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Fair Trade – an alternative made to Aid and Free Trade?

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“Trade not Aid”: this used to be the slogan of third-worldist movements in the mid-1960s, an epoch when intellectual figures in the Third World were denouncing the unequal exchange between the capitalist Center and the Periphery.

The aim was then to challenge the capitalist system at its very basis. Forty years later, in a global neoliberal context, it seems that the issue of unequal exchange has resurfaced through the Fair Trade movement, a movement which purports to help the poorest and most marginalized producers of the global South. Based on the perceived failures of aid and free trade paradigms, the Fair Trade protagonists count on the generosity and solidarity of Northern consumers in order to achieve fairer trade relationships between the North and the South.

The Fair Trade movement is not monolithic however. There are at least two conflicting visions inside the movement. First, there is “historical” or “alternative” Fair Trade. In this approach, economic intermediaries are specialised in the distribution and/or sale of ‘Fair’ products – agricultural products or handicrafts – which are purchased from producers in the South by specialised group purchasing organisations in order to be sold in dedicated shops in the North. The rationale here is to create alternative trade channels operating outside standard distribution networks and where agrifood giants are excluded. At the global level, the World Fair Trade Organization (WFTO) federates specialised/alternative Fair Trade organisations.

Since the 1980s, another approach, the labelling one, has progressively imposed itself. It is epitomized by the Max Havelaar/Fairtrade label. Unlike the previous approach that certifies “organisations”, the labelling approach only certifies “products”. As there is no requirement to be ‘100 per cent fair-trade specialised’ in order to obtain a licence for the sale or distribution of Fair Trade products, the sale/distribution of certified products is in theory available to all corporations, provided that they comply with specific standards and pay their annual licence fees to the label holder (namely the national labelling initiative). As a result, the classical sale and distribution channels can be more easily integrated.

In this approach, producer organisations in the South that wish to sell their products under Fair Trade conditions must first of all obtain certification, which is subject to complying with the standards

defined in this respect by the certification organisation. It is also important to point out that the label holder does not buy or sell any product. It rather trades the use of the said label. At the international level, Fairtrade International is the federating entity whose mission is to promote the Fair Trade label. Created in 1997, Fairtrade International is based in Bonn, Germany.

The evolution of the Fair Trade movement from an “alternative” approach to a “product certification” approach has sparked many debates. The Max Havelaar/Fairtrade approach has often been accused of having betrayed the original mission of the Fair Trade movement. By working with agrifood giants and standard distribution channels, evolution that has helped boost his sales to unprecedented levels (4.9 billion euros in 2011), it would provide an opportunity of “greenwashing” for these controversial actors.

I will not follow this line of argumentation here. Rather, I will try to defend the idea that the Max Havelaaar/Fairtrade approach (abbreviated by FT), as it is currently conceived and as it currently works, is an alternative neither to aid nor to free trade. In some ways, as we will see, it tends to reproduce their shortcomings.

I – The Fair Trade economic model in theory

Developing countries producers face generally three kinds of interrelated issues in conventional markets: the price of their product are often very volatile; the price they receive for their products tend to be low, sometimes below the cost of production, and non-sustainable ecologically and humanely; due to the influence of middlemen and inequalities of power, their share of the added value created in agricultural value chains tend to be low, even in the circumstances when the price of their products is booming.

To address the issue of price volatility, the FT economic model sets for each product a guaranteed minimum price. The second issue is addressed by making sure that the guaranteed minimum price covers the cost of a “sustainable production” (that is a production which is environment-friendly and which is associated with decent working conditions for producers) and by the payment of an additional premium (which amounts to a pre-defined fraction of the FT volume sold by each producer organisation). As for the exploitation of producers by “unfair” middlemen, the issue is supposed to be tackled by the certification process (only buyers complying with FT standards are able to enter FT value chains).

The crucial element of the FT economic model is however the availability of “ethical consumers” from the North who are ready to pay a higher price for products labelled FT. This element of solidarity forms the basis without which the model is simply impracticable. The growth of FT markets is ultimately dependent on the growth of the population of “ethical consumers”. Hence the strong need for the FT movement to have recourse to awareness and marketing campaigns.

This is in a nutshell the logic, or the spirit, of the FT economic model.

Though the rhetoric of FT activists might sound progressive and opposed to free trade, as a matter of fact, the FT economic model obeys in practice to a neoliberal logic. I must add that this unexpected and unfortunate outcome derives from the premises of the FT economic model itself.

