Show blog for Too Fat for Our Pants on Radio One, 91 FM, Dunedin, New Zealand. Airs Mondays 10 am - 12 pm.

If all economists were laid end to end, they would not reach a conclusion.
~ George Bernard Shaw

Sunday, 18 September 2011

The Mighty Trans Pacific Partnership Agreement (and how it's going to screw us)

Too Fat For Our Pants airs on Radio One, 91FM Dunedin.  Listen to the whole show, including music and interviews, here.
Listen to the interview with Jane Kelsey here.

The Trans Pacific Partnership Agreement is an extension of an agreement signed initially between New Zealand, Singapore, Brunei and Chile and has now grown to include eight countries, the most significant addition being, of course, the United States.  The other countries are  Australia, Brunei, Chile, Peru, Singapore, and Vietnam, with Malaysia and Canada hanging around looking eager.  Between these 8 countries there are 12 separate Free Trade Agreements already in existence, and this agreement deepens those commitments.  If you are over 40 and this sounds familiar to you, it is – this is basically a a stronger, scarier, secreter version of the Multilateral Agreement on Investment, which was already defeated in NZ in the 1990s.

Being a free trade deal, it is primarily about deregulation, the belief in which is predicated on a number of beliefs that have been disproven over and over again. The first, of course, is a belief in the rationality of the unhindered market, which itself rests on the article of faith that prices are inherently meaningful and accurate.  They are not, obviously, they are skewed by innumerable factors, including the kinds of economic activity that are recognized by the market in the first place, the cultural narrative which informs people’s conception of what is necessary, which then impacts demand for a given commodity, and that narrative is further skewed by advertising.  Further to that, we price commodities by their ‘value in trade’, as opposed to their ‘value in use’, (I don't get all my information from Wikipedia, it's just the easiest place to get that kind of specific, concise explanation.) which is inherently subject to the influence of advertising and politics, and is how we’ve arrived at a pricing model that has diamonds costing a fortune and, I don’t know, batteries costing pocket change. Of course all this is true without even talking about government subsidies, business lobbies, and trade agreements which impact market price.
      Hillary Clinton openly calling the goal of this agreement “regulatory coherence” - this is a euphemism for deregulation, which is the kind of regulation with which all signatories would need to cohere.   I can’t believe we don’t have enough evidence that all deregulation does is concentrate capital in a few huge multinational hands, and that those hands do not then redistribute it. There’s a great analogy in Inside Job, a documentary about the lead up and causes of the US financial crash in 2008, which describes the economy like an oil tanker: regulation are the compartment walls that keep the oil relatively evenly distributed in the holding container; when you start to remove them the oil all sloshes to one end and the tanker sinks.  There’s some growing support for the notion that economic inequality is at least one significant cause of financial crises and recessions, and it makes some intuitive sense to me: The economy grows through transaction, right; economics is activity.  Money you are saving does not contribute to the growth of the economy because it isn’t moving.  And this is actual movement I mean, not the movement of special financial tools and mortgage packages and credit default swaps, because that kind of movement, as we should all know by now, leads to bubbles of fake money, a falsely growing economy, that will crash eventually.  When so much is concentrated in the hands of so few, the kind of numbers those few are holding onto are so astronomically large that you couldn’t possibly spend it all if you dedicated your life to it.  Political economist Robert Reich makes this example in his book Aftershock: Kenneth Lewis, the CEO of Bank of America, earned $100 million in one year, 2007.  “To spend it all, Lewis would have had to buy $273 972.60 worth of goods and services every day that year, including weekends.  If he had devoted twelve waking hours a day to the tast, he’d have had to spend $22 832 every hour, $380.52 every minute.”  Of course he did not spend all that money, and that was just one year.  After the first big rush of excitement and novelty, you just don’t spend all that much, as a percentage of your wealth – having a lot less money in the hands of a lot more people, people who will spend all that money regularly, would do much more to grow the economy than making sure we still have rich people.  The economy is movement, and the rich compile. The poor spend.
This principle also debunks the notion that what’s good for business is good for the country, which is, from what I can tell, at the heart of New Zealand’s interest in the Trans-Pacific Partnership Agreement – they want Fonterra to have access to US dairy markets.  Besides the widespread consensus that there’s no way the states is going to open up their already flooded dairy market to foreign companies - even if they wanted to, the US dairy lobby is massively powerful - business and the country have pretty opposing interest.  What’s good for business is a healthy bottom line and a lot of money tied up in those financial services that look like economic fuel, but we know unequivocally now are not.  What’s good for the country is heavy economic regulation and aggressive redistribution of wealth to ensure lots of concrete transactions, which are actually what fuel the economy.

 But, none of this, to me, is the most sinister part.  What bothers me the most about all of this is not the continued emphasis on neoliberalism, though I do find that just baffling, it’s the fact that all these talks have taken place under such heavy guard, with such towering degrees of secrecy.  I won’t be the first person to suggest that this is being done on purpose because if the people who live in New Zealand knew the details of the arrangement and what they meant, we wouldn’t stand for it.  And THAT’S what we should be worried about.  This is a fundamentally, inherently undemocratic situation, from the clauses in the agreements that could disallow future governments to rescind unpopular or even harmful sections to the supreme secrecy of the talks themselves.  And while this shouldn’t, if you’ve been paying attention, surprise you, it should enrage you.  You should be furious at the governments’ willingness to disregard democratic process and frightened of the ease with which democracy was outmaneuvered.  
Given the methods with which these talks are being conducted, I’m skeptical of the kinds of democratic action I would usually advocate: there are petitions – there’s one up here right now –  and there have been letters sent to the PM by dozens of high profile signatories, but as the government won’t even tell us what the talks involve it seems unlikely that our unsolicited input will be given due consideration.  But the practice of democracy is as important to us as citizens as it is to the health of the democratic process – you kind of have to teach yourself how to get involved.  You could get the word around all your networks, facebook pages, websites and media; ssk your MPs, local government and iwi leaders if they know what’s going on; demand the government holds an inquiry to bring the negotiations into the daylight.  Make sure YOU know what’s going on – there are lots of places to go for this information, and I highly recommend reading Jane Kelsey’s book No Ordinary Deal. 
However, I also agree with a number of pundits who see this whole agreement as being too ambitious and too fraught to be enacted any time in the near future.  That does not mean that we’re out of the woods, here; it means that we must learn from this how fragile any democracy is, and how much citizen involvement it requires to work properly.  We’ve been convinced for years that the extent of our involvement in democracy is to show up at the polls every few years and we can then be satisfied that we are participating.  Of course the only entity that benefits from that narrative is a corrupt government; it certainly isn’t us, the people who live here.  We have to wake up, we have to start paying better attention; I know it can be difficult and we have so many more pressing concerns, so many of us are out of work, and we think that politics is something we can’t afford to spare time or thought to.  But this isn’t about politics, necessarily; politics are about ideology.  This is about fairness, and justice, and taking care of one another, and a genuine desire to make sure everyone is fed, and clothed, and safe, and can make a productive living; these are issues of human rights which have been dragged into the political realm in order to make them distasteful and divisive.  Don’t fall for it. We are smarter than they give us credit for; let’s make them remember that.

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