The Free Trade Lie Is Exposed
The High Priests of Economics tell us that "globalization cannot be stopped," much like the wrath of the Inca's Volcano God. We've been told that there is no alternative to neoliberal globalization other than utter ruin.
Every time someone suggested renegotiating, or Gawd-forbid leaving NAFTA, then you better have a fainting couch nearby because you would think that someone just told the economists and politicians that Santa Claus died.
Don't anger the Great Volcano Gawd Of Free Trade!
This leaves one to assume that corporate executives would feel the same.
It turns out that CEO's don't.
In describing what life would be like without Nafta, some business groups have stopped just short of predicting a plague of locusts.
Listen to American CEOs, though, and the potential collapse of the continent’s trade framework doesn’t sound quite so scary.
As talks on reshaping the pact drag into a seventh month, executives are getting asked -- on earnings calls and at conferences -- how their businesses would fare in the event of a breakdown. Words like “well-positioned” and “manageable” keep cropping up in their answers.
Gosh, why would corporate executives not get excited over a FTA that we've been told for a generation is absolutely necessary? They don't even use it.
Still, some little-known data from the depths of the Nafta ledger helps explain why the CEOs sound sanguine. A growing number of exporters in Canada and Mexico don’t even bother to fill out the paperwork that would entitle them to use Nafta’s preferential tariffs.
Last year, only 43 percent of imports from Canada came into the U.S. under Nafta rules. The figure for Mexico was higher, at 58 percent, but still short of an overwhelming majority.
Canada's Prime Minister Justin Trudeau came out and said, “We will not be pushed into accepting any old deal, and no deal might very well be better for Canada than a bad deal.”
NAFTA isn't very popular south of the border either.
Lopez Obrador, 64, has been attacked by the business community and NAFTA supporters as a "threat to Mexico" because of his nationalist economic policies and his populist motto: "For the good of all, the poor come first."
The poor come first? Now there's a very un-American idea.
Both Mexico and Canada at least consider the welfare of their working class.
In the United States, the Democrats never even considered the idea of re-negotiating NAFTA for fear of offending their corporate donors. They ignored the threats and pleading of labor unions and the working class.
It required a meglomaniacal, anti-union Republican to renegotiate NAFTA.
How sad is that?
Corporate America doesn't care all that much about NAFTA anymore because it already got what it wanted most of all - the destruction of labor union in this country, and the submission of the working class.
The decline of the American middle class has finally reached the point that American workers can compete against Chinese peasants. Victory is in sight!
How much have things changed since the start of this Depression? A lot.
Whereas the gap in labor costs between the two countries was about $17 per hour in 2006, that could shrink to as little as $7 per hour by 2015,
With any luck our corporate masters will soon be installing suicide nets outside their American factories too.
All one needs to do is look at economic history to see that the free trade mantra has no basis in fact.
Ulysses Grant, the Civil war hero and US president between 1868 and 1876, remarked that "within 200 years, when America has gotten out of protection all that it can offer, it too will adopt free trade". How prescient - except that his country did rather better than his prediction.
The fact is that rich countries did not develop on the basis of the policies and institutions they now recommend to developing countries. Virtually all of them used tariff protection and subsidies to develop their industries. In the earlier stages of their development, they did not even have basic institutions such as democracy, a central bank and a professional civil service.
Once they became rich, these countries started demanding that the poorer countries practise free trade and introduce "advanced" institutions - if necessary through colonialism and unequal treaties. Friedrich List, the leading German economist of the mid-19th century, argued that in this way the more developed countries wanted to "kick away the ladder" with which they climbed to the top and so deny poorer countries the chance to develop.
The American System: The blueprint for prosperity
Most Americans aren't aware that America once had a national economic plan, and it existed from the days of President Lincoln to President Nixon in one form or another. During that 112 year period America grew from an agrarian, frontier nation, to the most mighty economic power the world had ever seen.
The roots of the American School of Economics go back to Alexander Hamilton, Friedrich List, and Henry Clay of the Whig Party.
The American School of Economics was far different from the dominant economic thought of today.
