"Free Trade" And "Free Market" Are Not The Same [2001/09/15] The following sets out what I believe to be a new perspective on the subject of globalization. It would be appreciated if wiser heads could comment on the merit of pursuing, and expand upon the line of thinking. I recall at various times being challenged to "define my terms" or "what do you mean by that", when expressing my opinion. In the interim, I have paid many visits to dictionaries. That doesn�t make me expert, it only says that I have paid visits there. It has been forgotten that one of the greatest inventions that brought us out of the dark ages was the dictionary. That allowed diverse people to join their lights together. Definitions, mine open to correction, are at the root of resolving the problems with which we are faced. In addressing the question of "free trade" and "free market" therefore, I submit the following definitions, with comments. "Free" = "The Old English root of the word "free" is "freo," a word that brings out the communal basis of liberty very clearly. It means dear, chosen, fully accepted within the circle, [the social unit of family, tribe, clan, as a "sovereign" self-governing socio-economic unit.] Its Germanic and Celtic sense reflects its use as the distinctive epithet of those members of the household who were connected by ties of kindred (i.e. not, (at the time, aliens) slaves or bondsmen or women)." While the word "free" in reference to trade is used to mean uninhibited or free-flowing, the "trade" within a family unit is also generally uninhibited. (unfortunately, the conventional wisdom regarding the word �free� is used interchangeably in place of �anarchy�, (in the pejorative sense) the rule of the jungle, the absence of law, or the absence of its enforcement. ) The operative words above are "family" and "sovereign". It has been suggested, disparagingly, that nationalism is akin to tribalism. We might also invoke "integrity", being part of a whole. We could also expand the definition to "social unit", meaning that "all" members of the unit are dedicated to the well being of all the other members. Pertinent is that in such a unit there is a relaxed or absence of strict accountability, except where the well-being of the unit is threatened. Since a sovereign social unit cannot exist without property, (that is the broad definition including food shelter and clothing etc.) and the process and means of supplying those needs, we have to include the definition of ... "Economics" = My source says that it comes from the Greek "Oikonimo" and means how a sovereign social political entity, a household, looks after "all" the material needs of "all" its members, (property - i.e. food, shelter, clothing, implements etc..) and of the people within the unit who are "free". (with connotations of stewardship) "Capital" = Is another word that is abused is "capital" which has meanings that stretches from "capital investment" (economic sense) to "capital punishment" (social sense) In the modern economic sense the narrow definition is (monetary) savings. The broader definition is that capital includes "stored value" That would include knowledge, skill, manufactured goods, food reserves, (e.g. a tree, in which lumber is 'stored'), minerals, all of what is called natural resources, flora and fauna. etc.. In fact everything that is useful to serve the interests of an economy and that is and can be traded within that (integral and sovereign) economy. Capital is then, the "main property", the main thing being a capitalist�s head, (on his mind) (The process of monetising the stored value to facilitate its trade falls into the related area of monetary policy) In the social sense the best definition of "capital" that I have come across is that it refers to the top of a Greek column. (In literature, the top is also referred to the head and the column as the body.) Referring to the Greek column, the existence of "cap" and "column" implies that there is also a base. When we envisage the above we come to a the interesting " I ", meaning of course the individual as opposed, separate and distinct from the "we" of which the "free" social unit is comprised. Politics is how we organise ourselves, as people free to do so, socially and economically, in our own best interests. That, I am sure, needs not my help in defining it as one of the 5 disciplines of philosophy. The other 4 being physics, metaphysics, logic (including all the sub-disciplines) and aesthetics, which is "the form that is most appropriate to the purpose for which it was intended" Next to define "Free Trade". Trade is the "exchange" of (above - broadly defined) capital in a free socio-economic entity, conducted for the well-being of all, participated in by all. A cow for four sheep, a chicken for a nights lodging, 100 ton of grain for 10 ton of bananas, etc.. In a free society, trade is conducted by individuals and consists of the surpluses of one person being exchanged for the surpluses of another person (corporations being persons). Internationally free trade follows the same rule. "Trade" then in my vocabulary, is a completed exchange and does not include positive or negative monetary balances left owing. (As soon as "balances owing or owed" is introduced to the equation, the matter of interest and the criteria for monetisation of property is introduced. Again, the subject of monetary policy) In antiquity, (i.e. The Trojan, Hittite, Sumerian & Athenian Empires, ) to "facilitate" trade, the gods-kings-monarchs of the time issued clay disks (with their likeness superimposed) to circulate as money. The collateral backing for the disks was the trust people had in the issuing god-kings' having their (the people�s) best interests at heart, and their (the people�s) trust in each other. It is important to note that the clay disks were fiat money (i.e., not metal or collateral backed or substantiated) issued for the purpose of facilitating trade, and the value of which (disks) rested in its utility as a measure of and store of value, (within the above defined "free" "economy") to facilitate trade and not as a value in itself. The rest of the evolution of money is peripheral to our discussion, except to say that private property ownership and the private issue of collateral (property) backed money made possible the "market" economy with greater complexity. The proper role and function of bankers making an especially beneficial contribution, and contributing to that market complexity. Another important point is that until modern times the "market" operated under the supervision (laws-regulations) of the sovereign power, (tribe or nation, (see Jack London's 'The Strength Of The Strong') especially in regard to trade between sovereign nations. . That