Nice post Kiwi Nuke. I was gonna reply to Chris but I think you summed up what I was about to say nicely.

Chris, just remember that Stiglitz knows more than any of us – yes you and me included – about the effects of globalisation and free trade on developing nations, given that he has SEEN IT FIRST HAND. He is about as high up in the hierarchical chain of bureaucracy as you can get, so I think he knows what he’s talking about – and deserves a little bit more credit than being called a mere ‘malcontent’.

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Love the debate people – good stuff, apologies for the delay in climbing in, been on the road. Only got time for one posting at present but will come back with more later. So, first things first:

Hey RedGreenFrog: Amen to that – who needs the name calling (no, I’m not an Exclkusive Brother).

Chris Bishop, liked your post Chris, nice and provocative – in response to the several points in your posting of 5:17pm , Sept 29th:

i) Re your: “One golbaslisation malcontent� – good try, but Joe Stiglitz is not alone in his view neither in the broader community nor amongst the economics profession. He just puts it better than most and has the deserved credibility to be taken seriously on this by anyone interested in an open and well-informed debate on the merits of free-trade and globalisation. Of course for anyone who feels threatened by a well-reasoned challenge to the free-trade religion then obviously Josepph Stiglitz will be seen as a heretic.

ii) Nice turn of phrase but I respectfully suggest that ‘Fair trade’ is no more a ‘buzzword for middle class guiltâ€? than ‘clean energy’, ‘clean transport’ and ‘clean production’ are buzzwords to ameliorate middle-class fear of the impacts of accelerating climate change on their comfortable import-dependent lifestyles. All these concepts have substantial and important content in addition to their undoubted emotional appeal – to everyone not just the middle class (i.e. most of us in NZ) that you appear to have some disregard (is that thinly-veiled contempt?) for.

iii) Re your: “every other party in Parliament … has realised that free-trade is something to be strived for�. Apart from the nitpicking that it should be ‘striven for’ – this is an interesting phrase – so it’s a ‘realisation’ then, almost a Damascene revelation perhaps? Does logic, analysis, real-world experience and econometric assessment not have a part to play? And another nice try but since when does the phrase “(almost) every other party in Parliament� have any moral or intellectual force? Is that an argument for homogeneity of policies across all parties? Where would be the ‘market’ in that? Would you entirely remove voter choice and have all parties promote the bland ‘mainstream’ policies that are demonstrably leading humanity to its own destruction?

Ain’t this fun? Catch y’all later

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The term “free trade” like that of it’s cousin, “the free market”, tends to mean different things depending on who is doing the talking.

If you are talking about the increasing interconnectedness of nations, the ability to move goods and services around the planet equitably then as an academic or a person of bright intentions, free trade is indeed the means by which the entire human race may eventually become prosperous.

However like all slogans “free trade” has it’s dark side. In the hands of big money it means….”we buy your assets and you work for us as slaves”. Within the borders of a modern nation there are balancing forces that tend to moderate the excesses of capitalism. Progressive taxation, health and education systems, welfare in all its forms, workplace and safety legislation, rights to collective bargining and strike action, a media that may expose wrong-doing, and access to a legal system as a last resort…all of which are mechanisms to protect the less powerful members of society against the predations of those who would exploit them.

However on a global scale these mechanisms are either absent or far weaker. For this reason those capitalists who have the size and power to act at a global level may well be tempted to define “free trade” as “conscience free trade”.

Do all global corporates act badly, I think not, although to a large extent there is a huge amount of hypocrisy that goes on here. Everytime you buy some low cost Chinese goods at Bunnings or the Warehouse you are supporting a system of exploitative labour that you would not tolerate working in yourself. If these Chinese factories that made those goods were located just down the road from you, you might have a different opinion. If you had to suffer the environmental degradation of Dickenesian proportions that is going on in Asia right now, you might hold more radical views.

The fact is that gloabl capitalism is exploiting huge reservoirs of underpriveledged Asian labour as virtual slaves. The question is, where will it lead to? There are of course reports of skillled workers becoming more expensive even in China, and the optimistic assumption is made that eventually China will go the same way as Japan as the current wage imbalances cure themselves.

Of course when that happens the capitalists will simply move to the next low cost location they can exploit, say Africa. The cycle seems not only endless, but dreary in the extreme. In the end, as others have said, it all just amounts to a non-stop race to the bottom. Along the way of course the big money capitalists will have ensured that they own or control all the really valuable assets, eg the banks, the media, the infrastructure, food supply, etc.

