European Community will spend nearly $25 billion on transition needs (mostly for the relatively poorer countries of Spain, Portugal, and Greece) fell on deaf ears. What the media cannot comprehend, it cannot transmit. But at the broader level of public awareness, the de-legitimization of the state's role in the economy has greatly hindered attempts to pose alternatives to the supra-national policy agenda²⁴ — ideas of "community sovereignty," and "self-determination,"²⁵ are difficult to describe to a public that only knows the national state as a corrupt and wasteful protector of special interests (e.g. the Pentagon). And despite the strengthened international ties among labor, environmental, and community organizations that this struggle has most fortunately helped to develop, there is no avoiding the reality that the power of the national state, in combination with whatever new democratic supra-national institutions can be created, will be necessary to regulate capital in the public interest. At an abstract level the logic of this proposition is clear enough, since supra-national corporations are not accountable to anyone but their owners nor do they even claim to be. But the combination of a real appreciation of the corruption of our political process with a mythical portrayal of the actual historical relations between states and markets has made such positive state intervention appear, for much of the population, as utopian as the anarcho-syndicalist visions of the IWW. Hence the effectiveness of what has become the ubiquitous slogan of supra-national capital: there is no alternative.

This latter shibboleth is perhaps the most important ideological pillar supporting the implementation of the supra-national policy agenda, again due to the recent successes of neo-conservatives in theory and practice at undermining the legitimacy of the state's role in the economy. It is important to recognize how monolithic our dominant media and intellectual institutions are on this score. This is not simply a case of ideas about radical transformations of ownership, control, or management of economic institutions being excluded from the public discourse, although they certainly are. We are talking about capital controls, industrial and fiscal policies, institutions of collective bargaining, and other instruments that have been used by various developed capitalist states (to different degrees in different times and countries) throughout the period of most rapid growth in the latter half of this century (1945-73). One of the most dangerous aspects of this annihilation of alternatives is that as regressive forms of economic integration are increasingly implemented, they actually foreclose alternatives. To the extent that NAFTA, for example, restricts all three governments' abilities to intervene for the benefit of their respective national economies, military spending and union-busting/wage-lowering become the only available forms of industrial policy. The United States has long used its military budget as a disguised (and most inefficient) form of industrial policy, but there have been at least rhetorical steps toward a more open and rational form of the latter in the wake of the cold war's demise. We can only hope that the coming years do not see a reversal of this nascent trend, along with the discovery of the requisite international enemies and armed conflicts.

III

The gap between the public's understanding of NAFTA and what they were instructed to believe can thus be seen in terms of the strengths and weakness of the relevant ideological obfuscations. As we travel down the formal educational ladder we find a lower attachment to the ideals of free trade, the masses not having shared in the insights of the neoclassical (or Ricardian) theories of comparative advantage. There is, however, a conception of fairness much more pronounced than in elite discussions, which suffer so much from the influence of the neoclassical notion of efficiency aptly named for Wilfredo Pareto, to the point that it is no longer possible to say that Mexican workers in the maquiladoras are exploited (it's a voluntary exchange, after all). And although the word class is as far removed from the vocabulary of everyday life as it is from the minds of mainstream journalists, the concept seems not so alien as to preclude the observation that owners of TNCs can actually gain while mostly everyone else — workers and citizens on both sides of a national boundary — loses. Absent this concept, the media had trouble presenting conflicts of interest in anything other than strictly national terms, something that not only obscured the character of the agreement but helped to promote Perot and to a lesser extent the more right-wing and racist Buchanan as representatives of the opposition. As for the reification of technology and "naturalizing" of global social and economic relations, the general public is pretty well mystified due to the monolithic input received, but again not so completely as their educators. Here we see the most significant and stubborn resistance to the received wisdom. Despite all efforts to inoculate against it, there is a recurring idea that great wealth is actually produced and even more is capable of being produced within the national boundaries of the U.S.; that it could be shared more equally than it is; and most importantly, that lower wages and environmental standards anywhere else in the world do not have to reduce anyone's standard of living in the U.S. any more than we choose to let it do so. The word protectionism does not have the same demonic connotations for the general public as it has in elite circles, if it is meant to protect living standards from a global race to the bottom.

