“Free markets”, “free trade” and the emasculation of democratic control

 “I just think that a lot of modern corporate capitalists — the managerial class basically — has no loyalty to any country anymore, or any particular values other than the bottom line.” (Pat Buchanan quoted by Daniel Brandt in his article “Class Warfare” in issue 13 of Namebase Newsline -http//www.namebase.org/news13.html).

Buchanan is grasping a demon which he only dimly apprehends. What is happening is vastly more significant. We are presently witnessing the creation of an international class of plutocrats who care for nothing but their own class and self-interest.  They have the potential to form a true international aristocracy. If that happens, the imperfect democratic control the masses have been able to exert over their elites in the past century will end. The prime tool for the creation of such an international aristocracy is “free trade”.

There are parts of Western elites which are more or less reluctant to embrace “free markets” and “free trade”, but the general economic trend is clear: the internationalist, globalist creed is the dominant philosophy when it comes to trade and increasingly the idea of “free markets” in the domestic sphere is being accepted in practice if not in overt political policy.

Why have these elites moved from their previous socially oriented nationalism to internationalism?  The answer to this question reveals the nature  both of elites generally and the particular philosophy they currently support.

In most circumstances throughout history the wishes of the mass of a population have been of little or no account in any formal  sense. The masses made their presence felt through rioting and social disturbance or as pawns in the service of elite members who wished to rebel. An elite took note only when they were frightened enough – the creation of a form of national public assistance by the Poor Law of 1601 is a classic example of such behaviour.

Eventually, representative government evolved to the point where the masses began to have a direct say in the political process through the vote. The elite as a group did not welcome this but felt it could not be resisted. It was not democracy to be sure but elective oligarchy, which was buttressed by elite constructed devices  to exclude new entrants into the political process such as first past the post voting, election deposits and a very strong party system. Nonetheless, once the franchise was broadened the masses were able to exercise a large degree of democratic control because politics was still national and a political party had to respond to the electors’ wishes. The elite resented this control over their behaviour as all elites do and looked around for a way to diminish democratic influence. They found the means to do it through internationalism.

In a sovereign country elected politicians cannot readily say this or that cannot be done if it is practical to do whatever it is.  That is a considerable block on elite misbehaviour. So elites decided that the way round this unfortunate fact was to commit to treaties which would remove the opportunity for the electorate to exercise control. The most notable example is the Treaty of Rome and the subsequent treaties which have tied Britain into the EU.

Vast swathes of policy are no longer within the control of the British Parliament because of these treaties. Add in the treaties tying Britain to the UN and the WTO and the commitment of every mainstream British party to them, and democratic control has essentially gone.

 To the anti-democratic  consequences of  Treaty obligations such as those tying  Britain to the UK are added those of more open international markets. “Free trade”   damages democracy by confining economic policy within narrow limits. The present “free trade” agreements mean that no political party can easily stand on a platform of extending  state intervention, whether by nationalisation, trade restrictions such as embargoes or the subsidy of its own industries.  A party which wished to do any of these things could of course propose to withdraw from the treaties, but that would be in practice a very difficult course to follow, especially where the treaty obligations go beyond mere trade such as those involved in membership of the European Union. 

Loss of democratic control is obviously to the disadvantage of the masses. However, it also has implications for competition.  The prevention of the formation of monopolies and cartels can be done at the national level, but it is impossible when companies become supranational. You offend against America’s anti-trust laws?  No problem, you remove your manufacturing abroad to countries which are happy to have you (or at least their clients are) regardless of what arrangements you may have made with competitors or the any monopoly position.

But internationalism is not simply a bureaucratic  elite device to weaken democratic control, it is a sociological event in itself.  An elite thinks of itself as a separate group, a group which may in some circumstances  extend beyond national boundaries and jurisdictions. The medieval aristocracies of Western Europe thought themselves part of a chivalric whole.  When Charles I of England was executed in 1649 the monarchs of Europe were horrified because they thought it would set an example for other royal killings.

The ruling elites in the First World today have a class interest which binds them more closely to one another than to the people they rule. Indeed, there  is arguably a greater sense of international elite solidarity than ever before.  This is because modern communications allow people, goods and ideas to move with an unmatched ease. Because of this the international class can constantly revitalise and  extend their group solidarity.

The advantage to the elites of this culturally based  international solidarity underwritten by many personal elite relationships across national boundaries,  is that it allows them to weaken even further their dependence upon their immediate (native) populations, because not only does a particular national elite have a ready made excuse for not doing something – our treaty obligations will not permit it – but the personal relationships and the growing sense of class solidarity increases the confidence and hence the willingness of the various national elites to act ever more in the international elite class interest. Indeed, the more they are together and the more they act together, the more natural it will seem.

 It is important to understand that elites are not engaged as a group in a conscious conspiracy against the masses. What happens is that the psychological and sociological forces which press upon us all lead the  elite to adopt policies which always lead to their retention of power. It is not difficult to see how this happens.

All human beings have a powerful ability to write a narrative in their heads which will persuade them that they act not from self-serving or disreputable reasons but honourable and socially useful ones.  The consequence of this is that while individual members of an elite will consciously comprehend  the likely effect of their ideology,  the majority will simply accept their ideology at face value. This helps to bolster and stabilise the elite’s position because no elite ideology ever overtly states that the masses will be disadvantaged if the ideology is followed, and in the case of formal democracies, the ideology positively claims to materially better society as a whole. This will emotionally reassure most elite members, who will bolster their acceptance of the ideology through inter-elite conversations – if most or  all those in a group are positive about something,  that is most powerful social reinforcer.

