History is locked on fast-forward. In terms of economic and financial news-flow, as last week showed, we live in turbo-charged times … Allowing Doha trade talks to fail is a mistake, both politically and economically – UK Telegraph
Dominant Social Theme: Don't let Doha die! If government bureaucrats cannot revive these talks, the free-market is doomed.
Free-Market Analysis: The Telegraph is out with an article, "Allowing Doha trade talks to fail is a mistake, both politically and economically," that confirms many of the points we ourselves made in a recent article on the Doha talks, though in reverse. You can see our article here: Doha Dies Well Deserved Death.
Now we are aware that the Doha talks seem somewhat removed from the practicality of everyday existence. But in fact they are most important from a trans-national point of view and mirror the trouble that the Anglo-American powers-that-be are having in many other areas from the Afghan war to global warming to the European Union. So from our view it is worth re-emphasizing what is going on with them, especially as they are not receiving a lot of attention in the alternative 'Net press, even among free-market sites.
The idea of course is that trade negotiations are absolutely critical to "free markets. If great nations cannot create world-spanning trade agreements, then capitalism itself will fail, or so goes the elitist dominant social theme. This Telegraph article is notable for promulgating this point of view as well or better than most. It is a most instructive example of how a fear-based promotional meme is developed.
How does Liam Halligan, chief economist at Prosperity Capital Management, present his subject? He begins by citing a variety of incidents that are intended to be disturbing, from central banks stockpiling gold to the unraveling of the EU to the unsettled situation in Pakistan and bin Laden's (supposed) death. The reason to mention these supposed negative events is to make the point that the failure of the Doha talks has been obscured by larger failures.
"With so much happening, it is easy to miss crucial, yet slower-moving, trends taking place beyond the headlines," he writes. Behind the scenes, he explains, "our system of multi-lateral trade rules is falling to bits and is now on the verge of outright collapse … Despite the massive importance of this system, and its pivotal role in securing more than 60 years of relative peace and prosperity, few people appear to have noticed and even fewer seem to care."
Right away, we see that Halligan has framed his fear-based argument in terms of government effectiveness. There is to be no discussion as to whether these world-spanning "managed trade" talks are actually good for the market in the long term or even accomplish the goals they are said to aim at accomplishing. Their veracity and vitality is simply asserted as a given. In fact, evidence that such laboriously erected contractual facilities benefit any groups other than the largest of multinationals should be presented rather than asserted. Alas, it is not to be.
It is managed trade that Halligan is suggesting, not free-trade. But he does not make the distinction. He should. Managed trade agreements such as NAFTA and CAFTA have proven disastrous to countries such as America. The free-trade agreements negotiated by Western governments are actually Trojan Horses designed to sap the industrial vitality of Western nation-states and thus prepare the world for Anglo-American global government. It benefits an agenda rather than industrial practices.
Halligan plunges on. Next, he provides us with a blanket assertion of the most alarming sort. Having established that managed trade is free trade (simply by asserting it), Halligan now explains that Pascal Lamy, director-general of the World Trade Organization (WTO), believes Doha is in "serious danger." If this is not alarmist enough, he quotes former US Trade Representative Susan Schwab as saying the Doha round is "doomed". EU Trade Commissioner Karel de Gucht meanwhile has stated, he asserts, that there is "no reason to be optimistic."
He wastes no time in jumping to a most extreme interpretation of the results. "Below the news radar," he writes, "the world is currently in the throes of the first failure of a multi-lateral trade negotiation since the 1930s." Of course at some point evidence must be provided – a line must be drawn between failure of negotiations and failure of economic vitality. He provides it in the very next paragraph by making clear that the results of trade-negotiation failure is common knowledge.
"Everyone knows about the 1929 Wall Street crash and the Great Depression which followed," he informs us, then goes even farther by claiming that not only were the depressed 1930s the result of the failure of free (managed) trade but so was "the ensuing global conflict." In a single article then, Halligan not only manages to peddle the usual perspective, he goes a step further to attribute World War II to the failure of governments to look out for business. It is a blanket indictment of the strongest type.
"Stupid politicians," he writes,"[erected] misguided trade barriers. Across the world, in response to economic fear, tariffs and quotas were raised. Yet protectionism is economically disastrous and politically explosive. Throughout history, countless lives have been blighted, and lost, proving that point – lessons seemingly lost on the politicians of today."
This is strong stuff. Again, the fate of the world and peace itself lies in the hands of unelected bureaucrats. If government does not "get it right" the ramifications are endless and agonizingly destructive. "Only the leaders of the world's largest economies can now save the Doha round," he informs us apocalyptically, "so providing the world with an insurance policy against future protectionism, and all the conflicts and loss of prosperity that brings. Yet they seem united in sticking to their eloquent silence on this most important of economic issues."
Despite such language, Halligan is ultimately willing to back away from arguing that World War III is imminent as Doha unravels. Instead, he suggests, the putative failure of Doha will led to " bilateral deals between countries" and quotes former Australian Prime Minister Kevin Rudd as saying the Doha difficulties signal that "protectionism is OK." The failure of Doha, Rudd says, means that the world not only misses out on "a positive trade outcome, but also be confirming that the era of free trade is coming to an end."
Again, what is coming to an end is a particularly corrosive era of managed trade. Thousand page long contractual facilities created as a result of Doha-like treaties are nothing like free-trade. In fact free-trade is just what it says it is, an untrammeled environment in which businesses themselves can create trading environments that are NOT subject to government regulation.
For Halligan, however, the Doha story is simply and tragically the narrative of how bureaucratic representatives of regulatory democracy are once again proving unreliable. The BRICS themselves – particularly China – began to assert their clout in 2003, demanding more access to G7 markets and refusing to sign off on a Doha deal. In 2005, he writes, the same result occurred. Both the West and the BRICS remained frozen in their respective positions. Now six years later, "the world economy has imploded and protectionist sentiments are rising."
Halligan wonder if it is not already too late. President Barack Obama came to office with the aim of "doubling US exports over five years," he writes, and yet global free trade has languished under Obama. The West in Halligan's opinion should needs to be promoting free-trade aggressively out of self interest because the prosperity of tomorrow depends on the likes of Doha today.
It is nothing but a power elite dominant social theme – that massive government bureaucracies and ten-year negotiations are necessary to the functioning of the marketplace. These large-scale agreements inevitably benefit the very largest multinationals and one might hope that their failures, as embodied in Doha, would lead to more modest, local negotiations. In fact, if Doha founders entirely, we are almost sure they will.
Trade will go forth regardless of such massive jabberings. Individual entrepreneurs will find a way to circulate their goods and services. Bilateral negotiations can take the place of multinational ones. This is of course the fear, that it will become evident sooner or later that the world can progress without President Barack Obama making the world safe for capitalism by "doubling exports." In fact, Obama has never run an import-export company and never created an export item for sale.
The worldwide Depression of the 1930s had everything to do with monetary manipulation by Money Power and very little to do with a "trade war." World War II also was at least in part an Anglo-American manipulation as Adolf Hitler's rise to power was partially funded by Anglo banks.
What the Western establishment fears most is that lapsing of the intricate ritual of government palavering in a number of areas will reveal the truth: government is NOT necessary to the general welfare of the population; regulatory democracy, far from being a benefit to humankind, is simply another iteration of human brutality and even slow-moving genocide.
The private sector creates the products with which the world trades and ultimately it is the entrepreneurs and business leaders that will determine how they are traded. Such massive talk fests as Doha only obscure this fundamental truth. Perhaps that has been the point all along. And perhaps the failure of Doha will lead finally to a greater appreciation of the free-market itself and perhaps even a greater understanding.