Ideological Positions and Economic History

 

My response to Shekhar Gupta's video

Dear Mr. Gupta

I believe your thesis on economic history is flawed when you argue that Japan, Korea, Taiwan and Singapore have grown because of economic freedoms i.e. I presume you mean free market practices. I have often heard you say that India too should follow free market practices to achieve similar heights. In the above process the elephant in the room i.e. how China rose with state intervention, has also been ignored.

Kindly permit me to state a few historical facts extracted from 'Bad Samaritans The Guilty Secrets of Rich Nations...' by Ha Joon Chang

1.  When Robert Walpole became the British Prime Minister in 1721 he launched a Swadeshi* policy aimed to protect British manufacturing industries from foreign competition, subsidise them and encourage them to export. Tariffs on imported foreign manufactured goods were significantly raised while tariffs on raw materials were lowered. Regulation was introduced to control the quality of manufactured goods so that unscrupulous manufacturers could not damage the reputation of British products in foreign markets. Walpole’s protectionist policies remained in place for the next century, helping British manufacturing industries catch up with and then finally forge ahead of the counterparts on the Continent.By the end of the Napoleonic wars in 1815 British manufacturers were firmly established as the most efficient in the world and it was then that they started campaigning for free trade.

2. The US too followed similar protectionist policies, espoused by Alexander Hamilton, which included protective tariffs, import bans, subsidies, export ban on key raw materials, financial aid...until the end of the Second World War (WWII). It was only after WWII, with its industrial supremacy unchallenged, that the US started championing the cause of free trade. Even when it shifted to freer trade, the US government promoted key industries by another means; namely public funding of Research and Development (R&D). Without government funding for R&D the US  would not have been able to maintain its technological lead over the rest of the world on key industries like computers, semiconductors, life sciences, the internet and aerospace.

3. In Japan the famous MITI (Ministry of International Trade and Industry) orchestrated an industrial development programme that has now become a legend. After WWII, imports were tightly controlled through government control of foreign exchange. Exports were promoted in order to maximize the supply of foreign currency needed to buy up better technology. This involved direct and indirect export subsidies as well as information and marketing help from JETRO the state’s trading agency.

4. Even Korea has not been an exception to this pattern. The Korean miracle was the result of a clever and pragmatic mixture of market incentives and state direction. The Korean government did not have blind faith in the free market either. While it took markets seriously, the Korean strategy recognized that they often need to be corrected through policy intervention.

5. Singapore has had free trade and relied heavily on foreign investment, but even so, it does not conform in other respects to the neo-liberal ideal. It used considerable subsidies to MNCs in industries it considered strategic. It also has one of the largest state owned enterprises which supplies housing and almost all land is owned by the government.

To conclude, I feel that Mr. Gupta’s advocacy of free markets is based on a fundamentally defective understanding of the forces driving globalisation and a distortion of history to fit the theory. Free markets and trade was often imposed on rather than chosen by weaker countries. Virtually all successful economies, developed and developing, got where they are through selective strategic integration with the world economy rather than unconditional  global integration.

Regards

Girish Menon

* Swadeshi  is a conjunction of two Sanskrit words: swa ("self" or "own") and desh ("country"). Swadeshi is an adjective which means "of one's own country".

The Buddha Speaks - Brexit: How do you interpret a referendum?

Britain sees the Commonwealth as its trading empire. It is sadly deluded

Nearly every Commonwealth country opposed Brexit. Leavers are wrong to hope old imperial patterns will replace EU trade


 Ian Jack in The Guardian

 

Illustration by Matt Kenyon


Early April, 2018. In Brisbane a cheeky radio interviewer asks Prince Charles if he really does carry a personal lavatory seat on his travels, and the prince replies, “Oh, don’t believe all that crap.” Elsewhere in the Queensland capital, India win gold in the women’s weightlifting and lose to Cameroon in the men’s basketball. At Buckingham Palace, a menu is drawn up for a banquet to be attended later this month by 53 heads of state or their representatives. In Whitehall, the Department for International Trade ponders the effects on British farming of hormone-treated beef imports from Australia, which is a probable consequence of the UK’s first post-Brexit trade deal.

