Logic that leads to a plundered world : Melbourne Indymedia

Logic that leads to a plundered world

(a very good third way article)

Advocates of globalisation want goods, services, and capital to flow without restriction across national boundaries. The same economic logic recommends that labour be allowed to move freely across borders; but where is the campaign for free migration?

The World Trade Organisation wants foreign capital to be able to go anywhere in the world and once there to have the same rights as domestic capital. But it doesn't call for people to have the right to go anywhere in the world and have the same rights as the indigenous people.

This inconsistency may have something to do with the fact that the least mobile factor of production is at a competitive disadvantage in the distributive struggle.

Go more deeply and perhaps free traders instinctively recoil from free migration because they can see the problems of the "tragedy of the commons" - the depletion of shared resources - and destruction of existing local community.

It is hard to imagine how a national community could maintain a minimum wage, welfare programme, subsidised medical care or state school system in the face of unlimited immigration.

Few would deny that some migration is a good thing, but we are speaking here about free migration, where "free" means "deregulated, uncontrolled, unlimited", as in free trade or free capital mobility. Some cosmopolitans think it is immoral to make any policy distinction between citizen and non-citizen, and therefore favour free migration. They also suggest that free migration is the shortest route to their vision of the equality of wages worldwide.

A more workable moral guide is that our obligation to non-citizens is to do them no harm, while our obligation to fellow citizens is first to do no harm and then try to do positive good. Globalisation already means that condition is not being met. Over-specialisation on a few volatile export commodities, crushing debt burdens, exchange rate risks, foreign corporate control of national markets and unnecessary monopolisation of "trade-related intellectual property rights" all harm the citizens of other countries.

If globalisation advocates refuse to follow their logic and embrace free migration, maybe they should question whether their misgivings about the free flow of people might also apply to the free flow of things that are vital to people, namely goods, services and capital. Markets hate boundaries but, as the free traders admit, where the movement of people is concerned, public policy in the interest of community requires them. Markets need policy and laws for their functioning; so indirectly, even markets ultimately require boundaries.

Since globalisation is the erasure of national borders for economic purposes, it also comes close to being the elimination of national economic policy. In addition, it implies the eradication of international economic policy. Suppose all nations agreed to the Kyoto accord. Imagine how these nations could enforce domestically what they had agreed to internationally if they had no control over their borders.

Institutions of control would have to be global because the unit being controlled would be global. Not global in the federated sense of cooperation among individual nations that control their borders but global in the cosmopolitan sense of the integration of formerly separate economies into a single, borderless world economy. International interdependence is to global integration as friendship is to marriage. All nations must be friends, but should not attempt multilateral marriage.

The opposite of "free trade" is not "no trade". It is "regulated trade". Free trade is a rhetorically persuasive label for deregulated trade. No one is against freedom, or against trade, but many are against the total deregulation of international commerce.

The traditional regulation of international commerce in the national interest has become anathema to many of the same economists who accept the arguments against free migration. If they follow their own logic they should realise that, without regulation, globalisation risks abolishing the nation and turning it all into a global commons for corporations to plunder.

Herman E Daly is professor of economics at the University of Maryland. This is an extract from The Real World Economic Outlook, edited by Ann Pettifor and published by Palgrave Macmillan.