A while ago at BHL, Andrew Cohen took notice of a New York Times article on some recent political compromises in the U.S. that might speed the passage of three proposed “free trade” agreements (with South Korea, Colombia and Panama). Andrew takes notice of one of the provisions of the agreements — that the deal includes authorization for a series of subsidies (including retraining and cash payouts) for U.S. workers whose jobs are offshored up through 2013. Then he asks:
The two things are separable of course: there is the free trade agreement (which may or may not be a genuine free trade agreement) and there is the so-called “trade adjustment assistance” that will help those whose jobs are lost …. Will this be overall good? I suspect so, but can’t be sure. In general, I am wary of “free trade agreements,” since they end up being anything but. If anyone has a better understanding of the situation, I’d be happy for input. How free is the free trade?
I’m much less uncertain, and much more pessimistic, about the agreements in question than Andrew is. But not especially because of “transitional” welfare programs like the one he mentions. Of course, I oppose that, because I oppose the welfare state as a whole. (And I oppose the welfare state as a whole because I oppose the state as a whole. Your mileage may vary.) But the major issue here is not so much with small-scale, explicitly time-limited welfare programs tacked on to the deal; it’s with the core of the agreements themselves. Getting rid of protectionist tariffs is a fine thing, and really economically beneficial — especially for working folks. But in my view neoliberal “free trade” agreements don’t get rid of protectionist tariffs; they swap out one form of protectionism for another.
That’s because how free the “free trade” in these agreements looks is going to depend on your views about so-called Intellectual Property. For reasons I’ve discussed elsewhere (and which have been handled in greater depth by Roderick Long and Kevin Carson), I think that the legal protection of copyrights and patents has nothing to do with genuine property rights, but really is a form of coercive monopoly, which suppresses peaceful competition and allows the IP-holder to extract monopoly profits from consumers, with the explicit aim of fattening profits to protect the business interests of the copyright- or patent-holder. (Now, many libertarians disagree with the anti-IP position; if you’re one of them, I won’t have much to satisfy you here, but the in-depth discussions I’ve linked may be more helpful. Or we can discuss in the comments.) However, while IP (on my view) is radically anticompetitive, and has nothing to do with — indeed, is the exact opposite of — genuine free trade, an extensive and uniform system of IP restrictions does smooth out the road for, and serve the commercial interests of, a number of well-placed First World corporations. As a result, every major FTA, from NAFTA through CAFTA and down to the FTAs proposed for South Korea, Panama, and Colombia has had a big, fat chapter on Intellectual Property, and the function of the chapter is always to institute a massive, synchronized hike in copyright and patent terms, penalties for infringement, and the police powers that governments can invoke to enforce IP restrictions. For example, here is a brief summary of the IP chapter of KORUS FTA:
The KORUS FTA strengthens protection for intellectual property, including software, music, film, videos, and text.
For copyrighted works:
- Extends copyright from life of the author plus 50 years to 70 years.
- Protects temporary copies of copyrighted work (music, movies, text, etc.) on the Internet.
- Prevents tampering with technical protection measures (TPMs). [This is essentially an implementation of the invasive powers granted under DMCA and ACTA, as discussed here –CJ.]
- Criminalizes recording of movies in theaters.
- Strengthens enforcement against Internet online piracy, holding liable those who profit from unauthorized downloading, and establishing penalties for end-user IPR piracy.
- Provides an extension of patent terms for undue delays in granting the original patent.
- Abolishes the revocation of a patent due to non-usage.
- Requires the seizure, forfeiture, and destruction of counterfeit and pirated goods and the equipment used to produce them.
- Deters IPR violators from shipping counterfeit products through Korean ports and free trade zones through new customs enforcement rules.
- Sound and scent marks will receive trademark protections [!]. Introduces “first-in, first-in-right” to trademarks.
- Protects Internet domain names.
In short, one of the major functions of KORUS FTA is to lengthen the terms of existing government monopolies, to escalate government enforcement of the monopolies, and to enlist legal power to clamp down on (mainly Korean) peaceful trade and competition with (mainly U.S.) IP holders. It’s clear enough how this serves the interests of a certain, politically fetishized form of corporate commerce (“trade” by multibillion dollar entertainment, technology and pharmaceutical businesses); but whether that’s an instance of
freeing markets, or invading markets in order to prop up the bottom line of big business, is going to depend on whether you see IP as a legitimate exercise of private property rights, or an anticompetitive privation of property rights for the protection of big players. For anti-IP libertarians, FTAs promise at best one step forward and two steps back — the easing of old-fashioned protectionist controls on commodities, in favor of creating and expanding protectionist controls on information and technology.
