Free trade (a personal view of globalisation)

Free trade? (The negative effect of big business, globalisation and
free trade on our lives, and how to combat it.)

A personal view, by R. Eric Swanepoel

Introduction

'Cafe latte, espresso, cappuccino, moccaccino...?' We are assailed by
choice on every front. Which coffee, what phone service, which TV
channel, which shampoo, what Internet service provider, mobile phone,
ring tone...? Consumer heaven!?

But where has all our time gone? We, the wealthy few, fritter our lives
away making trivial decisions, deleting unwanted E-mail messages,
answering unwanted sales calls, binning unwanted junk mail, agonising
over sporting fixtures and soap operas on television, "communicating"
over a distance with people we may never meet in the flesh and we
wonder why we are so "busy". And so lonely. The consumption of
antidepressants skyrockets, even amongst the affluent, so-called
successes in the "war against drugs" do not seem to bring us any closer
to eliminating the problem, and the gap between the rich and the poor
grows, and this applies both to countries and to the people within
them, not least in the wealthiest nations on the planet.

AIDS, drug-resistant TB and malaria, Third World debt, child poverty,
child labour, child soldiers, arms sales to repressive regimes,
internecine and seemingly intractable warfare between vague and dubious
entities for vague and dubious ends... In this essay I propose to show
how these problems are related, and how we can make a difference.

Summary

I start by examining how the debate may be subtly distorted by the
terminology used. I then examine the logical offspring of the free
trade philosophy - the multinationals - and their influence on
governments, tax, welfare and human rights legislation. I argue that
this influence runs hand-in-glove with the growing power of
undemocratic institutions as the Federal Reserve Bank, the European
Central Bank and the World Trade Organisation. I maintain that this
latter organisation's championing of free trade is often inimical to
the interests of the poor and does nothing to fight disease and child
labour in the Third World. I further illustrate this point with the
current dispute between the USA and Europe over bananas and how the
spin-off from this has even affected the Scottish cashmere industry!
Sometimes the philosophy of economic liberalism runs counter even to
the interests of big business, and then they are only too happy to
change the rules to suit themeselves. In no sphere is this sort of
hypocrisy more evident than in the case of drugs, and I argue that the
multinationals de facto promote and benefit from the ongoing
drug-related misery of millions. Reactionary attitudes to crime and
punishment (apart from tax evasion, of course!) and the victimisation
of minorities are also useful tools in the promotion of the interests
of big business, which often has control over the media. Using every
possible method to avoid paying tax on their profits, multinationals
may support regressive taxation methods, which is, in effect, what the
British lottery amounts to, as does tax on alcohol and tobacco. The
logic of good business practice contributes to locking the poor in a
poverty trap. Advertising, also a concomitant of free trade,
significantly detracts from people's quality of life, and the so-called
"information age" is a vacuous farce.

I end with a suggested solution to these problems. Read it and
see!

Terminology: communism, capitalism and free trade

It is easy to get lost in the details of the apparently complex world
situation. In reality it is simple to understand. It boils down to the
meaning of one word: "free" as used in "free trade". But let's look at
some other words first.

It is unfashionable to use words such as "capitalism". After all, with
few exceptions, we are all "capitalist" these days. Is there any other
way? Of course not - "communism" has long been discredited as a malign
system, which denies people choice and self-determination at best, and
kills and tortures them directly at worst. The word "communism"
connotes all these things then, and this connotation acts as a barrier
to an open-minded discussion of the issues. (Never mind the truth: the
philosophy of communism is a long way from its supposed manifestations
as Stalinism and Mao-ism.) If one uses the term "capitalist" one is
immediately assumed to be "communist" (in the commonly accepted
negative sense) and therefore out-of-date and to be pitied at the very
least, or, in the extreme, mad, bad and dangerous to know. Let us
abandon these terms, for they are no longer useful.

