Global Free Trade

Global Free Trade, the way of the future or a passing phenomenon? Barry Green

Isn’t it strange?  The same people who laugh at gypsy fortune tellers take economists seriously.                                                                                                             Cincinnati Enquirer

Global Free Trade, the way of the future or a passing phenomenon, only time will tell. It seems to me that global free trade, as it exists today, is a product of cheap oil, virtual slave labour and environmental exploitation  in developing countries. I believe that it is neither economically nor environmentally sustainable.  The current "success" of global free trade could well bring about its downfall as rapid economic development is pushing demand for oil and hence prices to a level at which transport costs will make trade over long distances uneconomic.

Free trade in unprocessed agricultural products might make sense to university qualified economic rationalists (economic fundamentalists) in highly paid government and big business jobs in the city, but they make no sense to me, a small scale organic farmer in regional WA. Horticultural industry associations are wasting resources in fighting off the importation of diseased foreign produce that has the potential to devastate our capacity to produce quality food, for the Australian consumer. Once a new disease arrives and becomes established, (as happens frequently) the only people to benefit are the shareholders of the foreign multinational companies that produce the sprays to control these new diseases.

All Australians should be concerned that under the free trade agenda, Australia is losing its ability to feed its population while concentrating on a Quarry Australia mentality. Farmers are getting older and young people are not going into farming because it doesn't pay. We run the risk of becoming the Twenty First century Nauru. If we keep going the way we are, in 30 years time there could be 30 million of us standing around a bloody great hole saying now what?  Sure we are unlikely to run out of iron ore but are unlikely to have the energy to extract it. Can anyone explain why our government is allowing foreign companies to dig up Australia faster than we have the population to do it? We are bringing people into the country to meet the demands of the boom. What are all these people going to do at the end of the boom? I would have thought the more economically rational thing would be to leave some minerals in the ground for our kids to dig up. The minerals are sure to be more valuable then that they are now anyway.  Despite the boom our national debt is higher than ever. Could it be that the Paul Keating / John Howard "modern economy" is not all it's cracked up to be? The price we pay for allowing lawyers, suburban accountants and other miscellaneous spin doctors to run the country. Perhaps we need more farmers, engineers, scientists and social workers involved, people who work in a world governed by the laws of nature and human behaviour rather than by man made laws.

The economic fundamentalists have a fanatical belief in the ability of "The Market" to come up with a replacement for oil as an energy source to drive trade. Obviously renewable energy sources will evolve for stationary purposes, but is is hard to imagine such a compact energy source as oil for transport, especially aviation. What will become of international tourism? As oil supplies dry up, much of Australia's grain production is likely to be diverted into bio-diesel so will not be available for export. 

The Western economic model relies on continually increasing GDP to sustain itself. GDP has become a function of oil consumption. To increase GDP by x% requires an (x+y)% increase in oil consumption. We have used 50% of world oil reserves in the last 50 years, I wouldn't have thought it would take a Rhodes Scholar to figure that this can't continue. That is, even if you ignore the environmental damage being done by consuming all this oil  and coal and releasing to our atmosphere in little over 100 hundred years,  carbon that has been tied up for billions of years. We are not going to suddenly run our of oil but as demand exceeds supply the price will become unstable. The skeptics will say that we have heard this before, to me that is like the bloke who jumped off the 30 story building, saying as he passed the tenth floor, I don't know what all the fuss is about, it doesn't hurt a bit! The implications of all this to our food supply are discussed by Paul Roberts in his interesting and informed books, The End of Food and The End of Oil.

Change is starting to happen driven by thinking people who see that there is more to life than money. This is happening through things like Farmers Markets , Organic Farming, Permaculture the Slow Food movement and groups like Fight Back Australia, all part of a process of people taking back control of their food supply and economic destiny, that in recent years has been hijacked in the western world by multinational corporations. The funny thing is that these activities are becoming more profitable than the money driven big business approach.

The Global Economy  is like the Titanic heading for an iceberg of global warming, energy shortage, toxic food, over population and pollution.  The leaders of the developed world are all in the ward room congratulation themselves on the speed of the ship and are all getting drunk on their success. Until recently, they hadn't seen the iceberg, but things have started to change and there is renewed hope that by the people of the world working together and individually taking responsibility for their actions, a disaster can be avoided. Australian of the Year Tim Flannery is helping raise awareness with his book the The Weather Makers.  Like the Titanic, some believe the the global economy is to big to sink, they are wrong.  The ship can't be stopped but if enough of us take action we might be able to change the course enough to miss the first iceberg. 

If our political parties have lost the plot, it is up to all of us to point them in the right direction.

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The above was written between 2006 and 2008. It is now March 2009, the global economy is in a mess brought about by, among other things, the greed of the banks. We have the bizarre situation of governments baling out big businesses around the world. The great Capitalist countries are taking on the characteristics of the Communist economic model with businesses now owned by the government. Unfortunately the small businesses that drive these economies are being allowed to go to the wall. Six months ago our economic experts were saying the the mining boom in WA had 5 years to run, now the state is in debt but we are still turning to these people to provide the solution. This is a form of communal madness, like a drug addict looking for another fix to solve their problem. The Citizens Electoral Council of Australia which promotes the beliefs of Lyndon LaRouche has an interesting explanation for the current situation. Providing this link is in no way an endorsement of some of the more extreme views of this organisation which seems to believe that it is possible for future human survival on this planet even if we totally destroy the natural environment.

May 2010. Its on again. WA is back into a mining boom, sucking people in from around the world to dig holes and send iron ore to an overheated Chinese economy. Has anyone in government done a long term cost benefit analysis to the people of Australia of this rapid industrialisation?  There seems to be a new McCarthyism directed at anyone who questions the rate of this industrialisation, even though it is being driven by the "evil communists" that the last McCarthyism was directed against! I'm not generally a supporter of increased tax, but if the so called mining super tax slows mining expansion to a more moderate level we could well be better of. The argument that the mining super tax affects us all because superannuation funds are major investors in mining companies, does raise the question, has superannuation turned Australian Capitalism into a virtual communist economic model? At last the question of what population Australia can sustain is on the agenda with Dick Smith joining others to force the government to take the question seriously. 

Barry Green, Managing Director, Western Tourist Radio.