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FREE TRADE AND JUSTICE: A DISCOMFITING LIAISON Margaret Thornton In Helen Irving, Jacqueline Mowbray, Kevin Walton (eds), Julius Stone: A Study in Influence The Federation Press, Sydney, 2010, pp 145-65

Introduction: Justice and Equality Julius Stone’s abiding concern for justice animates much of his work, including his famous trilogy on jurisprudence, especially Human Law and Human Justice. 1 Stone has inspired me to address the perennially vexed issue of justice, especially as the concept now tends to be heard only faintly and apologetically. Although debated since the time of Plato, it remains no less elusive. For some, it represents a description of the way things are while, for others, it is an ideal that can only ever be imagined. Nevertheless, there is agreement that it possesses normative force regarding the way things ought to be; that it is concerned with the pursuit of the good, behaving ethically towards others, and ensuring fairness and equitable outcomes in decision-making and the allocation of resources. The contemporary depersonalised world of the global market place, on which I shall elaborate, accords scant regard to the pursuit of the good other than in economic terms. Post-modernity has also introduced a note of scepticism about moral goodness that suggests absolute injunctions. I want to shine a spotlight on the new world economic and political order that has caused the discourse of justice to recede. Justice needs to be considered in conjunction with the cognate concept of equality, another societal ideal. Equality is not only imbricated with justice as Aristotle and successive philosophers have recognised; equality is also a means by which justice is rendered calculable. Julius Stone described equality between all persons as the test of justice. 2 This test that originated with Aristotle involves treating in the same way those who are similarly situated, 3 but the plea for equality as the normative ideal has also receded. However, if equality is indispensable to justice, why is there a growing lack of interest in it? 4 Of course, we often hear about equality in its formalistic sense as equal treatment, procedural equality or equality before the law. This understanding of equality as sameness is politically appealing as it acknowledges differences in ability and correlative attributes, including advantages that emanate from entrepreneurialism and self-promotion. Quantitative university entrance scores, for example, occlude 1

Stone, J, Human Law and Human Justice, Maitland Publications, Sydney, 1968 (hereinafter Human Law), p 332. The other volumes are Stone, J, Social Dimensions of Law and Justice, Maitland Publications, Sydney, 1966 (hereinafter Social Dimensions) and Stone, J, Legal System and Lawyers’ Reasoning, Maitland Publications, Sydney, 1968 (hereinafter Legal System). 2 Stone, Human Law, p 332. Stone, however, goes on to question the adequacy of describing justice in terms of equality, suggesting that it is more usually a settlement between equality and other values (p 335). 3 Aristotle (ed & trans Warrington J), Politics, Everyman’s Library, J M Dent & Sons, Lond, §1282b. 4 Christensen, B (trans Smith, AF), ‘Equality and Justice: Remarks on a Necessary Relationship’ (2005) 20 Hypatia 155.

Electronic copy available at: http://ssrn.com/abstract=1758973

differential experiences in terms of class and race. Treating in the same way those who are unequally situated at the point of access may be compatible with gross inequalities of outcome. 5 For this reason, conservatives favour formal equality, for it allows responsibility for historic discrimination to be sloughed off, while social liberals favour substantive equality, for it allows cognisance to be taken of contextual factors, such as access to resources. As Rousseau recognised, social and political equality is contingent on economic equality. Economic inequality leads to dependency, as well as marginalisation and exclusion from the social contract. 6 Generally speaking, however, economic equality as a moral good has tended to elicit a degree of ambivalence among philosophers.7 I suggest that in an environment where the market is the measure of all things, inequality is displacing equality as the pre-eminent social norm. It is economic inequality that is corroding notions of social and political equality. Competition, the raison d’être of the market, assumes that some will succeed while others fall by the wayside. Within this new marketised universe, injustice and inequality are embedded within the fabric of society. Equality has become devalued as a social good, resulting in its decoupling from justice. 8 Neoliberalism, the political philosophy currently in vogue, cloaks its taste for inequality with the discourses of choice, entrepreneurialism and merit, concepts that are central to individual success and competition policy. The assumption is that those who work hard deserve to retain the rewards of their labour. The idea of distributive justice as an indicator that a community cares about its weakest members, is on the wane. Inequality, of course, is not a new norm since it is central to any free market economy, but it is challenging equality as the central norm of democratic liberal societies. We have seen a revival of the economic liberalism that ‘burst forth as a crusading passion and militant creed’ in the 1830s. 9 Under the social liberalism of the 20th century, the excesses of the market were tempered by a commitment to egalitarianism and collective good. Strategies such as progressive taxation and welfare assistance were designed to ensure a modicum of distributive justice. Neoliberalism has resiled from the idea of public good, preferring to rely on the market itself rather than state intervention to improve conditions, even though the primary beneficiaries of the market are private actors. An intimate relationship has been effected between the state and the market, replacing the state’s previous relationship with and support for civil society. Neoliberal rhetoric nevertheless avers that increased productivity and a strong economy will exercise a flow-on effect so that the entire society benefits. While this idea carries a certain superficial allure with it, it is belied by the uneven distribution of wealth. The concept of a self-regulating market has long been recognised as utopian, 10 but the myth is difficult to dislodge. Furthermore, the success of the ‘free’ market is measured in economic rather than social terms. 11 Improving the conditions of those who are less well off is no longer seen as a worthy objective of the 5

