Center for a Stateless Society
A Left Market Anarchist Think Tank & Media Center
Jeff Madrick’s Misplaced Criticism of Free Trade

If you accept your enemy’s conceptual categories, you’re apt to wind up with a badly framed debate in which both sides are unsatisfactory. Jeff Madrick’s article “Our Misplaced Faith in Free Trade” (New York Times, October 3) clearly demonstrates this. The corporate state and its stooges in both major political parties and the commentariat are heavily invested in passing off neoliberal globalization as “free trade.” Their interest in doing so is understandable. The global corporate economy is a system of power resulting from massive government intervention in the market, and involves the use of force to promote some interests at the expense of others. It’s entirely in the interest of the beneficiaries of this system of power to use language like “free trade” to conceal its origins in force, and grant it ideological legitimacy by passing it off as “free trade.” But by taking their enemies’ terminology at face value, opponents of corporate globalization enter combat with one hand already tied behind their backs.

In the opening paragraphs of his commentary, Madrick identifies “free trade” with “more trade,” international “free trade agreements” and “globalization,” attributing the negative effects of these things to “free trade.” In fact free trade is none of these things. Corporate globalization and so-called “free trade” deals actually involve gross violations of the genuine principles of free trade.

The centerpiece of the neoliberal agenda is not “free trade” — that is, voluntary exchange of goods and services in which all parties operate on their own nickel and nobody has access to coercive power to set the rules in their favor — but the age-old ruling class agenda of “privatization” (enclosure) of the commons as a source of rents. The increased volume of international trade under the neoliberal policy regime results from direct state subsidies to long-distance trade and state intervention to reduce the transaction costs of trade — in both cases socializing the operating costs of transnational corporations.

To the extent that peasants were evicted and transformed into wage laborers working land that was previously there, or western capitalists and white settlers seized mineral resources in the global south over the past few centuries of imperialism and neo-colonialism, neoliberal “protection of private property rights” actually amounts to guaranteeing the thieves continued control of their stolen loot. Globalization guarantees the ill-gotten gains of those who engage in cash crop production on Latin American haciendas and other large-scale capitalist farming operations around the world, and those who extract the mineral wealth of Africa and the oil of Nigeria and Indonesia.

The “intellectual property” regime enforced under assorted “free trade” agreements enables western-owned companies to outsource actual production of goods to Third World countries while maintaining a legal monopoly over disposal of the product. Likewise, “intellectual property” in software, entertainment and biotech enables corporations to make profits not from actually producing anything, but from controlling the circumstances under which others are allowed to produce.

The majority of global “trade” is not, as the term suggests to most people, the free exchange of goods between actual producers. It involves the importation of goods produced under contract to be sold with the Nike or Apple logo, or the movement of raw materials and unfinished goods between local subsidiaries of transnational corporations. It’s about as entitled to the “free trade” label as the movement of materials between state factories in the Soviet planned economy.

By accepting the term “free trade” at face value, Madrick allows protectionist, mercantilist global corporations to appropriate the positive aura attached to genuine free trade, and principled advocates like Richard Cobden. In so doing, he winds up with the unnecessary hurdle of opposing “free trade,” when he could instead be — much more effectively — attacking transnational corporations as beneficiaries of corporate welfare and protectionism.

The global corporations that talk the most about “free trade” are basically arms of the state. Genuine free trade would destroy them. It’s time to call things by their correct names.

 

Markets Not Capitalism
Organization Theory
Conscience of an Anarchist