Despite the continued failure to agree on new rules to increase international trade opportunities, the capitalists' desperate search for new gimmicks to extend their profit continues.

Mostly we are now hearing about bilateral 'free trade' deals, with Chile, Thailand and China and other potential trade 'partners' (also known as adversaries).

These proposed deals aren't really about creating a free market, heaven help the capitalists if it were! The poor dears would be cut off from the nanny state that has suckled them for so many years at our expense. In a free market the BNZ and Air New Zealand would have been left to go bankrupt, the asset stripping of the railways would have continued until the last spare wheel had been sold for scrap and Jim Anderton wouldn't be able to hand tax dollars over to big businesses in return for vague promises to create a few jobs.

What follows is an entirely capitalist argument. My point is that 'free trade' as proposed doesn't even follow the principles the capitalists claim to believe in.

There are a few inherent problems with the 'buy from whoever does it cheapest' principle as there are things one doesn't want to be dependent on the goodwill of a seller to be able to buy. A country may decide it wants to be self-sufficient in basic food stuffs, for example. That champion of free trade, the US government, loves to lecture the world on how trade promotes freedom and democracy, while embargoing anyone it doesn't like. The European arms industry is set to lose its US market, on 'security' grounds, if it goes ahead with plans to resume exports to China. Free trade advocates are generally happy to relax their principles when it comes to crucial things like weapons, while insisting that luxuries like food and water can be left to the great green god of the market.

However, the general concept of buying things someone else can make cheaper or better isn't always a bad one. Some things just aren't available everywhere. If you want to buy particular minerals, you are going to have to get them from somewhere that was lucky enough to have the things lying around in the ground minding their own business until someone comes to dig them up. And pinot noir grapes certainly seem to grow better in Marlborough than most other places.

However, note what the above examples have in common. These are basically things that depend on the natural environment, which does vary extensively from place to place. Most things traded are human created — manufactured goods, services and money. There is little reason to trade in such things since they can be made or provided where they are needed and don't need to be moved around the world. The reason they are traded to such an extent isn't a result of a free market, but as a result of what economists like to call 'distortions' in the market.

For example, nobody is seriously suggesting Chinese workers are inherently better at making cheap brightly coloured plastic things than the rest of us proles. The reason Chinese business dominates in this field is chiefly down to a repressive state that keeps wages, safety standards and environmental protection low by suppressing democracy, trade unions and any other form of activism.

It also helps that China's state-controlled banks provide capital, in the form of loans to those business people with government connections that nobody expects to be paid back. In other words, the advantages China has as a manufacturer have nothing to do with natural ability, but to do with state intervention in favour of local businesses. Should there be a 'level playing field,' that is, similar labour and financial rules in China and New Zealand (or some other trading partner) there wouldn't be much point in making things in one place and paying the transportation costs to send them elsewhere. Much cheaper to make them where they are needed, importing raw materials only where absolutely necessary.

Trade in services is similar. Multi-nationals seem to succeed when they can bring in large amounts of capital to establish themselves at the expense of small local competitors (where would McDonald's be without its advertising budget?), or when they can buy into a natural monopoly, normally by grabbing an under-priced formerly government-owned operation. The ownership of Wellington's buses by a Scottish company, Stagecoach, doesn't appear to have given any advantage to the consumer, and profit levels are more or less set by the level of government subsidy that can be negotiated, under threat of closing services if the subsidy fails to maintain profit levels. The supposed market only comes into play if the local government body controlling the service decides to offer the contract to a competitor. Stagecoach's real business isn't running a bus service; it's convincing the council to keep giving it the contract. Not many free-market principles there.

Politically, increased trade helps the economy to look healthy, at least on the surface. Crude economic indicators such as GDP are improved; cheap imported consumer goods keep inflation (and hence wage demands) down. Cheap imports kill local manufacturing, but the simplistic tendency of both left and right to promote the unemployment rate as the only indicator of social well-being obscures the replacement of relatively secure and often well-paid jobs by lower paid seasonal and temporary ones.

Many critics of trade agreements adopt the meaningless social democratic slogan 'fair trade, not free trade' without specifying what 'fair' means. 'Fair' could mean that producers and consumers enjoy a similar standard of living, but to its proponents 'fair' seems to mean 'slightly better than regular capitalism.' Products transported by flag of convenience ships with Third World crews and sold in Western supermarkets by non-unionised staff on minimum wages are labelled 'fair.' Fair for whom?

In a very different world, trade, probably on a relatively small scale, could be a helpful tool for improving our lives. But trade between different parts of the world can't be fair when people are constrained by regulation of trade unions and industrial action, by the monopolisation of capital and land, and by the constraints on democracy that are all essential parts of modern capitalism.