II – Some limitations of the FT economic model

For the FT economic model to be efficient and to be considered as a superior alternative to free trade, it has at least to provide to producer organisations better outcomes in terms of prices and market access compared to conventional international trade. However, owing to the way in which it has been conceived, there is no guarantee a priori that producers involved in the FT movement should be better-off than conventional producers, or at least that the FT economic model can help stabilise or improve the revenues of FT producers.  

First, there are limits to the “generosity” of the FT minimum price. If it is too high relative to standard price observed in conventional markets, there is the risk that consumers will be discouraged to buy FT products. However, if the FT minimum price is not generous enough, it will probably not have a significant effect on poverty. In other words, there is a trade-off to be made between the need to ensure the growth of FT markets and the need for the FT movement to have a significant economic impact for the producer organisations involved. Given the high level of competition in the field of “ethical consumption” (with the proliferation of “ethical labels” with varying standards), there is a growing tendency in the FT movement to privilege FT sales growth, tendency which implies to lower standards and to align FT prices more closely to conventional market prices.

Second, contrary to a popular belief, the disposal of a FT label does not guarantee producer organisations that they will be able to sell all of their FT production at FT conditions. Labelling initiatives can just simply define the rules of the game for FT markets (certification, minimum price,

pre-financing, traceability, etc.) and try to ensure that standards are enforced. They cannot guarantee that each producer organisation involved in the movement will have access to FT markets. They cannot guarantee either that buyers involved in the movement will pay a price higher to FT minimum price. In other words, as in conventional markets, market access and prices are also determined on a competitive basis in the FT value chains. Free trade logic takes place once FT rules and standards are accepted by the different protagonists in the FT value chains. As underscored by one author: “Fair Trade does not pose any challenge to the free market system; rather it is a part of that system that increases the welfare of a target group through a speciality market” (Mohan, 2010: 45/6).

Following this free trade logic, it is not a surprise that FT producer organisations are generally recruited not from the most marginalized but from the better-off among them. Producer organisations that have some “social capital” and some international ties are those that are more likely to enter the FT value chains.

“Over-certification” is the other unfortunate implication of this free trade logic. “Over-certification” means that some FT production (production obtained by following FT standards) had not been sold according to FT conditions. According to estimates from F air t r a d e I n t e r n a tio n al (FLO), over- certification concerns on average 30 per cent of the volume produced by producer organisations and up to 70 per cent in the case of “hired-labour” (that is plantation wage workers) organisations. Note however that some case studies tend to report higher over-certification rates. Whatever the case, one scenario must be borne in mind: as FT producer organisations tend to have higher costs on average, they might incur huge losses in the case where their “over-certified” production is sold on conventional markets at prices below their costs.

These limitations regarding price-setting mechanisms and market access explain why the local impact of the FT movement is generally mixed. In some circumstances, involvement in Fair Trade has proved beneficial for producer organisations. In other circumstances, this had not been the case.

III – The global impact of FT

If the evidence regarding the local impact of the FT label tends to be mixed, it is all but unambiguous regarding its global impact. It is at this latter level of evaluation that the shortcomings of the FT economy are more apparent. We must say that if Fair trade has been a huge marketing success (revealed by the important sales growth rates recorded until now), it remains until now a very insignificant part of the world trade system.

As an alternative economic model which aims to supersede aid and free trade, the FT approach tends to generate low average revenues for producer organisations involved in it. In 2008, the gross average revenues that accrued to producer organisations amounted to 74 Euros annually per worker. This figure which represents 16 per cent of the average GDP per capita of the Least Developed Countries in 2008 is not measured net , i.e. costs are not deducted.

As a transfer mechanism, the FT economic model seems also to lack efficiency. To take the case of the United States, for each dollar paid by “ethical consumers” to buy a FT coffee product, only 0.03 dollars are actually transferred to producer organisations. This low rate of transfer is illustrative of the fact that the surplus paid by consumers is appropriated by intermediaries, including the labelling initiatives.

If the FT economic model is supposed in principle to benefit producers in the poorest countries, in actual practice, the FT movement targets more those in the richest developing countries. The Least Developed Countries are for example underrepresented among FT producer organisations (13 per cent of the total). This outcome derives from the bias associated with the FT certification model. To be involved in the FT value chains, producer organisations have to pay for the certification (which is to be renewed annually). Given that the certification process is relatively costly, this tends to favour producers in countries with a higher level of development. There is also the fact that the offer of certification by labelling initiatives is biased towards products exported by Latin America countries (coffee and bananas for example), a region which is on average richer than Africa and developing regions in Asia.

