Sunday, January 27, 2008

The myth of free trade...

I've been struggling with the idea of globalism - whether it truly is the way to 'raise all boats' or is it just another way of exploiting the masses.
Most economic theorists argue the former: that free trade and access to markets benefits both the advanced and developing economy. Something has always bothered me about this purported axiom ... and it seems like someone with some credentials have spoken up:
Ha-Joon Chang is a Cambridge economist... His latest book: Bad Samaritans looks to be a good read. Truthdig has a review. Since I'm pressed for time, as usual, I'll excerpt it.
The new book is a discursive, well-written account of what he calls the "Bad Samaritans," "people in the rich countries who preach free markets and free trade to the poor countries in order to capture larger shares of the latter's markets and preempt the emergence of possible competitors. His central point (from the review I read) is that we (the west) preach the panacea of the free market and free trade -- but a look at our history clearly demonstrates that we didn't practice what we currently preach during our own economic development. In fact, all of the current economic powerhouses: S. Korea, the US, China, etc. ALL practiced protectionism and nurtured their indigenous industries with tariffs, subsidies and the like. In fact, even today the US subsidizes farming to an alarming degree -- while calling for 'free trade' with nations that have farmers who cannot hope to compete with our high-mechanized corporate farms.
We live in an allegedly enlightened age of free trade.  Nonetheless, European citizens support their dairy industry with subsidies and tariffs to the tune of 16 billion pounds sterling a year. This amounts to more than 1 pound per cow per day, when half the world's people live on less. The pattern is repeated with regard to a vast range of agricultural commodities grown in rich, developed countries. The U.S. subsidizes corn and exports it to Mexico, where it is the staple diet of most of the people. These exports, however, drive small Mexican farmers into bankruptcy and encourage their illegal immigration into the United States, where a racist backlash is directed against them. In many cases, the American proponents of farm subsidies are one and the same people who stir up hatreds against Mexican farm workers. Japan is one of the world's richest countries, with a remarkably even per capita income distribution, but it still lavishly subsidizes its extremely inefficient rice growers and prevents the import of rice that could easily compete on price with domestic rice.

With "Bad Samaritans," Chang has succinctly and comprehensively exposed the chief structures of economic imperialism in the world today. What is now required is the leadership to undermine and dismantle the barriers that keep so much of the world so poor.

I'm going to pick up the book.


skip sievert said...

Free trade as commonly described is a way to destroy the resource base of North America for profit.
It is based entirely on Price System logic of growth and destruction.

It is based in Babylonian civil society contract law. Private property and money making and taking.

It insures our destruction to no real purpose.

Intellectual Insurgent said...

You need a book to tell you what?

That there is no such thing as free trade when these trade agreements are one-sided, and are usually obtained at the barrel of a gun or by buying off the most corrupt members of society?

"Globalism", whatever that term is meant to mean, is a disaster for 99.9% of the humans on this planet. It only benefits the small numbers of those who control the central banks and stock markets.

Rick said...

I agree ... we pretend to practice 'free trade' while I'll gov subsidizes everything from wheat and tobacco to the pharmaceutical industry.

BTW -- Nice to be back home...