Friday, April 19, 2002

Anyone remember the term "golden straitjacket"? I'm not sure who coined it, but it gets thrown around by globalization fetishists like Tom Friedman.

The basic idea is that international organizations such as the WTO, IMF, etc... establish a framework of rules and punishments that are designed to punish countries that do counterproductive things such as have trade wars, subsidize preferred failing industries, run excessive budget deficits, pass pesky environmental legislation, etc... etc... To be in the club, you have to behave, and if you misbehave you get punished or booted out. Being booted out will deny you access to world capital markets, preferential trade agreements, etc.

I'm all for free trade. I'd be quite happy to abolish all tariffs and to work to reduce discriminatory trade restrictions. However, there is an important thing to keep in mind...

Despite the constant praise heaped on the "free market" and on "competition" by the Masters of the Business Universe, any CEO worth a bucket of spit despises these things. Competition is bad for profits, not good. Businesses look out for their own interests, not that of consumers, and anything they lobby for should be met with much suspicion, particularly when it is justified by pithy phrases like 'open markets', 'smooth capital flows', 'foreign direct investment', 'adam smith, 'golden hand' and the like. So, if American businesses are pro-WTO, one should be concerned that as times goes on, they will do their best to perform a bit of reverse alchemy on that golden straitjacket, if they haven't already succeeded.