The Selling of "Free Trade": NAFTA, Washington, and the Subversion of American Democracy

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The Selling of "Free Trade": NAFTA, Washington, and the Subversion of American Democracy

University of California Press, 2001. 9. 1. - 400페이지

"MacArthur's faultless ear and muted irony make The Selling of 'Free Trade' an immensely pleasurable read. . . . MacArthur makes abundantly clear that one motive lies at the heart of global trade liberalization. It's cheap labor, stupid."—David Mulcahey, Chicago Tribune

"The Selling of 'Free Trade' puts a human face on the victims of the NAFTA agreement . . . MacArthur describes NAFTA, correctly, as not a trade agreement but an investment agreement, one designed to assure the safety of American investment in Mexico rather than to increase exchanges of indigenous Mexican and indigenous American goods. . . . He has written an impassioned and righteous book with some illuminating human stories."—Lars-Erik Nelson, New York Review of Books

"An illuminating, periodically astounding serial account of how NAFTA was forged, then spun, out of opportunistic backroom alliances between the Bush and Clinton administrations, joined by congressional Republicans and Democrats alike—all of them in close consultation with a star chamber of businessmen and their phalanxes of lobbyists."—John Phillip Santos, San Francisco Chronicle

"MacArthur's is the first book to relate the inside story of the Washington battle over NAFTA in a highly readable style. The author painstakingly reconstructs one of the most intense Washington lobbying efforts of all time."—Paul Magnusson, Business Week

"[A] brilliant dissection of the legislative and public relations battles over the North American Free Trade Agreement... MacArthur is a masterful investigative reporter. . . [He turns] the tale of NAFTA and its aftermath into a heartbreaking account of real workers losing real jobs and of the chilling indifference not just of multinational corporations but of political figures who have abandoned Main Street for Wall Street."—The Progressive

"A spirited and engrossing case study of low-wage American workers brazenly sacrificed for a corporate-sponsored 'turbo-capitalism.'"—Publishers Weekly starred review

“Even at a moment when all of us are searching for comfort, the time hasn't passed for books that bring discomfort. The Selling of ‘Free Trade’ is a book for American patriots who choose to be brave: citizens who refuse to be misled.”—Hartford Courant, Best Books of 2001

"If there is spin, there is counterspin: The Selling of 'Free Trade' is a devastating unraveling of yet another Bill Clinton con job. MacArthur tells the NAFTA story in the voices of those who did the spinning and those who suffered from it. It doesn't get much better."—Seymour M. Hersh

"A gripping and fresh analysis of the corporate construction of an onrushing NAFTA and the human damage in its wake. MacArthur demonstrates what happens when an underdeveloped democracy is confronted by an overdeveloped corporation-governmental oligarchy."—Ralph Nader, consumer advocate.

 http://www.ucpress.edu/book.php?isbn=9780520231788

CHAPTER ONE

The Selling of "Free Trade"
Nafta, Washington, and the Subversion of American Democracy
By JOHN R. MacARTHUR
Hill and Wang

Read the Review

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DEATH OF A FACTORY:
LONG ISLAND CITY

The opening up of new markets, foreign or domestic, and the organizational development from the craft shop and factory to such concerns as U.S. Steel illustrate the same process of industrial mutation—if I may use that biological term—that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one. This process of Creative Destruction is the essential fact about capitalism.
—Joseph A. Schumpeter,
Capitalism, Socialism and Democracy

"You see, Charlie," he said, "not so very long ago there used to be thousands of people working in Mr. Willy Wonka's factory. Then one day, all of a sudden, Mr. Wonka had to ask every single one of them to leave, to go home, never to come back."
—Roald Dahl, Charlie and the Chocolate Factory

From time to time during an ordinary workday in my office overlooking Greenwich Village in New York City, I find myself hefting a shiny black, all-steel, one-pound-two-and-a-half-ounce Swingline "747 Classic" stapler. I might be on the phone and bored, in need of a distracting toy; I might have picked it up because it was blocking my jar of paper clips, dread competitor of staples. Occasionally, I will gesture with it to underscore a point with a subordinate. I sometimes revert to childhood curiosity and lift the stapler cap to examine the "magazine" containing the staples themselves, still pleased after all these years that I can see into one of the mysteries of everyday mechanical objects. Now and again (for my secretary frequently does it for me), I stack some papers or newspaper clippings together, place them under the stapler head, and experience the crunching satisfaction that comes with binding the ephemera of office life into semipermanent togetherness.

    As promised in the Viking Office Products Discount Buyers Guide, my Swingline "Classic" has proven durable over the years—testimony, I suppose, to the quality of design and workmanship: "MADE TO LAST. Tough, all-steel construction takes pounding—keeps stapling for years." I don't doubt the ad copy, for I'm reliably informed that my stapler is at least nine years old, one model removed from the current version of the 747 Classic, which has a slightly different base. But I suspect that it's closer to fifteen years old, roughly the span of my career at Harper's Magazine. I'm confident I could drop my stapler on a hard floor quite a few times before it showed any serious wear and tear. Not that it would be costly or difficult to replace. In December 1998, you could buy the newer model of the 747 Classic from Viking for $17.99, $15.99 each for two, and $12.99 each for three.