In one way or another, the Commonwealth is responsible for all these things: for the Commonwealth Games, which demand the presence of the heir to the throne in Australia; for the Commonwealth heads of government meeting (Chogm), the 25th such conclave since 1971, which occurs in London (and Windsor Castle) on 16-20 April; and, simply by its dogged and unlikely persistence as an international grouping, for permitting the British delusion that old imperial patterns of trade can replace the present arrangements with the EU. (Enter the hormone-treated beef.)

Not that the Commonwealth itself encouraged this idea: nearly every Commonwealth republic and “realm” wanted the UK to remain inside the EU. And not that Europhobes have always prized the Commonwealth. As our present foreign secretary wrote in 2002, “It is said that the Queen has come to love the Commonwealth, partly because it supplies her with regular cheering crowds of flag-waving piccaninnies.” The Commonwealth that some Brexit campaigners had in mind was perhaps a little whiter – taking the definition of Commonwealth all the way back to the time when it meant the British empire’s settler dominions: Australia, New Zealand, Canada, Newfoundland and South Africa, which were sovereign states, not colonies, and bound only by their loyalty to the crown.

Indian independence forced Britain to be more flexible about who could be included. As India would be a republic, loyal oaths were out of the question. But Britain was keen to maintain some form of the old connection “in the mistaken belief”, according to the Commonwealth historian Philip Murphy, “that India’s huge standing army would continue to underwrite British great-power status”. There were other reasons too. Historic sentiment, fear of American ambition, the need to protect British markets: together they led Britain to propose a compromise. All that would be required was that India recognise the king as the head of the Commonwealth, “as the symbol of the free association of its independent member states”, rather than pledging loyalty to him. Even so, the offer still flew in the face of the complete withdrawal that had been promised by leaders of the independence movement. But India’s prime minister, Jawaharlal Nehru, finally went along with it – realising, he said, that Commonwealth membership meant “independence plus, not independence minus”.

Other countries felt the same. In his forthcoming book, The Empire’s New Clothes: the Myth of the Commonwealth, Murphy argues that Britain didn’t mastermind the growth of the modern Commonwealth as part of a grand geopolitical strategy. Newly independent colonies wanted to belong, not least because their anticolonial leaders still felt a strong sense of cultural attachment to Britain and the British institutions – universities mainly – that had brought them into contact with contemporaries from other parts of the world.


Any thought that the Commonwealth could successfully perpetuate the empire vanished with the Suez humiliation in 1956

Any thought that the Commonwealth could successfully perpetuate the empire vanished with the Suez humiliation in 1956, when Nehru and India sided with Gamal Abdel Nasser and Egyptover the Anglo-French assault. The ties to London began to weaken. Names changed to reflect different realities. Founded in 1930, the British Empire Games became the British Empire and Commonwealth Games in 1954, the British Commonwealth Games in 1970, and finally the Commonwealth Games in 1978.

On paper, the facts remain compelling. The countries of the Commonwealth spread across a fifth of the world’s land surface, contain nearly a third of the world’s population and produce around 15% of the world’s wealth (depending on the measure used). But how much does the Commonwealth affect the lives of the people behind these statistics? Hardly at all. The organisation defines itself as a “diverse community of 53 nations that work together to promote prosperity, democracy and peace”. Friendly politicians call it a useful talking shop. Many people in its constituent countries have never heard of it, or know the name only because of the games. Both its longevity and its apparent importance owe a lot to the enthusiasm of the Queen and the international affection for her.

Until the run-up to Brexit, the notion that the Commonwealth offered the UK economic salvation would have been comic. In 2010, it was left to Ukip’s manifesto to promise a Commonwealth Free Trade Area, which would account for “more than 20% of all international trade and investment” and enable Britain to flourish outside the EU. Ukip’s leader, Nigel Farage, later described the manifesto as “drivel”; nevertheless the Tory manifesto for the next general election, in 2015, pledged to “further strengthen our ties with our close Commonwealth allies, Australia, Canada and New Zealand”. And by the time the referendum came around, several prominent leavers, including Boris Johnson and the Tory MEP Daniel Hannan, were happy to say the UK had “betrayed” the Commonwealth when it joined the EEC in 1973. It was time, as a Daily Telegraph headline had it, to “embrace the Commonwealth”.

