Saturday, July 02, 2016

It May Be Too Late

In his speech to Parliament on Wednesday, Barack Obama called for a version of globalization where the benefits accrued to all, not just the top one percent.  A consummation devoutly to be wished. But, Tom  Walkom writes, it may be too late to make it happen:

Indeed, the best Obama could come up with as a model for humane globalization was the deeply flawed Trans-Pacific Partnership trade and investment deal. Yet it is so unpopular in the U.S. that even Hillary Clinton, Obama’s ally and presumptive Democratic presidential nominee, has vowed to deep-six it.

The TPP is unpopular for good reasons. Many Americans (and Canadians) don’t want to lose their jobs to workers in low-wage Pacific Rim countries like Vietnam.

 Given their experience with the North American Free Trade Agreement, Americans are justly suspicious of politicians who promise that these losses will be more than compensated for by new jobs at home.

And so they are fighting back through antiglobalization politicians, such as Trump and would-be Democratic presidential nominee Bernie Sanders.

Bucking the trend is nothing new:

In 19th century Canada, it found expression through John A. Macdonald’s National Policy of protective tariffs.

The new Dominion of Canada was losing population as workers migrated to the U.S. in search of jobs. Macdonald’s break from British free-trade orthodoxy was designed to create the jobs that would keep them at home.

A few decades later, in the 1930s, governments around the world used the power of the state to resist the logic of a market capitalism that had depressed wages, prices and jobs.

In some countries, notably Germany and Italy, this resistance was commandeered by racists and fascists.

In others, it was not. U.S. President Franklin Delano Roosevelt’s New Deal, a direct challenge to the prevailing economic orthodoxy, led not to fascism but to projects such as the Tennessee Valley Authority electrification scheme.

Canadian Prime Minister R.B. Bennett’s New Deal, while not quite as bold, led to the CBC.

During the ’40s and ’50s, the battleground moved to the shop floor as North America’s new industrial unions challenged an orthodoxy that said only markets could determine wage rates. All of which is to say that this tension over the market economy never goes away.

And so, once again, we find ourselves in a place where governments -- the latest being the UK's -- are rejecting the conventional wisdom of the day. On Wednesday, Obama spoke in support of the conventional wisdom. But, in spite of the good will he generated on Parliament Hill this week, the train may have already left the station.



Steve said...

Globalization is just another word for cheap labour and no regulations

Owen Gray said...

And, finally, ordinary folks are catching on, Steve -- for better or for worse.

The Mound of Sound said...

There are interesting studies on the role protectionism played in the rise of every great economic superpower. It was a vehicle for transitioning from an agrarian to an industrial economy. Only since the Thatcher/Reagan/Mulroney era have we been fed, and greedily swallowed, the nonsense that tariffs and duties are somehow bad or hurt our economy. What the neoliberals and the corporatists were angling for was one giant freebie. They wanted unrestricted movement of capital, investment and production anywhere in the world PLUS continued unrestricted access to our markets. There was no quid pro quo in this deal. We gave up our limited control over our corporate sector, our ability to require companies dealing in Canada to benefit Canada and to comply with minimal labour and environmental standards, while at the same time freeing them to offshore Canada's industrial base and yet continue to trade in our markets, all without repercussions or compensation. With each successive free trade deal we surrendered incidents of our national sovereignty,not to our partner states, but to the corporate sector. This inevitably led to the progression from multi-nationals to transnationals to today's meta-national corporations that have no national affiliation and, to a large extent, exist in "the cloud" safely removed from the watchful eye of regulators. These meta-nationals are coming to exercise clout that rivals national governments which, for the public, adds a new level of governance, one that is neither elected nor accountable.

I am convinced, Owen, that the only way out of this, the only way to prevent the wreckage of our democracy, is to repudiate these trade deals and restore a degree of protectionism through duties and tariffs to ensure trade benefits Canada and complies with our national goals and requirements. What other means exists to re-assert our national sovereignty?

Kirby Evans said...

The UK didn't exactly "reject" conventional wisdom. The motivation of many of the "leave" campaigners was a result of their feeling that the EU is too "bureaucratic," but what they really mean is too "socialist." Much of the establishment in the UK wants to leave the EU because they want to establish their own standards of neo-liberalism and exploitation. Some average "leave" voters may be angry at what they perceive as elements of "globalization" but most of those "leave" campaigners who were in the know, are just as committed to conventional wisdom as ever and that is exactly why they are leaving the EU.

Owen Gray said...

If one of the primary principles of democracy is self-determination, Mound, that principle has to apply to nations as well as individuals.

Owen Gray said...

I agree, Kirby. The motivations on both sides were complicated. It's interesting to see how the referendum split the established political parties. It's hard to predict what the final outcome will be. But, one way or another, what used to be the status quo will change.

Steve said...

One thing undereported about China is that due to the way the GST rebate works there is a 3% export tax on Chnese products. We should do the same on natural resouces at least.

Owen Gray said...

The Liberals are going to have to find a way to raise some revenue, Steve.