By Jeremy
J. Nuttall, Today, TheTyee.ca
http://thetyee.ca/News/2015/12/14/TPP-Plutocrats/
Canada's new trade minister has sitting on her desk the sweeping
Trans-Pacific Partnership, a deal some say will accelerate the gap between rich
and poor by protecting corporations' interests over those of workers and
governments.
The winners, say high profile critics, will be captains of
global finance and others already so moneyed they've earned the moniker
plutocrats.
That's a class of people Trade Minister Chrystia Freeland knows
extremely well. Plutocrats is the title she gave her 2012 book
about how they are sucking up riches for themselves as income inequality grows.
Freeland takes readers into the world of the super-rich, who play by different
rules and lead opulent and vastly different lives than the rest of the human
race.
The former reporter for the Financial Times goes at the wealthy
and powerful hard, pointing out how their success is coinciding with the
destruction of "everyone else."
That puts Freeland in an interesting position, to say the least,
as she mulls whether and how to manage passing the TPP, which was negotiated in
secret by the recently ousted Conservative government, but endorsed by Liberal
Prime Minister Justin Trudeau during the election.
TPP as inequality accelerator
Freeland must be aware of criticism, coming from a range of
respected sources, that the TPP will widen the wealth gap in developing
countries as well as the U.S. and Canada.
"If the Trans-Pacific Partnership is enacted," Robert
Reich, secretary of labor in the Clinton administration, has warned, "big corporations, Wall Street, and their
top executives and shareholders will make out like bandits. Who will the
bandits be stealing from? The rest of us."
Foreign Policy magazine published a piece in July arguing the TPP is
harmful to developing economies, including inhibiting their ability to use
state-owned enterprises to boost some sectors of their economies.
And Robert E. Scott, director of trade and manufacturing at the
Washington, D.C.-basedEconomic Policy Institute, told The Tyee the TPP will
increase the wealth gap in the West as more jobs are outsourced.
The profits from such moves only go to those who own stock in
the companies sending their labour elsewhere, Scott said.
He said international trade deals pitting western workers
against low-wage labour abroad has forced millions of Americans into
unemployment or in jobs making smaller wages. The TPP will only increase the
trend, he said.
"Even if trade were balanced we stand to lose the good
jobs," he said of the United States. "Manufacturing pays more than
alternative jobs in the economy."
The deal will increase the current $150 billion trade deficit
the U.S. already has with TPP nations rather than shrink it, he argues. The
impact will be harder if China and South Korea join in the future.
Friday the United Steelworkers Union adopted a resolution urging
Canadian and American governments to reject the agreement.
"The TPP will only continue the failed trade policies of
the past that have valued corporate profits, wherever obtained, over the
interests of job and opportunity creation here at home. The USW will put every
effort into defeating the TPP," said the international union in a release.
In Plutocrats, Freeland seems to agree with that
analysis.
"Both globalization and technology have led to the rapid
obsolescence of many jobs in the West; they've put western workers in direct
competition with low-paid workers in poorer countries; and they've generally
had a punishing impact on those without the intellect, education, luck or
chutzpah to profit from them."
'Crony capitalism'
In 2013 Freeland gave a Ted Talk in Scotland about the problem
of the income gap growing not just in the West, but all over the world. (You
can join 1.6 million others in watching it here.)
Near the beginning of her speech, Freeland points out Warren
Buffett and Bill Gates have as much wealth combined as the bottom 40 per cent
of the United States.
"We're living in the age of surging income inequality,
especially at the top," she told the Ted crowd. "What's driving it
and what can we do about it?"
Freeland blames privatization, anti-union legislation and
deregulation as some of the reasons wealth has been bleeding to the top and
creating a new aristocracy.
"A lot of these political factors can be broadly lumped
under the category of crony capitalism -- political changes that benefit a
group of well-connected insiders but don't actually do much good for the rest
of us," she said. "In practice getting rid of crony capitalism is
incredibly difficult."
She pointed to how hard it has been to tweak banking regulations
after the 2008 crisis, or getting companies to pay as much tax as members of
the public. These issues unite both the left and right, she said.
Helping out that crony capitalism are globalization and
technology, which can make people extremely rich quickly. But that's not enough
for the new super-rich, she said.
"Once you have the tremendous economic power that we're
seeing at the very, very top of the income distribution and the political power
that inevitably entails it, it becomes tempting as well to start trying to
change the rules of the game in your own favour," she said.
"It's what the Russian oligarchs did in creating the sale
of the century privatization of Russia's natural resources. It's one way of
describing what happened with deregulation of financial services in the U.S.
and the U.K."
That kind of power is leading to the hollowing out of the middle
class in the West as the wealthy lean on governments for legislation that helps
them become richer, she said, which has led to the offshoring of western jobs
enabled by trade deals.
Hearing from the mega-rich
If Freeland still holds such concerns, none of them are on
display in how the Liberal government is characterizing the TPP.
"The elimination and reduction of tariffs offer the
prospect of new and enhanced market access opportunities for Canadian
producers, manufacturers and processors," said the Global Affairs Canada
website Friday. "Preferential access to foreign markets through tariff
liberalization will make Canadian goods more competitive in those markets."
Scott cautions he's seen politicians in the past change their
tune once they are given the direction of their political overlords.
And no one could mistake Freeland's Plutocrats for
a radical call to arms against capitalism, which she had said is "the best prosperity-creating system
humanity has come up with so far" if in need of "retooling." In
her book, she musters admiration for those cornering so much of the world's
wealth, finding them to be "hardworking, highly educated, jet-setting
meritocrats who feel they are the deserving winners of a tough, worldwide
economic competition." But the rich, she reminds, truly are different from
the rest. They "have an ambivalent attitude toward those of us who haven't
succeeded quite so spectacularly."
That's apparent in the views some plutocrats shared with
Freeland. As a Guardian review of her book noted:
"'I think the ultra-wealthy actually have an insufficient
influence,' says one billionaire Republican donor. Another says taxes should be
virtually abolished, arguing that the government should pay the likes of Bill
Gates and Steve Jobs for their contributions to society. 'It's that top one per
cent that probably contributes more to making the world a better place than the
99 per cent,' he concludes outrageously."
The Tyee sought comment from Freeland on whether she and her
government intend to promote, change or scuttle the TPP. No response yet, but
if she does grant an interview, we will ask her, in addition, to give her take
on the treaty in the context of her book.
In the meantime, here is a quote from the conclusion of Plutocrats that
would seem relevant:
"Trying to slant the rules of the game in your favour isn't
an aberration, it is what all businesses seek to do. The difference isn't
between having virtuous and villainous business people, it is about whether
your society has the right rules and policing able to enforce them."
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