And the Commonwealth itself had not been idle. In a desire to be more obviously useful – particularly to the UK, its biggest backer – it had begun to sell itself as a business asset, boasting on its website of the common legal systems and language that led to a Commonwealth advantage where trade and investment flows increased by up to 20% and the cost of doing business could be cut by nearly the same. According to Murphy, the atmosphere in London was further politicised when the Royal Commonwealth Society, founded in 1868 as a literary and scientific institution, merged in 2015 with Commonwealth Exchange, a far harder-nosed outfit run by a Eurosceptic Tory, Tim Hewish, who became the society’s director of policy research.

But to the Brexiteer, the Commonwealth offered more than the prospect of increased trade (from a very low base: Australia takes 1.6% of UK exports and the Commonwealth as a whole 9.5%). Before the referendum, it was also talked up as an alternative source of immigrants, and better-quality immigrants, the kind we could pick and choose, at that. The question is, from which particular part? In 2013 Johnson, then London mayor, proposed a “bilateral free labour mobility zone” between the UK and Australia, writing in the Telegraph that “we British are more deeply connected with the Australians – culturally and emotionally – than with any other country on earth”. Hewish picked up the idea and published a paper for Commonwealth Exchange that extended it to Canada and New Zealand. There was no proposal, however, to include the countries of south Asia, Africa or the Caribbean – which just as many, if not more, Britons are as deeply connected to, culturally and emotionally, as others are to Australia.

The theme of this month’s Commonwealth heads of government meeting is “Towards a Common Future”. The host runs the risk of turning into the most unpopular guest.

The Problem is Free Trade not Free Movement

Ian Allinson in The Guardian


While freedom of movement has been a hot topic since the debates around Brexit began, few would have predicted it would become such a focus in the Unite general secretary election, in which I’m standing.

Anger around jobs and conditions is justified, but often misdirected. Neoliberal capitalism has been disastrous. Free trade deals enshrine the rights of capital while ignoring the needs of humans and our warming planet. Workers have been dumped out of jobs by the million, work has intensified, workers feel more vulnerable to managerial whim, the share of wealth going to wages has fallen, welfare systems have been slashed and huge areas of life – including education, health and housing – are increasingly commoditised, all while our limited democracy is increasingly hollowed out.

Migrants are prime scapegoats for many politicians and media. Some employers provide fertile material for racists and nationalists. Fujitsu, my own employer, proposes to cut 1,800 UK jobs, hoping to boost profits by offshoring jobs to low-paid countries. Fujitsu is even asking some workers to train their replacements, brought to the UK to learn the job. Workers are being asked to dig their own graves.

When our livelihoods are threatened, workers sometimes respond by claiming privileged access to jobs, housing, and so on, and excluding others on the basis of gender, race or nationality. This is tempting because it sometimes “works” for some people for a short time. But it is misguided. If some workers try to protect their interests at the expense of others, the unity we need to win is undermined and we all lose.

Gerard Coyne is also standing for the general secretary post and his silence on this question, as on so many others, is deafening; meanwhile his relationships with the Labour right are worrying.

Len McCluskey, the present general secretary, though anti-racist, has fudged on workers’ freedom of movement, wrongly conceding ground to racists and nationalists. Just before the EU referendum McCluskey referred to it as an experiment at UK workers’ expense. As a delegate to the Unite conference shortly after the referendum, I moved a motion defending freedom of movement. Unite’s leadership opposed it, with their own motion calling for debate on the question. McCluskey now boasts that he has led this debate “demanding safeguards for workers, communities and industries affected by migration policy driven by greedy bosses”. Beyond dog-whistle politics, what does this mean?

McCluskey explained in a speech for the thinktank Class (Centre for Labour and Social Studies) that his “proposal is that any employer wishing to recruit labour abroad can only do so if they are either covered by a proper trade union agreement, or by sectoral collective bargaining”. All jobs should be covered by union agreements, but union weakness means most are not, and this applies especially to industries in which migrants have to work.

What would McCluskey’s proposal mean in practice? What would count as recruiting abroad? How long would a worker have to be in the UK before they could apply for an un-unionised job?

