On Free Trade

Even among left wing parties and progressive politicians trade is worshipped as the saviour of the world, but perhaps we should ask ourselves Is Trade Evil ?

After we do that we can consider the question of free trade and free trade agreements.

We need to seriously look at the so-called free trade agreements for what they are. They certainly do not guarantee free trade. What they guarantee are rights to corporations over sovereign countries with things like investor state dispute provisions that allow corporations to sue countries for passing legislation in the public interest that offends the multinational corporations rights to maximize their profits.

So what could real free trade look like. One option would be absolute free trade. Eliminate all tariffs and non-tariff barriers. Provide no artificial advantages to domestic products or corporations. Provide no, intentional or otherwise, advantages to foreign products or corporations.

Any goods could be sold in Canada, subject equally to any forms of taxation applied, regardless of country of origin, as long as the goods are produced subject to health and safety, environmental, and labour standards (minimum wages, collective bargaining and workers rights provisions, etc.) equivalent to those required of goods produced in Canada.

That would be true free trade.

Is Trade Evil

Trade has become a sacred cow with no one questioning its costs. Even anti-globalization organizations do not argue against trade but argue for “fair trade”. In a world where economic power is so unbalanced can trade ever be fair.

Globalization is supposed to save the world and provide untold opportunities for the “third world” to develop. But has global trade ever served the interests of the “third world” or the working classes of the “first”/imperial/developed world.

The history of modern trade as we know it (beyond barter) begins with colonialism and in particular the British Empire. It started with luxury goods such as silks and spices and tropical fruits. It extended into what became basic, but not essential goods, such as coffee and tobacco.

One of the first impacts of this broader trade was the development of monoculture in the colonized “third world”, particularly in the form of coffee, tobacco and sugar cane. Agriculture in these countries was transformed from sustainable farming that fed the people to cash crops that provided money to colonial financial interests. Monoculture not only did not feed the people it also contributed to the decline of soil quality and greater susceptibility to drought. From there came the inevitable impoverishment of the “third world”, in particular Africa. Trade in drugs and slaves followed.

Fast forward to the current day.. Trade has gone way beyond trading what we can produce (and others cannot) for what they can produce (and we cannot) to where the developed world is dependant on imports from “third world” countries for basic goods such as food and clothing and even technology. These good are produced at below subsistence wages in dangerous slave-like conditions. This is called raising the standard of living of poor people. Meanwhile in the developed world unemployment is rampant, factories and whole towns are closing. This is called progress.

But the owners of “the means of production” are getting richer and richer. As our economies become more prosperous on paper the gap between the rich and the poor is at an historic high.

One of the major impacts of unnecessary trade (trading for goods that can be produced in the home market) is the additional costs of transportation. To offset that it becomes an absolute necessity of the system that the workers producing the goods be paid less than they could have been paid if they were selling into the local market. Because of the huge power differences between workers and owners in poor countries where there are no unions (and even talking to a union organizer, if there were any, would likely result in death) the gap is even greater than it needs to be.

But that does not mean that those of us in rich countries who buy the goods benefit. A lot of these goods are “designer” products that are heavily advertised with advertising and endorsement costs likely being more than production costs resulting in the consumer paying more to be convinced to but the product than he is paying for the cost of producing the product. Even after adding those costs, and transportation costs, there is lots of room for excess profits. Meanwhile we watch factories and towns close and our neighbours thrown out of work so we can pay excess prices for cheaply produced goods made by workers treated like slaves.

But this is only half the story. At a time when the very survival of the human race on the planet is threatened by global warming, caused by the burning of fossil fuels, we are transporting goods from the far corners of the world, rather than producing them at home, using tremendous amounts of energy that contribute to this crisis.

So what is the solution. It is an age old common sense principle that both right and left wingers can appreciate - community and self sufficiency, taking care of ourselves and our neighbours. The most efficient way of doing something is doing it yourself - taking care of yourself first so you are not dependent on others and building communities to take care of common needs.

It starts at the most basic level by feeding ourselves. In this day and age we cannot all be farmers but we can buy our food locally. Locally produced food, produced by farmers who own their land, provides more income to the farmers than mass produced food provides to factory farm labourers and is usually much more environmentally sustainable and does not include transportation costs, with its environmental impacts. We need to go beyond buying a few things at the local market - we need to rearrange our agricultural economy to encourage and support local agriculture.

We need to extend this to the basics of our economy. We need to rebuild an economy based on local industries producing the basics of life. We need to rebuild the economy of the local textile, footwear, furniture and electronics factories. We need to use local products in our building our homes, factories and locally owned stores (rather than chain stores where the profits go outside the community). Would it not be wonderful to know that the people who produce the basic things we use in our everyday life live in our communities and benefit from our purchases.

