"US President Barack Obama announced on Saturday the framework for a vast free-trade agreement spanning the Pacific as he sought a new era of US leadership in a fast-growing region."This is from an AFP piece published in the Taipei Times earlier this week on Monday. What's wrong with it is the now routine appellation of "free-trade agreement" to what is actually an agreement between ten governments* in the Pacific region to harmonize the terms of government intervention viz capital controls, labour laws, environmental regulations and other matters.
Second quote:
"The TPP started out in 2005 as a free-trade agreement with four signatories — Chile, New Zealand, Brunei and Singapore — with the US, Australia, Malaysia, Vietnam and Peru joining later."This is from today's Taipei Times editorial, which is the editorial written by a member of the editorial staff, rather than an imported piece from one of the main press agencies. Thus somebody at the Taipei Times is directly responsible for it. Again, what's wrong with this is the routine transmogrification of the adjective "free" to describe something which is not free.
To some people, it may seem like a trivial point to criticize the editors of a newspaper for one ill-chosen word. However, there are three serious implications here.
The first is that it directs attention toward a narrowly framed objective of the agreement (trade "liberalization" by means of tarriff reduction), rather than the procedural actions that will be taken in the name of that agreement. Yet it is the procedural actions to be taken that warrant critical attention, not the mere objective. The reason this is important is that because the TPP agreement provides for the reduction of tarriffs through an expanded process of multi-lateral negotitation and agreement between member states, the process of tariff reduction and other aspects of trade liberalization will likely get bogged down by political calibration (as with similar WTO-sponsored trade talks). It would be much better for the cause of freedom to see member states unilaterally dismantle barriers to trade to set an example for others to follow**.
The second point is that this TPP agreement is not merely concerned with the multi-lateral reduction of tarriffs; the broader "trade liberalization" objective encompasses an agreement to harmonize the purposes and design of government intervention in all member States. That is the behaviour of a cartel; rather than member states competing against one another to attract both foreign investment and immigration by imposing different investment, labour and environmental restrictions and regulations, both immigrants and investors will now have less of a basis on which to choose between member states rather than more of a basis on which to choose. Thus, to describe this agreement as a "free-trade" agreement is a travesty. It is an agreement toward the cartelization of governance.
The third point follows from the first two in that calling this agreement a "free trade" agreement is a linguistic bug which will tend to retard the quality of public debate. It is quite sufficient for the purposes of journalistic accuracy to refer to this type of agreement as simply an "agreement on governing trade", or, should a greater economy of words be required, a "trade governance" agreement. Inserting the superlative "free" into the description can only serve the purposes of propaganda, since it is not a "free-trade" agreement by any honest use of the concept.
Perhaps somebody else should write to the Taipei Times to correct them on this point; anything I would write to them would be both feared and loathed.
*Brunei, Chile, Singapore, Australia, New Zealand, Malaysia, Peru, Japan, Vietnam and the United States.
**I would argue this point from ethical principle. Whether unilateral dismantling of trade barriers would be "better" on consequentialist grounds is an open question; if an honest attempt to answer that question is to be made, it will have to go beyond the mere confirmation bias of establishment Marxists like Ha Joon Chang.
"It is an agreement toward the cartelization of governance."
ReplyDeleteMichael, the nations working together to establish a minimum level of standardization is hardly a cartel. They aren't setting the prices of the goods--which is what a cartel does. Besides, competing firms within industries do exactly what these governments are doing--each company agreeing on a minimum sale price for their product so as to stay profitable. They're still competing for the same business on product-quality, while ensuring they won't find themselves losing money just to keep business. Why can't states do it to protect their products--citizens-- and working people's livelihood? What good does it do a person, or nation, if they have to constantly compete for the same business by underbidding their neighbor? As you know, Marxism stems from the fact that at the dawn of the industrial revolution, the industrialization that was occurring was making people's lives worse--not better. So, the people got together to establish minimum laws--a 10 hour work day, per say--and this TPP falls into that same category.