So the connotation of words is extremely important, and what word
(other than "love" perhaps) could have better, healthier, more
positive, connotations than "freedom" and its associated adjective
"free"? "Freedom" connotes liberty, the ability to make choices and
direct one's life, happiness, skipping merrily through the daisies,
blue skies and birdsong, the wide open road, the self-made man and the
American dream. Is it any wonder that the merits of "free trade" are
scarcely ever questioned in the public mind?

What does "free trade" really mean? It means privileging the right to
trade above all else. What is trade? The buying and selling of goods
and services. Who does it? Individuals and companies, businesses,
enterprises... What is the purpose of trade? To earn a living, make
money, accumulate profit. Given the fact that businesses compete with
each other, which are most likely to be better at competing and
accumulating profit, big businesses or small businesses? On the whole,
big businesses. Why? The economy of scale, larger resources to survive
lean periods (and undercut and kill less-resourced competitors) and
more money to influence political decisions, present arguments and
advertise. (The existence of the stock market amplifies the effects,
and makes it possible for money to be made on the basis of speculation
and rumour rather than on the production and trading of goods, but it
doesn't change the argument that big businesses are, by and large and
with some exceptions, more successful than small ones.) What are the
biggest businesses? Multinationals. What does "free trade" mean to
them? The ability to trade in more than one country with as few
restrictions as possible.

Multinationals - their influence on governments and tax, welfare and
human rights legislation

The least thought will tell you that multinationals have vast
resources, of which some will be used to influence governments to enact
laws which benefit them, whether by direct bribery or through the
donation of money to party election funds. The public perception (and
how much of this is erroneous and manipulated?) is that "investment" by
a multinational is a good thing. To secure such "investment"
governments will offer these companies incentives such as reduced rates
of taxation, grants and weak employment laws. Multinationals play off
one government against another with regard to these. Those countries
most successful at attracting multinationals will tend to have low
rates of direct and company taxation (and therefore poor social and
health services), poor workers' rights, and large gaps between the rich
and the poor. (It is instructive to consider Cuba, a country which has
excellent basic health care and education, and is the victim of a
longstanding trade embargo by the USA.) As companies tend to have a
major base in one country, profits will tend to be siphoned off to this
home country. (This is all part of "free trade".) US-based
multinationals indisputably rule the world.

The Federal Reserve Bank and the European Central Bank

The United States, like many so-called "democracies" is highly
plutocratic, as the political parties need vast sums of money to
compete in elections, and these funds tend to come from big business.
He who pays the piper calls the tune. The Federal Reserve Bank adjusts
the interest rate to suit these multinationals, and is not
democratically elected. US interest rates and the value of the US
dollar have a huge impact on the world economy. The European Central
Bank (an unelected body also) has little option but to respond to what
the Federal Reserve Bank does. The European Union, far from enabling
Europe to stand up to the USA, indirectly has its policies dictated by
the very same multinationals. The treaties of Maastricht and Amsterdam
have imparted to the European project a momentum that will carry Europe
down the road of further deregulation, privatisation and reduced
spending on health and welfare.

Disease and child labour

In the light of all this it is no wonder that there has been little
spending on malaria or TB research (there's not much profit for
multinationals in diseases that affect mainly the poor and the Third
World.) It is not surprising that child labour is rife, etc., etc.,
etc...

Bananas

Let's look at some specific issues to clarify things. At the moment the
European Union is involved in a dispute with the World Trade
Organisation (largely a front for US-based multinationals) over
bananas. Europe, valiantly and surprisingly perhaps, wants to continue
to support its desperately poor former colonies in the Caribbean by
buying bananas from them, rather than buy cheaper bananas traded by
US-based multinationals. (By the way, the health and safety of the
growers of these bananas is woefully neglected.) This breaches "free
trade" regulations, never mind the fact that the livelihood of
thousands of extremely poor people is at stake. The US government,
kow-towing to big business as usual, has whacked huge levies on certain
European products in retribution. Ironically, in the interests of "free
trade" Europe is not free to trade with whom it wants. The Scottish
cashmere industry has been one innocent victim.

