Quantcast

{Empty title} | The Nation

I have never blamed China for this economic mess, and I am pleased that their economy is doing well. The collapse of the Western Economies is a self-inflected wound by the stupidity of our business and political elites. Free Trade agreements encouraged the outsourcing of industries and jobs overseas for cheap labor. Free Trade is all about driving down wages and eliminating national social safety nets all over the world.

Historically, economic imperialism occurred when a developed state, with and industrial base, sought a "free trade" relationship with an underdeveloped state, trading their cheaper industrial products for minerals or agricultural products. No local industrial base could be developed, because they could not compete with the industrial base of the developed country. This is why Alexander Hamilton sought tariffs to develop and protect industries in our new country. His policies were continued by various political parties throughout the nineteenth century, and well into the twentieth. As Hamilton noted in his "Report on Manufactures," the British had a twenty-year head start into the Industrial Revolution, and would have retarded Industrial development in America in a "free trade" relationship.

However, multinational corporations and investment banks have become more ambitious! Based on David Ricardo's Iron Law of Wages (1817), they are seeking, through "free trade" and "open borders," to turn ordinary worker into wage slaves, without a social safety net, in every country in the world.

However, big banks and big business will be paying millions in bonuses and salaries to the (talented?) few at the top, and the Main Street market that supports them will collapse. Sixty to 70 percent of Western markets are supported by the disposable income of ordinary workers as consumers. Reduce wages and the disposable income that supports these markets are removed, and these markets fail. It is now 2010 and not 1817.