Freedom vs. Free Markets, Part 2
Note: This is the second article in a three-part series scheduled to appear this week. Part 1, which analyzed the ongoing protests in Turkey, Brazil and Egypt, can be found here. Part 3 will appear on Friday.
By NAVID FARNIA
The United States and the European Union recently began meetings to discuss an agreement that would potentially establish the world’s largest free trade zone. Proponents of the Transatlantic Trade and Investment Partnership (TTIP) between the U.S. and Europe argue both sides would profit by over $100 billion. One representative even proclaimed TTIP would “complement one of the greatest alliances of all time with an equally compelling economic relationship.” The U.S. is currently conducting similar free trade negotiations with Asian countries in what is called the Trans-Pacific Partnership.
Free trade agreements reflect capitalism’s globalization through neoliberal policies. Thus, efforts made to advantage multinational corporations by deregulating their activities are not unforeseen. The negotiations’ conspicuous lack of transparency however, is significant as it implicates nation-states’ convoluted partnerships in neoliberal projects. Specifically, states are maneuvering to decrease government roles in markets while at the same time, advancing national security apparatuses that protect free market expansion and neoliberalism.
The secretive nature of the free trade negotiations reveals representatives’ foresights that any agreement would likely prompt widespread public dissent. Proponents of these talks recognize, like everyone else, that free markets deregulate the expansion of labor exploitation. And while open markets reinforce exploitation of workers, racialized workers are exponentially abused, a process referred to as superexploitation (women, and particularly women of color, experience superexploitation as well).
The infamous North American Free Trade Agreement (NAFTA) perfectly demonstrates the method by which superexploitation – also known as hyperexploitation – takes place. In addition to driving over a million Mexican farmers out of business after taking effect in 1994, NAFTA also initiated the Mexican manufacturing industry’s collapse, inevitably leading to massive job losses. Moreover, American companies that originally moved to Mexico after the agreement, eventually relocated again after finding even cheaper labor in Asia. In the meantime, David Neiwart explains:
The American economy was bustling, creating in the process in excess of 500,000 unskilled-labor jobs every year, the vast majority of which American workers either would not or could not perform. Yet the antiquated American immigration system only issued 5,000 green cards annually to cover them.
The result was a massive demand for immigrant labor in the United States, and an eager supply in Mexico seeking work – but at the border where a rational transaction should have been taking place, there was instead a xenophobic crackdown aimed at keeping Mexican labor in Mexico, with predictably limited success.
Multinational corporations benefiting from NAFTA decimated Mexico’s economy, which subsequently led to the accession of the drug trade in the country. While much of Mexico’s capital left its borders, it became further concentrated in the U.S., explaining why masses of Mexican workers emigrated north. In effect, NAFTA sanctioned superexploitation of Mexicans on both sides of the border by enabling corporate monopolies in the free market (concurrently essentially destroying small business ownership in Mexico) and deregulating working conditions. Mexican workers are furthermore, continually relegated to jobs that as Neiwart says, Americans cannot or will not perform.
This process parallels another mass racial migration in American history. Industrialization from the late 19th through mid 20th century was perhaps the central basis for the Great Migration of Black people from the South to the North during the period. While it is naïve to ignore that Blacks in the South were also moving to escape racial violence, the South’s devastated post-war plantation economy and the flow of capital to the North were undoubtedly major factors (especially given that racial violence existed in the North as well).
Superexploitation of Black workers was typical during this period. Blacks who remained in the South were relegated to the sharecropping system (essentially a reincarnation of slavery with debt); in the North, Black workers did not have the same rights as their white counterparts and were systematically excluded from labor unions. These historical labor disparities resonate to this day.
Today, migration effects are not limited to the U.S. In fact, migration processes have become increasingly global over time due to capitalism’s expansion. William Robinson describes this outcome in detail:
Over the past few decades there has been an upsurge in transnational migration as every country and region has become integrated, often violently, into global capitalism through foreign invasions and occupations, free trade agreements, neoliberal social and economic policies, and financial crises. Hundreds of millions have been displaced from the countryside in the Global South and turned into internal and transnational migrants, providing a vast new pool of exploitable labor for the global economy as national labor markets have increasingly merged into a global labor market.
The creation of immigrant labor pools is a worldwide phenomenon, in which poles of accumulation in the global economy attract immigrant labor from their peripheries.
In the broad scheme, neoliberal policies to create free markets and ensure capitalist expansion lead to a global network where capital is concentrated in certain areas while resources are drained elsewhere. The historical and contemporary cases exemplify this development.
Internal and transnational migrants are easily exploited because state ideological apparatuses deem them inferior. This is especially true in Western countries, which uphold the white male citizen as the standard. In practice, state ideology permeates through institutions such as law and education, reinforcing racialized migrants’ status as second-class or non-citizens. In the U.S., the state’s racist ideological apparatus particularly targets Blacks (who are constantly displaced through projects of gentrification and mass incarceration), Native Americans (who continue to experience the effects of colonization) and Latinas/os. Ultimately, free market capitalism’s direct effect is racial and economic superexploitation.
Neoliberal deregulation and privatization policies lead to unemployment, underemployment and labor outsourcing, which all disproportionately impact people of color and lead to other issues. Blacks and Latinos have higher unemployment rates than whites in the U.S.; this is exacerbated by free trade agreements that result in the relocation of American jobs to countries where corporations can more easily exploit workers. These jobs are largely in industry and large-scale agriculture, which are dominated by workers of color. In sum, neoliberalism manifests in racialized labor marginalization (unemployment) at home and superexploitation both domestically and abroad through wage servitude. American economic policies are unavoidably rooted in racial exploitation.
To be sure, many white workers are exploited as well. And in circumstances where white workers are especially at risk, interests between people of color and whites converge. For example, labor and environmental groups have expressed reservations with the TTIP negotiations between the U.S. and Europe. Critics recognize the talks are strictly about maximizing big business profit. There are real concerns that a free trade agreement will result in the transfer of American jobs to EU countries that have lower wage restrictions and less worker protections (which has happened after previous free trade agreements). But these concerns are realities for working class people of color because their jobs are often the first to be shipped elsewhere. In a global landscape where numerous countries are deregulating their economies and cutting social subsidies and benefits, neoliberal expansion is an attack on workers of color.
In truth, free market capitalism is fundamentally dependent on the existence of widespread poverty and exploitation. For capitalist entities, maximizing economic profit means lowering workers’ wages to the most allowable extent. And although this exploited class includes many white workers, workers of color experience superexploitation – systematic racial discrimination exacerbates their economic exploitation. Therefore, analyses of economic globalization that do not centrally consider racism, lack concrete definition and undermine capitalism’s targeted effect on people of color. In the free market, the racially exploited worker is unfree.
Navid Farnia received his Master of Arts degree from the Institute for Research in African American Studies at Columbia University in New York. He is an Iranian American who was born and raised in Oklahoma.
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