The notion of “free trade” is not so easy to be “for” or “against”. Depending on the circumstances in which it is implemented, it can be good or bad.
For instance, free trade among the free states of the U.S. yields mostly positive results. We surely would have not grown to be a powerhouse without it. But there is a downside – for years manufacturers (before they ran off to China, Mexico, Vietnam and other exotic locales) ran to the southern states to be free of unions. So free trade tended to keep wages lower than they otherwise would have been. The south is poorer today than the rest of the country, and surely that has something to do with it.
And for states like Montana, resource-rich but far away from population centers, we tend to suffer from a mild kind of colonialism where we sell cheap so that others can make a handsome profit on the natural resources that we have. Years ago we enacted a coal severance tax and put the money in a trust fund. That’s not quite the same thing as establishing a manufacturing base, but it is something – perhaps the only thing we ever done for ourselves to protect from exploitation by wealthy corporations.
Mostly, free trade among equals is a good thing – the U.S. and Canada and Western Europe are mostly equals, and if they eliminate trade barriers, we won’t get hurt.
But among unequals, it is disastrous. For poor countries, it opens the door for rich countries to buy their resources on the cheap and exploit their labor forces. “Third world” countries, as they were once known, have suffered from “free trade” for centuries. For that reason, I prefer to call free trade by its old and more proper name – imperialism. The reason why poor countries tend to stay poor is that they cannot close their borders, install tariffs, and avoid malicious interference by the likes of the United States, Europe and Japan. All of these wars we have fought over the years with Cuba and Latin American and Southeast Asia have been aimed at preventing development. We need, and cannot live without, cheap labor and cheap resources.
When they stand tall, resist, install tariffs, monopolize their control of resources (OPEC), use their own resources for internal development (Cuba and Venezuela), we attack and embargo them, and do whatever necessary to undermine them. It’s an old story – every citizen of every poor country knows about it, and Americans are clueless.
But it’s a two-edged sword, as we are finding out. There was a time when the United States was protectionist – our country imposed heavy tariffs well into the late 20th century even as we knocked them down elsewhere. But under Clinton, those tariffs were removed (except to protect “intellectual property”), and our labor force was thrown to the wolves. We are left to compete with dollar-a-day workers in Vietnam and China and Honduras, and flip burgers for one another.
It’s by design, I suspect, a decision within the upper echelons of our plutocracy who decided that Americans workers had prospered too much. We were, after all, just another work force.
So “free trade” came back to bite us. We can’t complain much – for two centuries we were the beneficiaries of tariffs and imperialism, our jobs and lifestyles protected. But American workers lived off the cheap resources of others while we enjoyed protection. So it makes sense now that we are spiraling downward. Who ever thought, for even a second, that the multinational corporations that control our government and foreign policy cared any more about us than the citizens of Iraq or Vietnam?
This quote, supposedly by Ulysses S. Grant in 1865, was translated into Spanish and then back into English, and was cited by Andre Gunder Frank in his book Capitalism and Underdevelopment in Latin America. It was repeated in the New York Times, September 30, 1981 by L.S. Stavrianos, professor emeritus of history at Northwestern University, who at that time taught at the University of California, San Diego. Even if Grant never said it, he should have.
”For centuries England relied on protection, carried it to extremes, and got good results from it . . . . England has found it desirable to adopt free trade because protection no longer offers advantages.
”Very well, gentlemen, the knowledge that I have of my own country leads me to believe that within two hundred years, when America has gotten all that she can from protection, she too will adopt free trade.”
It’s a sentiment is understood by all on the receiving end of free trade policies, and denied by all who profit therefrom.
P.S. I fell into the trap of using the language of the right, saying “free trade”. Better to say “unregulated” trade. “Free”, by definition, sounds like something desirable. People get paid for dreaming up names like that.
Piece of Mindful 