free trade – Olduvai.ca

The founder of the World Economic Forum shares what he sees as the biggest threat to the global economy

January 15, 2019

The founder of the World Economic Forum shares what he sees as the biggest threat to the global economy

Economist Klaus Schwab is the founder and executive chairman of the World Economic Forum which will be holding it’s Annual Meeting in Davos, Switzerland January 22-25, 2019.
Schwab explains the theme of this year’s meeting, “Globalization 4.0: Shaping a New Architecture in the Age of the Fourth Industrial Revolution.”
When asked if we were currently in a trend of deglobalization he said no, “we have to make a differentiation between globalization, which is a fact, and globalism.”
He says the biggest threat to economic stability is the imbalances in the world.
Schwab says he believes trade imbalances are a problem. He is not an unconditional advocate for free trade, which he says is great but only if there is equality.

Sara Silverstein: This year’s theme for 2019 for the meeting is Globalization 4.0 and shaping the architecture of the Next Wave of Globalization which is the industrial revolution, the fourth industrial revolution, which you’ve literally wrote a book on. Can you tell me what makes up the fourth industrial revolution?

Klaus Schwab: We are living in a time of multiple technological innovations. I just mentioned artificial intelligence, blockchain, you could add and add, and all those technologies together will fundamentally transform the world, not just business models but economies, society, politics and so on. So when we speak about globalization 4.0, we want to address the global architecture which is needed in this new context of the fourth industrial revolution.

Silverstein: And what was the issue with the last wave of globalization?

Schwab: We see it already now so so many issues like inequality, trade wars, and I could go on and on. The danger is that we deal with those issues, we address those issues with patchwork policies.

…click on the above link to read the rest of the article…

Big Oil Cheers Trump’s ‘New NAFTA’ But Mexico Could Complicate Things

October 18, 2018

Big Oil Cheers Trump’s ‘New NAFTA’ But Mexico Could Complicate Things

While the oil and gas industry has lauded the new trade deal that may soon replace the North American Free Trade Agreement (NAFTA), a provision added by Mexico, along with its new president’s plan to ban fracking, could complicate the industry’s rising ambitions there.

The new agreement, known as the United States–Mexico–Canada Agreement (USMCA), has faced criticism as being tantamount to NAFTA 2.0 — more of a minor reboot that primarily benefits Wall Street investors and large corporations, including oil and gas companies.

Mercilessly critiqued by then-candidate Donald Trump during the 2016 presidential campaign, NAFTA is now the second major trade deal kicked to the curb by now-President Trump. The other, the Trans-Pacific Partnership (TPP), was canceled days intoTrump’s presidency.

After the most recent deal’s announcement, the oil and gas industry offered praise for USMCA. The White House even pointed this out in a press release, highlighting a quote given by the U.S. industry’s major trade group, the American Petroleum Institute (API).

“We urge Congress to approve the USMCA. Having Canada as a trading partner and a party to this agreement is critical for North American energy security and U.S. consumers,” said Mike Sommers, President and CEO of API. “Retaining a trade agreement for North America will help ensure the U.S. energy revolution continues into the future.”

In its own press release declaring its support for USMCA, API further spelled out the parts of the deal it supports.

Those include “continued market access for U.S. natural gas and oil products, and investments in Canada and Mexico; continued zero tariffs on natural gas and oil products; investment protections to which all countries commit and the eligibility for Investor-State Dispute Settlement (ISDS) for U.S. natural gas and oil companies investing in Mexico…

…click on the above link to read the rest of the article…

Our “Prosperity” Is Now Dependent on Predatory Globalization

August 16, 2018

Our “Prosperity” Is Now Dependent on Predatory Globalization

Nowadays, trade and “prosperity” are dependent on currencies that are created out of thin air via borrowing or printing.

So here’s the story explaining why “free” trade and globalization create so much wonderful prosperity for all of us: I find a nation with cheap labor and no environmental laws anxious to give me cheap land and tax credits, so I move my factory from my high-cost, highly regulated nation to the low-cost nation, and keep all the profits I reap from the move for myself. Yea for free trade, I’m now far wealthier than I was before.

That’s the story. Feel better about “free” trade and globalization now? Oh wait a minute, there’s something missing–the part about “prosperity for all of us.” Here’s labor’s share of U.S. GDP, which includes imports and exports, i.e. trade:

Notice how labor’s share of the economy tanked once globalization / offshoring kicked into high gear? Now let’s see what happened to corporate profits at that same point in time:

Imagine that–corporate profits skyrocketed once globalization / offshoring kicked into high gear. Explain that part about “makes us all prosperous” again, because there’s no data to support that narrative.

