The World Trade Organisation represents the interests of the capitalist class\nand is a product of the lessons they have learned for protecting their system.<\/em>\n<\/p>\n\n\n\n \nThe World Trade Organisation is not to blame. Capitalism is. Although \nthe WTO has emblazoned itself in everyone’s consciousness as the \nunacceptable face of globalisation \u2013 indeed as the secretive cabal \ndirecting the insidious movements of world finance \u2013 what it really \nrepresents is a trend as old as capitalism itself, and the continuation \nof old policies under a new name.<\/p>\n\n\n\n Capitalists are not oblivious to their own interest in preventing \ntheir system crumbling. The WTO and its associated world infrastructure \nis directly related to lessons they have learnt throughout the history \nof wars and disasters that the market has inflicted on the human race in\n the past century. <\/p>\n\n\n\n In the 1930s, national governments relied on the free trade in gold \nto regulate the relative value of their currencies, and structure \ninternational transactions. Capitalism’s tendency towards disharmonious \nmovement and uneven economic growth meant that gold tended to \nconcentrate into the hands of a handful of states (America possessed up \nto 60 percent of the world’s monetary gold at one point), leaving others\n (such as Germany) desperately short of the means of international \ntrade. This imbalance in trading power led directly to the conditions \nwhich prompted the second world war, and devastated almost the entire \ncontinent of Europe. <\/p>\n\n\n\n Determined to avoid this situation happening again, the dominant \ncapitalist powers met after the war, to construct an effective \ninternational machinery to enable trade to progress between states \nsmoothly. The Bretton-Woods agreement, as devised largely by J M Keynes,\n sought to regulate international capital movements. <\/p>\n\n\n\n Likewise, the International Monetary Fund and the World Bank were \ncreated to ensure nations avoided suffering the same bankruptcy as \nGermany effectively endured in the 1920s. It was envisaged that these \ninstitutions would be joined by an International Trade Organisation, to \nlay-down the rules by which trade would be governed. This institution \nwas, however, vetoed by the US at the Havana conference in 1947.<\/p>\n\n\n\n Unworkable system <\/strong><\/p>\n\n\n\n What stood in place of the IT0 was the General Agreement on Tariffs \nand Trade, which came into force in 1948, and was based on the \nunobjectionable sections of the Havana Charter. Over time, GATT proved \nto be unworkable, with inadequate enforcement procedures, unclear rules \nand the rigidities of consensual agreement systems. <\/p>\n\n\n\n Thus, at the Uruguay round of GATT negotiations which ended in 1993, \nthe World Trade Organisation was agreed upon, as a “superior” successor.\n The Uruguay round significantly expanded the scope of the international\n agreement’s remits, bringing agriculture, services and intellectual \nproperty within its field of competence, as well as seriously reducing \ntariffs and other protective measures allowed. This lead to an almost \nimmediate increase in the volume of international transactions: \naccording to the Eurostat Yearbook 2000 external investment by European \nUnion states increased by almost 500 percent from 1995 -1999. <\/p>\n\n\n\n This is simply part of an on-going trend within the development of \nthe market system. As trade progresses, so too does standardisation of \nthe rules and groundwork. In the early nineteenth century England, for \nexample, a merchant would have had to know how to reconcile his Durham \npecks with his Dorset grains and his Norfolk drams, when selling goods \nby weight. Likewise, each town would have its own time (relative to its \ndistance in minutes from Greenwich). These times and weights formed the \nlegal framework for trade in each of these districts, and formed a \nburdensome cost to any business trying to operate across them.<\/p>\n\n\n\n In time, the need to concentrate capital, and increase the area and \nscope of the circulation of commodities meant that such discrepancies \nbetween local authorities were overcome. Usually, this meant over-ruling\n them through the authority of the centralised state, and enforcing a \nuniform set of rules across the whole economic zone. This tendency for \nthe concentration of capital continues, and the same problem manifests \nitself in differences of trade regulations between nation-states, \nalthough this time there is no central authority powerful enough to \ncompletely over-rule them and impose its standards. <\/p>\n\n\n\n The reasons for the increasing concentration of capital lie, \nessentially, in the methods by which labour is exploited by capital. \nWhen a commodity is produced the capitalist calculates its cost of \nproduction (the cost of goods that went into it, plus labour), and then \nadds a profit mark up roughly in line with the expected rate of profit \nof their rivals. This average rate of profit applies regardless of the \namount of value added by the specific production process involved, but, \nrather, the total value added across the whole economy. <\/p>\n\n\n\n What this means is that industries which involve a large input by \nlabour (i.e. which add a lot of value) lose out because the average \nprofit mark-up is less than the value they add. This means that this \nadded value is transferred into the profits of industries which are less\n labour intensive. It is, therefore a competitive advantage for \ncapitalists to increase the ratio of productive capital to labour (known\n as the organic composition of capital). With this increase comes an \nextension of the productive capacity in an industry, with capacity being\n taken up by fewer and fewer production units.