What cannot be done locally should be done regionally and what cannot be done regionally should be done nationally - always keeping the costs and benefits as close as possible to the local community.

That is not to say that there will not be a place for trade in our economy, for goods we cannot produce locally, but it should be a small part of economic life, not as the driving force of a global economy that only serves transnational corporations and the wealthy classes.

Some will call this a backwards step - fighting progress. But does the system we have now serve the community and the workers, or does it just serve the establishment, the owners of the “means of production”.

It does not take much to extrapolate the economic benefits of this economic community building to all facets of our community - from reduced poverty to safer communities.

Nor does it take much to extrapolate these same principles to the “third world” and the building of economic structures that serve local communities and people rather than global financial interests controlled by a few wealthy transnational corporations and individuals in the “overdeveloped” world.

We need to start building a global economy based on sustainable local communities. It may be the only way to prevent a global economic and environmental crisis. It may be the only way to prevent the “terrorism of desperation” that is a growing force in the world..

Can Sociology Save the World

This column is dedicated to my daughters who are studying Sociology at Ryerson University and Glendon College at York University.

When I was growing up in the 50s and 60s technology was going to save the world. It was going to create a new society of greater productivity, affluence and increased leisure time.

The increased productivity came, but at a cost. The affluence came, but for an increasingly smaller number as the prosperity gap increased giving truth to the proverbial phrase “the rich get richer and the poor get poorer”.

Those who benefited decided not to channel that increased productivity into more leisure time, or time for family, but instead channelled it into more things. According to capitalist economic theory that is supposed to trickle down to the working classes in the form of jobs creating those things. But even as we were buying more things we were reducing jobs by buying those things, including the basic necessities of life like clothing and food, from overseas where they were produced at below poverty wages. Better to get a good deal than provide jobs for our neighbours.

We are increasing that gap. At first it was low tech trinkets and tourist items that came from cheap labour markets, then it became clothing and household goods. The theory was that it was a waste for our educated highly developed society to produce such goods. I remember when Japanese automobiles first entered the North American markets and the jokes about them. We were shocked when the standard for quality in automobiles shifted from German and Italian workmanship to Japanese technology. And then of course there was the transistor radio and all the consumer electronics that followed.

Not so suddenly we had become a society that imported much of its basic necessities and toys (leisure goods) from overseas while our unemployment, poverty and crime increased. But all was well, as the rich decision makers were still getting richer while being isolated from the impacts.

Indeed we, as a society, led by the elites, began to convince ourselves that we could prosper on ideas alone. We did not have to produce any actual goods. Research and Development was the new Industrial Revolution. All we had to do was design things and have them produced elsewhere at cheap wages and we would prosper, or at least the establishment elites would prosper. So we thought.

But countries like China and India are learning that North America, and to some extent Europe, will not only buy cheaply produced goods but we will also buy cheaply produced ideas, as intellectual technology jobs are now being exported to low wage countries.

The irony, of course, is that to the corporate establishment that does not matter. They will see their profits and wealth increase as the very society they live in is disintegrating around them. And they could not have done it alone. The rest of society, or at least the “huddled masses”, had to buy into it. Considering the massive media and advertising empires the corporate establishment has under its control that is not surprising.

So is technology evil. The truth is technology has nothing to do with the current situation. We are in this state because of social decisions made by both the elites and the masses.

These are social decisions with enormous consequences. We have looked at the impact on the poverty gap but along with that are tremendous social impacts - the biggest being the loss of a sense of community. Why else would we throw our neighbours out of work and into poverty so we could buy cheaper shoes.

The other side of the leisure vs things equation is the environmental impact of the consumerism of those who benefit from the increased productivity. Producing all those things require resources and energy with tremendous environmental impact. Producing all of those things in “developing countries” with lower environmental standards increases that environmental impact and to an extent makes our so-called higher standards meaningless. And of course transporting them from the “third world” to the “first world” adds to the resources and energy used and the environmental impacts.

Increased leisure on the other hand, while having some environmental impact, as more people enjoy the environment, can provide experiences that enhance our understanding and respect for the environment.

Our society is finally beginning to recognize the fragile state of our environment just as we are at a pivotal point between being able to save the earth, and it being too late to stop the inevitable.

So what is the point. The point is that technology is not the issue. It never is. There is always technology. The issue is the decisions we make as a society about living together on the planet. The benefits and problems resulting from our decisions always come down to social ones. It is about how we live together.

The technicians will never be able to provide the answers. It is up to the sociologists to save the world.