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NAFTA, Free Trade, Liberal Hegemony

Elements of a Dialog on the Idological Implications of Free Trade

Subject: NAFTA, free trade, liberal hegemony

Date: Fri, 20 Jan 1995 09:33:13 EST
From: "Mark Rupert" (
Message-ID: (

Gosh, all of two postings to this net since I joined the other day and already the presuppositions of liberalism seem to permeate this virtual space. Both postings asserted as virtual truth that free trade was, is and always shall be generally beneficial in the long run.

I am skeptical of liberal claims about the universal wonders of free trade insofar as economists' theories of trade - and liberalism more generally - tend to abstract politics from economic relations. In the case of NAFTA this results in a neglect of the systematic and institutionalized Mexican policies which suppress independent labor unions, keep workers subordinated and their wages low, and offer a "friendly" business climate for foreign investors interested in low-wage production for export to the vast consumer market next door (on labor supression in Mexico, see Dan LaBotz, Mask of DEmocracy; also documented by Amnesty and Americas Watch). Liberals also neglect the bargaining power which MNCs gain relative to workers and (potential or actual) host communities when their mobility is enhanced by agreements such as NAFTA. Although the positive effect of NAFTA on capital mobility has often been denied, the Business Roundtable (which represents the largest investors) was very clear and explicit about the advantages of politically stabilizing the Salinas reforms through institutionalizing them in a continental trade pact (see, for example, Sandra Masur's article in Columbia Journal of World Business, 1991). This means that 'factor price equalization' will get a substantial boost from the ability of corporations to whipsaw on a continental scale. It means lower wages in the US and Canada, it means a further undermining of unions and their vision of 'industrial democracy' (limited as that may be, especially in the US), and it means the accelerated erosion of labor, health and safety, and consumer regulations. In short, it means downward harmonization. Evaluated relative to standards of communal self-determination - rather than the aggregate output beloved of liberal economists - NAFTA does not promise an improvement in everyone's lives. What's good for General Motors is not necessarily good for (North) America.

I don't want to bore people with a protracted diatribe on this issue, I just wanted to have something posted which suggested to other readers of this net that it is not a homogeneously liberal space.

Mark Rupert
Department of Political Science
Syracuse University
Syracuse, NY 13244-1090
(315) 443-1748

From: "Joe F. Walenciak" (
Date: Fri, 20 Jan 1995 10:22:45 GMT-6
Message-Id: (

Wow! I always thought that defense of free markets was the conservative position! I am slightly to the left of Rush Limbaugh, but very much on the right end of the political/economic spectrum.

May I call attention to recent findings of a study done by the Heritage Foundation (reported in the WSJ) regarding economic freedom.....

Taiwan, South Korea, Chile, Mexico and many other emergint-market countries have provided vivid proof that economic prosperity depends on a free economy, not on U.S. aid, the heavy hand of government planning, or even advanced infrastructure and abundant natural resources. Freedon is what counts most. Indeed, the data clearly show that the wealthiest countries in the world are the most economically free, while the poorest countries are the most unfree. Thus, economic freedom is a critical factor in the relative wealth of nations. The more government interferes in the market, the more it impedes and lowers the standard of living of its citizens.
...the main cause of poverty around the world is not the failure of rich countries to spread the wealth through foreign-aid programs, but the misguided economic policies of developing countries themselves. This presents a paradox: The countries that appear to most need U.S. aid are the ones that least deserve it because their government- controlled economies will misuse the money. By the same token, the countries that are least likely to squander U.S. aid--because they have free economies--are the countries that least need it.
The 'Index of Economic Freedom' demonstrates unequivocally that countries with the highest level of economic freedom also have the highest living standards. Likewise, countries with the least amount of economic freedom have the lowest living standards.

I view this as the conservative position. In these parts, when you call someone a "liberal," them's fightin' words!

Joe F. Walenciak, Ph.D., Associate Professor of Business/Economics
John Brown University, Siloam Springs, AR, 72761, USA
Office phone: 501-524-7281, Home phone/fax: 501-524-8856