Trans-Pacific Partnership: Another Free Trade Agreement Causing Job Loss And Lower Wages

TMR Editor’s Note: First published on April 10, 2008, but still relevant today.

Free trade… try Democratic Trade

By Kent Welton

It is now evident that the NAFTA/GATT regimes (dictated by capital) have, like other stupid deregulations, generated far more costs and problems than the systems and regulations which they replaced… at immense costs to our economy, standard of living and national security.

First, “free trade” fails the democratic test, produced as they were in secret conclaves and foisted upon a purposely ill-informed public… by capital’s media, and voted upon by “our” representatives who did not even read the bills.

Clearly, the peoples of the First World G7 countries did not rise up and say, “please force me to compete with the greater slave and see to it that all the progress of the 20th century is wiped out in a ‘race to the bottom’ in order to reward an irresponsible and amoral capital.”

Indeed, the NAFTA and GATT regimes represent nothing less than a coup d’etat by capital. They have created a neo-fascist and totalitarian form of capitalism – one destined (as Karl Marx predicted) to produce reaction and revolution around the world.

This is the dismal current state of an effectively forced globalization today. The vast majority didn’t want it, didn’t ask for it, and didn’t vote for it. Free trade as we know it is thus corporate fascism pure and simple.

In short, it is precisely the wisdom and freedom of the people, within their local cultures and economies, that was forcibly overridden to our mutual peril and cost. Further, the notion of Comparative Advantage is a 250 year old concept fit for yesterday’s world – i.e., one without internet, jet planes, great mobility of people and capital, etc. Even David Ricardo recognized its limitations and caveats. Today even our own CIA states we are losing our freedom and security due to an ill-considered globabalization.

In general, a truly free and costless trade can really only take place between countries of equal wages, standards, and levels of development – otherwise the forced-trade relationships are problematic and worse, particularly in an age of instantaneous capital transfer.

The real problem is a capital-defined GATT-NAFTA system. Under this regime we cannot expect business to do anything but de-employ the G7 peoples, and employ China and India starving millions – all in order to compete with other companies forced by a perverse trade regime to do the same thing. This is done because they can, and because there exists no compensating tariffs or taxes, and the people are forced to bear the immense costs and social burdens of a corrupt and undemocratic trade regime.

With an effectively forced trade regime Capital has we, the people, by the balls. We are told there is nothing we can do and that we must simply 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 gulag. Incredibly, some imply we are “terrorists” if we protest a corrupt and self-defeating globalization – some 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 elites alone, while the wishes and opinions of the vast, wage-earning, majority are both hidden 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.

What the world needs now is a system of Free Tariffs, and truly free economies and free markets as defined by the majorities. In other words democratic free markets. By removing all incentives and incentivizing tariffs the First world has guaranteed it’s own reduction to second-world status or worse and depressions are inevitable under the current system – a corrupt setup which rewards the greater slave and authoritarian systems, punishes democracy and the environment and removes the people’s ability to define their own markets and cultures. And they call if free… and they call it a trade.

We forget that the US, Japan, and Germany did not become the worlds most powerful economies, with the highest living standards, via policies of free trade. Yet many believe the Smoot-Hawley hokum foisted upon us by the legions of economists serving the interests of the few and protecting the “Federal” Reserve from proper blame. The Big Lie is in full force today and so “protectionists” are akin to communists.

Today, however, more people and economists as well now understand that the whole “free trade” thing was a mistake – an utterly naïve and irresponsible move, and one not free for the great majority to define their systems and make them suitable for the local geography, culture, state of development, or for better human rights and environmental conditions, etc.

Freedom is for we, the people, not for markets controlled by the few or corporations licensed by the people. Tariff policy is freedom, not capital’s forced trade variety wherein we have given away our markets and economy, received nothing in return (save some lower prices for a few years, and now going up unlike our wages), and placed the world into the hands of totatitarian capitalists.

In my 1993 book, Cap-Com, The Economics Of Balance, I explored the history and ideology of free trade in depth and outlined a process and system suitable for a disparate world, – i.e., one in which compensating, and incentivizing tariffs were and are today both appropriate and rational. What we needed both then and today is smart and democratic trade policies, and not a forced trade regime defined by capital alone.

Due to a lack of such incentivivizing and balancing tariffs we now have huge trade deficits and we have lost capacity to produce and so are becoming abjectly dependent. Interdependent with whom, for how long, and to what end we must ask… but don’t.

As a result of a lack of smart trade and incentivizing tariffs, the world is now defaulting to global oligopoly – thereby decreasing competition, innovation, local freedom and, in the long run, guaranteeing higher prices due to fewer produers and currency depreciation.

Trying to balance trade with monetary policy is idiotic, and very costly as we are now seeing. Left with only currency depreciaton “in order to compete” we have seen our currency lose half its value in a few short years and yet the trade deficits and imbalances remain as high as ever. As a result of two decades of “free” trade we now have little or nothing left to manufacture and so trade in order to rebalance accounts.

As a result an undemocratic nation (China) has garnered tremendous leverage and power over the entire world – all due to a forced “free” trade. The idiocy of “engagement” leading to this dismal state should have been clear after Neville Chamberlain’s debacle. Now, China has more and more of our assets and can threaten us on monetary and trade policy due to their dollar reserves. Will we be working for Chinese Generals in the near future?

If you wanted to destroy the United States you could not construct a better regime to do so than “free” trade… amidst a still very disparate and undemocratic world.

As we now see, we, the fast-declining First World, are left to depreciate our currencies in order to compete in a downward, self-defeating, spiral, benefitting only the big multinationals. Instead of rifle-shot tariffs to fix and balance markets, and incentivize market openings, we punish everybody with lower currency values and rising import prices – thereby defeating any prior benefits from free trade. It is truly idiotic and irresponsible… but great for bankers and currency traders.

We haven’t yet mentioned the additional carnage of a global fossil-fuel trade – in which goods that move, say, 10,000 miles to market via fossil fuel vehicles are traded and treated the same as those which move only 100 miles to market. We thus reward the greater fossil fuel destruction of the environment – all due to a lack of distance tariffs (as proposed by this writer) – and all of which are easily calcalated and collected in our container-ridden ports of call.

Then there’s food and agriculture. We, and people around the world, don’t want chemical and genetic “frankenfoods” putting local farmers out of business so huge agribusiness can make everyone dependent upon their seeds and crops produced on latter-day latifundia complete with neo-slaves.

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 abjectly dependent.

In short, 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 an undemocratic 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, or to what end? In addition, no dismal result is ever ascribed to “free” trade.

Indeed, it is Free Trade Uber Alles 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 and 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 and terrorism.

Again, 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 effect, 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.

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 enclosure by capital. Only if the nations of the world have National Initiative processes whereby they can override “their” representatives corrupted votes can we then have truly free markets, free economics and free trade… as we, the people, like it.

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 simply ruinous.

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..

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. In general, there is little problem with tariff-less trade between G7 countries of proximately equal wages and social standards. But it is integration between First, Second and Third world countries, and global exploitation by multinationals, which needs intelligent, responsible, upward-moving, mediation and 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, 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.

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 it is evident we need new ideas, and real democratic processes, in determining our trade policy.

Kent Welton,

TheCenterForBalance.org