Free trade is a combined government/corporate construct that promotes an ideal environment for large multi-national companies to maximize profits. It is a system that allows a company that may or may not have begun as a manufacturer of a product to contract with factories, often in developing countries to make the product. This allows a company to move the manufacturing end of their business from factory to factory and country to country.
Proponents of this model will proudly say that allowing unfettered free market capitalism works for everyone. That ultimately, everyone is freer and the idea of hard work bringing the rewards of capitalism remains unchanged. But does a strictly profit motivated economy support this thesis?
This video takes all of this a step further and identifies how companies are no longer marketing a product but a lifestyle. Naomi Klein explains the implications, the problems and the growing resistance to this economic model. It makes a complex issue entertaining to watch and understandable. Ms Klein is a visionary, making this definitely worth watching.
The cost of materials generally are such that a company has a limited amount of control. A shoe manufacturer for example, will have basically the same cost for materials regardless if the plant is located in Mexico, China or the United States. Not being tied to a geographic location gives them a good deal of control over only one thing: labor costs.
So called industrialized nations have the highest labor costs. Even a non-union plant in the U.S. paying minimum wage will have substantially higher labor costs than a plant in a developing country paying workers $4 per day. Often, a company with a contract which accommodates paying that $4 a day will sub-contract with a factory in another country paying only $1 or $2 per day.
This has the effect of delegating workers to jobs with the lowest possible wages, the least benefits, and the worst conditions. Anything else would put the workforce at risk of losing even the meager wages they have. Minimum wage in the Philippines is a little over $4 per day. The Philippines competes for manufacturing jobs with Indonesia, Thailand, VietNam, China, Malaysia as well as Central American countries.
Free Trade only works for the big corporations and in the long run maybe not even for them. They have effectively painted us all into a corner. Cheap labor has locked us into an economy based on low prices and low wages. The U.S. manufacturing sector is dying. Low paying service industry jobs can’t support a family. The working poor rely on products from developing countries. Demand for cheap stuff perpetuates the need for expanding Free Trade areas.
The South Korean government recently signed a Free Trade agreement. Major protests were happening all around their country, leading up to the signing and after it was a done deal. The workers know what’s up. They see how wages have dropped in every participating country. Resistance to government/corporate collusion is growing all around the world.