from article written in 1995...
FREE TRADE DEPRESSIONS
- Why GATT/NAFTA must be renegotiated and Compensating Tariffs Employed –
"Abandonment of the protective policy by the American government must result in the increase of both useless labor, and idleness; and so, in proportion, must produce want and ruin among our people."
It is now evident that, due to costly and irrational free trade that the economic engines of world prosperity, freedom and democracy – i.e., the G7 countries – are being ruined, hollowed out, and rendered abjectly dependent.
The chief reason is that nearly every manufacturing and high-tech service job can now be exported to China and/or India… and will be given the perverse "race-to-the-bottom" incentives of the current, corrupt, GATT/NAFTA, trade regimes.
The question now is whether we, and "our" representatives, will stand by and watch as the First World economies, and centuries of social progress, are slowly reduced to ruin and every advantage is given to totalitarian and undemocratic powers, and their legions of exploited neo-slaves, upon whom we are fast becoming dependent.
In toto, what we are witnessing is no less that the greatest, involuntary, transfer of wealth and power in the history of the world – all due to a trade regime within which we are forced to trade with the greater slave, regardless of consequence or end result. In the corporate media, no one is asking trade with whom, on what terms, and to what end? In addition, no dismal result is ever ascribed to “free” trade - much like the Fed is never blamed for the Great Depression and the Smoot-Hawley bogeyman is touted as cause one.
Indeed, it is Free Trade Uber Alles today, and for free traders their imagined ends justify their fascist, undemocratic, means which, as a result, mean endless social and economic cost. All in all, these “free” policies mean a demise resulting in the most expensive trade possible in which both economic benefit and social power are privatized to the few while all the immense costs are socialized upon the many.
Current trade policies are neither intelligent economy nor the result of majority rule but, rather, reflect a religious-like absolutism - a naïve and perfidious faith in the service of Capital alone. Despite ever-growing trade deficits, job losses, dependency upon imports, phony export statistics, doctored employment statistics, and willingness to undermine our currency "in order to compete," free traders go on pretending there is nothing wrong with our mounting deficits, loss of capacity, and all the myriad social costs on this paved road to depression.
Indeed, free traders have no answers to growing deficits or the potential loss of nearly every industry, only a blind and irresponsible faith in a centuries-old English, imperial, dogma unfit for a still very disparate and dangerous world – i.e., one in which capital now moves at the speed of light. Even US intelligence agencies are now warning that globalization has become a serious threat to US security due to its unwanted, negative, effects on economies around the world. In other words, “free trade” and globalization are breeding global dissent, terrorism, oligopoly and oligarchy.
Firstly, for trade to be truly free you have to be free not to trade, otherwise it is forced trade. Worse, no morality, freedom, justice, human rights, child labor, or ecological impacts are considered or calculated – meaning the regime is a clear recipe for universal loss. Under capital’s GATT/NAFTA, even our energy–efficiency standards are a crime, as are recycling laws, attempts to protect family farmers, and virtually any Buy-American effort or legislation.
In short, in a still very disparate and dangerous world - wherein huge magnitudes of differences in wages, standards and human rights exist - to have virtually no incentives working to improve rather than reward the greater slave and their worse conditions, is simply to reward the criminal, the dictator, the terrorist, the Red Chinese generals, all the greater exploiters of mankind and the environment, and punish the free, democratic, and ecologically responsible.
It is utter perversity to give away entry into our G7 markets and get nothing in return – except the promise of evermore lob loss, lower currency values, corporate hegemony, and endless rewards for the greater-slavemaster. Yet this is capital’s criminal nonsense, which is guaranteed to end in riot, revolution, and new pogroms against the rich… as Karl Marx predicted.
To avoid depression, the concept of "comparative advantage" (i.e., a 250 year old amoral theory once appropriate for agricultural products in a world where capital was relatively stationary) must be re-mediated by truly free, democratic, and ecologically responsible countries and policies. Otherwise, neo-slavery, child labor, ecological ruin, and currency destruction are "advantages" which cannot be lost by economies forcibly turned into export machines - only to generate huge overcapacity, dependency, local and global ruin, and our complete capture and enclosure by capital.
In my book Cap-Com, The Economics Of Balance, I propose a re-writing of GATT/NAFTA to give nations, and the great majority of wage-earning people, the freedom to define their 'free markets’ - as opposed to Capital having all the power to define the terms, dictate the legislation, and then extort the wage-earning majorities of every country. This despicable, undemocratic, regime is guaranteed to pervert economy, ecology, freedom, and lead to riot and revolution as the backlash to forced globalization gathers steam.
Only if the congresses of the most representative bodies (those representing wage-earning majorities) of the G7 countries re-group and change the perverse nature of today’s costly trade regime will we avoid ruin, global oligopoly, and full enclosure by capital.
In a still very disparate and dangerous world, compensating tariffs (defined by boards on which capital and labor are equally represented) will enable countries to decide how they want their economies shaped and mediated into a global economy. A "goldie-locks" approach to getting tariff levels just right - in order to preserve economic diversity and local freedom, and grant greater market entry only as foreign wages, standards, and democracy improve - is what is sorely needed. Using currency adjustments – i.e., intentionally demolishing the value of our own currency - instead of temporary, rifle-shot, tariff measures to balance and incentivize trade, is ruinous idiocy.
