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Free Trade is Jesus Christ?

For the market anarchists, free trade and free markets is their religion. 'Free trade is Jesus Christ: Jesus Christ is Free Trade' chanted one evangelical free marketer, Sir John Bowring in 1841, (Marx, ON THE QUESTION OF FREE TRADE, MECW Volume 6, p. 450). As the fourth Governor of Hong Kong, Bowring was a free trade missionary, visiting death and destruction onto the Chinese in the "Second Opium War". Bowring, as Governor, helped co-ordinate the British strategic objectives: legalizing the opium trade, expanding commerce, opening all of China to British merchants, and exempting foreign imports from internal transit duties.

British capitalism in the 1840s: wasn't it great to be alive? Not if you were a member of the working class. Think only of Engels's book THE CONDITION OF THE WORKING CLASS IN ENGLAND (1845) to understand how miserable the conditions were for workers and their families. However this is the utopian cut and thrust world to which the free market Brexiteers, from John Major's 'bastards' to the 'Conservatives for Britain', under David Cameron's premiership to the 'European Research Group' under Theresa May, want to return: the world of naked self interest and the cash nexus. And they believe their market utopia is in sight. They believe they have won the battle of ideas. Apparently, victory over all their enemies' means at is back to the 1840s.

The 1840s was a time when where there was no Liberal Party with its National Insurance Acts and old age pensions, no Labour Party with its Robin Hood redistributive taxation, no votes without the property qualification, no suffocating red-tape regulations and social reforms, no organised trade unions, no NHS, no welfare state and no nationalisation or state capitalism. The promise of a return to the 1840s is the promises to the return of a minimal state with little or no taxation and British capitalism once again the workshop of the world. This is the free market utopia promised by the free market institutes and its supporters. Ideas of laissez-faire and 'self-help' will once again become dominant.

A Serpent in the Garden of Eden

They do not want much - the market anarchists just want a world where the Twentieth Century did not occur. Unfortunately for the free marketeers there is a serpent in their Garden of Eden. And that is Karl Marx. He lived through the economic crisis of the 1840s. He made a note of its destructive capabilities, enough to make a comment about economic crises in the COMMUNIST MANIFESTO (1848), written along with his revolutionary friend Frederich Engels.

Marx wrote:

"It is enough to mention the commercial crises that by their periodical return put the existence of the entire bourgeois society on its trial, each time more threateningly. In these crises, a great part not only of the existing products, but also of the previously created productive forces, are periodically destroyed. In these crises, there breaks out an epidemic that, in all earlier epochs, would have seemed an absurdity - the epidemic of over-production".

Marx went on to say:

Society suddenly finds itself put back into a state of momentary barbarism; it appears as if a famine, a universal war of devastation, had cut off the supply of every means of subsistence; industry and commerce seem to be destroyed; and why? Because there is too much civilisation, too much means of subsistence, too much industry, too much commerce.

And he concluded:

"The productive forces at the disposal of society no longer tend to further the development of the conditions of bourgeois property; on the contrary, they have become too powerful for these conditions, by which they are fettered, and so soon as they overcome these fetters, they bring disorder into the whole of bourgeois society, endanger the existence of bourgeois property. The conditions of bourgeois society are too narrow to comprise the wealth created by them. And how does the bourgeoisie get over these crises? On the one hand by enforced destruction of a mass of productive forces; on the other, by the conquest of new markets, and by the more thorough exploitation of the old ones. That is to say, by paving the way for more extensive and more destructive crises, and by diminishing the means whereby crises are prevented"

Marx comments on crises in the COMMUNIST MANIFESTO were written before he had a chance to study the trade cycle in greater detail and presented its cause in a more considered manner in his three volumes of CAPITAL.

"...the ultimate reason for all real crises always remains the poverty and restricted consumption of the masses as opposed to the drive of capitalist production to develop the productive forces as though only the absolute consuming power of society constituted their limit" (CAPITAL VOLUME III, Ch. XV, p. 484).

In particular, he later clarified that crises were not caused by underconsumption (CAPITAL VOLUME II, Ch. XX, pp 410-11).

However, Marx's remarks on crises in the COMMUNIST MANIFESTO show that he understood the anarchy of capitalist production and exchange for profit and the destructive economic forces acting on an unplanned economy. His point was that capitalist class relations of production act as a fetter on the forces of production. This was the reason for crises to occur and still holds true today.

Free Market Economics is built on Sand

Bourgeois economists have to deny that crises are inherent in commodity production and exchange for profit. The whole infrastructure of free market economics is built on the premise that the capitalist system is self-regulating and harmonious. It is a theory built on sand.

Marx showed that crises occur even in simple commodity production; the world favoured by the free marketeers. There is always the possibility of crisis where there is commodity production. The possibility of crisis exists because of the contradiction between use value and exchange value in the commodity. This contradiction is compounded by the existence of money which is a medium of exchange and a store of value, by capitalist production for exchange and by the numerous unplanned circuits of capital.

For Marx, this means that under capitalism there is a periodic split between the buying and selling of commodities. Marx wrote:

"...but no one is forthwith bound to purchase, because he has just sold. Circulation bursts through all restrictions as to time, place and individuals imposed by direct barter..." (CAPITAL, VOLUME 1, Chapter III, p. 113)

"...if the split between the sale and the purchase becomes too pronounced, the intimate connection between them, their owners, asserts itself by producing - a crisis" (CAPITAL VOLUME 1, Ch, Iii, p. 114).

We only have to consider the consequences of the trade cycle. To pass from an economic depression to an up-turn in the economy means the imposition of austerity measures, cuts in wages, a time of high levels of unemployment, the breakup of family relationships, eviction from homes, drug abuse, petty crime, mental health problems, ill-health and the inability of parents to afford to feed children at breakfast. Anything but harmonious: for the working class it is painful, insecure, unpredictable and debilitating.

Free trade and free markets cannot prevent the destructive economic laws acting on capitalist commodity production and exchange for profit. Not even Jesus Christ.

Economic Crises even affects its most notable evangelical supporters like Sir John Bowring. The trade depression of the late 1840s caused the failure of his venture in South Wales in 1848 and wiped out his capital, forcing Bowring into paid employment. From Profitability to bankruptcy: from capitalist to worker. Free market utopias cannot escape the industrial reserve army of the unemployed. They cannot have capitalism without the effects of capitalism. Capitalism can never be perpetually stable and harmonious with constant uninterrupted growth.

It was Marx who wrote:

"...capitalist production moves through certain periodical cycles. It moves through a state of quiescence, growing animation, prosperity, overtrade, crises and stagnation" (WAGES, PRICE AND PROFIT, Selected Works, Vol. 1, p. 440).

Marx has been proven right ever since he spoke these words at an address he delivered at two sessions of the General Council of the First International in 1865.

A Hundred and fifty years later we were told by the former Prime Minister, Gordon Brown that the economic cycle had been resolved and that there was going to be "no more boom and bust. There was going to be "economic stability" and "economic harmony" leading to a constant increase in production and wealth.

This was supposed to be the "new normal". Then out of nowhere came the economic crisis of 2006-07. After 2006 capitalist economics lay in tatters, free market ideas were discredited and Marxian economics and its theory of the trade cycle was everywhere triumphant.

Let the free marketeers and their think tanks go back in their dreams to the fictional world of the 1840s to indulge in their fantasies about a barren and empty market utopia. This will leave the future for the working class to consciously and politically organise for the practical and attainable world socialist society, free from capitalism and the profit system.

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