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The World Trade Organisation represents the interests of the capitalist
class and is a product of the lessons they have learned for protecting
their system
The World Trade Organisation is not to blame. Capitalism is. Although
the WTO has emblazoned itself in everyone's consciousness as the
unacceptable face of globalisation – indeed as the secretive cabal
directing the insidious movements of world finance – what it really
represents is a trend as old as capitalism itself, and the continuation
of old policies under a new name.
Capitalists are not oblivious to their own interest in preventing their
system crumbling. The WTO and its associated world infrastructure is
directly related to lessons they have learnt throughout the history of
wars and disasters that the market has inflicted on the human race in
the past century.
In the 1930s, national governments relied on the free trade in gold to
regulate the relative value of their currencies, and structure
international transactions. Capitalism's tendency towards disharmonious
movement and uneven economic growth meant that gold tended to
concentrate into the hands of a handful of states (America possessed up
to 60 percent of the world's monetary gold at one point), leaving
others (such as Germany) desperately short of the means of
international trade. This imbalance in trading power led directly to
the conditions which prompted the second world war, and devastated
almost the entire continent of Europe.
Determined to avoid this situation happening again, the dominant
capitalist powers met after the war, to construct an effective
international machinery to enable trade to progress between states
smoothly. The Bretton-Woods agreement, as devised largely by J M
Keynes, sought to regulate international capital movements.
Likewise, the International Monetary Fund and the World Bank were
created to ensure nations avoided suffering the same bankruptcy as
Germany effectively endured in the 1920s. It was envisaged that these
institutions would be joined by an International Trade Organisation, to
lay-down the rules by which trade would be governed. This institution
was, however, vetoed by the US at the Havana conference in 1947.
UNWORKABLE SYSTEM
What stood in place of the IT0 was the General Agreement on Tariffs and
Trade, which came into force in 1948, and was based on the
unobjectionable sections of the Havana Charter. Over time, GATT proved
to be unworkable, with inadequate enforcement procedures, unclear rules
and the rigidities of consensual agreement systems.
Thus, at the Uruguay round of GATT negotiations which ended in 1993,
the World Trade Organisation was agreed upon, as a "superior"
successor. The Uruguay round significantly expanded the scope of the
international agreement's remits, bringing agriculture, services and
intellectual property within its field of competence, as well as
seriously reducing tariffs and other protective measures allowed. This
lead to an almost immediate increase in the volume of international
transactions: according to the Eurostat Yearbook 2000 external
investment by European Union states increased by almost 500 percent
from 1995 -1999.
This is simply part of an on-going trend within the development of the
market system. As trade progresses, so too does standardisation of the
rules and groundwork. In the early nineteenth century England, for
example, a merchant would have had to know how to reconcile his Durham
pecks with his Dorset grains and his Norfolk drams, when selling goods
by weight. Likewise, each town would have its own time (relative to its
distance in minutes from Greenwich). These times and weights formed the
legal framework for trade in each of these districts, and formed a
burdensome cost to any business trying to operate across them.
In time, the need to concentrate capital, and increase the area and
scope of the circulation of commodities meant that such discrepancies
between local authorities were overcome. Usually, this meant
over-ruling them through the authority of the centralised state, and
enforcing a uniform set of rules across the whole economic zone. This
tendency for the concentration of capital continues, and the same
problem manifests itself in differences of trade regulations between
nation-states, although this time there is no central authority
powerful enough to completely over-rule them and impose its standards.
The reasons for the increasing concentration of capital lie,
essentially, in the methods by which labour is exploited by capital.
When a commodity is produced the capitalist calculates its cost of
production (the cost of goods that went into it, plus labour), and then
adds a profit mark up roughly in line with the expected rate of profit
of their rivals. This average rate of profit applies regardless of the
amount of value added by the specific production process involved, but,
rather, the total value added across the whole economy.
What this means is that industries which involve a large input by
labour (i.e. which add a lot of value) lose out because the average
profit mark-up is less than the value they add. This means that this
added value is transferred into the profits of industries which are
less labour intensive. It is, therefore a competitive advantage for
capitalists to increase the ratio of productive capital to labour
(known as the organic composition of capital). With this increase comes
an extension of the productive capacity in an industry, with capacity
being taken up by fewer and fewer production units.
Alongside this concentration of capital is the increase in the
transportation capacity of society. Technological advances in transport
continue apace with productive capacity, meaning that, in general, the
circulation of commodities and trade can increase faster than the
productivity of society (more goods to transport multiplied by a faster
rate of moving them). This is born out by the chart below from the WTO
In each period the rate of increase in trade is greater than the rate
of increase in output of merchandise. One of the most significant
details, however, if the massive increase in trade in 1990-2000, in a
period in which merchandise output actually fell compared to the
previous period. The effects of the inauguration of the WTO can be seen
in this increase. It is an increase in excess of the usual growth in
trade, and thus represents an exceptional occurrence.
The motivation for this spurt in trade may well lie in the observable
decline in productive output across the whole chart. The rate of output
growth is under half that of 1963-1973. Capitalists, misled by theories
which see value as being created rather than realised by trade, treat
trade as a good in itself, and think that by increasing the circulation
of goods they will be able to dig themselves out of the profitability
hole indicated by the drop in output growth. Alongside this is the
temptation to exploit the differences in national and regional rates of
profit to try and realise an exceptionally high profit.
What this means is, effectively, that through increased trade
capitalists are attempting to rip each other off, as a result of their
incapacity to exploit the workers enough. Through increasing trade
competition, they are effectively increasing the scramble for a share
of the total global production of surplus value. This can also be seen
in the increase in currency speculation and finance capital movements
around the world. Since these forms of activities are entirely
unproductive they represent a mere redistribution of booty among the
thieves.
This tendency can also be observed in the decision to open up services
to international competition. Although British ministers maintain
fervently that this does not mean the WTO will force privatisations
upon countries, the fact is that International Monetary Fund (IMF)
structural adjustment programmes usually force countries to attempt to
decrease the size of their state sector, paving the way for firms from
advanced capitalist countries to take over these services and sweat
profits out of the workers there. It represents another way of opening
up otherwise marginalised sources of surplus value to be taken back to
the industrialised core.
Certainly, so long as world society depends first and foremost upon
competing capitalist groups vying for profits, it will be subject to
the anarchy of capitalist self-interest, and any world body will be
subordinated to the Machiavellian manoeuvrings of these groups.
So long as capitalism remains any world body will be used as a
potential tool for exploitation and robbery. The only genuine way to
move forward to a world human community is by the abolition of
sectional national élite interest, and the creation of a world human
interest of common ownership of the worlds wealth, so that we can end
the horrendous divisions the property system has created.
Jt
www.worldsocialism.org
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