Insight and inspiration in turbulent times.
Trade ought to be a simple thing. I give you something, you give me something else in return, and we’re both better off. But our capitalism-on-steroids society has converted the simple idea of exchange into an overly exploitative monster
With coronavirus prompting a slowdown in global trade, it’s all the more critical to find a different way forward. Thankfully, Asher, Rob, and Jason have a few ideas about how to have fun while building a resilient local economy.
‘The food that you buy will all be grown locally,’ says policy director at New Consensus, Rhiana Gunn-Wright, in a Vox video. This is stated simply, as an aspect of what it will be like to live in the time of a Green New Deal (GND). Yet it represents a fundamental challenge to international trade governance in ways that must be addressed if the GND is to be successful.
The way trade works in the global economy can be insane – it wastes resources, worsens climate change, and undermines the livelihoods of millions of small-scale producers worldwide.
Free trade is in real trouble today. But the promoters of free trade brought this on themselves. However, it is not because they have been tepid in their defense of free trade, as the description of this debate has it. They have been guilty of far greater sins.
While trade liberalization was a boon for big business, able now to chase cheap labour and exploit newly opened markets, it has been bad news for many millions of ordinary citizens around the world.
For someone like me who believes we ultimately need to strengthen local economies but doesn’t believe heavy industry (like mining and aluminum extrusion) should form the heart of these economies, the issue of tariffs has no clear answer.
Comparative advantage is still routinely invoked as a justification for free trade today, so it remains sadly necessary to explain why it’s a poor foundation for contemporary economies.
Later economists like David Ricardo took the idea of specialisation and refined it into a theory of why free trade would supposedly improve everyone’s welfare because it led to specialisation between countries.
In the matter of Free Trade, as with any ideology, there are none so zealous as the newly converted.
One of the major currents underlying 2016’s political turmoil in Europe and the United States, in fact, has been a sharp disagreement about the value of free trade.
Today, interlinked multinational banks and corporations constitute a de facto European government, determining economic activity through the ‘European market’….In other words, corporations run Europe.