The key components of the American School directly confront, deny and refute the economic imperialism that the so-called "Free Trade" school championed then by England and imposed by means mostly foul upon Europe over the years. It rejects free trade by imposing a system of duties, tariffs and other measures designed to defend the nation against economic threats by foreign predators. It uses government-directed spending projects meant to provide the infrastructure necessary for individuals to develop into the highly-educated and highly-trained people capable of being the ambitious and enterprising productive people we are famous for being. It chartered a national bank, owned wholly by the government, that administered the lines of credit necessary to get all of this done and otherwise oversaw the monetary policy of the state- and thus remained utterly accountable to the people by way of Congress and the Presidency.
The American School of Economics also involved government support for the development of science and a public school system. Through this economic philosophy America set the standard in manufacturing, higher education, scientific research and development, finance, and general standard of living.
What will the corporate Democrats do if NAFTA collapses and an economic catastrophe doesn't happen, like they've assured us would happen for decades?
Will they just ignore the fact that they've been lying to the working class for a generation? Will they pretend that no one remembers their lies?
"[They say] if you had not had the Protective Tariff things would be a little cheaper. Well, whether a thing is cheap or dear depends upon what we can earn by our daily labor. Free trade cheapens the product by cheapening the producer. Protection cheapens the product by elevating the producer. Under free trade the trader is the master and the producer the slave. Protection is but the law of nature, the law of self-preservation, of self-development, of securing the highest and best destiny of the race of man."
- President William McKinley
Comments
The 'Murica East India Company must die.
As should the Repigs and Porky Dems. None of them give a fuck about us.
Modern education is little more than toeing the line for the capitalist pigs.
Guerrilla Liberalism won't liberate the US or the world from the iron fist of capital.
You Don't Believe in Ricardo and Comparative Advantage?
Look at all the great things the Good Ole US of A produces!
A riddle wrapped in a mystery inside an enigma
Yet a huge % of “entertainment” (music, TV, movies, video games)
in Germany comes straight from the U.S. first-person shooter fantasy factories.
The cultural hegemony part still works fine here in the Western European colonies / satellites / vassal states / garrison states.
America's first flag
shows just what America was based on - mercantilism. The East India Company had a private army (twice as large as England's) which exercised military power as it assumed administrative functions over the sub-continent of India.
The War of Independence was basically a trade war. The new American colony's wanted a bigger piece of the action. America has been mostly about making money since it's inception. Financial gain is what drew millions of immigrants to this new nation. It had little to do with true "democracy" and "freedom". It had every thing to do with freedom to make money.
[video:https://www.youtube.com/watch?v=JkhX5W7JoWI]
Well sort of!
When you consider that 500 years ago, the Venetians, the Chinese, the Portugese etc were sending wooden ships out to trade these Satus Quo economists know that trade will not be stopped. That was both a very expensive and a difficult undertaking. Trade is a natural out growth of even low level civilization. My anecdotal example is the shell bead I found as a young man high in the Sierra Nevada mountians. It no doubt came from the Chumash that lived for several thousand years near where I reside on the central coast. They made a small industry of making shell beads and trading them with Native Americans throughout California.
Globalism as it manifests now will break and fragment for various and sundry reasons, the price of oil, wars, thermodynamic collapse, nationalism, climate change, etc. so expect some chaos and breakdown. Our Chilean grapes , and specialty coffee may not arrive on time or at all. Global finance is just ramping up, and knitting the globe together. We may move to a global SDR (Special Drawing Rights) currency. And certainly cyber currencies are trying to circumvent currency controls. It's my thinking that we are at peak globalism and will likely stay here until some exogenous event, likely climate change in a few years breaks the squid like grip that free trade has on the global economy. Think of it a new route and new oil fields opening up in the Arctic. The globalist are!
We are nowhere near peak.
Three quarters of the world's population live in undeveloped or developing nations. The Chinese Belt and Road Initiative will bring these countries into the 21st century. What is phenomenal is the speed at which this is occurring. China has done in few decades what took a century to do in the United States. And it is speeding up.
China's New Silk Road | DW Documentary
[video:https://www.youtube.com/watch?v=u-ybBZgN154]
It's an amazing acheivment in the making.
A transportation corridor from Beijing to Lisbon would truly rank as a modern Wonder of the World. Like a massive twenty first century update on the Golden Spike across the breadth of Eurasia.
It's a human civilization milestone.
But instead of trying to figure out ways to make money from this mother of all economic linkages, the overriding policy of the US and its oceanic allies is (and has always been) to kill a lot of people and waste colossal amounts of public labor and treasure simply on trying to keep it from happening.
