When free enterprise fails, what’s next?

What do you do when your economy is built on the mineral and natural assets of your country? In the case of an unregulated free enterprise system, the answer is watch them dissipate, be exported for quick profit, slowly dwindle till there are none. That’s the capitalist way, that’s the unchained entrepreneurial way. Countries such as ours were built on exploiting the land and our mineral assets for gain. And there is nothing wrong with, say, a copper mine extracting copper to build our country’s telephone network. Nor is it wrong for trees to be cut for lumber to build homes, or for oil in Pennsylvania to first replace whale oil for lamps and later heat homes.The problem comes in two ways later on. Firstly there is the question of nonrenewable resources, assets that belong or should belong to the national benefit because once they are mined out, we’re done. And secondly there is demand from other countries that provokes a wholesale exploitation of our nation’s assets for export, for quick profit. I say quick profit because no refining or processing jobs are created in this country when raw natural assets, like freshly cut redwood trees or raw copper or aluminum ore are exported. And therein lies another problem: The greater the export demand for raw assets, the larger that workforce becomes. And the larger that workforce is, the more similar jobs are created to keep them employed. In California the whole issue of the spotted owl campaign — pitting environmentalists against the lumberjacks over the issue of whether industrial logging or protection of a species was more important — could have been resolved by everyone fighting for real jobs for the lumberjacks. Instead of exporting 1,500-year-old trees to Japan with the bark still on, two-thirds of the lumberjack workforce could have been put to work in mills, in transport and into wood product manufacturing. Oh no, instead they clashed over an owl and allowed those same jobs to be created in Japan. And the profit on those trees? About 20 percent of the profit compared to the finished wood products. As a capitalist enterprise that was a failure. As an unregulated free enterprise system it was a resounding success — for someone else, overseas.In Switzerland there have been simple laws for many years protecting what few natural assets they have. Products can be imported in their raw state, but nothing can be exported unless it has been handled, reprocessed, three times. Cut down the tree, mill it, then make something out of it (cuckoo clocks will do, so will axe handles). Iron or aluminum ore can be mined, then smelted, then you make something out of it — watches and Swiss army knives. Anyone think those items are cheap? And the unemployment in Switzerland? Zero. Actually it is a negative percentage — they import skilled workers.China seems to be catching on. As a country they have already begun raping most of the world’s minerals and natural resources. Africa, especially West Africa, has more than 300 Chinese companies extracting ore, gems and minerals. Siberian timber is being cut down wholesale for shipment to China, ending up at a Walmart near you as tables, chairs and broom handles. Millions of barrels of crude oil are being imported and turned into plastics and then exported to the tune of multi-billions of dollars. But there is one thing China controls 90 percent of the world’s supply of, all mined within China’s borders: rare earth metals. Crack open your periodic table, these are scandium, yttrium, lanthanum, cerium, praseodymium, neodymium, promethium, samarium, europium, gadolinium, terbium, dysprosium, holmium, erbium, thulium, ytterbium, lutetium. OK, you ask, what are they used for? These minerals are the backbone of huge new growth industries that most people think are American (in origin anyway): safe lithium batteries for computers and cars, the glow of flat screen TVs and computer monitors, lasers for fiber optic transmissions, medical equipment (MRI and CAT scanners), solar cells and, never least, the manufacture of computer chips, especially the high-tech ones.China has realized that exporting these rare earth metals means that high-tech jobs are growing somewhere else, not in China, so they have begun to reduce their exports. They have put on a non-free-enterprise cap as part of national policy. In short, these valuable natural assets should be producing Chinese employment in the near future and reducing corresponding employment here and in South Korea, Japan, Taiwan and India.Yes, that is national protectionism to a certain degree, but it is also sensible husbandry of a nation’s assets and employment. Traditionally, nations have used customs and tariff charges to regulate the fairness of import/export. But tariffs and customs charges are restrictive of the capitalist system in ways that restricting the export of raw minerals and natural products are not. Capitalism, the ability of industry and employment to grow and respond to meet demand is not hampered if there is a cap on export of a nation’s unprocessed natural resources. But if you impose tariffs and customs duty, then you artificially set pricing and reduce desire for products, thereby hampering trade.Given all the wonderful and still abundant natural resources America has, perhaps it is time we started to preserve these for the employment of Americans and American industry first. Let’s make products here, the American way, a better way, and build for our future instead of shipping it overseas.Peter Riva, formerly of Amenia Union, lives in New Mexico.