Trade, Jobs and Innovation
“Workers of the World Unite” Karl Marx
“Peace, commerce and honest friendships with all nations” Thomas Jefferson
Trade is front and center in the presidential election this year. In my opinion, the debate is flawed. Both the left and the right wings of the political spectrum are spouting xenophobic analyses of what international trade is and how to make trade “fair.” Let’s take a look at the forces in trade, jobs and innovation.
The basic principles of Capitalism are at play in trade; Capital maximizes profits through seeking lower cost of labor, production and materials. This has been happening since the birth of the Industrial Revolution. And this fact has caused major disruptions of peoples and nations for centuries. How is this playing out now? The international business community wants the free flow of capital anywhere in the world to enhance profits. Nothing new here. The Apples’ & Nikes’ of the world love it. The nativist Right (Trump and crew) blames jobs losses on unfair trade deals and immigrants. Their solution: build walls, tariffs, ban some imports and roundup undocumented immigrants. The Liberal/Progressive Left ascribes job losses on to unfair trade deals and big business. Their solution: tariffs on imports, taxes on capital leaving the country and scrapping current trade deals. Outside of the blatantly racist solutions put forward by the nativist Right, the Left are in alignment with the Right. What’s going on here?
Xenophobia, my friends, XENOPHOBIA! A good example is NAFTA. Simply put; yes over 350,000 American jobs went to Mexico, BUT, what happen in Mexico? Do you know? Probably not, it was never reported here. Over 1.3M Mexican small farmers were forced off the land when cheap Iowa corn flooded the Mexican market and undermined their ability to make a living. This is only one example of many. The winners? The elites of course. If people think that NAFTA can be undone, think again. The economies of Mexico, the USA and Canada are completely integrated—we are one economy. If we pulled out of NAFTA, the fallout for everyone would be extreme. It could plunge all three countries into recession or depression. From a radical point of view, NAFTA has accelerated the decline of the nation state though this economic integration. The contradictions of class, race and gender have intensified as peoples become a global community and struggle against the on slot of Capital that is destroying our planet.
What about China? Oh my, they decided to industrialize and invited international capital to invest. What happen, America was flooded with cheap consumer goods and millions lost their jobs. BUT Americans have benefited from this—if the polices of the Right and Left were in place, this computer I’m banging away on would cost 3x’s as much. Cell phones for $1k and innovation would have slowed. This was the tradeoff for lost jobs—cheap goods. You get my point. China has paid dearly, their environment is destroyed, the government is aligned with international capital, and the profits are being enjoyed by the elites. So much for the People’s paradise.
Where is the American Labor Movement (with a few exceptions) coming from? Their solutions to job losses are pure protectionist policies—tariffs and taxes on capital flow out of country. Whatever happen to Workers of the World Unite? From my point of view, labor doesn’t give a damn about foreign workers. Labor was purged of internationalists leaders during the red scares of the 50’s and 60’s. This contributed to the decline of the labor movement. They can’t see beyond their noses.
When it comes to jobs, this is the reality: high paying, low skill manufacturing jobs are not coming back to our shores. The good news is that highly skilled manufacturing jobs are blossoming in our economy. Also, the whole nature of work and jobs is changing under our very eyes. Forget about job losses to trade, the real elephant in the room is technical innovation and automation. For example, driverless vehicles, they are here and will be on the road in large numbers soon. Impact on jobs; for example, over the road truckers, the job losses could exceed 1m jobs. Innovation and automation are here to stay. How are going to handle this?
Barring a social revolution, we need a comprehensive social safety net. What this will look like, I don’t know, but we need to engage our talents to explore the options. The ultimate goal is “from each according to his (sic) (her/ their ability), to each according to his (sic) (her/their) need”—Louis Blanc 1851. But this slogan just scratches the surface. How are we connected to life, both animal and human, to each other, the planet? What is truly meaningful in our existence? What is equitable trade in a world community? What are the environmental cost of trade? The big question is why are we pursuing the path of growth, mindless consumption and endless wars over resources? Why?
If I sound like a revolutionary, it’s because I am.