Giving different rights to different workers based on their nationality is discriminatory and divisive. It undermines solidarity. Blocking employers hiring on the basis of nationality would repeat the mistake of some trade unionists of a previous generation who sought to control the labour supply by excluding women from some jobs, fearing “they” would push down “our” wages. We, Unite’s membership, like the working class as a whole, come from all over the world. This is a strength, not a weakness.

It is free trade, not free movement of people, that has been a disaster for working-class people. Manufacturing has seen colossal job losses in recent decades as production has moved to countries in the south and east. Too often unions have responded by making common cause with the very employers sacking their members, against the foreign competition.

This approach has failed to protect jobs. Whether it is an employer threatening to dismiss and re-engage the same workers on lower pay (like the Durham teaching assistants), replacing workers with cheaper ones in the same workplace, or moving the jobs halfway round the world, workers are right to fight the degradation of employment. You can’t do that in partnership with the employer who is sacking you.

Thankfully workers are not always paralysed by the confusion of their leaders. Unite members at Capita and Prudential won important victories against offshoring. Members at the Fawley oil refinery spurned British Jobs For British Workers slogans and built solidarity to win equal pay for workers of all nationalities instead of trying to restrict the employment of migrants. Inspired by the Prudential win, industrial action in my own workplace currently includes refusal to cooperate with projects to move work offshore.

Unions should be following Fawley workers in demanding everyone is paid the rate for the job, regardless of employer, employment status, or nationality. We should be demanding full pay transparency, monitored by the unions. We should be calling for all jobs to be openly advertised, with no discrimination in hiring based on nationality. And existing workers should refuse to cooperate with handing over work unless their employment is assured.

The labour movement needs to regain the confidence to demand solutions that meet human needs, even when that upsets big business. We won’t do that by turning workers against each other on nationalist grounds, or by fudging the issue.

No general secretary candidate should chase votes by undermining the unity members need to defend their jobs. I am calling on Len McCluskey and Gerard Coyne to join me in championing workers’ rights to move freely (not just within the EU) and opposing any employment restrictions based on nationality.

It's too late for globalisation – Kakistocracy is in fashion

Bob Swarup in The Guardian

The world is getting smaller. That is the unbidden meme of our generation, thanks to the juggernaut of growth unleashed by an outpouring of global bodies, free trade agreements, technology and international capital. Every business and person now has a global reach and audience.

Today’s paradigm is globalisation and free trade is its evangelical mantra.

But this narrative has become worn and no longer fits the facts. In recent months, there has been a backlash, accompanied by emotive talk about the reversal of globalisation and the battle for society’s future. The Organisation for Economic Co-operation and Development used its latest health check on the global economy to warn of the costs of protectionism.

The hand-wringing is half a decade too late, because globalisation is already dead and we are already some miles into the journey back.

Donald Trump and Theresa May are not flagbearers in the distance, they are catapults battering at the walls. Trump’s stated intent to pull the US out of the TPP on his first day in office underlines the new reality we inhabit, as does the European Union’s recent troubles closing a trade agreement with Canada thanks to Wallonia’s obstinence.

Today, we have a new meme – deglobalisation – as people turn their backs on an interconnected world economy and societies turn iconoclastic.

It is not for the first time.

Globalisation may be defined as when trade across nations is growing faster than GDP. People interact more, transact more and create more wealth. Deglobalisation is the alternate state where trade grows less than GDP. Countries focus inwards, trade declines as a proportion of GDP and growth shrinks. A clear cycle of the two emerges over history.


 Phases of globalisation and deglobalisation over the last two centuries. Illustration: Maddison, World Bank, Max Roser, CPB Netherlands, Camdor Global


Proto-globalisation (1820-1870): Rapid global trade growth, thanks to the Industrial Revolution and the spread of European colonial rule

Globalisation 1.0 (1870-1913): Empire building became the norm. Rapid advancements in transport and communications grew trade. But rapid change also meant volatile bouts of economic obsolescence and crisis


Deglobalisation 1.0 (1913-1950): Limited growth, unequal outcomes and a huge debt overhang from previous decades stoked economic nationalism and protectionism. Trade fell and a collective failure to tackle deeper structural issues led to the 1930s
Globalisation 2.0 (1950-2010): Since then, we have been on a tearaway expansion with unparalleled growth of both global trade and GDP


Deglobalisation 2.0 (2010-?): The last financial crisis focused policymaker attention inwards and crystallised the growing sense of social disenfranchisement. A toxic mix of suppressed wages, rocketing debt and political myopia have largely destroyed the allure of globalisation.

