Who pays the price for free trade?
Bishop, Jordan
WHO PAYS THE PRICE FOR FREE TRADE? FARMERS, WORKERS, THE UNEMPLOYED JORDAN BISHOP uestions have been raised repeatedly in certain quarters concerning linkage between human rights and trade...
...Neoliberal policy (in North America it is called neoconservative policy) is centered on the conviction that the discipline of the market is necessary for economic efficiency...
...now you can go and have one too...
...We have come full circle...
...In 1944 Karl Polanyi published The Great Transformation (Beacon Press, 1954), a book dedicated to the thesis that a society integrated by a self-regulating market inevitably creates self-destructive pressures, so that historically, toward the end of the nineteenth century, conservative governments, in self-defense, introduced the beginnings of what we now know as the welfare state: workmen's compensation, health insurance, minimum-wage legislation, abolition of child labor, legalization of unions, and other measures which all tend to protect small players from the destructive forces of the market...
...Today's underclass is lucky to get the legal minimum wage...
...As is well known, in Brazil hundreds of teen-agers, and even younger children, living by their wits in the cities, have been eliminated by death squads...
...In the developed countries, in spite of recent riots in Paris over a lower minimum wage, it is assumed that the combination of more police, more prisons, a well-disciplined media, and increasing political apathy will enable the economy to function with lower wages, lower welfare and unemployment insurance rates, more nonunion jobs, and other features of "lean-mean" capitalism...
...This is hardly a new discovery...
...While one hears talk of markets in both Mexico and China, the labor market is of primary concern for many investors...
...The End of Economic Man...
...Yet the negation of these rights almost inevitably leads to actions, on the part of those deprived, that are met with a real denial of political and civil rights...
...Henry Ford's genial notion of paying his workers $5 a day so that they could buy his cars is no longer the rule in the postmodern division of labor...
...There is active international competition for the lowest wages, and ideas such as community loyalty are regarded as relics of pre-industrial societies...
...This can be true in more ways than one...
...A spokesman for Canada's Fraser Institute (a neoconservative think-tank in British Columbia) declared that the Canadian economy could do without any manufacturing sector...
...To cite one example, social assistance costs have increased phenomenally...
...Neoliberal policy and reliance on the market makes it worse, although attempts by governments or NGOs to remedy the situation are often met by serious capital flight on the part of the elites...
...Zapata's cry of tierra o muerte is now heard again...
...D 17...
...Adam Smith cites a seventeenth-century magistrate to the effect that those whose labor did not bring in the ten shillings a week required to support a family of six—"the father and mother, two children able to do something, two not able"—"must make it up either by begging or stealing" (The Wealth of Nations...
...A majority will not...
...Both in China and in Mexico there is another linkage, one that cannot be made or unmade in Washington or Ottawa...
...If necessary, death squads will be employed to deter union organizing...
...There will be no end to this problem, since people will not give up in their search for freedom and equality...
...All this obviously goes beyond the problem of human rights as we usually define it...
...It is now a foregone conclusion that the consumer society as we have known it may be enjoyed by working classes only if several adults in a family are working...
...His visit to Mexico was concerned with trade...
...And while things are not as bad as they were in eighteenth-century Europe or in the third world today, it is obvious that consumer demand cannot be maintained at the levels we are accustomed to...
...Western nations have always been skeptical about the cluster of economic and social rights in the UN declaration of 1948...
...For today's theorists, import substitution involves unacceptable protectionist practices, since its success depends on the protection of nascent enterprise from foreign competition...
...After all, except for fringe JORDAN BISHOP, a frequent contributor to Commonweal, worked for fourteen years in Bolivia and Mexico...
...Now, as often as not, they are industrial...
...groups on the left, one hardly ever hears of any concern for human rights in (say) Indonesia or East Timor...
...From discussions about the Free Trade Agreement (FTA) and NAFTA it appears that those whose advice is most effectively heard by governments are not worried by the fall of real wages...
...There is nothing else...
...And all this, as a Chinese ministry for social affairs noted in a recent report, can only lead to an increase in poverty, unemployment, and social unrest...
...We expose ourselves to the destructive dimension of market economics...
...There is also, for some, the safety valve of emigration to the United States or Canada...
...For their men, cheap subsidized corn from the United States and the new agricultural policies of the Mexican economic miracle have already made agriculture, for them, a no-win adventure...
...Perhaps we need to look again at our basic policy decisions...
...But it did create some pressure for higher wages so that there would be greater effective demand for local manufactures...
...we have what we want already: a safe haven for investment for our own transnational corporations, a pool of cheap labor, and a stable political environment for trade and investment...
