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Stuck in an Antique, Suicidal Idiocy

The Problem With the TPP is Capitalism

by ROB URIE

Two decades or so ago Scottish philosopher Alisdair MacIntyre made the point that had so much effort not gone into proving the existence of God few people would ever have doubted it. As is currently the case in economics, had ‘free-trade’ not been so wildly oversold much of the economic malpractice attributable to it might not be so easily targetable. As it is, ‘free-trade’ is a slogan, a ‘brand,’ for an opportunistically defined set of social practices and relations. Even with reduced or nonexistent tariffs and trade barriers ‘the economy’ carries with it the residual of historical social relations, standing armies, governments that are political and economic actors on multiple levels and the preponderance of economic acts that never find their way into the economist’s purview.

While the pending TPP (Trans-Pacific Partnership) and TTIP (Trans-Atlantic Trade and Investment Partnership) trade deals have been correctly reported to strengthen intellectual property protections, patents and corporate say over civil governance, (1) a large contingent of mainstream economists and politicians is still invoking free-trade theory to sell the deals and (2) even leftish economists are careful to challenge only these specific aspects of the trade agreements, and not the base premises. Career risk is one reason for not stepping outside of free-trade dogma— economics is amongst the most intellectually constrained of ‘professions.’ And as history has it, the academic mainstream exists to explain the fundamental correctness of existing social relations, not to pose challenges to it.

uriettp1

Graph (1) above: manufacturing wage differences between countries, here including the costs of social insurance, are very large. U.S. wages are lower than those of Scandinavian and major European countries due both to lower direct wages and to lower social insurance benefits. Free-trade theory would have these countries at a major economic disadvantage to the U.S. When adjusted for hours worked, U.S. manufacturing workers are relatively poorly paid. And considering that the value of social insurance is a function of its price, high health care costs and poor outcomes place U.S. wages significantly lower when adjusted for the benefits that are actually delivered. While ‘developed’ Europe is rapidly moving toward ‘liberalization,’ toward the systematic immiseration of its manufacturing workers, residual labor power has slowed the pace relative to that of the U.S. Source: BLS.

A typical rhetorical strategy amongst economists is to isolate the effects of wage differentials on jobs gained or lost despite the fact that few of the corporations likely to outsource look at the world this way. Wages, including the costs of social insurance, are but one factor in the consideration of where to locate manufacturing. The ability to pollute with fewer restrictions (costs) is actually...

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