This is more than a sense of ennui. Global trade today is not slowing down but has plateaued – hardly a barometer of rude global health. After their peak in January 2015, global exports fell -1.6% by the end of August 2016. The blame lies not with commodity price falls, but shifts in trade policy. Protectionism is en vogue. Restrictive trade measures have outstripped liberalising measures three to one this year and increased by almost five times since 2009, as policymakers try to circumvent the WTO. Meanwhile, the deleveraging of banking balance sheets over recent years has hit global lending, as banks retreat from peripheral to core domestic activities, cutting vital credit flows through key arteries.

All of this preceded the populist deluge of 2016 and, indeed, contributed as policymakers myopically prioritised stability over social cohesion, ignoring the lessons of the past.

But globally, politicians are now fast realigning to shifting public moods. A year ago, to imagine a world where the major western leaders included Trump, the Brexit brigade and Marine Le Pen was the province of satire. Today, we are two-thirds there. Their ascendancy has shifted the political debate towards nativism in a hauntingly familiar nationalist narrative, as others follow suit.

Our new politics are not leftwing or rightwing, merely whether you are in this world or out of it. Even defenders of globalisation are falling into the same trap. By demonising those that voted against and not providing alternative options, they cling tighter to those that confirm and affirm their beliefs. That is still nativism of a different sort and still the politics of division, not unity.

This is Deglobalisation 2.0.

Monetary policies such as quantitative easing and its newborn sibling, fiscal easing, cannot change this dynamic. Absent structural change, their cumulative corrosive impact on savings and fillip to global debt ensure a limited runway and only inflame the rhetoric of disenfranchisement. Meanwhile, divorces are turning ugly as emotions override reason, viz the talk of Brexit fees and anti-dumping levies, the metaphorical Kristallnacht of populist victors like May and Trump as they struggle for coherence, and emerging divisions between central banks and politicians, to name but a few.

Democracy is fast turning to kakistocracy – government by the least qualified leaders. Globalisation is transmuting to nationalism. The effects are well documented in history – autarky, economic naivety, protectionism and a rush to grab what remains of the pie, only to trample it underfoot.

Me first always ends in me last. The world is still getting smaller, but just in our minds and horizons now, and thoughtless we risk becoming all the poorer for it.

Whatever you think of him, Donald Trump is right on TPP and TTIP

Youssef El-Gingihy in The Independent

In a YouTube video of policy proposals released this week, President-elect Trump announced that the US would withdraw from the Trans-Pacific Partnership. This trade agreement encompasses the major economies of the Pacific Rim with the notable exclusion of China. Other policies included a hodge-podge of climate change denial through promoting fracking and coal, deregulation, infrastructure spending and measures against corporate lobbying.

There are mounting concerns about xenophobia following Trump's victory. The appointments of Breitbart's Stephen Bannon as chief strategist, the anti-immigration Jeff Sessions as attorney general, Mike Pompeo as CIA director (in favour of bulk data collection) and General Michael Flynn as national security advisor would appear to reinforce Trump's targeting of Hispanics, Muslims and other minorities.

Yet amid all this soul-searching, the key question liberals should be asking is why authoritarian nationalism is spreading across the West. The answer is relatively simple. Neoliberal globalisation has left millions behind both in the advanced economies and the global south over several decades. Wealth has been siphoned to the top. The economic fallout post-2008 has seen inequality widening, with many falling into poverty. The effects of austerity on southern Europe are a social catastrophe.

The liberal and social democratic parties previously representing working-class constituents have abandoned them and are captured by corporate power. The Democratic party under the Clintons and Obama as well as New Labour under Blair and Brown were emblematic of this process. The result has seen millions of voters turn to candidates positioning themselves as anti-establishment. Hence the success of the SNP, Ukip, Brexit and now Trump.