is, it served the interests of a "free" "economy". Monarchs and ruling bodies jealously guarded the integrity of their jurisdictions, even to the extent of making war. The next point I introduce is the "fordist paradigm." I first saw the term in Queen's U. Prof. Tom Courchene�s book explaining Paul Martin�s CHST, "Canadian Health and Social Transfer" Act. (1995) Dalton Camp introduces it better than I can. "This "techno-economic" revolution is beginning to alter the very concept of "work" in a modem economy, and that fact has huge and troubling implications for social organization. The Fordist paradigm, in which workers were paid enough to be able to buy the (sorts of) products they had a hand in making..." Henry Ford incurred the wrath of his fellow industrialists by passing on the productivity benefits of the assembly line to his workers. Thereby retaining and maintaining the integrity of the "free" "economy". What the "free market" does is violate the above defined, and essential to democracy, previously defined "free economy". It allows the integrity of a free and sovereign state to be abrogated and allows it to potentially become the vassal of a corporately integrated free economy, comprised exclusively of that corporation since the "free" refers to the corporation�s shareholders and their well-being, not the well-being of the society within the sovereign state. The consequence is that the "free" people are separated from the property without which they cannot be "free". We regress to the feudal society, where the people are renters, and worse, slaves. To continue Camp�s item, "Globalization has meant that factory workers in the US cannot compete with their counterparts in Korea and still maintain a high and growing standard of living. It has meant that governments cannot afford to administer huge social programs on the proceeds of a declining manufacturing sector..." (Excepted From Dalton Camp�s April 19th 2000, Toronto Star column, "Does Anyone Really Know What the Experts are Doing?) There is an appropriate quote by FDR, who said, "The liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it becomes stronger than their democratic state itself. That, in its essence, is Fascism -- ownership of government by an individual, by a group or by any controlling private power." In this age, (the post 60�s revolution, - see Michael Ignatieff�s "The Rights Revolution") where individual and minority rights are venerated regardless of the consequences to society and without the existence of a 'community consensus' , the "borderless world" advocated by some must result in national boarders being replaced by corporate designated borders. Another aspect of the problem of free market is the fact that the same free market has been used by sovereign nations (and their corporations) to wage economic warfare, subsidies being one of the lesser weapons. That too has been going on since antiquity. The modern equivalent of sibling monarchs warring on each other finds a ready parallel in the competitive warring of corporations. The collateral damage being the equivalent of serfs, peasants and property-less wage-earners. Adam Smith has been quoted on this list, especially his "Wealth of Nations" and the hidden hand as regulator of the economy. An important point in his book was that a nations (or tribes) are wealthy when they provide for their own needs with their own resources, provided by their own people, their skills etc. Corporate charters in Smith's day were granted by the sovereign power and subject to its control, not for the benefit of the shareholders alone, (who were also subject to the sovereign) but for the all the subjects of the sovereign power as well. An example of the market's disconnection from the state in the following news item makes clear the difference between free trade and free market. News Item - Toronto Star, 2001, 07,28 "Oil And Gas Fail To Bring Promised Era Of Prosperity" by Kelly Toughill, Atlantic Canada Bureau, Drumhead, N.S. - The way Vernon Zwicker sees it, the only thing Atlantic Canada.'s new multi-billion-dollar petrochemical industry has given him is one more lousy patch in a highway riddled with holes. "If you give me $50,000, I couldn't tell you one thing that natural gas has done for me," says the retired Coast Guard officer, who lives just down the shore from where a pipe carrying natural gas begins its 1,045 Kilometer journey to Boston. "Here I am, burning oil from Iraq and Venezuela and my house is only one mile from the gas plant and I'll never ever get the gas, not ever." Atlantic Canada's newest natural resource - oil and gas were supposed to launch a new era of prosperity for a part of the country that has struggled against poverty for generations. But 18 months after the pipeline to New England was switched on, Nova Scotia still has no gas, no royalties and few new jobs. It is an old sorrow here, watching local resources shipped out to make new products - and hefty profits - for people far away. Some despair that if Atlantic Canada can't capitalize on one of the world's most promising new oil and gas fields, it will never overcome the string of economic handicaps that have stifled hope here for so long. It isn't like no one has tried. Politicians of all parties have poured money and energy into schemes to help Atlantic Canada.... Another item proposes that the boarders between Canada and the US be abandoned. Will that benefit those who advocate a "free" "economy" for a democratic people? Or will it benefit those who insist that freedom and economy are separate and distinct entities. The "New World Order" that I increasingly apprehend is one where Human Rights are abstracted into Corporate Rights and Property Rights are abstracted, as collateral, into the abstract value of money. Currently our Federal Government is ceding the Sovereignty of Canada to a number of international organizations such as the IMF, WTO, World Bank. This is being done without consulting the most important institution in a democracy, which is the people�s commons. The incontrovertible fact is that, as Aristotle found, inequality isn't compatible with democracy -- if there's a small number of very rich people and a large number of very poor people, the poor will use their democratic rights to take property away from the rich. So communities (or countries) have two options -- (a) reducing inequality or (b) reducing democracy. "The constitution of Canada does not belong either to Parliament, or to the Legislatures; it belongs to the country and it is there that the citizens of the country will find the protection of the rights to which they are entitled" Supreme Court of Canada A.G. of Nova Scotia and A.G. of Canada, S.C.R. 1951 pp 32 Respectfully submitted. Ed G
