We may have representation and control in the political sphere, but what of the economic?

The word “sovereignty” is derived from “sovereign”, which means supreme ruler. At the time the principles of Western political thought were being elaborated, the sovereign was in most cases a king, and sovereignty was understood as the king’s right to act as he pleased within the territory he considered to be his kingdom.

The American Revolution vested the king’s rights and powers in the people and their elected representatives. Under a democratic government, national sovereignty thus becomes the implied right, shared by all citizens, to order their life as they please without interference by foreign agencies or powers.

Sovereignty has until now always been looked upon as a political concept. At the time the U.S. Constitution was written, economic sovereignty was a given. The overwhelming majority of goods used for daily life were produced locally, usually within the immediate vicinity. Only a small portion came from outside the national territory, and those were mostly luxury products that the majority of the population had no use for.

In an agrarian economy such as prevailed in 1776 everything needed for physical existence is under the population’s de facto control. This gradually changed as the Industrial Revolution took hold. As the standard of living rose, a growing proportion of the goods needed to support life and material prosperity came from more the distant locales where industrial facilities were concentrated.

As industrial production acquired greater importance the control of these facilities became a major issue. The fierce and lasting struggle between capitalism and socialism was over the “control of the means of production”, and brought to the fore the concept of the people’s right to control the basis of their material existence.

Until the middle of the 20^th century, however, and regardless of the economic system in force, the bulk of such goods were produced within the national territory. The “oil shocks” of the 1970’s were the first public sign that this was no longer the case. At least some of the “necessities of life” were now coming from outside the national territory.

The globalization of the oil and energy markets was followed by a similar evolution in many other fields. The U.S. today is deeply enmeshed in trade networks spanning the entire planet, and a host of vital supplies, ranging from drugs to clothing to fertilizer, are no longer produced domestically. Two major justifications are offered for this process of increasing dependence on foreign supply sources.

The first is the lower cost obtained by going to the cheapest supplier, wherever that may be. Global markets are assumed to be more efficient, providing the greatest amount of goods at the lowest expense.

The second justification is simply that this evolution represents “progress”, meaning that it is the next phase in the general development of mankind, and is therefore by definition both inevitable and beneficial.

That the historical development of mankind is linear and irreversible is of course an unproven assumption. That this particular manifestation of it, namely economic globalization, is entirely beneficial is also debatable.

In a democracy, the citizenry controls the government, at least in theory. Foreign suppliers of goods to U.S. citizens are controlled by their respective governments, be they democratic or not. They are the suppliers, and to that extent they control us. We, as their market, have some control over them. But each side is also dependent on the other, implying in the end a loss of both freedom and sovereignty.

This loss is amplified by the fact that the terms of trade and exchange are usually set by persons and organizations with no formal responsibility towards the citizenry for which the goods are intended: multinational corporation executives, international institutions, and the managers of the globalized financial system. All these persons and entities pursue their own interests and are not bound by a popularly approved charter such as the U.S. Constitution.

The question of whether the citizenry approves or disapproves of this state of affairs has never been mooted, even though the populace has to bear the consequences, as has been the case in the course of the current economic crisis.

The essence of democracy is that the people should be able control the circumstances of their own life, be they political or economic. In the United States at this time they do not, in the economic sphere, have such control. While political sovereignty still stands, its economic counterpart is eroding away.

This issue is as vital as the causes of the political revolutions of the 18^th and 19^th centuries. It will in the end lead to similar upheavals if it is not addressed in the very near future.

Further Reading:

The Case for Economic Sovereignty