The G20 summit, that semi-annual jamboree celebrating state power and global corporatism, is set to get underway this week amidst pointed reprimands, issuing from the U.S. government toward China’s regime, over monetary policy. The United States, speaking for the domestic Big Business interests it represents, maintains that the Chinese are undervaluing their currency in order to bolster their country’s exports; the Chinese riposte is that the U.S. should “face [its] own problems.”
This exchange of barbs inflames worries over the exchange of actual goods, raising the prospect of a protectionist trade war. Underscoring the irony of the U.S. lecture, European governments have been quick to castigate the U.S. for its own inflationary excesses, calling on Washington to practice what it preaches. With their systems of thievery on the brink, the world’s most powerful states seek salvation through collusion as their distinguished meddlers and miscreants to descend on Seoul.
The gathering represents an incredible act of presumption in, as Bill Haynes noted last year: “The notion that the very people who created the problems can solve them through more government actions.” But the states come to the table not so much to solve global economic problems as to shore up their shared schemes of exploitation despite those problems.
Every politician on earth knows that consistent protectionism, carried to its logical end, means economic debilitation and suicide, but the whole state-corporate paradigm depends on its structured application. The state’s reticulate structure of regulations and subsidies constantly adapts to hamper competition, outlawing it entirely or making it impracticable in terms of cost. The political class carefully shapes policy to protect corporate markets — and accordingly profits — by discouraging voluntary associations that threaten their bottom line.
Since the state-corporate system is, by definition, founded on some ratio of protectionist cheating, the state faces the problem of explaining its more noticeable features. Leveraging the population’s capacity for nationalism and xenophobia, political leaders rationalize corporate welfare (and its inherently and artificially higher prices) into “protecting our country’s jobs and industries.” If arbitrary political boundaries possess the economic significance that protectionists imply, however, acquiescence to free trade on any geographical level is problematic.
For instance, under the “protecting jobs” rationale, it is unclear why, supposing protectionism is good for the country as a whole, it would be harmful for a state, a county, a city, a neighborhood, or a street. “[T]his absurdity,” wrote Murray Rothbard, “is inherent in the logic of protectionism. Standard protectionism is just as preposterous, but the rhetoric of nationalism and national boundaries has been able to obscure this vital fact.” Still, none of this is to say that globalization, in its present manifestation, is something we ought to hail as an answer to the trade-averse policies of corporate sheltering.
Although truly free, global trade between self-governing individuals is the ideal, the globalization of today’s supposed “flat” world has little if anything at all to do with simply allowing unobstructed exchange between people. Advocates of free markets too often fall reflexively into extolling the virtues of global markets, failing to notice that today’s multinationals achieve their universal presences through the channels of state, not the free market. Specialization of labor, comparative advantage — the many advantages of trade that Rothbard observed — are completely severable from the mercantilist program of privilege he so hated (and that still afflicts us today).
Completely wed to the state, Big Business pries open its foreign markets alongside the American military, planting its factories under indigenous populations ripe for exploitation. We can predict with certainty that, when all is said and done in Seoul, the ruling class will have found a way to make things work for their respective states. Equally certain is the bleak reality that their “solutions” won’t work for the rest of us, for the mass of people all over the world who lack the option of using force to extract our livelihoods, and who wouldn’t if we could.
Ludwig von Mises wrote that “[t]here are two kinds of social cooperation: cooperation by virtue of contract and coordination, and cooperation by virtue of command and subordination or hegemony.” The cooperation going on at the G20 summit represents the latter kind, the kind in which men compete not in peaceful, creative contests, but in struggles to control what others may do with their property.
