As any economist will tell you, the future of humanity depends on the economy. Before Trump and Brexit plans were afoot to introduce proto-Common Markets across the North Atlantic (TTIP) and Pacific ("Comprehensive and Progressive Trans-Pacific Partnership" (CPTPP)). After Trump and Brexit the pressure will continue to create a global, extended Free Trade Agreement.Who do these extended Free Trade Agreements, these Partnerships, benefit and what are their consequences?Free Trade Agreements benefit Multinational Corporations - those large companies that derive their revenue from International Trade. International Trade is beneficial for countries with a GDP per head of less than 000 and hence these may also benefit from extended Free Trade Agreements.See Note 2 for an explanation of
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Who do these extended Free Trade Agreements, these Partnerships, benefit and what are their consequences?
Free Trade Agreements benefit Multinational Corporations - those large companies that derive their revenue from International Trade. International Trade is beneficial for countries with a GDP per head of less than $16000 and hence these may also benefit from extended Free Trade Agreements.
|See Note 2 for an explanation of the highest trade figures.|
There are consequences to increasing International Trade. Suppose the UK doubled its international trade. It would then be critically dependent on Multinational Corporations for its wealth. Even large countries like the EU will find that they become dependent on Multinationals if they allow their economies to be dominated by them. Dependence results from the loss of the independent ability to produce goods because local producers have been put out of business and parts have become sourced from a large number of scattered foreign suppliers. Once a Multinational produces goods and services for a country it is extremely difficult to reverse the dependence that arises.
Suppose the EU, CPTPP, TTIP etc. are enacted and Multinational Corporations are able to distribute their production globally so that they can control the economies of Nation States such as the EU and USA. The inevitable reaction from the Nation States will be to combine so that they can control the Corporations. As a result of this combination the various customs unions (Common Markets) will turn into a Global Economic Community (GEC). The GEC will then slowly become a Global Union GU. The path: Customs Union to Economic Community to Union is a German model for the creation of a State. We have already witnessed this sequence of events happening, for example with the unification of Germany in the 19th Century and the creation of the EU in the 20th/21st Century.
Hooray! you might cry. Gene Roddenberry's Star Trek will have happened, a United Earth, a peaceful utopia will have been created. Now relax and face up to what a Corporate Global Union will really be like. It will be an oligarchy run by the bosses of the big Multinationals and Banks with a token democratic component to mollify any opposition. A Global Union will not serve the particular interests of any of the economies within it. After a few decades to a century it will fall into the hands of Tyrants. After a Global Union there will be no Nation States to nurture rebellion against tyrannical rule and the Chinese will be in charge.
Even worse, as the Chinese are demonstrating, the modern state is better placed to suppress all opposition than at any time in history. As an example, the Chinese are selling an AI system that can control all aspects of a City from traffic lights to waste collection. It can locate any citizen within a few minutes.(See New Scientist).
The Chinese have also recently been testing a Social Credit System that ranks all members of society (See ForeignPolicy.com for a full description). The System combines credit ratings, company, police, social, government and civil rankings. According to the Chinese State Council in 2014, the scheme should “allow the trustworthy to roam everywhere under heaven while making it hard for the discredited to take a single step.” It is planned to roll out the system nationwide in 2020. Those with a high Social Credit will receive favourable terms in business and advancement, those with a poor score will receive demotion.
These Chinese developments could have happened anywhere in the developed world but were forbidden or unpalatable in some Western States. It is easy to imagine the Russians and their satellite states, most of the Islamic World, the shaky African democracies and the South American Socialists being tempted into using the Chinese Solution. "Terrorism" could persuade the EU to go that way. The British and Americans would be forced to comply if it were GU policy and, of course, terrorism is the ultimate argument for such oppression.
Of course, Gene Roddenberry in his Star Trek series imagined a future based on the 1960s when the world was still big enough to provide hiding places. In the 21st Century we must be incredibly cautious about losing our national economic sovereignty because this is a large part of political sovereignty. Free Trade Agreements with a measure of protection for domestic industry are as far as we should ever go when giving away our sovereignty because customs unions and Common Markets contain a point beyond which the sovereignty lost may never be regained.
It is the Multinationals and International Banks who are pushing for Customs Unions and Common Markets because international trade and transactions are the part of the global economy where they make their profits. When they meet and openly conspire at Davos they don't see any further than their own advantage and profit and are unaware that they may be doing wrong. In the absence of guidance from people who believe in freedom the Multinational Corporations will see the Chinese system as optimal for furthering their business: it will create peace and the State will ensure that there are no major dislocations in the business environment.
If Global Union comes to pass human beings will see Chinese Capitalism as a total defeat of what it is to be human but be trapped by it for millennia.
Note 2: The more alert reader may have spotted that the total
trade figures (imports+exports) exceed 100% of GDP for many countries.
This is due to a mixture of entrepot activities (simply importing then
re-exporting goods), the use of imported parts in exports, use of
countries as tax havens with most profits being taken abroad etc. The
GDP figures for countries exclude much of this activity so "total trade"
is not a component of GDP and can exceed it.
The scale of this activity is surprising until you consider that multinationals need to set up reservoirs of goods in each continent for rapid distribution. International trade appears far more important than it really is because a Japanese car will appear as an export in Japan, an import and export in, say, Germany where the distributor is based, and an import in France where it is finally purchased. The same car is counted four times in the total figures for global trade.