The global trading network today is guided by GATT [General Agreement on Tariffs and Trade]. These should give
way to a new set of rules to create a new world order. It’s guiding principle should be the satisfaction of
human needs with minimum pollution without generating much new production.

There are two types of trade that are wasteful and unnecessary to meet human demands around the world.
One is intra-industry trade, which constitute more than half of global commerce; the other is trade in raw
materials. In order to minimize trade-induced pollution, GATT should be replaced by the following set of
principles:

1. Monopolistic corporations in all nations should be broken up in order to generate intense domestic
competition and preclude the need for foreign competition.

2. Intra-industry should be minimized. Multinational corporations should, as much as possible, produce and
sell goods in the same nation. Another possibility is for multinational firms to swap their production
facilities in different countries, for instance, General Motors exports cars to Europe but also imports them
into America from its European facilities. This is clearly unnecessary. GM should not export when it can
produce the products in Europe itself. Similarly, it should not import when it also produces cars in the
United States.

What is the point in generating transportation goods, producing pollution in the process? If GM’s plants
in Germany are uneconomical without their exports to the United States, the firm should simply sell them
to a German manufacturer and use the money for other productive but nonpolluting purposes.

3. International transfer of technology should be augmented. Instead of maximizing global trade, we should
maximize the international transfer of capital and technology. For instance, today Japan focuses primarily
on exporting goods, creating pollution in the process. If the Japanese companies instead opened plants
around the world, local needs would be met by foreign controlled local production and without much trade.
Japan would not need to import vast quantities of raw materials in exchange for its exports. Human needs
would still be met, but trade in goods and raw materials would be minimum.

4. The above principle suggests that countries rich in technology and capital should export them in
exchange for raw materials for home production. The Third World should not export primary goods but
should either import technology or invite foreign firms to utilize its raw materials in local production.
The idea is to locate plants near mineral rich areas as well as near population centers, so that
international trade can be minimized.

5. All resource-rich but industry-poor economies should impose high tariffs on imports of manufacturers
while vigorously generating competition in domestic markets. This would induce technology-rich countries
to locate their plants in tariff-imposing nations. Thus India, Australia, Canada, Mexico, and the
resource-rich nations in Africa and Latin America should follow this policy, combining it with internal
competition. Domestic competition would sharply reduce inequality and thus stimulate the demand for goods
at home. This in turn would reduce the need for exports and trade.

6. Governments should direct their R and D spending to discoveries that can potentially reduce pollution
as well as the optimum size of plants, thereby reducing the need for economies of scale. Some firms
enter the arena of exports just to utilize such economies. New technologies should be developed to make
this unnecessary. It is worth noting here that the value of economies of scale is often exaggerated. The
highly competitive firms of Japan, after all, started small. Similarly, if economies of scale are so
important, why do firms have multiple plants in one country to produce the same product? These are some
of the rules that should replace GATT to create a new world economic order. The migration of factories to
mineral-rich areas can trim international trade by as much as 25 percent without reducing global living
standard. The same is true of intra-industry trade. We can eliminate it altogether without much effect on
planetary production. In other words, global trade can be cut by at least 75 percent without much harm to
overall output. But while the output effect of trimming trade would be small to negligible, the benevolent
impact on the environment would be tremendous. Energy use would plummet, the oil price would tumble,
oceans would be safe from oil and chemical spills, the atmosphere would be more secure from toxic gases,
the risk of accidents would be smaller, and our ears would be less exposed to deafening noise. Such would
be the beneficence of minimum international trade and competitive protectionism.

Ravi Batra, Ph.D., is a world renowned economist and the author of half a dozen books, including
The Great American Deception and The Myth of Free Trade.

Cavallo and de la Ru’a were all about cow tow-ing to the international finance community, particularly the
IMF. They cut jobs, pensions, and government salaries. After massive protest in the waning days of 2001,
Cavallo and de la Rúa had to resign. Since then [**three] more presidents have resigned.

