Did you know President Obama’s “core legacy” is free trade — and the centerpiece of this alleged “free trade” policy is the Trans-Pacific Partnership (TPP)? Neither did I. But that’s what Shikha Dalmia says, writing at the leading right-wing libertarian periodical Reason (“Why Is Hillary Throwing Obama’s Core Legacy on Free Trade Under the Bus?” October 15). Dalmia explicitly refers to the TPP as a “free trade agreement between America and Pacific Rim countries.” That should give some indication of what the right-libertarians at Reason mean by “free trade.”
As I intended my title to suggest, equating TPP to “free trade” is the kind of monstrous Orwellian Big Lie that should be an Ingsoc slogan alongside “War is Peace,” “Freedom is Slavery” and “Ignorance is Strength.” Neither TPP, nor any of the gaggle of “free trade agreements” with -FTA in their acronyms, has anything to do with actual free trade.
And please note: I’m not just making the perfect the enemy of the good by complaining that “free trade agreements” like TPP aren’t a big enough step in the direction of free trade. No, I’m saying that such agreements are the direct opposite of free trade. They create a net increase in protectionism. The reduction of tariffs and other barriers to the movement of goods across national borders is only secondary, if not incidental. Their purpose, rather, is to drastically increase the form of protectionism most central to the dominant corporate business model today: So-called “intellectual property.” The draconian IP provisions of contemporary “free trade” treaties serve the interests of global corporations the same way high industrial tariffs served American corporations a century ago.
In another piece she wrote on the same day (“The bogus assumptions of Hillary Clinton’s free-trade switcheroo,” The Week), Dalmia inadvertently gives away one way that “intellectual property” protectionism serves global corporate interests. “Free trade” agreements like NAFTA and TPP, she says, will “actually prevent labor from driving the middle class into a hole.” That’s right — “free trade” agreements are a tool for disciplining that great devil-figure of the Right: The evil unions. (I never get over my amazement at someone blaming union wages for deindustrialization, when CEO pay has gone from about forty to four hundred times that of the average production worker over the past generation.)
These treaties, by facilitating the movement of means of production across borders, enable corporations to contract production to independent sweatshops in low wage countries, pay them $2 for a pair of sneakers, and import them for sale at Walmart for $200. And because patents and trademarks give them a monopoly on sale of the product, they’re protected against the independent contractors deciding to produce identical shoes and selling them for $10 on the local market.
In the early 20th century, when most industrial capital was national, Western countries’ main imports were raw materials from the colonial world and their main exports were finished industrial goods. So it was in the interest of American manufacturers to restrict competition in the domestic market from imported goods manufactured in other industrialized countries. Fast forward 100 years though, and most American imports are by the Western-owned global corporations themselves, importing goods produced under contract for them so they can sell them in the domestic market at an enormous “intellectual property” markup over the cost of production.
Since the movement of goods across borders is now mostly an internal affair of global corporations themselves, outmoded tariffs that impede the movement of goods have become an inconvenience. What they need, instead, is a form of protectionism that still gives them a monopoly over selling a particular product in a particular market — but operates at corporate boundaries rather than national ones. That’s what “intellectual property” does.
Aside from the manufacturing corporations we just discussed, most of the other profitable industries in the global economy have business models centered on IP: Entertainment, software, electronics, biotech, etc.
So what’s falsely called “free trade” today isn’t a decrease in protectionism. It’s a shift from one kind of protectionism that no longer serves corporate interests, to a new kind of protectionism that better serves them.
The main thing the state does is subsidize big business and protect it from competition. Such intervention is the main source of corporate profit. When you see something packaged as “free trade,” “deregulation,” or “privatization” — and it has heavy big business support — you can figure it’s nothing of the kind. Anyone who seriously believes either the state or the corporate interests it serves would push so hard for TPP if it actually reduced state intervention in the economy, probably also believes in Santa Claus.