<\/p>\n\n\n\n Alongside this concentration of capital is the increase in the \ntransportation capacity of society. Technological advances in transport \ncontinue apace with productive capacity, meaning that, in general, the \ncirculation of commodities and trade can increase faster than the \nproductivity of society (more goods to transport multiplied by a faster \nrate of moving them). This is born out by the chart below from the WTO<\/p>\n\n\n\n In each period the rate of increase in trade is greater than the rate\n of increase in output of merchandise. One of the most significant \ndetails, however, if the massive increase in trade in 1990-2000, in a \nperiod in which merchandise output actually fell compared to the \nprevious period. The effects of the inauguration of the WTO can be seen \nin this increase. It is an increase in excess of the usual growth in \ntrade, and thus represents an exceptional occurrence.<\/p>\n\n\n\n The motivation for this spurt in trade may well lie in the observable\n decline in productive output across the whole chart. The rate of output\n growth is under half that of 1963-1973. Capitalists, misled by theories\n which see value as being created rather than realised by trade, treat \ntrade as a good in itself, and think that by increasing the circulation \nof goods they will be able to dig themselves out of the profitability \nhole indicated by the drop in output growth. Alongside this is the \ntemptation to exploit the differences in national and regional rates of \nprofit to try and realise an exceptionally high profit.<\/p>\n\n\n\n What this means is, effectively, that through increased trade \ncapitalists are attempting to rip each other off, as a result of their \nincapacity to exploit the workers enough. Through increasing trade \ncompetition, they are effectively increasing the scramble for a share of\n the total global production of surplus value. This can also be seen in \nthe increase in currency speculation and finance capital movements \naround the world. Since these forms of activities are entirely \nunproductive they represent a mere redistribution of booty among the \nthieves.<\/p>\n\n\n\n This tendency can also be observed in the decision to open up \nservices to international competition.\nThe International Monetary Fund (IMF) structural adjustment programmes \nusually force countries to attempt to decrease the size of their state \nsector, paving the way for firms from advanced capitalist countries to \ntake over these services and sweat profits out of the workers there. It \nrepresents another way of opening up otherwise marginalised sources of \nsurplus value to be taken back to the industrialised core.<\/p>\n\n\n\n Vast areas of the world, the “post-colonial” zones are still \ndedicated to low value yielding primary products such as mono-crop \nagriculture and mining. Most of the increased trade remains between the \nindustrialised manufacturing centres. The top five exporting states (EU,\n US, Japan, Canada, China) represent 53.2 percent of the world export \nmarket (according to WTO figures), whereas the top four importers take a\n 54 percent share between each other. The EU and the US both import \nconsiderably more than they export, and represent a substantial \nlucrative market to access. <\/p>\n\n\n\n This imbalance of trade between the core and the periphery indicates \nthe way in which the idea that opening up free trade will benefit poor \nnations and assist in their development is flawed. The sheer economic \nclout of the big capitalist states means they can bully and force other \nstates into letting them have their way. As George Monbiot noted in his \nGuardian column (6 November) one WTO delegate from a poor state saying \n“If I speak out too strongly, the U.S. will phone my minister. They will\n twist the story and say that I am embarrassing the United States. My \nGovernment will not even ask, ‘What did he say?’ they would just send me\n a ticket tomorrow”. <\/p>\n\n\n\n Such raw power means that whatever formal equality of the rules, they\n will still be used to serve the ends of the dominant states. Each \nnational capitalist class seeks to protect its position and its \ninvestments, and is exceedingly unwilling to relinquish control of the \nstate force which props up its power. The dominant policy is currently \nto pursue mutual capital interpenetration, and thus prevent losing \ncontrol of their national economy at home, whilst having sufficient \nhostage capital to deter expropriation abroad. Whilst the times are good\n this policy is tolerable, but come a time of crisis each group will \nseek to save their own skins first and foremost. Should America sink \ninto deep recession, it may decide to put a stop to the raiders taking a\n share of its profits, and throw the barriers back up. <\/p>\n\n\n\n Certainly, so long as world society depends first and foremost upon \ncompeting capitalist groups vying for profits, it will be subject to the\n anarchy of capitalist self-interest, and any world body will be \nsubordinated to the Machiavellian manoeuvrings of these groups. So long \nas capitalism remains any world body will be used as a potential tool \nfor exploitation and robbery. The only genuine way to move forward to a \nworld human community is by the abolition of sectional national \u00e9lite \ninterest, and the creation of a world human interest of common ownership\n of the worlds wealth, so that we can end the horrendous divisions the \nproperty system has created.<\/p>\n\n\n\n
\n\n\n\nBackwardness <\/h3>\n\n\n\n
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