As famously recognised by Anatole France and cited by Stone: ‘the law in its majestic equality forbids the rich as well as the poor to sleep under the bridges, to beg in the streets and steal bread’. Human Law, p 104. 6 Rousseau, JJ, ‘A Discourse on the Origin of Inequality’ in The Social Contract and Discourses (trans G D H Cole), Everyman’s Library, Dent, London, 1966. 7 Eg Frankfurt, H, ‘Equality as a Moral Ideal’ (1987) 98 Ethics 21. 8 Christensen, above n 4 at 156. 9 Polany, K, The Great Transformation, Rinehart, New York, 1944, p 137. 10 Ibid at 141. 11 Ibid at 33-34; Summers, C, ‘The Battle in Seattle: Free Trade, Labor Rights, and Societal Values’ (2001) 22 University of Pennsylvania Journal of International Economic Law 61 at 76. 2 Electronic copy available at: http://ssrn.com/abstract=1758973

state. The market norm of distributive injustice has thereby insidiously become naturalised. I propose to show how globalisation has insidiously induced a normative shift from equality to inequality. I would not go so far as to suggest that injustice has replaced justice but it is causing a displacement as globalisation asserts itself as the new form of imperialism. 12 It has created an environment where injustice may be tolerated in the interests of maximising profits. My focus is on contemporary Australia as one piece of the mosaic within the new world order. To show how the privileging of the market is reflected within our normative universe, I refer to several decisions dealing with applications for exemptions under anti-discrimination legislation on the ground of race. In these decisions, the profit-making that produces economic inequality is held to be a social good that outweighs the social bad of racism Neoliberal Political Philosophy Neoliberalism favours the accumulation of private wealth and regressive taxation policies that enhance the status and power of the few at the expense of the many. A striking feature of advanced capitalism is the way power is concentrated in fewer and fewer hands. 13 According to neoliberals, the individual pursuit of wealth through the market comports with the idea of freedom that is central to liberalism because it is the best way of satisfying human wants and aspirations. 14 Liberty is included by Rawls in his theory of justice, 15 but the exclusive focus on the pursuit of wealth in the market is a perverted understanding of freedom, 16 for it serves to deflect attention away from a structural critique of the economy. The recent roll-back of social welfare initiatives (including labour, environmental and anti-discrimination measures) has been marked, not just in Australia, but in other parts of the developed world. 17 The lives of workers have deteriorated, and job tenure has become parlous with a dramatic increase in contingent work. For many, stable full-time work has become a relic of the past. 18 Part-time and casual workers fit the idea of a ‘flexible’ workforce which means working the hours that suit the employer, even if it is for only a few hours a day, or being dismissed at will. The ‘at will’ philosophy, which typifies labour relations in the United States, the paradigmatic site of the free market, is now widely emulated elsewhere. 19 Contingent labour has become an integral part of business, rather than supplementary to it. 20 For those in full-time work, increased surveillance, longer working hours and rising stress levels are familiar contemporary features designed to increase productivity. Work intensification, the downgrading of working conditions and the widening of the gap between labour and capital are marked dimensions of late 12

I draw on Hardt and Negri’s work for this idea. See Hardt, M and Negri, A, Empire, Harvard University Press, Cambridge, Mass, 2000. 13 Spitz, L, ‘The Gift of Enron: An Opportunity to talk about Capitalism, Equality, Globalization, and the Promise of a North-American Charter of Fundamental Rights’ (2005) 66 Ohio State Law J 315 at 327; Silbey, S, ‘“Let them eat Cake”: Globalization, Postmodern Colonialism, and the Possibilities of Justice’ (1997) 31 Law & Society Rev 207 at 227. 14 Self, P, Government by the Market: The Politics of Public Choice, Macmillan, London, 1993, p ix. 15 Rawls, J, A Theory of Justice, Oxford University Press, Oxford, 1971. 16 Stone is critical of Rawls for confusing justice with liberty. See Human Law, p 333. 17 Spitz, above n 13 at 329. 18 Sukert, AB, ‘Marionettes of Globalization: A Comparative Analysis of Legal Protections for Contingent Workers in the International Community’ (2000) 27 Syracuse J International Law & Com 431. 19 Ibid at 475. 20 Ibid at 433. 3

capitalism. 21 While the participation of women in the labour market has risen, the type of work many are doing is increasingly casual and part-time. Despite the struggle to be accepted into the world of paid work in the 20th century as a step towards independence, autonomy and equality, the entry of women into the workforce has been effectively deployed to legitimise the expansion of corporate capitalism. 22 The precarious nature of employment has caused non-standard workers, men as well as women, to absorb the neoliberal message that they should eschew collective action. When workers in the United States try to form unions, at least half of the employers threaten to close their plants. 23 The result may mean a choice between dilution of employment conditions and loss of employment altogether. 24 The decline in union membership, underpinned by anti-union rhetoric and government measures designed to by-pass the collective role in wage-setting has contributed to the erosion of civil society and the common good. A striking by-product of the social transformation that has occurred is that ‘the poor’ are no longer the unemployed but non-standard workers, 25 a factor that occludes new incarnations of class inequality. In a remarkably short time, Australia has experienced a transition from an egalitarian society with a high regard for social justice to a society where the focus is on profit-making and individualism. 26 Exemplary is the fact that Australian society tolerates the chief executive officer (CEO) of the Macquarie Bank receiving a salary of $33.5 million, 27 the equivalent of the average wage of 6,479 Australian workers. 28 The bank sought to justify the CEO’s salary on the basis of its record annual profit of $1.46 billion. 29 The CEOs of many other corporations are paid similarly inflated salaries, but attention is usually drawn to them only when their executives are dismissed or the company collapses. By means of what Harry Glasbeek refers to as the ‘artifice and miracle’ of the corporation, the rule of these rich white men is usually rendered invisible. 30 Australia’s fabled egalitarianism is exemplified by its former centralised wage-fixing system, the effect of which was to restrict the distance between the lowest and highest-paid workers within an industry award. While managers and executives were not subject to regulation, the restraint inherent within awards served to inhibit the inflation of executive salaries. The disparate salaries of the CEOs and workers symbolise their respective power within a free market economy. 31

