Wednesday, July 9, 2008

Wherein the Free Market Simply Won't Do: Airbus vs Boeing

In the world of television fiction, Seinfeld had a way of tying every minute detail of each episode together in the waning seconds. Reality provides no shortage of such symmetry, as time and again stances taken by the government one day have an uncanny knack for being contradicted days later.

The most recent instance involves the re-opening of the Air Force tanker contract, originally granted to a European company, Northrop Grumman. The first 25 minutes of the episode can be seen as the confluence of two tenets on American economic policy abroad, which in any logical world would be seen as faintly contradictory.

One is the persistent worship of the 'free market.' The term of course is not taken to mean quite what it implies. That is, the US supports the free market and concurrent globalization so long as the victors are American multinational corporations. Should any other outcome occur by happenstance, corrections (read: not-free market forces) will be applied by the rightful owners of the world marketplace.

Second, compare the US's dealings and consternation over the tanker deal with its influence over the Iraqi oil contracts. Again, in an equitable world, these two examples would seem contradictory. Consider that the US's economic policy in the globalized world is that it is the rightful heir to every other country's wealth, resources, and cheap labor. Those countries in turn are the rightful heirs to allowing America free reign within their markets.

Whereas the US has defended its granting of no-bid contracts for the reconstruction of Iraq to American companies tied to the administration, it is now putting a halt to the free market after the Air Force chose the wrong company in a bid with actual competition. Those of us still committed to defining words clearly would see that as the antithesis of the free market, but logical consistency has become somewhat quaint these days.

The deal was expected to cost Americans jobs and send US funds to a foreign country, to be sure, but when placed alongside the taking by the West of 75% of Iraq's oil revenue it begins to pale. Americans, though, have never been known for their grasp of analogies.

John McCain isn't helping his conservative credentials on the deal either:

The Pentagon's decision will also enter the realm of U.S. presidential politics because John McCain, the presumptive Republican nominee, had long been a critic of Boeing's initial bid. As a member of the Senate Armed Services Committee, he held a series of hearings that opened the door to the bid made by Northrop and EADS.

Some critics have contended that McCain favored a European supplier over an American company for a critical U.S. military contract - an impression not helped by the fact that several of his top campaign advisers had worked as lobbyists for Airbus.

McCain's crime, then, was not opposing vehemently enough the first chance for a European company to fulfill an American defense contract in spite of the fact that the Europeans, along with the rest of the world, regularly buy from America in large quantities. In other words, he allowed the free market to dictate the outcome. Or, to put it yet another way, he took the rhetorical facade of conservative pundits a bit too literally.

But conservatives aren't for a free market any more than they're for democracy. Though both are used as political punching bags, they are supported only so long as the benefits find their way to their proponents. Should a country's citizens democratically choose a path independent of Washington or a competitive contract be granted to the wrong company (say with ties to a country that didn't support the Iraq invasion), the gig is up.


Iraqi Oil, Western Profits, July 9

Sphere: Related Content

No comments: