An Open Letter To The Seattle, Washington D.C. and Quebec Protesters Re: Your Worldview and Strategy
We were and are sympathetic to your objective of ending the exploitation, oppression and poverty experienced by many in the economically developing world and we respect your efforts, through your protests of the World Trade Organization (WTO), International Monetary Fund (IMF), and Free Trade Agreement of the Americas (FTAA), respectively, to bring attention to the real and potential evils of these international and multilateral institutions. But having become familiar with your movement over the past two years, while admitting to the sincerity of heart in many of you, we also recognize several flaws in the case that you are making. In order to win the debate with the " free-trade globalists", you will have to strengthen your arguments on three issues: capital, currencies and patents/intellectual property.
Capital. Because so many of you have only dabbled with a study of Karl Marx and have been influenced by socialist academics and activists you have a knee-jerk reaction to capitalism. In many respects that is good but in some others it causes you to see demons where there are none and even worse, to misinterpret economic principles as exploitative tools in the hands of multinational corporations. Far from the opinion of many in your enthusiastic ranks, every human being has "capital". We are all born with talents, skills and interests. Or as Nation Of Islam leader The Honorable Elijah Muhammad one day told his Minister Jabril Muhammad, of Phoenix, Az., in response to a question, " Allah has given us all many talents, but each a talent that we can perform perfectly." Look deep into the word talent and you will see that it has, throughout history, been inextricably linked to trade and exchange. It is the commercialization of talent that is the base of every economy. Every human being has intellectual and physical capital. And it is this intellectual and physical capital, in the form of talents, skills and the ability to perform work that gives human beings value in the marketplace. Far too often, we hear the protesters speak of capital only in terms of finance and machinery owned by wealthy elites, and used to replace manual laborers. This is true and Karl Marx foresaw this and wrote about it. Sure, paper money and machinery are forms of capital but they are forms that grow out of the minds of human beings exercising their divine capital. What has made for poverty in the developing countries, in part, is the lack of education, the underdevelopment of markets and government created barriers and burdens in many instances. It is education, of course, which draws out of the human being what talent(s) lies within the human being. It is education that effectively nurtures the human being according to their talents, skills and interests, and which seeks to help the individual "perfect" their talent. Commerce in a fair and developed marketplace where human beings are allowed to commercialize their talents or novelties, and where government regulations and taxes on production are not excessive is absolutely necessary for human beings to create wealth. Ironically, it is in the economically developing nations that you are seeking to help, where education is not what it should be and where the most barriers to starting businesses and bringing talents to market take place. Economist Steve Hanke recently wrote about this in his Forbes column. It is unfortunate that the greatest government costs and barriers to entrepreneurial development and marketplace entry exist in countries that have the least economic development and growth. This scenario is not caused by the globalization and multinational corporations that you are protesting against. Your efforts have to be more supportive of the implementation of sound economic principles in side of developing nations. You have to recognize that these developing countries have capital sources of their own, in abundance. In a sense, you are unintentional imperialists with your emphasis on the West's stranglehold on "capital". You give them too much power with that view.
Currencies. It has always struck and even amazed us how woefully unaware many of the protesters are of the impact of monetary policy on trade. In our discussions with various members of your movement - people who attended all three protests - we were surprised to hear virtually no recognition of how Federal Reserve monetary policy and currency devaluations are responsible for poverty throughout the world. This is even more ironic considering the amount of time and thought that Karl Marx spent on commodities and currencies in his epic work, " Das Kapital". We have spent considerable energy and time reviewing Volume 1 of "Capital", and were impressed by his attention and understanding of how important it was for a society to have a clearly defined unit of account by which a community could fairly measure its labor, regardless to the profession. Marx recognized that the commodity gold was best suited for this purpose. While many of you have gobbled up the Communist Manifesto few of you have even attempted to pour through "Capital" and because of that, you are missing possibly the most brilliant of all of Marx's insights - that a gold "standard' was the means by which laborers of various stations could become equal. To Marx, a currency was not just "money" in a superficial sense, it was a measurement by which all forms of labor could be evaluated and exchanged in the marketplace. There can be no fair trade policy if there is no stable unit of account or medium of exchange. Inflation and deflation, which only occur when the monetary standard is allowed to fluctuate, are the premier sources of inequality in economic trade today. It is always interesting to hear protesters rail against NAFTA and yet remain silent on the Mexican peso devaluation of 1994. It also is interesting to see that the majority of IMF protesters are more concerned about getting the multilateral institution to recognize labor and environment standards than they are in getting the IMF to stop encouraging currency devaluations around the world, like they most recently did in the African nation of Zimbabwe. Lastly, your movement against "free-trade" has to include a critique and understanding of the impact that Federal Reserve monetary policy has on international trade. I recently told a group of socialists that it was not NAFTA or the WTO who were most responsible for the recent drop in commodity prices worldwide. It was the Federal Reserve, which allowed the price of gold to fall from over $400 an ounce in 1996 to below $260 an ounce in a year. A drop in the gold price signals a coming commodity deflation which drags down the prices of farm commodities and metals which the developing world depends upon and trades in the international marketplace. Trade agreements are lightweights compared to the damage the Federal Reserve can do. We have for years, been perplexed by how much attention your movement gives to trade policy and multinational corporations and how little you give monetary policy and central banks.