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Spitz, above n 13 at 344. Cf Eisenstein, H, ‘A Dangerous Liaison? Feminism and Corporate Globalization’ (2005) 69 Science & Society 487. 23 Andrias, KE, ‘Gender, Work, and the NAFTA Labor Side Agreement’ (2002-03) 37 U San Francisco Law Rev 521 at 529. 24 Burgess, J and Macdonald, J, ‘Are Labour Standards threatened by Globalisation?’ (1998) 6 Internat J Employment Studies 145 at 154. 25 Murray, J, ‘Labour Issues in Times of Globalisation: Is the Social Clause an Appropriate Legal Response?’ (2004) 21 Law in Context 283 at 294-96. 26 Jackson makes a similar assessment of the effects of 15 years of free trade in Canada. See Jackson, A, From Leaps of Faith to Hard Landings: Fifteen Years of ‘Free Trade’, Canadian Centre for Policy Alternatives, Ottawa, 2003. 27 In one year, the CEO, Allan Moss, received a rise of $12.3 million. See ‘Macquarie stands by $33.5m pay packet’, ABC Online, 15 May 2007 28 In May 2007, the average wage was $51,700. 29 ABC Online, above, n 27. 30 Glasbeek, H, Wealth by Stealth: Corporate Crime, Corporate Law, and the Perversion of Democracy, Between the Lines, Toronto, 2002, p 253 et passim. 31 Christensen, above n 4 at 160. 22

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The move from a socially stable society to a market-oriented one brings with it disequilibrium, inequality and rivalry, as pointed out by Polanyi. 32 Although he was writing primarily about the impact of the emergence of economic capitalism from the early 19th to the early 20th centuries, Polanyi’s insights are remarkably prescient with regard to the contemporary incarnation of globalisation. The shift from the idea of collective good from the state to the market effectively entails individuals taking responsibility for their own success. They become rational economic actors who out of self-interest are motivated to work hard. Neoliberals deem distributive justice to be incompatible with a free market economy, 33 causing the public good to wither away. In noting developments in theories of justice by the 1960s, Stone observes a trend from an ‘individualist’ to a ‘socialist’ direction after more than two centuries. 34 Forty years later, there has been a swing away from a ‘socialist’ imperative after a brief flirtation with it, and a return to a focus on individual good. Equality is a key value of liberalism, the Enlightenment and modernity, and it may be that the influence of postmodern discourses has also contributed to the waning interest in the concept. Instead of diversity and difference, equality has been depicted as being obsessed with sameness. Its essentialising core suggests a white male subject that is held up as the ideal, causing a strong reaction against it on the part of women, people with disabilities, gays and lesbians, indigenous people and those of nonEnglish speaking background. They have all felt that there was a homogenising dimension to equality that should be rejected. While recognition of the multifacedness of the Other is politically important in the chequered history of social movements, identity politics encouraged a focus on the micropolitical and tended to overlook the injustices emanating from the nascent neoliberal Grand Narratives of globalisation and free trade to which I now turn. It might be noted in passing that the discourses associated with these terms are also simultaneously postmodern, for they both encapsulate and reflect the instability, permeability and immanent nature of power associated with the market. Globalisation Today, globalisation is a concept that is everywhere but nowhere. While it denotes interdependence and carries a positive communal gloss with it, it also has a dark underbelly. It is a euphemism for capitalism, which Susan Silbey suggests serves to camouflage the organisation of power and impede the struggle for justice. 35 As a result, she suggests that ‘global justice’ is oxymoronic. Silbey also invokes the term ‘postmodern colonialism’ in order to capture global capitalism’s power to achieve a world free from restraint in its perennial quest to invent and invest. 36 This power enables it to secure favourable sites of production and outlets for its products all over the world. The interdependence that economic globalisation denotes does not signal a relationship of equality, but inequality, which I suggest is the mark of the market. Globalisation involves overcoming the temporal, spatial and cultural distances in new ways through technological developments and the implementation of capital. 37 Donna Haraway’s term, the cyborg, captures the idea of the contemporary new knowledge worker who is perennially connected to the internet as well as the mobile phone. The cyborg is ‘a cybernetic organism, a fusion of the organic and the technical 32

Polanyi, above n 9, p 234. Hayek, FA, The Constitution of Liberty, Routledge & Kegan Paul, London, 1960, p 232. 34 Stone, Human Law, p 4. 35 Silbey, above n 13 at 233. 36 Ibid at 210. 37 Martinez, RO, ‘Globalization and the Social Sciences’ (1998) 35 Social Science J 60. 33

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forged in particular, historical, cultural practices’. 38 The new knowledge worker as cyborg is incapable of independence and autonomy but must always be managed. 39 This cyborgian quality in employer/employee relations now extends to classes of employees, such as academics and lawyers, who formerly possessed a modicum of autonomy but are now paradigmatic neoliberal subjects. Globalisation is a postmodern phenomenon with its fragmentation, contradictions and refusal to be corralled, as well as being a modernist grand narrative that goes hand-in-glove with late capitalism. Globalisation may be understood as an ideology as well as a process that is philosophically committed to the promotion of market deregulation and state minimalist policies. 40 At one level, globalisation is undermining the nation state at the same time as new forms of governance are strengthening its regulatory role. In this light, the conjunction of fewer national boundaries but more regulation points to the way globalisation operates as a set of contradictory processes, expanding certain spaces, while closing down others. 41 Taking Silbey’s descriptor of globalisation as postmodern colonialism somewhat further, Michael Hardt and Antonio Negri bestow the name ‘empire’ on this sovereign power that now governs the world. 42 They develop a sustained critique of the decline of nation states and the postmodernisation of the global economy. They invoke the concept of empire, not so much as a metaphor but as a signification of the historical shift that has taken place as a result of the globalisation of capitalist production. The invocation of the word ‘empire’ conveys a sense of its ‘rightness’, as evidenced by the way the Athenians presented themselves in The Peloponnesian War, 43 for example, or the way the British Empire presented itself until recently. The idea of ‘rightness’ is a crucial element of imperial success. What is distinctive about this new capitalist form of empire, however, is that it lacks a transcendent site of power − a metropole − but operates on a plane of immanence through networks and relationships of dominance. 44 It is this institutional and juridical world that throws the attainment of justice into question. 45 With the active assistance of neoliberal governments, globalisation has effectively reduced labour’s bargaining power. Transnationals are able to issue credible threats that they will withdraw their capital and move offshore if their demands are not satisfied. Indeed, the capital-importing states, where the transnationals locate their factories, may go to extraordinary lengths to attract foreign capital, including rescinding or suspending existing laws. 46 This conduct is not confined to developing countries, for the effect of moving manufacturing off-shore has exerted a marked effect on the less skilled workers in developed countries. Their 38

