This spring, President Obama and Republican leaders in Congress want to use an outdated process used to pass the North American Free Trade Agreement more than 20 years ago — a rule called “fast track” — to force through trade deals without a real debate or any amendments. And fast track would be used to speed passage of the giant Trans-Pacific Partnership, or TPP, trade deal.
If you haven’t heard much about the TPP, that’s part of the problem. It would be the largest trade deal in history — involving countries stretching from Chile to Japan, representing 792 million people and about 40% of the world economy.
Yet it’s been devised in secret, with a disproportionate amount of advice coming from corporations and Wall Street. This secrecy is the norm since NAFTA. Most of the details that are known to the public have come through WikiLeaks. Instead, we’d like to see the negotiating texts made public, so there can be an honest and open debate.
A fast-tracked TPP would lock in a rigged set of economic rules, lasting potentially forever, before most Americans — let alone some members of Congress — have had a chance to understand it thoroughly. If the administration gets fast-track authority, it could hand a completed deal to Congress, which must then vote yes or no, without amendments and little debate, within 90 days.
It would be a grave mistake for Congress to authorize fast-tracking this giant trade deal.
We were both involved in the NAFTA debate — one of us as the leader of a major union, the other as secretary of Labor. No one knew how the agreement would turn out or the full ramifications of approving a trade deal without a full debate. We now know that NAFTA has cost the U.S. economy hundreds of thousands of jobs and is one reason why America’s workers haven’t gotten a real raise in decades. It and agreements like it have also contributed to the huge U.S. trade deficits. We now import about $500 billion more in goods and services each year than we export.
Following NAFTA with the Trans-Pacific Partnership is like turning a bad television show into a terrible movie. It will be on a bigger screen and cost a lot more money. A few might walk away happy and rich, but it won’t be the audience.
This isn’t a contest between free trade and protectionism.
In the first three decades after World War II, “free trade” meant other countries opening their borders to American-made products, and the U.S. opening its borders to their goods. The United States chose free trade, and it worked. Living standards rose here and abroad. Jobs were created to take the place of jobs that were lost. Worldwide demand for products made by American workers grew and helped push up U.S. wages.
But American corporations have gone global, and in recent decades the payoffs from trade agreements have mainly gone to those at the top. Now they make many of their products overseas and ship them back to the United States. Recent trade agreements have protected their intellectual property abroad — patents, trademarks and copyrights — along with their overseas factories, equipment and financial assets.
But those deals haven’t protected the incomes of most Americans, whose jobs have been outsourced abroad and whose wages have gone nowhere.
As for the problems with the TPP? What’s been leaked about its proposals reveals, for example, that the pharmaceutical industry would get stronger patent protections, delaying cheaper generic versions of drugs.
The deal also gives global corporations an international tribunal of private attorneys, outside any nation’s legal system, that can order compensation for lost expected profits resulting from a nation’s regulations, including our own. These extraordinary rights for corporations put governments on the defensive over legitimate public health or environmental rules.
The deal would encourage and reward American corporations for outsourcing even more jobs abroad. And it does nothing to prevent other nations from manipulating their currencies to boost their exports and undermine the competitiveness of U.S.-made products.
The administration calls the TPP a key part of its strategy to make U.S. engagement in the Asia-Pacific region a priority. It thinks the TPP will help contain China’s power and influence. But the trade pact is likely to make giant U.S. global corporations even more powerful and influential. White House strategists believe such corporations are accountable to the U.S. government. Wrong. At most, they’re answerable to their worldwide shareholders.
At a time when corporate profits are at record highs and the real median wage is lower than it’s been in four decades, most Americans need protection — not from international trade but from the political power of giant global corporations and Wall Street.
We need trade agreements that address unfair trade practices such as currency manipulation, foreign subsidies to exports, corporate power grabs and systematic and egregious violation of internationally recognized labor rights.
Congress should debate whether the Trans-Pacific Partnership promotes the shared values of democracy and prosperity that the United States stands for, as well as sets high standards for countries such as China to follow. Or whether it merely speeds the global race to the bottom.
If it’s the latter, Congress should be able to change it, not act as a rubber stamp on agreements negotiated in secret. It can start by not fast-tracking the Trans-Pacific Partnership.
http://www.latimes.com/opinion/op-ed/la-oe-reich-trumka-tpp-trade-fast-track-20150303-story.html
Robert Reich and AFL-CIO union leader Richard Trumka see the world with one-eye blindfolded. Their view is limited to just one-factor of production––labor––and they appear to be oblivious to the other, more productive factor––non-human capital assets (land, structures, tools, machines of every level of sophistication including human-intelligent and robotic variations, super-automation processes, computerized operations, etc. Both factors earn income––wages, to the labor worker who toils and contributes manual, intellectual, creative and entrepreneurial work, and dividends and capital gains, to the OWNERS of physical capital assets whether owned by people individually or in association with others. Fundamentally, economic value is created through human and non-human contributions.