Capitalism is not innately bad, it is simply an economic tool. But if it is the only tool that we know, and we use it to the exclusion of all other tools, then we destroy more than we achieve. As a means to protect ourselve from this destruction, trade protections are but another tool, and one that really only works within a limited frame.

If one is surrounded by thieves, then a security presence is required. In the long run the cost of this security becomes burdensome, so your thoughts turn to “how to get rid of the thieves”. In free trade terms, any protectionist action, needs also to be accompanied by an equal effort to promote globalisation of the same kind of social justice and environmental standards, that we enjoy ourselves, to the entire world. Because such an effort cannot succeed overnight, nor can we predict it’s final outcome, then maintaining and protecting our own national economy and environment in the meantime, is a sane path to take.

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Shit, let’s get past the name-calling. I don’t care whether someone is a right winger or whatever. Reality is that as the cost of transport goes up as oil prices rise, the cost of shopping goods backwards and forwards around the world becomes increasingly prohibitive.

And what is the point of shipping Arnotts biscuits and Streets ice cream from Australia to New Zealand while Griffins biscuits and Tip Top ice cream are shipped from New Zealand to Australia. Just a waste of fuel and labour, as far as I can see.

And, Chris, you are probably right that if the EU would get rid of its protectionist CAP then billions upon billions of dollars would accrue in real terms for Africa. Billions upon billions more into the pockets of despots like Mugabe, Kabila, Bouteflika, and Ali Madhi Mohammed. But how much into the pockets of the ordinary people of their African nations?

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To Chris Bishop
Sorry to the be the academic geek:

” Study after study has shown that the best way to remedy third world poverty is for unfettered trade between the North and South. ”

…is plain wrong. That idea is not a fact. It stems from an ideology, rather than being a proven theory. It would be nice if that ideology always fitted the facts of the world (things would be “neat”, like in Physics), but it doesn’t.

Study after study HAS suggested free trade is a desirable place to be, but the implication most people make (and I’m pretty sure you have) – that 3rd world countries should immediately and rapidly liberalise – is incorrect and dangerous.
Study after study says “the best policy depends on a whole gamut of circumstances, conditions, and other policies, so zippit with your one size fits all opinions”. For instance, if a developing country lowered barriers to agricultural imports while the USA still subsidised farmers, then this kind of free trade (if you can call it that) would be devastating for them.

However, you’re right in your second point – that freeing up of agricultural trade between developing countries, the EU, USA, Japan etc would be beneficial (for both sets of countries). But this is way off topic as far as NZ’s trade stance, and Greens policy, is concerned.

Which raises a point, for you and probably everyone else with quickdraw opinions – even if you were right about 3rd world countries, why would that be relevant for NZ? Would something which is true in one set of circumstances hold in completely different ones? Unfortunately it’s not that easy, and you won’t resolve an unresolvable argument (like “free trade = good or bad”) this way.

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Belch

The problem with you as a right-winger is that you don’t seem to realize that Greens in NZ ARE well aware of the barriers to trade imposed by the EU and the USA. The fact is that it is almost impossible for any Kiwi to ignore the barriers since there is no protection or supports at all for our own agricultural sector.

So whatever you are projecting onto Green policies, it isn’t remotely like actual Green attitudes or knowledge.

We’d like to be able to get the rest of the world to recognize that the use of the commons has an associated cost and make the price equitable and proportional to the use, but this is just one of more than 100 different countries, and not one of the bigger ones. So we do what we can… but we recognize the limits.

Is there a particular ANSWER to the free-trade conundrum that you wish to provide us? Or are you just stirring because you like argument?

BJ

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Is anyone else but me concerned at the value laden terms “developed” and “developing” countries. It implies that the way the economy is structured in the US is the model all countries should strive for, and they are to be judged according to how close they are to that ideal. The fact that some poorer states such as Kerala are a lot better at looking after their marginalised members of society and the environment than so called “developed” countries is not mentioned.

The terms first, second and third world are obsolete, using “North” and “south” is hemispherist, so there appear to be no acceptable ways to distinguish between the rich and poor countries, except perhaps to use factual terms like “low income” and “high income”.

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Hi again Belch;

Having posted my reply I looked back at previous posts and realised that you most likely assumed that my stuff was in reply to your post at 5:44 pm.

It certainly wasn’t … I am very much in agreement with what you said!