Haraway, D, Modest_Witness@Second_Millennium.FemaleMan_Meets_OncoMouse: Feminism and Technoscience, Routledge, New York, 1997, p 51. 39 Baxi, drawing on the work of Haraway and that of N Katherine Hayles, invokes the term ‘the posthuman’ to capture the depersonalisation and lack of human subjectivity that is symptomatic of the age. See Baxi, U, ‘Revisiting Social Dimensions of Law and Justice in a Posthuman Era’, Keynote Address, Julius Stone Centenary Conference, Sydney, 5-7 July 2007. 40 Burgess and Macdonald, above n 24. 41 Lenz, I, ‘Globalization, Gender, and Work: Perspectives on Global Regulation’ (2003) 20 Rev Policy Research 21. 42 Hardt and Negri, above n 12. 43 Thucydides, The Peloponnesian War (trans R Warner), Penguin Books, Harmondsworth, Middlesex, UK, 1954. 44 Ibid at 326. 45 Ibid at 19. 46 Stark, B, ‘Women and Globalization: The Failure and Postmodern Possibilities of International Law’ (2000) 33 Vanderbilt J Transnational Law 503 at 539. 6

job security has been threatened by a flood of cheap imports, such as has occurred in the garment industry. They find themselves in direct competition with workers in developing countries. 47 These countries have what economists term a comparative advantage because of their poorer conditions, 48 which enables the work to be done more cheaply. While this has a positive side in providing income that might not otherwise be available, it tends to entrench the subordinate position of workers, particularly women, who predominate in manufacturing. 49 While Western society is tantalised by the economic benefits of globalisation, the beneficiaries are transnational corporations, their shareholders and CEOs, as well as those new knowledge workers whose skills are in demand. Increasing social inequality at both the national and global levels is a marked characteristic of globalisation for ordinary workers. 50 Late capitalism is not fazed by this, for it has no sense of justice in itself, as can be seen from the way one developing country can be quickly replaced by another if there is a prospect of greater profits, regardless of the impact of withdrawal on the local economy. The amorality of globalisation has had the effect of entrenching divisions between developed and developing nations. Institutions such as the World Bank, the International Monetary Fund (IMF) and the General Agreement on Tariffs and Trade (GATT) have all operated to assist the systematic development of global capitalism. The United States, the home of the world’s biggest and most influential transnationals is playing a central management role in the global economy in respect of the provision of finance capital and the extraction of raw materials from developing countries. 51 The gap between rich and poor has grown with the cutting of taxes for wealthy corporations, a noted characteristic of neoliberalism. Instead of assisting the less well off, the state now provides ‘corporate welfare’, monetary incentives to entice corporations to move their businesses into a particular country or region, or to stay there. 52 The concentration of power in the hands of the few − whether it be nations, corporations or people − has created an impermeable web of inequality. Despite the American origin of many transnational corporations, they have no real home base, other than where they are nominally registered, often for the purpose of paying the least tax. They flit from country to country, endlessly looking for cheaper raw materials and sources of labour, as well as new markets. This constant search for capital is the essence of global imperialism. 53 It is facilitated by the paradigmatic new knowledge workers in informatics and law. Neither of these disciplines has any interest in the ethics of the movement of global capital. The same point has been made about human rights law at the global level, for it is similarly dominated by investment capital. 54 47

Kabeer, N, ‘Globalization, Labor’s Standards, and Women’s Rights: Dilemmas of Collective (In)action in an Interdependent World’ (2004) 10Feminist Economics 3 at 6. 48 The developing countries actually opposed the proposal to couple core labour rights (discussed below) with free trade, not only because they would be in danger of losing their comparative advantage, they also feared that the core labour rights would be used by the developed countries as a pretext for protectionism. See Summers, above n 11 at 69. 49 Kabeer, above n 47. 50 Martinez, above n 37. 51 Ibid. 52 The Australian Federal and Victorian State Governments provided an AUD24 million aid package to prevent the closure of the car manufacturing plant of multinational, Ford Australia. See Ruffles, M, ‘Ford Closure endangers 3000 Jobs’, Canberra Times, 19 July 2007, p 2. 53 Hardt and Negri, above n 12, p 228. 54 Stark, above n 46 at 540. 7

