Free Trade ... a Sham?
Up until about 1/2 an hour ago, I was a believer in "free trade." You know, if everyone builds and sells freely what they are the most efficient at producing -- goods or services -- then it should all come out in the wash.
But this makes some assumptions: (1) that raw materials are equally available -- not that everyone has iron ore, but that everyone has something to use for production or sales, even if it is brain capital; (2) that everyone will play by the rules and allow others to sell or produce goods or services in their countries; (3) that everyone is large enough to be able to participate at all -- enough people; (4) that there are not overarching political needs within certain trading partners that require that the administrators of the country address the problems, even if it means breaking the rules; and (5) probably a treatise-worth of exemptions and special cases ... little countries need protection, we can't pollute but they can, we care about people, they regard people as fungible, etc.
And America has played by the rules, generally, for far too long. Sure we cheat a little with regards to shipping within the US. We also shamelessly subsidize corn, sugar and other agricultural products. We refuse to sell our best electronic stuff or allow foreigners to sell to our military, etc. But we generally play by the rules because it has been in the best interests of our corporate community to do so, to open up other markets for them to profit in ... for the repatriation of the loot abroad.... The assumption being: "we can do it better than they can." Play by the rules so that we can win and when America, Inc., wins, so do the people.
The trouble is that we are no longer winning. In fact, since the fall of Communism and the rise of the "Tigers," we have been bleeding out of our eye-balls. By "we," I mean the American people ... the United States of America. For what is our country but the sum and aggregate of its people? And all the while, we -- meaning our politicians and officials have done a "Nero."
Individual corporations still benefit ... and are keen to promote free trade and trade agreements. That means fat bonuses for the CEO and executive staff. But the employee who lost his job to some Guatemalan ... what about him or her? "Oh, that's all for the better, he or she can get retrained to get a higher paying job. And that is good for America."
No, it is not. You see, when looked at collectively, America is a little enterprise of its own. Its corporations are people engaging in trade (at law, they resemble them, but on an indefinite basis ... as individuals, we tend to die), and its physical people also engage in trade by buying goods made abroad or here with foreign components. And when an enterprise or person buys more from others than they sell -- in dollar value -- they go into debt. Eventually, when nobody will extend any more credit, they go bankrupt: the person from whom they bought all that stuff winds up "owning" the debtor.
If an individual or a corporation, you go bankrupt and there is an auction or a sheriff seizes your remaining goods. Look at the foreclosures in the market! A corporation re-organizes or dissolves. The individual gets a judgment against them, and struggles to makes ends meet. In some countries, they simply starve to death.
A country gradually sells itself to whomever will hold its debt, and also sells pieces of itself in the form of real property and corporations. All because the component organisms that make up the country have contracted a disease which causes them to buy goods and services from the least expensive seller, quality be damned. "Oh," you may say, "that is rational behavior," and for the individual organism in the abstract, perhaps it is. But for the corpus of the whole it is not. Consider a supplement that heightens awareness and mental agility ... nicotine or caffeine, maybe ... helps you think, but poisons the rest of your body. Heroin probably feels good to the individual receptors in the brain, but take too much and you die.
That is: there is such thing as the common good. Not in the sense that we should all become communists and share and share alike. That has proven to be crap. But, the common good of Americans dictates that we need to get our communal accounts into balance. Other countries out there have long looked at the greater whole and diverted our attention to the great talking mask, telling us to ignore that funny old man behind the curtain. Europe has done that for all of our existence as a nation and certainly haven't stopped. The Tigers, China and India do it now, and have accumulated vast tracts of real property, intellectual property, means of production (factories and the trained personnel to run them), and our I.O.U.s in the form of U.S. Government Treasuries.
And now, like the heroin addict, we are dying as a commercial trading nation. We may be the most productive -- per worker -- nation on the face of the planet, but when we buy more from abroad than we retrieve through trade (goods and services) we slowly poison ourselves. Maybe the analogy is more like the Death of 400 Cuts.
Also, we cannot sustain the immigrant flow into this country, just as we cannot sustain the outsourcing of jobs abroad that would and could provide income to thousands domestically. I refuse to believe that we need to import plastic spoons from China: since when does anyone touch them during production anyway? There is no meaningful labor input, just oil and some cardboard -- none of which comes from China in the first place. In fact, the cardboard is probably made from wood pulp imported from the North American continent. And why should we buy Apple Computers ... "designed in California" but made in Shanghai? The assembly is largely robotic anyway. What little loopholes are Apple leaping through to make this more cost efficient "to benefit the American consumer" anyway?
I am not advocating a Smoot-Hawley tariff which plunged the world into the Great Depression (or at least some economists cite that as the trigger), but a desperate need to re-balance our books. In the process, international companies will have to declare themselves: American or not. If not, you face restrictions. If so, you need to start coughing up your taxes. And money cannot simply flow South to wherever the impoverished came from to work here: taxes must be paid, and limits imposed on repatriation of capital ... requiring registration and legal formalities to be observed.
Countries that restrict the import of U.S. goods by tariff, must face countervailing tariffs to balance out trade with that country. We are not asking unfettered permission to raid your national treasury, only that you cease raiding ours. And I don't care if the living standard of your people is less than the standard enjoyed by ours: it is not our duty to bring every person on Earth to the same level ... in fact, I condemn that strongly because of what that would mean: by sheer demographics and fertility rates the majority of Americans would enjoy the living standards of the average Indian (subcontinent). Or lower ... there are a lot of Africans and Chinese. I REFUSE to accept that. It might benefit the CEOs and other corporate fat cats, hedge fund managers, and political the recipients of their largess (Bush, Clinton), but the average American, the component that makes up the organism is and will continue to get hurt.