When I was a child my father had a stainless-steel stapler—I can't remember the brand—on his desk at home, for which he always kept a few boxes of replacement staples. Besides wastefully punching out the staples for fun, I used to break the strips into shorter chunks, trying to figure out what held them together. More than thirty years would elapse before this particular manufacturing mystery was revealed to me, late on a midsummer's night in 1998, across the East River from Manhattan in a bleak industrial section of Queens known as Long Island City. It was well past midnight, and Chris Silvera, the forty-three-year-old Jamaican-born secretary-treasurer of the International Brotherhood of Teamsters and Warehousemen Local 808, had ushered me past a complaisant night security guard. The guard wasn't supposed to be letting outsiders—especially journalists—inside Swingline plant number 2, known as the Leemar Building, at 45-20 Thirty-third Street. Here, down a flight of stairs in the windowless basement, I found the third shift in, so to speak, full swing. The Swingline plants, as everyone there knew by then, were on their last legs, the buildings themselves for sale. But the hum of machinery and the strong smell of warm metal mixed with industrial solvents and oil belied the impending doom for this particular manufacturing enterprise. You could almost hear the factory breathing, along with the thirty or so souls still working at that late hour. As I descended into the depths of the Leemar Building, it might have been 1978, or even 1958, for the techniques for making staples and staplers—apart from selected automation—hadn't changed all that much since 1950, when Jack Linsky moved his booming enterprise into brand-new quarters on Skillman Avenue, a couple of blocks away from the Leemar Building.

    On the other hand, the world outside the Leemar Building had changed a great deal in fifty years and even more rapidly in the past ten. Indeed, the rate of change in every sector of what was once sentimentally referred to as the American experiment seemed to be accelerating by the minute. Many important people—mostly politicians, economists, businessmen, and public relations agents—were saying this was all for the best, that "economic forces," "technological innovation," "globalization," "economic integration," "free trade," "free markets," and the theory of "comparative advantage" were creating an unprecedented capitalist dynamism that was revolutionizing the entire world. Alluding to the sheer speed of economic movement in 1998, the U.S. trade representative during the Bush administration, Carla Hills, had explained to me the difference between American economic man of the 1940s, 1950s, and 1960s, and that of today: "You know, my father would have thought of joining a company and staying with it from the time he joined and got married until he retired. ... That's not true of the generic fellow today. He sort of thinks, well, `I'll be with a company,' and probably he moves on every five years. I mean the [average frequency] with which Americans move their residence has dropped below five years.... That is life in the big old world today, and I think we'd better get used to it if we want to stay on top."

    Just then the advertising business was capturing perfectly Hills's insouciance about the speedy world of neocapitalism. In a Fidelity Investments promotion for its Rollover Express investment retirement account in the March 1999 issue of Forbes magazine, the comedian Don Rickles was depicted with a smiling "what me worry?" expression‎ beside a theater billboard that—perhaps with unintended irony—listed Rickles's tour schedule of major gambling resorts. Under the photograph, Rickles was quoted as saying, "With all my job changing, I should consolidate my retirement savings at Fidelity."

    If the benefits of life in the global fast lane weren't always immediately obvious—for these exciting and new forces touted by the free marketeers were throwing everyone at the Leemar Building out of work—the speeding up of change was "inevitable," according to Hills and her fellow true believers. There was, they said, no turning back from what Edward Luttwak, a critic of the latest version of the new economic order, had dubbed "turbo capitalism." At the annual World Economic Forum at Davos in 1999, the organizers declared that in spite of financial panics in Russia, Asia, and Brazil brought on by the "volatility of global capital markets," nothing could stop the tide of ever-faster-moving money and goods. Drawing heavily from the standard glossary of economic clichés, David Morrison, Davos's director, wrote that "it would be impossible to reverse the technological innovation and integration that has been one of globalization's key drivers."

    Such overarching, bold, almost messianic economic rhetoric had not perhaps been heard since Nikita Khrushchev was first secretary of the Soviet Communist party. "Whether you [the capitalist states] like it or not, history is on our side," the Russian leader declared in November 1956. "We will bury you." Khrushchev and his ideological mentors, Karl Marx and Vladimir Lenin, were also great believers in forces—"historical" and "class" forces, especially—and they too viewed their version of progress as "inevitable." Such was the confidence and determination of the Communists, the brazen bluff of their ideas and their anticapitalist rhetoric, that even the most virile spokesmen for the bourgeois-democratic world declined to dispute the absurdly exaggerated power of the Marxist-Leninist system. As late as September 1986, three years before the collapse of the Berlin Wall, The Economist, that great British tribune of Western capitalism and free trade orthodoxy, lamented in an editorial on the fate of the tiny, then-leftist-ruled nation of Nicaragua:

For democrats, the prospect of another communist government matters not so much because such regimes are unpleasant as because they seem irreversible ... after too many decades of experience the world has yet to see a single communist regime dislodged ... because the single permitted party has established a monopoly of control—over the economy, education, culture and communications, as well as ordinary politics—far tighter than that achieved by any conventional dictatorship.... If a country is sliding into Leninism, more modest instruments of pressure, like economic sanctions, are often useless. Military force is frequently the only thing that can stop it, and the decision has to be made at an early stage: once a country has crossed the line, it is lost.