The tendency to ‘free the market from intervention’ is a notable characteristic of economic policy throughout the contemporary world. 55 This has meant abandonment or contraction of the regulatory practices of the 20th century that were designed to effect a modicum of redistributive justice. The formation of transnational entities, such as Association of Southeast Asian Nations (ASEAN) and North American Free Trade Agreement (NAFTA) (1993), were interested primarily in the free flow of trade without tariffs or other protective and regulatory impediments. The transition has not been without opposition. The North American Agreement on Labor Cooperation (NAALC) (1994) emerged from intense protests during the NAFTA debates. It set forth eleven labour principles, including equal pay and the principle of non-discrimination. 56 Non-government organisations (NGOs) dealing with issues of women and minorities are finding it difficult to exert pressure as civil society becomes less relevant in the hierarchy of power and there are cuts in funding. 57 The effect of the market discourse has been to reconfigure, if not erase, the gains made by women and racial minorities in the late 20th struggle for social, political and economic justice. These gains largely derived from state regulation, not adjudication, but deregulatory measures are being effected at the national level to facilitate the smooth functioning of markets at the global level. Now, justice for those excluded from the community of Equals is deemed inconsequential. While nation states have acceded to pressure to deregulate, effect liaisons with supranational bodies and accord transnational corporations favourable terms of operation, they may by-pass democratic processes of consultation. Only the powerful élites, that is, the transnational corporations, are likely to be consulted. They want, and are able to secure, decisions in their interests. Nation states are complicit in a ‘democracy deficit’ that is weakening the body politic everywhere. There is therefore scant regard for the disproportionate impact on gender and race of the effects of globalisation. The privatisation of once public entities means that they can behave in the market like any corporation without accountability and transparency, other than to their shareholders. Most significantly, the public sector is shifting from an idea of public good in its provision of services to a commercial approach in the way these services are provided. Hardt and Negri suggest that even the concept of public itself has been dissolved and privatised. 58 I suggest that even state agencies charged with administering anti-discrimination legislation have absorbed the commercial message. Free Trade Agreements Free trade agendas are playing a significant role in muting the discourses of justice, equality, gender and race. Like the concept of empire, free trade and globalisation are painted as unequivocal social goods, so that opposition to them is stifled. Australia signed a free trade agreement with the United States in 2004 (AUSFTA), despite the fact that was unable to show just what would be the impact of the free trade agreement on the Australian economy. 59 Although the Australian Government under Prime Minister John Howard dismissed the idea of including labour rights, a clause 55

Beneria, L, ‘Globalization, Gender and the Davos Man’ (1999) 5 Feminist Economics 61. Wolfgang, H-M and Feuerhake, W, ‘Core Labour Standards in World Trade Law: The Necessity for Incorporation of Core Labour Standards in the World Trade Organization’ (2002) 36 J World Trade 883. 57 Maddison, S and Partridge, E, How well does Australian Democracy serve Australian Women? Democratic Audit of Australia, School of Social Sciences, Australian National University, Canberra, 2007. 58 Hardt and Negri, above n 12, p 301. 59 Murray, above n 25 at 287. 56

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was included because it was accepted by the United States (both Democratic and Republicans) that it should be inserted in all United States trade agreements, regardless of the opposition of business. 60 Nyland and O’Rourke suggest that the reason why the United States has been successful in this regard is in its linking of human rights and jobs, which has given the issue more cachet than in Australia. 61 Although an important precedent, which will be tested in the use of the proposed free trade agreements with China and Japan, the inclusion of a social clause has not stopped the erosion of labour standards emerging from globalisation, as Burgess and Macdonald noted percipiently prior to AUSTFA: The threat, in Australia at least, lies from the neo-liberal policies of the state rather than from the decisions of transnational corporations or the policies of trading parties. 62 As a result of the pressures of globalisation, there are more and more of these free trade agreements so that, to quote the late Julius Nyerere, ‘the world is becoming one huge free market’. 63 The social justice of multilateral trade treaties remains highly contentious, as seen by the anti-globalisation protests around the world. 64 On the other hand, the profree traders were strongly critical of the protesters, depicting them as mindless, because they did not want free trade tied to labour rights: Thus, from a neo-liberal perspective, measures promoting a link between labour standards and trade are an ill-considered perversion of the inevitable and desirable diversity in labour standards and practices across countries. 65 The effect of lobbying by free marketeers has been to weaken the role of the International Labour Organisation (ILO), the supranational body concerned with labour standards. The impact is affecting not just developing countries but developed countries too, as can be seen by initiatives designed to transform labour relations in the interests of employers. 66 The ILO occupies a leadership role, but its powers are limited to moral suasion; it does not possess enforcement powers. The World Trade Organisation (WTO) is the only international agency with the power to pressure nation states into compliance with basic human rights standards but it has disclaimed responsibility. 67 At present, a world-wide obligation that is enforceable can only be effected through multilateral agreements. 68 As the power and authority of many transnational corporations now exceed that of nation states, this is unlikely. The social clause entails exporters complying with a set of agreed minimum labour standards. There are only four core labour rights: the prohibition of forced 60

Nyland, C and O’Rourke, A, ‘The Australia-United States Free Trade Agreement and the Ratchetingup of Labour Standards: A Precedent set and an Opportunity missed’ (2005) 47 J Industrial Relations 457 at 459. 61 Ibid at 463. 62 Burgess and Macdonald, above n 24 at 149. 63 Quoted in Kabeer, above n 47 at 31. 64 See, eg, Summers, above n 11; ‘Anti-APEC Protests stop Sydney CBD’ 65 Haworth, N and Hughes, S, ‘Trade and International Labour Standards: Issues and Debates over a Social Clause’ (1997) 39 J Industrial Relations 179 at 188. 66 Workplace Relations Act 1996 (Cth); Workplace Relations Regulations 2006 (Cth). Australian Prime Minister Kevin Rudd moved to curb the most egregious manifestations of WorkChoices the Workplace Relations Amendment (Transition to Forward with Fairness) Act 2008 (Cth). 67 Summers, above n 11 at 89-90. 68 Wolfgang and Feuerhake, above n 56. 9

