“Fair Trade” = Socialism
The inevitably wrong Eric Alterman (part of the George Soros-funded Left Wing Noise Machine) laughably tries to portray socialism as mainstream economic thought in America:
A demand for tougher trade policies was nearly as fundamental to the success of the 2006 Democratic electoral sweep as opposition to Bush’s catastrophic war. “There has been an evolution among almost all Democrats that these trade agreements simply need to be constructed in a different way–for fair trade, not for free trade,” a victorious Senator Sherrod Brown of Ohio explained. In Virginia, James Webb promised, “We are going to work very hard on issues of economic fairness in a country that has become too divided by class…. We must re-examine our tax and trade policies.” And Rhode Island’s Sheldon Whitehouse beat Lincoln Chafee, despite the latter’s anti-Bush stance, by proclaiming, “It’s time to reject trade deals like NAFTA and CAFTA that fail to protect American jobs.”
Now, how many mainstream pundits share the fair-trade view endorsed by so many millions of voting Americans and demonstrated in decades of polls conducted by the Chicago Council on Foreign Affairs? Virtually none. “Free trade,” really just a nice name for a free investment policy that allows global corporations to move production and capital around the world with no thought to the human and environmental consequences and that offers countless exceptions when the powerful are threatened, is the religion of the American elite.
Well, there’s a good reason for that, Eric – it’s because free trade, capitalism, democracy, and freedom are all different sides of the same coin (I realize that’s a four-sided coin, but there you go).
Let’s peak in at Venezuela to see how their ‘fair trade’ is going:
Venezuela’s President Hugo Chavez has threatened to nationalise stores that sell meat above a government-set price.
The government says supermarkets have been artificially boosting prices of basic foods by manipulating stockpiles.
But critics blame regular food shortages on prices imposed four years ago, forcing shops to sell at a loss.
Many privately-owned supermarkets have suspended sales of beef, milk and sugar after one chain was temporarily closed for pricing meat above allowed levels.
The government has already seized goods that it says are being hoarded to drive up prices.
…President Chavez told a gathering of pensioners in the capital, Caracas, that he was waiting for the “first excuse” to take over privately-owned outlets that manipulate prices.
“If they insist on violating the interests of the people, the constitution and laws, I will take away the warehouses, the shops, I will take away the supermarkets and I’ll nationalise them,” he warned.
…Venezuela’s inflation rate rose to a two-year high in January, with consumer prices rising 18.4% in 12 months.
…Some private companies are also concerned about President Chavez’s intention to make them allow their employees time during the working day to study socialism.
The rhetoric of Chavez is remarkably similar to the rhetoric of Alterman, James Webb, and other quasi-socialists. It’s always about “the people”. Well, you know what? Walk in any Wal-Mart, and you’ll see plenty of “the people”. Why are they there? Because “the people” like low prices, that’s why.
Free trade inevitably results in job losses in certain sectors, because capital flows to those locales where it can most profitably be put to use. And that free flow of labor and capital is not just a feature of a modernized capitalist economy, it’s the very backbone.
Peddle it somewhere else, boys – this is the U.S.A., not some banana republic…
I agree with you on the economics, but I think Democrats are tapping into the longtime isolationist streak among many Americans; it’s the same streak that leads many voters to have flipped their opinions on the Iraq War; if the savages want to bomb each other to oblvion, let ‘em do it, seems to be the thinking.
The notion of “protecting American jobs” has a lot of resonance with people, and with corporations that would prefer less competition. The only problem is that protectionist measures just don’t work. You can’t opt out of the realities of the global marketplace.
I wonder how long before we get some congresscritters taking sledgehammers to some foreign-made goods on the steps of the Capitol once again.
I’m still waiting for a “fair trade” advocate to take the logical next step – if international trade is bad for America (as a result of wage/regulation/resource imbalances), then surely interstate trade must be bad for the states. And, as such, it should be curtailed. Right?
Fair Trade certainly does not equal socialism. It simply seeks to recognize that “free” trade has never, and likely will not in the near term, be truly free. Fair trade advocates recognize the reality that global trade is manipulated all the time by nations attempting to gain an advantage in the global market for their corporations, via subsidies, laws and tariffs. So-called free trade agreements, from an American perspective, have been nothing more than attempts to negotiate terms for corporations to do unrestricted business in another nation. In most cases this means American businesses can operate in another nation without regard to basic labor standards that have become standard in the developed world. Fair trade advocates are simply the labor-rights activists of the era of globalization, fighting to establish an internationally recognized and enforced standard for labor rights. Trade is fundamentally a human interaction. Lives are impacted on either end of any trade deal and laws should reflect that fact by ensuring the rights of people at either end are protected, not simply the rights of the multi-national corporations on one end. For instance, the Peru Free Trade Agreement that narrowly avoided passing at the end of the lame-duck Republican congress is typical in its assurance of rights for American corporations in Peru (i.e. the right to sue, the right to trademark, etc) but utter lack of any basic assurances for Peruvian workers.