    But by late July 1998, Khrushchev and his speech were long forgotten, the Sandinista government of Nicaragua had been strangled to death by American economic sanctions and internal democratic opposition, and "Communism," not to mention genuine socialism, were being hurled onto the historical scrap heap like so much toxic waste in an Environmental Protection Agency Superfund site.

    In its place, a capitalist triumphalism—Marxist-like—was justifying everything that happened everywhere. We were—so many of the better newspaper columnists, editorial writers, and opinion makers implied—witnessing a rosy-fingered dawn in which the best of all possible worlds was even better than we thought. The New York Times, in an editorial headlined "America's Amazing Economy," noted that "in the United States, consumers are spending with abandon and economists continue to be surprised by how robust the economy is." Bill Meehan, a market analyst at a New York brokerage firm, went so far as to paraphrase, apparently without irony, Voltaire's ridiculous Dr. Pangloss: "There's a widespread belief that we're in the best of all possible worlds."

    As I walked into the fluorescent-lit habitat of Swingline's Leemar Building on July 30, the Dow Jones Industrial Average was still giddy from a record high of 9,338 on July 17, U.S. unemployment had fallen to 4.5 percent, and the U.S. dollar was the dominant currency of the world. At the same time, Swingline Inc., a division of ACCO USA, in turn a subsidiary of Fortune Brands, was shutting down its two Long Island City plants, laying off 450 people and moving the operation and all its jobs to Nogales, just across the U.S. border, in the Mexican state of Sonora. A few economic apostates were blaming the five-year-old North American Free Trade Agreement (NAFTA) and its reduction of tariffs between the United States, Mexico, and Canada for the unhappy fate of the Swingline workforce. Others were blaming free trade in general and the policy of the U.S. government of helping capital find the cheapest labor possible in countries like Mexico. They warned that a nation that held down wages by exporting manufacturing jobs—for despite the boom, the median U.S. weekly wage was still $17.51 below its 1979 high of $558.47 (1998 dollars)—was a nation at risk. For the moment, however, their voices were drowned out by the free-market ultras, who tended to describe events like the Swingline plant's closing as the beneficial result of "market forces" and David Ricardo's theory of "comparative advantage," which holds that a duty-free world will automatically cause each nation to produce most what it produces best. The most important official gazette of received political wisdom, The New York Times, was looking on the bright side, noting in an article that "while Swingline's closing represents another major blow to the old-style heavy manufacturing that once dominated Long Island City, the neighborhood has experienced a recent industrial rebound with the opening and expansion of a number of smaller manufacturers." (For some reason, the Times didn't mention what sort of wages these smaller companies paid, though it did remark that Swingline's workers were less than inspired by the prospect of starting all over at the minimum wage.) The Times's hopeful tone was echoed by countless tenured university economists and sedentary editorial writers across the country: Life might be tough for some unhappy few during the "restructuring" of the U.S. economy, but in the long run, Mexico's "gains" would be America's and Long Island City's. Everybody was going to get richer. Always a reliable parrot of orthodox economic thinking, The Washington Post reminded its readers in an editorial published a few weeks after the removal of the Swingline sign that sat atop the factory: "As a general principle, increased trade contributes to increased prosperity."

    One was tempted to say, in the face of so much expert opinion, Not so fast! As the MIT economist Paul Krugman, a partisan of free trade, noted in his 1991 book Geography and Trade,

the tendency of international economists to turn a blind eye to the fact that countries both occupy and exist in space—a tendency so deeply entrenched that we rarely even realize we are doing it—has, I would submit, had some serious costs. These lie not so much in lack of realism—all economic analysis is more or less unrealistic—as in the exclusion of important issues and, above all, important sources of evidence.

Indeed, as I toured the Leemar Building, two powerful and nonquantifiable forces were present that existed outside the bounds of conventional economic analysis. One was the simple truth that people were about to lose their jobs through no fault of their own. The other was a life force named Jack Linsky, then eighteen years dead, the man who had invented the jobs. I suspect that Krugman would view this dapper and ingenious salesman as one of the nonclassifiable bits of evidence that can enrich our understanding of economic theory. For when we talk about economic "forces," we should never forget those that are embodied in actual human beings.

