The Ravaging Effects of Capitalism on My Hometowns

By Mark Klempner, AlterNet. Posted March 31, 2008.

What will become of Costa Rica? That's the question on my mind, now that my adopted country has narrowly accepted CAFTA. Our national slogan is "Pura vida!" meaning "pure life," and it's commonly used as an affirmation that life is good. It's easy to understand how such an expression could catch on here: Costa Rica has virtually no enemies, a temperate climate, and a hell of a lot of good beaches. However, as an expatriate whose previous hometowns have been despoiled by global capitalism, I find it difficult to imagine that life will be as pure or as good once the effects of CAFTA begin to kick in. At the very least, the treaty will accelerate trends already evident in Costa Rica, such as more corporations like Intel and Procter & Gamble setting up operations. Indeed, CAFTA promises an improved "business climate" and "regulatory environment" for foreign firms and investors, but I wonder what that will mean for Costa Rica's actual landscape, and the people who inhabit it.

I first witnessed the negative effects of global capitalism from the North American side, being from Schenectady, N.Y., the original "home of General Electric," a phrase that resounded through my childhood. Known also as "the city that lights and hauls the world" in its heyday, Schenectady and General Electric grew together during the first half of the 20th century. They remained interdependent, both economically and socially, and when I was growing up in the early 1970s, G.E. was still the biggest employer in town, with about 27,000 workers. It was also the biggest polluter: the more than 1 million pounds of toxic PCBs that it dumped into the Hudson River caused various health problems for local residents, ranging from skin diseases to birth defects -- and probably cancer. In the 1980s, G.E.'s famed CEO Jack Welch initiated an aggressive strategy of eliminating and outsourcing jobs with the result that the company now employs fewer than 4,000 workers in Schenectady.

And where did the outsourced jobs go? Mexico, Malaysia, China, India, you name it. It might appear that Costa Rica will gain only from being among the nations that are insourced, but it has yet to have an industrial force that big move in and seriously befoul its environment. Nor has Costa Rica had the experience of being abandoned by such a transnational when it moves its operations to yet another country that can offer still greater savings.

For more than a decade now, tourism has been Costa Rica's main source of income, currently accounting for 60.4 percent of its GDP. One would think that Costa Rica's president Óscar Arias would do all he can to safeguard the beautiful environment that generates Costa Rica's wealth, but, considering that his administration recently rescinded the moratorium on offshore oil drilling, that does not seem to be the case. Though Costa Rica has protected about 25 percent of its nature areas, and plenty of environmental laws are in place, many of them are either partially enforced or not enforced at all. Furthermore, some of these laws can potentially be challenged under CAFTA, one reason that environmentalists have been united in their opposition to the treaty.

But equally pernicious is the possibility that CAFTA will bring about the demise of the small farms that grow some of our best coffee and produce. That this will be an incalculable cultural loss might be hard for outsiders to understand unless you are one of those tourists who came to Costa Rica for its pristine forests or beaches and fell in love with the people here. I believe that their boundless hospitality has its roots in the strong agricultural tradition whereby, as in bygone years in the United States, neighbors would help each other to bring in the harvest or to raise a barn.

My wife and I live in a coffee-growing region where our town monument depicts a farmer with two oxen pulling a cart full of coffee beans to market. Nearly every day someone does something to reflect this campesino spirit, like yesterday when the grandmother of my son's playmate sent him home with a bag of oranges from the tree in their backyard. A less trifling example is the playground cleanup and repair project initiated by one of our neighbors in which nearly everyone on our block participated. That scene of the adults working together to make things better for the children, while the children frolicked in the grass, helping where they could, is one I'll never forget. The point is that this tight-knit, highly cooperative community will not remain that way for long if it loses its agricultural base.

At present you can buy a mango in Costa Rica for about 50 cents. An apple from the United States, however, costs about 75 cents. The reason is that a tariff equal to the price of the imported fruit is applied, so that it sells here for twice as much as in the United States. CAFTA will eliminate such tariffs and thus cut the prices for imported grains and produce in half. It's unlikely that Costa Rican farmers will be able to compete with U.S. agribusiness, which has not only the advantage of economies of scale, but of massive government subsidies as well.

