by Dr. J.W. Smith
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Controlling technology in the outlying countryside so as to maintain access to resources and the wealth-producing-process originated in the city-states of Europe in the Middle Ages. They were learning to "plunder by trade:"
"Up to and during the course of the fifteenth century the towns were the sole centers of commerce and industry to such an extent that none of it was allowed to escape into the open country. . . .The struggle against rural trading and against rural handicrafts lasted at least seven or eight hundred years. . . .The severity of these measures increased with the growth of 'democratic government.'. . .All through the fourteenth century regular armed expeditions were sent out against all the villages in the neighborhood and looms and fulling-vats were broken or carried away. The problem of the towns collectively was to control their own markets, that is, be able to reduce the cost of items purchased from the countryside and to minimize the role of stranger merchants. Two techniques were used. On the one hand, towns sought to obtain not only legal rights to tax market operations but also the right to regulate the trading operation (who should trade, when it should take place, what should be traded). Furthermore, they sought to restrict the possibilities of their countryside engaging in trade other than via their town. Over time, these various mechanisms shifted their terms of trade in favor of the townsmen, in favor thus of the urban commercial classes against both the landowning and peasant classes" (Karl Polanyi, Henri Pirenne, Eli F. Heckscher, Immanuel Wallerstein).
Those simple looms and fulling vats were primitive industrial capital. With this primitive technology, the cities could produce cheaper and better cloth and trade these commodities to the countryside for wool and food. But when the serfs came to town and looked at the simple looms and fulling vats, it did not take them long to build their own tools and produce their own cloth.
The loss of the city's markets for both raw material and manufactured products due to the comparative advantage of the countryside meant impoverishment and possibly even starvation for those in the city who formerly produced that cloth. The same loss of monopoly through increased technological knowledge of the countryside and its natural comparative advantage held true for other products and other cities. The wealth-producing process had to be protected. The comparative advantages of the outlying villages were eliminated by force to maintain dependency upon the city and lay claim to both the natural wealth of the countryside and the wealth produced by technology.
When one city took over the countryside markets of another city, the dispossessed would again face starvation. Thus the wars between the City-states of the Middle Ages were wars over control of trade. City-states evolved into countries that that also went to war over control of trade. And powerful countries evolved into empires which controlled resources and trade far beyond their borders.
Americans gaining their freedom was essentially gaining the freedom to trade. The colonialists
"could import only goods produced in England or goods sent to the colonies by way of England. They were not allowed to export wool, yarn, and woolen cloth from one colony to another, "or to any place whatsoever," nor could they export hats and iron products. They could not erect slitting or rolling mills or forges and furnaces. After 1763, they were forbidden to settle west of the Appalachian Mountains. By the Currency Act of 1764, they were deprived of the right to use legal tender paper money and to establish colonial mints and land banks" (Philip S. Foner).
England's Lord Brougham proposed destroying America's infant industries by selling manufactured goods to them below cost. "He thought it 'well worthwhile to incur a loss upon the first exportation [of English manufactures], in order, by the glut, TO STIFLE IN THE CRADLE THOSE RISING MANUFACTURES IN THE UNITED STATES.' " One hundred and fifty years after gaining its freedom, America took over from Britain the job of imposing Adam Smith Free trade upon the world.
This was a scam from the beginning. So long as weak nations could be made to believe it, they handed their wealth to the imperial-centers-of-capital of their own free will. Not a nation in the world ever developed under Adam Smith unequal free trade. Virtually every successful nation developed under the philosophy of Friedrich List's 1841 classic, The National System of Political Economy.
To stop fast expanding socialism, America provided the money, technology, and markets to Western Europe, Japan, Taiwan, and South Korea. That is Friedrich List protection, not Adam Smith free trade. Later, the Asian Tigers and China moved in under the umbrella of that protection, all the while mouthing the words of Adam Smith free trade. These nations were taking advantage of America's paranoia and turning the scam back upon them.
After the collapse of the Soviet Union, America and Europe no longer needed protection against fast expanding socialism and withdrew their protection. The result, the 1997 currency collapses and economic crisis throughout most the developing world. The money fleeing those periphery countries for the safety of the imperial centers actually strengthened the American and European economies as periphery nations, including Japan, remained in crisis.
The collapsing prices on the periphery of empire increased the wealth in the imperial center as per the formula in our last column (high pay divided by the low pay squared). When equally-productive labor on the periphery is paid 10% that of the wealthy world, in world trade they retain one unit of wealth while the well-paid nations retain 100 units of wealth ($10 divided by $1=$10; $10 X $10=$100).
The powerful military of imperial nations today are for the same purpose as those raiding parties of the city-states centuries ago, control of control of technology, control of resources, and thus control of the wealth-producing-process. The only way this can ever change is if all the world's poor nations understand how their wealth is plundered through unequal trades. Inform your friends, form your discussion groups. People are good. Prove to philosophers and negotiators in the wealthy world the reality of plunder by trade and many will recognize they have been misinformed and support you.
Our next column will expose the currently invisible borders of Adam Smith free trade capitalism which channel the wealth of the world to imperial-centers-of-capital.