My beef is with the assumptions (and mantra) that the Planet can stand “business as usual” ever expanding … without changes in the way we do things …

Sorry about the likely misunderstanding !

eredwen

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Hi Belch;

I’m very interested that you jumped to the conclusions you obviously have about what I have attempted to say … and in the process the assumptions that you have made about me and my values … and what that tells me about you.

“Development” is a good idea, but what exactly does that mean and how will things need to be modified to suit iminent “realities” … and future “realities”. We live on a finite planet, and our current behaviour needs urgent modification. There has to be a better way than, for example, biscuits in our supermarkets that are made in Australia, and similar biscuits in Australian supermarkets flown in from NZ etc.etc.etc…

We have to look at the “big picture” … a much bigger picture than the one we are looking at now … If not for us, for the sake of our mokopuna … and their zillions of fellow inhabitants on this planet … (including all the non human species!)

eredwen

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That’s right eredwen it would be better to keep the less developed world ummm less developed.

Even I, as a right winger, am not that morally bankrupt.

Or perhaps we should join them by exporting less goods. I’m sure that would help our balance of payments deficit ha ha

Not too mention our ability to pay for public goods and services…

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One more question (to debate) …

Will “the Market take care of it”
before or after the oil wells sputter to a stop?

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Woops! I forgot to say the next bit …

“The Market will take care of it”

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A free trade world is a GREAT idea … to continue using up what is left of world oil reserves to fuel the shipping of goods backwards and forwards around the planet at the whim of the “free market”.

In Aotearoa this will add nicely to our balance of payments deficit …

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‘Yea it’s not fair for third world countries, thats why they are poor and we are rich. It is inherently unequal.’

Actually its a little more complex than that greenboy but you can practice economic reductionism if you like.

However, on the subject of ‘free trade,’ I wonder why you greenies haven’t in fact realised that in most of the sectors that the developing countries (yes its no longer the third world since the collapse of the USSR – keep up with history guys) now have comparative advantages – mainly agricultural – there is no ‘free’ trade between the developed and less developed countries. The fact that the EU and US still practice protectionism and subsidize their farmers means that free trade does not actually exist in the agricultural sector. U get that? Its part of the reason the WTO talks keep breaking down.

If countries in the less developed world could export more of their produce easily they would make more money enabling them to eventually restructure their economies and societies. Whether they will ever catch up is another issue entirely but so long as they are stopped from doing all that they are capable of – they will be kept where they are.

Yes developing country debt relief is important but more important is allowing them to export more easily through making trade freer and hence, fairer (ooo I used the evil word and the good word in one sentence).

There are however many internal cultural, political, and social problems – as well external dynamics – that many developing countries need to face before they can truely get out of the place they find themselves in.

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CB: Free trade means an out and out war on price. How do you produce things cheaply? by degrading the environment (pumping untreated toxic waste into waterways etc.) and driving down the minimum wage, how is that fair? and where would best be able to do this? countries without strong government regulations on labour and the environment.

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In response I would note the following:

a) One globalisation malcontent does not persuade me that free trade is not the answer to third world poverty. Study after study has shown that the best way to remedy third world poverty is for unfettered trade between the North and South. In particular if the EU would get rid of its protectionist CAP then billions upon billions of dollars would accrue in real terms for Africa. Same too with cotton subsidies in the USA.

b) ‘Fair’ trade is merely a buzzword for western middle class liberal guilt at the ‘fate’ of the Third World. The fairest trade is the trade that is free among nations, producers and corporations – I fail to see groups voluntarily exchanging products is unfair.

c) The Greens and NZ First are the only parties in Parliament to advocate that free trade is somehow wrong. Every other party (I’m not counting JAP here) has realised that free trade is something to be strived for.

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Precisely.

Chris, if you’ve read ‘Globalisation and its Discontents’ by Joseph Stiglitz, former Vice President and Chief Economist of the World Bank, I very much doubt that you would classify free trade as ‘fair’ trade. It would also become apparent why, as greenboy infers, free trade both impoverishes Third World nations and entrenches them in a never-ending and ever-perpetuating cycle of debt.

Mind you, this ain’t coming from a hippy or tree-hugger, but a world-renowned and well-respected intellectual/academic, bureaucrat, professor and economist.

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Yea it’s not fair for third world countries, thats why they are poor and we are rich. It is inherently unequal.

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Most certainly to corporations.

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Free trade is fair trade.

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