Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Why the Capital vs Labour Antithesis is Screwing Capitalism, Labour, and Free Trade

Politics / Protectionism Sep 20, 2011 - 01:25 PM GMT

By: Submissions

Politics

David Chapman writes: The fundamental reason that "Free Trade" will end, and end badly, is that while movement of capital, goods and services is substantially free, and exchange rates are substantially floating, labour is imprisoned; creating massive imbalance.


This radical distortion is the reason western countries can't produce cheap enough goods and have a declining manufacturing sector and it is the reason the "BRICS" have to accept declining value US dollars to keep their export markets open.
 It is the reason for currency wars. It is also the longer term reason that consumption will decline in western countries and is rapidly growing in developing countries. Unsustainable longer term imbalances, and one way flows!

Whether Capitalism, as we know it, will end as an outcome of the current world crisis remains to be seen.
 However, the idea that one part of the equation of capitalism, labour, should have substantially different rules to production and capital is flawed; because labour, in contemporary times, is also "the market."
 This “imprisoned” labour distortion will end Free Trade as we know it; it's only a matter of time, however it will probably happen sooner rather than later due to the world crisis.

The massive imbalances and bubbles we have seen since the onset of globalism are a natural side effect of imprisoned labour in an otherwise global economy. Global capitalism freed of this flaw would be able to react to market forces and change much more efficiently. Production and consumption would eventually become more localised, by natural market adjustment, with exports becoming mainly corrective addressing imbalances and shortages. Exports, in a nutshell, would cease to be the main game, as would international finance. These two huge drags on capitalism would then decline leaving capitalism itself much more efficient, vibrant and healthy (The losses to big banking and big shipping would profit the rest of us). Significantly, national politics would also be liberated from unsolvable problems.

However "free migration" which is required, will probably never happen because the keepers of capital are too bloody minded to see the bigger picture; being typically captive to their own ultra right winged anti-labour, anti-foreigner, rhetoric. Ironic don't you think, given that the owners of capital have a huge amount to gain by correcting this distortion; as do all of us. Correcting the flaw may even prevent the dreaded "end game" of capitalism.

As I see it, we have the choice of either 1) fixing the fundamental flaw of international capitalism by liberating labour, requiring removal of migration controls; or 2) regressing to traditional trade barriers and small time nationalism. Either will work just fine for capitalism. Either reduces the role of big banking and big shipping. Only the former moves us forward to a more liberated world view in which most people might be served rather than limited by capitalism, in which the achievements of capitalism might become universal. Unfortunately the latter will most likely be the outcome, and will probably lead to international conflict as it previously has in history.
 Down to the fear of competition, power, and prejudice of the ultra right; down to workers buying into the fear and prejudice of racism instead of asserting themselves as equal partners to capital.

David Chapman

dave.chappo(at)yahoo.com.au

© 2011 Copyright David Chapman- All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in