No way.
But this makes some assumptions: (1) that raw materials are equally available -- not that everyone has iron ore, but that everyone has something to use for production or sales, even if it is brain capital; (2) that everyone will play by the rules and allow others to sell or produce goods or services in their countries; (3) that everyone is large enough to be able to participate at all -- enough people; (4) that there are not overarching political needs within certain trading partners that require that the administrators of the country address the problems, even if it means breaking the rules; and (5) probably a treatise-worth of exemptions and special cases ... little countries need protection, we can't pollute but they can, we care about people, they regard people as fungible, etc.
And America has played by the rules, generally, for far too long. Sure we cheat a little with regards to shipping within the US. We also shamelessly subsidize corn, sugar and other agricultural products. We refuse to sell our best electronic stuff or allow foreigners to sell to our military, etc. But we generally play by the rules because it has been in the best interests of our corporate community to do so, to open up other markets for them to profit in ... for the repatriation of the loot abroad.... The assumption being: "we can do it better than they can." Play by the rules so that we can win and when America, Inc., wins, so do the people.
The trouble is that we are no longer winning. In fact, since the fall of Communism and the rise of the "Tigers," we have been bleeding out of our eye-balls. By "we," I mean the American people ... the United States of America. For what is our country but the sum and aggregate of its people? And all the while, we -- meaning our politicians and officials have done a "Nero."
Individual corporations still benefit ... and are keen to promote free trade and trade agreements. That means fat bonuses for the CEO and executive staff. But the employee who lost his job to some Guatemalan ... what about him or her? "Oh, that's all for the better, he or she can get retrained to get a higher paying job. And that is good for America."
No, it is not. You see, when looked at collectively, America is a little enterprise of its own. Its corporations are people engaging in trade (at law, they resemble them, but on an indefinite basis ... as individuals, we tend to die), and its physical people also engage in trade by buying goods made abroad or here with foreign components. And when an enterprise or person buys more from others than they sell -- in dollar value -- they go into debt. Eventually, when nobody will extend any more credit, they go bankrupt: the person from whom they bought all that stuff winds up "owning" the debtor.
If an individual or a corporation, you go bankrupt and there is an auction or a sheriff seizes your remaining goods. Look at the foreclosures in the market! A corporation re-organizes or dissolves. The individual gets a judgment against them, and struggles to makes ends meet. In some countries, they simply starve to death.
A country gradually sells itself to whomever will hold its debt, and also sells pieces of itself in the form of real property and corporations. All because the component organisms that make up the country have contracted a disease which causes them to buy goods and services from the least expensive seller, quality be damned. "Oh," you may say, "that is rational behavior," and for the individual organism in the abstract, perhaps it is. But for the corpus of the whole it is not. Consider a supplement that heightens awareness and mental agility ... nicotine or caffeine, maybe ... helps you think, but poisons the rest of your body. Heroin probably feels good to the individual receptors in the brain, but take too much and you die.
That is: there is such thing as the common good. Not in the sense that we should all become communists and share and share alike. That has proven to be crap. But, the common good of Americans dictates that we need to get our communal accounts into balance. Other countries out there have long looked at the greater whole and diverted our attention to the great talking mask, telling us to ignore that funny old man behind the curtain. Europe has done that for all of our existence as a nation and certainly haven't stopped. The Tigers, China and India do it now, and have accumulated vast tracts of real property, intellectual property, means of production (factories and the trained personnel to run them), and our I.O.U.s in the form of U.S. Government Treasuries.
And now, like the heroin addict, we are dying as a commercial trading nation. We may be the most productive -- per worker -- nation on the face of the planet, but when we buy more from abroad than we retrieve through trade (goods and services) we slowly poison ourselves. Maybe the analogy is more like the Death of 400 Cuts.
Also, we cannot sustain the immigrant flow into this country, just as we cannot sustain the outsourcing of jobs abroad that would and could provide income to thousands domestically. I refuse to believe that we need to import plastic spoons from China: since when does anyone touch them during production anyway? There is no meaningful labor input, just oil and some cardboard -- none of which comes from China in the first place. In fact, the cardboard is probably made from wood pulp imported from the North American continent. And why should we buy Apple Computers ... "designed in California" but made in Shanghai? The assembly is largely robotic anyway. What little loopholes are Apple leaping through to make this more cost efficient "to benefit the American consumer" anyway?
I am not advocating a Smoot-Hawley tariff which plunged the world into the Great Depression (or at least some economists cite that as the trigger), but a desperate need to re-balance our books. In the process, international companies will have to declare themselves: American or not. If not, you face restrictions. If so, you need to start coughing up your taxes. And money cannot simply flow South to wherever the impoverished came from to work here: taxes must be paid, and limits imposed on repatriation of capital ... requiring registration and legal formalities to be observed.
Countries that restrict the import of U.S. goods by tariff, must face countervailing tariffs to balance out trade with that country. We are not asking unfettered permission to raid your national treasury, only that you cease raiding ours. And I don't care if the living standard of your people is less than the standard enjoyed by ours: it is not our duty to bring every person on Earth to the same level ... in fact, I condemn that strongly because of what that would mean: by sheer demographics and fertility rates the majority of Americans would enjoy the living standards of the average Indian (subcontinent). Or lower ... there are a lot of Africans and Chinese. I REFUSE to accept that. It might benefit the CEOs and other corporate fat cats, hedge fund managers, and political the recipients of their largess (Bush, Clinton), but the average American, the component that makes up the organism is and will continue to get hurt.
No way.
posted by Zaphod at Tuesday, February 26, 2008
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