Dr. Jack Rasmus - Free Trade As Centerpiece Of Neoliberal Policy

We think of free trade as easing tariffs and other barriers to the flow of goods and services, but free trade is really about the international flow of investment spending. We can’t understand free trade without understanding politics, says Dr. Jack Rasmus, and we can’t understand the politics of free trade without looking at how corporate-driven free-trade agreements are eroding national sovereignty and democracy. It’s where the money is being made, as much from moving money as from moving goods, and money owes no allegiance to any flag.

Multinational corporations want free trade, which grows profits. Bankers want free trade because it means business to the banks in financing those money movements. Corporate contributors reward free-trade-minded politicians with contributions, and local elites in all countries share in the free-trade pie as well. The losers: Workers whose jobs have been offshored, consumers who see a growing income gap with the wealthy.

Neoliberal policy (tax cuts for corporations and investors, a hollowed-out social safety net for everyone else) drives free trade, says Dr. Rasmus in “Free Trade as Centerpiece of Neoliberal Policy,” a video presentation of the Henry George School of Social Science. Deregulating international money flows led to an increase in free trade, but it also led to growing trade deficits abroad and social disruptions at home, with workers’ wages and benefits. Despite the free traders’ mantra that a rising tide lifts all boats, some boats are lifted higher while others founder; income and wage inequality grow apace.

As for Donald Trump and his seemingly protectionist talk, he’s as much a free trader as any of his predecessors, says Dr. Rasmus, a professor of economics and politics at St. Mary's College in California and the author of important books on the Green economic crisis and the global economy. Trump, in fact, may think of of himself as the wheeler-dealer who will negotiate better deals with Mexico, China and Germany.

What’s next? Dr. Rasmus predicts that any unhappiness with free trade (because of continuing income inequality and the anemic recovery from the global Great Recession) will lead to renegotiated trade deals and an effort to try to reestablish US economic hegemony over the rest of the world.