Free Market Vs. barriers: Who wins?

“You will serve foreign interests, whose only
worries are abroad? Or go listen to the metalworkers
of West Virginia, Ohio, Pennsylvania, Indiana, Illinois et al.
large state steel producers?”

Jay Rockefeller – senator from West Virginia[1]
In a world where globalization, open markets and productivity are the only processes considered concrete – in the sense that Karl Marx gave to the term in his Contribution to the Critique of Political Economy [2] – It seems difficult to understand what is really happening. With a little attention, we can see heads of state and government go public every day to defend the opening of markets, sempre argumentando com a já caricata "inexorabilidade da globalização".
Impressed by beautiful words and detailed descriptions of the world, We turn off the television or put down the newspaper, and behold, we return to reality. The reality I refer to is that produced not by the words spoken, but for those written, especially when it comes to memos, presidential recommendations and signatures.

Not even his throat rested after giving a liberalizing speech, and the hand already picks up the pen to sign the most varied types of barriers and limitations to the free flow of capital and goods (let's not even put labor on that list so we don't end up in utopia).

Two quick examples that concern Brazil. Military. In 2001 we export US$ 5,2 bi to the USA, while that government offered a subsidy of US$ 2,8 bi to American soybean producers. Thereby, we export US$ 1 bi less than we could. Another example: cold rolled steel. We export to that country US$ 54 mi (or equivalent to 185 a thousand tons) in 2001. At the beginning of the month, the possibility of imposing customs tariffs on 40% about our steel, something that ended up materializing with the no less scandalous tariff for 30%.

Cheaper soybeans and steel are good for American consumers and consumer companies, for these because it reduces the final value of their products, increasing their international competitiveness and for those because they will spend less to buy the product, leaving some change for other things. It's also good for Brazil: increases the profits of exporting companies and helps balance the balance of payments.

So, who is interested in subsidies and barriers? To the groups that lose with the entry of foreign products, that is, those who have a lower productivity. This is exactly where the mystery lies. They are just inefficient productive groups that live in a time of globalization and open markets and that are doomed to disappear. Will it really be?

Military, steel and orange juice in the USA; agri-business sector in Europe; and planes around the world seem to demonstrate a slightly different scenario. The disappearance of the State, so publicized by some fashionable businessmen (to know some names, just look at the best sellers in the areas of business and marketing), seems to be nothing more than declarations of intent or simplistic dreams.

Why is there such a difference between what is said and what is done?? Most likely it is not because the State wants its citizens to pay more for the products they buy nor because they have stopped believing in “relative comparative advantages”.” by David Ricardo. The ingredient that seems to be missing in all of this is precisely what sustains the State and the economy: the society.

When we think about the role of society in all of this, we will see that the rulers are not stupid nor that hypocritical, how they look. At the level of discourse they release the most general values (globalization & ccedil; & atilde, the, free market, economic-productive integration) while in practice they release actions (defense of their societies, uma vez que ela sustenta a realidade na qual busca-se alcançar os valores).

Moral of the hist & oacute; ria: in today's world, mais vale uma sociedade estável comendo cenoura à R$ 1,00/cada, do que uma sociedade dilacerada comendo cenoura à R$ 0,70!

 

Notes
[1] Citado em “Bush avalia opções para proteger siderurgia in Gazeta Mercantil, 01 March 2002. Página A-9.

[2] "O concreto é concreto porque é a síntese de vários determinandes, that is, a unidade do diverso"

Originally published in:

magazine Author

economy

Year II – N. 9março 2002

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