If there was ever a glamour side to the inherently unglamorous endeavor of manufacturing Swingline staplers, it resided not in the Leemar Building, where the staples were made, but in the main plant and headquarters building across Queens Boulevard at 32-00 Skillman Avenue, where the staplers themselves were fabricated and assembled. For nearly five decades, the four-story red-brick edifice was something of a landmark in New York because of the enormous, jaunty electric sign that, until January 6, 1999, dominated the Skillman side of the building. Measuring roughly sixty feet high and fifty feet wide, the sheet-metal-and-steel I-beam structure required six people working three ten-hour days to pull it down from the factory rooftop. Like the gigantic Maxwell House coffee cup that once loomed across the Hudson River in Hoboken, New Jersey, and the still extant Silvercup bakery sign two elevated train stops west in Long Island City, the big brash Swingline logo possessed the sort of commercial design cachet that occasionally excites the admiration of urban preservationists and architects. It's safe to say that since its construction at the beginning of the 1950s, tens of millions of train passengers had passed Swingline's enormous advertisement on the way to work or home, either from below, on the Long Island Rail Road, or from above, on the elevated number 7 train that curves by the southwest corner of the plant on its way from Manhattan to the Thirty-third Street (Rawson Street) station. Swingline's public image was very hard to miss from the 7 train. On the way to Long Island City from Manhattan, when you first emerge from the East River tunnel into the daylight, you begin to gain altitude. The former Bloomingdale's department-store warehouse appears on your right, after which you make a big left turn past the back of the former Silvercup plant—now converted to an ominous bit of industrial nostalgia called Silvercup Studios, where thirteen film/video studios have replaced the gigantic commercial bakery that used to attract schoolchildren on field trips. (How is white bread baked, sliced, and wrapped anyway? How are staples made?) Another big turn, this time to the right, brings you to the major junction stop of Queens Plaza, after which, off to the left, the bulky, electric Swingline sign announced itself in the distance in vertically rendered and very legible script. At night the red neon lettering could be seen for miles. Subtlety wasn't the thing in 1950s signage, but you couldn't argue with the effective directness of the message. Growing out of the words "Swingline Staplers" was a curved red-and-white arrow carrying the words "Easy Loading," which pointed directly at the base of a big gray "747" stapler depicted in a round frame. The sign seemed to say, Not only won't you have any trouble putting the staples in a Swingline Stapler, but you might even have fun doing it.

    The actual Swingline logo, which appears on the staplers themselves, is rather suggestive of fun, almost lovely in the way it flows. More spread out and `horizontal than the factory sign, its simple but readable cursive lettering sticks in your mind but also fairly shouts of a self-confident era before graphic design became the pretentious, grandiose enterprise that it is today. It's hard to imagine Swingline presented in the unsentimental sans-serif block-letter style so popular with the contemporary Fortune 500 set. Nowadays no self-respecting stock tout would bring a new securities offering to market with such an outdated symbol. The curves are too gentle, too old-fashioned, too insouciant for the turbo-charged economy of the twenty-first century. As for the product itself, it's hopelessly unsexy in an era of high-technology gods and digital magic. It may not be a coincidence that Jack Linsky started calling his staplers Swingline in 1935, just before the release of the movie Swing Time, a glamour vehicle for Fred Astaire and Ginger Rogers. Had I been writing the company's advertising copy in the 1930s, I would have linked the graceful design of the product with the elegant clothes and seamless routines of Hollywood's first couple of ballroom dancing.

    An aesthetic appreciation of the Swingline look and logo is not so far-fetched if you place it in the context of what David Gelernter (the computer scientist and polymath maimed by the Unabomber's antitechnological rage) called "the high-thirties industrial aesthetic," the notion that "art made technology beautiful" and "technology made the future beautiful." No industrial designer of the era exemplified this spirit better than Raymond Loewy, with his beautifully contoured Gestetner duplicating machine and dynamically streamlined steam engine created for the Pennsylvania Railroad's Broadway Limited. Loewy didn't design my 747 Classic Swingline stapler, but the resemblance to his locomotive masterpiece is unmistakable.

    It may also be a coincidence that Jack Linsky, founder of Swingline, and his wife, Belle, were avid collectors of beautifully designed objects—Renaissance jewelry, eighteenth-century French furniture, and Rococo porcelain, among other things. So serious were the Linskys about their hobby that their private collection formed the 3,190-square-foot Jack and Belle Linsky Galleries of the Metropolitan Museum of Art in New York. Their daughter, Lenore Hecht, estimated the value of the collection at $90 million at the time it was donated in 1982.

    Fine art was cheaper in the first four decades after World War II, of course, but the Linskys made an awful lot of money selling staplers, accessories, and business forms—"stationery," they liked to call it—and they could afford a spectacular art collection, including paintings by Rubens, Gerard David, and Boucher. Their voyage from being poor subjects of the tsar (Jack came from northern Russia, Belle from Kiev) to owners of two dozen porcelain figurines made in the tsar's imperial factory, must have been remarkable. To stand in the Linsky Galleries today and gaze upon their seventeenth-century ewer—a small pitcher of smoky crystal covered in a riot of gold and diamonds, made in the Prague workshop of Ferdinand Eusebio Miseroni—is to stand in awe of the ingenuity of American capitalism. Staples into gold.