Patents/Intellectual Property. It is in this area, next to monetary policy, that your movement is operating the most behind the curve. This is most visibly evident in your effort to get the multinational pharmaceutical companies to lower the price of AIDS drugs throughout the world but especially in Africa. While you think that you are doing the right thing and that you even are "winning" in your efforts, it becomes more obvious, with each passing day, that your lack of knowledge regarding the war for intellectual property rights and patent protection is being used against you. Many of those in your movement are totally unaware that the Western countries and the multi-nationals are not really that concerned about profits from HIV drugs in Africa or in other parts of the developing world. They are mostly concerned with gaining intellectual property right concessions in Africa and the developing world and with the imposing of Western patent laws onto Africa and the developing world before those countries begin to provide patents to local companies and innovators. The West knows that the developing world is not properly rewarding and protecting innovation in their countries. Western governments and the multinationals also do not want the growth of productive industrial capacity to take place in the economically developing world. So, while you think that you have won by getting these drug companies to slash the prices of their HIV drug cocktails, you really have only helped these corporations grow in strength. How? Because you have ensured that it will be their cheap drugs that are purchased by African governments and not the drugs of generic companies in Brazil or India or Cuba. Some of you are even pushing for a plan developed by Harvard Professor Jeffrey Sachs which would have western governments set aside as much as $5 billion for the purchase of AIDS drugs worldwide. But guess from whom the drugs will be purchased? The same multinational corporations that you claim to be at war against. They will be the beneficiaries of the billions of dollars of Western "aid" that your lobbying efforts will help to generate. Your efforts to make HIV/AIDS drugs cheaper will not only wipe out the generic drug companies in the developing world and the industrial productive capacity that they represent, but they also ensure billions in profits to drug companies that prior to your efforts, had no business in Africa. Furthermore, the lower prices that you are demanding on behalf of Africa are still too high for Africans to afford, so you will be helping multinationals gain profits for products that may not even be delivered. And the gains are not just monetary in nature. By not fighting for the interests of generic companies and compulsory licensing you strengthen the effort of the developing world to have its patent regimes become the law of land in the economically developing world. And by the way, you also help to kill the herbal and alternative medicine industry/community that produces medicines that do things that the HIV/AIDS cocktails can't and that are found on land controlled by the indigenous populations in the developing world. In the Amazon and in Africa there are medicinal herbs and plants that don't grow elsewhere. The West wants to find them and get patent rights on them and their byproducts. Your sincerity and ignorance is being used against you. There is an intellectual property world war going on surrounding the WTO's TRIPS provisions and almost all of you seem unaware of how your actions actually have you on the side of the multinational corporations.
There is no doubt that you all possess the necessary enthusiasm, sincerity and organization to not only stop the deleterious aspects of globalism and not so "free trade, but also to place elected officials in office at the local, state and federal level.
But you must match those attributes with an analysis that allows you to discern economic principles from the tools of the oppressor; Karl Marx's critique from the rhetoric of uninformed communists and socialists; and finally, you need an understanding that allows you to parse the details and nuances of good-sounding plans that in reality, are fronts for the expansion of corporate power.
If you were to do that, we believe your movement would sweep across this country.
Remember, organized wickedness is much more powerful than disorganized sincerity.
Wednesday, April 25, 2001