Free trade, capitalism and catastrophe
The North American Free Trade Agreement (NAFTA) went into effect on Jan. 1, 1994, uniting Mexico, the U.S. and Canada into one common market. Indigenous communities in Chiapas rose in revolt, knowing immediately that it would threaten their lives. In the process they heralded a new movement against global capital. In the U.S., however, much of the debate over NAFTA then turned on whether it would result in more or fewer jobs.
Now, on NAFTA’s tenth anniversary, it is certain that one impact NAFTA has had on jobs is a qualitative one: relatively good-paying manufacturing jobs moved in great numbers to Mexico where workers were then paid 14.5% of what U.S. workers were getting. NAFTA was at least supposed to help close the gap between U.S. and Mexican workers. Instead, Mexican labor costs have fallen to 11.5% of U.S. costs. The U.S. has lost one in six jobs in its manufacturing sector which continues to shrink.
BILLS OF GOODS
The threat of relocation hangs over workers remaining in manufacturing in the U.S. and serves to keep wages and benefits down as well as to stop unionization drives. Many laid-off manufacturing workers have drifted into service sector jobs paying a fraction of previous wages and lacking benefits. The daily news is peppered with stories of workers losing a $22 an hour job and feeling lucky to land a minimum wage job with no benefits.
NAFTA was just the first of a series of new world trade regimens that include the World Trade Organization and now a proposed extension of NAFTA called the Free Trade Area of the Americas (FTAA). Each of these has engendered massive demonstrations all over the world from people asking where is their say in decisions affecting every aspect of their lives from the workplace to the environment. Global integration of capitalist production has made that single party totalitarian state, China, the world’s sweatshop. It matches the horrors, but this time on an unprecedented scale, of the Dickensian conditions of labor, that prompted the first reforms within 19th century capitalism. THE NEW YORK TIMES dubbed one manufacturing center in China, Yongkang, the "dismemberment capital of the world" because of all the limbs workers there lose to machines.
Now China is the U.S.’s number one manufacturing center as companies continue to abandon Mexico and other low-cost producers in Asia. In the U.S. service work and even professional high-tech jobs are moving to low-waged educated workers in India. In this brave new world economy, workers are being forced to take all the risks whether that means losing their livelihood, their pension, their healthcare or even their lives. Wal-Mart, with its pervasive use of Chinese manufactured goods and a non-union minimum wage workforce in the U.S., is now expanding into groceries, setting a new standard of exploitation in that area. On the west coast 70,000 unionized grocery workers have been on strike since Oct. 11 because grocery chains seem hell-bent on making workers pay huge co-payments for their health benefits.
The facts on the ground for workers are so dismal that nearly all the Democratic Party candidates running for President have had to disavow their previous support of NAFTA and come out against the FTAA. Nothing, however, stops the ideologues from promoting trade as a panacea. That is so even though December 2003 marked the 41st straight month of decline in manufacturing jobs. Every year under Bush has seen a decline in all jobs, including the past two years of "recovery.” The Bush political team began to celebrate a more vigorous economic "recovery” with an 8.2% annual GDP growth rate in December 2003. Then the news came that the U.S. produced virtually no new jobs that month.
This economic growth with little or no job gains is unprecedented and signals intense speed-up as well as the introduction of technology to replace and more thoroughly control workers in production. Trade agreements are really investment agreements to give capital a huge weapon, maximum mobility, against workers, forcing them to work harder to try to save their jobs in the new global context.
An ominous consequence of the new trade agreements is the rolling up of unprecedented and unsustainable U.S. trade deficits of nearly half a trillion dollars a year. Ideologues promoted trade agreements like NAFTA as a way to expand exports and bring down deficits, but instead deficits have expanded many-fold with each new agreement. Bush may be hoping that the bubble caused by a world awash in dollars and easy credit from this trade imbalance will not cause a collapse before the election, but a growing number of experts on global finance are predicting a huge global economic catastrophe, the consequences of which will fall mostly on workers.
In his COMMUNIST MANIFESTO, written over a century and a half ago, Marx caught the ethos of the ideological prize-fighters for today’s trade agreements. "In place of the countless inalienable chartered freedoms,” wrote Marx, "the bourgeoisie has set up that single, unconscionable freedom--Free Trade.” The integration of the three North American economies and subsequent trade agreements were put in place for the needs of capital against workers, that is, for capital to move freely to avoid meaningful unions, occupational health and safety laws, or environmental controls.
The answer is not just a more representative political democracy as a way to gain control over corporations and global capital. The dictates of a free trade bureaucracy are just another layer built on the undemocratic nature of everyday life in the workplace under capitalism. Capital is uncontrollable because its very nature is to have social power over humans. Things, commodities and capital, are granted freedom of movement in the world because in the workplace capital, machines, dominate living labor. Capital cannot be controlled. It is a social relation that has to be abolished through new human relations--democratic associations built through worker-to-worker solidarity across all boundaries.
Published by News and Letters Committees