Today we live in a world of consumerism and materialism. Money determines if you eat and what you eat. The insatiable desire of countries with economic wealth and technological power for resources has infected other cultures with the same illness of consumerism dragging them to a state of poverty, need and dependency – a condition alimented by “free trade”, a strategic and well thought method. Behind the apparent initial aspiration towards an equitable development through “free trade” there is a reality where disequilibrium and infinite disadvantages for the periphery occur. The purpose of this essay is to discuss the failure of “free trade” and show how this method adopted by “the new rulers of the world” (Pilger J.) leads to poverty and creates intentional underdevelopment in the South. Moreover, my aim is to discuss the reasons of the implausibility and inadaptability of “free trade” in development by displaying some of the invisible and disastrous realities hidden in today’s process of globalisation.
“Free trade” is a strategic tool used by “private tyrannies” as Noam Chomsky calls them (Pilger 2002, 72) to keep the economy under control. It has been disadvantageous for countries such as Chile, for instance, known to be the “new democracy” in Washinton (Pilger 1999, 64). In Chile, in the 1980s all state enterprises were sold off to multinational corporations in the name of “free markets”. As a result, a country which prior to Pinochet had maintained a reasonable standard of living for most of its people was ravaged. Industry was dismantled and currency was devaluated (Pilger 1999, 64). This dragged 40% of Chilean people into poverty (McMichael 2008, 159). As a result, “free trade” is not conducted between nations, but “as transactions within 180 multinational corporations” (Pilger 1999, 72). Underdevelopment is a consequence of the partnership formed between “developed” nations and powerful elite classes in less developed countries. This, for instance benefited the minority class of Latin American elites only, rather than its entire population. The independence of an ex colony from a nation during the period of decolonisation was transmogrified into dependence of the country on powerful multinationals using “free trade” as a development tool to play the game of dictating global rules. Taiwan, Singapore and Korea were those who succeeded by not using the Washington Consensus policy and therefore proofed “free trade” to be not functional. Korean steel and shipbuilding industries, for instance, developed and became more competitive than those of Britain in the industrial sectors, not because of hyper-mobile productive capital that relocated from high-cost Britain to low-cost Korea, but because of a successful alliance between the Korean state and local capital in developing these industries (Kiely 2008, 183).
Furthermore, “free trade” preaches “market freedoms” but celebrates control over resources threatening the environment and resource regeneration. Global managers of today’s “market freedoms” extract resources from resourceful and therefore developed countries to satisfy their own interests of high mass consumption for the North. This “under-develops” resourceful countries such as Chile, Ghana and Brazil. Chile’s export boom overexploited the country’s natural resources beyond their ability to regenerate. In Ghana timber exports increased from 16 million dollars to 99 million dollars from 1983-1988 reducing its tropical forest to 25% of its original size. Deforestation has led to sharp increases in malnutrition and disease. The deprivation of food, fuel and medicine in Ghana and the replacement of rainforests with cattle ranches in Brazil which contract with European markets have led to poverty in the South (McMicahel 2008, 161-164). These facts contradict the Millennium Development Goals of human rights – the rights of each person on the planet to health, education, shelter, security. In today’s society millions of acres once used to feed poor countries are now used to grow kiwis, strawberries and asparagus for upper-middle-class consumers (McMichael 2008, 161). “Free trade”, therefore, is being adopted to satisfy the needs of the insatiable desire of the rich towards more materialism and consumerism rather than eliminating poverty. This means that it is profit rather than development oriented. According to the Shamans of the Amazon, for instance, the frequent eruption of volcanoes, tsunamis and cyclones are the manifestation of the anger of nature which has not been looked after (Shamans of the Amazon 2010, youtube). I think that underdevelopment is being created intentionally by putting the South into a comparative disadvantage. As a result, liberalisation is not about freeing trade, but about consolidating a corporate food regime (McMichael 2008, 171). It is worth mentioning the invalidity and implausibility of Ricardo’s economic theory of comparative advantage rooted in “free trade” policy. Firstly, because as Engels claimed, when countries are progressing the demand for manufactured goods are superior to primary goods such as food. As a result, trade via specialisation is a comparative advantage for countries producing manufactured goods and a comparative disadvantage for those producing primary goods such as the South. Secondly, because specialising in the production of a particular commodity means overproducing resources for exports and consequently threatening resource regeneration. I believe that self-sufficiency is the equivalent of development. Therefore, a self-sufficient country does not need to overproduce since it is already developed. Overproducing resources means working for the development of other countries at the expenses of one’s own underdevelopment.