Besides excluding producers in the poorest countries, the FT movement tends also to marginalise the countries which are the most dependent of the revenues obtained from the exports of primary products. To illustrate this, let’s take for example the case of coffee, the FT flagship product. Ethiopia and Burundi are the two countries most dependent in the world on coffee revenues which account respectively for 34 and 26 per cent of their export revenues. Until 2009, there were only three FT coffee certifications in Ethiopia and none in Burundi. Paradoxically, Mexico and Peru which are not dependent at all on coffee exports (less than two per cent of their export revenues) accounted for 31 per cent of the total FT coffee certifications, that is a share superior to those of Latin America countries like Honduras and Nicaragua which are much more dependent on coffee exports. For products like bananas and cocoa, the same pattern can be observed. In these different cases, the geography of trade flows obeys the classic determinants of conventional trade flows: development level and distance. American buyers of FT products will prefer to buy FT coffee in Mexico at lower costs than to travel until Burundi just to make the world trade exchanges “fairer”!

Conclusion

Despite the generous intentions of its protagonists, the FT economic model is not in practice an alternative to aid and free trade. It tends rather to reproduce their deficiencies, those of free trade notably. If the FT label has been more successful than previous attempts (“historical” Fair Trade) in terms of sales, it owes that performance to its association with standard distribution networks and the giants of the agrifood business, i.e. the same actors who are considered by many as responsible for a non-negligible part for the “unfairness” of the international trade system. Looking at its global socioeconomic impact, the limits of the FT economic model are certainly illustrated by the way in which it marginalises the poorest producers and the most dependent countries as well as it low average returns.

However, the most important criticism that can be levelled at the FT movement is that it does not challenge the current structure of the international trade system. Its acceptance of the current global division of labour is a serious impediment to the achievement of fairer distributional outcomes. For producer organisations in developing countries are not poor because they receive low prices. The fundamental reason is that they are trapped in low-productivity economic activities. Unless developing countries change their economic specialisation, by starting to process locally their own primary products, it will be in vain to expect a strong economic development. Centuries of history within the capitalist global system show that specialisation in the exports of primary products is not conducive to economic development. That lesson is still to be learnt by the FT movement.

The current challenge is not to adapt to the current neoliberal order (what the FT movement does) but to transform it. This radical idea of “alternative” Fair Trade remains relevant more than ever. Its practicability will no doubt necessitate stronger mechanisms of international solidarity between peoples.

References

Mohan, Sushil (2010) Fairtrade without the Froth: A Dispassionate Economic Analysis of ‘Fair Trade’ (London: Institute of Economic Affairs).

Sylla, Ndongo Samba (2014)

The Fair Trade Scandal. Marketing Poverty to Benefit the Rich (Pluto

Press; Ohio University Press).

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Economy

Pandemic Recovery: Follow the trail of silence

Naseem Javed

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When common sense becomes the enemy of state; deep silence slowly slips and slides, covering high and low competence in order to survive; gagging new ideas and killing change.  Discover hidden peaks of such fears, lack of skills and incompetency and follow the trail of silence and here to achieve a faster pandemic recovery engage in open discussions eliminating fears of change and encourage upskilling. Wake up the sleepy isolated Rip Van Winkle from the dreams as the world has already changed.

Now is post pandemic recovery time. Follow the silence and engage in constructive dialogue.

Trapped in post-pandemic paralysis of local economy facing restless citizenry; today, some 200 nations mostly in critical lack of digital transformation, without speed and efficiency to uplift the nation, all delayed for fears of change and lingering incompetency, already leaving some 100 high potential nation critically behind.

Digitization of Public and Private Bureaucracies of the world became critical necessity decade ago, almost free many years ago, but the deep silence never allowed any open bold debates on transformation for fear exposure of mismanagement risking job securities.

Today, stripped naked in public are broken economies of the world, buried under mountains of crumpled twisted paper, trying to figure out backlogs and deep losses. Nations without digitization will remain crumbled economies, businesses without digitization will not survive and individual office workers without advanced understanding on such topics may have no future. Any business model irrespective size, type, location to go forward must base on solid digitization to bounce of global stage.

When people stepped out of caves or from darkness into light, a time came when without electricity a business could not function.  Digital transformations of world economies during the last decade were at a snail pace. Now Covid-19 simply stepped on that snail. Calling nations to digitize or linger on bankruptcies. Institutions lagging behind, like Chambers and Trade Associations in old models and Public Private Sectors of the world all now openly challenged.

Pandemic recovery needs massive real value creation, calls for revitalized national SME base, digitized on global standards, capable and upskilled citizenry to produce quality, performance and profitability. Ability to dance on global digital platforms and showcase talents creating collaborative synthesizim.  Today, any absence of national mobilization of entrepreneurialism and upskilling of national SME on digital platforms for exportability is becoming number one national economic and political issue.