The current president, President Eduardo Duhalde, has made several moves that “appall Washington’s orthodox
economic policymakers,” says the Washington Post. “Duhalde has blamed the U.S.-backed freemarket approach
for his nation’s troubles and proclaimed it a ‘broken model,’ raising the specter that Latin America’s
third-largest economy may turn away from globalization and spark a movement toward protectionism in a region
where President Bush had hoped to forge a hemisphere-wide free-trade zone,” said the Post in a January article.

In truth, the Argentine economy has been tumbling since 1997. In order to service national debt, public
enterprises were sold to foreign and domestic capitalists, and the new owners fired thousands of workers.
Unprofitable mineral and energy operations were closed, essentially eliminating the economies of entire
towns. Public workers were laid off or just not paid. Education, health care and other social services were
cut way back. Ironically, but not unsurprisingly, the Argentine bourgeoisie moved billions out of the country
following the crash that followed rampant foreign investment in the country. By 2001, unemployment surpassed
50 percent in some parts of the country, and the majority of households fell into poverty.

Clearly, the neoliberal model of globalization, that requires countries to maintain high international credit
ratings no matter what the domestic expense, was not working. It seems that Cavello and de la Rua had
bought in to a paradigm that the people of Argentina now know is flawed: that by allowing capitalist elites
to get rich off Argentina, Argentina also would benefit; that the deluge of capital into the country would
float all boats; that the profit potential of investors must always come before the needs of common people.

In the Barrio’s, the unemployed had had enough, both with austerity programs designed to appease the IMF,
and with party bosses and union bureaucrats who had done nothing to change their plight. The Unemployed
Workers Movement (MTD) started as a grass roots movement in the urban and suburban barrios. The
organization has a horizontal structure: the assembly makes decisions, and even negotiations with the
government takes place in front of assemblies. The MTD began organizing roadblocks in 2001 to have their
voices heard. Thousands of men, women, and children participated. The blockades had great popular support,
making it difficult for the gendarmes to arrest their leaders. The government had to negotiate.

The MTD demanded locally administered state-funded jobs, food relief, the freeing of political prisoners,
and investments in roads, water, and health facilities. The MTD didn’t want temporary jobs, but stable
employment at living wages. In General Mosconi, for example, the leaders of the MTD movement came up with
over three hundred project ideas, some of which have been implemented. These include a bakery, organic
gardens, water purifying plants, first aid clinics, and more.

The local unemployment committee in fact runs this town. In some suburbs, the unemployed movement also has
displaced the local government, setting up a parallel economy and offering a vision to the nation of the
capabilities of the unemployed to take command of their own destinies.

Interestingly, while the IMF–essentially an agent of U.S. capital–required Argentina to give up
sovereignty on fiscal matters, the US government itself is at this moment exercising the right to deficit
spending. George Bush sites the recession as justification for giving a Keynesian boost to our economy,
but when Argentina was in much worst economic straits, it was Washington’s position that budgets must
be balanced, never mind that unemployment was through the roof and Argentines and the domestic Argentine
economy were starving for lack of domestic spending. How does the U.S. government expect the Argentine
middle class to react to this kind of hypocrisy? One of the causes of economic depression and recessions in
capitalist economies is the reduction of the money flow due to its concentration in the hands of a few.
Since the majority under such circumsance has no purchasing capacity, the syndrome is self re-enforcing:
the rich have no incentive to invest in an economy that promises no returns. This clearly happened in
Argentina, which witnessed not only the flight of foreign capital, but also the withdrawal of billions of
dollars from the country by the Argentine bourgeoisie. Now common Argentineans can’t even get back the money
they’ve deposited in banks.

Argentine Proutists have responded to the situation with proposals of their own. Perhaps now more than ever,
disenfranchised Argentines are willing listen.

David Griffin is a freelance writer from Minneapolis, Minnesota, a copyeditor, and a member of the
Prout Journal editorial board.

References:
James, Petras, The Unemployed Workers Movement in Argentina, Monthly Review, 2002