What’s interesting about all this is the way that politicians are openly threatening voters with recession if they vote against globalization. In other words, whatever “prosperity” is still being distributed to the bottom 80% is now dependent on a predatory version of globalization.

Let’s rewind to the era of truly free trade, from the late Bronze Age up to the Roman Era. In the late Bronze Age (circa 1800 to 1200 B.C.), vigorous trade tied together the ancient empires and states of the Mideast and the Mediterranean. In the Roman Era, trade in silk and other luxuries tied China, India, Africa, the Mideast and the Roman Mediterranean together in a vast trading network.

…click on the above link to read the rest of the article…

Whose Trade War Is It Anyway?

July 31, 2018

Whose Trade War Is It Anyway?

Everybody complains about Trump, but he wasn’t the one who started it

German Chancellor Angela Merkel speaks to President Donald Trump in front of other world leaders in Charlevoix, Canada, at the G-7 summit on June 9, 2018. The mainstream media and world leaders are blaming Trump for starting a trade war, where in reality all politicians are fighting to protect their special interest groups. (Jesco Denzel /Bundesregierung via Getty Images)

War is aggression, often with the use of physical violence to conquer land, people, and power. Trade wars, though not quite as bad, also are aggressive in nature. Where two or more private parties want to transact freely, aggressive governments step in the way and prevent trade from happening with the threat of force.

In 2018, most of the mainstream media and the establishment powers blame President Donald Trump and his administration for starting a trade war, which—like real wars—can only produce losers on both sides. “How Much Damage Will Trump’s Trade War Do?” read a headline in The Atlantic, and countless other articles and official statements say similar things.

So the mainstream media and some politicians are pretending that trade was 100 percent free before Trump started to threaten the “free traders” of China, the European Union (EU), Mexico, and Canada with tariffs. The media paints Washington as the aggressor in this trade war. Trump shot first.

However, truth be told, this trade war did not start this year and certainly the United States isn’t the biggest aggressor. In real war terms, the Americans are now starting to shoot back after being under siege for decades and the whole world is complaining about this act of self-defense.

…click on the above link to read the rest of the article…

How America’s Wars Cut Down American Liberty

June 13, 2018

How Mises Explained the Fall of Rome

June 8, 2018

How Mises Explained the Fall of Rome

An excerpt from Mises’ classic work, ‘Human Action’.

Observations on the Causes of the Decline of Ancient Civilization

Knowledge of the effects of government interference with market prices makes us comprehend the economic causes of a momentous historical event, the decline of ancient civilization.

It may be left undecided whether or not it is correct to call the economic organization of the Roman Empire capitalism. At any rate it is certain that the Roman Empire in the second century, the age of the Antonines, the “good” emperors, had reached a high stage of the social division of labor and of interregional commerce. What brought about the decline of the empire and the decay of its civilization was the disintegration of this economic interconnectedness.

Several metropolitan centers, a considerable number of middle-sized towns, and many small towns were the seats of a refined civilization. The inhabitants of these urban agglomerations were supplied with food and raw materials not only from the neighboring rural districts, but also from distant provinces. A part of these provisions flowed into the cities as revenue of their wealthy residents who owned landed property. But a considerable part was bought in exchange for the rural population’s purchases of the products of the city-dwellers’ processing activities. There was an extensive trade between the various regions of the vast empire. Not only in the processing industries, but also in agriculture there was a tendency toward further specialization. The various parts of the empire were no longer economically self-sufficient. They were mutually interdependent.

What brought about the decline of the empire and the decay of its civilization was the disintegration of this economic interconnectedness, not the barbarian invasions. The alien aggressors merely took advantage of an opportunity which the internal weakness of the empire offered to them.

…click on the above link to read the rest of the article…

Central Banks Have Killed Free Trade

March 24, 2018

Central Banks Have Killed Free Trade

Defenders and critics of “free trade” and globalization tend to present the issue as either/or:

It’s inherently good or bad. In the real world, it’s not that simple. The confusion starts with defining free trade (and by extension, globalization).

In the classical definition of free trade espoused by 18th century British economist David Ricardo, trade is generally thought of as goods being shipped from one nation to another to take advantage of what Ricardo termed comparative advantage:

Nations would benefit by exporting whatever they produced efficiently and importing what they did not produce efficiently.

While Ricardo’s concept of free trade is intuitively appealing because it is win-win for importer and exporter, it doesn’t describe the consequences of the mobility of capital.