One other note on the political debate over the FTAs. In the comments on Andrew’s post, Fernando Teson has this to say about “trade adjustment” subsidies:
Libertarians (e.g., Gary Becker, Walter Block) generally reject re-training of workers displaced by imports, but we must remember that the policy, bad as it may be, is less bad than protectionist measures. Given the enormous difficulty of convincing the public of the advantages of unrestrained trade, free trade cum re-training may well be a second-best solution.
Another commenter, Aaron, has this to say in response:
But this brings up an interesting question, Professor – what’s the general preferred libertarian mitigation against the risk of having one’s career shipped overseas before you’re done with it? It seems that demanding a higher salary if you perceive a risk isn’t that workable, if the whole point is that you’re dealing with a price-sensitive employer. Saving to pay for one’s own retraining seems like a good option, but if you pick the wrong career to train for, you’re in trouble, and there’s pretty much no-one with a long-term interest (after any student loans are paid off) in seeing you get it right – after all, once they’re paid, they don’t care if you can get a new job.
Well, I can’t speak for Gary Becker, Walter Block, or Fernando Teson — let alone all libertarians. And I don’t have anything to offer at all on the policy question of how governors might best package free trade legislation (even if it were genuine free trade, rather than a faux-free FTA) in order to sell it to an anxious public. But what I can say for myself is that, as an Anarchist, I believe in DIY social transformation, and as a left-libertarian I think that free trade is best when it comes along with a robust culture of grassroots solidarity and mutual aid. So my view is that the best non-state means of mitigating against the risk of losing your job is twofold. One, you focus on getting rid of the state capitalist political controls which dispossess the poor and marginalized, constrain the options available to impoverished people, and make ordinary workers artificially dependent on corporate employers. (The basic problem here, as stated, is that the labor market is constrained in such a way that any particular worker is much more dispensable for his employer than any particular employment is for the worker. If that’s the result of free market processes, then perhaps it’s a problem for libertarian economic views; but if it is — as I contend — substantially the result of state capitalist controls on the direction and extent of market activity — in particular, oppressive political restrictions on the poor, and exploitative protections for established businesses — then that’s a problem for business as usual, but not for markets. The thing to do is not to “mitigate” the economic problem, but to get rid of the political problem that produces it.)
Second, while I think that removing constraints on individual workers is important (thus putting them in a better position to fall back on alternative resources, drive harder bargains, or make a living outside of wage-labor entirely), it’s also important to remember that — on a sufficiently rich conception of what’s in a market — a freed market is an individualist social order, not an antisocial one. What I mean is this: it’s a mistake to think that the only available options are for (a) government-organized safety nets or (b) uncoordinated personal measures, leaving workers with only the personal savings or insurance arrangements that they can individually provide for. There is a third option: (c) consensual socially-organized safety nets, providing grassroots mutual aid. What I’ve said elsewhere about community-based mutual aid in medical care can be applied broadly to grassroots efforts where workers pool resources to help cope with many different kinds of hard times or catastrophic costs:
Pervasive confusion of the existing government-supported anticompetitive corporate health care market with medical services provided by a genuinely freed market leads to two related confusions about what a real market in medicine would mean.
First is the widespread, but ultimately ridiculous notion that free markets would require individual workers to rely only on personal savings or expensive corporate health insurance to cover high medical costs. In fact in the late nineteenth and early twentieth centuries, freer medical markets actually offered many competitive, noncorporate means for working folks to get affordable, decent health care for themselves by pooling resources through free-market bargaining and free association. As libertarian scholars David Beito and Roderick Long have discussed, “contract practice” agreements, organized by low-income workers and primarily negotiated through unions, mutual-aid societies, and fraternal lodges, provided reliable medical care for 20-50 percent of workers in English-speaking countries for about one day’s wages per year. These affordable arrangements were ultimately driven out not by the ruthlessness of the free market, but rather by deliberate assaults by government and the government-privileged medical guilds.
The anti-state response to economic pinches and hard transitions is — grassroots community organizing.
- Typically, these escalations in IP protection and enforcement are designed to bring less-restrictive laws in U.S. trading partners up to the insanely restrictive state of copyright and patent law inflicted by the U.S. government. ↩