Utania's attraction to business
Hope's missing agenda
Will Cryer rule forever
Rovens: Is PIMR in the communist's pocket?
Zartania remembers the war
Ulnovabad's commercial missions
Club'NIZ to expand?
Porto Capital's new defence force
Westria's sixth year
Looking to a lighter future
Dyson's Lendosan suiter
Delacroix considers Utania
Osprey Technologies settles with the UEC
The "Fair" trade agreement
Moun's Front legacy
RZOEAZ's Albionish 500
Vela Luka prepares for the Savant 350
Fiona Elma: diva?
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The Aethel-Vinnish "Fair" trade agreement
Free trade's changing of the guard
That free trade would move the source of production is the "scariest" principle of free trade because it threatens the current producers, and is the source of almost all opposition to free trade. Opponents to free trade, many tend to forget, have always been a loose coalition of corporations, unions, farmers and their representative politicians.
Such trade threatens the wealthy nation farmer who produces efficiently but not as cheaply as the farmer in Allacoa. He will be opposed to the increasing "commercialisation" of farming in his country, which is more efficient, because it undercuts his wages and forces the family farm out of his hands. It threatens the corporation with lower prices for goods that may endanger their profit- making higher prices. It threatens the factory workers whose jobs might effectively move overseas.
It is only recently that left-wing philosophers and anarchists have paid much attention to the subject. Yet, in the wider sense, there has been no great shift in free trade philosophy, the centuries old principles are unchanged.
(We need) free trade without the large corporations.
Hope administration insider
So, what changed? Merely the size of those companies.
Once captains of industry in wealthy nations incited nationalism in their calls for protection from cheap imports from poorer nations. Yet, as their companies grew, their ability to control those very same cheap production facilities in poorer nations grew. Suddenly, it was in their interests to call for barriers against those imports to be dropped, and the age of globalised free trade has been born.
What scares left-wing intellectuals, anarchists and, arguably, the authors of the FTA most is the levels of market power wielded by these companies is unparalleled in all human history, save by the largest empires. Even free trade proponents are finding themselves confronted with images of free trade they do not favour, forcing even the freest of thinkers to think of qualifying their positions.
One insider in the Hope administration has even been quoted as saying that what is needed is "free trade without the large corporations". It is a statement that echoes true for many, including this magazine.
Capitalists undermining Capitalism
If free trade relies on competitive market forces balancing the world, then it truly ironic that the increasing size and reach of these international corporations, coupled with free trade, could make the world less competitive. Simply, they have weight on their side, allowing a monolith to crush local competition, and to dominate markets, making markets ultimately less competitive.
(It would be remiss of this magazine not to note that this is the exact problem predicted by a very prescient economist of the second century, who predicted that capitalism's demise was written within the very foundation stone of its existence. He predicted that companies would grow too big, and become anti- competitive, instead entrenching their own positions. Despite this prescience, his name is all-but mud now: his name then was Carl Marks. It is also an idea that the game "Monopoly" was designed to demonstrate.)
For example, Lendosans buy an estimated 4.5 million cars a year, and assuming that one company made half of those cars, that company would have the capacity ten times that of Savant Motors. Assuming there was a 10% profit on cars (it's much higher), Lendosa could produce as many cars as Savant and sell them for zero crowns in Utania and not make an overall loss. Savant would not be so lucky. Savant would instantly lose market share, and could be bankrupted in no time.
Globalisation proponents might argue that no company is interested in this method of marketing, deliberately losing money in one market to bankrupt a competitor. Yet any and every business school student understands that the key to a successful business is to get market share first, a sound basis from which to compete. Lendosan Motors Inc. could claim half of the Utanian market within days if it was giving cars away for free. Furthermore, even if companies are not interested in this method of operation, the fact that there is this potential means something has to be said about it.
What is wrong with that, ask globalisation evangelists? Consumers are winning: cars were sold for free! However, once Savant Motors, having gone bankrupt from being unable to compete, is out of the picture, and Lendosan Motors is alone in the market place, free from market forces to keep their prices down, and thus can happily profiteer in Utania uninhibited.
But won't there be other companies, of equal size to Lendosan Motors, that will compete for the Utanian consumer's pund? Perhaps on a global scale, but the fact remains that fewer competitors will exist, leaving open the possibility that on a local scale the risk of anti-competitive behaviour, such as price-fixing between opponents dramatically increases. And, with their sheer size, Lendosan Motors could pressure the government not to interfere with such practises.
It is, however, worth noting that this is not the experience in all cases on Earth. The automotive industry has been one of the most competitive despite there only being a handful of players left in the world. And while there hasn't been a proliferation of more environmentally friendly cars, this may have less to do with lack of competition as the size of investment required and lack of incentive: consumers are still buying cars, regardless whether they're environmentally friendly or not.
Yet, despite this very real risk to the foundation of capitalism, precious little opposition to free trade and globalisation is focused on this risk, when it is, ultimately, at the heart of all opposition.
So, does the FTA address this issue?
Workers of the world be the same
While it might be unfair to criticise an incomplete document, this magazine can find no hint of this issue being addressed from the preliminary statements. Once the agreement has listed the political philosophy that underpins it, the FTA proceeds with listing the measures that co-signing nations must implement to be allowed to participate. To begin with, it calls for a range of measures it calls the "Social paragraph".
The "Social Paragraph" standardises labour laws, ordering signatories to "devise and implement legislation" for "reasonable" working hours, holidays, unpaid leave, safety and hygiene standards, paid leave, etc.. Legislation must "actively counteract discrimination of workers by employers" and ensure "proper" working conditions.
The measures also incredibly include "workers' physician", "medical assistance" and "children's daycare", yet without any detail as to whether such measures should be free. Yet, even in the wealthiest of countries, such measures could bankrupt the smaller businesses.
Workers' rights are included, ordering signatory nations to "actively support" the establishment of unions, yet it makes no statement ordering permission of collective bargaining, emphasising that there is much assumed in this document. It also states that legislation must cover the establishment of a "workers' council" yet does not definie what is meant by this.
If there is an easy criticism to be made of this agreement, it is that much is left undefined. For example, above, what is the definition of "reasonable" working hours? Conversely, the agreement is also proscriptive, insisting on specific -- and very "developed world" -- measures that carry a great deal of cultural weight. For example, why insist specifically on unions, when a culture might do better at achieving the aims without them. Alternatively, referring to systems of "collective bargaining" might better achieve that goal that specifically mandating the formation of unions.
Leaving the agreement "loose" in terminology may be a strength of the agreement, leaving local culture to define the limits and standards to be applied, however, it also makes it impossible to enforce, instead a nation need only "do one's best". In contrast, this seems not to be the authors' intention when they proscriptively mandate that minimum wages should not be less than 33% of GDP per capita, and unemployment benefits no less than 20%. Furthermore, disability pension must be a minimum of 60% of the workers' prior wage.
The agreement also includes a series of mandates toward environmental goals, however the agreement is significantly advanced on environmental science, which may provide problems for implementation. Notably, it calls for legislation "according to the principles of sustainable development".
The only hope for capital markets in Utania: Hope!