Free trade agreements are at the heart of the matter. Negotiations have taken place behind closed doors with corporate lobbyists. Transparency has been minimal. It is exactly this kind of undemocratic, technocratic managerialism which is prompting a backlash against elites. It is the same technocratic managerialism that saw the troika of the European Central Bank, the European Commission and the IMF impose unrelenting misery on southern Europe, rendering Greece as expendable. The troika even issued memoranda to be rubber-stamped by national parliaments.

Both the EU-US trade agreement, or Transatlantic Trade and Investment Partnership (TTIP), and the Trans-Pacific Partnership (TPP) are sold as reducing barriers to trade through harmonisation of regulations thus increasing growth. But harmonisation effectively means a race to the bottom with the lowest common denominator regulations being adopted. In fact, there are not many barriers left and the question is more of how growth is distributed. It is now clear that trickle-down economics is a myth.

Trump has stated that he is against TTIP and TPP, and may even reverse the North American Free Trade Agreement (Nafta). Many people do not understand what these trade agreements mean so let me spell it out. They promote trade liberalisation. This essentially means opening up public services to corporate takeover. They would likely make public or state ownership difficult. They would restrict the financial tools available to countries to regulate banks. They would also limit their ability to impose capital controls.

They would lock in privatisation through Investor-State Dispute Settlement clauses. This means that multinational corporations could sue governments if they took steps that harm their profits or even the future expectation of profits. This would take place through private, secretive courts rather than the normal law courts. In fact, precedents have already seen tens of countries sued by corporations for measures taken in the public interest.

The NHS is a good example. It is currently being privatised, paving the way for a private health insurance system. TTIP would mean that if a future UK government took steps to reverse this then they might well be sued. In effect, this acts as a deterrent against government actions harming corporate interests. This would apply not just to healthcare but to all public services, from education and broadcasters such as the BBC to public transport and utilities.

These trade agreements would also enforce enclosure of the commons through intellectual property rights. So drug patents would be extended to combat cheaper generic medicines. Patenting of the human genome would be enforced. Farmers might have to buy seeds from corporations. I don’t know about you, but that sounds like a dystopian world to me.

Neoliberal globalisation is not some irresistible force of nature. Economic protectionism may not exactly be progressive but the current status quo of wage stagnation and falling living standards is unsustainable. If steps are not taken to remedy the damaging effects of neoliberalism then the backlash will only intensify, likely leading to rising nationalism, fascism and global conflict.

Politicians must grasp the difference between free market and corporate stitch-up - or face popular rage

Janet Daley in The Telegraph

Does anybody in the governing business actually understand political ideas anymore? Or, to be more precise, is there any interest in what constitutes a real political position as opposed to a desperate scramble for tactical advantage? You will gather from the wording of these questions that they are rhetorical.

Almost nobody in the professional political class seems to me to have the remotest idea of what constitutes a coherent argument involving the basic equipment of consistent principles and rational conclusions. Oddly, this judgment applies most of all to the revivalist Labour party, whose leadership presents itself as being more purely ideological and avowedly principled than any in living memory.

The morass of confusion and self-contradiction is most clearly illuminated in the messy, ever more vindictive, debate about Brexit which, in fact, can scarcely be dignified by the name “debate” since there is no agreement about what would constitute winning. Some of this is the result of deliberate obfuscation and dishonesty around the specific question of ending our membership of the European Union.

But there is a larger void too. In fact, some of the most difficult points about the exhaustively disputed advantages and disadvantages of the EU could be brought into luminous clarity if the parties involved understood (or stopped pretending that they did not see) the obvious political lessons.

The most fundamental facts of economic and governmental life are being scrambled, obscured and blatantly misrepresented in ways that are designed to make sensible discussion virtually impossible. And it is not just in cynical old Europe where this crime is being perpetrated: the American presidential election is making a grotesque nonsense of the issues that might provide some understanding of what is at stake for the country.

But let’s look first at the EU farrago since the perversity and deceptions here are so blatant. Surely suspicion should have been raised when it became apparent that the most fervent opposition to Leave, and the most militant opposition to the referendum result, came from an unlikely alliance between political Left-liberals and global corporate interests.

