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Free Trade and Economic Imperialism


The modern dilemma is to understand just how unreasonable the reasoning classes are in both thought and action. Political ‘progressives’ were behind efforts to obliterate Native American cultures through forced assimilation and acculturation for the purported ‘benefit’ of their victims. Likewise, progressives continued and expanded institutional racism in ways that persist to this day through promotion of bogus social ‘metrics’ like IQ (Intelligence Quotient), the racialization of ‘crime,’ and through formal strategies of forced cultural and economic assimilation via ‘education.’

Likewise, political ‘liberals’ have been the primary facilitators of the ascendancy of the radical right in both academia and politics. In academia liberals have functioned much like progressives in an earlier age, producing ‘reasoned’ rationales in their economics for economic imperialism. And in politics liberals play three essential roles: to insist political differences are matters of degree to be ‘worked through’ rather than the irreconcilable differences of competing interests; to derail meaningful political action until a ‘better time’ in the future that never arrives, and to claim the political center no matter how far the rightward march has taken it.

In the dimensions of economics and the environment ‘reason,’ both academic and political, is producing unreasonable outcomes for most people. The ‘managed’ neo-liberalism of academic economics pays lip service to the looming catastrophe of global warming that its own radical capitalism produces. If economic ‘growth,’ as measured by traditional metrics like GDP (Gross Domestic Product), is desirable and it represents the output of industrial capitalism contributing to global warming, as it does, then ‘solutions’ to global warming are simply attempts to clean up the catastrophes and dislocations that capitalists and their academic apologists create. But as is becoming increasingly obvious, these catastrophes never get cleaned up.

For example, about a decade after NAFTA (North American Free Trade Agreement) was passed in the early 1990s cheap American corn flooded Mexico and destroyed the peasant agriculture that had sustained millions of peasant farmers for generations. Their livelihoods destroyed, those ‘freed’ from the land went to work either in Maquiladoras, factories established by multi-national corporations in Mexico to exploit cheap labor, or migrated to the U.S. in search of work.

Most of the corn exported to Mexico is ‘genetically modified’ and cross breeds (pollinates) with domestic strains to render the traditional food supply suspect. Subsequent U.S. policy diverted U.S. corn from the food supply to ethanol production causing its price to rise just as Wall Street began ‘financializing’ agriculture through dedicated investment in agricultural ‘commodities’ funds. The result was that people whose indigenous economies had been destroyed by cheap agricultural imports instantly faced starvation as the imported food that consumed most of their incomes became unaffordable.

In the U.S. the ‘financial crisis’ and global recession caused by de-regulated finance was then exploited by cynical and / or ignorant politicians to scapegoat for domestic economic travails the displaced peasant farmers from Mexico who had come to the U.S. looking for work. The circumstances of these economic refugees thus diminished, many now feed the detention and deportation ‘industries’ as new and ever more intrusive ‘free-trade’ agreements are negotiated in secret and to the exclusion of those affected by them.

The destruction of a sustainable indigenous economy and its (forced) replacement with unsustainable industrial agriculture and newly ‘freed’ labor adds to the environmental catastrophe of global warming and the human catastrophes of economic disenfranchisement and dislocation. The ‘efficient’ model of industrial agriculture in use in the U.S. is a major contributor to greenhouses gases through heavy use of fossil fuels, poses an unknown health risk through genetic modification of crops, replaces localized economic risk with systemic economic instability and forces millions of people into labor ‘competition’ in rigged labor ‘markets.’

The issues of nominal importance to political progressives and liberals are here—potentially catastrophic global warming, a global food supply forcibly compromised through untested modification of its fundamental constituents, reliance on fossil fuels, economic inequality and the destruction of sustainable economic practices. Liberal economist Paul Krugman and President Barack Obama are both vocal proponents of the ‘free-trade’ policies behind these outcomes while also proposing that ‘something should be done’ to clean up the rolling catastrophes that their economics produce. But why if radical capitalism is ‘reasonable’ would progressive and liberal cohorts find the outcomes unreasonable– why flail about for ineffective solutions rather than stopping these problems before they arise?

The reason why from the perspective of Western academics is that actual economic history has been replaced with the canard that people in their ‘natural’ state have no economic existence. Neo-liberals permanently point to the economic circumstances that capitalism (and other forms of economic imperialism) create, such as that of the Mexican farmers displaced by radically destructive U.S. agricultural practices via ‘free-trade’ predation, as the ‘natural state’ of humanity that capitalists then claim that capitalism is the solution to. If it weren’t for the Mequiladoras and the work they provide, goes the argument; those poor, ignorant people would be naked, rolling in the dirt, too stupid to feed themselves. And the role of a ‘good’ liberal / progressive is to provide them with a job making genetically modified death burgers for less than subsistence wages.

Lest this seem an exaggeration, spend a moment with what Western economists use to ‘prove’ their case of capitalism’s benefits. The aforementioned GDP measures the monetary value of the goods and services produced within a country. Economic production outside of tradable goods and services, such as household labor, child rearing non-monetary mutual aid—the economic fundamentals of any healthy society, make no contribution to GDP. Likewise, the destruction of real economic value from the effects of global warming—the devastation of the coastal Northeastern U.S. by ‘Superstorm’ Sandy, provides a positive effect as measured by GDP due to the rebuilding of destroyed property that it entails. Depending on the ratio of current to past economic production, global warming could provide the largest boost to global GDP in modern history as it ends human existence.

Likewise, when economists use relative GDP growth rates as evidence in policy debates, what is left out is the distribution of the benefits of economic production that GDP measures. The argument that while Barack Obama has occupied the White House U.S. GDP growth has outpaced that of austerity-burdened Europe leaves out that the resultant income gains have gone almost entirely to the richest one percent of the population. Cheering for GDP growth in this circumstance is pure trickle down economics—if the rich get richer they can hire more of us to mow their grass and polish the silverware on the yacht. (Low paying service jobs constitute the near entirety of Mr. Obama’s employment ‘boom’). The austerity of failed capitalism forced on all but the very wealthy is being used to prove that austerity for the very wealthy doesn’t ‘work.’ The Princeton-Harvard-Wall Street- Washington circle of contrived misdirection is complete.

Economic imperialism has a long history—colonialism, neo-colonialism and modern corporate extraction through new and historical colonial channels, which contemporary mainstream economists appear to have no knowledge of. This is more likely than not why trade economists can write about ‘free-trade’ without tying actual trade relations to imperial history. Progressives and liberals hope to moderate the worst effects of capitalism without admitting their historical roles as facilitators of imperial predation. And contemporary liberals are proponents of the most radical forms of capitalism ever conceived—just consider which self-described liberals win the ‘Nobel’ prize in economics (it is actually a banker awarded prize having nothing to do with a choice of the Nobel Committee) and then take an actual look at their trade economics.

Looming global environmental catastrophe renders the last several hundred years of Western economic theory dubious, if not outright suicidal. Economic ‘progress’ that increases dependence on unsustainable economic practices produces catastrophe in increasing proportion to the benefits that even proponents claim will result. But the great thinkers behind modern trade theory appear to have no knowledge of this paradox. For their own benefit, as progressives would have it, why not ‘free’ the economics departments at Princeton and Harvard to compete with displaced peasant farmers serving genetically modified death burgers for $7 per hour? GDP would certainly rise as a result.

Rob Urie is an artist and political economist in New York.

Rob Urie is an artist and political economist. His book Zen Economics is published by CounterPunch Books.

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