labour, the prohibition of child labour, the right to equal treatment at work and the right to free association and collective bargaining. The first two rights are uncontentious. In the abstract, equal treatment at work is uncontentious, although this is likely to be quite different in practice. Provided that everyone is treated equally badly, there appears to be no problem. I have already drawn attention to the contention surrounding unionism and collective bargaining, the concern being that there will be pressure to improve wages and conditions. As Summers points out, the core labour rights are all human rights: The issue is not simply one of economic efficiency − but one of humanitarian concern, whether free trade serves to promote or deny basic human values. 69 However, if globalisation has hastened the advent of the ‘posthuman’, human rights are necessarily dispensable, a point I illustrate in the next section Equality Measures Anti-discrimination legislation was enacted in accordance with the norms of social liberalism to address inequality on certain grounds. I have argued elsewhere that the legislation is a limited mechanism for effecting equality because of its narrow conceptualisation, individualised focus, numerous exceptions and limited interpretation of the remedies provisions. 70 I will show how the global norm of economic inequality is undermining anti-discrimination legislation and rendering the attainment of justice even more elusive. While social liberalism proscribed discrimination on certain grounds, including race, sex, disability, sexuality and age, discrimination based on wealth has never been proscribed. However, it is economic inequality that underpins and sustains other forms of inequality, particularly in respect of race, sex, disability and age. The omission attests to the formalistic interpretation of equality that is favoured over a substantive interpretation. 71 It is the opportunity that is privileged in the phrase ‘equal opportunity’, not equality. After thirty years of operation, anti-discrimination legislation had begun to be grudgingly accepted, at least so far as individual complaints are concerned. This acceptance has been largely restricted to the formalistic understanding of equality, as measures designed to effect substantive equality, such as affirmative action, remain highly contentious. That is, provided that there is equality at the starting point, the equal treatment prescript is satisfied even if the outcome is grossly inequitable. As already suggested, this interpretation of equality suits the prevailing free market rhetoric very well. It legitimates acts such as the $33.5 million salary paid to the CEO of the Macquarie Bank. The assumption is that any qualified person is eligible to apply to become an employee of the Macquarie Bank, and provided that all are treated fairly in regard to their race, sex and other specified characteristics of identity in appointment, promotion and access to training, the exorbitant salary paid to an employee who, as CEO is in a category of one, does not violate the nondiscrimination principle. The status of anti-discrimination legislation, like human rights generally, is changing due to the transformation of the workplace arising from the conjunction of neoliberalism and globalisation. Rather than focusing on workers’ rights, a key development of the 20th century, the 21st century has seen the political pendulum 69

Summers, above n 11 at 68. Thornton, M, The Liberal Promise: Anti-Discrimination Legislation in Australia, Oxford University Press, Melbourne, 1990. 71 Glasbeek, above n 30, p 21. 70

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swing back to a scenario reminiscent of the 19th century where the employer exercised untrammelled power in the workplace. This means that even formal equality is under threat, as new manifestations of racism, sexism and other forms of discrimination are played out. The move away from stable, full-time employment has also made it much more difficult to lodge a discrimination complaint. There may be no identifiable employer (particularly if one’s status has been changed to that of an independent contractor); there may be no comparator − real or hypothetical − and the power of the employer to fire a worker at will renders complainants conspicuous and vulnerable. The shift from industry-wide awards to enterprise and individual agreements has meant a suppression of knowledge about conditions of work. This raises the probative burden to a level where it is virtually insuperable for an individual alleging discrimination by a corporate respondent. In such cases, it is easier for the person aggrieved to leave than to lodge a complaint and assiduously pursue it, particularly if employed on a casual basis. As a result, the number of complaints has dropped significantly, with few proceeding to formal hearing. The phenomenon of inflated salaries being paid to a small class of very rich people, counterpoised against a growing class of working poor, with an insecure and debt-ridden middle class in between, has served to normalise discrimination and desensitise the community towards it. The Jurisprudence of Inequality Australian anti-discrimination legislation (apart from the Racial Discrimination Act 1975 (Cth) (RDA)) includes provision for an exemption from the equal treatment principle. Exemptions are granted for a specified period and normally have a beneficent or protective element that promotes the aims and objects of an Act comparable to a special measure. 72 The startling change that has occurred in the 21st century is the overt tendency to privilege the interests of the market over the social harm of discrimination, even if the effect of the exemption is to undermine the raison d’ệtre of the Act itself. Several instances relating to race discrimination post-9/11 have arisen because of Australia’s desire to be competitive on the world stage, while not offending the dominant world power, the United States. 73 The granting of these exemptions is a striking manifestation of the way the market has become what Roberts has termed the metanarrative of our time. 74 It is also notable that the hearings proceeded with remarkably little public attention, attesting to the normalisation of discrimination within a market context. The hearings involved a series of applications by several powerful defence contracting companies and their affiliates, including Boeing, Australian Defence Industries (ADI) and Raytheon, which sought exemptions on the ground of race from Australian State and Territory anti-discrimination Acts. To obtain access to United States aerospace technology, which the companies argued was essential to fulfil their contractual obligations, it was necessary to comply with United States International Traffic in Arms Regulations (ITAR). ITAR denied access to foreign nationals from certain proscribed countries, including Australian citizens with dual nationality. Compliance meant that the companies would violate the Australian legislative 72

Eg, RDA s 8(1). A comparable issue has also arisen in Canada. See Rice, S, ‘Discriminating for World Peace’, Working Paper 2007-15, Division of Law, Macquarie University, 2007, p 7. 74 Roberts, P, ‘Rereading Lyotard: Knowledge, Commodification and Higher Education’ (1998) Electronic Journal of Sociology 73

