Sunday, March 16, 2014

Joe Stiglitz Tells Us Why We Should Worry About Free Trade Agreements

The US has been negotiating a trade agreement with its trading partners in the Pacific Region.  Negotiations are also being discussed between the US and its Transatlantic partners.  Joe Sitglitz is not happy about these trade agreements.  In the first place, they are conducted in secret.  The public has no opportunity to evaluate the agreements that are negotiated by those who represent the world's largest corporations and industries.  They are all interested in the same thing.  That is, protecting intellectual property rights and making globalization more profitable for the multinational corporations and industries that they represent.

Stiglitz reminds us that our economies are shaped by laws and institutions.  The winners and losers in any economy are determined by the laws which define how the global economic game must be played.  Consequently, the laws that determine the shape of globalization should be open to a public debate.  They should not be conducted in secret.  Unless of course the multinational corporations, and the governments which assist them in shaping the global economy in their interest,  see no reason to allow the public to protect its interests.  After all, the global economy is operated for the benefit of different group of citizens.  The citizens of the global economy are the multinational corporations and the industry groups that represent them.  The role of the sovereign nations is to provide trade negotiators to represent their industries and corporations in the negotiations which shape the global economy.  The elected governments of our sovereign states are in the business of providing valuable services for their most important constituents.

The economics profession is also an enabler of this process.  Free trade is one of the ten commandments of its religion.  Joe Stiglitz, whose background is in international trade, has lost his faith in the commandment.  He explains the differences between the assumptions about it is supposed to work and how it really works in practice.  Free trade became one of the ten commandments of the economics profession when England was developing its colonial system.  It was very good for England, but the benefits were not equally shared with its colonies.  Today, it is no longer conducted to benefit specific nations.  Multinational corporations are the primary beneficiaries.

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