 The best way of judging any political ideology is to ask cui bono? (who benefits?) The obvious answer in the case of “free markets” and “free trade”  are those who believe (with good reason) that they nor their dependants will never be amongst those who will suffer the ill-effects of free trade. These people are and will continue to be overwhelmingly drawn from the middle and upper classes for the same reasons that such classes have always maintained their superiority, namely that such people will have inherited wealth, social connections and  superior opportunities for education which are denied to the majority.

 The new international elite is neither left nor right. Its ideology is simply designed to promote the interests of the elite. It has aspects of right and left, but they are merely the policies which allow the elite to both disguise their true intention and to give a pseudo-moral  camouflage  to their ends.  They speak  of  the internationalist  equivalent of “motherhood and apple pie”  with exhortations to “end world poverty” and fund a  “war on disease worldwide”. If I had to find a term to describe this elite I think I would settle for neo-Fascist because so much of what is proposed is reminiscent of fascism. 

It is also telling that Western businessmen who ostensibly support the idea of the positive effects of competition arising from “free markets” and “free trade”  never want it for themselves. They always happily grab  a state subsidy or an embargo if it is to their advantage. None of the US airlines had any hesitation in grabbing billions of dollars from the Federal government after 911. Large companies  publicly complain of government regulation while secretly welcoming it because they  can bear the cost of it more easily than their smaller competitors. Multinationals shamelessly play one country off against another in their search for massive subsidies and other favours before they deign to operate in a country. 

Countries play the same game, cheating wherever they can. And the more powerful the state the greater the cheating, both in terms of helping particular industries with direct state aid and in the formulation of the treaties governing world trade. Hence, the USA presents itself as the ultimate champion of free enterprise whilst being both now and throughout its history one of the greatest of protectionists and state subsidisers of its industries – that it is  seen widely as an enterprise society is one of the great propaganda triumphs of history. Its behaviour after 911 is symptomatic of the unequal nature of modern “free trade”.

The US not only handed billions to its ailing private airlines, but put up protective tariffs to protect its steel produces. It has been ever thus. The two greatest names of the early Industrial Revolution, Josiah Wedgewood and Matthew Boulton, were  happy to climb on the Enlightenment bandwagon with its beliefs in the universality of Mankind  and advocate lesser tariffs and freer trade – until the proposed freeing threatened their own businesses.  What goes for businessmen goes for the individual worker. Who has ever met someone whose job was threatened by “free trade” speaking in favour of it?

 Abe Lincoln’s  used to put this question to pro-slavers who said slavery was a boon for the slave because they were provided for and were free of normal responsibilities: “What is this good thing that no one wants for himself?”  An equivalent question should be put to the “free traders”. 

The truth is simple: “free markets” and “free trade” are simply part of an elite ideology and like all elite ideologies they serve the purposes of the elite first, second and last. Those not of the elite who espouse it act merely as useful idiots to promote the interests of the elite.

Opposition to globalisation should not be a Left or Right issue.  The socialist and the Conservative should both resist it because it removes the ability of the electorate to control those with power and  the power of their political movements to realise their ends.

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  • Hugh J. Campbell, Jr. CPA  On January 6, 2011 at 3:46 am

    An America Lost in Squanderville

    The United States’ trade gap is the proverbial “leak-in the-dike” with its de-simulative effect on our recovery. In November 2003, Warren Buffett in his Fortune, Squanderville versus Thriftville article recommended that America adopt a balanced trade model. The fact that advice advocating balance and sustainability, from a sage the caliber of Warren Buffett, could be virtually ignored for over seven years is unfathomable. Media coverage that China has kept it currency undervalued is a gross understatement, it has actually been keeping the U.S. dollar over-valued; which adversely affects all our trade with all our trading partners, not just trade with China. Until action is taken on Buffett’s or a similar balanced trade model, by the powers that be, America will continue to squander time, treasure and talent in pursuit of an illusionary recovery.

  • William Gruff  On January 7, 2011 at 12:32 am

    Not one of your better posts Mr Henderson, although, like the proverbial curate’s egg, it was good in parts.

  • Robert Henderson  On January 7, 2011 at 12:13 pm

    Well, William, I am always ready to try to improve a piece but you don’t give me much to go on.

    I can’t see a great deal wrong with the post, although I must confess I put two passages from a longer piece together. Nonetheless, I can’t see that has produced any obvious incongruity of matter or style. What exactly grated with you?

  • efgd  On January 21, 2011 at 8:50 pm

    “The truth is simple: “free markets” and “free trade” are simply part of an elite ideology and like all elite ideologies they serve the purposes of the elite first, second and last. Those not of the elite who espouse it act merely as useful idiots to promote the interests of the elite.

    Opposition to globalisation should not be a Left or Right issue. The socialist and the Conservative should both resist it because it removes the ability of the electorate to control those with power and the power of their political movements to realise their ends.”

    How can one oppose globalisation?

    • Robert Henderson  On January 22, 2011 at 9:40 am

      “How can one oppose globalisation?”

      The answer is probably MacMillan’s classic reply to being asked what was the trickiest thing about politics: “Events, dear boy, events”. As the pernicious effects of globalism worsen politicians everywhere will revert to ever more protectionist measures simply to remain in power. (Elites only have one settled principle: to do whatever is needed to retain their power and privilege). This is already happening in many parts of the world which are supposedly signed up to the globalist regime. Moreover, much of the world has never signed up to globalism.

      What those of us who have always seen through globalism can do is keep putting the message before the public to speed the process up.

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