...The situation is in fact desperate, and while one cannot blame neoliberal strategies for all of it, they have made the situation worse, not only in the third world but in developed areas as well...
...And this leads inevitably to serious human-rights problems...
...Capitalism as a means toward freedom and equality," wrote Peter Drucker in 1939, "had been proved illusory by 1848...
...When we first began to think about economic development, import substitution was the common strategy for thirdworld industrialization...
...Theft was the common strategy for supplementing low or inadequate wages...
...Their only recourse is to join the ranks of the urban unemployed, living by their wits beyond the margins of society...
...For his part, Mr...
...With the assassination of Luis Donaldo Colosio, the ruling Institutional Revolutionary Party (PRI) candidate for the Mexican presidency in this summer's elections, Chretien's chief concern appeared to be that rumors of political instability might dampen enthusiasms for Canadian investment in Mexico under the newly signed NAFTA agreement...
...Warren Christopher's problems with China gave rise to similar questions...
...It is not to be allowed, because it necessarily limits the scope of the market, and the market is sacred...
...In Chiapas, the reaction was only to be expected...
...Except for some privileged elites, eighteenth-century workers were poor, and if they fell below the subsistence level, they were forced to beg or steal, just as are many Latin Americans today...
...industrial production is principally for export, not for home consumption...
...Already, many of the workers in the maquiladora are young, female, and short-term...
...When governments are involved, they often appear to be highly selective in their concerns for human rights...
...It also involves some hard social choices...
...This means in fact the subsidizing of inefficient, or, at least, less efficient industries...
...We tend to associate this with fly-by-night operations, but if we think twice we can recall countless serious and sophisticated industrial operations in Ontario, Quebec, and the American rust bowl that have packed up and moved South in the past ten years...
...And this is perhaps even more the case in Mexico, where it is estimated that five million campesinos will be added to the urban population as a result of the neoliberal economic policies enshrined in NAFTA...
...He now lives in Ottawa...
...Departments of trade and industry, perhaps rightly, do not feel that human rights are part of their brief...
...Union organizing is not tolerated...
...Some of these campesinos may find employment...
...Such organization is incompatible with a market-driven society...
...FARMERS, WORKERS, THE UNEMPLOYED JORDAN BISHOP uestions have been raised repeatedly in certain quarters concerning linkage between human rights and trade privileges...
...In South Korea we are more concerned with maintaining its military potential against the threat from the North...
...Orthodox economists deplore these measures as "market imperfections," but as John Kenneth Galbraith noted in response to a Hungarian journalist with re16 spect to Friedrich Hayek's market model, "...it was a design that we in the West would not care to risk" (Manchester Guardian Weekly, February 4, 1990...
...everywhere there are strong pressures to rollback the welfare state, which, it is said, we can no longer afford...
...And while some concern is occasionally heard from government sources, most of the noise comes either from human rights nongovernmental organizations (NGOs) or from groups opposed to the exportation of manufacturing jobs to the third world under agreements such as NAFTA...
...And we should not forget that for Polanyi the market is not simply a natural institution...
...In Adam Smith's day no one thought it odd that the craftsmen who made carriages for the wealthy could never ride in one...
...It can be argued that the lower classes in most third-world countries are in a similar situation, along with increasing numbers in developed countries...
...In East Asia, the "Tigers" have pursued their development with vigorous industrial policies that have no place in the "pure" market model...
...We try to maintain at least the rhetoric of equality as a social ideal, but markets do not lead to equality...
...In the current recession, Statistics Canada noted a rise in consumer spending, but added that it was financed by savings...
...While we in Canada and the United States deal with theft by having the highest prison populations in the developed world, begging is becoming more and more common...
...With export-led development this pressure, ineffective as it was, is entirely gone...
...Already there has been a reaction in Britain, from within the Conservative party, to Thatcher's lean-mean capitalism, although critics would argue that the return to a universal market discipline begun under Thatcher is still extremely destructive...
...It is created by legislation...
...There was a time when, in discussions on third-world development, many in the South read the European and North American message as: "We had our nineteenth century...
...For the ideologues of neoconservatism this is not a problem...
...Have we "won" the cold war only to be defeated by our own propaganda...
...In Ontario, after ten years of neoconservative rule, they have doubled...
...In other words, are we talking linkage or leverage...
...Like Galbraith, they have been unwilling to let the market make all their development decisions, and they have defended their institutions against the ideologies of free trade...
...We used to think of ghost towns in terms of mining, logging, resource industries...
...Given the way the international labor market works today, this is almost "necessary...
...Any effective political and social organization on the part of the poor is opposed by force...
...This is not inevitable...
...In many North American cities, one has to take similar precautions with a car radio...