    By some accounts, the Linskys were thrifty to a fault, if not downright cheap. Howard Pollack, a former partner in the accounting firm of H. T. Schwaeber & Co., who prepared the tax returns for all the Linsky enterprises in the late 1960s, got a notion of just how cheap during encounters with Belle in Chicago at Swingline's Ace Fastener subsidiary. "I would go to Chicago quarterly," he recalled. "I hated it there because in Chicago generally it was snowing. And Mrs. Linsky would appear in Chicago in the middle of the snowstorm. Belle would march in, and I would say to her, `What are you doing here?' and she would say, `I've come to check the petty cash.' I would ask why. She'd say, `You don't have to watch the dollars; they take care of themselves. You have to watch the pennies.'" Lenore Hecht confirmed that her mother was the "bookkeeping watchdog" and that her father would hide behind crates with the intention of catching thieves and slackers among the employees. In today's media-political parlance, Linsky was a "job creator," but by no accounts was he generous with the rank-and-file worker. Not that Swingline was a particularly oppressive place to work, just that thrift came naturally to a man who had experienced extreme poverty in his youth. One of seven children, Jack Linsky had emigrated to New York from Russia in 1904 in less-than-comfortable circumstances. Linsky's father, Zus, a fabric peddler, had arrived earlier with but one of his children in tow because he couldn't afford to bring the rest of the family. So poor were the Linskys, according to Lenore, that they sent one of their five daughters to live with an aunt.

    Jack Linsky evidently hit the streets of New York City's Lower East Side running. Employed by a stationery store at the age of fourteen, he saved money on his delivery route by taking the trolley one way and returning on foot to keep the remaining nickel. He became a salesman at seventeen, earning, according to his obituary, the substantial salary (for 1914) of $21 a week. It was only a matter of time before a go-getter of this caliber would launch his own wholesaling business, Jaclin Stationery. As a jobber, Linsky imported German-made staplers, but the design left much to be desired.

    "In his business travels, Linsky went to Europe in the 1920s and came back with an idea for a stapling machine that would more or less revolutionize the industry," explained Alan Seff, Lenore's ex-husband, who worked for his father-in-law from 1946 to 1960. "It was what we call an open channel. Before, in order to load a stapling machine, you practically needed a screwdriver and a hammer to put the staples in. He and his engineers devised a patented unit where you just opened the top of the machine, and you'd plunk the staples in. And that was what made his company; of course he was a great businessman and all that, but the invention of the open-channel stapling machine was what made the company a success."

    Nat Klein, who was employed by Swingline in the 1930s, also said that Linsky's trip to Europe was the spark for everything that followed. "Prior to that time," he recalled, "the only staplers that were around were machines from Germany or Russia, and they were very crude.... He hired a man who had worked for Ford Motor Company, and he designed a very modern-looking machine, and from then on it took off like a big bat out of hell."

    Originally Linsky called his manufacturing company the Speed Fastener Corporation, which he established in Long Island City in 1925. Eventually the renamed company, while not quite synonymous with staplers the way Xerox is with photocopiers, came to dominate the industry.

    "A brilliant, brilliant businessman," said Alan Seff of Jack Linsky. "His big forte was as a salesman.... His wife and a few close associates used to run the factory. But he could sell anything.... See, besides the stapling machine, they made the staples. And the main thing in the staple industry was to be able to sell the refills, just like in the razor blade industry.... To make the razor is all right: you sell it, and you get your money. But the idea is to get refills. So his big ambition was to get these stapling machines out to all the stationers and then resell them staples." Along the way, Linsky expanded the business through the acquisition of Wilson Jones, a maker of loose-leaf business forms, and even began manufacturing little rubber "finger tips" to help secretaries and clerks in the monotonous but exacting task of collating sheets of paper. But he never stopped pushing the staples. Inside the upper magazine of my 747 Classic, engraved in the steel track on which the staples slide toward their "outlet" point, is the simple, permanent reminder, "Use Genuine #4-Swingline 100% Round Wire Staples."

    Linsky sold so well that in London in 1964, Belle could afford to pay $176,400 for a Louis XVI marquetry commode, at that time the record price for a single piece of French period furniture sold at auction. He got so rich selling that Howard Pollack described their Fifth Avenue apartment as "a museum—they had a lot of it roped off because it was so valuable. You had to sit in another room."

    Jack Linsky made so much money that in 1965 he could endow the Belle and Jack Linsky Pavilion at Beth Israel Hospital in Manhattan for $1 million. When he finally decided to let go of his empire in 1970, Jack and Belle's "stationery" business was purchased by American Brands for $210 million (about $882 million in 1998 dollars).

    As Swingline grew, so did its largely immigrant workforce, which peaked at about thirteen hundred people in 1980. Nobody but the Linskys ever got rich from making Swingline stapling equipment, but for a relatively low-skill, low-wage manufacturing operation, a lot of employees stayed for quite a long time. Bernard Nelson, who was married to Linsky's niece, Doris, and worked as a manager at Swingline more than thirty years, until 1985, said that the founders were "very loyal to the employees. We had a lot of people who were there over fifty years.... You could see that you don't like to drop anybody after that much time.

