Free Trade is Plutocratic Propaganda

Free Trade is Plutocratic Propaganda

Featured in Zero Hedge

Daniel Drew, 5/10/2015

With the looming Trans-Pacific Partnership dominating the headlines, now is a good time to revisit an old scam called "free trade."

In 2003, Kevin Flanagan was an information technology employee at Bank of America. They told him he was being replaced with foreign labor, and he was ordered to train his replacement. After he completed his assignment, he was laid off. Then he went to the parking lot and shot himself.

That's "free trade."

Like The Ministry of Truth in George Orwell's 1984, sometimes, the most effective way to lie is to use the most innocent words. No word is more susceptible to propaganda-leveraging than "freedom." Attach that word to any concept, and all of a sudden, it's unassailable. That's exactly what happened with "free trade."

Proponents of free trade will often use the simplest analogies to convey their point, as if you were retarded. The reason they have to resort to such caveman illustrations is because free trade does not exist in the real world. There is no such thing as equality of bargaining power. If someone has ten million dollars and you have zero dollars, anything above zero is an "improvement" in your situation. The free trade economists will say this person with zero dollars is "free" to work for $1 per hour, and they will do so because it improves their situation. This is what "freedom" means to free trade economists.

If you doubt the free trade economists, they will call you a "protectionist," as if protecting your country's economy were some kind of grievous transgression. In fact, nothing is more American than shunning free trade nonsense.

Ian Fletcher calls free trade the myth of "cowboy capitalism." According to Fletcher, all four presidents on Mt. Rushmore were protectionists. The entire American Revolution was fought because the colonists were tired of being economically exploited by the British. Alexander Hamilton realized that British dominance in manufacturing and American reliance on agriculture were dooming us to a banana republic future. The solution? Tariffs. By taxing British goods, the United States boosted its manufacturing industry. By 1820, tariffs were at 40%.

Abraham Lincoln said, "Give us a protective tariff, and we will have the greatest nation on earth."

One of the fascinating parts of this history is that the South was opposed to protectionism. They wanted free trade. Why? Because free trade was necessary for the international slave trade from Africa to the United States.

Fast forward to 1994. That's when the North American Free Trade Agreement was enacted. The result was nothing less than the wholesale destruction of the American manufacturing industry. And where did these displaced workers go? In the 1990s, 98% of all net new jobs created were in the service industry, which has lower wages.

This is what free trade looks like. I love the smell of freedom in the morning.

One doesn't have to look hard to find free trade evangelists in the corporate world. Apple, the world's largest company, is also the largest example of how free trade is a game of heads I win, tails you lose. Only 5.6% of Apple workers are in the United States. There are 43,000 Apple employees in the country and 20,000 employees overseas. However, Apple is nothing without its global suppliers, where 700,000 workers make the next round of flashy gizmos that nobody needs anyway. These suppliers should be included in the worker count because they are directly involved in the manufacturing process.

In February 2011, President Obama asked Steve Jobs, "Why can't that work come home?" Despite having the last name of "Jobs," Steve Jobs made it clear that he didn't care about jobs. He only cared about money. He said, "Those jobs aren't coming back."

In 1983, Jobs used patriotism when it was convenient for him. He called the Macintosh, "a machine that is made in America." Later, he said, "I'm as proud of the factory as I am of the computer." But by 2004, patriotism gave way to profits, and Apple became an American company in name only. It relied on foreign manufacturing.

Betsey Stevenson, former chief economist at the Labor Department, said, "Companies once felt an obligation to support American workers, even when it wasn't the best financial choice. That's disappeared. Profits and efficiency have trumped generosity."

Of course, Apple falls back on the timeless corporate lie that American workers are not skilled enough. One anonymous Apple executive said, "We shouldn't be criticized for using Chinese workers. The U.S. has stopped producing people with the skills we need." They were skilled enough before NAFTA, but after NAFTA, all of a sudden, they all forgot how to do their jobs. It's funny how that amnesia works. Now, for every two American college graduates with degrees in science, technology, engineering, or mathematics, only one of them is hired into a job in their field. Sounds like a real skills shortage.