...Unemployment over 10 percent is now declared to be the natural rate in Canada, and it is a given that jobs lost to the South—whether this be the South of the United States, Mexico, or other low-wage areas—as a result of these agreements are gone for good...
...And in third-world countries, one form that this destructive tendency takes is that of systematic abuse of human rights...
...Beyond this, there is a deeper contradiction...
...Guatemala is nearly forgotten...
...If wages are allowed to rise, the industry will move elsewhere...
...Can the developed nations impose their own standards of human rights on developing nations even as they impose policies that make human rights impossible to realize...
...For these children, as for the family mentioned by Adam Smith, crime and begging are the only means of survival...
...When land is defined as a commodity under these conditions, it is almost inevitable that arable land possessed by indigenous communities or individuals will be taken over by more powerful players in the marketplace—haciendados in the nineteenth century, modern capitalist agriculture today...
...Some of this is simply the recession, but the way in which the economy was managed is a significant part of it...
...Both in China and Mexico the casual observer might be forgiven for speculating as to what is involved in our concern for human rights...
...most recently, the principal areas concerned have been China and lMexico...
...o the South, matters are even worse...
...Petty crime is all too often a question of survival...
...Today most workers in Mexican industry are unable to buy the products of their labor, most of which are in any case sold abroad...
...When our governments do raise questions concerning human rights, are they linking human rights with trade, or cynically using the question of human rights to gain trade concessions...
...When Canada's Prime Minister, Jean Chretien, visited Mexico in March, the question of Mexican human rights problems and the events of Chiapas in January were fresh in people's minds, although an agreement had apparently been reached between the Mexican government and the Mayan leaders of Chiapas...
...there is a market for their services, just as there is no place in the market for their victims...
...Smith obviously sympathized with the working poor, and was even somewhat optimistic, although he noted that while combinations of workers to raise wages were severely punished, combinations of masters to keep wages low went unnoticed...
...In both places problems with human rights are exacerbated by development policies pursued by those countries, policies which are vigorously supported and praised by governments in the United States and Canada...
...Chretien, he chose to raise the question of human rights when he visited China in March, and was told that this was none of his business...
...If Mr...
...Here there is, with the favored development policy defined as export-led free market capitalism, considerable pressure to depress wages...
...We have forgotten our history...
...In most Latin American countries, one routinely removes windshield wipers and locks them inside when a car is parked...
...One might even say, given the pressures from the International Monetary Fund and other agencies, that these policies are imposed by our governments, through their strong influence in these agencies...
...The days of stay-at-home housewives are as foreign to today's working class as they were to those of the 1840s in England...
...In the reforms of the 1850s, this led to the loss of land by indigenous communities and individuals, the formation of the hacienda system (the Spanish colonial regime had protected the communal lands of indigenous communities), debt peonage, and eventually, to the revolution of 1910...
...They promise nothing but trouble in third-world nations, and we face serious problems at home...
...In Canada and the United States, one now hears more often of a "recovery without jobs...
...in Mexico its members live by their wits...
...So they move to the cities to join the ranks of the urban unemployed...
...The logic of a society completely integrated by a selfregulating market is to create the possibility and often the reality of economic growth, while also creating a permanent underclass of poverty, since the benefits of growth flow in greatest share to the local and distant elites who control the process...
...Chretien never raised the question of human rights...
...Unlike Mr...
...The January events of Chiapas were triggered by Mexico's economic reforms, that is, by a concerted effort to install leanmean capitalism on a national scale, including the commercialization of the communal lands (ejidos) of native communities...
...This very competition provides a strong incentive—or should we say a strong temptation—to governments to discourage such activities as union organizing to the point where real human rights problems arise, and indeed have already arisen in many places...
...Peasant agriculture stands condemned as inefficient, and the peasants feel strongly that they are condemned with it...
...Today the streets of Ottawa remind me of those of La Paz, Bolivia, in the 1950s, and Ottawa is one of our more prosperous cities...
...But while our governments have welcomed NAFTA, and indeed, worked hard to get NAFTA signed and delivered, 15 we are less enthusiastic about absorbing the surplus population created by NAFTA, despite the fact that most of the immigrants, like those in the past, are hard-working, frugal, and self-motivated people who are willing to undertake work that most descendants of older waves of immigration are not interested in doing...
...Chretien refuses to do either, it may well be to his credit...
...Perhaps we do not need to raise the question of human rights in these places...
...On the contrary, they systematically exacerbate social inequalities unless their impact is limited by social legislation, trade unions, and other "market imperfections...
...They do not murder children as a public service...
...But even after Chiapas, the commercialization oiejido lands stands as part of Mexico's neoliberal policy...
Vol. 121 • June 1994 • No. 12
