Mpumelelo Mkhabela

Free trade is not Jesus Christ the Saviour

2017-01-20 08:49
Poultry is displayed in a market in Huaibei, central China's Anhui province. (STR, AFP)

Poultry is displayed in a market in Huaibei, central China's Anhui province. (STR, AFP)

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“Jesus Christ is free trade and free trade is Jesus Christ.”

So declared Dr Bowring, an English economist, in the middle of the 19th century when people were enjoying cheap imports.

Bowring’s belief in free trade was heavily criticised by Karl Marx who accused him of ignoring the fact that cheap imports were decimating workers in England. Marx argued that workers would eventually not afford cheap products, the very cause of their unemployment and exploitation. Competition was driving wages down.

Exactly 169 years ago, this month, Marx delivered a speech at the Democratic Association in Brussels arguing that free trade was destructive. “It breaks up old nationalities and carries the antagonisms between proletariat and bourgeoisie to the uttermost point,” he said.

He said free trade would quicken a socialist revolution. “In this revolutionary sense alone, gentlemen, I am in favour of free trade,” he concluded sarcastically.

Of course, a socialist revolution of the type Marx envisaged never happened and doesn’t look like it’s about to happen anywhere in the world. Nowhere in the world do workers think of themselves as owners and managers of the means of production. And one doubts if South African Communist Party leaders like Blade Nzimande, Solly Mapaila and Jeremy Cronin are preparing South African workers for such eventuality.

A brilliant analyst whose impractical revolutionary solutions or predictions never saw the light of day, Marx had a point about free trade. South African poultry farm workers started 2017 on a tragic note. Thousands have been laid off and more could be retrenched if our government’s trade deals with the European Union and other trading partners that give us cheap imported chicken are not reviewed.

The South African poultry industry has to compete with producers who dump cheap chicken into the market. The solution, however, is not to resort to protectionist measures envisaged by the likes of US President Donald Trump. The solution lies in competent management of trade deals.

Chinese Premier Xi Jinping, a senior communist party leader, has told the World Economic Forum that global commerce must be allowed to flourish.

“China stands on its own conditions and experience. We inherit wisdom from the Chinese civilisation, learning widely from the strengths of both East and West. We defend our way but are not rigid,” he said.

“We learn but do not copy from others. We formulate our own development path through continuous experimentations . . . No country should put its own way on the pedestal as the only way.”

Our poultry farm workers are in trouble. Several steps must be taken to rescue them and their families in ways that show our understanding of the workings of the global economy and our ability to, as Xi puts it, “stand on our own condition and experience”.

First, government must raise its aptitude in trade negotiations to balance the imperative for free trade with the need to grow the domestic industry.

Second, government and governing party officials must stop labelling big business as “white monopoly capital” that is the enemy of the people. Instead, they must work as partners to re-industrialise the country. Poor business-government relations make nonsense of any talk of re-industrialisation and global competitiveness.

Third, there is a need to invest in trust between government, business and labour. Any of the three who regard the other as the enemy is naive.

Fourth, government must heighten its sense of South Africa’s national interests when it bargains with other countries on trade matters. It should neither be awed by China nor bullied by the US.

Fifth, government and business should always work together in search for global market opportunities that could spawn new industries and strengthen existing ones. I recently learned of the establishment of Exotic Leather South Africa, a great initiative to promote South Africa’s exotic leather industry. Sadly, about 80 percent of our exotic leather from ostrich and crocodile is exported raw to manufacturers who make high-end products for brands such as Louis Vuitton and Prada. Very little is beneficiated in South Africa.

Sixth, government, business and labour should learn from past mistakes. The textile industry was killed, resulting in the layoff of hundreds of thousands of workers because of poor planning ahead of the lowering of import tariffs. South African workers could not compete with Chinese cheap labour that was churning out cheap exports. Similarly, the steel industry is teetering on the brink of collapse because of cheap imports.

Seventh, everything should be done to prevent worsening of the jobless bloodbath in all sectors of the economy. With more than 50 percent of the youth unemployed, including many who have never worked and are unemployable, nobody knows what kind of revolution is awaiting us. It may not be a socialist revolution as envisaged by Marx, but it could take other forms.

Finally, we must keep in mind that free trade is not Jesus Christ the saviour, and Jesus Christ is not free trade. Our poultry farm workers know this very well.

- Follow Mpumelelo Mkhabela on Twitter.

Disclaimer: News24 encourages freedom of speech and the expression of diverse views. The views of columnists published on News24 are therefore their own and do not necessarily represent the views of News24.

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