Subsistence Assistance

New at Reason: Ron Bailey braves the elements in forbidding Cancun to report on how pampered first-world nudists want to prevent poor campesinos from improving their lives.

Comments

[Kevin Carson]

fydor,

On the most basic philosophical level, I think the WTO violates libertarian principles even when it knocks down genuine foreign trade barriers. It is the responsibility of the U.S. government only to allow American business to trade with whom it wants, without restriction, and to let them assume the costs and risks involved in dealing with the other foreign governments. A centralized state, by imposing a "free market" order from the top down, eliminates the transaction costs involved in doing it the other way. The very existence of a single, centralized legal order covering the entire world, instead of an order built from the bottom up by voluntary relations between localities, is objectionable. All the infrastructures that promote law and order, enforce contracts, etc., involve transaction costs in their creation; and the transaction costs should be entirely paid for by those voluntarily willing to pay the costs with their own money, rather than being eliminated from above.

The very existence of the centralized state over large geographical areas tends to promote certain forms of business organization. The national corporations and the single national market in the U.S. would not have come into existence in the 19th century without the unconstitutional legal framework created by John Marshall, the Whigs, and the Gilded Age Congress and Supreme court.

I've already outlined the major substantive activities of the WTO and Bretton Woods agencies that subsidize or protect corporate interests. In the case of the WTO/GATT, the worst is the IP provisions. The worst thing done by the IMF/World Bank is to subsidize infrastructure, and to use structural adjustment programs to impose pro-corporate policies on governments (including selling off, cheaply, assets the interest on which is currently being paid by taxpayers).

Jason Ligon,

The WTO, like the Pope, has no divisions. Its decisions are enforced by the trade sanctions of national governments. But the decisions of that unelected body provide legal cover for those governments.

[Kevin Carson]

I meant to add, fyodor, that the overcoming of those transaction costs is a so-called "public good," which I do not consider a legitimate concept. The legal and political infrastructure necessary to eliminate the transaction costs requires coercive taxation for its funding, and coercion to punish non-compliance. So it is taxing people to provide something they may or not want, but are not actually coughing up the $$ for (and whether they want it is effectively unverifiable, if they are unwilling to pony up their own cash).

[fyodor]

Kevin,

Thanks. I take your point about the government doing business's work for it and how that can pervert the market. I don't understand the last part about using structural adjustments to impose nefarious policies. Are you saying the World Bank uses leverage to get governments to make sweetheart deals with World Bank cronies? I always wince at the use of the word "impose" when no force is involved. Why don't these governments just refuse to play along if the arrangements are so bad for them?

[fyodor]

Kevin,

With your last post, it sounds like the only problem with enforcing free markets through government treaty is that is requires coerced taxpayer money to make and enforce the treaty? Point certainly taken, although I wonder how that justifies your vehement denunciations and "mercantilism" accusations. If this is your primary concern (other than IP and World Bank shenanigans), that would seem to imply that WTO would be fine and dandy as long as it were privately financed. Am I reading you right?

[Jason Ligon]

Kevin,

How do you reconcile the idea that the people in Africa should be free from WTO interference to make their own decisions in a free marketplace with the idea that the law and order institutions encouraged by the WTO drastically increase their freedom in the marketplace over their current state of affairs vis a vis their own crappy governments?

It isn't as though the WTO goes to a bunch of free people with representative governments and imposes any sort of order on them. The requirementas are the people need to be more free than they currently are.

Also, the IMF, World Bank, and WTO don't enforce anything. They are agreements between international bodies (not to be confused with a One World Government, as you are indicating) concerning trade across international boundaries.

Reducing transactions costs that arise from political processes does not distort the market, it reduces existing distortions in the market.

[joe]

"pampered first-world nudists"

Why can't libertarians lay off the class warfare? Not all rich people are evil, you know.

[joe]

"...want to prevent poor campesinos from improving their lives."

Objectively pro-poverty, eh Ron? Shame on you.

[joe]

er, Tim.

[Kevin Carson]

Once again, what do "WTO trading rules" have to do with "free trade"? Or rather, I know what they have to do with "free trade," but what do they have to do with free trade? It would be more accurate to say that the major ENEMIES of free trade are gathered in Cancun. Free trade, for the U.S., simply means lowering our trade barriers and ceasing to subsidize the operations of American capital overseas. It doesn't require multilateral agencies of global economic governance to regulate (!) "free trade," and it sure as hell doesn't have anything to do with enforcing anti-free market patent monopolies.

The WTO, along with the Bretton Woods agencies, is a mercantilist institution. It is not about free trade, but subsidized trade.

[Kevin Carson]

"But positive claims that a product is fairly trade can easily be interpreted as saying that competing products are unfairly traded. And what subjective standards should apply? For example, should purchasers be allowed to discriminate in favor of products "Made in America" on the basis that US labor laws are allegedly better than those of Russia or Brazil?"

Allowed? ALLOWED??!! Ron, please tell me you aren't suggesting the "fair trade" equivalent of food libel laws, or calling for government restraints on voluntary labelling of Made in America products.

Although you grudginly concede the free market legitimacy of voluntary certification and labelling, the fact that the concession was immediately followed by the above quote indicates you are very ambivalent about what you are willing to "allow."

[joe]

'It doesn't require multilateral agencies of global economic governance to regulate (!) "free trade,"'

Yes, it does. Maybe it shouldn't, but in the real world, the government is going to have to point to something better than a text book when explaining why all those textile mills are shutting down.