It was perfectly understandable that, in a shameless display of brazen self-interest, international corporations which dominate the globalised economy should be in favour of a system that would tear down borders and allow them untrammelled access to as big a unified trading bloc as possible. For what we used to call, back in the day, “corporate capitalism”, the EU is very heaven.

Here in a package deal is a bloc of countries trussed up in regulation that puts smaller competitors out of business, and is ready to provide an infinite supply of cheap labour which can be shunted around the continent without restriction. What’s not to like?

If you were wondering where all that passionate advocacy for a repudiation of the referendum vote was being generated, just remember that there is a great deal of investment (which is to say, money) at stake here. (Did you really think this was all about idealistic devotion to the communaitaire European vision?) The destabilising of the EU arrangement presents a threat to the hegemony of some of the most powerful manipulators of capital in the world. So I get it: I understand what that well-organised campaign is about.

This is manipulation of public opinion by what should be a clearly identifiable, self-serving source to protect its own vested interests. What I do not understand is why anyone who regards himself as being on the Left or even the centre-Left – indeed anyone who professes sympathy with what we might call “little people” (ordinary working families or aspiring entrepeneurs) – should be pitching in with such gusto.

The EU is a club that celebrates the power of Big Leagues: Big Business, Big Government, and Big Bureaucracy. To a much lesser extent, it grants power to Big Labour in the form of the most well-connected trade unions, but this is very much on sufferance: any union that put up serious resistance to the transporting of cheap labour – which is what the “free movement of people” should properly be called – would find itself outside the magical sphere of influence very quickly.

Incendiary discontent will not be defused by any election unless there is a serious attempt to talk properly about the commodification of labour

But how can it be morally worthy for the Mediterranean countries which have youth unemployment rates of around 60 per cent, and the eastern European countries which are struggling out of post-Soviet poverty, to lose the best and brightest of their young to the rich established economies of western Europe? What kind of freedom is that?

It’s a dream for ruthless international businesses for whom local community ties and historic roots are a nuisance at best and a major obstacle at worst but it further impoverishes the poorer countries and makes conditions of employment impossible for all but the most nomadic and adaptable.

Most significantly at the moment, it creates impossible tensions with the indigenous workforce who do not have the mobility or the minimal personal responsibilities of that transient labour army which employers find so very useful. As this column has noted before, this is an almost perfect example of what Marx called the “commodification of labour”. It has become the most febrile component of the electoral politics of Britain and the United States: the incendiary discontent which will not be defused by any election in the foreseeable future unless there is a serious attempt to talk about it properly.

At this point, regular readers may be tempted to conclude that I am regressing. My account must sound conspicuously like that of the young Marxist I confess that I once was. But the Left’s failure to acknowledge what should be staring it in the face is not the whole story.

What should be central to any real argument about the globalisation of labour – because that is what the electoral hot potato of immigration actually means – is that it is very different from the kind of economic freedom that is of genuine benefit to the people of the world. Free markets and free trade have produced mass prosperity on a scale that is unprecedented in human history: not just prosperity in the crass material sense but self-determination and self-fulfilment of a kind that was once available only to the wealthiest and most privileged individuals.

In the developing world, free-market economics and the lowering of trade restrictions have wrought miracles, bringing whole swathes of Africa and Asia out of poverty. Now all this is in danger of ossifying with the US and the EU likely to block entry not only to emerging markets and small, flexible entrepreneurs but even to major countries: the long-negotiated EU trade agreement with Canada has just collapsed, absurdly, due to a veto by one small Belgian region.

Even self-styled progressives in the West are now endorsing this retreat from open markets. Hillary Clinton is pulling away from free trade commitments in her eagerness to placate indigenous working class voters who are lured by Trumpist xenophobia. So she veers more and more toward protectionism and high-tax government when the only true antidote to economic stagnation is the opposite of those. What she and Theresa May need to offer is a new political settlement in which the indispensable role of free trade is accepted alongside protection against the unlimited imported labour which leads to social unrest.

In Britain, too many Conservatives who ought to know better confuse monopolistic corporate interests with free markets, and refuse to recognise the difference between national sovereignty and nationalism. Maybe some politicians here and in the US do understand all this. It’s difficult to tell because there is so little grown-up discussion. Meanwhile ordinary people believe they are being forgotten or deliberately shafted by a conspiracy of the powerful: global corporates, international money, and self-aggrandising super players. Are they wrong?