Bring it on, say the turbo capitalists: If these Costa Rican agricultural workers can't compete in the global marketplace, they should enter another line of work. No matter that Costa Rica's agrarian tradition is a major repository of its folklore, culture and history. No matter that the land means so much to these people. No matter that tens of thousands of visitors tour coffee plantations and other such places each year who won't want to see factories and industrial parks. For the champions of free trade, the invisible hand of the market knows best, and it's just fine if all those farm workers eventually go to work in factories owned by foreigners.

To refute this type of thinking, one need only look at the effects of NAFTA, the earlier free trade agreement with Mexico on which CAFTA is based. Activists warned that NAFTA would displace small farmers and farm workers from the rural life that they had lived for generations and drive them into the cities, where the only way they would be able to survive would be to sell their labor to foreign employers. Organized labor in the United States predicted "a giant sucking sound" as a huge number of U.S. jobs were transferred to a labor force that would not expect the same benefits, rights or protections, and would be willing to work for one-tenth the pay. Environmentalists argued that U.S. corporations would likewise take advantage of Mexico's laxer environmental laws and the lack of enforcement of those laws.

Unfortunately, all these predictions came to pass. A large percentage of farmworkers were displaced from the land, and many of them began working at factories in the cities. Others left Mexico altogether, swelling the ranks of illegal alien workers in the United States. Meanwhile, U.S. jobs were indeed exported to Mexico: the number was between 750,000 and 3,200,000, depending on who is interpreting the statistics. And greater environmental damage occurred than would have been the case had those factories remained in the United States. We not only outsourced jobs, we outsourced environmental destruction, inflicting on Mexico what our laws would not have permitted us to do to our own land, air and water.

But didn't U.S. farmers, at least, benefit from NAFTA? Not farmers with faces and families, according to Kathy Ozer of the National Family Farm Coalition. She cites some telling statistics: "Under NAFTA, we lost 100,000 family farmers between 1996 and 2001. Commodity prices for corn, wheat, and cotton all fell by 20 to 30 percent. But the profits of Archer Daniels Midland (ADM), one of the largest U.S. exporters of corn -- much of it genetically modified, of course, and grown using massive amounts of pesticides -- more than tripled from $110 million in 1994 to $301 million in 2000 to $451 million in 2003. The story is the same for ConAgra and Cargill. Clearly, the big winners are the large processors and grain traders."

And what kind of life awaits those Costa Ricans who would enter the growing industrial sector? Probably not one they would have chosen in the absence of financial exigencies. Even the most prestigious firms exact an undeniable price on the cultural identity of their workers. For example, in our capital city of San Jose, Hewlett-Packard employs thousands of phone agents who sit in cubicles and answer service calls in an environment that might just as well be San Jose, California. You don't have to study the research of Brazilian sociologist Ruy Braga to realize how demoralizing it can be for employees to spend all day in a workplace that subtly or overtly invalidates their collective frame of reference. Along with this comes the calculated imposition of corporate norms that are in certain respects antithetical to the personal values held by most Costa Ricans.
I've never seen an HP personnel manual, but I doubt it bears much resemblance to the social contract here. The smiles of the Costa Rican people arise from a mixture of family values in the best sense of the term and a society that prefers friendly cooperation to aggressive competition. Their graciousness and warmth will prove highly perishable if they have to adhere to such written and unwritten precepts of corporate America as "time is money," "watch your back," and "work comes first."

But the effects of "free trade" will extend far beyond the realm of work. Since I moved here in 2001, the same fast food franchises that have aggravated the health and weight problems of millions in the United States have appeared on streets that previously contained only little lunch places serving rice, beans and tortillas. In another development, the first big malls have been erected. I wonder what family-run stores they will put out of business, as Costa Ricans flock to Nike and Tommy Hilfiger. On yet another front, Wal-Mart, in what is no doubt the beginning of a marketing plan to conquer Costa Rica, recently acquired two of our most popular supermarket chains.

