This week’s opinion piece by Marxian Theory expert Professor Richard Wolff discusses the withdrawal of capitalist investment from western nations to non-western emerging nations.
Over the past 200 years, Wolff argues, the capitalist nations of Europe, North America and Japan used Empire as a tool for exploiting cheap raw materials and foreign labor abroad in order to fuel economic growth through manufacturing at home. However, by the 1970’s technology had advanced in ways that allowed the cheap and efficient transportation of manufactured goods throughout the world, removing the need retain the means of production domestically. Instead, capitalists began to establish manufacturing plants abroad to exploit cheaper labor and low transportation costs while continuing to sell to domestic markets.
As manufacturing moved overseas, wages fell at home. Domestic investment became more risky as markets shrank in response to lower worker wages. Investors sought shelter from risk by diversifying their portfolios to include investments in emerging markets. There, goods were being manufactured locally and wages were rising.
The American political dysfunction of the last few years reinforces investors’ urge to withdraw from traditional capitalist nations, leaving the old bastions of capitalism poverty stricken shells of their former prosperity as investors flee the crazy for more politically stable, pro-corporate climes.
Enter the Trans Pacific Partnership (TPP), a super-secret “free trade” deal between the US and Australia, Brunei, Chile, Canada, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam. A September, 2012 Alternet piece describes how huge multinational corporations like Cargill, Pfizer, Nike and WalMart are conspiring to codify “a wish list of the 1%—a worldwide corporate power grab of enormous proportions” through the TPP.
The TPP is called a ‘trade agreement,’ but in actuality it is a long-dreamed-of template for implementing a binding system of global corporate governance as bold as anything the world’s wealthiest elite has attempted before. Of the 26 chapters under negotiation, only a few have to do directly with trade. The other chapters enshrine new rights and privileges for major corporations while weakening the power of nation states to oppose them. The TPP essentially proposes to establish a parallel system of justice where companies can sue countries in a tribunal of judges composed of unaccountable international trade lawyers with little to no process for appeal.
The TPP is a deal to “facilitate the movement of capital and to give capital even more priviledge than it has now.” says Yves Smith of Naked Capitalism. It is a way for corporations to flee the restrictions placed upon them by democracy and create a corporate governance that supersedes national laws.
The TPP is potentially one giant step toward international capitalist rule where resources will be legally moved from one location to another to best exploit profits for the global elite at the expense of everyone else and with no possibility of justice.