Thus the allegedly positive features of McDonald's are cited, but the environmental degradation associated with direct foreign investment in northern Mexico, the raucous behaviour of commodity traders, or the massive failures of markets to produce and disseminate information in recent financial crises are not. The earlier decades of phenomenal growth in East Asian economies are due to their enthusiasm for markets and their catastrophic collapse in a period of intense financial globalization is due to their excessive reliance on states. A more nuanced analysis of actually existing capitalism is needed. Third, the purported correlation between democracy and markets is overly simplistic. Corporations may offer support to dictatorships rather than civil society as the mutually beneficial relationship between Shell Oil and the Nigerian government illustrates.
Democracy is about much more than the rule of law.
Indeed laws can be used oppressively as for instance in states such as Nazi Germany. As the literature on regulatory capture has demonstrated, even in industrialized democracies powerful firms can use their resources to get laws and regulations granting them special privileges that violate the spirit of democracy. Many commentators have argued that the rights granted to investors under the North American Free Trade Agreement or to pharmaceutical firms under the World Trade Organization provisions on intellectual property rights are contemporary examples of this problem. As Held in Democracy and the Global Order has commented, it is nation-states not markets that have been the traditional locus of the practice and theory of democracy and the difficult challenge posed to this by globalization cannot be quickly solved by faith in the liberating potential of markets. Fourth, treating globalization as the solution for ethno-nationalism overlooks the degree to which the former contributes to the latter.