Perhaps you equate fair trade with socialism because price floors are sometimes used in fair trade agreements between wholesalers and producers. In volatile markets, such as the coffee market, fair trade certification does require a minimum price, it is currently 1.26 USD per pound. But remember that fair trade coffee businesses are competing, and winning, in the same market as Nestle and Starbucks. Fair traders are not asking any law-making body to legislate a price-floor for goods, we simply recognize that a good portion of consumers appreciate the benefits a stable, reliable price gives to disadvantaged producers and are thus willing to pay a premium in the marketplace for fair trade coffee.
Fair trade is not socialism. Venezuela under Chavez could be considered socialist, but please stop confusing your readers with such inappropriate comparisons and do a bit of due-diligence before posting more nonsense about fair trade.
[...] Some gasbag on a blog called Decision ‘08 titled a post “Fair Trade = Socialism” that appeared in my RSS reader this morning. In this post he quotes an article by Eric Alterman published in The Nation. In this article Eric Alterman derides American-style free trade agreements as “really just a nice name for a free investment policy that allows global corporations to move production and capital around the world with no thought to the human and environmental consequences and that offers countless exceptions when the powerful are threatened….” [...]
Brady, thanks for calling me a gasbag on your blog. Your knowledge of basic economic theory is appalling…”fair trade” is nothing more than anti-globalist warmed-over socialism, and its inevitable result is market disruptions, unemployment, lower growth, and protectionism.
Might I suggest a basic course in economics from your local community college?…
Yeah, I felt bad about calling you a gasbag. I have since removed it. My apologies. No one reads the blog yet anyway…
I still, of course, disagree with you about dismissing fair trade as warmed over socialism. Fair trade businesses operate within the same capitalist principles of supply and demand that every other business does. Because the movement also demands rights for workers does not make it socialist in the economic sense. I know that a hallmark of socialism is its focus on labor and can understand confusing the two on these terms… but economically speaking fair trade operates within a capitalist global economy and is operating well within it. Some like to call it social-capitalism, or capitalism that recognizes and respects the human element of trade.
Hey, you didn’t have to remove it, but thanks anyway…I’ve been a little touchy lately, as we’ve had some knock-down dragouts in the comments section as of late.
What can I tell you? I’m a unabashed free-trade capitalist. I truly believe that any interference in the free flow of labor and capital is a net detriment to the economy.
Fair trade means protectionism (typically via tariffs). Thus, when a government implements protectionist policies, the government forces its populace to subsidize inefficient industries at home; for instance. If a Toyota can be sold for $15,000 before an import tax, but is sold for $25,000 afterwards, when compared with a $20,000 Ford (I am being completely arbitrary in prices here), then the American government might as well be taxing the American auto consumer and giving the proceeds to the American auto industry. This is a redistribution of income. The goal of this redistribution is to, as the mantra goes “keep American jobs in America.” Or in other words, it is the government doing a favor for labor. How is that not socialism?
See that’s the common misunderstanding right there. Fair trade does not equal protectionism. Fair trade has nothing to do with economic policy. Politicians have latched onto the term and are misrepresenting it. Fair trade is a movement that seeks greater equity in the trading process. This is achieved through businesses making deals with poor producers and artisans that adhere to the fair trade criteria, namely long-term partnerships, safe and healthy working conditions, adaquate pay and, when possible, education and training. This is strictly a business relationship and has nothing to do with policy. My wife and I run a fair trade business and we operate wholly within the capitalist system and are profitable. In exchange we get to advertise the healthy relationships we have with our suppliers and this brings in business, and profits, while helping a poor community develop.
In fact, I am a fan of unrestricted trade. It however, does not exist between any nation now and likely will not for a long long time. The US is very protectionist in some economic sectors and this harms development in the poorer parts of the world. Fair trade is a consumer movement that bypasses policy and makes trade fairer within a profitable capitalist model. How is this protectionist? I still pay protectionist tariffs on the good I import… I’m not helping to create them, certainly.
Brady, I think we’re talking about two different things here: your idea of ‘fair trade’ seems to be agreed-upon private transactions at a somewhat mom and pop level – I can assure you that is not what ‘fair trade’ means to James Webb and Sherrod Brown. They are, in fact, talking about jettisoning free trade agreements and putting up new barriers at the policy level…