A new type of international trade is possible, one that is fair and just for all involved, as long as there is a critical stance toward corporations.
Humans are definitively living in a global market. The global scope of neoliberal capitalism is an expansion of not only the body but the spirit of capitalism. The body of capitalism can be defined as the infrastructure needed for a capitalist system such as roads, factories, and technology. The spirit of capitalism is the subsumption of society under the requirements of a capitalist market where all aspects of the social is commodified. Trade in this global market is therefore contained by the neoliberal capitalist system. But the old issues about trade with multiple nations, issues that have been prevalent for the United States since the 1800’s, still emerge. This emergence is due to the fact that those who participate in the global economy, both workers and owners, have remained the same for over a century. As humans, they have basic needs that are constant and they are in positions of power or subservience that has not actually changed during this period of time.
One must begin with a primary explanation of tariff and trade. The tariff, as it was implemented within the system of nation-states, dealt with imports and exports between countries. There was the common understanding that factories, as the body of capitalism, were located in the individual nations of origin. Trade was seen as the only element of capitalism at that time that went beyond borders. The import of goods was charged with a tariff in order to make them more expensive than domestic products. There would be no competition across borders by businesses to lower domestic prices. No competition implied a need to raise wages in the domestic economy to match high prices. But domestic businesses would use the trade advantage to ignore increases in wages or labor rights. What at first appeared as a protected domestic market where the quality of life could rise for workers could easily be the space needed for business monopolies to grow. On the other hand, in regards to exports, there would be a surplus of domestic products that needed to be sold outside of the country. While a tariff existed, other nations would trade with each other to circumvent the added cost of a tariff in one country. These other nations would create their own tariffs in response to the tariff protection of the first economy. The domestic conditions would therefore exist in all of the nations where the businesses in each nation would have an advantage often at the expense of the labor and consumer population. With a tariff system, what one sees is a disconnection between wages, price, and profit. An imposed tariff would benefit domestic businesses, and those benefits would not spread to the society overall. However, in a global context with no tariff and supposed free trade, the competition between businesses would result in decreased wages alongside decreased prices in order to maintain a high profit. What is ignored is the understanding that labor cost and production cost are the minimum setting for prices. Profit is the subsequent extraction from price for the owners. The externalization of costs throughout society by large businesses is another way to have an increase in profit. The corporate model, a structure that has been able to find some positive aspect during times of tariff or free trade, has excluded labor from the conditions of ownership. Labor, as a part of the cost of goods, is also the main way many humans have been able to survive economically. But the treatment of labor as just another production cost has ignored human needs that must continually be met regardless of the economic system in place. In other words, the tariff or free trade issue has become outmoded as a way to improve the situation for workers.
There is now a different stage of trade within the phenomenon of globalization. International capital, and the body of capitalism that follows it, is the circulation of investment toward areas of lowest cost across the planet. Borders in this sense are ignored due to the integration of various nations in free trade agreements where a tariff is unheard of. Within each of the participating countries, government regulation facilitates capital expansion and business hierarchy. This capital expansion redefines every aspect of life as commodities. This process is the spirit of capitalism that grows alongside the physical body of capitalism. In regards to international labor, it is treated as a collective resource for multinational corporations. The internal business hierarchy results in labor separated from the rights of ownership. Without any claim to at least some kind of partial ownership, capital expands where labor costs are minimized. This in turn exacerbates the undemocratic nature of the corporate hierarchy which conflicts with the democratic process that might exist in various participating countries. A centralized government, whether democratic or not, will support a centralized economy that takes shape as the corporation. In fact, as the rules of free trade in globalization are now set, the multinational corporation is the only viable entity with enough resources and power to act on the global stage.
