How free trade keeps the poor poor

[Karmadillo]

http://www.japantimes.co.jp/cgi-bin/getarticle.pl5?eo20051116gc.htm

<edit>

If there are no truck-making and few other sophisticated industries in the Philippines or Bangladesh today, it is not because the people there are backward. It is because the IMF and other free-trade dogmatists have decided that these people should be denied the long-term protection needed to bring such industries to maturity, and to develop the industrial base -- the network of suppliers, transport links, repair shops, distribution outlets, skilled workforce, experienced officials and so on -- needed to support those industries.

Thailand is a good example of what can be done if the dogmatists are kept at bay. Forty years ago it had almost no industry to speak of. Through skillful use of tariffs it was able first to entice and then to force foreigners to invest in a range of key industries. Today it is even making and exporting trucks.

South Korea was even more ruthless in protecting and subsidizing the industries it needed to create the powerful industrial base it enjoys today. China is following the same path. None of this would have happened if the World Bank and IMF free traders could have had their way.

Take the pathetic and much-noted example of Mozambique. Ravaged for decades by a cruel civil war imposed by South African and U.S. hawks, it tried to ease some of its crushing rural unemployment by developing a cashew nut-processing industry. To do that, it had first to place a 20 percent tax on the export of raw nuts to other countries with established export and domestic markets and which wanted to do the processing themselves.

But in the eyes of the World Bank and IMF, that 20 percent tax was a breach of sacred free-trade dogmas. They threatened withdrawal of badly needed loans if the tax was not abolished. Mozambique had to back down. Its first attempt at industrialization was stopped dead in its tracks. Employees in the already-established processing plants were thrown out of work.

more...

[JanMichael]

1. I bet you'll be shocked by some of the responses you'll get.

A good deal of Dems still don't get, or want to get, that we're screwing the world for cheap pants.

[spancks]

3. I get it...

...and I think it stinks.

I always have.

[JanMichael]

4. Oh I know that a good number do actually "get it" it's just that there are

some threads that really expose the troglodytes.

[callady]

2. Free Trade

-traditional slogan of imperial monopolists and protectionists...for export only.

Synonymous with "investors rights"

We must make the world safe for tourism.

[CrispyQ]

5. Free trade isn't free --

someone's gotta pay. We need fair trade, not 'free' trade.

[Lydia Leftcoast]

6. I posted this link in Editorials

"Free" trade was the reason I stopped subscribing to The Economist, an often-informative magazine whose editors have an unquestioning devotion to this misnamed type of foreign commerce.

Just before my subscription ran out, they carried an article surveying the effects of "free" trade on the world. The maddening thing was that they acknowledged ALL the problems that protestors have brought up--ruined local markets, destruction of the social safety net, destruction of the environment, you name it. But their proposed cure was.... more "free" trade, on the grounds that all the problems were due to incomplete or inept implementation of "free" trade policies.

It's like saying, "Bleeding and purging sick people weakens them and can hasten their deaths, but that's because we haven't been bleeding and purging them enough, or at least we haven't been bleeding and purging them in the right way."

[punpirate]

7. Another good example...

... is Chavez' buy-back of unused land for redistribution to peasant farmers. The free-traders are up in arms over that move (just as they were with regard to Guatemala and Arbenz fifty years ago). But, it's just common sense. Most of the big estadas are owned by the British, and so what's grown on them is exported to Europe and the profits leave Venezuela, as well. As a consequence, Venezuela has to import 85% of their food, which definitely cuts into the trade surplus they would otherwise enjoy from oil.

There are a whole lot of people who want Chavez gone, so they can turn that around and make Venezuela dependent upon El Norte again.

The IMF and the World Bank has succeeded in keeping Jamaica dirt-poor, as another example. Michael Manley was still furious, thirty years later, about the deal with the devil he had to make--it just about ruined Jamaica's agricultural economy.

There's example after example. The writer is correct--those countries that avoided the debt/privatization of services racket and protected their home-grown industries have done much better.

[Lydia Leftcoast]

10. And after the Asian currency crisis of 1997, the IMF and free traders

were up in arms when Malaysia decided to implement strict currency controls. They predicted utter disaster from the move. The key was to allow money to move across borders freely, they said.

Guess which country recovered from the currency crisis first. :evilgrin:

[callady]

8. kick

[Nikki Stone 1]

9. kick and recommended

:kick:

[bvar22]

11. Free Trade a bonanza for the Global MegaCorps,

a disaster for everyone else!
Only the "Big Boys" can afford the "Buy In."
Independents need not apply.


