Saturday 17th April 2021
Because of “booster”
Typical retro idea of the neoliberals
A column by Katja Kipping
The pattern is well known: there is a crisis – and what are the liberals doing? They call for free trade. The real question, however, is how we can initiate a sustainable economy that meets the challenges of the time.
Free trade, as neoliberals imagine it, is a retro idea that no longer fits in with the times. His record is bad. One of the best-known free trade theorists, David Ricardo, linked free trade with the hope that “naturally every country will devote its capital and labor to uses that are most beneficial for everyone”. Ricardo lived in the time of colonialism: Strong economies exploited their colonies and shipped their resources across the oceans. The cost advantages that Ricardo was hoping for only came about for the colonial powers.
The world was divided into a few rich industrial nations and the global south, which was exploited. They wanted to put an end to this in the 1970s. The United Nations set up its own commission under the leadership of the then Federal Chancellor Willy Brandt, which worked out proposals to make the world economy fairer. The General Assembly passed a resolution on a “New Economic International Order”: The new order should ensure balance and sustainability worldwide.
But then the neoliberals pushed through the opposite: in the World Trade Organization (WTO) and in the European internal market, a neoliberal free trade agenda was anchored in the 1990s. The idea was: as much as possible dismantling of tariffs and regulatory options, equal treatment of all investors, regardless of whether they destroy the environment or trample on social protection standards. Liberals still cling to this idea to this day. Konstantin Kuhle also argued in this column a week ago. He sees free trade as a “booster against the corona blues”.
We see the consequences of this thinking today: deeper social inequality, the inability to respond to climate change as well as the abandonment of democratic power and a loss of confidence in globalization. This creates a breeding ground that nationalists in particular have known how to use for themselves in recent years.
In the meantime, this insight has even reached the Council of Economic Wise Men in our country. Council member Achim Truger, for example, advocates liberating the political economy of trade policy from its ideological one-sidedness and focusing more on what is produced under what conditions, by whom and where, and what economic and social effects this has.
The cause of flight is free trade and ecological costs
He is right, because the retro ideas of the liberals create reasons for people to flee every day. The tomato farmer from Ghana can hardly sell his tomatoes because the canned tomatoes from Europe, which are cheaply produced with EU subsidies and highly industrialized agriculture, are also cheaper in his region. Economic hardship is forcing many African farmers to risk fleeing to Europe.
Certainly, there are natural resources that can only be found in a few places. There are agricultural products such as coffee that can only thrive under certain conditions and that must be traded worldwide. But beyond that, the amount of goods that are transported around the globe every day has reached a level that also has devastating ecological consequences. After all, a quarter of all harmful emissions are caused by the global flow of goods. In this respect, we can state that today not even the people in western countries benefit from free trade, because the ecological follow-up costs alone are too high for all of us. So free trade is not a booster. Rather, he’s a downer, an approach that pulls everyone down.
Strengthening the engines of change
What is needed now is not a retro free trade agenda, but increased international cooperation for sustainable business. For reasons of climate protection alone, the development model cannot consist of transporting goods around the globe under conditions of global dumping competition that could also be produced regionally. On the contrary, we need a strengthening of the regional economic cycles as well as binding social and ecological rules. This is also in the interests of those companies that are already preparing for the challenges of the future. These engines of necessary economic change must be protected and strengthened.
We should start with the European internal market and make a new attempt. Instead of privatization and competition, we have to realign the European market with an ambitious Green New Deal. In doing so, we should rely on binding standards instead of an outdated free trade idea whose “freedom” consists in not adhering to such standards. We should also look for international partners for a sustainable development path. Be it the USA under Joe Biden, who is currently in the process of renewing the American economy with a large investment package, or developing and emerging countries that want to follow this socio-ecological development path with the EU.
Today freedom means that we maintain the ability to shape democracy and a good life, even in the face of the upheavals of climate change. In order to achieve this, we no longer need free trade, but rather trade that serves freedom and a turn towards sustainable economic activity.
Katja Kipping is the social policy spokeswoman for the left parliamentary group in the German Bundestag and a former chairwoman of her party. In weekly alternation with Konstantin Kuhle she writes the column “Kipping oder Kuhle” at ntv.de.
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