Capital — cash, credit, tools and the intangible capital of expertise — moves freely around the globe seeking the highest possible return, pursuing the prime directive of capital: expand or die.

Capital that fails to expand will stagnate or shrink. If the contraction continues unchecked, the capital eventually vanishes.

The mobility of capital radically alters the simplistic 18th century view of free trade.

In today’s world, trade can not be coherently measured as goods moving between nations, because capital from the importing nation owns the productive assets in the exporting nation. If Apple owns a factory (or joint venture) in China and collects virtually all the profits from the iGadgets produced there, this reality cannot be captured by the models of simple trade described by Ricardo.

In today’s globalized version of “free trade,” mobile capital can skim labor, currencies, interest rates, regulatory burdens and political favors by shifting between nations and assets.

…click on the above link to read the rest of the article…

The Illusion of Free Trade

March 15, 2018

The Illusion of Free Trade

The current trading system was never free; Trump’s tariffs merely change who gets what

Container ships are docked in the Port of Oakland in this file photo. (Justin Sullivan/Getty Images)

The backlash from popular media and the affected countries’ politicians blames Trump for ruining the beautiful “free trade” system built up around the World Trade Organization (WTO) and its predecessor the General Agreement on Tariffs and Trade (GATT).

As with anything Trump says or does, it’s important to step back and look at the bigger context he’s acting within.

Not Free

The first big-picture news flash is that neither the WTO nor the GATT was “free.” Free trade is trade without government intervention.

One country or industry may produce and export a lot of steel, but if it doesn’t get any subsidies and doesn’t have protective import tariffs, then it deserves to capture global market share because it’s the most competitive. It uses the locally given resources of labor and capital in the most productive way.

Another country may be the best in producing solar panels, making it the world leader in solar panels. The two countries can swap steel and solar panels and balance their trade, with each country doing what it does best.

…click on the above link to read the rest of the article…

There is No “Free Trade”–There Is Only the Darwinian Game of Trade

March 12, 2018

There is No “Free Trade”–There Is Only the Darwinian Game of Trade

Rising income and wealth inequality is causally linked to globalization and the expansion of Darwinian trade and capital flows.

Stripped of lofty-sounding abstractions such as comparative advantage, trade boils down to four Darwinian goals:

1. Find foreign markets to absorb excess production, i.e. where excess production can be dumped.

2. Extract foreign resources at low prices.

3. Deny geopolitical rivals access to these resources.

4. Open foreign markets to domestic capital and credit so domestic capital can buy up all the productive assets and resources, a dynamic I explained last week in Forget “Free Trade”–It’s All About Capital Flows.

All the blather about “free trade” is window dressing and propaganda. Nobody believes in risking completely free trade; to do so would be to open the doors to foreign domination of key resources, assets and markets.

Trade is all about securing advantages in a Darwinian struggle to achieve or maintain dominance. As I pointed out back in 2005, the savings accrued by consumers due to opening trade with China were estimated at $100 billion over 27 years (1978 to 2005), while corporate profits expanded by trillions of dollars.

In other words, consumers got a nickel of savings while corporations banked a dollar of pure profit as sticker prices barely budged while input costs plummeted. Corporations pocketed the difference, not consumers.

As longtime correspondent Chad D. noted in response to my essay on capital flows, restricting trade may be one of the few ways smaller nations have to avoid their resources and assets being swallowed up by mobile capital flowing out of nations with virtually unlimited credit (the US, the EU, China and Japan).

…click on the above link to read the rest of the article…

Forget “Free Trade”–It’s All About Capital Flows

March 9, 2018

Forget “Free Trade”–It’s All About Capital Flows

In a world dominated by mobile capital, mobile capital is the comparative advantage.

Defenders and critics of “free trade” and globalization tend to present the issue as either/or: it’s inherently good or bad. In the real world, it’s not that simple. The confusion starts with defining free trade (and by extension, globalization).

In the classical definition of free trade espoused by 18th century British economist David Ricardo, trade is generally thought of as goods being shipped from one nation to another to take advantage of what Ricardo termed comparative advantage: nations would benefit by exporting whatever they produced efficiently and importing what they did not produce efficiently. While Ricardo’s concept of free trade is intuitively appealing because it is win-win for importer and exporter, it doesn’t describe the consequences of the mobility of capital. Capital–cash, credit, tools and the intangible capital of expertise–moves freely around the globe seeking the highest possible return, pursuing the prime directive of capital: expand or die.

Capital that fails to expand will stagnate or shrink. If the contraction continues unchecked, the capital eventually vanishes.