These differing attitudes by class toward economic nationalism are often used to discredit resistance to the supra-national policy agenda as inherently jingoistic or racist. While not denying that such attitudes exist (among all classes and sectors of the population), it is of the utmost importance to place the blame where it belongs. To the extent that Ross Perot or Patrick Buchanan emerge as representatives of the opposition, it is because the liberal intelligensia has chosen to embrace the internationalism of the transnational corporation and the ideology of "that single, unconscionable freedom — free trade." And as noted above, since the media has also institutionally excluded the more progressive articulations of the needs of globalizations' victims, the path is clear for demagogues and racists to mix their fear-mongering and hatred with the obvious truths that are screened out by the media's filters. Buchanan is a good example of someone who is reviled in the liberal media more for the things he says that are true, than for his bigotry or fascist leanings. "NAFTA would supersede state laws and diminish U.S. sovereignty. It takes power from elected leaders and turns it over to transnational bureaucrats whose allegiance is to no country at all," he writes. Quoting Jefferson ("Merchants have no country") and others: "To lower the price of labor, our business leaders are willing to sell out not just the working class but the country itself," Buchanan asks, "Is a worker a unit of labor, or one of the family?"²⁶ Perot also seemed to draw more fire for his honest characterization of the intents and purposes of NAFTA (he is also viewed with contempt by the media as an "outsider") than for his jingoist fantasy of America being taken advantage of by other nations (like Mexico!)²⁷

It is also worth noting how little criticism the pro-NAFTA arguments received when they occasionally took on racist overtones, with ideas about the lousy jobs going to Mexico while the good jobs stay here, Mexican workers can't possibly be as productive as U.S. workers, and especially in the final stages of the corporate lobbying blitz, appeals to fears of hordes of illegal immigrants swarming across the border if NAFTA were to fail. And of course the anti-working-class bias of the pro-NAFTA publicists, from President Clinton's conjuring of violent imagery to describe the legitimate lobbying activities of organized labor, to the Washington Post's cartoon of Lane Kirkland as caveman²⁸ — such prejudices are hardly noticed as inappropriate for respectable opinion-makers.

Conclusion

This review of the process by which NAFTA was debated gives some idea of the institutional and ideological obstacles faced by those who favor a more progressive form of economic integration than that of the current supra-national policy agenda. Although these obstacles are formidable, the unusual breadth of the public debate over NAFTA resulted in some very valuable gains. The recognition, in principle if not in practice, that labor and environmental standards are an integral part of trade and commercial policy is both necessary and unprecedented. The building of international coalitions among labor, environmental and community groups²⁹ is another vital side-effect of this struggle which is a prerequisite to further progress. And, perhaps for the first time, the overall direction of the supra-national policy agenda was cast in doubt before a mass audience.

To improve on this record it will be necessary for broader sectors of the population to perceive the dangers and irrationality of current policies, as well as the possibility of alternatives. To the extent that the current stagnation of the OECD countries can be linked to the increasing stratification of income distribution during the last two decades, (a very basic Keynesian argument put forward by many in the labor movement but one that never made it into the public debate over NAFTA), there is potential for active opposition to spread beyond the manufacturing workers and unemployed who have thus far incurred the greatest casualties. And of course the grass-roots environmental organizing around these issues has reached, and will continue to reach many people whose livelihood is not directly affected by the regressive direction of current trends.

The barriers presented by the media and the economics profession will remain daunting. Nonetheless the NAFTA debate created some significant cracks in these structures, and there is the possibility that the authority of both institutions will continue to erode. The wide gulf between public and official opinion throughout most of the controversy should be cause for optimism, as it demonstrates that some of the ideological underpinnings of current policies are very weak among large sectors of the population, despite the near unanimity of the mainstream media and intellectual institutions. This means that progressive alternatives may resonate with a wide audience, when such alternatives attain their rightful place on the political agenda.

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Endnotes