Free Trade Overwhelms Workers

Walmart, the free trade behemoth, cleared over $11 billion in profits last year, but decided that it couldn't pay even as much of their workers' health care costs as they had before (a measly amount that left more than half their US workers seeking Medicaid even before the cuts). And Walmart is just the tip of the iceberg; more and more employers are phasing out employee healthcare while their corporations earn high profits. Shareholders are doing better than ever; workers are not. Why?

The selfish class is global; workers are pawns in their free trade game; if American workers don't want to play, too bad: Indians and Chinese will willingly take their place, but all are exploited. Productivity gains are almost entirely gobbled up by capital; workers lose their jobs, or see their wages cut in response to their producing even more. The Economist ran a series on free trade globalization in their Sept. 22, issue. In article after article they stated that the value of capital has increased relative to the value of labor because of free trade. What their writers meant, but didn't say, is that the "free" trade marketplace has been designed to favor corporations, which can switch production to "lower cost" venues with the click of a mouse, meaning that workers are in competition with each other all over the world, even if what they produce is not yet in significant competition with imports. It's a race to the bottom, in which the American worker will soon think he's lucky if he can earn as much as an Indian or Chinese worker in his field.

The Economist pointed to the danger of an American backlash, which could endanger free trade by demanding protectionism as a solution. As if greater and greater profits and stagnant (or falling) wages were a solution! The magazine, in "More Pain than Gain," recommended a significant boost to services, perhaps financed by more progressive income taxes, to counteract pressures against "free trade." It would be a sort of New Deal revisited, but offered by business interests, not by populists.

In fact, his solution reminds me of the Roman Empire's bread and circuses. The "bread" was increased over time to include pork, cooking oil and wine, and the "circuses" included public access to baths (massages, ball courts, etc.) for all citizens, as well as free entry to the Colosseum and the race track. That's what you do with superfluous population if you want to prevent revolution: offer benefits to "the people."

A real solution, one not attempted in Rome, would be complicated. It would require a restructuring of trade rules (WTO, IMF) to safeguard workers' wages and the environment (lax environmental standards attract many corporations to pollute elsewhere, but pollution has global consequences). A solution would also require a political revolution, in which the vast majority would take back its power, so that wages (and employee benefits) gained a fair share of profits; if productivity went up, wages would, too, and profits would not take an unfair share.

In Rome what happened was that the power of the selfish class continued to grow, until it had a virtual monopoly on all the wealth of the Empire. Remember that it connived in the Empire's overthrow and remember that the global corporations have no loyalty to a particular nation, not even the United States. They can, and probably will, connive in the destruction of the American Empire--when it no longer works to their interests--unless their power is counteracted, locally and globally.