Trade wars mostly become issues when nations lack skilled citizenry with speed to earn exportability and create foreign exchange to boost economy and create grassroots prosperity….hence, chaos on the streets, towers of debts, broken economies. Today, the global masses are not waiting for The Fourth Industrial Revolution as what they need is ‘mental-industrialization’ a serious process of self-discovery gymnastics to liberate them from blockades of old mental-divides and enter into new digital-divides.

Daily Briefing 365 Days: Cold Facts and Harsh Realties

The world learned quickly, how national leadership could shine with daily LIVE briefings, regimented execution and presence with all hands on deck to tackle issues of national importance. The populace of the world is thrilled. Following are the current critical issues of national economy, craving for the national leadership to go LIVE daily and hold open and bold discussions with questions answers and shine. Make daily briefing a yearlong agenda to fast economic recovery.

The tectonic shifts, affecting nation by nation

Hastily, societies all over the world are losing addiction to endless consumption like repulsion; such shifts on buying behaviors will alter consumption based economic models and create new narratives. This may shrink Retail 50% in developed economies. Offices may shrink by 50% due to remote-work acceptance. Downtowns may shrink 50% in selected countries. The ‘cement-structure based retail’ as predicted decade ago will eventually give-in to ‘cyber-structured-retail’ now fully dressed up in cyber-windows with AI+AR+VR 24x7x365 a new thinking emerging.

What are the new game plans; how to bring all such calamities to calm and authoritative regional and global debates and Round-table discussions to achieve sustainable systematic solutions?

The global educational delivery system crashed decades ago; the value of education lost years ago, with heavy burden on society in times of crisis must try to save itself under new models, pricing and thinking. Now speed and execution skills with complex problem solving with entrepreneurial leadership flares are the top skill needed for future, national leaderships must create daily briefing on such special areas to uplift the smartness of working citizenry.

Where is the national umbrella to park all these conflicting ideas but open discussions with new discoveries?

The small and medium size business will play the most significant role on coming years. The national trade groups like vertical trade associations and Chambers of commerce of the world will all need new adjustments to deal with new and digitally advanced entrepreneurial centric world. Some 100,000-trade associations and 11,000 Chambers must come together on digital platforms to lead in the future.

How mobilization of all such institutions and trade bodies land on digital platforms with amazing results?

Metamorphosis of Coronavirus; hidden in the damage is a bright future, the isolation and break down of economies have shifted the cause and action;  The global populace has now advanced, metamorphism has new craving; as if a caterpillar pretending asleep but in reality learning fast to fly; now leaves chrysalis, spread colorful wings and fly…

Next Step:

Firstly, speak, boldly explore and claim your path to victory and change; create big and small discussions, internal or companywide podcasts, local, national or global webcasts, but always bold and open discussions. After all, any lingering incompetency is only a proof of new grounds in big need of fertilization to uplift and upgrade knowledge. Lack of skills only represents that the discovery and exploration process of new skills never occurred. The world’s greatest people were all lifelong learners. They openly explored their own levels of competency, changed and advanced. The more you realize how little you know the more new doors you open to new ideas with amazing new information uplifting skills to advance your future, try it, share it. Follow the trail of silence and help achieve fastest economic recovery for all…

The rest is easy

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The COVID-19 Pandemic and the “Phoenix” of the Globalized Technological Capitalist System?

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In the midst of the COVID-19 pandemic, it is important to acknowledge that three prominent intellectual figures spanning the 19th and 20th centuries forecasted the cataclysm of modernity. Thomas Carlyle, René Guénon, and Jacques Ellul provided reasoned accounts to justify their views that modernity is engulfed in a state of crisis on the basis that the not-mutually-exclusive hegemonies of technology, capitalism, and globalization are not invulnerable.

While each offered a slightly different viewpoint and a slightly different description of what they took to be the crisis, their views all coalesce around the general thesis that the continuous expansion of the material and technological built landscapes will eventually prove to be catastrophic. This is for two reasons. The first, because an ever-more complex system becomes ripe for error, an error which could cause the whole system to go haywire. Essentially, “the bigger it is the harder it falls.” The second reason is that in constructing an external environment as its hegemonic priority, humanity is neglecting giving attention to spirituality, philosophy, and developing the human inward nature. The external and material becomes the fog that humanity becomes ensconced in to such an extent that pursuing such things as the ascertainment of spiritual reality through intuition, the project Plato inaugurated academia with and inspired Christianity and Islam’s later development with, becomes wrested away wholesale from the consciousness of humanity. The two factors work in a type of synergy in that they mutually reinforce one another and precipitate cataclysm. The renunciation of the pursuit of constructing an ever vaster and more complex material system, which ostensibly implies a turn toward the spiritual as a premise, is the only means to stave off ever-greater cataclysms as the material system continuously grows more complex and more globalized.