Another reason of why “free trade” leads to underdevelopment and poverty is because of the strategic and atrocious game played by undemocratic private tyrannies such as the WTO, a multinational corporation that is not elected by the citizens and is therefore more powerful than the state. This shows the inapplicability of Friedrich Von Hayek’s argument according to which “liberalism makes it possible to utilise the knowledge and skills of all members of society to a much greater extent than would be possible in any order created by central direction” (Peet and Hartwick 2009, 81). There are some facts outlined by the Australian journalist John Pilger which I find necessary to refer to in order to comprehend why “free trade” is a misnomer and how the WTO which is the pumping vein of “free trade” contradicts the principles it is based on, namely non-discrimination, reciprocity, transparency and fairness. These facts, therefore, show the imperialistic nature of “free trade”. “Children in Iraq die because there is no chemotherapy and no pain control. The UN Sanctions Committee had banned nitrous oxide as ‘weapons dual use’. Yet this was used in caesarean sections to stop bleeding, and perhaps have a mother’s life.” (Pilger 2002, 50). As a result, it is clear that development via “free trade” remains a quixotic fantasy created by powerful corporations in order to satisfy their personal needs. If “free trade” is supposed to eliminate poverty through an equal exchange of resources, then the UN Sanctions Committee in New York should provide the medicine to Iraqis to survive. As a fact “free trade” certainly does not eliminate underdevelopment. On the contrary, it creates underdevelopment. Moreover, although the medicines are made from material extirpated from the South, the countries which are allowed to obtain them get charged a high price. Also, “if diseases are common in developing countries but are not a particular public health problem in the developed world, there is unlikely to be a profitable market for new drugs” (Matthews and Munoz Tellez 2008, 565). “Free trade”, therefore consists in no trade and no freedom.
Moreover, “free trade” in practice turns out to be a comparative disadvantage of the South due to exploitation of the workers and unequal income distribution. In Haiti, for example, workers work overtime to produce baseballs for the USA and get paid 38 cents for every dozen baseballs sewn. Three and a half to four baseballs can be sewn a day. (Pilger 1999, 65). This contradicts one of the principles of neoliberalism according to which workers get paid what they are worth. According to Marx, the value of a commodity is calculated by the labour time invested in a product (Peet and Hartwick 2009, 151). Today, however, brands are produced as opposed to products. What determines the value of a commodity today, such as sugar for example is not labour time but the name of the brand. This makes the value unquantifiable. We are living in a “private label decade” (Klein 2001, 6). Unequal trade and income distribution determine the essence of “free trade”. Exploitation of workers in developing countries producing manufactured goods for First World countries seem to be inevitable since a similar or even better product and mass-production technologies could sooner or later be manufactured by other countries reducing the price of the product. Since these mass-production technologies may involve large amounts of labour, it is convenient for firms to move production to developing countries with lower labour costs (Gwynne, Klak and Shaw 2003, 164-6 as cited in Gwynne 2008, 202). According to United Nations Development Programme (UNDP) figures, by the late 1990s, almost 50 per cent of manufacturing jobs were located in the developing world (Kiely 2008, 183). As a result, while people in the North are being bombarded by products of mass consumption with the sole purpose of “getting the economy flowing”, people in the South are being exploited in the name of “development” and “free trade”. Therefore, development connotes unlimited economic growth for rich countries at the expenses of the less privileged via “free trade”. “Underdevelopment is generated by the same historical process which also generates economic development: the development of capitalism” (Frank 1966, 18 as cited in Peet and Hartwick 2009, 168).
To sum up, “free trade” seems to be a quixotic development tool which in theory draws a positive picture of its intentional development policy, but in reality practices unfair trade. Its literal meaning and discourses allude to a utopian development where all countries can achieve economic growth and comparative advantage by “liberalisation”, that is to “free” markets for an equitable exchange of resources. In reality, trade makes poor countries poorer and rich countries richer since “freeing” markets actually means being under International Financial Institution (IFI) supervision and controlled by powerful multinationals such as the WTO. “Free trade” is a misnomer. It entails hidden but evident imperialistic goals. This means that in reality, progress and change are also illusions since nothing has actually changed in real life since the period of colonialism and imperialism: In the past people used to conquer territories through colonisation. Today they conquer resources via “free trade”.
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 With this term Pilger J. refers to the multinationals.
 With this terms Noam Chomsky refers to the multinationals.
 Meaning the more people consume the more money circulates and finally the faster the economy grows. This, however, leads to global rather than national growth of the economy. I believe that development within a country can only be achieved if the focus is on the nation rather than the globe.