I May 1981 RAIN Page 17 Rethinking the Econom,ics of World Trad.e © by Hazel Henderson sors. They are told that "protectionism" is a dirty word, together with "mercantilism," "autarky," "quotas." and ,·,tariffs"-all recipes for "beggar-thy-neighbor" policies that must be foregone in the name of "free trade." But this "free trade" in the unreal "world marketplace" is leading not to world peace and global economic efficiency but to dilemmas of domestic disruption, social breakdown, ecological depletion, even violence and revolution. Jamaica: Racing the Clock The case of Jamaica is a bellwether with which we can re-examine various theories in light of the new forces at work. For almost a decade Michael Manley's socialist government was mocked by the structural dependencies of Jamaica's cash-crop and raw materials export-based economy, hooked in typical neo-colonial patterns to the world trade roller-coaster. These vulnerabilities of excessive inter-linkage to a global system well beyon·d Manley's.control reflect the pathologies of small, weak countries still addicted to such trade patterns requiring continual "fixes" of external capital infusions and causing increasing indebtedness, whether to the International Monetary Fund (IMF) or other Northern Hemisphere-controlled financial institutions. Breaking such cycles of dependency would mean many years of painful withdrawal and an economic re-orientation toward domestic agricultural self-reliance, local manufacturing to add value to raw materials, revival of indigenous crafts and culture, and retraining of workers-while simultaneously restructuring and forging links based on regional trade, bartering and monetary agreements. Re-integrating such econm.:nies into more localized patterns better fitted to local cultures and ecosystems could gradually replace the vagaries of the world trade system. But Jamaica ran out of time. Mr. Manley's valiant attempts to confront the IMF and the world trade and monetary system, while trying to explain its inequitable workings to his impoverished people, did help to create a new framework for rethinking and debate in such 1980 documents as the Terra Nova Statement signed in Kingston and the Arusha Declaration issued in Tanzania. But Manley's efforts were overwhelmed by events and the very destabilizations he sought to explain and mitigate. Mr. Seaga'seven less workable formulas hark back to the obsolete comparative advantage model and will only exacerbate Jamaica,.s dependencies in the world trade arena, also well beyond Seaga's control. Indeed, one could put Adam Smith himself in charge of Jamaica and it would make little difference. Karl Marx might do little better, since these structural dependencies cannot be mitigated by "economic development" policies alone, but must include social, cultural and regional issues in- ~orporating local resources. Indeed, one could put Adam Smith himself in charge ofJamaica ' and it would make little difference. The View from Europe The need to rethink the entire body of economic theory on world trade-and what constitutes "development" itself-is clear in the case of Jamaica and many other Third World countries pushed to the wall by these new forces and catastrophic social costs. Further evidence of this bankruptcy is visible in countries once considered the pillars of the world trade system. Britain, Denmark, Sweden, France, the V.S. and even Germany are all showing similar signs of pathology: rising balance of payments deficits; destabilization of whole sectors of their domestic economies; rising unemployment and inflation; tax revolts; and social conflicts over the no-longergrowing economic pie. Politicians are forced to act in new ways despite economic theories ruling out "protectionism." British holdout Margaret Thatcher clings to the old Adam Smith model, wracking the economy with high interest rates, increasing unemployment and bankruptcies in the smaller business sector, while promising cont.--
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