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proscription against race discrimination. The situation was not covered by United States employment discrimination legislation, which proscribes race discrimination extraterritorially only when it is for the benefit of United States citizens who work for a United States company. On its face, it would seem to be impossible to argue that granting such an exemption could in any way be said to promote the interests of anti-discrimination legislation, yet the various tribunals hearing the applications have repeatedly granted them. The legislation generally does not specify criteria for the granting of an exemption, but leaves it to the discretion of decision makers. 75 To fill in the gap, they have rediscovered that hoary old phrase ‘the public interest’, a classic example of what Julius Stone refers to as a category of illusory reference. 76 In the past, decisions arising from complaints of discrimination referred to the ‘public mischief of discrimination’, 77 whereas the contrary position is now taken in the exemption cases. New South Wales, 78 Victoria, 79 Queensland, 80 South Australia 81 and Western Australia 82 have all accorded considerable weight to the public interest, which has been construed to encompass economic interests that trump discrimination on the ground of race. The Australian Capital Territory was the only jurisdiction to refuse an exemption (to Raytheon), which is subject to review by the Australian Capital Territory Administrative Appeals Tribunal. The Commissioner, supported by the Human Rights Commission Act 2005 (ACT), was of the view that other jurisdictions had failed to give due consideration to the ‘profoundly damaging effects of race discrimination (individual as well as systemic)’. 83 The Northern Territory also proposed to reject an application by Raytheon, but it was withdrawn. The Commissioner nevertheless published what would have been his decision, firmly stating that the public interest would be ‘better served by the avoidance of racial discrimination. 84 I will consider the typical approach adopted by the State agencies. In the ADI application to the Victorian Civil and Administrative Tribunal (VCAT) in 2004, for example, McKenzie DP cursorily adverts to ‘possible race discrimination’, 85 but appears to accord the issue short shrift. She granted the exemption ‘because there are significant aspects of the public interest which support its granting’ (§48). (It is notable that the application was unopposed). The stance adopted by McKenzie DP is noteworthy because she presided over an application for exemption a decade before in which she developed criteria for the granting of exemptions. 86 These oft-quoted 75

The Regulations made under the NSW Anti-Discrimination Act in 2004 now specify criteria that include reasonableness, necessity, non-discriminatory ways of achieving the objects of the exemption, measures taken to reduce the adverse effect of the action, and ‘the public, business, social or other community impact’ of the proposed exemption. 76 Stone, Legal System, p 263 ff. 77 Xiros v Forbes Life Assurance Ltd (2001) 115 FCR 306, per Driver FM at 326. 78 Three-year exemptions were granted by the NSW Attorney-General to Boeing and ADI. See NSW Government Gazette, No 25, 11 February 2005 and No 81, 1 July 2005. 79 Raytheon Australia Pty Ltd (CAN 063709295) & Ors Exemption Application (Anti-Discrimination) [2007] VCAT 2230. 80 Exemption Application re: Raytheon Australia Pty Limited & Ors [2008] QADT 1. 81 Application for Exemption: BAE Systems Australia Ltd [2008] SAEOT 1; Application for Exemption: Raytheon Australia P/L & Ors [2008] SAEOT 3. 82 Commissioner for Equal Opportunity v ADI Limited [2007] WASCA 261. 83 84 85 ADI Limited (Exemption) [2004] VCAT 1963 (5 July 2004). 86 Stevens v Fernwood Fitness Centres P/L (1996) EOC ¶92-782 (Vic EOB). 12

criteria included regard to the appropriateness of the exemption, the circumstances of the case, reasonableness and relationship with any of the statutory exceptions. Most significantly, commercial advantage was viewed as being outside the ambit of the discretion: ‘if exemption is sought for reasons wholly unrelated to the objectives or scheme of the Act (such as commercial advantage), an exemption would be inappropriate’. 87 Contrary to the principles developed in Stevens v Fernwood Fitness, the more recent ADI and Boeing decisions all refer to the fact that the companies are currently generating substantial profits. 88 The Western Australian State Administrative Tribunal (WASAT) in an ADI application identified the economic factors as the number of jobs involved, the loss of the production of defence equipment, the effect on the broader economy of Western Australia and the impact on tertiary sector funding. 89 WASAT was of the view that granting the exemption was the only way to control properly the adverse consequences (§163). The tribunal paid scant attention to the discriminatory effect of the exemption in respect of race. Once the precedent had been set and an exemption granted, tribunals subsequently found that it would be ‘inequitable for an exemption to be given to some, and not to others competing in the same market’. 90 The inequity in respect of racism was accorded short shrift. The normalisation of the use of the exemption power for economic benefit is borne out by the fact that the applicant companies are now applying for further exemptions after the expiry of the initial terms. In the Boeing application to VCAT for a second 3-year term, 91 Morris J did not accept the criteria that had been devised elsewhere, including the public interest, but came up with his own ‘succinct test’, that is, ‘whether the proposed exemption is necessary or desirable to avoid an unreasonable outcome’ (§34). However, ‘unreasonableness’ is another category of illusory reference. Julius Stone described ‘reasonableness’ as ‘slippery and even treacherous’, 92 a descriptor that must apply no less to its antinomy. The unreasonableness of not allowing the exemption emerges directly from the competing interest pertaining to the Realpolitik of international relations. In an unusually frank acknowledgement of the power discrepancy between the United States and Australia, Morris J likens the United States to the elephant in the room: ‘Like it or not, the United States is the world power and controls key aerospace technology’ (§42). While he acknowledged that acquiescence would compromise human rights standards, failure to comply would mean ‘the potential sacrifice of jobs, economic benefits, defence capability and higher education advantages’ (§42). Thus, the granting of the exemption on this occasion, as with the other applications, turned on the material benefits that flowed from the contracts. The decision to use United States technology, described as ‘the best available’, 93 was made by the Australian Government without resolving the question

Ibid at 78,805. At the time of the application by ADI to the WA Administrative Tribunal, 49 agreements were generating $400,000,000 in sales revenue. See ADI and Commission for Equal Opportunity [2005] WASAT 259. 89 ADI Ltd v Commissioner for Equal Opportunity [2005] WASAT 259. 90 Raytheon Australia Pty Ltd (CAN 063709295) & Ors Exemption Application (Anti-Discrimination) [2007] VCAT 2230. Cf Exemption Application re: Raytheon Australia Pty Limited & Ors [2008] QADT 1; Application for Exemption: Raytheon Australia P/L & Ors [2008] SAEOT 3. 91 Boeing Australia Holdings P/L VCAT 2007. 92 Stone, Human Law, p 328. 93 ADI and Commissioner for Equal Opportunity [2005] WASAT 259, §69. 87 88