Hypocrisy and drugs

Yes, "free trade" is fine when it suits big business, but sometimes
there's a vested interest in blatantly stifling it, and where there's a
wealthy man's will, there's a way. The drugs issue is instructive. A
recent recommendation to the British parliament that cannabis be
decriminalised was rejected in the face of all evidence - from the
police as much as anyone else! I am not advocating the use of drugs,
but the warped nature of the "debate" illustrates how this sort of
issue has been and continues to be distorted for ulterior
motives.

Cannabis was originally criminalised in the USA by a man related to
Dupont, who had developed the synthetic fabric nylon, with which the
natural fibre hemp was in competition. There was a deliberate campaign
to besmirch cannabis, with stories being invented about black men under
the influence of cannabis raping white women. Many of the tales of
cannabis's ill-effects date from this campaign, and anyone who knows
anything about cannabis would know how far-fetched this is! The facile
argument that it is a gateway drug could equally apply to milk - did
you know that research has shown that all criminals and drug addicts
started by drinking milk?

What a waste of time and resources to target soft drugs such as ecstasy
and cannabis when alcohol, tobacco and paracetamol destroy many more
lives. Paracetamol, taken in slight overdose, is metabolised into a
potent liver poison. It's a frightful form of suicide (or murder!) It
could be rendered harmless by the inclusion in the tablets of a
sulphur-containing amino acid. Drugs companies will not do this because
it would slightly increase the cost of the drug, and the resultant
scare surrounding the revelation of paracetamol's toxicity might damage
the market. (I'd love to see the figures for paracetamol vs. ecstasy
mortality.)

Heroin addiction is a major and growing problem in the UK, and addicts
commit a large proportion of crimes such as theft. About one fifth of
world trade is in illegal drugs and yet millions of pounds (dollars)
are supposedly spent on combatting it. Is it naive to believe that
those organisations and political institutions benefitting from this
money have no real interest in ending the trade? Some have argued that
the "war on drugs" provides a good excuse for organisations such as the
CIA to interfere in the internal politics of other countries, notably
those of Latin America. What for? To promote "US interests", i.e. the
interests of US-based multinationals.

I contend that the seizure of large quantities of drugs does not
constitute "success" but is merely evidence of how much trade there is,
and, in fact, of how unsuccessful conventional methods of "combatting"
drugs are. Approached rationally it would, in fact, be easy to end the
trade in addictive drugs such as heroin. If heroin were prescribed,
addicts would receive a consistent strength and dosage, they would have
no incentive to steal to feed their habit, they would not come into
contact with criminals, and the criminals would have no market and no
incentive to push the drug. This was, indeed practised by a UK doctor -
he maintained many addicts for over a decade I believe. During this
period they remained in good health and held down jobs. As soon as the
establishment got wind of this they stopped him. Within a short period
several had died, and some had committed crimes to feed their
habits.

Reactionary attitudes to crime

Part of the reason the prescription solution cannot currently be
implemented is the view that it is wrong to "reward" criminals for
their crimes. This short-sighted, counter-productive and Puritan view
is propagated by business tycoons, which brings me on to the subject of
the media. On the drugs issue, as with many others, the UK government,
for example, seems in thrall to the right-wing media, much of which is
controlled by the fabulously wealthy in whose short-term financial
interests it is to pay less tax. For example, Rupert Murdoch controls,
I believe, about 41\% of the British press by circulation.

Tax evasion, media control and the victimisation of minorities

Murdoch, the head of a vast international media empire, was born in
Australia and took out US citizenship. By hiring the best accountants
and shuffling money around he all but avoids paying tax. To illustrate
his wealth, if you converted his annual profits into the finest single
malt whisky (?20 a bottle) and used this to fill elephant skins, you
could stand whisky-stuffed elephants trunk-to-tail all the way from
London to Hull (a third the length of mainland UK!) Mr. Murdoch's
papers (The Sun, The Times, News of The World...) fail to point this
out, and whip the poor residents of towns in which refugees and asylum
seekers are housed into a rage about how their money is being wasted on
what are portrayed as greedy lying foreigners. This undoubtedly
contributed to the violence that East European refugees suffered
recently in Dover, and continue to suffer all over Europe. (Research
has shown that, given the opportunity to work, refugees are, on
balance, an asset to the countries that accept them. Go back far enough
and you'll find that most of us are the descendants of immigrants of
one sort or another.)

