April 11, 2002

12:09 AM

So the rich get richer? Or just another bleeding heart.EU and US selling poor down the river
Oxfam report accuses west of double standards on trade
The European Union and the United States are robbing the world's poor of billions of dollars each year in export earnings by preaching free trade while protecting their own markets, development campaigners claim today.
posted by onegoodmove (16 comments total)

One has to admire the cheek. Oxfam's no Thatcherite outfit, but they're actually accusing the free-traders of, well, unfree trade. Ostensibly this might be an argument in favor of still-freer trade, but you know they had to wrestle the car back on the road they know at the end: Oxfam is calling on the World Bank and the IMF to stop imposing trade conditions on their loans [endorsing one-way protectionism], for poor countries to be given better access of markets [no, we won't buy another drop of your oil, because we're mean], and for a new international body to support the prices of the primary commodities many developing countries depend on. Support the prices with whose money? Not through the Tobin Tax one hopes.
posted by dhartung at 12:39 AM on April 11, 2002

In other news, the sky is blue.

This reminds me of a story I read a few years back. In a small village of Niumi in Africa 150 years ago, people lived peacefully through subsistence farming. In came Europe, discovering the value of peanuts found on some plantations in Niumi. Europe gave those farmers handsome rewards in exchange for peanuts. Niumi's citizenry immediately farmed peanuts fully, and were able to purchase food and other goods from Europe with their new found profits.

Industrialization soon occurred in Europe and the ability to exploit a peanut for more product rapidly increased. Suddenly the price of peanuts plummeted, but the farmers of Niumi had switched their entire farming system to peanuts, and their economy was devastated. So instead of becoming affluent Africans, they became indentured servants.

The moral of the story: the rich will always exploit the poor. That's how they remain rich...The key is to educate the poor and their governments to these practices. Stop giving them free money and teach them how to compete in a global market. Force these governments to realize instant gratification will win elections; educated planning will help them become developed nations. The smell of money is nice; the smell of success is intoxicating.
posted by BlueTrain at 1:55 AM on April 11, 2002

Stop giving them free money and teach them how to compete in a global market

Errr, that's the whole point: there is no free money and no real market to compete in. For instance, you cannot seriously tell China to freely compete in textiles when the U.S. places restrictions on the amount of Chinese textiles that can be imported into the country. These restrictions do not have a political slant to it beyond the fact that Chinese textiles are much cheaper, thus more competitive and will create loss of jobs in the U.S. They might call it human rights-based sanctions, but it's all about securing the money stays where we like it to be.
posted by magullo at 2:23 AM on April 11, 2002

BlueTrain, that story doesn't support the idea that 'the rich will always exploit the poor'. The rich bought the poor's peanuts. That's exploitation? The poor tried to make more money by only growing peanuts. Well, that's their decision. It worked, for a while. They didn't anticipate a market collapse. Neither did the US steel industry in the 1960's. Neither did Enron when it entered the telecom market. But no one is guaranteed a market. Technology changes, markets come and go, agility is rewarded, complacency is punished. It's not exploitation, it's the nature of the post-industrial world, and the rich are at risk as much as the poor.

The major problem the developing world faces, as far as I can tell, is not the multinationals which provide jobs and foreign exchange, but corrupt, kleptocratic governments, that steal capital out of the system.
posted by Slithy_Tove at 2:51 AM on April 11, 2002

Here's the book I read from which my story was based.

Errr, that's the whole point: there is no free money and no real market to compete in.

Was there ever? Has the world ever had a free market? I'm not being facetious here, but I cannot, for the life of me, think of any time in our history as a civilization that we have had a free market, or equal citizenry. I'm not saying it's not possible; I'm simply saying that it's yet to happen.

The major problem the developing world faces, as far as I can tell, is not the multinationals which provide jobs and foreign exchange, but corrupt, kleptocratic governments, that steal capital out of the system.

Or maybe it's a little from column A, a little from column B. Take a look at this comment I wrote a couple days ago. MNC's constantly colonize small areas of less-developed countries for profit. And amusingly, I can't blame them. Businesses are for profit; if they're able to save the environment and protect cultures, more power to them, but we cannot expect it.