[Anonymous]

They won't be pointing at a text book, they'll be pointing at costs of production.

[fyodor]

Kevin, are you against ALL patent protection, or do you merely think it's excessive as enforced by GATT?

Joe, good point about Tim's comments amounting to accusing protestors of being objectively pro-poverty, but alas, only up to a point. Aside from the fact that Tim was likely being at least somewhat toungue-in-cheek in using "want" the way he did, I've known environmentalists who genuinely WANT third world nations to stay poor because they believe that would be better for the environment. How much of this sentiment fuels WTO protest I obviously can't say, but from my experience in close quarters with environmentalists (heh-heh, they think I'm one of them! well, in SOME ways I am...), I believe it's not entirely out of line to think that POV may be involved, unfortunately.

[joe]

...while the protectionist opposition points at little boys and girls whose daddies lost their jobs and can't pay the mortgage. I wonder why the LP doesn't have anyone in Congress.

[Kevin Carson]

joe,

Those textile mills are shutting down, among other things:
1) because the government's subsidies to merchant marines and airlines reduce the cost of shipping the product back to the U.S.;
2) because the U.S. government props up regimes friendly to sweatshop employers and unfriendly to labor organizers; and
3) because multilateral agencies like the IMF and World Bank subsidize the creation of the infrastructure Western capital needs to locate facilities in the Third World (not to mention subsequently using the debt slavery thus incurred to pressure them into selling that infrastructure off to Western capital at pennies on the dollar).

And that's just off the top of my head--I'll probably think of more later. As usual, most of the problems of capital flight from the U.S., deindustrialization, etc., are not actually created by free trade, but by "free trade" (i.e., state intervention).

fyodor,

I'm against all patents. But traditional patent law would be a definite improvement on the IP provisions of the Uruguay Round. The latter not only extends the terms significantly, but actually protects industrial secrets NOT patented--traditionally the responsibility of a company to do for itself.

[Brad S]

There's an interesting distinction being made here which helps bring some perspective on the whole globalization versus anti-globalization issue to me.

For the protesters to oppose the broad notion of "globalization" makes very little sense to me. After all, the wheels of globalization have already been set in motion. We have modes of transportation that can take us to the other side of the globe within a day. We have means of communication that allow news to travel around the globe in literally seconds. As a global people, we are far more connected and interrelated than ever before. And people who are connected naturally want to trade with one another. And in almost all instances, this trade is mutually beneficial. I'm better of for having traded with you, and likewise you are better off for having traded with me. Indeed, trade is one of the few arenas where anyone who produces a trade-worthy product can reap benefit, regardless of race, gender, creed, sexual orientation, or any of that other stuff. In this light, who could be against globalization?

Perhaps what the anti-globalization protesters really oppose is the WTO, and the WTO's version of globalization. The argument for this is that the WTO is a large, mercantile, bureaucratic organization, and as such it serves the interest of other large, mercantile, bureaucratic organizations (READ: large, multi-national corporations) at the expense of smaller traders. Basically, the WTO favors free trade on the surface, but in reality the WTO wants a version of free trade that benefits its constituency of large corporations. If that is the Cancun protesters' argument against free trade and globalization (or, should I say, "globalization" and "free trade"), then I can appreciate where they're coming from.

[joe]

The question here is not "What is the right policy?" Kevin, but "How can we get that policy implemented?" A candidate who sez, "We should abolish the merchant marine because it's a good idea" is going to get his ass kicked, even if he agrees with you 100%. The WTO provides political cover to do the right thing; reduce trade barriers that have a strong and organized domestic constituency.

[fyodor]

Kevin (and maybe Brad S.),

Okay, I want to be educated here. Kevin has cited overreaching patent and industrial secret protection and the subsidizing of foreign investment via taxpayer support of the World Bank. How else does the WTO actually interfere with free trade? And Kevin, please limit your answer to effects actually caused by the WTO (and/or related institutions and agreements), not just ways in which perfect free trade does not currently exist. Your assignment, if you choose to accept it! I'm all ears...er, eyes!

[Jason Ligon]

1) The WTO is a not a regulatory body. What are the consequences of non compliance with its mandates? Do people go to jail? Do we blockade non complying countries?

2) The interests of the 100,000 textile workers in the US do not supercede the interests of the 270,000,000 consumers of textiles. If the guy down the street is willing to sell similar hotdogs for less than half what you sell them for, you had better figure out another business to be in.

3) The free trade that benefits large corporations is defined by open access to labor and product markets. In other words, free trade. There is no version of free trade that won't benefit those with more to invest more than those with less to invest.

4) I have no problem with a voluntary 'fair trade' label, but because the term itself is meaningless, I can't imagine that it will be anything more than a marketing gimmick. Can someone tell me what 'fair trade' would mean in specific terms?

[fyodor]

Jason Ligon,

My own answers, for what it's worth.

1) Good point for those treating WTO as evil incarnate. But unless you're arguing that it has no effect whatsoever, it still makes sense to debate what effect it does have.

2) Sure, but Kevin Carson is arguing that our trade laws (which may or may not be part of the WTO treaties, that part is not clear to me) actually benefit foreign competition at the expense of the market, whereas Joe is merely arguing the politics of appearances, if I read those two correctly.

3) Kevin is claiming (and Brad S seems to be suggesting) that the WTO is not accomplishing this. Thus I have asked them how so.

4) As practiced by the coffee distributor currently exploiting that term, I would say it means philanthropic (i.e., above market price) pay to producers. Which one can choose to voluntarily subsidize or not.