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Mutualist Blog: Free Market Anti-Capitalism

To dissolve, submerge, and cause to disappear the political or governmental system in the economic system by reducing, simplifying, decentralizing and suppressing, one after another, all the wheels of this great machine, which is called the Government or the State. --Proudhon, General Idea of the Revolution

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Tuesday, June 28, 2005

Maxspeak on Thomas Friedman

According to Max Sawicky, Tom Friedman's been getting rich off protectionism:

Of course, Thomas Friedman is a huge supporter of protectionism, it has made him a relatively wealthy man, he just doesn't realize it.

How is Thomas Friedman a protectionist? Well, for one he sells books that are protected by copyrights. Copyrights are GOVERNMENT imposed monopolies. The government will arrest me if I make copies of Thomas Friedman's books and sell them like any other good (or in the Internet Age, I make it available for free on the web).

Actually, this is quite consistent with what Friedman means by "free trade." It doesn't take much reading between the lines to realize that when Friedman talks about the neoliberal version of "free markets," he's fully aware that they're a statist construct.

For globalism to work, America can't be afraid to act like the almighty superpower that it is....The hidden hand of the market will never work without a hidden fist-McDonald's cannot flourish without McDonnell Douglas, the designer of the F-15. And the hidden fist that keeps the world safe for Silicon Valley's technologies is called the United States Army, Air Force, Navy and Marine Corps.

In other words, what Thomas Friedman means by "free trade" would make Cobden and Bright roll over in their graves. His idea of "free trade" has fallen afoul of Joseph Stromberg's acid wit:

For many in the US political and foreign policy Establishment, the formula for having free trade would go something like this: 1) Find yourself a global superpower; 2) have this superpower knock together the heads of all opponents and skeptics until everyone is playing by the same rules; 3) refer to this new imperial order as "free trade;" 4) talk quite a bit about "democracy." This is the end of the story except for such possible corollaries as 1) never allow rival claimants to arise which might aspire to co-manage the system of "free trade"; 2) the global superpower rightfully in charge of world order must also control the world monetary system.

Contrast that to real free trade:

The formula outlined above was decidedly not the 18th and 19th-century liberal view of free trade. Free traders like Richard Cobden, John Bright, Frederic Bastiat, and Condy Raguet believed that free trade is the absence of barriers to goods crossing borders, most particularly the absence of special taxes – tariffs – which made imported goods artificially dear, often for the benefit of special interests wrapped in the flag under slogans of economic nationalism. That was the point, for instance, of the Anglo-French treaty of 1861 which abolished a whole array of restrictions.

Classical free traders never thought it necessary to draw up thousands of pages of detailed regulations to implement free trade. They saw no need to fine-tune a sort of Gleichschaltung (co-ordination) of different nations’ labor laws, environmental regulations, and the host of other such issues dealt with by NAFTA, GATT, and so on. Clearly, there is a difference between free trade, considered as the repeal, by treaty or even unilaterally, of existing barriers to trade, and modern "free trade" which seems to require truckloads of regulations pondered over by legions of bureaucrats.

The present neoliberal project of "free trade" dates back to FDR/Truman's Grand Area, and the global economic order enforced by the Bretton Woods agencies:

....I think we can deduce that when, from 1932 on, the Democratic Party – with its traditional rhetoric about free trade in the older sense – took over the Republicans’ project of neo-mercantilism and economic empire, it was natural for them to carry it forward under the "free trade" slogan. They were not wedded to tariffs, which, in their view, got in the way of implementing Open Door Empire. Like an 18th-century Spanish Bourbon government, they stood for freer trade within an existing or projected mercantilist system. They would have agreed, as well, with Lord Palmerston, who said in 1841, "It is the business of Government to open and secure the roads of the merchant." British historians John Gallagher and Ronald Robinson have referred to this as "the imperialism of free trade." Quite so, provided we don’t confuse it with the genuine free trade espoused by anti-imperialists such as Cobden and Bright. (You know that the other side has done well in the semantic war when you have to put words like "genuine" in front of formerly uncontested concepts.)

Tell me about it. I ought to have a separate key for "genuine free markets" to save myself time.

According to Oliver MacDonough,* the Palmerstonian precursor to Friedman's neoliberalism was utterly loathed by the Cobdenites. The sort of thing Cobden objected to included the "dispatch of a fleet 'to protect British interests' in Portugal," to the "loan-mongering and debt-collecting operations in which our Government engaged either as principal or agent," and generally, all "intervention on behalf of British creditors overseas" and all forcible opening of foreign markets. Cobden opposed, above all, the confusion of "free trade" with "mere increases of commerce or with the forcible 'opening up' of markets." I suppose this is my cue for a gibe at the Adam Smith Institute. Consider them already gibed at.

*"The Anti-Imperialism of Free Trade," The Economic History Review (Second Series) 14:3 (1962) .

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