The Globalization Illusion

Opinion Column

For over sixty years, people around the world have been duped into the unfounded belief that “all trade is good.” From well-known and respected economists like John Maynard Keynes to local politicians, everyone seems happy in the belief that trade is an inherently good thing.

Unfortunately, too much trade can be very detrimental to a society. The fervid approach to “free trade” promoted by most economists and policymakers seeks the global abolition of all barriers to trade. Vehicles like the World Trade Organization and North American Free Trade Agreement have already become entrenched in the psyche of the developed world. These vehicles of trade liberalization have cost the United States thousands of jobs and are continually putting this country in a disadvantageous position.

However, in a global economy, trade is necessary because it allows economies to interact; it facilitates the flow of ideas and is an integral part of immigration. Without trade the world wouldn’t know the comfort of a cotton shirt (originally cultivated in the Indus River Valley over 4000 years ago) or the miracle of the incandescent light bulb. Trade has allowed technology to advance from the Dark Ages to the Space Age in just 500 years.

Yet the old adage that “you can have too much of a good thing” holds true regarding “free trade” just as it does anything else. Food is good and essential to life, but too much can lead to obesity and various ailments, diseases and conditions, some of which are life threatening. It is even quite possible to die from consuming too much water.

Free trade creates wealth on a scale never before seen. It has allowed for the inflation of executive income to remarkable heights, but it has not necessarily made life any better on average. Americans have more goods for consumption than any other citizens of any other nation in the world, but that hasn’t protected us from the collapse of our housing, credit and financial industries. Citizens of other nations are not markedly better off either. NAFTA was formed primarily with the intention of propping up Mexico; making it as prosperous as Canada and the U.S. The volume of trade has certainly increased exponentially, but the fruits of that trade are not inherently appealing. NAFTA has helped to create wealthy elites in Mexico, but average citizens are left behind.

To many people, “free trade” is the goal in and off itself. But trade should be recognized for what it is: a means to an end, rather than a definitive end. Under WTO stewardship (originally the General Agreement on Tariffs and Trade) the world has seen the destruction of trade barriers and a huge leap in the sheer volume of goods and freight being transported. It has not on the other hand, seen a similar leap in the living standards of people around the world.

Many argue that we must continue to tear down trade barriers of free trade and simultaneously maintain the gains we have achieved. But what real gains have we seen? There is no more equality in the U.S. (or in the world) now than there was in previous generations. The ultra-rich still live extravagantly, while average people struggle to pay their mortgages on time. Company executives get multi-million dollar severance packages for running their companies into the ground, while normal employees are simply laid off and told to fend for themselves.

Trade liberalization, globalization, “free trade,” all of these things are waved in our faces as objects to pursue. What we really should be pursuing is economic stability. Free markets are by their very nature incredibly unstable, they are meant to experience “boom and bust” cycles. How is that a national policy worthy of pursuing? In the globalized “free trade” world, the U.S. is accountable to other world leaders instead of being held accountable to its own populous. Our leaders make decisions that their constituents vehemently oppose without really caring about our interests. They all believe that “free trade” will save them, even though “free trade” got them into this mess.

Unregulated capital and securities markets have destroyed the financial, housing, banking and credit sectors. Unregulated trade access has destroyed the manufacturing and industrial sectors. The United States of America is not even the world leader in technological research and development anymore; that title has long since been taken by Asian and European nations. Perhaps instead of looking to “free trade” to save us, we should be trying to save ourselves from “free trade.”

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