British Prime Minister Tony Blair met Rupert Murdoch just before the
last elections. What assurances would Mr. Murdoch have asked for about
taxes, and the rules against media monopolies for that matter? Which
party did The Sun support? How effective has Blair been in closing the
gap between the rich and the poor?

As a general rule the bigger businesses attempt to divert the attention
of the public away from their tax-dodging machinations and set them
against the poorest and most vulnerable. (Set the poor and relatively
powerless against the very poor and absolutely powerless!) Hence the
consistent targeting of minorities, which is not limited to press
barons.

Witness, as another example, Brian Souter (a millionaire from UK bus
privatisation) and his homophobic pro-Clause 28 (2A in Scotland)
crusade, complete with such dirty tricks as unfounded scaremongering
about gay role-playing exercises in schools. (Souter's past donations
to the Scottish Nationalist Party, supposedly left-leaning, are
worrying.)

Witness the performance-related pay of teachers, recently a hot topic
in the UK. On the surface this may seem innocent, but it puts in the
minds of the public the notion that there are lots of incompetent
teachers, and that they are to blame for the problems in education
(rather than poor parenting skills, inadequate funding, poor
teacher:pupil ratios and the unteachable nature of some young people
brutalised by poverty.)

Regressive taxation

One could argue that the UK's national lottery is a masterstroke. Not
only is it immensely diverting (distracting attention from real issues)
but it is also a means of taxing the poor rather than the rich.
Deprived of real choice in their lives and seeing no great possibility
of bettering their lot by other means, the poor spend a much higher
proportion of their income on the lottery.

Similarly, the immediate and dependable pleasures of alcohol and
tobacco (not to mention drugs!) are more appealing to the poor and
powerless than to the rich who have other possibilities of pleasure and
fulfilment. This behaviour is human nature, and in its own way entirely
rational. One can therefore argue that high taxation on these items is
regressive and, far from being health-friendly, serves to widen the gap
between the rich and poor, exacerbating poverty. (Incidentally, the
biggest correlate with rapid ageing and short life spans is relative
poverty, not alcohol or tobacco intake!)

The invidious nature of this phenomenon has yet another twist: seeing
the poor "wasting their money" on such things as alcohol and tobacco,
the rich bemoan their fecklessness and use it to justify giving them
even less money. "Cut back on social spending and reduce my income tax
because the poor don't deserve any help!"

The poverty trap and its consequences

The balance is further tipped against the poor by the simple logic of
good business practice. Consumers who can buy in bulk (because they
have more liquid cash or credit, or have vehicles) and can sign up for
standing orders (because they have bank accounts) are more profitable
and so are worth attracting and are offered discounts. The poor pay
more for everything.

So the poor have less choice and a bad and often deteriorating quality
of life. Like the wealthy subjected to the injunctions of the media
with regard to what they should wear and consume (see below), they are,
however, unable to keep up. (The pressure on schoolchildren to conform
is enormous.) Powerlessness and frustration lead both to outward
aggression, such as vandalism, and to self-destructive behaviour. (And
this, of course, is used to justify their "unworthiness"!) That much is
easy to appreciate. But why are even the relatively wealthy
discontented?

Advertising, lowest-common-denominator programming and the information
age

Deregulation and privatisation, under the influence of the bigger
businesses, has opened the floodgates. Numerous companies compete for
territory formerly occupied by a few state-controlled organisations.
Examples would include power utilities, telecommunication companies,
transport providers and the media. Often concentrating their efforts on
the wealthier segment of the population (but not exclusively - some
prey on the ignorance of the more vulnerable) they shower their target
clients with advertising. Television channels struggle to attract the
largest audiences in order to attract advertisers. Quick-fix,
wham-bang, laugh-a-minute and salacious programming wins out over the
serious and analytical. This has two negative consequences. Firstly, in
the days when there were only one or two stage-controlled channels on
TV and radio a higher proportion of the population received programmes
of educational value. Now, in the so-called "information age", much of
the "information" we take in is of dubious value (this essay excepted,
of course! ;-)). Secondly, the more sound and sight "bites" to which
people are subjected, the shorter their attention spans become and so
the situation deteriorates.

