Thursday, July 17, 2008

Semantics are important and "Free Trade" is not free

Semantics are very important. Changing the names of things is a potent method of obfuscating their true nature. George Orwell gave us a clear indication of the political power of names in “1984” with his Newspeak. We have been treated to Orwellian nomenclature by the United States government for years, and that naming to hide the purpose of things has been brought to its zenith under the Bush Administration. The Patriot Act comes to mind.

This very short article is going to talk about another nefarious governmental deception: “free trade”. This term is applied to a certain type of international commerce. I intend to show, without citations or statistics but rather with simple logic, that our international trade is NOT free, and that if we called it by a name that more accurately reflects its nature, popular support for it would evaporate. In order to establish a starting point, let us look at the definitions of free and of trade:

1 not under the control or in the power of another; able to act or be done as one wishes.
• (of a state or its citizens or institutions) subject neither to foreign domination nor to despotic government.

1 the action of buying and selling goods and services

After reading those definitions I come to the conclusion that free trade should mean the commerce between individuals or companies that is not controlled by any other party, in particular, that is not controlled by governments.

Do we have examples of free trade? Absolutely. The trade between individuals and companies in the fifty different States of the USA is free. According to the “Federalist Papers” free trade among the states was one of the important motivations for the creation of a Federal rather than a Confederate government. Free trade was seen by Madison, Hamilton and Jay as a way to unite the country. We can ship goods from one state to any other without paying tariffs and without restrictions, but we are required o pay the state taxes of each state where we sell products and services. That is free trade. It is not managed by the different parties, and although the Federal government has the ability to regulate commerce, that has come to mean that is has the ability and the authority to see that all states are open to competition from the others.

Is this what happens in the international commerce that our government calls “free trade”? Not even close. All commerce with the countries with which we have “free trade” is regulated in detailed treaties that specify quotas and conditions. Most tariffs are eliminated and there is an effort to control “dumping” or the purposeful sale of subsidized products below their real cost of production. Certain industries are protected, fairness in the labor force is negotiated and critical products are left out of treaty obligations. Tremendous lists of specific industries and products are given their own special rules.

There are numerous “free trade” treaties and organizations. There is GATT and NAFTA and CAFTA and the European Union and the ConoSur, etc. All of these “free trade” bodies encompass hundreds of pages of binding regulations and include the mechanisms for arbitration, recourse and punishment.

The fact is that governmental representatives of the various countries involved negotiate every aspect of a “free trade” agreement. These treaties are long, complex binding documents with the force of law and they absolutely regulate who can sell what, where. They also regulate labor practices and environmental practices. Foreign governments negotiate oversight and regulation of domestic rules, subsidies and taxes. These treaties are written by governments and the treaties and trade organizations manage international trade in exquisitely specific detail.

So is the commerce that the government and big business refer to as “free trade” free? The two definitions of free from above are:
not under the control or in the power of another; able to act or be done as one wishes.
• (of a state or its citizens or institutions) subject neither to foreign domination nor to despotic government.
In the system of international commerce that is purported to be free, an individual is absolutely under the control of others and that individual is not able to act as he wishes. Commerce is under foreign domination which may include despotic governments.

There is nothing free about “free trade”.

I suggest that if we want to continue with these treaty obligations that at least we call it by a more appropriate name. Let us call it International Managed Commerce, because that is what it is.

Perhaps if we call it what it is, people will be less apt to vote for treaties that are not in their best interest.

To see an interesting interview with the lefty libertarian, Ralph Nader about his opposition to "free trade" agreements, click here.


SeekerOfTruth said...

Chris, found your blog while Googling. You are absolutely correct. Under our marriage of democratic self-rule and economic capitalism, the long term benefactor to economic vitality should first and foremost benefit the sovereign and not capital. Surely not understood by government forces negotiating 'free trade' agreements under influence of purveyors of capital.

It is when capital trumps labor over the long term that free markets are turned upside down. Yet, capital trumping labor has been pointed to as an economic boon by many current 'free-traders'. Ironically, it is just such an environment where socialism and government intervention has heightened potential to bloom. In other words, much of the current beliefs of many economists and dogmatic politicos are a self-fulfilling prophecy of exactly the opposite outcome. This has been a chronic problem with American supported governments in Central and South America. In reality, many of these governments were lackies to American capital's influence as opposed to supporters of the rights of the sovereign.

Jason Gammel said...

Good read.


Anonymous said...

If you think 3 million manufacturing jobs disappearing under NAFTA and NAFTA clones is bad, let a Libertarian run the country like Ron Paul. 300 million jobs will disappear then magically re-appear anywhere BUT the US.

Chris Ferrell said...

@Anonymous, Only about 160 million Americans work, so it would be real difficult for us to lose 300 million jobs.
But why do you think that we would lose jobs under a libertarian President. What would be the impetus to drive jobs to go "anywhere BUT the US"?