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Monday, March 13, 2006
  The Invisable Hand of the Market Place

We should be promoting the best interest of the American people in international trade. The Bush Regime, the Republicans, and even to a lesser extent the Democrats, all serve the interests of the “global” multinational corporate “oligarchy.”

I believe in free trade. The policies of this regime have always been ideally suited to serving the interests of the rich powerful and privileged elite against the interest of the working class, poor and disenfranchised.

China does not allow their currency to float. They hold the price of their currency artificially low relative to the dollar. They allow corporations to rape the environment and unfairly exploit their workers. These are subsidies. We pay a hidden price when corporations rape the environment in China because we live in one world - one ecology - and the winds carry the pollution here.

The corporations do not want true free trade. They want labor (slave labor) and hidden environmental subsidies, and when subsidies exist, everybody loses. The corporate mantra for free trade is actually an Orwellian chant meaning; let us rape, destroy, and exploit for short term profit and pleasure, without having to concern ourselves with the long term costs that our descendants will be forced to pay.

So, the “protectionist are naive but they are reacting to those real loses.

I would suggest a “free trade, “invisible hand of the market place, compromise that would be at least an improvement on the current situation. We know that our government - Democratic or Republican - is as a result of our campaign finance situation - pretty much a wholly owned subsidiary of big business. So we cannot trust the government to enforce human rights, environmental, or child labor rules. International agencies are even less effective.

I think a good free market approach to this problem would be to create seals of approval sort of like the Good Housekeeping Seal of Approval. Create a child labor seal of approval. Create an environmental seal of approval. Create a human rights seal of approval. Pass a law that requires products sold in the U.S. to clearly display two sets of the seals on it, or on its packaging. One set would relate to the raw materials that where used to manufacture the product. The other set would relate to the manufacturing of the product.

Companies would be free to lie and put any seal on thier product that they wanted to. But give child labor, environmental activists, and human rights groups the right to sue any corporation that sells products in the U.S. - in order to force the company into accurate compliance with the seals of approval. Do not allow any monetary damages in the law suits - only the right to obtain court orders forcing accurate seal of approval labeling - this would prevent frivolous law suits and ensure that activists only brought suits against violators.

The child labor seal of approval for example could contain three levels - green, yellow, and red. Green would be a certification that no child labor was used. Yellow would certify that any child labor that was used at least met some minimum standard of safety and human rights. Red would indicate that child slave labor was used to obtain the raw material or manufacture the product. Then let the American people decide whether they wanted to buy the product or not. Let the child labor activist groups “police” the issue and sue the most egregious violators. When company "A" saw that their competitor, company "B" was cheating the system, company "A" would inform and support the appropriate activist group, in order to force company "B" into accurate compliance with the seals of approval.

The same sort of thing could be done with environmental and human rights issues.

This would not constitute a trade barrier. Any country or company is free to manufacture their products where ever and however they want, and to sell those products in the U.S. But they have to display the “seals of approval and they are subject to legal action in a U.S. Court if they lie. Any country or company has the ability to make sure that their products are manufactured without child labor, environmental rape, or human rights violations. Countries can control their country and companies can control where their products are manufactured, how they are manufactured, and who they hire to manufacture them. The same applies to the raw materials that are used to manufacture the products.

I just used child labor as one example. We don'’t have an efficient way of knowing which companies and products use child labor. We know that globally we do have a major problem with child labor. Globally we also have major problems with slavery, human rights and environmental abuse. The following links for child labor, human rights, and environmental abuse involving Coke and Nike are two examples. Of coarse, these have been in the news but forcing companies to put labels on their products would make consumers much more well informed at time that they make their purchases.

Nike


Coke


These is a complicated problem. Protectionism and isolationism does not work. But we can give all of our work away through so called free trade, and redistribute all of our wealth, and the world is still going to be poor, and so will we. Shipping our work to low wage countries drives our wages down but also provides inexpensive products for us. I think most of those cost savings go into the pockets of corporate profits. Still, the profits do get distributed through stock dividends. But much of the dividends that are paid go to the rich, and increasingly to foreign countries as result of the massive trade deficits that we run which gets reinvested in American stocks. As a result of the way we finance campaigns these multinational (American) corporations have an excessive amount of power and essentially form an oligarchy that controls our country. Inexpensive products and corporate profits create cash flows that can be reinvested in the U.S. and around the world which can expand production - bake a bigger pie - for all of us to share. So this is not a static problem. It has many variables and is extremely dynamic. Every change that you make has many intended and unintended (often unexpected) effects.

I think that my idea, that I listed above, of creating mandatory seals of approval for child labor, environmentalism, human rights, and perhaps also one for the fair trading practices of the country of manufacturing origin, should be given more serious consideration. It would be one way to at least begin to level the playing field to some slight degree without creating trade barriers.

The so called invisible hand of the market place can work to resolve many issues but there are too many things that are not accounted for in the economic system like the environment, the safety of children, and human rights. What is the economic value or cost of Coca-cola plant managers having eight union leaders killed in Columbia? How does one account for that in the economy? It saves Coke money, therefore it is good for the economy - unless it costs them sales - which it can if it gets publicised. My seal of approval idea, as listed above, would force Coke to publicise it.

 
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