Mises Daily Articles
Those WTO Protests
With the anniversary of the WTO protest, the protesters once again descended on the city of Seattle. Like a troop of primates, they hooted, threw rocks and bottles of gasoline, even pelleted a police officer's eye out. Those who weren't dragged off, left, knuckles still trailing the pavement, and the debate not much more elevated.
The WTO must, of course, be opposed with vigor, but not for the reasons the protesters trot out. As an organ of the United Nations, the WTO should strike terror in the heart of any true free trader. The organization is the concoction of international statists; it's a powerful bureaucracy concerned with managing trade not freeing it; a central planner whose goal it is to "harmonize" labour, health and environmental laws throughout the world.
Wrote commentator Lew Rockwell before the charter was ratified: "The WTO will convert peaceful trade into policy imperialism. It will allow economic exchange with some countries under approved conditions, and impose a variety of sanctions on others. The conditions will include all the legislation beloved to the U.S. left-liberals..." In short, a mercantilist takeover that bears little resemblance to free trade.
Every nation produces and exports what it can generate most efficiently. It imports the products it cannot generate efficiently. The same division of labour and barter occurs between individuals. The top-notch lawyer may be perfectly capable of repairing his car, but his time is more productively spent in counsel. It pays him to hire a mechanic. It is precisely this inequality of human and natural resources that impels nations--rich and poor, developed and undeveloped--to co-operate and trade to mutual advantage.
All of which trade barriers obstruct.
Poor nations must be able to use their labour leverage, and they should have free entry into our markets. This means abolishing malevolent quotas and anti-dumping regulations, and allowing developing--and all other--nations to flood our markets, or sell to us below cost to their heart's content.
To duck prosecution under our protectionist laws, a foreign trader must raise his prices. And from who is this duty confiscated? From the consumer, naturally. "Trade with this foreign price-cutter," governments effectively tell the consumer, "and we'll seize an extra $10 from you." Is this not naked theft that our execrable anti-free traders are cheering? Tell me this isn't a rank violation of the right to contract freely.
This protectionism, the kind the protesting monolith advocates, is to the detriment of third world nations. It also forces consumers to subsidize less efficient local industries, making them the poorer for it. To keep inefficient industries in the lap of luxury, hundreds of others are doomed to shrink or go under.
While they loitered about the streets, our cherubs chomped on their dirt-cheap tofu and big Mac burgers. The cheap transportation that got them there, and the technology that disseminates their sub-intelligent messages, were once luxuries reserved for few. Thanks to mass production and economic freedom these are now staples for the masses. Our humanitarians suffer no shortages, yet they would prevent third world nations from aspiring to this plenty.
And so they vilify Kathy Lee Gifford or Nike for having created jobs where few likely existed.
But let us deconstruct a little: Nike is either offering higher, the same or lower wages than the wages workers were earning before its arrival. This franchise would find it hard to attract workers if the case was that it was offering less, or the same as other companies. It must be then that Nike, and Starbucks are benefactors that offer the kind of wage unavailable prior to their arrival.
Moreover, economies where child labor is a sad fact are best compared to medieval England or Europe. Child labor is not the problem in Chad or Bhutan, poverty is. Child labor is merely a solution to this problem. Had a government in England of the 1500s outlawed child labor, the death of millions of children would have followed. Children, very plainly, must work to survive in these countries.
Wages in the US and Canada are high not because of any intrinsic quality of the workers, but because labor is highly productive, which is due to the degree of capital invested in it. The Canadian and American work force is infinitely more productive than that of developing countries, hence it is more expensive. The entrepreneur who is forced to pay third world workers in excess of their productivity will simply go bankrupt.
Alas, these realities are not for our street fighting dilettantes to fathom or consider. These protesters are, after all, paternalistic westerners who need to preserve their Hollywood image of the authentic--if starving--foreigner.