Alan Blinder, a professor of economics and public affairs at Princeton and a former vice chairman of the Federal Reserve Board, said, "Contrary to conventional wisdom, the more offshorable occupations are not low-end jobs, whether measured by wages or by education. The correlation between skill and offshorability is almost zero."

The anonymous Apple executive made it clear that Apple was really a country to itself and did not care about jobs or social effects, "We sell iPhones in over a hundred countries. We don't have an obligation to solve America's problems."

Manufacturing analysts estimate that if Apple paid Americans to build iPhones, it would cost an extra $65 per iPhone. With hundreds of dollars of profits per phone, Apple would still be profitable.

While Obama asked Steve Jobs about bringing jobs back to America, the Apple executives had their own suggestions. They wanted more visas so they could bring in more foreign workers. They wanted a tax holiday so they could bring back some of their overseas profits at no cost. They wanted government funding to train American workers. Notice a pattern here? They want to exploit government assistance so they can maximize their profits, which would boost their stock options. On and on it goes.

You may be familiar with the term "corporate raider" from the 1980s, but what is happening now is on a scale much larger than that. It is "country raiding." Entire countries are being exploited and saddled with the burden of supporting multi-national behemoths who tell you that your very demise is actually your greatest freedom. Some Americans are catching on to this scam and are actually leaving the country in pursuit of opportunity. Imagine that: leaving America for economic reasons. Ellis Island has been flipped on its head. "Give me your tired and your poor" has been replaced with "Let's GTFO!"

As Zero Hedge reported, in the first quarter of 2015, a record number of Americans renounced their citizenship.

One expatriate, Emily Matchar, described her experience, "After applying for 279 jobs over two years, my husband finally got the offer he'd been hoping for: a well-paid position teaching philosophy at a respected university. We should have been thrilled. There was just one little thing. The job was in Hong Kong. My husband said, "I feel like we're being deported from our own country."

Meanwhile, in China, Apple continues to thrive on its masses of slave labor. Like the antebellum South, Apple supports free trade because it makes their slave labor possible. Foxconn, Apple's major supplier, is located in Shenzhen. Do you know how they keep their unemployment rate down? If you are a migrant worker who has been unemployed for more than 3 months, it is illegal to rent housing. So you can either be homeless or leave. I'm sure the people at the Bureau of Labor Statistics would love a policy like this in the United States. Then they wouldn't have to bend over backwards to goal-seek all their employment data to conform to the official "recovery" story line. If you're not unemployed in Shenzhen, you're probably getting beaten by Foxconn security or jumping off buildings to escape your miserable existence.

So you can imagine my level of trust when President Obama says this time will be different. He called the Trans-Pacific Partnership "the most progressive trade deal in history." And yet he doesn't want to tell us anything about it. With NAFTA, 5 million American manufacturing jobs were lost, and 57,000 factories shut down. What will the Trans-Pacific Partnership do? It's like a sequel to a movie that was terrible in the first place.

Obama visited Nike's headquarters as part of his political rally. One of the high-quality jobs at Nike is held by a 32-year-old mother in Indonesia who processes 100 shoes per hour for 83 cents. I'm sure she is a free trade supporter.

After awhile, you start to realize that the people who love free trade so much are economic hacks and the uber-rich. They use sterilized language and hollow arguments to convince you of the positive ideals of free trade. In all honesty, it's a great theory. It really is. But then the moment you start believing it, they start working in all sorts of exceptions - usually for themselves. Before you know it, you're an unemployed American or a Chinese slave at Foxconn. And the uber-rich are in the Bahamas laughing about it, thanking the economists for playing along with the story.

One thing is for sure: The Founding Fathers would have never put up with this bullshit. Neither should you.