Since the Industrial Revolution of the 19th century, technology, capitalism, and globalization have exerted their unquestioned domination only increasingly—until COVID-19. Technology, capitalism, and globalization have been unquestioned to such an extent that in hindsight it is obvious, in the midst of the COVID-19 pandemic, that a global emergency of major proportions was necessary to even entertain the question that they were bound all along to eventually lead to a breakdown and inflict unprecedented harm to global health and the global economy. World War II was a destructive moment, but in no way did it impede the post-war expansions of technology, capitalism, and globalization in the latter-half of the 20th century and the first two decades of the 21st. The COVID-19 pandemic is dissimilar even to the catastrophe of World War II because of the magnitude and the nearly-universal geographic scope of the economic toll it has taken in such a short time. Moreover, while there was room for technology, globalization, and capitalism to both re-emerge and expand following World War II, their room for expansion from their forms immediately prior to the economic contraction COVID-19 exacted is likely to be minimal and is more likely to be non-existent or even negative. The contraction of the technological globalized capitalist system would inherently imply the beginning of a new post-globalization era.

What makes Carlyle, Guénon, and Ellul interesting to entertain in the midst of the COVID-19 pandemic is the grand, global, and “esoteric” natures of their philosophies of modern history. It should be noted that the dominance of scientific rationality, mechanization, and materialist economy in the modern era itself was the lens through which enabled their philosophies to bereceived as radical and “esoteric,” or not based on empirical, positivist, scientific evidence. If their views had found a way to usurp the hegemonic position in the popular collective consciousness, they would not have been seen as radical or off-base.

Thomas Carlyle’s Sartor Resartus is an 1836 fiction book that essentially inaugurated and epitomized modern social criticism toward the blind commitment to the Enlightenment and the resulting emergence of the non-spiritual materialistic basis of 19th century European politics, economy, and society. It was a chief inspiration for Ralph Waldo Emerson and Henry David Thoreau and a foundational book for American Transcendentalism as an intellectual movement in general. In Sartor Resartus, Carlyle offers a cryptic diagnosis of the ailment of modernity during the midst of its advent, the Victorian industrial age.

Speaking through the voice of the book’s protagonist, Professor Diogenes Teufelsdröckh, Carlyle theorizes of a “phoenix” that can be forecasted to take place roughly sometime in the 21st century. Carlyle writes, “we are at this hour in a most critical condition; beleaguered by that boundless ‘Armament of Mechanisers’ and Unbelievers, threatening to strip us bare! ‘The World,’ says [Teufelsdröckh], ‘as it needs must, is under a process of devastation and waste, which, whether by silent assiduous corrosion, or open quicker combustion, as the case chances, will effectually enough annihilate the past Forms of Society; replace them with what it may.’” This is flowery language that communicates Carlyle’s view that the world is destined to be consumed and destroyed as a function of the domination of those who uninterruptedly pursue the “boundless” construction of the material economy single-mindedly as their highest/only priority in conjunction with those who are non-spiritual, the “Unbelievers.” The “Armament of Mechanisers” and “Unbelievers” are synergistic and largely synonymous in that they are those who acknowledge only that which is material and perceptible by their senses.

To Carlyle, the “Armament of Mechanisers” and “Unbelievers,” by promoting the material economy, are inherently ignoring the spiritual realm, a realm that would be a moderator and reign in all-consuming materialism by embodying the virtue of renunciation (a virtue in nearly every theological and spiritual tradition). Humanity loses consciousness of the spiritual because modernity inherently divests the world of its spirit. Such a process is unsustainable because the finite nature of the world and its finite resources cannot sustain the pursuit of infinite material consumption and the increasing chaos that inherently manifests with a system that grows ever more complex. Thus, the materialist economy is bound to come into its full being, just like the mythic phoenix, before returning to ash and emerging in a different form. Carlyle reflects, “what time the Phoenix Death-Birth itself will require depends on unseen contingencies” and that it is a “handsome bargain would she engage to have [it] done ‘within two centuries.’”

