Deborah Orr: When free trade spins out of control

Mandelson, with his deal on quotas, has become a protectionist himself
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It is an indictment of the triviality of Britain's political and media culture that it took a bureaucratic job at the EU for the chap's political enemies to grasp the fact that they might be able to attack him on his record rather than on his vanity.

At present the poor chump is bleating that his job as European trade commissioner does not imply any responsibility for the ongoing trouble over Chinese textile quotas. What sort of an image-making genius fails to understand that clever politicians make sure that they appear to be shouldering all blame, while at the same time making it subtly but abundantly clear that it was all the fault of that guy over there? Mandelson, God love him.

He's supposed to be a champion of free trade, revelling in his dream job, as the man who will open the European Community's markets to the world. He really ought to be telling Italy, France, Portugal, Greece, and all the other member states that are whingeing about the Chinese threat to their home-grown textile industries to wake up and smell the dirt-cheap coffee. Mandelson's creed, theoretically at least, is to praise the great god of capitalism because China has seen the error of its ways and is now embracing globalisation. Instead, in a gesture of unconscious irony not seen in politics since Napolean crowned himself, he left it to Bo Xilai, the Chinese Trade Minister, to deliver that very message. "Conservatives and protectionists in the EU," this apparachik lectured, "posed a great danger to the voice of free trade." What larks!

And the laughs keep coming. The Tory trade spokesman, David Willetts, is no more willing to champion wealth creation than Mandelson. He asserts that cheap clothes from China are needed to help the poor of Britain, when clearly the real reason is to help the large retailing organisations who wish to make very large profits. Even the Conservatives seem to sense now that people are no longer seduced by the idea that "greed is good" and "wealth trickles down".

How quaint it is that we used to call the phase of capitalism that was dominated by the supremacy of Western interests "late capitalism". Already it is obvious that this was, so to speak, a little bit previous. Capitalism is only now getting into gear, beginning to bounce voraciously and destructively round the markets of the world, with the "race for the bottom" accelerating so fast that the only worry is that the planet will burn out before it all comes full circle. Will Britain ever get its turn to undercut dominant manufacturers and become "the workshop of the world" again? We're damned if we do, and damned if we don't.

Not so long ago, it appeared that docile foreign manufacturing markets were an answer to Western prayers. Goods could be produced by the absent poor, in order to curb the tendency of the local factory fodder to get above their station. How arrogant Western capitalists were, to fail to see that such a situation would have its own dynamism, a dynamism reliant on being able to deliver the most compliant and desperate of workforces in order to ensnare them in the relentless servicing of the comparative wealth of others.

The workforce that makes the clothes in China that retailers in Europe are so desperate to sell at a massive profit, but still awfully cheaply, are made by people who have escaped from peasant poverty of medieval intensity. They work literally like slaves, themselves obliged to make a punishing quota of items each day before they collapse into bed in their company-provided dormitories in the purpose-built factory towns that they hardly ever leave. Typically, they'll get two days off a month, and a 10-day holiday at Chinese new year. Even though they get a pittance for their labours, they feel rich, partly because they are earning 10 times what they would from working on the land, and partly because they have no time or energy left over to spend any of their money anyway.

If this sounds just like Britain back in the days before social reformers pointed out the sheer wickedness of exploiting the weak so ruthlessly, then that of course is the whole idea. Victorian Britain worked brilliantly, economically speaking, and globalisation is really all about recreating such conditions, but on a much larger scale. Western capitalist politicians may only now be beginning to grasp that this is not a sustainable model, for all sorts of reasons. But they are already stuck in their own economic cycles, unable to make a stand against cheap imports and the human exploitation behind them, because their own popularity relies on maintaining consumer spending and expanding economies in their own countries. Mandelson needs Chinese clothes to come into British shops, not because he believes that free trade is morally right, but because somehow consumers have to be kept economically active, even as they start to lose their confidence. Mandelson, king of spin, is revealed as a cheap illusionist spinning nothing more meaningful than plates on sticks.

The protectionists of Europe - and Mandelson, with his deal on quotas, has become one - may be hypocrites. The West, so far, has used the cover of "free trade" to rein in the presumptions of its workforces and exploit the poverty of other nations. But the free marketeers are even greater hypocrites, pretending to champion the poor of Britain (the Tories) and the poor of the world (Labour), when in fact they champion the rich, as capitalism by definition does. But those who believe that truly free trade is the answer (and that includes the mainstream of the Make Poverty History campaign) are wrong. Sustainable economies service their own markets, trading only in what they can't produce for themselves, not in what they can make more cheaply than anyone else.

China may have its moment of glory, but as its own economy expands, it too will face raised expectations among workers who will want the things they make for themselves as well, and the time to enjoy the getting and having of them. Mandelson may be taking the blame at the moment. But the free-trade plates will all be smashed one day, whoever is spinning them.