People power is ending TTIP and other unpopular EU free-trade deals

Molly Scott Cato in The Guardian


The corporations and political elites that have been steering free-trade deals for many years are finding they are losing control. Strong public resistance and opposition from national and regional governments in Europe are throwing the controversial TTIP and CETA trade deals off track.
The Transatlantic Trade and Investment Partnership (TTIP) between the US and the EU has proved deeply unpopular. Across Europe, campaigns to stop it have had a huge impact. Almost three and a half million Europeans have signed the“Stop TTIP”’ European Citizens’ Initiative petition against the deal.

But it’s not just citizens, unions and NGOs who are concerned about the way trade deals seize control from democratic governments and put it into the hands of private corporations. The member states themselves are getting cold feet. A few weeks ago, only 12 of the 28 EU countries were prepared to sign a letter in support of the deal. In the summer, France cast serious doubt on TTIP when its trade minister called for a suspension of talks and the German economy minister declared TTIP “de facto failed”. All this led the EU director-general for trade, Jean-Luc Demarty, to warn that the EU’s trade policy was “close to death”.

Meanwhile, the Comprehensive Economic and Trade Agreement (CETA), a similar free-trade deal between Canada and the EU, is also in deep trouble. On Tuesday, EU trade ministers decided to postpone the decision to approve CETA, leaving the deal in limbo.

European Green MEP and anti-globalisation activist José Bové in Montreal, where he was detained and prevented from speaking against CETA. Photograph: Clement Sabourin/AFP/Getty Images

You can tell the designers of this project are worried. Last week French Green MEP and renowned anti-globalisation activist José Bové was detained by Canadian border officials when he arrived in Montreal to speak against CETA. He was eventually allowed into the country, but his detention prevented him speaking at the event. It seems that for the architects of trade deals freedom of movement for goods and services comes ahead of freedom of expression.

The politicians and corporations might feel they can silence voices but it is harder to ignore votes. And on this, a regional Belgian parliament has delivered a potentially fatal blow. The federation of Wallonia-Brussels parliament, which focuses on the cultural and educational concerns of 4.5 million French-speakers in Belgium, recently voted to reject CETA because of worries about public services and agriculture. Under Belgium’s constitution, all five regional governments must approve the trade deal before the federal government can give consent. And for CETA to be agreed, unanimous support is needed from all 28 EU countries.

The centrist, grey politicians who have mindlessly repeated the mantra of growth-and-trade for decades have become aware that those whose votes they periodically require no longer see these deals as working for them. With tens of thousands of European citizens once again taking to the streets in protest against these trade deals, European negotiators are fighting a losing battle.

All those who have campaigned against TTIP and CETA should take great credit. Despite the power of the corporations that were set to gain massively from the deals, the grassroots movement of people from across the EU, US and Canada have used their democratic rights to protest and to lobby to challenge their might.

While we should celebrate a victory for people power, we must also recognise that this is just the start of the fight. For the UK, either inside or outside the EU, the potential for these damaging trade deals to proliferate remains. Some argued, particularly those “leavers” on the left, that exiting the EU would free us from having to sign up to damaging trade agreements. But actually, it looks as though it is Europe that could save us from these dodgy deals, while the Conservative government, fearing the risk of isolation and desperate for trade deals at any price, will lead us in a race to the bottom. The risk of isolation following the Brexit vote may encourage them to sign us up to even more damaging bilateral agreements than those on offer to the EU.

Globalisation has brought us marvels including the internet and ease of international travel, but the power in this new paradigm has so far been held by corporations that exploit their ability to transcend national boundaries. Perhaps the rejection of the global trade treaties that we Greens have always dismissed as corporate power grabs might mark the beginning of the popular fight to unshackle ourselves from the chains of corporate power. With so much of the energy of the anti-TTIP fight coming from the UK, what a tragic irony it would be if we found ourselves leaping out of the TTIP and CETA frying-pan and into the fire of whatever pro-corporate trade deals Liam Fox has in mind for us.