René Guénon, a 20th century intellectual and metaphysician, offered what is perhaps the most sweeping and all-encompassing critique of the historical trajectory of Western civilization. He is also noteworthy in the contemporary sense as an inspiration for Steve Bannon, a chief political and policy adviser to President Donald Trump and a prominent promoter of traditionalist conservatism through such channels as Breitbart News Network. For Guénon, the West is in precipitous decline and he forecasted that it will reach a breaking point since the world is progressively displacing the realization of the quality of what he called the “Essence” of the transcendental realm (i.e. what lies beyond time and space and is perceived through the use of Platonic/spiritual intuition) with the realization of ever-greater quantity of the substance of what is material on Earth. Essentially, the progressive development of civilization corresponds to a cheapening of it and what he refers to as a “reign of quantity” rather than a reign of the quality of what can be nominally cast as the timeless Platonic Forms. Rather than conceiving of an ideal (i.e. a Platonic Form) through the use of intuition and then pursuing its realization in the Earthly material realm, everything modern defaults to gravitating around what Guénon takes to be the lowest-common-denominator, which is the measurement of everything by its quantitative rather than qualitative value. In other words, we are losing our ability to grasp and realize by intuition the ideal incarnation of all objects, concepts, and phenomena that are timeless and unchanging in the transcendent realm yet ephemeral in the material Earthly realm.

In The Crisis of the Modern World, published in 1927 shortly after World War I’s explicit embodiment of the rejection of the narrative of continual progress in modernity, Guénon reflects: “the belief in a never-ending ‘progress’, which until recently was held as a sort of inviolable and indisputable dogma, is no longer so widespread; there are those who perceive, though in a vague and confused manner , that the civilization of the West may not always go on developing in the same direction, but may some day reach a point where it will stop, or even be plunged in its entirety into some cataclysm.”

Guénon parallels Carlyle in Sartor Resartus in that he acknowledges the deeply problematic nature of cutting material existence on Earth off from any transcendent/spiritual/divine reality, a phenomenon which is only increasingly taking place in the context of modernity and not in previous ages. Devoid of any collective consciousness of transcendent reality that may prove effectual to moderating the continuous expansion of materialism and the “reign of quantity,” Guénon thinks modernity takes on a dimension antithetical to the transcendent and thus can be deemed “satanic” in the simplest nominal and non-theological use of the term. This narrative, Guénon maintains, explains the eventual dissolution of the modern world, as “the reign of quantity” will maximize the realization of quantity to its farthest limits, before triggering a cataclysmic contraction. According to Guénon in The Reign of Quantity and the Signs of the Times, the “rectification” of modernity “presupposes arrival at the point at which the ‘descent’ is completely accomplished, where ‘the wheel stops turning.’” Guénon concludes that until such a breaking point is attained, “it is impossible that these things should be understood by men in general…”

Jacques Ellul, who was perhaps the foremost philosopher-critic of technology in the 20th century (and a chief inspiration for the Unabomber), largely reincarnated without citation Carlyle’s original criticisms of modernity. Ellul felt that modernity was synonymous with one vast global technical civilization that was autonomous and not subject to human control since its overall historical development as a system and long-term consequences are not subject to human control.Ellul defines what he takes to be technical civilization in his magnum opus The Technological Society, published in 1954: “technical civilization means that our civilization is constructed by technique (makes a part of civilization only what belongs to technique), for technique (in that everything in this civilization must serve a technical end), and is exclusively technique (in that it excludes whatever is not technique or reduces it to technical form).”

Ellul made known his theory that the technical civilization will have to perfect itself and sustain its perfection, as the only other alternative to perfection is the commission of an error, either small or large, that has the ability to cause the vast and interconnected system to go haywire. Ellul declares, “the technical society must perfect the ‘man-machine’ complex or risk total collapse.” For Ellul, technical civilization is a “Behemoth” and it can “rest easy” as nothing “will prevent him from consuming mankind.” Such an elucidation of the stakes involved in creating an ever-more complex and gigantic globalized and technological system are deeply relevant to the narrative of how COVID-19 wreaked havoc on global health and the global economy so quickly and so easily. Air travel and other forms of transportation infrastructure were technological developments that had reached a zenith at the time of the onset of the pandemic as a function of globalized capitalism also being at a zenith. The totality of the network of global transportation infrastructure manifested by technical civilization’s progressive global development since the Industrial Revolution was compounded by the growth in the levels of global travel on the part of the largest global population in history at the time of COVID-19’s onset.

