When I was younger, I was both a
socialist and a supporter of 'free' trade. Both concepts make eminent
sense in an ideal world. Take away the complexity of real world affairs
and debate the benefits of either concept strictly philosophically, and
the 'no' side doesn't stand a chance. Unfortunately, or fortunately if
you have an ideological opposition to either or both concepts, neither
concept works in the real world -- in fact, they both backfire and make
things worse. The problem is that the elite wealthy and powerful who
control the media and most world governments are violently opposed to
socialism and selfish supporters of 'free' trade. So while the myth of
the viability of socialism as a workable political system has been
soundly and widely discredited, the myth of the viability of 'free'
trade as a workable economic system is cynically perpetuated by the
powers that be.
I've written
at length about why 'free' trade doesn't work: Why in a world of
massive, hidden government subsidies it creates a hugely unfair playing
field, how it leads to unaffordable prices for medicines in the third
world and hence causes immiseration and death, why it leads to a 'race
to the bottom' of social and environmental standards worldwide, how it
encourages unsustainable agricultural and manufacturing processes at
the cost of sustainable ones, how it leads to an inexorable
deterioration in quality of products and services etc. But some of my
readers still say that by advocating the repeal of 'free' trade
agreements and replacing them with import duties on goods and services
that cannot reasonably be
produced domestically, I'm encouraging the continued impoverishment of
the third world.
So here
is an article, written late last year by Timothy White of Dollars & Sense magazine that
shows that for Mexico, a country that has embraced 'free' trade openly
and honourably, whose people have done everything they can to make it
work, and whose government and people had such high hopes for it, NAFTA
and 'free' trade in general have been an unmitigated disaster. If you
want to know the real truth about 'free' trade, please read the article in its entirety
-- it is free of economic jargon and political rhetoric, and full of
astonishing data on the cost of 'free' trade to that country.
Here is the synopsis at the end of the article, emphases mine:
- NAFTA took effect in 1994, but
the "neoliberal" experiment began in the mid-1980s following Mexico's
1982 debt crisis. Ten years into NAFTA and nearly twenty years into
neoliberalism, the track record, drawn from official World Bank and
Mexican government figures, is poor:
- Economic growth has been slow.
Since 1985, Mexico has seen average annual per capita real growth of
just 1%, compared to 3.4% from 1960 to 1980.
- Job growth has been sluggish.
There has been little job creation, falling far short of the demand
from young people entering the labour force. Manufacturing, one of the
few sectors to show significant economic growth, has registered only
marginal net job creation since NAFTA took effect.
- The new jobs are not good
jobs. Nearly half of all new formal-sector jobs created under NAFTA do
not include any of the benefits mandated by Mexican law (social
security, vacations, holidays, etc.). One-third of the economically
active population now works in the "informal" sector.
- Wages have declined. The real
minimum wage is down 60% since 1982, 23% since NAFTA's inception. Wages
in all sectors have followed suit.
- Poverty has increased.
According to Mexico's most respected poverty researchers, the number of
households living in poverty has grown 80% since 1984, with nearly 80%
of Mexico's people now below the poverty line, up from 59% in 1984.
Income distribution has become more lopsided, making Mexico one of the
hemisphere's most unequal societies.
- The rural sector is in crisis.
Four-fifths of rural Mexicans live in poverty, over half in extreme
poverty. Migration levels remain high despite unprecedented risks due
to increased U.S. border patrols.
- Imports surpass exports. The
export boom has been outpaced by an import boom, in part due to
intrafirm trade within multinationals.
- The environment has
deteriorated. The Mexican government estimates that from 1985 to 1999,
the economic costs of environmental degradation amounted to 10% of
annual GDP, or $36 billion per year. These costs dwarf economic growth,
which amounted to only $9.4 billion annually.
This
is a story that could be told and re-told in almost any third-world
country. African and Asia agriculture has been devastated by
heavily-subsidized European crops just as Latin American agriculture
has been crippled by heavily-subsidized North American crops. The
environmental destruction wrought by business in the third world, and
the criminal, dangerous, inhumane working conditions of workers, mostly
run by manufacturing and mining businesses owned by or dependent on
Western imports, is a global disgrace. 'Free' trade is in fact a
massive fraud designed to further enrich a small number of
multinational corporations and the governments they control. There is a
reason for the huge, spontaneous global demonstrations against 'free'
trade and globalization: People around the world directly affected by
it know it is a scourge, a power and wealth grab by those who already
have far too much of both. The multinationals are attempting to get
additional 'free' trade agreements signed before the rest of the world
wakes up to the reality of their enormous cost and inequity. They
continue to argue about the theoretical benefits of 'free' trade, and
blame its failings on corrupt third world governments. This is a
smokescreen, and White's article eloquently shows the real motive for
wanting 'free' trade agreements signed: pure greed.
The alternative to 'free' trade is not no trade, it is trade regulated
for the benefit of the world's people. Regulation is not a dirty word,
no matter how aggressively neocons try to paint it as such. It is our
only protection against corporatists who put profit before people.
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MADE IN CANADA
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