Protectionism is dead. Long live protectionism!

Protectionism is dead. Long live protectionism!


Wednesday, July 30, 2014

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IF you follow the news, you will hear regularly various treaties — GATT's Uruguay Round, NAFTA, CAFTA, TPP — described as "Free Trade Agreements", whose purpose is to "reduce trade barriers". This is a lie. Without exception, such agreements actually strengthen the one form of protectionism most vital to safeguarding corporate interests against competition in our time: so-called intellectual property.

In a recent Facebook discussion David K Levine, co-author (along with Michele Boldrin) of Against Intellectual Monopoly, explained that what copyright actually confers is property right. If you record a song and give me a copy of the MP3, Levine asks, and I duplicate my copy and email it as an attachment to a third party (Bill), what "loss" have I inflicted on you? Not loss of the song itself, because you still have it. "What you have lost is (possibly) a sale you might have made to Bill. In other words, the right that you are granted by copyright is the exclusive right to sell to Bill. In other words, the property right granted by copyright is not over the 'idea' but rather a right over customers."

Exactly! Intellectual property is a protectionist monopoly, just like the tariff. In both cases, what's protected is a monopoly on the right to sell a particular thing to a particular set of customers. The difference is that the monopoly conferred by the tariff operates along territorial lines — the boundaries between nation states — whereas the monopoly conferred by patents and copyrights operates along corporate boundaries.

Today's free trade agreements, falsely so-called, weaken or remove some outdated trade barriers like tariffs, while greatly strengthening other trade barriers, like "intellectual property" protections, increasingly to the point of nullifying free speech and due process rights against search and seizure in signatory countries, and giving the corporate "owners" of proprietary content what amounts to police state rights to enforce censorship on Internet publications and Internet service providers.

So, why weaken one form of protectionist trade barrier then strengthen another — more than enough to make up for it — if this is really a free trade agreement? Maybe because it's not.

These agreements are about — and only about — serving the interests of the industries whose representatives write them. "Free trade" is just a slick advertising slogan they're packaged with to sell them to the allegedly sovereign public "represented" by the governments that negotiate them. Of course, the only way the public ever gets to see the actual provisions of these secretly written and negotiated treaties is if they're illegally leaked.

The governments that negotiate these treaties, and the corporate lawyers that actually write them, don't lower tariffs because of a principled opposition to trade barriers. They lower tariffs because they're no longer useful. A hundred years ago, most industries in the industrialised world were national. They were physically located within a country, and owned by a corporation chartered in a particular country. So a monopoly on the right to
sell manufactured goods to the domestic population was useful.

Today, most corporations are global. The major forms of international "trade" in physical goods are trade in unfinished goods between local subsidiaries of the same global corporation, unfinished goods produced by nominally independent contractors in a global corporation's supply chain, or finished goods produced
on contract overseas and then marketed domestically in the United States. So a territorially based restriction on the free flow of raw materials, finished and unfinished goods no longer suits the needs of global corporations because they, themselves, are no longer territorial. On the other hand, it's extremely useful for a corporation to hold a monopoly on the right to sell a product to consumers. Thanks to patents and trademarks, Nike, an "American" corporation, can delegate actual production of sneakers to nominally "independent" sweatshops in Asia, while using its monopoly on the sale of the finished product to pay the actual manufacturers a few bucks a pair and market them in American retailers with a "Swoosh" markup of several thousand per cent. This is true, to a great extent, of every manufacturing supply chain in the world. And it's even more true of things like software and entertainment.

What we see, in the negotiation of these "free trade agreements" is really an updated version of Adam Smith's observation: When representatives of a single industry meet in secret, they do so only to work against the public interest. What these corporations actually do in their secret meetings is terrorism of greater destructive impact than al-Qaeda could ever have dreamed of. And their main weapon of terror is the State.

Kevin Carson is a senior fellow of the Center for a Stateless Society and holds the Center's Karl Hess Chair in Social Theory.

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