Market theory lacks social consciousness and tends to treat people as abstract economic units, leaving justice to the indifferent workings of the marketplace. Contrary to the predictions of free market theory, productivity gains in practice lead to a reduction in the number of available jobs but never seem to lead to a net increase in them. Market economics has served a useful function in purging industrialized economies of systemic dysfunctions. However it has reinstalled social dysfunctions that such democracies had prided themselves in overcoming. It is creating unemployment and as a result living standards are being reduced.
The GATT Uruguay Round negotiations, terminating in 1993, were designed to create a global free market in all goods and services, including agricultural products. Binding countries into a global trading system with clear rules and a referee to enforce them is designed to lead to improved trading prospects. It permits tariff cuts up to 38% on more than 20,000 products. In some sectors, such as electronics, tariffs will be reduced by up to 65%. These should lead to a general reduction in consumer prices, although only in sectors where there is some competition will processes drop noticeably once agreement is reached. It is expected that better market access and increased competition will lead to lower prices and increased trade. It has for example been estimated that EEC/EU consumers pay an extra £300 per year to finance the Common Agricultural Policy.
A world of free trade and deregulated markets would generate increased global investment, employment and income. The alternative is the doomsday prospect of 1930s-style trade wars and the collapse of the liberal trading order. Behind the free market smokescreen, the institutionalized proposals of GATT place the strategic interests of powerful governments and corporations above the social and economic rights of vulnerable communities and poor countries. This is not a vision of international trade management which deserves to be termed "multilateralism".
While market-based reforms can be useful in boosting living standards in developing countries, they should only be implemented with regard to the wider economic and social context in which they are likely to operate. They only work when they can be supported by a pre-existing institutional, legal and social framework. Contrary to the prescriptions of the more pro-market World Bank and IMF, well-judged economic intervention plays an essential role in maximizing growth.