With that in mind I give you, "What to Expect When You're Free Trading" published on Wednesday in the NY Times. The article purports to be a a defense of free trade. But it's so much creepier than that. From the piece:
"All economists know that when American jobs are outsourced, Americans as a group are net winners. What we lose through lower wages is more than offset by what we gain through lower prices."
That's a debatable premise. If you lose your job to a Chinese manufacturer -- no amount of cheap goods at Walmart is going to offset the fact that YOU DON'T HAVE ANY INCOME.
But the premise does have a certain partial truth -- sometimes outsourcing leads to lower prices (sometimes not). It fails to examine who wins and who loses -- instead focusing on net gains and net losses (see the sleight of hand?) but we can still keep talking.
But simply arguing in favor of so-called free trade is not enough for economist Steven Landsburg. Rather, he's out to vilify those who don't want to starve to death in the interests of his economic theories. His article builds up to the grand conclusion that if you don't want to lose your job to Chinese slave labor then YOU are a bully.
For many decades, schoolyard bullying has been a profitable occupation. All across America, bullies have built up skills so they can take advantage of that opportunity. If we toughen the rules to make bullying unprofitable, must we compensate the bullies?Get that? If you're an autoworker, or textile worker, or electronics worker and you don't want to lose your job (and so you go and take the despicable action of VOTING for someone who will look out for you) then Dr. Landsburg says YOU are a BULLY, who uses FORCE, to ENRICH YOURSELF AT SOMEONE'S INVOLUNTARY EXPENSE.
Bullying and protectionism have a lot in common. They both use force (either directly or through the power of the law) to enrich someone else at your involuntary expense. If you’re forced to pay $20 an hour to an American for goods you could have bought from a Mexican for $5 an hour, you’re being extorted. When a free trade agreement allows you to buy from the Mexican after all, rejoice in your liberation...
Look, Steve, here's how I see it -- if you want to argue in favor of free trade that's fine. If you want to be a corporatist whore ala Gordon Gekko in Wall Street screaming about "Greed is good" -- the first amendment says go ahead. But when you call a manufacturing worker a bully for voting for a guy you don't like -- then you've crossed the line.
Here's the story that Steven Landsburg won't tell you. If you're a union organizer in a third world country and have the audacity to ask for a few more cents an hour in wages (or bathroom breaks or other unspeakable socialist crimes) oftentimes the CIA or a local oligarch will send a death squad to kill you and your family (and possibly your whole village). If you're a foreign government that wants to control its own natural resources, the U.S. government will send troops to occupy your country or use the CIA to organize a coup to topple your government. The reality is that so-called "free trade" requires enormous levels of bullying, force, and violence -- BUT ALL OF THE VIOLENCE IS BEING DONE BY MULTINATIONAL CORPORATIONS AND THEIR ALLIES. For Steven Landsburg to suggest that unemployed U.S. factory workers are bullies for voting while he ignores the crimes against humanity committed by his corporatist friends is sickening.
It seems to me that we can have an honest conversation about trade agreements.
- We can look at who wins and who loses.
- We can look at all of the costs -- factory workers who lose their jobs, depression, suicide, and the collapse of former company towns; the real costs of death squads and military interventions; as well as brutal working conditions, toxic pollution, and birth defects in the third world.
- We can look at moral costs of killing people for cheap goods and what that says about us as a people.
- I'm also happy to look at benefits -- such as cheaper boxer shorts at WalMart and lower-priced coffee at the supermarket and whether that improves my quality of life.
- We can also debate whether national economic policy should make allowances for a natural diversity of talent, intelligence, and strength. Should economic policy allow a man with nothing but a strong back and a good work ethic to be able to achieve a middle class standard of living through a unionized factory job or should he be expected to live under a bridge because he's not a college educated manager (working all day to outsource factory jobs to Mexico)?
A final note: Can anyone guess where Steven Landsburg got his Ph.D. in economics? If you guessed the University of Chicago -- you're our big winner. For more on the University of Chicago's distinguished history of training the apologists for genocidal regimes please see my earlier post, "Milton Friedman Wants You to Be His Bitch."
was wondering if you have ever read 'confessions of an economic hitman' by john perkins.
he actually states (from experience)that the white collared 'economic hitmen' go in first, and in case of resistance, the military/paramilitary/CIA 'jackals' are sent in.
but yeah that piece was really strange.
If in doubt; if overcome by econometric models' false assumptions, anachronistic trade theory and associated ideologies...turn to the facts.
How has the world done before and during the neoliberal 'free trade' regime?
* Annual real GDP growth in the world economy averaged 4.9% in the years from 1950 to 1973, it slowed to 3.0% in 1973-92.
* Western European growth rates fell from 4.7% in the early period to 2.2% in the latter.
* Latin America's growth averaged 5.3% from 1950-73, but only 2.8% from 1973-92.
* Africa grew at a 4.4% pace in the first period, but at a 2.8% rate in the second one.
* Asia, which rejected the neoliberal model, was also the only major area not to experience a significant slowdown, maintaining growth between 5% and 6% for the entire era.
Focusing on the 1990s:
* World GDP growth averaged 2.2% from 1990-98, the slowest growth of the post war era. Developed nations had an average GDP growth rate of only 2.1% from 1991-98.
* Latin America growth averaged 3.2% from 1990-97, better than in the “lost decade” of the 1980s, but much lower than in the pre-1973 period.
* Africa showed GDP growth of only 1% a year from 1990-97.
* Asian economies grew by 6.5% from 1990-96, prior to the outbreak of financial crisis in that region.
* US GDP growth averaged 4.2% a year from 1959-73, but only 2.6% in the Neoliberal years from 1980-98. From 1990-98, growth was only 2.5% per year.
[-Angus Maddison, Monitoring the World Economy 1820-1992 (Paris: OECD, 1995), p.60.
-World Development Indicators 1999 (Washington, DC: World Bank, 1999), p. 4.
-United Nations Conference on Trade and Development, Trade and Development Report (New York: United Nations), various issues.
-Council of Economic Advisers, Economic Report of the President (Washington: United States Government Printing Office, 1999)
In Crotty, 2000]
Fantastic comments!!! I've been intending to read Confessions of a Economic Hitman and will now go out and buy it. Also Juan's stats are incredibly illuminating! Thanks for the great work!
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