The arguments for free trade are good, as far as they go. Different regions of the world are differently resourced, meaning that what is easy and cheap to produce in one place may be difficult and expensive to produce in another. It is of mutual benefit to all regions if goods and services are produced where they are mostly easily produced and then traded freely. Free trade on fair terms creates a win:win — everyone is better off. Of course, if this benefit of free trade is obtained only by a select class of people, then it can be the case that most people do no better. Worse, if the control of global trade is in the hands of transnational corporations, then the appearance of free trade can mask a reality of tax avoidance, wage suppression, and price fixing which can mean that the poorest people are left worse off.
in Australia (and elsewhere) there is a long tradition of working-class opposition to free trade, but this approach throws out the baby with the bathwater. Resisting the rationality of free trade has costs. Supporting the relative privilege of one nation’s working class can mean supporting the relative impoverishment of another. Rather than worker-nationalism (which at times veers into some rather xenophobic territory), it is a better radical objective to embrace free trade on terms that are internationally fair and socially equitable.
Only a truly global system of law, taxation and trade regulation can ensure that the benefits of free trade are realised by all the people who are affected by free trade. Often the argument for free trade has been advanced by people who still believe in national borders, and it has seldom been extended logically to the support of free migration of people. Yet free trade in goods without allowing free migration of people is inherently unfair. It is free trade without personal freedom.
In economic terms, it is most fair and effective not to impede the movement of people. Wages low in one region? Let the workers move from that region to where wages are higher. This will tend to have the effect of lowering wages where they are expensive (because the supply of workers will be increased) and raising wages where they are low (because the supply of workers will be reduced).
The free movement of people allows people to maximise their opportunities and maximises the outcomes for all people on average. Of course, what gets destroyed in the process is the privilege of the minority who currently benefit from inequality of opportunity.
To take one example: who can doubt that if Indians and Chinese were allowed to migrate at will to Australia, the resulting population shift would be massive. The effect on the lifestyle of the 25 million Australians who live here now would probably be negative, but the benefit to the unknown number of new Australians (5 million? 50 million? 100 million?) would be huge, and the departure of that many migrants from India and China would also be a huge benefit to those who stayed behind. If we cared about the total sum of human happiness, we would be in favour of allowing such movements of population.
Funnily enough, you won’t find much Australian support for this sort of free trade in people, but neither will you find much of it among the rulers of India or China either. Politics around the world is set up on nationalistic lines, in which we pretend that the needs of one nation are more important than the needs of people, and on corporatist lines, in which we pretend that the needs of one corporation are more important than the needs of anything else. True internationalism, in which people act for the good of people without reference to their race, nation, religion or corporate allegiance, is very rare.
But let’s have it: globalism, true globalism — free trade in things and free movement of people — with one world government, and the abolition of national borders. The disruption to life as we know it would be spectacular (although we could plan a staged transition to our new global future if we wished) but think of some of the wonderful opportunities, new wealth and freedom that we could create.
Without a global community under a global government, how will we ever:
- find an economic and effective solution to human-induced climate change
- find a way to make transglobal corporations pay a fair share of tax
- provide equality of opportunity to all the world’s children
- do away with flag-waving nationalism and the risk of war it brings
- learn to think and act like there is only one world and one humanity?
© 2018 Craig Bingham
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Thanks for commenting. God knows what Marx would make of the developments that have taken place since his time — the demonstrated capacity for capitalism to reinvent and extend itself would surely have inspired him to revise his theories.
I think the TPP is a good example of the odd sort of ‘free trade’ you get when the cartels that are governments work to improve the health of the cartels that are transnational corporations. Allowing corporations to sue governments is a sign that the governments are acknowledging the pre-eminence of the corporations in the world power structure.
Having said that, I would rather we work our way through globalisation to a new internationalism than see a retreat to nationalism and trade protectionism. I would rather have Turnbull than Trump, even if neither of them come close to what I really want!
Radical. Posited, in part, by Marx? The TPP was concluded by all, including Minister Robb, through collusion and obfuscation. There also appears to be incompetence on the part of some negotiators. For example, why would corporates have enshrined a right to sue governments in this agreement?