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of race discrimination, 94 and the applicant companies claimed that they had no choice in the matter. There is nevertheless no evidence of pressure being placed on the Australian Government to take up the issue of discrimination at the diplomatic level. The Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (AMWU) submitted in the course of the Boeing hearing in Victoria that pressure should be applied to the United States Government to back down. Morris J stated that he was doubtful that it would back down in the face of a decision from VCAT (§41). The question whether pressure ought to have been exerted through the Australian Government does not seem to have been otherwise canvassed. In contrast, the ACT Human Rights and Discrimination Commissioner, in denying the exemption to Raytheon, undertook to make submissions to both the Australian Government and the United States State Department regarding ITAR’s discriminatory terms. 95 Morris J sought to play down the racist element in the discrimination against ‘a national of a third country’, which he construed as being synonymous with discrimination on the basis of citizenship. He suggested that nationality/citizenship might be a ‘less offensive basis for discrimination…as a person can often exercise more control over their citizenship’ (§25). This is despite the fact that nationality is clearly included in the broad legislative definition of race discrimination that has regard to its social construction. The prejudice against Others, particularly Moslems post-9/11, appears to be a sub-text of the new racism that has been absorbed into the market discourse. In fact, there was nothing subtle about the distinction between the favoured and disfavoured categories of nationals in the workplace, as employees were required to wear a badge identifying them as American, Australian or Canadian. Morris J pays no attention to what might be considered a just outcome in the circumstances, particularly when the granting of the exemption had the potential to legitimise a racialised and hostile workplace. The granting of exemptions condoning racial discrimination in an instrument proscribing race discrimination is prima facie unjust and inequitable. The readiness to accede to the applications in the face of a market-based rationale not only undermines the non-discrimination principle, but hastens the process of unravelling it. Ironically, this is occurring in an environment where the discourse of human rights has become more pronounced. 96 Conclusion If transnational corporations now rule the earth and nation states have declined in importance, justice for racialised Others appears to be more elusive than ever. I have shown how domination by the market has induced a resiling from the equality prescript underpinning anti-discrimination legislation. Not only has the lodgement of complaints become structurally more difficult as workers’ connection with the workplace becomes more tenuous, but the normalisation of inequality legitimises less favourable treatment. Also notable is the way that law is complicit in entrenching the new racism in the interests of the market. Law and power have all too often formed a liaison in opposition to justice. Hardt and Negri show that global society has been subsumed under capital so that there are no longer clear lines that allow the inside to be distinguished from the outside. The immanence of the power of capital would seem to allow little scope for orchestrated opposition.

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Rice, above n 73, pp 8-9. 96 Human rights legislation now exists in Victoria (Charter of Human Rights and Responsibilities Act 2006) and the ACT (Human Rights Commission Act 2005), and is being debated at the federal level. 95

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Despite the best endeavours of social liberalism, the new imperialism is exacerbating social inequalities The way racism may now be invoked to delimit profits or enhance fears of terrorism illustrates the point. Ironically, as philosophers have turned away from equality as a key normative value of liberalism, it has surely become more important than ever, as Christiansen observes: [I]t is precisely because contemporary society is a society of unequals that we cannot do without equality’s being the goal, or, more to the point, the basis, of a just society. 97 This immanence of global capital suggests that we are wrestling with something intractable and profound. Because it lacks a material form and is not a suable entity, the positivistic tools of liberal legalism cannot deal with it. The way that judges are now prepared to pay scant attention to the proscription against racial discrimination in the interests of the market in the exemption applications underscores how difficult it is to resist an ideology that has entered the very soul of society. However, I do not want to end on a nihilist note. The rapidity of change, one of the characteristics of globalisation, suggests that its very success must contain the seeds of its own destruction, just as empire begins to decline at the very moment of its rise. 98 It may be that the recent experiences of communism in Eastern Europe and China have temporarily rendered the idea of alternatives unimaginable, but global capitalism is not inevitable, despite its imperial veneer of naturalness and rightness. Foucault’s insight that power comes from below gives us a skerrick of hope. 99 The notion that power inhabits the capillaries, as well as the heart and head, sustains an ongoing struggle for justice. While Foucault recognised the immanence of disciplinary power through the body politic (the idea of biopower), 100 global capitalism exceeds the magnitude and intensity of the regimes of institutional power of the past. Foucault’s take on this phenomenon would be that the imperialism of the global market necessarily invites resistance. 101 This is attested to by demonstrations throughout the world. Albeit not notably successful in restraining the reach of global capitalism, demonstrations by ordinary people have drawn attention to its injustices and inequities. As scholars, we must turn our attention to new ways of thinking about how the cherished norms of justice and equality can be invested with new meaning within an unstable and uncertain world. Although the power of global capitalism has effected a contraction of civil society at the municipal level so that there is less space for critique, teaching and writing remain the primary sites of resistance for legal scholars; we do not have to take to the streets. 102 Julius Stone lived through the cataclysmic events of the 20th century but did not abandon faith in the pursuit of justice through scholarship. He recognised that justice was to be found everywhere, including in the most inhospitable places. 103 We would do well to keep this in mind rather than 97

Christensen, ‘Equality and Justice’ 161. Hardt and Negri, above n 12, p 392. 99 Michel Foucault, The History of Sexuality. Volume One: An Introduction (trans Robert Hurley), Penguin, Harmondsworth, 1981, p 94. 100 Ibid at 140. 101 Ibid at 95. 102 Martin, B, Justice Ignited: The Dynamics of Backfire, Rowman & Littlefield, Lanham Md, 2007. 103 Stone concludes Social Dimensions with a reference to justice being found even in the wilderness (p 798), an observation also made by Baxi, above n 39, p 5. 98

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supinely defer to globalisation’s imperial message that the market is the measure of all things.

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