Free Traders : Elites, Democracy, and the Rise of Globalization in North America

Today's global economy was largely established by political events and decisions in the 1980s and 90s, when scores of nations opened up their economies to the forces of globalization. In Free Traders, Malcolm Fairbrother argues that politicians' embrace of globalization was much less motivated by public preferences than by the agendas of businesspeople and other elites. Drawing on over one hundred interviews with decision-makers, and analyses of archival materials from Canada, Mexico, and the U.S., Fairbrother tells the story of how each country negotiated and ratified two agreements that substantially opened and integrated their economies: the 1989 Canada-U.S. and trilateral 1994 North American Free Trade Agreement. Contrary to what many commentators believe, these agreements-like free trade elsewhere-were based less on mainstream, neoclassical economics than on the informal, self-serving economic ideas of business. While the stakes in the globalization debate remain high, Free Traders uses a comparative-historical approach to sharpen our understanding of how globalization arose in the past to provide us with clearer trajectory for how it will develop in the future. This book is about the political events and decisions in the 1980s and 1990s that established the global economy we have today. Different social scientists and other commentators have described the foundations of globalization very differently. Some have linked the rise of free trade and multinational enterprises to the democratic expression of ordinary people's hopes and desires; others have said they were a top-down project requiring, if anything, the circumvention of democracy. This book shows that politicians did not decide to embrace globalization because of the preferences of the mass public. Instead, using comparative-historical case studies of Canada, Mexico, and the United States, this book shows that politicians' decisions reflected the agendas and outlooks of various kinds of elites. On the basis of more than a hundred interviews, and analyses of materials from archives in all three countries, the book tells the story of how the three countries negotiated and ratified two agreements that substantially opened and integrated their economies: the 1989 Canada-US and trilateral 1994 North American Free Trade Agreements. Contrary to what many people believe, these agreements (like free trade elsewhere) were based less on mainstream, neoclassical economics than on the informal, self-serving economic ideas of businesspeople. This folk economics shaped the contents of the agreements, and helped bind together the elite coalitions whose support made them politically possible. These same ideas, however, have reinforced some harmful economic misunderstandings, and have even contributed to the recent backlash against globalization in some countries Cover......Page 1 Free Traders......Page 4 Copyright......Page 5 Contents......Page 6 List of Figures......Page 8 Preface......Page 10 Acknowledgments......Page 12 Chronology......Page 16 1. Explaining the Rise of Globalization......Page 18 2. Why Globalization Didn’t Happen, 1948–​1982......Page 49 3. Canada: To Secure and Enhance......Page 75 4. Mexico: Rise of the Technocrats......Page 93 5. The United States: Divided Hegemon......Page 111 6. Did Economists Cause Globalization?......Page 130 7. Does Business Exist?......Page 156 8. Conclusions......Page 180 Afterword: The Legacies of North American Free Trade......Page 199 Appendix A: List of Interviewees......Page 222 Appendix B: Archives Consulted......Page 228 References......Page 230 Index......Page 262 In Free Traders, Malcolm Fairbrother argues that politicians' embrace of globalization was much less impacted by public preferences than the agendas of various firms and elites. Drawing on over one hundred interviews with decision-makers, and analyses of archival materials from United States, Mexico, and Canada, Fairbrother uses both NAFTA and individual cases from each country to tell the story of how they negotiated and ratified agreements that substantially opened and integrated their economies