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What’s The Problem With 'Free Trade'


What’s The Problem With 'Free Trade'

Dave Johnson

Our country’s “free trade” agreements have followed a framework of trading away our democracy and middle-class prosperity in exchange for letting the biggest corporations dominate.


Economics (the dismal science) is an incompetent master.


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…and only the blind can win the Nobel prize.


By turning the problem of power and its abuses into some alleged reversal of the citizenry’s objectives, Mr. Johnson leaves out the true causes for the rush to “free trade.”

“We stopped “protecting” American jobs, and allowed companies to freely lay off workers and close factories here and we have seen what has happened since.”

Not we–rather, special interests working the puppet strings of so-called representatives of The People!

Here is a more nuanced version of what led to this deleterious outcome:

A. The l980s was the onset of a new corporate gold rush. Led by Reagan’s anti-govt. rhetoric in the U.S. and its echoes across the Atlantic in the form of Margaret Thatcher’s–“There is no society!” This shift made the corporate agenda possible… by gradual increments.

B. Pete Peterson, Koch Brothers, and other billionaires funding think tanks, specific curriculum objectives inside academe, and the media outlets that would turn THEIR pro “free trade” narrative into “the sensible proposition” and most advantageous theoretical route for American interests to travel.

C.Clinton triangulating to effectively morph typically pro-business Republican stances into the “fiber” of the Democratic party. The result: Deregulation of media, NAFTA (as “free” trade), deregulation of banking (taking down the Glass Steagall Wall that separated investment banks from Wall St. speculation) and “ending welfare as we know it.”

D. Major funding of right wing radio shock jocks who pushed an anti-govt. narrative. The defanging of govt and its would-be regulatory agencies unleashed the corporate takeover of many formerly govt. run entities. It also allowed for vulture capitalists to engender “hostile takeovers” and other strangleholds on small business operations.

E. Results of the Piketty Study–that since the crash of 2008, almost all wealth has gone to the top of the financial pyramid.

F. Results of the Page and Gilens Study: that when it comes to U.S. policy–foreign and domestic–public majority opinions almost NEVER factor into the outcome or net calculus

G. Results of “Citizens United” enabling the wealthy to purchase politicians (and through them, specific policy incentives).

Once again, the bitter fruit of “free trade” was NOT something the public supported.

Did the public support the bankers’ bailout?

The chasm between public wishes and actual policy has seldom been wider.

Stop taking what has been done by elites both overtly and covertly and placing the onus on The People!

IF this was a functioning Democracy with an honest press; and if the courts served justice not the corporations; and if vote counts and outcomes were fair and honest… the case for the public’s consent MIGHT be made.

However, since these criteria are not met… cease and desist from this false narrative, damn it!

And YES!!! to this:

“It is time for Washington elites to scrap our current “free trade” negotiating model that allowed giant, multinational corporations to dictate our trade policies, and open up the process to all of the stakeholders, including labor, environmental, consumer, human rights and other groups. Then we can begin to negotiate trade policies that lift American workers along with workers across the world, while protecting the environment.”


“Economics” is largely the science of creating models to predict outcomes. The body politic (which in the US is owned by the mega global corporations that Johnson discusses) dictate what economic models are developed, mostly with foregone conclusions. The environment is not considered because the body politic doesn’t want it to be.

As long as Johnson, and just about every other pundit and media outlet keep discussing NAFTA, TPP, etc. within the context of “free trade”, Obama and his corporate cronies will have the upper hand. Most trade barriers were broken down prior to NAFTA (1994), resulting in only 5 of the 30 TPP chapters addressing trade rules, while 25 chapters transfer judicial authority from governments to corporations. Although “trade barriers” play well in the rust belt, they are a red herring in the TPP discussion, and won’t provide the leverage needed to stop TPP, TTIP, TISA.


The “Washington Model” for free trade is based on antiquated economics that ignored externalization of costs. Especially in developing countries, costs are dumped on workers and the environment. Building codes, labor laws, unemployment insurance, Occupational and health safety regulations, Environmental regulations, Social Security, Medicare, etc. are non-existent or not enforced. In a “Fair Trade” model, import duties would be imposed to adjust for these missing costs.


The problem with free trade is that it is neither free nor trade. It is a vehicle designed to allow corporations to make a quick profit by moving jobs offshore to locations with lower labor costs. This is accomplished by not charging the tariffs due on foreign made goods when these are imported into the U.S.

Free trade is a form of corporate welfare.


Johnson telling us that NAFTA enabled “large, efficient American agriculture companies to sell corn and other crops into Mexico for low prices” is misleading when you consider that those American companies sold “corn and other crops into Mexico for low prices” only as long as it took to drive the Mexican farmers out of business, This strategy is called DUMPING, whereby a large company or government sells product at cost or below cost until the competition folds, at which point the “low prices” disappear. No “efficiency” is required to apply this strategy, just the enabling legislation and an ability to sell without profit for a short period of time.


As Mexican farmers are forced out of business, the pressure to immigrate to the USA increases. That in turns puts downward pressure on American wages, as undocumented migrant workers are hired instead of unemployed Americans who cannot afford to live on starvation wages.