The mobility of capital radically alters the simplistic 18th century view of free trade. In today’s world, trade can not be coherently measured as goods moving between nations, because capital from the importing nation owns the productive assets in the exporting nation. If Apple owns a factory (or joint venture) in China and collects virtually all the profits from the iGadgets produced there, this reality cannot be captured by the models of simple trade described by Ricardo.

In today’s globalized version of “free trade,” mobile capital can arbitrage labor, currencies, interest rates, regulatory burdens and political favors by shifting between nations and assets.

…click on the above link to read the rest of the article…

Why Free Trade is Officially Dead

March 27, 2017

WHY FREE TRADE IS OFFICIALLY DEAD

G20 Finance ministers meeting in Baden Baden last weekend agreed, on America’s insistence, to drop the long-standing commitment to free trade from the final communiqué.

It is hard to know to what extent America’s position is driven by her autarkic view on world trade, or to what extent it is an acknowledgement of the fruitlessness of paying lip-service to an ideal which is never delivered. Doubtless, it’s a bit of both.

It is certainly true that finance ministers in the advanced nations have always shown a protectionist attitude towards international trade, protectionism that has intensified through attacks on American international corporations, which to a large extent can choose where to pay their taxes. The thrust of research by international NGOs, particularly the Paris-based OECD, has been to decry tax competition; however, even though it has bullied tax-havens to supply tax-related information to revenue-hungry states, it has failed to stop multinationals, armed with teams of tax lawyers, from complying with their statist demands.

Therefore, the reasons for anti-globalisation in high-spending governments so far have been based on job protection and maximising taxes. But with President Trump, it’s different. He wants to tilt the odds firmly in favour of American business, and he appears to believe that the World Trade Organisation is little more than an obstructive repository for anti-business bureaucrats. This view is misinformed, because over the years WTO officials have successfully managed to get their members to reduce tariffs to historically low levels.

The threat to this progress is not new. America has in the past often ignored WTO rules, banning or imposing tariffs on imports on overtly protectionist grounds. As always, vested interests and protectionism prove difficult for politicians to resist. However, Trump is different in one respect: he appears to be an old-fashioned mercantilist, seeing America as one gigantic commercial enterprise needing direction.

…click on the above link to read the rest of the article…

True Free Trade vs. ‘Free Trade Deals’: The Misappropriation of Freedom

November 30, 2016

TRUE FREE TRADE VS. ‘FREE TRADE DEALS’: THE MISAPPROPRIATION OF FREEDOM

One of the most frustrating aspect of those trade negotiations that are sold as ‘Free Trade Deals’ is that they are not truly ‘Free Trade’ and, instead, they are just selective liberalisations that work to enrich particular interests, that increase the disparities between those who are endowed with political resources and those who are not, and that work to foster global, systemic trade imbalances (whether that be frustrating, persistent trade deficits or gross trade surpluses). Of course, this leads to advocates of True Free Trade to have a bad name despite the fact that the purist position is the most morally humaneand efficient means through which to alleviate global poverty, improve peoples’ welfare and tackle corporatist privileges.

Free Trade, broadly speaking, in the purest sense of the term would involve a situation where there are no tariffs, subsidies, quotas and significant trade restrictions such as licensure restrictions (which all work to unduly restrict exports and imports and, thereby, impede the flow of goods, services and income globally). Such a situation would work to alleviate both domestic and global inequalities.

This is because tariffs, subsidies, quotas and licensure restrictions are all, effectively, forms of quantity and/or price controls and manipulation that impose incentive structures that redirect the expression of demand and supply across the affected markets inefficiently and in ways that they otherwise would not have been expressed in a more ‘natural’ equilibrium.

Spillovers onto other markets

This also has spillover effects on other markets – for example, targeting particular imports and particular countries’ exports with tariffs, licensure restrictions and/or indirectly by subsidising competitors’ products domestically will have an impact on other markets as consumers and producers are forced to substitute spending and production accordingly.

…click on the above link to read the rest of the article…

Faith in Big Trade Deals Keeps Crumbling

May 29, 2016

Faith in Big Trade Deals Keeps Crumbling

Are we witnessing the beginning of the end of globalization?

French trade minister Matthias Fekl

‘Bad deal’: French trade minister Matthias Fekl said his country is likely to drop TTIP talks after leaks that US wants lower labour and environmental standards.

At the height of the battle over the Canada-US Free Trade Agreement in the 1980s, full page ads promised the deal would bring “more jobs, better jobs.”

The ads were expensive, but easily afforded by Canada’s 160 largest public corporations, who paid for them as the Business Council on National Issues.

