Bretton Woods II (part 2): free, foul or fair - what's to be done about trade?
When the people who got us into this mess gather in Washington to get themselves out of it, beware!
Among lots of other nonsense, they will probably say that free trade is better than beggar-thy-neighbour protectionism of the kind that turned the Wall Street Crash of 1929 into the Great Depression of the 1930s.
This truism has been repeated so often that you can be pretty sure no-one who utters it has the faintest idea what it means. Trade liberalization has been an article of faith for the World Trade Organization (WTO) and its predecessor, the General Agreement on Tariffs and Trade (GATT) for so long that its impossible for true believers to imagine that it might be mistaken, let alone responsible for the mess.
But the belief is false for at least three quite simple reasons.
First, because free trade does not in fact exist; never has and never will. Its most ardent advocates in North America and Europe have no intention whatever of putting it into practice. Straightforward protectionist measures (tariffs, quotas, anti-dumping, subsidies and the like) surround a host of industries in the US, including cotton and, most recently, steel. The Common Agricultural Policy is only the most notorious of many similar measures employed by the European Union.
Second, liberalization is for trade almost exactly what deregulation has been for high finance. What freedom in trade boils down to is a plea by the rich and powerful (currently embodied by corporate globalization) for exemption from any kind of democratic control. Put quite crudely (and Im not so sure theres any other way of putting it) what they want is the freedom to extract resources and profits from people around the world who are kept powerless to intervene or resist.
Third, the assumption is that free markets are possessed of some sort of self-righting mechanism that will, among other things, save humanity from climate change and self-destruction. The financial meltdown alone should surely be enough to disabuse us of that particular delusion. Free markets were developed and can only operate on the assumption of limitless natural resources recklessly exploited, which lies behind climate change and environmental destruction.
So its just about as absurd to imagine that free markets will get us out of the mess they are so anxious to create as it is to pin any faith on those who are about to gather for the G20 Bretton Woods II shindig in Washington.
You are, however, quite likely to hear free-traders bemoaning what they claim are protectionist retards among the resurgent US Democrats and the Obama entourage in particular.
Please, dont be fooled! Well, no doubt there are nationalist scoundrels (and not just in the US) anxious to exploit international issues to their own disastrously parochial ends. But there are others, such as Public Citizen, who are simply asserting that trade, like everything else, must be subject to some sort of deliberative democratic control.
Thankfully, we have in the fair trade movement the rough outlines of the kinds of principles that should prevail over the conduct of trade. Chief among these is, of course, that trade has to be a mutual benefit between people and peoples, not élites and corporations.
Added to this is the urgent priority to remove from international trade its ability to inflict on everyone else the environmental damage caused by a rich and powerful minority, thereby seeking to conceal its true consequences.
This is a huge agenda, and its about time we set to work on it. Sadly, if the bewildered G20 in Washington manage to find any new consensus to replace the old one, its likely to be the consensus of the grave.