    "They had hard-core people who started out with him in Manhattan when it was a small company," recalled Nelson. "You know, when I came in a little later [around 1950], the first group was still there, and from what I could tell they really respected Linsky. And he was very nice to them financially; if they had problems, [the owners] would help out." As for their skills as managers, Nelson noted, "Mrs. Linsky took care of the office end of it, and Mr. Linsky took care of the sales, so it was a good combination—watching both ends of the business. And they had very loyal people who watched with them." Linsky, recalled Nat Klein, "was generous, to certain people."

    After the sale, Jack Linsky joined the American Brands board, staying on as chairman of Swingline until May 1975, when he retired. Nobody who worked in management recalled any dramatic changes in the way the plant was run after Linsky's departure, although certainly the absence of the many Linsky family members who worked there through the years made the atmosphere a little more impersonal. According to Nelson, the people who worked for him in the rubber department in the original Long Island City plant on Northern Boulevard never noticed the change of ownership because they didn't realize it had taken place; "they didn't know; they thought I was the owner."

    But like military history told exclusively by generals, factory history told exclusively by managers and owners should be viewed with skepticism. On the shop floor, the quality of life can vary dramatically depending on the temperament of your supervisor, your day-to-day responsibilities, and how much you get paid. Repetitive tasks, whether on an assembly line or at a stamping machine making stapler parts, can be debilitating for the spirit as well as the body; how you're treated can make the difference between a monotonous but reasonably comfortable work life and a miserable daily act of servitude. In Linsky's day, Swingline never had much of a reputation for labor-management antagonism, but clearly all was not well after he left. To find out why, I needed to go a little deeper, and deeper into Swingline is where I went.

Downstairs, in the subbasement of the Leemar Building, in the predawn hours of August 7, 1998, I encountered a row of machines that automatically pack strips of staples six at a time into plastic boxes. Over the steady clanking and grinding of conveyor belts and metal objects scraping against other metal objects, a "set-up operator" named Gorica Kostrevski explained to me that for twenty-one years, until the installation of the packing machine in 1994, she filled the boxes with staples by hand, twenty-four strips of 210 staples each. At one time she also made the boxes themselves by hand; now automation spared her these monotonous tasks, and her principal responsibility was to prevent broken "sticks" of staples from entering the machine. With her heavy Macedonian accent, Kostrevski's fractured English was still better than that of a good many Swingline workers, and she described her job this way: "[One person] make sure both staple strips ... is straight ... no broke, no single ... two staples, you know?" The strips of staples must enter the machine joined together two at a time—one overlapping the other to form a closed rectangle—or else "they don't go ... [the machine] don't take it. So, I mean, you have to make sure if it's okay." Another person loads the boxes by hand onto the conveyor belt and then, once they are filled, places them into a hopper. If the staple strips enter the loader damaged or separated, or a box gets stuck, "the computer tells you something ... you take out the broken staples ... you clean up the machine and then start all over.

    "Before this machine started, I packed the staples in the [assembly] line," she continued. "There was no machine; we pack by hand ... twelve and twelve [strips]."

    I asked Kostrevski what she could do to prevent staple strips from coming apart; what sort of defect was she looking for? At last the industrial mystery dating from my childhood was revealed to me: "I check [if] they have glue," she said. Glue holds the 210 staples together, and in another room, vaster by far, I saw the staples actually being made and glued together. As it happens, the staplemaking endeavor is a continuous and fully automated process in which the workers feed long strands of metal wire off spools into machines that bend, cut, glue, and spit out strips of staples. Just one man appeared to be supervising the rows and rows of staple-makers, which were soon to be automated even further by a new machine slated for inauguration in the Mexican plant. This Italian-made machine improved efficiency by simultaneously forming 210 wires into staples; the old machine could do only eight wires at a time. But the word among employees in the Leemar Building was that technical difficulties with the "band" staple-maker, hidden away somewhere in the building, were preserving their jobs for the time being. Until the bugs were worked out, the Nogales plant would have to wait a little longer to realize its full "comparative advantage" over Thirty-third Street in Long Island City.

(Continues...)

(C) 2000 John R. MacArthur All rights reserved. ISBN: 0-8090-8531-3

http://www.nytimes.com/books/first/m/macarthur-free.html

Rough trade

Andy Beckett applauds John R MacArthur's The Selling of 'Free Trade': Nafta, Washington, and the Subversion of American Democracy - a book of unpatriotic questions at a time of conformity

• 
• • Andy Beckett
  • The Guardian, Saturday 17 November 2001 17.51 GMT

The Selling of 'Free Trade': Nafta, Washington, and the Subversion of American Democracy
John R MacArthur
400pp, California, £11.95

It can be a risky business these days for American journalists to suggest that the US is less than exemplary in its internal politics, or in its everyday relations with other places. Since September 11, several American newspaper columnists have been sacked for making remarks along these lines. Even in Britain, the blanket phrase "anti-American" has been much in use for smothering investigations of Washington's democratic credentials and global dominance. Quite often, listening to a speech or a phone-in about the current international situation, it can feel as though America's ambiguous recent history has simply been abolished.