Ellul denounces liberal political economy for providing the favorable climate necessary for the unquestioned manifestation of technical civilization and refutes prospective critics who would maintain that liberal economy and technical civilization are compatible for the long-term:

“It will doubtless be pointed out, by way of refutation, that production techniques were developed during the ascendancy of liberalism, which furnished a favorable climate for their development and understood perfectly how to use them. But this is no counterargument. The simple fact is that liberalism permitted the development of its executioner, exactly as in a healthy tissue a constituent cell may proliferate and give rise to a fatal cancer. The healthy body represented the necessary condition for the cancer. But there was no contradiction between the two. The same relation holds between technique and economic liberalism.”

Just as Carlyle documented what he took to be the crisis of modernity at its advent during the initial industrialism of 19th century Victorian England, Guénon documented in the context of retrospectively accounting for the catastrophes of both World Wars I and II, and Ellul documented in the context of the post-World War II exponential growth of technology, the COVID-19 pandemic provides another milestone with which to, at a minimum, revisit their mutually compatible theses with respect to the cataclysm of modernity. Whether COVID-19 proves to be the “big one” and arrests the hegemonic triumvirate of technology, capitalism, and globalization remains to be seen. At a minimum, what can be gleaned from Carlyle, Guénon, and Ellul is that modernity’s improvement of the material standard of living for so many globally needs to be balanced with a view toward moderation and long-term sustainability. Liberal political economy, science, and technological innovation have until now been single-minded seekers of continuous growth without acknowledging the need to at some point ossify or plateau the technical civilization they have each been instrumental in constructing so that it does not become a phoenix and burn to ash.

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Iron Fist for Pacific East

Stephen R. Nagy

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“Americans performed three very different policies on the People’s Republic: From a total negation (and the Mao-time mutual annihilation assurances), to Nixon’s sudden cohabitation. Finally, a Copernican-turn: the US spotted no real ideological differences between them and the post-Deng China. This signalled a ‘new opening’: West imagined China’s coastal areas as its own industrial suburbia. Soon after, both countries easily agreed on interdependence (in this marriage of convenience): Americans pleased their corporate (machine and tech) sector and unrestrained its greed, while Chinese in return offered a cheap labour, no environmental considerations and submissiveness in imitation.

However, for both countries this was far more than economy, it was a policy – Washington read it as interdependence for transformative containment and Beijing sow it as interdependence for a (global) penetration. In the meantime, Chinese acquired more sophisticated technology, and the American Big tech sophisticated itself in digital authoritarianism –‘technological monoculture’ met the political one.

But now with a tidal wave of Covid-19, the honeymoon is over.” – recently diagnosed prof. Anis H. Bajrektarevic on these very pages.

Following lines are a gross-detail insights into a mesmerising dynamic engulfing lately Far East and eastern Pacific.

Currently, China escalated its economic coercion against Australia by imposing two tariffs on the import of Australian barley. The first is a 73.6 % tariff on the agricultural product and the second, an additional 6.9 % arguing that the Australian government subsidies its farmers to grow this lucrative crop. Seen in tandem with the beef import ban on four Australian abattoirs, Beijing is pressuring Canberra hard to drop its calls for an independent COVID-19 (C-19) investigation and enforcing painful economic pain on Australia for what Beijing perceives as intolerable behaviour to a country that has “benefitted so profoundly” from trade with China. 

These actions raise serious questions for Japan and its friends. How does Japan respond to such a clear demonstration of punitive economic coercion against one of Tokyo’s closest friends in the region? What about other interested parties? Do Canadian, American, and other agricultural exporters take advantage of Australia’s thorny relationship with Beijing as Brazil did in the midst of the US-China trade war by exporting soya beans and other agricultural products?

Looking at the short term, especially in the wake economic damaged caused by the C-19 pandemic taking, the logic of expediency to quickly deliver economic goods to the struggling agricultural industry is sensible.

In that scenario, those countries with amicable relations with China would fill the vacuum being created by economic coercion against Australia. The candidates include Brazil, Russia, amongst others.

In the mid to long term, this sends the wrong message to states that engage in economic coercion. The message being sent here is that countries that are vulnerable to punitive economic measures have little choice to relent to Chinese or others states demands as other states will not collectively stand up to blatant economic coercion.

One by one, what can be done?

Japan and other liberal democratic states cannot make up for the sheer volume of agricultural and other exports that the Chinese market consumes. Even if they could open their markets as a temporary alternative, there would still be a huge gap. Nevertheless, an agreement to buy goods from a targeted state may relieve some of the economic pressure being applied by coercive states.  

Duanjie Chen of Canada’s MacDonald Laurier Institute correctly points out that Beijing practices economic coercion in a sophisticated and well-worn manner, by discreet to evade World Trade Organisation (WTO) disputes, precise calculation for maximum impact, and they are tailored to split western allies.

