Protectionism, Buy American, a catastrophe for US workers.

Left: Bosses' propaganda. It doesn't save jobs, never has,  and it makes workers' weaker

In addition to all the global hullabaloo about the US Federal Reserve’s printing of some $600 billion and throwing it in to the global marketplace, trade talks between South Korea and the US did not result in a “happy ending” at the G20 meeting in Seoul yesterday as the two countries failed to reach agreement over trade.

The South Koreans refused to change a previous 2007 agreement that allows for an immediate end to a 2.5% tariff the US imposes on imports of Korean cars. The US wants the tariff reduced gradually and also wants the Koreans to get rid of safety and environmental rules that forces foreign importers to make modifications to their models which could lead them to raise prices cutting profits.

There are other issues here of course, and there is never a level playing field, NAFTA for example, drove a million Mexican subsistence farmers from their land who could not compete with the giant US agribusinesses. Think about this when you are in an argument with the immigrant bashers.

The response from Richard Trumka, the president of the AFL-CIO is classic and reveals what’s wrong with the thinking at the helm of organized Labor. “President Obama is exactly right in holding out for a deal that puts working people’s interests first” ,says Trumka.

What nonsense is this? Obama is not over there negotiating a deal for workers US or Korean. He is negotiating a deal for US capitalism, for US business. Obama is trying to increase the profits and market share of US capitalism at the expense of South Korean capitalism. The Koreans are negotiating for Korean capitalists. The losers in these negotiations are workers, Korean workers and US workers. We have no one negotiating for us because we have leaders who have no independent position, who have the same world-view as Warren Buffet; they worship the market and see no alternative to it.

We hear all the time about free trade versus protectionism. Many workers will fall prey to protectionist and “buy American” views, especially during periods of high unemployment as we feel it will mean more jobs. The capitalists on the other hand dread it because it amounts to a restriction on capital. Freedom for capital means the right to go where it wants, when it wants, unrestrained by pesky environmental laws, safety restrictions and those damn Unions.

The capitalists also know the dangers of protectionist measures; they recall the Smoot Hawley tariffs that were introduced in response to the Great Depression that actually made it worse as countries retaliated leading to a world war. The world economy is far more integrated today than it was then and any jobs saved through protectionist measures would be countered by job losses as so m any US companies’ profits are made abroad.

In Ireland during the recent boom, profits of subsidiaries of US multinationals doubled in four years, from $13.4 billion to $26.8 billion. Between 1999 to 2002, US multinational corporations increased profits in countries with no taxes or low rates by 68%. At the moment there is some $1 trillion in profits of US corporations overseas. The bosses are squabbling among themselves about this because it would be taxed too high were they to bring it back to the US until they get their political friends in Washington and the White House to give them a huge break on it as they did a few years ago. (No complaints of “big government” here).

As terrified as the capitalists are about protectionist measures, the world is made up of separate nation states each competing for their share of the world market and in lean times they are driven further in that direction kicking and screaming. As we commented in an earlier post, it is quite possible, even likely, that we would have had World War Three by now were it not for the existence of nuclear weapons which does restrain them somewhat.

But for workers we have to recognize that both these measures are capitalist solutions to a capitalist problem, that of  overproduction or what the capitalists generally refer to as overcapacity. Profit comes from the unpaid labor of the working class. Workers are paid less in wages than the value our work produces, so the capitalist has something to sell that they never paid for---as long as there is a market for it. But it doesn’t take rocket science to figure out that if we produce more widgets than wages can buy, they have to find a market somewhere. With the incredible advances in productivity, the productive forces have outgrown the confines of national borders and, as we can see, even the world market has become saturated with players as the capitalists seek new markets for their products.

But at some point the market cannot absorb the excess and production shuts down. We only have to read the big business press to see the capacity utilization in industry. Some industries operate at 60% of capacity. In other words, machinery and material lays idle and workers can’t work simply because there is no profit to be made setting these productive forces in motion. Even with the recent US auto layoffs and plant closings, there too many car factories in the world. In extreme situations, when expansion of markets is blocked, the capitalist retreats behind national borders and protects their “home turf” But capital has no home, it yearns to be free and exploit at will and will try to do so with catastrophic consequences.                                     See what happens if we all do it It weakens solidarity

What does it mean for us to support protectionist measures? It means as US workers, we join with the Ford family, the auto and steel bosses, the owners of the chicken and hog farms and the hedge fund billionaires who terrorize our brothers and sisters each day in their factories and workplaces in their efforts to drive their foreign class colleagues out of business, or at the very least, cut their market share. Naturally, Japanese, German, Indian, Chinese capitalists are telling their workers that they should join with them in their struggle against their US competitors if they want to keep their jobs.
We don't support scabs that cross picket lines, let's look at it this way.

It is the international version of Team Concept. We are saying “Hey, fire the German worker, the Indian worker” It is impossible to build international working class unity this way; and we have to build international working class unity if we want a better life for all and bring the living standards of Chinese workers closer to ours rather than ours closer to theirs which is what is happening.

The capitalists do not like to be forced in to serious warfare. They have strong class-consciousness and they are very aware of the dangers that trade wars can lead to. They would rather divvy up the spoils and all be happy. But we are all forced to make choices that are not necessarily within circumstances of our own choosing; in fact that is the normal situation when we make choices. Capitalism like all economic systems before it, has laws, and capitalists are driven to destroy their competitors for fear of extinction.

Jack Henning, the former head of the California Labor Federation once said that we must have global Unionism to fight against global capitalism. He was quite an eloquent orator and did next to nothing to make that happen but he was right regardless. Supporting protectionism won’t help it either and it won’t help American workers. Workers must have international solidarity in economic organizations as well as political ones.

The official international Union structures and leaders, like Trumka and the AFL-CIO while paying lip service to international solidarity actually hinder it with their nationalist stance and capitalist world-view. The AFL-CIO has historically worked with the CIO to restrict the development of genuinely free and militant trade Unionism abroad that threatened US capitalism's interests.

But, as we are forced to make choices within circumstances not of our choosing, and if those choices are detrimental to the interests of the international workers’ movement, it becomes pretty obvious we have to change the circumstances. It can then become possible to build a global society where production of our needs is discussed within a framework of needs and cooperation rather than profit and competition.

Don’t buy their argument that this is not possible. Not only is it possible---it’s the only solution there is.