John R MacArthur, fortunately, does not have to go along with this. As a member of one of America's wealthiest liberal families and the publisher of Harper's Magazine, the mainstream American journal most consistently critical of US excesses during the 1990s, he is not going to get fired for the unpatriotic revelations in these pages. His previous book was about the pro-military bias of the American media, supposedly the most free in the world, during the Gulf war. This volume is about an even more uncomfortable topic for fans of the American way: how close to a one-party state the US can also veer in peacetime, and what the consequences of its overwhelmingly pro-business, America-first political consensus are for everybody else.

MacArthur takes as his example the seemingly dusty story of the North American Free Trade Agreement (Nafta) signed between the US, Mexico and Canada in 1993. At face value, this treaty was a standard piece of modern deal-making to aid international commerce, of interest then and since to transatlantic think tanks and especially keen students of American politics such as Iain Duncan Smith. Officially, the agreement established a single market between the three countries, similar to that in Europe, to the benefit of rich and poor alike across the north American continent. Jobs would be created in America. Mexico would get wealthier. Profits would rise everywhere. In the words of Lee Iacocca, the famous car salesman hired to advertise the benefits of Nafta on American television, "It's a no-brainer."

In fact, as with globalisation in general, there would be distinct winners and losers. The commercial union of a poor, loosely governed, populous country such as Mexico with two of the world's most prosperous nations would provide wide-ranging possibilities for closing factories in America and Canada and reopening them to the south, where cheap labour could be obtained and regulations of all kinds could be evaded. The best parts of this book focus on a single factory in New York, describing what happened when its owners, seeing the opportunity created by Nafta, suddenly moved it across the Mexican border.

The Swingline brand of office staplers and staples had been made in a redbrick plant beside the Queens railway tracks since 1935. MacArthur does not completely romanticise the noisy, low-paid operation of the business - he probes the old-fashioned bullying and ethnic stitch-ups that persisted through the decades - but it was unionised, the swooping Swingline logo was "almost lovely", and employees spent their whole working lives there. Then, one spring morning in 1997, the owners of the factory informed their staff that there were "tentative plans" to "phase down" operations in Queens in favour of "a more cost-effective solution". Less than two years later, the plant was empty.

Its replacement stood concealed by a desert hillside outside the border town of Nogales in northern Mexico. When MacArthur sneaks in for a visit, his official requests having been declined, he quickly notices something about the new compound: "If Nafta was going to cause Mexicans to buy American-made cars, where were the parking spaces?" The deliberate imbalances embedded in the trade agreement are apparent in other ways, too. All the factory's raw materials come from the US. Everything produced is sent back across the border. The only benefit to Nogales, a place of shanty towns and potholes, is the employment provided, which is so badly paid that Swingline has been able to abandon the expensive machinery it ran in Queens and replace it with long lines of Mexicans putting staplers together by hand.

Since Nafta came into force, MacArthur records, Mexico has endured a currency crisis and worsening government debt, among other economic and political disasters, and American unemployment has started to rise quite sharply. The rest of the book, which is less vivid, explains how an international agreement with such predictably unpleasant side effects was swallowed so easily by the politicians and voters of what is allegedly the world's greatest democracy.

The swift and regular "manufacturing of consent" in the US for right-wing policies at home and abroad has already been the subject of dozens of books by the American dissident Noam Chomsky, and MacArthur has little to add to this body of thinking. At times, his account of the passage of Nafta bogs down almost completely in detail about the workings of Congress and the Senate, memos and counter-memos, and eye-glazing quotations from people who know more than is healthy about tariffs and free-trade areas. Yet there are also moments of rather chilling clarity, as Republicans, Democrats and business leaders unite behind a treaty that betrays the interests of many of their employees and supporters. The White House gives permission for a "county fair" displaying the products of companies backing Nafta to be held on its South Lawn. It is raining on the day, so umbrellas are distributed printed with the American flag and the slogan "American Products, American Jobs... Nafta". Patriotism and soft universal rhetoric, as ever in the US, cloak a scheme whose aims are hard-nosed and divisive.

MacArthur, despite the melodrama of the book's subtitle, offers no grand political conclusion. He is content to let his facts do the accusing. The managers of American plants in Mexico, he notes, often prefer not to relocate across the border themselves, but commute from shaded bungalows in Arizona. Like Victorian empire-builders, they refer to the bulk of Mexico beyond the free-trade zone as "the interior". MacArthur does not discover whether his countrymen have set up their commercial stockades there as well. No American car-rental firm trusts Mexico enough to lend him a four-wheel drive.

http://www.guardian.co.uk/education/2001/nov/17/highereducation.news

May 21, 2000

Mexican Standoff

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Nafta, the author argues, has done a lot more harm than good.

