“WORLD TRADE TALKS COLLAPSE OVER TARIFF PROTECTION” is the headline in today’s papers, reporting the failure of the representatives of the world’s national capitalist classes, gathered at the headquarters of the World Trade Organisation in Geneva, to agree on a further “liberalisation” of world trade. Apparently, the representatives of Indian and Chinese national capital wanted a clause allowing them to keep out “foreign” imports if they got too much as well as a reduction in the subsidies given to US cotton producers but the US wouldn’t concede. So the so-called Doha round, started in 2001 and aimed at helping the developing capitalist countries, is dead and it’s each capitalist state for itself (and the devil take the hindmost - the poor states of Africa and the West Indies - but the devil was always going to get them anyway).
Some will be happy with this outcome. Not just US cotton producers and fledgling Indian and Chinese capitalists, but the “anti-globalization” movement too who are against “free trade” and, if you examine their “alternative”, for protectionism.
Free trade or protection? That was the irrelevant issue that the working class were invited to take sides over when the Socialist Party was formed over a hundred years ago. As Socialists, we advised the workers not to take sides and to ignore the issue. Neither free trade nor protection would improve their position or solve their problems since these were not caused by trading arrangements but by the capitalist nature of society and production. Workers were just as badly off in free trade countries (such as Britain) as they were in protectionist countries (such as the US and France) and vice versa.
This is still our advice today. Let the capitalist classes of the world and their representatives argue over their trading arrangements. They don’t concern us.
The failure to agree, though not inevitable, was predictable in that the negotiations were always going to involve the representatives of national capitals jockeying for position and advantages for their capitalists. It’s going to be the same with future negotiations over global warming. So the prospects for any meaningful action being agreed here are not that bright either. As the EU trade commissioner, Peter Mandelson, put it when the latest trade talks opened:
“If, after seven years, you cannot complete a trade round, what does that say for your prospects of reaching a deal on climate change?” (Times, 21 July).
What indeed !
"As Socialists, we advised the workers not to take sides and to ignore the issue. Neither free trade nor protection would improve their position or solve their problems since these were not caused by trading arrangements but by the capitalist nature of society and production. Workers were just as badly off in free trade countries (such as Britain) as they were in protectionist countries (such as the US and France) and vice versa.
ReplyDeleteThis is still our advice today. Let the capitalist classes of the world and their representatives argue over their trading arrangements. They don’t concern us."
Free trade benefits the working classes, and is just generally a good idea. When we remove tariffs on foreign cars, Americans of every class can save money on their cars. True, some domestic auto workers will lose their jobs in the short run. But the benefits far exceed the costs, as any introductory economics textbook can demonstrate. You might have a problem with who those benefits go to, but that doesn't mean you should pass up the opportunity to let people engage in mutually beneficial transactions.
Second, free trade often benefits the poorest people in the world. Case in point: poor laborers in China and Vietnam.
Stephan,
ReplyDeleteIf, as you suggest, the cost of consumer goods fell due to free trade, this would have an effect on wages. What would happen is that relatively speaking, wages would fall as the cost of living fell (more exactly,upwqards pressure on wages would decrease, and inflaion would take its toll).
Wages are determined by the price that the market will bear in order to maintain and reproduce a certain skill/ability. If someone can work for the same basket of goods at a lower price, then the employers will choose the.
To sum up, what is free trade, what is free trade under the present condition of society? It is freedom of capital. When you have overthrown the few national barriers which still restrict the progress of capital, you will merely have given it complete freedom of action. So long as you let the relation of wage labor to capital exist, it does not matter how favorable the conditions under which the exchange of commodities takes place, there will always be a class which will exploit and a class which will be exploited. It is really difficult to understand the claim of the free-traders who imagine that the more advantageous application of capital will abolish the antagonism between industrial capitalists and wage workers. On the contrary, the only result will be that the antagonism of these two classes will stand out still more clearly... To call cosmopolitan exploitation universal brotherhood is an idea that could only be engendered in the brain of the bourgeoisie. All the destructive phenomena which unlimited competition gives rise to within one country are reproduced in more gigantic proportions on the world market...Do not imagine, gentlemen, that in criticizing freedom of trade we have the least intention of defending the system of protection. One may declare oneself an enemy of the constitutional regime without declaring oneself a friend of the ancient regime.
ReplyDeleteKarl Marx 1848http://libcom.org/library/on-free-trade-karl-marx
The question of Free Trade or Protection moves entirely within the bounds of the present system of capitalist production, and has, therefore, no direct interest for us socialists who want to do away with that system
Engels 1888
"It is really difficult to understand the claim of the free-traders who imagine that the more advantageous application of capital will abolish the antagonism between industrial capitalists and wage workers."
ReplyDeleteI'm not really saying that, and I don't think very many free traders like myself would say that allowing mutually beneficial transactions to take place will abolish the antagonism between industrial capitalists and wage workers. What I am saying is that free trade has contributed to the growth of our economy, and not just for the greediest of the greedy. The median income of the people of the United States has increased from about $4,000 dollars in 1904 to $40,000 in 2004 (in 2004 dollars). That means that 50% of Americans are much better off than they were a century ago. And it's not because we are taking things from people in other countries, it's because we are producing more goods and services that people want (medical care, jazz music, ipods, and surf lessons, just to name a few.)That's something I think we can all get behind.