To lessen the effectiveness of these practices, Japan and other like-minded states need to mindful of these patterns and build multilateral mechanisms to create more resilience against punitive economic tactics.

In the first area, discreet to evade WTO disputes, Japan and other middle powers need to work collectively to close the WTO loop holes such that they cannot be exploit to deliver painful economic messages to states that are deemed to cross Beijing’s red lines.

To accomplish this task, WTO reform is crucial and that means collectively lobbying the US to work with allies to reform the WTO such that it functions better and can protect member states from economic predation.

If consensus cannot be achieved to reform the WTO, then like-minded states should consider a scrap and build approach that starts with like-minded countries but aims to achieve the same objectives.

The 2nd area Chen identified was the precise calculation for maximum impact. Japan felt this in 2010 with the rare-earth embargo, an embargo that hurt its high-tech firms and automobile industry. Australia is feeling this now with its beef and barley industries beings targeted. Canada felt similar measures against its canola, soya and pork industries in the wake of Ms Meng Wanzhou arrest. The tactics even included the hostage diplomacy of Michael Kovrig and Michael Spavor who are still detained to this day.

Mitigating this hard-line approach requires a multilevel approach and multilateral cooperation. At the first level, like-minded states need to brainstorm and commit to collective and equal reciprocation of the economic coercion. For instance, collective stopping the export of a key or key ingredient, components or otherwise to China until the respective coercion stops.

Here agricultural products come to mind. The growing middle class in China also has a growing appetite for the high quality and safe agricultural from countries like Japan, Australia, Canada, the US, and the EU. These like-minded states should find ways to collectively limit their agricultural exports when one or more of its members are subject to economic coercion. China is vulnerable in other areas as well.

Reputational costs are also critical levers that should be collectively applied as well. Chen mentions withdrawing membership from the Asian Infrastructure and Investment bank (AIIB) as a possible measure. I would add MoUs signed with the BRI, and 3rd country infra-structure projects as well. These are crucial institutions that China has invested both treasure and political resources in to bolster its international credentials as a provider of global public goods.

Of Ban and Japan

Japan would play a key role here in that Beijing has assiduously courted Japan to join the BRI and 3rd country infrastructure as a way to build credibility for the BRI infrastructure projects. Without partners, China’s signature initiatives cannot be internationalized, and China will not recognized as a globally admired and responsible stakeholder.

Another key initiative to be collectively adopted by Japan and other countries in their trade negotiations with Beijing is a clause that expressly forbids economic coercion on Japan and or its allies. This kind of clause could be included in other trade agreements and negotiations that Beijing deems critical to its socio-economic development.

Thinking creatively, Japan and like-minded countries such as Canada, Australia, South Korea and others should think about ways to introduce their own “poison pill” into trade agreements. The US did this with he USMCA FTA between Canada, Mexico and the US by the inclusion of a clause in which the US had veto over Canada and Mexico’s other free trade partners, in particular if either entered a free trade deal with a with a “non-market country”, i.e. China.

In this hypothetic “poison pill” or let’s call it “Musketeer Clause”, trade agreements would include a clause that required partners to collectively respond to economic coercion of one of its members by applying diplomatic, economic and other pressure on the offending actor. This could be a collective boycott, collective lobbying in international organizations, collective reciprocal tariff increase, etc. In short, an embodiment of The Musketeers motto of One for all, all for one.

The third area that needs be addressed is the tactics deployed to tailored to split western allies. The above hypothetic clause would go far in doing that by creating as grouping of like-minded states that are interested in protecting their national and collective interests.

This will not be enough. With China being the largest trading partner of Japan, South Korea, Australia and many ASEAN states, an economic re-balancing must take place in which states collectively socially distance themselves from China. Here, the key that they are less dependent on bilateral relations for economic prosperity and more dependent on a balanced, multilateral trade relations with a collection of like-minded, rules-based countries and China.

Complete decoupling from China is not realistic considering the level of integration of our economies. It is also not in the economic or security interests of the states in questions nor the global community. What is in the interests of Japan, Australia, South Korea, Canada and other middle powers and smaller powers is finding ways to buttress a rules-based international order and to push back against a track record of punitive economic policies. 

Resistance is not futile. Victims of economic coercion need to channel their own Winston Churchill and epitomize the his views on never giving up in the face of force.

“This is the lesson: never give in, never give in, never, never, never, never—in nothing, great or small, large or petty—never give in except to convictions of honour and good sense. Never yield to force; never yield to the apparently overwhelming might of the enemy.”

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