1945 successive U.S. governments have taken the lead in breaking
down trade barriers around the world. Why it has done so can only
be explained by a fanatical commitment to a dogma. Barriers to
trade were barriers between nations and, hence, caused wars. As
the barriers came down, global trade surged. The results have
been distinctly lopsided. Most Americans are hardly better off
now than they were 30 years ago. The rich, however, have done
extremely well. Companies switch their operations overseas to
take advantage of cheap labor. At home employees are thrown out
of work and may have to take a cut in pay. On the other hand,
profit margins along with the value of the company stock soar.
Hence, the growing income disparities in America.
figures are remarkable. From 1969 to 1996, median household income
rose a very modest 6.3 percent in constant dollars (from $33,072
to $35,172). Since 1977 the incomes of the top one percent of
the population have risen dramatically. They have risen modestly
for those in the middle of the income spectrum. And they declined
for those in the bottom fifth. As a result, the distribution of
income has changed markedly. In 1977, the top one percent of U.S.
households received 7.3 percent of the national after-tax income.
In 1999, this group is projected to receive 12.9 percent of the
income. The top 20 percent of households is projected to receive
50.4 percent of the national income in 1999. The remaining 80
percent of the population is expected to share the other half
of the national household income this year. Income disparities
have widened to such a degree that in 1999, the richest one percent
of the population is projected to receive as much after-tax income
as the bottom 38 percent combined.
elites latest enthusiasm is for something called the World
Trade Organization. No one is quite sure what this is. It is meant
to facilitate free trade. Its decisions are arrived at in secret
and it hands down rulings that are as incontrovertible as Mosaic
Law. Nations can no longer decide for themselves their health,
safety and environmental standards. They can no longer decide
what kind of trade agreements they have and with whom. They are
now to have but one missionto open themselves up to free
trade and free capital. If they fail to do so, they are to be
punished. Recently, the United States got into one of its regular
trade wrangles with the European Union. The issue was bananas.
For decades European countries had imported bananas from their
former Caribbean colonies. A special arrangement enabled these
less than efficient banana growers to compete against U.S. giants
like Chiquita (formerly and better known as the United Fruit Co.).
Earnings from these banana sales had enabled a number of these
Caribbean islands to survive economically. Chiquita, a major Democratic
campaign contributor, was enraged by this arrangement and lobbied
the administration to do something about it. The U.S. government
took the matter up with the WTO. In 1997 the WTO ruled against
the EU. Europe responded by altering its system of preferences.
The U.S. would have none of it and imposed trade sanctions against
the Europeansall with the smiling acquiescence of the WTO.
That there may be good reasons to ensure the survival of tiny
Caribbean islands cut no ice with the WTO. The wishes of Chiquita
WTO has ruled that the Europeans ban on hormone-fed beef
was a violation of free trade rules, even though these health
regulations applied equally to domestically and foreign-produced
beef. That Europeans care a lot about the quality of the meat
they are eating is of no concern to the WTO rulers. The WTO has
also ruled against the United States. Apparently, our Endangered
Species Act serves to restrict trade. Americans cannot reject
imported shrimp that were caught in nets that also killed sea
turtles. The WTO can step in anywhere at any time and decide what
habit or custom must be done away with because it stands in the
way of free trade. There are no nationsonly conglomerates
engaged in relentless commerce. I guess that is why our elite
love the WTO so much.