I have a sinking fear that Wal-Marts will one day be seen in close proximity to some of Costa Rica's most prized nature reserves, for I have already witnessed this same cycle play out in the United States: malls and box stores where local businesses used to be, or even where nature used to be. When I lived in Ithaca, N.Y., Wal-Mart wanted to build across from Buttermilk Falls State Park. This was a place I often went swimming in the summer; the frothy water plunges down from 600 feet into a natural basin with a surrounding patio of shale on which I would soak up the sun. Buttermilk was one of those places you'd go to clear your mind and forget about the world -- until suddenly the world's most powerful retailer wanted to mess with it.

If the city refused Wal-Mart the choice spot, the corporation threatened to build outside the city limits, as several malls had already done, thus further eroding the municipal tax base. Yet, who would want to hike up the scenic trail at Buttermilk Falls to be rewarded with a view of Wal-Mart? Some very knowledgeable citizens scrutinized the environmental impact report and pointed out numerous unresolved problems during countless meetings at city hall and elsewhere. In the end, Wal-Mart abandoned plans for the site -- though not before unsuccessfully suing the city.

But then Ithaca elected a new mayor who quietly entered into negotiations to construct what turned out to be a Home Depot in the very same spot. Ithaca's citizens were not informed until after building preparations had begun, and those who protested were simply ignored. Never mind that the environmental impact report raised serious concerns. The mayor had already moved on to Wal-Mart, and soon announced that the megacorporation would be constructing a store in a nearby wooded area.

What happened in Ithaca is but one small example of the way that Big Business and its representatives in government often get things done these days -- all around the world. In Costa Rica, it came as no surprise that all the large firms were solidly behind CAFTA and didn't hesitate to pressure their employees to vote for it. Those same firms also provided enormous political and economic backing for Óscar Arias, who ran on a pro-CAFTA platform in 2006. Arias was elected by a margin almost as slight as Bush vs. Gore in 2000; after taking power he nevertheless asserted, as Bush did, that he now had a mandate. He appointed a staunchly pro-CAFTA staff, and, like that mayor of Ithaca, expressed no interest in engaging in open debate about an issue that had divided the public like no other in recent decades.

The Arias administration's true colors were further revealed shortly before the CAFTA referendum vote when a confidential memo to the president was leaked to the University of Costa Rica newspaper. In it, Second Vice President Kevin Casas and Fernando Sánchez, a powerful legislator, wrote: "The coalition against us is formidable: universities, the church, environmental groups, etc. And on the other side, there is only the government and some of the big entrepreneurs." To win over the people, they detailed a profoundly unethical pro-CAFTA strategy that included a proposal to threaten Costa Rica's mayors with a funding freeze if CAFTA was voted down in their districts, and a Rove-style fear and smear campaign.

Casas was forced to resign completely; Sánchez, who happens to be Óscar Arias' cousin, remains in the legislature but has been removed from the two committees he chaired: elections and banking. It is disconcerting to think that if these two men had mastered, even in part, the techniques of stealth utilized so successfully by the Bush administration, they would still be at their posts. Actually, all they needed was to heed a bit of advice offered with levity by Dick Cheney when he spoke last September at the Gerald R. Ford Presidential Library. After making an aside about researchers who dig through the correspondence of key political figures, Cheney said, in regards to himself, "I want to wish them luck, but the files are pretty thin. I learned early on that if you don't want your memos to get you in trouble some day, just don't write any."

Cheney's aversion to public scrutiny is, of course, shared by Bush, and was evident in the CAFTA process. During the negotiations, a coalition of more than sixty nongovernmental organizations -- most of them U.S.-based -- signed an open letter calling for greater transparency and civil society participation. Indeed, a quick glance at the committee advising the president and Congress on environmental issues relating to CAFTA tells the story: only five out of the 29 members were associated with public environmental organizations, six if you want to include the Garden Clubs of America. Facing them off were representatives from such corporations as Agrisystems International, the Carlyle Group, General Motors and Harken Energy, which had recently filed for arbitration against Costa Rica for refusing to allow it to drill along the protected Talamanca Coast. Like Wal-Mart in Ithaca, Harken's response to failing an environmental impact review was to sue.

