Culled from the ``Analysis'' section of the November 21, 1996, internet edition of The Times.
Anita Roddick argues that the drive to deregulate free trade further is the last hurrah of an outdated theory
Last week the Government published a White Paper promoting global trade, which urged the abolition of all tariff barriers by 2020. Ian Lang, President of the Board of Trade, called it ``an idea whose time has come''. I would argue that it's an idea whose time has gone.
Free trade holds much of the blame for continued international conflict. Markets are said to possess wisdom that is somehow superior to man. Those of us in business who travel in the developing world see the results of such Western wisdom, and have a rumbling disquiet about much of what our economic institutions have bought into. I'm writing from southern Mexico, where I see at first hand how destructive unrestrained economic growth can be, not just for the natural environment but also to human development.
According to the theory of free trade, which I call ``licentious'' trade, we should all be happy the globe is rapidly becoming a playground for those who can move capital and projects quickly from place to place. It's not easy challenging the unshakeable belief in the omnipotence of unfettered free trade but it has to be done. Is the market really ``free''? Free for whom, free for what? Freedom at any price? Or is the price of human rights abuses paid too high? Let me invoke Adam Smith, the grandfather of the concept, who argued that for free trade to flourish it was necessary to destroy monopolies of power and create accountability in business. But free trade as practised has been one of the greatest deceptions.
It is the idea of business accountability whose time has come and one that is recognised by non-governmental organisations (NGOs) among the growing voices speaking out against the grand free trade deception. By globalisation they understand that human beings need to be protected, not profits. NGOs are the voice of the otherwise unrepresented poor.
Christian Aid recently launched its ``Change The Rules'' campaign, highlighting how many Third World farmers producing food for Britain's supermarkets suffer unacceptably low wages, or work in dangerous and degrading conditions. Supermarkets have the money, muscle and mechanisms to guarantee a better deal for Third World producers. Christian Aid supports a Supermarket Charter for the Third World and independent monitoring of conduct.
Detractors would argue that the cost to supermarkets would simply be passed on. That's where thoughtful regulation comes in. Changing the rules is useless if the burden is simply passed on instead of shared.
We need to change the rules governing international trade. If businesses trying to improve their own ethical performance got together with organisations that understand the needs of people in poorer countries, perhaps we could all move down the same path towards positive change. Our current economic indicators are inadequate for measuring global trade's human effects; we are tethered by the tyranny of the bottom line. What about putting emotion, compassion and caring into the economic equation?
Ask yourself what ``global'' really means. Politics and commerce are not separate. Events in Rwanda and Zaire are directly linked to armaments factories and dealers' offices in the UK. It is a chain of death, in which some links are more implicated than others, and one implicated more than most is the British Government with its unfettered free trade policy.
The White Paper says: ``Security and stability remain essential for the free market to operate successfully worldwide.'' Again, whose security, whose stability? In June 1996, Shell Nigeria's general manager said: ``For a commercial company trying to make investments you need a stable environment. Dictatorships can give you that.''
Malcolm Rifkind, the Foreign Secretary, hopes that the Government's campaign will help people to ``trade their way to prosperity''. Tell that to the Ogoni people of Nigeria, a country still just in the Commonwealth that might reasonably be expected to be subject to some UK influence. The real costs of unfettered trade environmental degradation and social unrest are always borne by those with least economic power.
``The world will be richer if others follow Britain's lead,'' says Kenneth Clarke, implying that all will be fine as long as people do not interfere. The time has come for business and political leaders to stop perpetuating this deceptive myth of free trade and create economics as if people and the planet really mattered.
* Anita Roddick is founder of The Body Shop