- Elgar original reference
Edited by Jonathan Michie
Chapter 26: Free Trade or Social Tariffs?
George DeMartino Introduction The last quarter of the twentieth century was marked by dramatic steps toward the achievement of global neo-liberalism. This is a policy regime that in principle features largely unregulated market forces that override the state in directing international trade and investment ows. It therefore comprises ‘free’ trade, the liberalisation of international nancial markets, the global protection of property rights, and so forth. The neo-liberal project has been advanced through a series of important international agreements, including notably the North American Free Trade Agreement (NAFTA), the GATT agreement that established the World Trade Organization, and through other explicit policy choices taken at the national and multilateral levels. Things have changed since then. As Polanyi (1944) understood but we have had to relearn, global neo-liberalism is an unachievable utopia, the pursuit of which can be harmful and even dangerous. As in the past, the severe dislocations and instability that are associated with today’s increasingly market-driven international trade and financial flows are instigating political reaction in the form of demands on national governments for economic protection and security. But global neo-liberalism has made it difficult for national governments to provide these protections, not least since this regime creates ample opportunity for private investors and firms to escape taxation by relocating their assets internationally. At just the time that workers and other vulnerable groups need greater state assistance, then, the burden of taxation required to fund social programmes has shifted onto the shoulders of these very same groups. While free trade...
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