All these things compete for our time, our energy, our money, and, I
would contend, our vital spirit. Big money promotes the latest pop
group's music and spin-off products. "You're not cool unless you wear X
jeans." People sense there is something wrong, and something missing,
but few seem to know what it is. There is an explosion of interest in
mysticism, crank religions, fringe medicine... and a corresponding
epidemic of depression, loneliness, abuse of drugs and alcohol and
thrill-seeking.

The solution

For thousands of years mankind existed in relatively small groups, and
socialised directly, talking about real people, helping each other,
telling stories, singing songs and making music. This is what is
natural and normal. This sort of life is "what we are meant for." How
do we get back there?

It is not all bleak. In many places and in many ways, people are
re-discovering "the simple pleasures". I list a couple of very
different examples.

On the Indian subcontinent and in Africa small local credit schemes
have been very successful in launching small businesses and giving poor
people independence. Women's groups have formed to combat deforestation
and set up co-operative business ventures. Helping women must be the
focus of Third World development projects: "Educate a man and you
educate one person. Educate a woman and you educate a family."

In Scotland (which, while remaining part of the UK, recently got its
own parliament) there is a resurgence of interest in traditional music.
As Stan Reeves (the Head of Edinburgh's Adult Learning Project, the
equivalent of Aberdeen's Scottish Culture and Traditions Association,
mentioned below) recently put it (I paraphrase): it is characteristic
of oppressed nations to define themselves by what they are against
rather than what they are "for". That way lies fascism. Once liberated
they may struggle to cohere. Similarly, on an individual basis, it is
easy and comfortable to join the club of popular "wisdom" and
prejudices when you yourself lack a sense of identity and self-esteem.
Nations and individuals are not mature until they define themselves by
what they are for. The tremendous growth of interest in traditional
Scottish music and culture is evidence that Scotland is re-discovering
a new and healthy identity, and is no longer merely "not
English".

In Aberdeen, for example, (my home town) the Scottish Culture and
Traditions Association is burgeoning. SCaT was started in 1996, and the
Rosemount Project (classes in Scottish music, song, dance and culture)
was launched in October 1997. There were initially four classes
(whistle, fiddle, song and guitar) and 50 enrolments. In Autumn 1999
they were up to 17 classes and about 260 enrolments. Classes now
include Gaelic, dance, clarsach etc. as well as different levels of the
three original instrumental classes. Those who have been to one class
tend to come back and attend other classes. A community has sprung up
around these classes, and people attend dances, musical, and social
events together rather than sitting at home in isolation watching
television. At the sessions (platforms for musicians to come together
and play spontaneously, of which there are now many in Aberdeen and
elsewhere in the UK and Ireland) the atmosphere has to be experienced
to be appreciated. The feeling of empowerment, self-esteem and simple
joy is tangible.

In summary, all is not lost. Bear this essay in mind as you view world
events. If the theory appears to match reality, vote accordingly. Don't
swallow the myth that "free trade" is universally beneficent. Vote to
lower indirect taxation and raise income tax for the wealthy. Join a
trade union if possible. Vote for workers' rights (human rights). Vote
for the cancellation of Third World debt. Don't blame the poor for
their problems. Don't let your government cede its power to unelected
bodies. Switch off your television and your mobile phone. Arrange to
see some friends. Sign up for music, dance or language classes. If you
have a choice of supporting a small business or a large one, choose the
former. Tear your children away from their videos and computer games.
Think carefully about what you most value in life, and treat yourself
to more than superficial and transient pleasures.