The best alternative to the corporate actor in global trade would be something called a federated combine. A federated combine would be an international economic actor, with requisite resources and abilities, that is specifically not a corporation. The federated combine would be cooperatives linked together in such a democratic way as to keep the cooperative commitment to the local community while still having the organizational resources to exist internationally. Cooperative businesses are important because of their democratic internal structure. These cooperatives engage in an equal sharing of profits with some percentage of those profits allocated toward benefits that all members have access to. In other words, a cooperative is the best point of intersection of labor and capital that allows a just empowerment for all involved. The cooperative form is embedded in the community, and there is the factor of municipal ownership to consider. The community is the limit and ground of any economic activity. Residents can be shareholders and stakeholders through various roles of worker, owner, consumer, taxpayer, and voter. The community is the field of investment for cooperative interaction and existence. Anything that benefits the cooperative business must also benefit the community due to the various close connections they share. The community is the background that allows the cooperative to act successfully and express itself completely. This interaction is the building block for a limited syndicalism where cooperatives can act on the global level. There would be not only connections on a regional basis between cooperatives, but democratic partnerships in regards to business infrastructure between businesses. Cooperatives could trade with each other as well as build the necessary structures that would help them engage in trade from a long distance. The federated combine would be a functioning network of cooperatives that would make sure that the democratic internal structure and the synergy with communities would not be compromised by the nature of international trade.
The standards of trade must be transformed to a degree as well. On the community level, there can be an iterative price function that would be a method to find the true cost of goods. The iterative price function would be a more formal adaptation of theIteration Facilitation Boards found in Participatory Economics. The community would have the submitting of input from consumers and producers that operate within that community. The average would be calculated from the consumer willingness to pay and the producer willingness to charge. This process would be a direct and visible negotiation of supply and demand. The result would be put into consideration by consumers and producers again, and the process would continue until a price is accepted by both sides. The final result would be an equilibrium where value is shared and debt is decreased. In order for the iterative price function to work, consumers and producers must recognize their common interests within the community. Therefore, there would need to be the repeal of corporate personhood alongside this process. The removal of corporate personhood would be the prevention of large corporations and the externalized costs that accompany them. The shifting of subsidies from corporations to cooperatives would occur afterward, and there would be a more accurate information processing network at the local level. In other words, the so-called free market would still exist, except that it would be greatly decentralized and broken up into communities so that its best properties would be amplified. The localized free market, perhaps more accurately defined as an agora, would not be in conflict with workers having the ability to own the means of production through the cooperative form.
On the level between nations, there would be the need to return to bilateral trade agreements. These agreements would be more conducive to stipulations for human rights and sustainability for all participants. This would in turn be a disruption of the influence of corporations on the global economic sphere which has been an exclusive monopoly of economic power due to accumulated resources and political influence. International trade without multinational corporations as the main economic actor can allow governments and citizens the chance for a clear understanding of causality in trade. This clear understanding can result in the formation of a new type ofmicroeconomic international trade pact. As sustainable person-to-person trade arrangements that can perpetuate fair trade, it would allow direct trade connections between local businesses across borders. The price of a traded good would be the average of the cheapest price in the export country and the highest price in the import country. The price of the resold product within the import country would subsequently be between the international price and the highest domestic price. The profit that would be gained would be divided equally between the individual exporter and the individual importer. This standardization of direct trade would allow local businesses to directly engage in international trade according to principles of fair trade while also being economically empowered as global economic actors.
The final goal of a fair trade system that is also global has many facets. There must be a balance of trade that is not mere protectionism. One third of trade as domestic production and domestic consumption, one third as domestic production and foreign consumption, and one third as foreign production and domestic consumption. The last two thirds would of course be a reciprocal relationship between countries. Once this balance of trade was established there could be a movement toward not only local implementation of a living wage and worker’s rights, but a universal living wage and universal right to collective bargaining. The basic standards of wages and worker’s rights would insure that the movement of capital and resources would hit a natural limit where quality of life would not be threatened. In this economic environment, international fair trade would be the direct connections between communities and small businesses. Fair trade would have no corporate mediation, but rather democratic structures that would facilitate a local business in one country to engage directly with a community in another country. In many respects, fair trade in this sense would be a complete transformation of global trade to such a degree that the earlier systems of tariffs would be unfathomable and quite unnecessary. The goal of fair trade would allow a global arena that would directly and succinctly insure that communities remained as the foundation of the economic sphere.