As the economic crisis deepens, rising protectionism becomes a greater threat. One of the contradictions of capitalism, the existence of nation states within a world economy, is beginning to exert itself a little more aggressively.
The “buy American” clauses that the Obama administration inserted in to the $800 billion stimulus package required any project that received stimulus money to use only US steel and Iron manufactured products. Negative consequences from this action are coming from Canada, the US’s neighbor to the north. Canadian capitalists are complaining that their products are being shut out of the US market and have begun to retaliate. Some Canadian state and local authorities have passed “Do not buy American” resolutions (Financial Times 5-26-09).
This is causing concern among some US capitalists whose businesses are surviving the slowdown and avoiding layoffs or complete collapse thanks to the export market. One steel company in Pennsylvania threatens to layoff 600 workers if this continues. Another factory in Texas will layoff 140 if the Canadian government continues with its boycotting of American products. Although NAFTA forbids this sort of economic discrimination, much of it is being skirted because much of the stimulus money is being handed out by states and local authorities which are not bound by NAFTA the argument goes.
It is not only Canada. Russia is increasing its limitations on foreign investment and is imposing duties on imported cars pork and poultry and India is placing tariffs on soybean oil imports. Argentina, Brazil, Indonesia, France and other countries are strengthening or adding further measures to protect the domestic economy. *
The capitalists class constantly reminds itself of the dangers of protectionism, recalling the introduction of the Smoot-Hawley measures as a response to the great depression 70 years ago that exacerbated it and led to the catastrophe of World War two and death of some 50 million workers. The meeting of the G20 twenty is an effort to forge a global response and avert independent national solutions, an “every man for himself and devil take the hindmost”, approach. But this is not possible in the long run. The G20, like the Doha round of talks contain much more ark than bite.
They are deathly afraid of a retreat behind national borders as they are faced with increased pressure from the working class at home that sees no alternative to this retreat. But the system inevitably drives them in this direction despite their concerns and subjective wishes. What are the huge sums of money pumped in to national economies but protectionist measure? The French and US bailouts of their auto industries are nothing but protectionist measures. US Union leaders, like Leo Gerard of the USW, are ardent supporters of capitalism and national states so offer no alternative but the catastrophe of national defense and have various actors and celebrities like Jessie Jackson and Danny Glover championing their “America first” campaign.
Neither so-called free trade nor protectionist campaigns to buy American, Japanese, Canadian or any other such campaigns serve working people’s interests. They are both capitalist solutions to the crisis of overproduction that is an inherent and insoluble contradiction of an economic system where the commanding heights of the economy are in private hands and are set in to motion only if profit can be extracted.
We live in a global economy like it or not. Each nations state produces autos, steel, energy, food and all the other necessities of life and they produce it not for a domestic but for a global market and the capitalist class of each nation is driven by the system to eliminate its competitors from the global marketplace. The only solution for working people is the struggle to own and control the forces of global production and develop a global plan of production on a democratic socialist basis. Free trade is an obstacle to this as workers are forced to compete for who are the cheapest and offer the fewest obstacles to profit making, such as safe working conditions, higher wages and Unions. And protectionist boycotting of the products workers of other nations produce cuts across our efforts to build global solidarity among the workers of the world, something that is necessary if we are to combat global capitalism. It inevitably leads us down a nationalist and racist path that brings us all down together. We cannot fight for higher wages as we compete with other workers in order to maintain the best environment for the employers to exploit our Labor power.
We all love our homes, our neighborhoods, the places we grew up. But within nations there are classes. Marx said, “Worker’s of all countries unite”. When you think about this, it is obvious to us. I am called an American. But is my American identity more akin to Donald Trump or to an auto-worker in Germany, Canada or Japan? If I went to live in Mexico would I feel more comfortable among factory owners or executives that manage them rather than the workers that worked for them? I think not it is obvious. Even if I wanted to enter that milieu, I would be excluded; they are very clear who they want their sons and daughters to associate with. But workers would recognize that we have certain things in common despite superficial differences like language—we would think very similarly, we would want to share our differences with each other.
I think we understand all this in our gut. We need to make sure we understand it in our consciousness—the future depends on it.
* “The End of The Free Market”: Foreign Affairs, May2009
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