The ad blitz was intended counter the effective campaign by opponents who warned Canadians that tens of thousands of manufacturing jobs would be lost.

Opponents won the battle for hearts and minds but lost the 1988 election on the issue, thus making Canada and the US “free trade” guinea pigs.

Hundreds of such deals have been signed since, in spite of the fact that the critics were right. Canada lost some 334,000 jobs between 1988 and 1994 as a direct result. Still, since 1988, the promoters of these investment protection agreements have held sway in large part because of massive support by corporate media.

Now, three decades later, citizens around the world are waking up and asking: just whom do governments govern for?

Battlegrounds in US and Europe

That question is being raised loudly in the E.U. and the U.S. In those two powerhouse economies, opposition to such deals could save us from more of them. On the line specifically are the Trans Pacific Partnership (TPP) and Canada’s proposed deal with the E.U., the Comprehensive Economic and Trade Agreement (CETA). If the U.S.-E.U. deal (the Transatlantic Trade and Investment Partnership – TTIP) fails CETA is unlikely to survive.

So-called trade deals empower transnational corporations by radically compromising the nation-state’s capacity for democratic governance.

…click on the above link to read the rest of the article…

Merkel’s TTIP policy is ‘wrong:’ German Vice Chancellor criticizes US-EU free trade deal

May 29, 2016

Merkel’s TTIP policy is ‘wrong:’ German Vice Chancellor criticizes US-EU free trade deal

German Economy Minister Sigmar Gabriel (L) and Chancellor Angela Merkel. © Fabrizio Bensch

TTIP Hastiness would lead to an unfavorable agreement, German Vice Chancellor and Economy Minister Sigmar Gabriel said, criticizing Chancellor Angela Merkel’s approach to reaching an agreement with the US on harmonizing trade and investment regulations.

“It was wrong that, in the euphoria of [President Barack] Obama’s visit to Germany, the Chancellor said that we will be able to conclude negotiations under any circumstances by the end of this year – and that she recently repeated that statement,” Gabriel said in an interview to the German regional RND newspaper group, criticizing Merkel’s stance on negotiations concerning the Transatlantic Trade and Investment Partnership (TTIP) between the EU and the US.

Gabriel, who is the leader of Merkel’s German Social Democratic Party (SPD), also stressed that haste would lead to an unfavorable deal adding that he and his party will “never” agree to something they deem “bad.”

“The SPD will not to be part of a bad deal,” he said. “I will never approve an agreement that retains [the right for the companies to appeal to] nontransparent private commercial courts,” he stated, referring to the issue that the agreement would allow transnational corporations to challenge domestic laws and regulations in special tribunals thus potentially undermining national environmental and labor protections.

He also stressed that he would not approve any deal that envisages standards deemed lower than those included in the freshly-negotiated EU-Canada Comprehensive Economic and Trade Agreement, which has already been approved by the Council of the European Union and the European Parliament.

…click on the above link to read the rest of the article…

A Great Awakening – Public Support for Fake “Free Trade” Deals Plunges in the U.S. and Europe

April 21, 2016

A Great Awakening – Public Support for Fake “Free Trade” Deals Plunges in the U.S. and Europe

Public opposition to the sovereignty killing corporate giveaway marketed as a free trade deal known as the Trans Pacific Partnership (TPP) has become so widespread that all the leading candidates for the U.S. Presidency are publicly against it. Specifically, Donald Trump and Bernie Sanders are virulently opposed, while Hillary Clinton is pretending to be against it in order to harvest votes.

Essentially, the more time the American public has to learn about this scam, the more they are against it. Which is precisely why the Obama administration wants to push it through as quickly as possible.

– From the post: Obama to Push Passage of TPP Trade Deal Despite Rising Public Opposition

One of the key themes here at Liberty Blitzkrieg over the past year or so, has been to highlight the fact that the plethora of “free trade” deals (TPP, TTIP and TISA) being promoted by the global robber barons are nothing more than fascist corporate handouts (links at the end). Calling them “free trade” deals is purely for PR, and primarily serves as a means for marketing these scams to the ignorant masses.

Fortunately, I have some good news to share. The public is not as ignorant as it used to be. There’s a massive awakening happening, and it’s sweeping these United States as well as Europe.

As Reuters reports in the article, Survey Shows Plunging Public Support for TTIP in U.S. and Germany:

Support for the transatlantic trade deal known as TTIP has fallen sharply in Germany and the United States, a survey showed on Thursday, days before Chancellor Angela Merkel and President Barack Obama meet to try to breathe new life into the pact.

…click on the above link to read the rest of the article…

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