Fucking barbarians.
The current working assumption appears to be that our Shroedinger's Cat system is still alive. But what if we all suspect it's not, and the real problem is we just can't bring ourselves to open the box?
Even the Golden Spike was made possible by predominantly
Chinese workers.
Maybe China build new, modern rail system for America? Very inexpensive but of excellent quality. Maybe build new high speed rail-line for California? China workers ready to start tomorrow. Do good job like last time. But US no want deal with China. Too bad. So sad. American build themselves. Maybe finish in 10, 20, maybe 30 years - hopefully finish before first part fall down.
The question nearly answers itself
One word: Putin.
He is the proverbial duct tape of the Corporate Democratic Party Establishment.
A little off-topic (again).
I think that automation is changing the dynamics of globalism. It may soon be more profitable to have all the automation/robotic production here, circumventing the costs of having products shipped in from overseas.
Especially when figuring in the reduced exposure to currency manipulation, the lowered trade deficits, not to mention the additional tax revenue from increased domestic production.
Will domestic automation finally outrun the multinational corporate 'savings' from cheap overseas labor? If it can it would definitely change the dynamics of globalization.
Mike Taylor
Your point about the destruction of unions
is spot on. Multinationals received far larger benefits from that and our tax code) then they ever did from "free trade" agreements.
"You can't just leave those who created the problem in charge of the solution."---Tyree Scott
Protectionism is not the answer.
Sorry, but when you're quoting William McKinley, I gotta take issue.
Worldwide economic integration is happening at literally a quantum rate. Severing economic ties between the US and the rest of the world now just keeps us on the outside looking in when (very soon) the grid is finally up and running.
Besides, why should I want Donald Trump to tell me how much I should pay for my coffee? Or anything else for that matter. A return to a tariff based economy simply locks us in a mercantile cage of our own making, with our benevolent corporate overlords holding the key.
And Henry Clay notwithstanding (Hamilton gets way too much credit), tariffs weren't exactly great for everybody back in the day. In fact, the Civil war nearly started thirty years earlier than it did over one called The Tariff of Abominations.
One of the many, many historical examples of a nasty trade war heralding a nasty shooting war. WWII is another. Oh, and the American Revolution for that matter.
(There seems to be a pattern here...)
We also need to stop playing this divisive game of our workers versus their workers and realize that workers worldwide are getting screwed by the neo feudalism that still defines most of the world economy.
That's the whole point of the Fair Trade movement which is trying to ensure that more of the benefits from this amazing global economic integration are passed to the people who actually make it happen.
Check it out.
The current working assumption appears to be that our Shroedinger's Cat system is still alive. But what if we all suspect it's not, and the real problem is we just can't bring ourselves to open the box?
Fair Trade movement
One aspect of any "Fair Trade" movement is the careful application of tariffs and protections. To wit: the worse off the workers that make a widget, the more that widget gets tariffed. Pay your workers enough to live decently, pay fewer or no tariffs.
The blunderbuss approach to tariffs is what started all those nasty wars you wrote about.....
"US govt/military = bad. Russian govt/military = bad. Any politician wanting power = bad. Anyone wielding power = bad." --Shahryar
"All power corrupts absolutely!" -- thanatokephaloides
McKinley was right
You don't have to like him for him to be right.
You can always learn more from your enemies than your allies.
The only question is, can you honestly find fault with his logic.
In case you haven't noticed, our corporate overlords already hold the keys, and they accomplished this through free trade agreements, not tariffs.
That fact alone should give you pause.
You're right. The slaveowners hated it.
That should also give you pause.
Uh, no. WWII started for a lot of reasons. Trade wasn't a major factor.
It's a great idea has that zero evidence of being able to work.
Every single international group in the world with any power is dominated by corporations. Period!
That's why it has to be done nation by nation.
you show me a worker-based international group with any real power and I'll change my opinion.
As for consumer groups, well, I don't want to offend.
What a specious non-sequitur.
Cheap shot. One has nothing to do with the other. All agricultural interests (as well as consumers) hated the tariffs that benefited manufacturing at their expense, not just those utilizing slave labor.
And the Nullification crisis also created the intellectual basis for secessionism, which should give you pause.
More nonsense:
Uh. Yes.
