From free trade, via fair trade, to scalar trade?
Free Trade is based on the assumption that markets will self-correct, but in a world where the rich companies actively block true costs of production showing up on price tags and balance sheets, the markets are a political construct, as artificial as Second Life or Disneyland.
Free trade is a game rigged so that global corporations can arbitrage over all sorts of cost factors, based on a patchwork quilt of labor and environmental laws, and nearly always choosing what makes the most money.
The Ambivalence blog of Stowe Boyd has a item directed to the union leadership in the U.S. wondering why they remain so tied to the free trade discourse.
He makes some interesting points about the unsustainability of the current system:
“The problem — at its core — is that the premises for free trade, going back to the start of the industrial era, have not yet been adequately pulled apart and debunked. Both political parties and the media have adopted a pro-free trade (pro-globalism) stance, and deemed that anti-globalism is illegitimate.
But the premises of free trade are too diffuse to ever work in practice. Outsourcing steel development to India or other developing countries ‘works’ economically because the steel developers can take advantage of lax regulation in distant lands to pollute and exploit cheap labor, while the US society has to absorb the costs of local steel workers laid off. The steel companies have no ongoing obligation to support those that they fire, here, and in a uniquely American fashion, former steel workers are left to scramble or fall.
Free trade is a game rigged so that global corporations can arbitrage over all sorts of cost factors, based on a patchwork quilt of labor and environmental laws, and nearly always choosing what makes the most money.
Shouldn’t our core principle be doing what causes the least harm?
The ‘fair trade’ term indicates that some have attempted to move in that direction, away from the unbridled excesses of free trade. But the unions should step forward and baldly state that free trade is inherently damaging to the world as a whole, and to local economies everywhere. A different sort of trade is needed, where the world is seen as a closed system, that all the inputs and outputs have to be tallied and associated with the costs of goods and services, and that the presumption should be that local production of goods, foods, and services is inherently better than globalism: less damaging, more open to inspection and safety, and relying on fewer connections in the rickety financial networks we have inherited.
We need a notion of scalar trade, where transportation, work displacement, and ecological costs are all factored in, and not neatly dropped out by corporate accountants. Someone has to do the full reckoning, and today’s businesses — and even our governments — don’t seem ready to do so.
Free Trade is based on the assumption that markets will self-correct, but in a world where the rich companies actively block true costs of production showing up on price tags and balance sheets, the markets are a political construct, as artificial as Second Life or Disneyland.”
July 15th, 2009 at 2:44 pm
The fair trade agenda has been criticized by some as being a marketing ploy for the free trade agenda. I have written a rebuttal to that position at my Blog at: http://silkroadmusings.wordpress.com - Readers should also take a look at Porritt’s book: Capitalism as if the World Matters.