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Free Trade benefits all?
Faced with the protests in Seattle, the Economist opined that the benefits of Free Trade included faster economic growth. Is this true?
The Brazilian economy is often pinpointed as an example of the positive effects of neo-liberal change. However, here the evidence does not support the Economists assertions. Over the last decade, Brazil's per capita GBP growth averaged approximately 2.5 per cent a year. By comparison, according to UN data, it averaged 4.7 per cent during the period 1960 to 1980 when it followed a more inward-looking path to development.
It could be argued that reform in Brazil has not progressed enough, that Brazil is still a relatively closed economy. If we look at Mexico, a nation much more integrated into the world economy, we discover that, according to data from the IMF, over the last 15 years its per capita GBP growth per year has averaged approximately 1.0 per cent.
Of course, both countries have seen the rich grow richer and inequality increase, proof that neo-liberalism works, only for those who matter in a capitalist economy - the capitalists.