Category Archives: Trade

The economic life as a marbles game

When I was a kid every boy played marbles. Later my children did too, in their case with some girls also participating. It was an interesting schooling for the life to come.

The older guys had the most marbles to begin with, and at the end of the day the younger ones, less affluent, usually had lost the few marbles they had started out with. The older ones were also the strongest, so the outcome of any controversy about rules and other conflicts was given beforehand.

The reward for the small guys was the privilege to get to play with the big guys in the first place. And the fairness of it all lay in the fact that the younger ones one day became the older ones, thus able to retaliate for past inequities, bringing home large bags of marbles.

This game is a parable for life, except that in reality those who are poor from the start seldom get the chance to ever come on top, regardless of age. The well-offs in the world have the upper hand all the way, and the richer countries can indefinitely dominate the poorer and dictate terms.

This inequity plays out in trade rules. “Free trade” is a core concept seemingly promising the poor nations shelter under the umbrella of the rich world, which undertakes to open its borders to share its wealth. But just as in the marbles game, where the rules are the same for all, the real outcome is decided by wealth and strength.

The economic “sciences” provide convenient theories to prove that free trade brings prosperity to all. In the real world it’s an instrument serving above all the already rich nations. The most powerful are served the most. It’s no difference from the situation within nations: the rich have the most bargaining power to acquire even more wealth.

The mechanisms by which businesses in rich countries can use “free trade” to enhance their predominance are often equally simple and horrendous. One basic step is to overflow developing countries with cheap, heavily subsidized agricultural products. Thus imperialistic agribusiness effectively wipes out domestic farmers, and forces them to enroll the army of unemployed, serving foreign-owned industries with labor forced to work for pennies.

Absence of tariffs gives businesses in the industrialized world the opportunity to establish workshops in poor countries and profit handsomely on minimal wages. One result of this can easily be found in the numerous rust belts in the rich world, where material destruction leads to destitute societies where people lose hope.

Modern imperialism also uses free trade agreements to avoid all kinds of regulatory constraints, such as environmental regulations, laws ensuring workers security and other kinds of “unnecessary” obstacles to the ever growing profits. Other absurd clauses give corporations the right to sue countries that enforce laws which restrict possibilities to make profit.

The Nation provides a comprehensive and revealing text on the consequences for Central America of the free trade agreement DR-CAFTA. Recommended reading!