The US oil embargo led directly to the Japanese attacking not just Hawaii but especially invading the Dutch East Indies oil fields denied them by US sanctions.
Not to mention the countless doctoral theses that have been written on how restrictive trade policy contributed on the start of WWII - from contributing to a serious deepening of the worldwide Depression to being an explicit catalyst for Pearl Harbor. To say trade policy had nothing to do with starting WWII (or WWI for that matter) is just false on its face.
And lest we forget the entire Cold War was based first on constructing an economic cordon sanitaire around the Soviet Union, which was soon followed by a military one. Iraq is also another more recent example of restrictive trade policy leading to war.
Geez, you only have to look at our current and increasing sanctions against Russia to see how trade barriers and sanctions foment conflict.
And you seriously want more of this?
The current working assumption appears to be that our Shroedinger's Cat system is still alive. But what if we all suspect it's not, and the real problem is we just can't bring ourselves to open the box?
Re:
True, but I still don't believe I made a cheap shot.
If the situation was reversed I wouldn't hold it against you for pointing out this fact.
And speaking of farming, by the start of the 20th Century America was one of the biggest food exporters in the world. This happened despite those high tariffs.
As for Japan attacking us in response to our trade embargo, that is true. However:
1) it was an embargo, not just a tariff
2) it was in response to a military invasion of China
3) WWII was more than two years old at this point
Sanctions and embargoes are not tariffs.
That's like saying this is a debate between free trade vs. no trade.
You know, free trade is the exception historically.
Protective tariffs are the historical rule.
Under protective tariffs the U.S. went from a backwater frontier nation to the richest country in history.
Under free trade the middle class was gutted.
Those two things are facts.
The First National Bank
(Hamilton's baby) -- was it privately or Federally owned?
Wondering because of " It chartered a national bank, owned wholly by the government" whether that was the proposal or the practice. All the conservative talk I ever heard was the FNB was a stalking horse for the bank of England and/or private bankers exclusively. But if not true, I'd like to know.
Orwell: Where's the omelette?
Banks of the United States
Private, as was the Second Bank. In both cases the US Government owned significant, but not controlling, stock.
Much like the Federal Reserve Banks today.....
"US govt/military = bad. Russian govt/military = bad. Any politician wanting power = bad. Anyone wielding power = bad." --Shahryar
"All power corrupts absolutely!" -- thanatokephaloides
American School is now the Chinese School
The Chinese will put in protective tariffs to build up various industries. They put heavy tariffs on GM jeeps (or just high end cars), and the end result was GM moving manufacturing to gain market share as the tariffs made them noncompetitive.
Same with solar panels. China heavily subsidized the entire production chain and pretty much wiped out American based producers. When Trump put tariffs on them, the democrats became rabid free traders.
The Chinese learned from the Americans
It's not as if we weren't forewarned. Back in 2006 very few believed that China would rise to become the manufacturing and technological powerhouse it is today. The following video won an award at the Sundance Film Festival. It was made to be raw and crude - just how Americans envisioned China at that time.
When I posted these on DKos, almost everyone said China could never come close to American ingenuity and manufacturing. The 21st century was to be THE American Century. It was the end of history. Didn't last long, did it? Most Americans are too busy gazing at their exceptional navels to understand what is happening in the world today.
[video:https://www.youtube.com/watch?v=dmANxHJ6s9M]
[video:https://www.youtube.com/watch?v=FxJdEqaCcGc]
[video:https://www.youtube.com/watch?v=F7wsBNqM8AQ]
Good videos.
The Chinese and Americans operate from a differing perspective
The current Chinese way is more akin to mid 20th century America. Building infrastructure - roads, sewers, airports, dams, things that once put dollars in American worker's pockets. They have scrutinized this and are duplicating it. (Can you remember how large the want-ad section in your local papers were in the 50's and 60's?)
The idea behind Chinese tariffs is to create jobs first and profits second. The idea behind American tariffs have been to maximize profits with jobs secondary. It is interesting that China will forgo profits for jobs while the US will readily jettison jobs for profits.
China's government is willing to subsidize it's industrial base with tax yuan to create jobs for many. America's government is willing to subsidize it's MIC and financial markets with tax dollars to create wealth for few.
The Chinese tend to be more co-operative while the American is more individualistic.
Some interesting photos here:
Coordination: China's new vision for development
What about the Geneva School ?
(in economics)