The stated GOAL of the FREE TRADERS is to "Remove the Barriers to Trade!" What they fail to mention is that those "Barriers to Trade" were in EVERY case put there for a reason, and that reason is ALWAYS to protect something worthwhile. What the FREE TRADERS really want to do is remove ANY obstacle limiting the ability of their Corporation to increase PROFITS for the owners by any means possible.

The FREE TRADERS are always quick to brand someone a "PROTECTIONIST" if they dare to question the sacred IDOL of Free Trade. Some things are WORTH protecting. PROTECTIONISM is NOT necessarily a bad thing especially when protecting one's family, protecting the ability to earn a decent living for LARGE segments of a nations Workers, protecting the Environment, protecting the cultural assets of a civilization, or protecting a nations natural resources from predatory Corporations!!!

In those respects, I AM A PROUD PROTECTIONIST, and it is time to debunk the myths, broken promises, and outright LIES being marketed by the "FREE TRADE for EVERYONE" corporate salesmen!


The Mexican Free Trade Disaster:

http://www.democraticunderground.com/articles/05/04/28_cafta.html

http://bernie.house.gov/documents/opeds/20040127181128.asp

http://www.heureka.clara.net/gaia/nafta.htm

[phusion]

12. thank you for this...

very informative. Recommending...

[Karmadillo]

13. Morning kick

nt

[losdiablosgato]

14. Free traitors are also making the middle class poor

[dcfirefighter]

15. I'll Bite. I support free trade, and think it's progressive

It's not the trade that kills economies, it's the monetary system, as well as property rights as recognized by the WTO.

If free trade were in fact harmful, we could expect that the US economy would be even stronger if the states were allowed to enact tarriffs between them. We could also expect that the most successful historical societies were the most culturally and economically isolated. Neither one of these is true.

Henry George asked the question in Protection or Free Trade:

"One thing or the other must be true—either protection does give better opportunities to labor and raises wages, or it does not. If it does, we who feel that labor has not its rightful opportunities and does not get its fair wages should know it, that we may unite, not merely in sustaining present protection, but in demanding far more. If it does not, then, even if not positively harmful to the working classes, protection is a delusion and a snare, which distracts attention and divides strength, and the quicker it is seen that tariffs cannot raise wages the quicker are those who wish to raise wages likely to find out what can."

Henry George was a progressive labor supporter and political activist near the end of the 19th century. He believed that a primary goal of a democratic government was to increase wages.

I will note that there are roughly 150 million 'jobs' in the US, and roughly 7.5 million 'unemployed' in the US. I recognize these numbers are iffy, and do not account for underemployment or those who have given up. While there are certainly specific cases where jobs have been exported, the cause is not lack of protection, but rather active suppression of domestic employment by our government. Namely, financial returns to land & natural resources are favored over returns to the products of labor, which are in return favored over wages. Note that most income enjoyed by land & resource owners - rent and capital gains - is nearly exempted from taxation; income enjoyed by owners of machinery and capital is taxed at a low ~15% rate; while a man who earns $50,000 a year supplies nearly 40% of his wages to the government, when payroll taxes and state taxes are concerned.

I am absolutely sure that reducing the cost of labor in this country by 40% would increase total employment in this country by more than 5-10%, MORE than eliminating our unemployment, and causing wages to rise.

'Protecting' industries in this country by assigning tarriffs against imports is about as progressive as a national sales tax. It isn't progressive at all. It merely further hides the root problem: we have allowed a relatively small portion of our population appropriate the natural and community-created value of our country. We have allowed the ownership of property to trump the value of labor.

[HippieCowgirl]

16. Check out the movie "Life and Debt" about Jamaica

It's a snapshot of what "Free Trade" has done to the Jamaican food supply. With the IMF and World Bank forcing them to accept produce "dumping" by the US, it has driven food prices so low that people can't afford to grow food locally.

[Karmadillo]

17. Thanks for the tip. Here's the link to Amazon. Sounds

excellent.

http://www.amazon.com/gp/product/B00008NNPK/002-2738783-9308059?v=glance&n=130&v=glance

Set to a beguiling reggae beat, Life and Debt takes as its subject Jamaica's economic decline in the 20th century. The story has reverberations in the plight of other third-world nations blindsided by globalization, like Ghana and Haiti. After England granted Jamaica independence in 1962, the World Bank and International Monetary Fund (IMF) stepped in with a series of loans. These loans came with strings attached--the kind that would eventually plunge the country $7 billion into debt, stranded without the resources to dig themselves out. Although IMF officials get the chance to have their say, it's clear where filmmaker Stephanie Black's sympathies lie--with the country's underemployed farmers and sweatshop workers. Jamaica Kinkaid (A Small Place) penned the narration, while the soundtrack features some of the "imports" with which this island nation remains mostly closely associated: Bob Marley, Peter Tosh, and Mutabaruka, who performs the title track.