The role of physical productive capital is to do ever more of the work, which produces wealth and thus income to those who own productive capital assets. Full employment is not an objective of businesses. Companies strive to keep labor input and other costs at a minimum in order to maximize profits for the owners. They strive to minimize marginal costs, the cost of producing an additional unit of a good, product or service once a business has its fixed costs in place, in order to stay competitive with other companies racing to stay competitive through technological innovation. Reducing marginal costs enables businesses to increase profits, offer goods, products and services at a lower price (which people as consumers seek), or both. Increasingly, new technologies are enabling companies to achieve near-zero cost growth without having to hire people. Thus, private sector job creation in numbers that match the pool of people willing and able to work is constantly being eroded by physical productive capital’s ever increasing role.
The result is that the price of products and services are extremely competitive as consumers will always seek the lowest cost/quality/performance alternative, and thus for-profit companies are constantly competing with each other (on a local, national and global scale) for attracting “customers with money” to purchase their products or services.
Over the past century there has been an ever-accelerating shift to productive capital––which reflects tectonic shifts in the technologies of production. The mixture of labor worker input and capital worker input has been rapidly changing at an exponential rate of increase for over two hundred years.
People invent “tools” to reduce toil, enable otherwise impossible production, create new highly automated industries, and significantly change the way in which products and services are produced from labor intensive to capital intensive––the core function of technological invention and innovation. Most changes in the productive capacity of the world since the beginning of the Industrial Revolution can be attributed to technological improvements in our capital assets, and a relatively diminishing proportion to human labor. Capital does not “enhance” labor productivity (labor’s ability to produce economic goods). In fact, the opposite is true. It makes many forms of labor unnecessary.
What is so disturbing is that it appears that neither Reich or Trumka can see that productive capital is increasingly the source of the world’s economic growth and, therefore, should become the source of added property ownership incomes for all.
Now, the Trans Pacific Partnership is certain to benefit an already wealthy ownership class by further enabling global corporations to amass even more economic inequality-causing concentrated capital asset ownership. As such, the any consideration should be halted.
But not surprisingly, it appears that the agreement will promote the interests of giant, multinational corporations over the interests of labor, environmental, consumer, human rights, or other stakeholders in democracy, AND FURTHER CONCENTRATE OWNERSHIP OF THE NON-HUMAN PRODUCTIVE CAPITAL MEANS OF PRODUCTION!
The REAL STORY is a story about the collusion among a globally wealthy ownership class to further concentrate private sector ownership in ALL FUTURE wealth-creating, income-generating productive capital asset creation on a global scale. A sorta FREE TRADE ON STEROIDS!
This is a battle between two property system choices: economies such as China in which the productive capital assets are primarily state-owned or state-sponsored communism or socialism and economies such as the United States, Great Britain, Canada, Mexico, Australia, Japan, etc in which the productive capital assets are primarily privately owned, although also largely concentrated among less than 10 percent of the population so as to require massive earnings redistribution, and thus welfare support open and disguised.
But there is another alternative, a balanced Just Third Way (http://www.cesj.org/thirdway/thirdway-intro.htm), based on an understanding of binary economics, by which over time the economy’s productive capital assets will become almost entirely individually owned by 100 percent of the citizens. Such an economy would produce efficiencies of production fully using ever-advancing technologies of production that will fuel a greater growth of the world economies by eliminating the problematic condition of the exponential disassociation of production and consumption through ordinary citizens gaining access to FUTURE productive capital ownership to improve their economic well-being, without taking anything away from those who already own.
It is critical that private property ownership in productive capital be extended to ALL people because of the increasing power of productive capital to produce more and more of the wealth or products and services needed and wanted by society. Because productive capital––the non-human factor of production––is an independent productive power separate from human labor power, and represents an increasing role in creating wealth, the question to be addressed is: Who has the right to acquire ownership of productive capital?
While people have private property rights in their own labor, due to tectonic shifts in the technologies of production it is not enough for individual survival if people cannot get jobs, or if jobs, in reality are no longer doing a substantial part of the wealth creation. As exponential technology shifts destroy jobs and devalue the worth of labor, people need not only private property rights in their own labor, but also private property rights in the productive capital assets that are doing ever more of the work.
We as a nation, and other nations, can no longer limit people to personal rights while restricting ownership acquisition rights in wealth-creating, income-producing productive capital assets to those already well-capitalized. To be a just society, all individuals MUST have effective property rights not only in their labor and personal use possessions but also in FUTURE productive capital asset creation. Because of this imbalance, the result has been that the consumer populous is not able to get the money to buy the products and services produced increasingly by the non-human factor––physical productive capital––as a result of substituting machines for people. And yet you can’t have mass production without mass human consumption.
Broadened, private sector individual ownership of FUTURE productive capital assets as a societal objective is the ONLY individual private property-rights approach that will provide solutions to income and wealth ownership inequality, unemployment, underemployment and anemic GDP growth––all of which is rooted in the tectonic shift in the technologies of production and its concentrated ownership. This reality, as a practical matter, is destroying jobs and devaluing the worth of labor, widening the income gap between the rich and the struggling middle class and poor (each resentful and suspicious of the other), and resulting in our inability to achieve double-digit GDP growth in the United States and other countries.