As for kleptocratic govts., it's too broad a stroke to label all developing nations' govts. as thieves, even depotisms. There's no proof that dictators are any less efficient than democracies; it's just that it's easier to exploit a nation if they're a democracy because they (the developing nations) are suddenly playing by our (the West's) rules, instead of their own.
posted by BlueTrain at 3:03 AM on April 11, 2002

the tobin tax sounds like a good idea to me, can you explain what the negatives might be, in your opinion dhartung?

taxing currency speculation hurts whom?

'Over 1 trillion dollars ($1,000,000,000,000) changes hands every day on global foreign exchange markets. More of this trading is of a speculative nature, buying and selling money for profit’s sake. This currency gambling is not part of any genuine trade or investment and it can result in basically healthy economies collapsing over a very short time frame.'
posted by asok at 4:07 AM on April 11, 2002

Has the world ever had a free market?

That is hardly the point. The point is that the Western countries that seem so bent in bringing the benefits of free trade to the third world are in fact protecting their own domestic markets. They mouth says one thing, the money does another. That is the point. No need to talk about peanuts in Africa. But if you really want to talk about it, read up on Sierra Leona's slave children and their global role on chocolate manufacturing. You'll never think of the stuff the same way ever again.
posted by magullo at 4:38 AM on April 11, 2002

a new international body to support the prices of the primary commodities

keynes actually proposed such an idea at bretton woods, but they went with the white plan instead.

What is needed is a revival of Keynes's proposal. By stabilising commodity prices both inflation and unemployment in the industrial countries are reduced. Incomes in the developing countries are stabilised and raised, by encouraging investment. And the world economy can expand at a stable rate. "Back to the future of Bretton Woods" would not be a bad slogan for the next reform of international economic relations.

it would have acted like a sister institution to the IMF and i think it would have done a lot to counteract its excesses IMHO.
posted by kliuless at 7:49 AM on April 11, 2002

[insert tomato rant here]
posted by five fresh fish at 8:10 AM on April 11, 2002

Great post. This just goes to show that all these "free trade agreements" are bogus, in fact they are contradictions in and of themselves. To achieve real free trade, all that is needed is for the governments to stop bullying peaceful individuals and companies who want to exchange goods with one another. That's it!
posted by dagny at 8:40 AM on April 11, 2002

tomato rant?
posted by kliuless at 10:40 AM on April 11, 2002

That's one tomato rant. The other is about how the US slapped tariffs on Canadian tomatoes because we can grow 'em cheaper up here (more efficient farming and lower air-temperate-control costs) than in Florida/Texas.
posted by five fresh fish at 10:47 AM on April 11, 2002

Here's a link to the Oxfam report itself:

'Rigged Rules and Double Standards'
posted by Owen Boswarva at 2:07 PM on April 11, 2002

It is always about protection of the national economy. Free trade can only be called free because rich countries are free to do what they like in our world market.
What we need is a kind of controlling mechanism, maybe an elected world parliament?
posted by roel at 3:09 PM on April 11, 2002

I'm no raving libertarian on taxes, asok, but your willingness to jump in and take somebody's money because you don't like what they're doing with it is exactly the reason that I'm rather suspicious of proposals to do just that.

The Commanding Heights is a PBS series, this week broadcasting its 2nd of 3 episodes, on how the world economy developed during the 20th century, represented mainly by a struggle between the views of Keynes (best known for his deficit-spending-to-jumpstart-the-economy stuff, but more largely about government management of macroeconomic factors) and Hayek (free trade, laissez-faire guru). At this point, the pendulum is swinging back heavily in favor of Hayek. Whatever one's views, it's an extraordinary program.
posted by dhartung at 8:34 PM on April 11, 2002

and i thought it was joseph"creative destruction"schumpeter!

deficit-spending-to-jumpstart-the-economy stuff

that's what bush is doing :)
posted by kliuless at 8:05 AM on April 12, 2002