It seems as if these and other transnationals have taken over the United States, which is one reason I wouldn't want to move back. In any event, the hometowns I used to know no longer exist. Once proud Schenectady currently has a hollowed out feeling, and a crime rate that has soared as its economy has plummeted. And in Ithaca, the road that runs alongside Buttermilk Falls as you enter the city is now a congested wasteland of parking lots and big-box stores. By the way, the PCBs that General Electric dumped into the Hudson River have yet to be fully removed, and you still can't swim in the river or eat the fish. Attempts to legally force G.E. to undertake dredging have met with formidable resistance. Home wrecker!

Meanwhile, back in our little village in Costa Rica, it's Friday morning -- which means the farmers' market is in progress over by the elementary school. About 40 farmers show up each week and set up stalls from which they sell a cornucopia of vegetables and fruits, including small sweet bananas that make the commercial varieties seem tasteless, and luscious papayas whose ambrosial flavor contains a hint of honeysuckle. It's always a busy scene over there: housewives doing their weekly shopping with children in tow, matrons carrying jute bags, schoolgirls giggling in their blue uniforms, town elders sitting on the stone wall talking. There are even a few tourists, delighted to have stumbled upon an authentic slice of Costa Rican life.

A couple of weeks ago, when I went to the market, a strange thing happened. An unusually large truck carrying building materials entered the little street where the farmers were set up, and as it passed a tall tree, something in the bed of the truck got caught on a low-hanging branch and started to pull the branch along with it. A farmer had tied one corner of his awning to a slightly lower branch of the same tree, and now the movement of the truck was beginning to tear the roof off his stall. He watched with tranquil bemusement (sometimes I think Costa Ricans have a pura vida gene) and then snap! -- the branch finally broke free.

That truck should be named CAFTA, I thought: an engine of change built in a foreign land on a scale inappropriate for the Costa Rican economy and infrastructure, an engine that could easily destroy branches of Costa Rican culture without the driver ever noticing. It is important to note, however, that anti-CAFTA legislators have been vigorously attempting to address such concerns.

Before CAFTA can be enacted here, twelve major bills will need to be passed, and these legislators are challenging their constitutionality -- even as they simultaneously strive to reform them so as to mitigate their negative impact should they move forward. The U.S.-imposed March 1 deadline has come and gone with only two of the bills having passed, and it is uncertain whether the additional ten will pass by the October 1 extension granted by the U.S. trade representative.

If CAFTA does, indeed, take effect by the end of this year, let's hope that the laws will have been finessed to the extent that the average Costa Rica is still left with a roof over his head. Though it's too early to celebrate such an ascendancy of the common good from the chambers of the legislative and judicial branches, I am heartened that the checks and balances within the Costa Rican government seem to be functioning better than those in Washington. This gives me hope that Costa Rica may ultimately be able to avoid an isolationist stance even while honoring its own proud traditions of providing for and prioritizing the health and well-being of its citizens, and caring for its environment.

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Mark Klempner is a folklorist, historian, and author of The Heart Has Reasons: Holocaust Rescuers and Their Stories of Courage. His email is mtk2@cornell.edu. He would like to thank the following people for commenting on, assisting with, or allowing themselves to be interviewed for this article: Judith Blau, Maxwell A. Cameron, Mark Engler, Gillian Gillers, Paul Glover, Ari Hershowitz, Dan Hoffman, Chris Hunter, Andrew Gow, Paul Rogat Loeb, James McConkey, Thomas F. O'Boyle, Kathryn Olney, Kathy Ozer, Dave Sherwood, Margrete Strand, Alice Truax, Joe Wetmore, and the GE Corporate Feedback Team.

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