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Wednesday
Jun112008

Globalization - tariffs and subsidies, are they merely 'sophisticated' bribes?

One of the functions that I have in my new post is responding to questions and queries from persons across the globe who are trying to understand our particular approach to establishing the Gospel of Jesus Christ (with all that entails - including justice, mercy and equity).

Today I received an email from a person who read one of the books that we suggest on healthy and responsible principles for being a Christian business person.  The person who enquired was referring to Chapter 16 of Ed Silvoso's book called 'Transformation'.  In this Chapter (among other things) Ed discusses how Christians should work against corruption and the abuse of economics to enslave people - a reality that is contrary to the principles of God's Kingdom.  Among other things he has a brilliant discussion on bribes (something that is common in Africa), and the use of 'tariffs' and 'subsidies' (something that is more common in the Western world, and among 'superpowers').  
The person who sent the email wanted to know how one could equate tariffs and subsidies with bribes.
Here's the response that I sent.  What do you think?  Anything I've missed, or misunderstood?
The core of the matter is simply that bribes, abusive subsidies, and enslaving tariffs all have a similar foundation – unjust and undeserved financial gain (often at the expensive of the good of others).  Tariffs and subsidies are however, much subtler and less easily identifiable as destructive economic practices.  And, the matter is complicated and compounded when such tariffs and subsidies have national (or multinational) legal backing.

 

Subsidies and tariffs are somewhat complex in the global economy since what they seem to do is either hedge and protect a certain group, or create space for a group to operate where they would otherwise not have the capacity to operate.  So, for example, South Africa is very fortunate to be strong in agriculture.  If there complete free trade it is likely that we could supply maize and wheat to Europe and the US that is both cheaper and possible of a higher quality (simply because we have an abundance of natural resources, arable land, and labour is much cheaper).   However, because of subsidies in the European Union farmers in those regions have their products subsidised so that they can offer them at a much cheaper rate.  The long and the short of such subsidies (in very broad generalizations) is that they keep the poor impoverished and do not take into account the necessity to spread wealth throughout the global economy (rather for political reasons it is kept within the wealthier regions).

The question that one would ask is whether God favours any one nation more than another?  In God's economy would it be pleasing to God that some suffer while others prosper – even when they are both equally productive, faithful, and fruitful in their labours?  So, the challenge is for those who make 'global deals' to keep God's picture of the world, and the world's economy in mind.  It is quite possible that a well intended deal could have an extremely negative impact upon others elsewhere in the world.  Of course my view is awash with generalizations and assumptions.  The point is simply that one must consider the impact of one's choices, not just by economic measures, but by the measure of the standards of God's Kingdom and God's desired economy for ALL the persons on earth.