Free your mind of free trade misconceptions
On the Tuesday, May 2 edition of “The Ed Show” on MSNBC, U.S. Senator Bernie Sanders (I-Vermont) reiterated, as he has so often, that what he insists on calling “unfettered free trade” has destroyed jobs in Vermont. At his official website he blames such “unfettered free trade policies” for our shrinking middle class, job loss, and ever-widening gap between the rich and poor.
Meanwhile, The Volokh Conspiracy blog's Ilya Somin writes (in a comment at Bleeding Heart Libertarians): “I think U.S. trade policy (which has done a lot to promote free trade, which even most left-wing economists see as beneficial to the poor) ... generally [does] a lot more good than harm.”
This common conflation of “free trade” with the existing policies of the U.S. government, coming from seemingly opposite ends of the American political spectrum, bears some remark — especially considering U.S. trade policies are nearly the reverse of free trade.
The “unfettered free trade” which Sanders accuses of destroying jobs and polarizing wealth is actually highly fettered, corporate-administered trade. The majority of so-called “international trade” is in fact the transfer of finished and unfinished goods between national subsidiaries of transnational corporations — actually an internal process within the administrative bureaucracies of giant global corporations. And the so-called “free trade” polices promoted by the American state are highly authoritarian regulations that enforce these corporate bureaucracies' stranglehold on world trade.
Contrary to what Somin believes, not only does U.S. trade policy not “do a lot to promote free trade,” it does the opposite. The centerpiece of American “free trade” agreements, far from simple tariff reduction, is the imposition of “intellectual property” monopolies through which corporate bureaucracies maintain control over international trade.
As I've frequently pointed out, “intellectual property” serves the same protectionist function for the global corporate economy that tariffs did for national industrial economies a century ago. Patents and copyrights — just like tariffs — restrict who is allowed to sell a given good in a particular market.
It's this monopoly which enables one transnational corporation's headquarters to outsource actual production to Shenzhen job shops while retaining control of marketing and “intellectual property,” charging a US$200 brand-name markup for sneakers that cost US$5 to make. It does this by making it illegal for those same job shops to produce identical shoes, minus “the Swoosh,” and market them domestically for US$10.
These monopolies prevent competition from passing along cost savings from innovation to the consumer, so that state-privileged corporations can instead enclose it as a source of rent. Patents on dual-purpose technology enable Western TNCs to secure lockdown on the latest generation of production technology and prevent the emergence of indigenous competition in the Third World.
Because of this highly statist system of global “intellectual property” law, the great majority of TNC profits are royalties on copyright or embedded patent rents on the intangible value of physical goods. The most profitable industries in the global economy are either heavily dependent on IP (entertainment and software), heavily subsidized by home governments (armaments and agribusiness), or both (biotech, electronics, pharma).
The global corporate economy, and the “intellectual property” regime at the heart of it, are almost as dependent as was the Soviet nomenklatura's system of power on totalitarian information controls. “Digital Rights Management,” anti-circumvention laws, website seizures without due process, ubiquitous surveillance, etc., constitute a level of police statism equivalent to that of the War on Drugs. It's no coincidence that offenders against this information control regime, like the old Samizdat publishers, are known by the state as “pirates.”
Then there's the highly profitable category of extractive industries. You don't even want to think about the massive evictions and population clearances, state pre-emption of vacant land, and slave labor that's gone into colonial mining operations around the world.
In agriculture, you've got Washington and World Bank technocrats colluding with local governments and landed oligarchies to enclose formerly peasant-occupied and -cultivated land for cash crop production, using GM seeds with terminator genes from Monsanto and working on contract for Cargill and ADM to raise feed for McCattle — while the peasants formerly feeding themselves on their own land are either driven to working as agricultural day-laborers or starve in the gutters and shantytowns of Nairobi and Calcutta. When supposed political adversaries share common vocabularies and conceptual frameworks, you know something's up. The implication is that “both sides” in our mainstream political narrative, far from being either mutually exclusive or mutually exhaustive, span the ideological spectrum from L-O and share probably 80 percent of their assumptions in common. That's because the “two sides” in the American political system are really two wings of the same establishment — the “right” and “left” boundaries of what's acceptable to our corporate-state ruling elite. Maybe it's time to look at the man behind the curtain.
Kevin Carson is a senior fellow at the Center for a Stateless Society (c4ss.org) and holds the Center's Karl Hess Chair in Social Theory.
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