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Related Link

First Chapter: 'The Selling of "Free Trade"'

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By JOHN B. JUDIS

THE SELLING OF ''FREE TRADE'' Nafta, Washington, and the Subversion of American Democracy. By John R. MacArthur. 388 pp. New York: Hill & Wang. $25.

ou would have to go back to the 19th century to find a trade battle in Congress that was as divisive as that over the North American Free Trade Agreement in 1993. What has been needed is a dispassionate study that gets past the sound and fury. John R. MacArthur's study, ''The Selling of 'Free Trade,' ''is not really that. It mixes a passionate attack on the treaty with a journalistic account of its passage and effects. Die-hard opponents of the agreement will probably like this book. Others may find it irritatingly one-sided.

Nafta emerged from at least three different impulses: first, Mexican officials, frightened by a growing foreign debt that was crippling their economy, wanted to attract American investment; second, American businesses wanted to be able to invest in Mexico free from export restrictions and domestic content rules, and from the ultimate threat of expropriation; and third, American officials and policy makers, worried about political instability and a torrent of illegal immigrants, wanted to incorporate Mexico into a Common Market-type arrangement that would lead to the revival of its economy, the reform of its government and the reduction of cross-border tensions.

MacArthur understands the first two impulses. He understands that Nafta was primarily an investment agreement rather than a free trade treaty. But he plays down or ignores Americans' broader concerns. Nafta, he insists, was ''entirely about money.''

MacArthur, the president and publisher of Harper's Magazine, is at his best describing the lobbying that occurred after the treaty was signed and went to Congress in August 1993. He shows how business lobbyists worked hand in glove with the treaty's Congressional supporters. But he has surprisingly little to say about the negotiations themselves, or about the domestic political conflicts that occurred while the treaty was being negotiated. His account of these tends to render shades of gray as black. When the Bush administration proposed that Congress agree to a fast-track vote (up or down without amendments), Richard Gephardt, the House majority leader and a Democrat, backed Bush on the condition that the treaty contain rules on labor standards and environmental protection. MacArthur dismisses this position as nave and opportunistic. (Gephardt ''was presumably ambitious to be liked by the sort of people, honest or not, who can make you president.'')

A year later, during the presidential campaign, Bill Clinton, under the influence of Gephardt and two advisers, Derek Shearer and Richard Rothstein, adopted the same position. MacArthur treats Clinton even more contemptuously than he does Gephardt. He says Clinton ''had already made up his mind on trade to the point where there was no substantial difference between his position and Bush's.'' Clinton's stand, he says, was primarily based on fund-raising. That assertion leaves little middle ground between those adamantly opposed to Nafta and those enthusiastically in favor. MacArthur may be right, but when I covered the negotiations I found otherwise.

In the Nafta negotiations, Clinton and Mickey Kantor, the United States trade representative, earnestly attempted to get Mexico and Canada to agree to set up commissions that would have significant punitive powers. They failed, primarily because of Mexican and Canadian opposition, as well as opposition from the Business Roundtable and Republicans in Congress. But they also failed because the A.F.L.-C.I.O., instead of trying to work with the administration, took a position of unequivocal opposition to the treaty in any form. Clinton and Gephardt found themselves caught between business-style internationalism and labor protectionism.

The resulting treaty was flawed. MacArthur's view, which also became Gephardt's, was that it should have been rejected, but MacArthur now criticizes Gephardt and John Sweeney, the A.F.L.-C.I.O. president, for failing to press for Nafta's repeal on the grounds that it has worsened the condition of Mexican and American workers. In drawing this conclusion, MacArthur ignores two important considerations.

He acknowledges that Mexico was in difficult straits on the eve of Nafta, but he attributes these problems to the Mexican government's abandonment of older high-tariff import substitution policies. Under these policies, MacArthur writes, there was ''less social inequality and more purchasing power for the average Mexican.'' But he fails to note that before the 1980's, the Mexican economy was propped up by oil earnings. When oil prices began to fall, the economy began to stagger, and it is still not on its feet. Nafta may not have improved Mexico's economy, but it is not clear that it has made things worse.

The second consideration has to do with the impact of American investment in Mexico on American jobs. Investment increased somewhat after Nafta was signed, but the boom in American investment in Mexico predated Nafta. And if that investment had not gone to Mexico, it might have ended up in Central America or Asia, not in the United States. If Nafta depressed American wages, it did so indirectly -- by giving credibility to corporate managers' threats that if a union organized or demanded too much for its workers, the company would move to Mexico. Modifying Nafta to strengthen its labor and environmental commissions could benefit both American and Mexican workers, but repealing the treaty doesn't hold any obvious promise for Mexico, the United States or Canada.

To MacArthur's credit, he has tried his best to make a potentially dull subject interesting by treating himself as a character in his narrative; by interspersing long interviews with lobbyists, politicians and affected workers; and by telling the story of one factory in New York that was affected by Nafta. But he is not the most artful author, and the book sometimes drags. It would have been much more lively at half the length. But it probably would not have been any more accurate a portrayal of the choices facing American policy makers and citizens in 1993.

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John B. Judis is a senior editor at The New Republic and the author of ''The Paradox of American Democracy.''

http://www.nytimes.com/books/00/05/21/reviews/000521.21judist.html