Why not a race to the top instead of the bottom? What is the comparative "advantage," or sense, in competing to be the greater slave under the thumb of capital?
In a smart and responsible trade regime – one fit for a still very disparate and undemocratic world - rifle-shot tariff adjustments are needed rather than a blunder buss, currency ruin, approach serving to destroy everyone’s wealth and raise the cost of imports. This not only cancels all previous "free" trade gains but does not guarantee any increase in exports… as we have already seen..
Further, in a fossil-fuel world in which we are busy destroying nature, Distance Tariffs are needed, and easily applied, to give some advantage to products which travel only a few miles to market versus those which travel 5-10,000 miles in fossil-fuel conveyances. As things stand, however, we are not only losing our jobs, capacity, historic independence, and currency values but also rewarding the destruction of our atmosphere and climate.
Clearly, global companies can always get their global markets by producing and selling in many countries. The problem is with the tariff-free re-entry of goods and services into G7 countries – which then serve to undermine First World economies, wages, values, productive capacity, and subvert freedom itself. There is little problem with tariff-less trade between G7 countries of proximately equal wages and social standards. It is integration between First, Second and Third world countries, and global exploitation by multinationals, which needs intelligent, responsible, upward-moving, and democratic mediation as well as intelligent tariff application.
True trade freedom, also meaning tariff freedom, will allow for more companies, competition, and innovation to remain and emerge as opposed to defaulting to a few global companies and global oligopoly – a sorry condition certain to mean greater prices, less competition, less diversity and innovation, and erase any and all the early benefits of trade. We might not have an American steel industry today but for Abraham Lincoln’s tariff on British steel, and President Bush’s recent moves. Are we to deny the same rational and responsible freedom to Indonesia or Egypt, for example?
Despite the obvious problems and immense costs of so-called free trade, Capital’s stranglehold on media has made being a "protectionist" a kind of crime – this despite our having armies, police forces, and neighborhood watch programs for obvious reasons. We also hear fairy tales about Smoot-Hawley creating or prolonging the Depression. We are also told we are consumers only and never citizens with a right to define the marketplace. Capital’s Big Lie is now pervasive, perfidious, and dismal.
In short, given a still very disparate and dangerous world, if you’re not a rational protectionist then you’re an irrational, irresponsible, and fascist Exposure-ist. This means you are willing to expose virtually every piece of freedom, wealth, and First World progress to evisceration and reward the greater slave masters for their superior exploitation of mankind and the environment.
So you want to be an Exposure-ist?
For reasons of democracy alone GATT-NAFTA needs to be re-opened. In fact, GATT-NAFTA came as a result of a virtual coup d’etat by capital. Legislation was passed in the dark of night, five days after the 1993 election in which this incredibly important topic was never mentioned, was buried in capital’s media, and passed with the help of 100 lame ducks in Congress - who, having just been un-elected, should never have agreed to vote on such an important topic. Moreover, polls then showed 87% of the people opposed NAFTA.
The process itself was thus criminal. At the time, Ralph Nader tried to get members of Congress to answer 10 simple questions about what was in the trade treaty. Only one representative took him up on the test. When he failed, he changed his vote to No as a result. As for the 534 others, this monumental legislation was not even read, much less understood, by "our" own representatives – yet another crime.
As the picture worsens, our own "labor" department quietly dropped its Corporate job-loss report recently since the dismal figures are too embarrassing and "our" companies need secrecy and protection from public opinion - all while they "restructure" and “outsource” our jobs offshore, only to drive us further into depression, deficit, and present us with a fait accompli.
In an era of obscene CEO wages, Wall Street crime, Enron-style corporate misfeasance, and extorted labor forces, not only nations but our states as well are being bankrupted, drained of productive capacity, tax bases, and forced to pick up all the myriad costs at the same time.
Today, we need new ideas, and real democratic processes, in determining trade policy. Why not a Foreign-Employee tax, Restructuring Tax, Distance Tariffs, Excess Profits Tax, Stock Options Recapture Tax, etc. while management is perversely rewarded for exporting jobs, ruining lives, and undermining the U.S. economy?
The real problem is the capital-defined GATT-NAFTA system. Under this regime we can’t expect business to do anything but de-employ the G7, and employ China and India, in order to compete with other companies forced by a perverse trade regime to do the same thing – all because they can, because there exists no compensating tariffs or taxes, and the people are then forced to bear the immense costs and social burdens of a corrupt trade regime.
With forced free trade, Capital has us by the balls. We are even told there is nothing we can do and that we must accept a corrupt and undemocratic globalization. We are to prostrate ourselves and accept capital’s ugly and irresponsible regime. We must become good neo-slaves in their global cage. Incredibly, some even imply we are “terrorists” if we protest a corrupt and self-defeating globalization - audacious nonsense from today’s totalitarian capitalists.
It is evident we live in a raging global oligarchy today in which our representatives and Beltway whores serve ruling-elite Banksters alone, while the wishes and opinions of the vast, wage-earning, majority are buried and ignored. This is why three un-elected guys in Belgium now meet in secret trade panels and decide America’s fate – from which there are no appeals.
Meanwhile, with corporate media, you can listen to endless "Nightly Capital Reports" about the evils of protectionism without hearing one "Nightly Labor Report" or alternative trade idea. Wake up America and G7 citizens, the "giant sucking sound" is now turning into a whirlwind of loss and destruction.
Kent Welton, OligarchyUSA.com