Take the U.S., for example. Each of the 50 states competes for production sites from corporations. What good does this do for the nation as a whole? None. It would be much better if all the states established a minimum tax/wage/union agreement, then let the corporations choose which state to produce in--based on location, market, education-level, and other conditions. Instead, the corporations now look for which state has the lowest corporate taxes, the weakest unions, etc.
We must take the historical development of trade into account. By completely slashing protective tariffs, human lives with unquestionably suffer consequences. From the 16th century on, protectionism and free trade have typically alternated every 25 years or so--25 years towards free trade, then 25 years of protectionism, then another 25 years of free trade. We cannot just drop all trade barriers at the drop of a hat, the human dislocation would be too large. Moving towards free trade must be done slowly--and notice, it must be "done". Free trade must be imposed, just like tariffs. Just as property wasn't private until the government made it so. Even free trade and private property must be subject to intervention.
-Derek-
{2-part comment}..
ReplyDelete"...nations working together to establish a minimum level of standardization is hardly a cartel. They aren't setting the prices of the goods--which is what a cartel does"
Bearing in mind the shift of context I think the essence of the matter remains the same. Agreements like this are examples of governments acting like cartels - obviously the terms of reference are different* - but the essential aspect is cooperation at the expense of the recipient people.
"Besides, competing firms within industries do exactly what these governments are doing--each company agreeing on a minimum sale price for their product so as to stay profitable."
And where that is done voluntarily, no problem. Where it is accomplished by direct or indirect government intervention (as is often the case)... then that is a problem.
"Why can't states do it to protect their products--citizens-- and working people's livelihood?"
Firstly, because citizens do not "belong" to a State, and nor does the State "produce" them - the State is nothing more than an institution among people, a human and deeply flawed creation. It has no "rights" at all, only people do, wherefore legitimate action by a State can only arise from consent among the people to so order their relations with one another through this institution. And that consent is as fragile and contingent as human error is persistent. That is the first thing.
The second reason is that, in acting to establish minimum standards, or more accurately, objectives to which State compulsion will be directed, the "protection" this metes out to its beneficiaries is both selective (it is never neutral) and it brings with it unintended consequences which will then be met with additional use of State compulsion, which will then generate unintended consequences which will then be met with... and thus the power arc of the State and its various subsidiary systems is established and cannot be undone unless by collapse - either as a result of confrontation or as a result of internal pressure.
"What good does it do a person, or nation, if they have to constantly compete for the same business by underbidding their neighbor?"
ReplyDeleteNone - but you presuppose a false assumption in that picture, i.e. that business stays the same over time. It doesn't.
"Marxism stems from the fact that at the dawn of the industrial revolution, the industrialization that was occurring was making people's lives worse--not better."
There is no doubt that working conditions at the dawn of the industrial revolution were often terrible. Yet that is to be expected from a society just beginning to move away from feudal norms. Viewed over a longer time-scale however, the industrial revolution was clearly of central importance to the flowering of human mastery over the material conditions of life.
"What good does this do for the nation as a whole?"
Why do you suppose "the nation as a whole" as a moral arbiter?
"It would be much better if all the states established a minimum tax/wage/union agreement, then let the corporations choose which state to produce in--based on location, market, education-level, and other conditions."
If the politicist class were powerful enough that they could bring that about, then why would they stop at a "minimum tax/wage/union agreement"? Why would they not seek to expand that agreement to eventually include the harmonization of State control over as many of those other conditions as possible?
"Instead, the corporations now look for which state has the lowest corporate taxes, the weakest unions, etc."
Or the state with the strongest corporate welfare, the most powerful friends in the legislature or courts etc...
"We cannot just drop all trade barriers at the drop of a hat, the human dislocation would be too large."
I am not arguing for that. I've been arguing for the confrontation and rational deconstruction of the State for years now.
"Free trade must be imposed, just like tariffs. Just as property wasn't private until the government made it so."
Nonsense. Property and exchange are logically prior to the State; people instituted laws to protect property because they already knew what it was - or else they could not have done so. QED.
*Instead of talking about companies, we are talking about States, so therefore instead of talking about market prices, we are thus talking about the terms of governance.