Reviews | The continuing damage of so-called corporate-run free trade
The great progressive Harvard economist and prolific best-selling author, John Kenneth Galbraith, wrote that “ideas can be superior to vested interest. They are also very often the children of vested interest.” I wish he had written that statement before taking Economics 101 at Princeton. One of the acquired ideas taught as dogma at the time was the theory of comparative advantage developed by the early 19th century British economist David Ricardo. He gave the example of the exchange of Portuguese wine for British textiles, with both countries gaining due to their superior efficiency in producing their native goods.
A common theme in Berry’s warnings is that monetized corporations, in their fierce pursuit of profit, are destroying or undermining far more important non-monetized democratic values of corporations.
Ricardo’s theory has driven politics and political power for two centuries, fortifying corporate and conservative proponents of so-called “free markets” (see: Busting the Myths of Market Fundamentalism) and “free trade”. The theory’s endurance was remarkably resistant to clear empirical evidence to the contrary. Whether Ricardo envisioned it or not, “free trade” has become an instrument of colonialism entrenching poor countries in the extraction and export of natural resources while becoming almost totally dependent on countries’ value-added manufactured goods. Westerners. “Iron ore for iron weapons” as one observer sums it up. Tragically, too often the weapons have come with the invaders/oppressors.
Fast forward to the current supply chain crisis disrupting trade flow. Why does the world’s biggest leader in economics and technology have a supply chain problem forcing businesses and consumers to wait helplessly for simple and complex goods to arrive on our shores? Why did we find ourselves in March 2020 desperately waiting for an Italian factory to sell us simple protective equipment to protect patients, nurses and doctors from the deadly arrival of the pandemic? Answer: the vaunted theory of comparative advantage embodied in so-called “free trade”.
In reality, there is no such thing. It’s business-run commerce under the guise of “free trade”. As Public Citizen lawyer Lori Wallach asked her audience, while brandishing large volumes of NAFTA and WTO trade deals: “If it’s free trade, why is there does he have all these rules pages?” Because they are corporate rules that often have little to do with trade and everything to do with subordinating the rights and priorities of workers, consumers and the environment.
These deals, struck in secret, have seen them lower higher American standards in these areas instead of seeing them pull up slave labor, polluting factories and consumer abuse in authoritarian countries. The corporate-run trade leads to inherently dangerous dependencies, such as the lack of antibiotic production in the United States, which imports these and other essential drugs from unregulated Chinese and Indian labs. The supply chain is linked.
A remarkable take appeared in a long essay titled “The idea of a local economy“twenty-one years ago by the agrarian sage, Wendell Berry, who used a larger framework demonstrating the so-called ‘free trade’, under the monetized control of corporations over governments, ignorant media and academics still under contract with Ricardo’s theory, he did not go to the obvious, namely that products imported from countries of bondage are opportunities for companies to make even more profits by maintaining high prices. , note the high prices of computers, iPhones, electronic toys and Nike shoes made in Asia and foreign motor vehicles sold to American consumers.This imbalance allows Apple boss Tim Cook to pay himself $ 833 a minute or $50,000 an hour. The margins on these products are staggering, but not as staggering as the plight of Apple’s million serf workers in China.
Berry sheds new light on the deception called “free trade”, namely: “Unsurprisingly, among people who wish to preserve things other than money, for example, each region’s native ability to produce essential goods , there is a growing perception that the global market “free market” economy is inherently an enemy of the natural world, human health and the freedom of industrial workers, farmers and others in the economies of land use, and further that it is inherently an enemy of good labor and good economic practice.”
Farmer-thinker Berry has listed many flawed assumptions behind corporate world trade. A few follow:
- “That there can be no conflict between economic advantage and economic justice.”
- “That there is no conflict between the ‘free market’ and political freedom; and no connection between political democracy and economic democracy.”
- “That the loss or destruction of the ability to produce needed goods anywhere is irrelevant and involves no cost.”
- “That it is normal for the livelihood of a nation or a region to be based abroad, dependent on long-distance transport and completely controlled by corporations.”
- “That cultures and religions have no legitimate practical or economic concerns.
- “That wars over commodities – our recent Gulf War, for example – are legitimate and permanent economic functions.
- “That it is normal for the poor in poor countries to work with starvation wages to produce goods for export to the rich in rich countries.”
- “That there is no danger and no cost in the proliferation of exotic pests, weeds and diseases which accompany international trade and increase with the volume of trade.”
A common theme in Berry’s warnings is that monetized corporations, in their fierce pursuit of profit, are destroying or undermining far more important non-monetized democratic values of corporations. This, in turn, leads to the suppression of impoverished societies on the ground where people live, work and raise their families.
This is why unlimited, unbridled greed, whether formed of empires or domestic plutocrats, eventually produces convulsions that devour their mass victims and themselves.