Ian McDonald FREE TRADE is the ideology of the age and protectionism the discarded evil. But in the real flesh and blood world bits of both, at one time or another, are essential human devices to organise production, trade and society most beneficially.
In the final analysis free trade is less an economic strategy than it is a moral doctrine. It assumes that the highest good is to shop. It assumes that progress is synonymous with increased economic activity. The exchange of material goods and capital takes precedence over the autonomy and sovereignty, and the culture, of local communities. Rather than promoting and sustaining the intricate social relationships that create valuable and vibrant communities, free trade theology relies on a narrow definition of comparative efficiency to guide all conduct.
In a world dominated by free trade theology bigger is better and huge is best - the economist Lester Thurow argues that even giant IBM is not big enough for the global marketplace. This obsession with bigness leads logically to that great postulate of free trade: the need for global markets. And another tenet of free trade is that each community and, naturally, each nation must specialise in what it does best to the virtual exclusion of otherwise worthwhile activities.
What are the implications of the tenets that bigger is better, that material self-interest drives humanity at dependence is better than independence? In sum, it is that we live to trade. We give up sovereignty over our affairs for a promise of more goods in total.
Just when the doctrines of free trade seem so dominant, the absurdities they give rise to are becoming more evident. A presumed benefit of free trade is a higher standard of living.
INEQUALITY
Well, whose standard of living is being considered? Inequality between, and in most cases within, countries has increased and is increasing. In 1930 the per capita GNP ratio between developed and undeveloped countries was 4 to 1, now it is 8 to 1.
Never mind, we are told, vast wealth is being created by unfettered free trade and a rising tide lifts all boats - to use that hideously misleading cliché so often employed by the new cultists. But the share of world trade captured by the United States over the last 20 years has increased dramatically while the least developed countries have seen their share cut in half. A great many boats are sinking, not floating higher.
Nor is the problem limited to inequalities among nations. Increasingly the dominating economic entity in the world is the huge transnational corporation. Two-thirds of international trade now involves transnational corporations and one-third involves trade within single transnationals. And, as UNCTAD has noted, small and medium-sized enterprises employing the majority of the world's workers are faring badly against the giant transnationals.
Free trade is favoured by those who have power. Can there be any doubt that by far the chief beneficiaries of free trade theology now are the developed countries, principally the USA, and the huge transnational corporations? Why on earth then is the theology so unthinkingly accepted by so many others as well?
Free trade and protectionism, once stripped of their ideological extremes, are both useful tools which can be balanced for general benefit, social stability and community development suited to each nation's traditions and needs. Finding an ideology in between is the art we have to learn.
Ian McDonald is a regular contributor who lives and works in Georgetown, Guyana.
