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The Case for Fair Trade

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 "Fair Trade" must be adopted as the trade policy of the U.S. for the sake of the survival of the U.S. working classes. If implemented correctly, it will result as well in an improvement of the living standard of workers throughout the world. This article will describe the deceptive and false premises used as an explanation of the need and justification for Globalization.The real motivation is an even more intensive exploitation of workers and resources worldwide. "Fair Trade" needs to  be accepted worldwide as the only suitable and equitable means of sustaining a high standard of living in the U.S., as well as an improvement in living standards worldwide. I will end the article with some of the changes in trade policy necessary to implement "Fair Trade".

  The theory of 'Globalization' is based upon the premise that there are three practices which are necessary to ensure optimal worldwide trade. They consist of 'free trade(the trading of goods and services with no duties, quotas, or other hindrances), free flow of capital, and the free flow of labor. The following paragraphs consists of a history of the evolution of "Globalization" and a description of the consequences to the working classes in the U.S. and overseas as these practices are implemented.

  Our "new"system of world trade, called "Globalization" is nothing more than "old wine in new bottles". The world has practiced "free trade" on and off for over 200 years starting with Great Britain's industrialization and the desire for uninhibited trade during this period. The British were at least astute enough to pursue it only at the times when they were the world's premiere trading nation. The U.S. started promoting it in 1944 under GATT, when the U.S. itself had become the worlds premier trading nation. But now, when  it has become the worlds least competitive trading nation, it still persists in pursuing this practice. The continuation by the U.S. of "free trade"will eventually result in the drain of all major assets from U.S.(including ultimately the money supply), and the pauperization of its working classes. 

  The second most fundamental practice which constitutes Globalization, namely the free flow of capital, has likewise been an issue during this same period. It was a concomitant to free trade necessary to facilitate it. It was, and still is, the method of financing trade deficits caused by free trade policies. This had resulted in the stripping of assets from those foreign nations who were unable to compete with the high-tech mechanized production of the Western developed economies and were forced to relinquish assets to finance their trade. This group includes the U.S. now that it too cannot compete with low-cost foreign producers.

   The financial problems of LDCs of today are the result of this takeover of assets. It had become clear that the advanced manufacturing countries would soon own all the natural resources of the LDCs which essentially represented the only inheritance of future generations. Some of the governments of these LDCs attempted to protect these assets by refusing foreign ownership of their most valuable properties, mainly those producing petroleum and minerals. Ultimately however, as these few assets were obtained by foreigners, these countries have had to borrow money from the west in order to further participate in world trade .

    The flow of profits from foreign-owned companies, as well as the proceeds from foreign debts, have resulted in a situation where almost all export earnings of these countries are consumed by these payments. The workers in export-oriented industries are simply working to support the citizens of other countries. That is the reason that the meetings of the WTO and IMF are accompanied by mass demonstrations whenever they convene around the world. These capital flows, if uncoordinated and uncontrolled, invariably lead to currency crises causing the ruination of the value of the currencies and the debasement of living standards of the citizens involved. The U.S. dollar will ultimately suffer this same fate, leading to a fall in the living standard in the U.S. as well as a decline in the prestige and power of the government.

   The last 'necessary' practice of Globalization is that of the "free movement of labor". Its sole intent is to create a pretense of equality and balance  to these other (unfair)practices, created  for the "benefit" of the working classes( who are in reality the victims of the scheme). The workers are told they can, or must, move to those countries where the work is currently being done if they want to work in those industries in which they have had their training and experience. Otherwise, they will have to work in the "service industries" which should, in the future, be called "servant industries" because they will eventually mainly consists of people working as servants to the rich.

   In the first place, this 'free movement of labor' is a flagrant and serious betrayal of the working classes by the U.S. government in that it is in violation of the spirit and intent of all law relating to the governments responsibility to provide suitable and maximum employment for American workers, enacted over the past century. It is in violation of the Fair Employment Act of 1941, the Employment Act of 1946, and of the spirit of numerous legislation in the sixties and seventies including the Civil Rights Bill of 1965. These Acts all stipulated that the government had the responsibility to support in every way employment of U.S. citizens. These laws have been flagrantly abused, and Globalization has completely invalidated them.

 As a matter of practicality, even if a U.S. worker could work overseas, somewhat like many Filipinos,Turkish, and South Koreans workers do currently, leaving their families behind to live off their foreign remittances, how could these remittances possibly pay for American workers normal current outlays such as for mortgages payments, health care expenses, and the provision of a college fund for their children? Overseas workers salaries are, for the most part, at best $4 or $5 per hour, which allow these workers, if they share quarters at the work site with 5 or 10 other foreign workers, to remit to their families perhaps $400 or $500 per month. This could hardly cover the expenses of an American family stateside. The only way to successfully effect this 'free movement of labor'would be for the worker, along with his entire family, to move overseas. This is absolutely the only way for the 'free movement of labor'to succeed considering the current worldwide wage scales. 

   The U.S. government has, in effect, suggested to the American worker to 'go east young man' with an added suggestion to 'don't bother to stop at the Atlantic' because there really aren't any jobs available for him here in the U.S. Implementing a international minimum wage would go a long way to avoid this brazen exploitation of labor and provide a level playing field for American workers. An international minimum wage would obviate the need for many workers worldwide to leave their families and attempt to acquire entry into the Western high-wage countries, as well as solve many of the recipient countries immigration problems.

   Just as a side issue, the U.S. government has done absolutely nothing to facilitate the securing of work overseas by U.S. workers, even if they had the the desire and finances to do so. While tons of foreign workers in certain select professions are flooding into the U.S., their counterparts from the U.S. are denied access to jobs overseas in the same countries whose citizens are acquiring work here. Their governments, or corporations(with the acquiescence of their governments) routinely prevent  Americans from working there because they are intent on preserving the jobs for their own citizens. Of courser, that is exactly what every government should be doing. The U.S. government, at the least, should be requiring reciprocity from these foreign governments. They are not making any attempt to do so. 

   A "Fair Trade" program can be effected by three policy changes. First, 'free trade'should be modified to allow a true float of the dollar and the establishment of an international minimum wage rate. This will prevent wage rate discrepancies to develop and the tendency of all production work to go to the 'lowest bidder'( the most poverty stricken and beaten down). Secondly, the free flow of capital should be regulated to prevent capital flight from destroying the money supplies of countries suffering from chronic trade deficits. For the LDCs in particular, this has caused an unwarranted and unfair drop in an already ultra-low prevailing wage rate. Thirdly, the free movement of labor should be limited to only those cases where trained workers are unavailable(not just highly paid!), and immigration policies should ensure this. All workers should have the opportunity to pursue their chosen profession in a fair competitive environment within their own country.

    It is time to throw out a government that has consistently ignored the interests of its own citizens. The Congress,as a body, must take responsibility for the poor treatment and betrayal of its working classes. If the Congress continues on this course the country will be ruined. My intention is to encourage the removal from office of all current members of Congress as a warning to future officeholders that the public will hold them accountable and have the power to do so. This can only be accomplished in the short run via the ballot, truly the sole democratic means currently available. I will be submitting a further article on this site suggesting how this can be done.


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Richard Backus is a journalist specializing in economics and politics.He has degrees in physics and engineering, and considerable experience in computer systems development. He is single, a good bridge player, and an enthusiastic tennis player.
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