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The Flip Side of Globalization
Tim Francis-Wright
8 April 2001

The upcoming Summit of the Americas in Quebec City later this month will bring to the fore serious arguments about the globalization and free trade. For corporations and the corporate media, the two terms are virtually synonymous. Globalization, however, encompasses more than the normal conception of free trade, that of money and goods. It is also the globalization of ideas. The internet and the spread of mass communication can make publishing easier and can provide an important counter to those who would be plutocrats.

Apologists for free trade argue that barriers to trade are inefficient, and that inefficiency skews the prices of goods upward. But while many goods lack competitors (their own free market) because of patents, no serious advocate of free trade has advocated scrapping the patent system anywhere. Free trade agreements have been and are still used by rich countries and their corporations to exploit cheap labor and lax pollution laws in less developed countries.

But the power of corporations does not need to be unmatched. For example, in Africa, a movement has grown out of South Africa's resistance to the patents held by Western drug companies on drugs that treat AIDS. The high prices charged because of the monopolies that patents provide, would bankrupt the health care system of most African countries. An Indian drug manufacturer, Cipla last month vowed to provide to Doctors Without Borders AIDS drugs at its production cost, well below the prices charged by American and European drug companies. A few days afterward, Bristol Myers Squibb announced that not only could it supply its AIDS drugs to South Africa at its costs, it would not object to South Africa licensing generic versions of those drugs instead. Other pharmaceutical manufacturers saw the light and began offering their drugs at far lower prices at the end of March than at the beginning of March.

Drug companies have long claimed, with some merit, that drugs are expensive to develop, test, and refine. However, the current patent system provides them with a vast amount of compensation: once new drugs reach market, the patent system protects them against competition for several years. Accordingly, most drug companies recover their startup costs in short order. In the United States, government funding fuels the initial research on drugs like AZT, and research tax credits compensate drug companies for much of their research.

Meanwhile, the incremental cost for manufacturing even the most expensive drugs is a few pennies per tablet. Much more than the incremental cost of the drug is spent on marketing, and much is retained as profit. Drug companies are immensely profitable; the high share prices for Pfizer, Pharmacia Upjohn, and Merck are the direct result of high prices that only patents can provide. Companies spend vast amount of spending on ads on television and in print for drugs like Allegra, Claritin, Viagra, Pazil, Detrol, Celebrex, and others (most Americans already know the marketing slogans for these drugs). They spend even more on ads and other spending aimed directly at doctors.

In previous decades, drugs companies, like other companies, enjoyed a huge advantage over independent groups in less developed countries. An era of free trade appeared to be a huge win for multinational companies, who could move production to countries with few checks on exploitation of human and natural capital. But the globalization of communication means that monitoring overseas activities of corporations and their proxies will become easier. Communicating to like-minded groups around the world will become easier.

Multinationals live in a culture of shame, and will sometimes do right by the world out of a sense of shame. Only after activists successfully shamed the large drug companies did those companies do the right thing by Africa. For years, activists could have restricted their campaign to protests against companies like Bristol Myers Squibb. Instead, they also pressured Yale University, which earned tens of millions of dollars from its royalties on AIDS drugs 3TC and d4T, to endorse the notion of ceding its rights to royalties from AIDS drugs in Africa. The campaign brought together local activists in Europe, the Americas, and Africa. And, of course, a maverick drug manufacturer in India supplied the necessary catalyst for this small victory by making its original offer.

Today, it is easier than ever to publish on a widespread basis. From Burmese exiles in Thailand to activists in Canada to dissenters in Mexico, it is easy to develop and spread arguments against the corporations and institutions that would reduce the sum of the world's politics to a set of economic free trade argeements. Only the most repressive governments will be able to keep their citizens silent. Even there, the corporations would give those governments aid and comfort will find that the free trade of information and ideas will expose them. Free trade of ideas for the sake of democracy can serve as a useful counter to the free trade of goods for the sake of enriching only the powerful.

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