Friday, July 11, 2008

E. J. Dionne Jr. goes after Brad DeLong's "free trade is good" argument:

Brad DeLong, who many mistake for a liberal, loves free trade. Says it's great because it helps people in other countries. But wait! Dionne has just penned an op-ed where he tackles various capitalist orthodoxies:
Regulation is the problem and deregulation is the solution. The distribution of income and wealth doesn't matter. Providing incentives for the investors of capital to "grow the pie" is the only policy that counts. Free trade produces well-distributed economic growth, and any dissent from this orthodoxy is "protectionism."
On free trade specifically, he quotes Barney Frank:
Frank also calls for new thinking on the impact of free trade. He argues it can no longer be denied that globalization "is a contributor to the stagnation of wages and it has produced large pools of highly mobile capital." Mobile capital and the threat of moving a plant abroad give employers a huge advantage in negotiations with employees. "If you're dealing with someone and you can pick up and leave and he can't, you have the advantage."

"Free trade has increased wealth, but it's been monopolized by a very small number of people," Frank said. The coming debate will focus not on shutting globalization down but rather on managing its effects with an eye toward the interests of "the most vulnerable people in the country."
Whoa!   How can that be? It's true that free trade has advantaged employers, reduced the power of labor, held down wages, and made a few people rich. But DeLong says free trade is great, so the facts must be ignored. Especially by a highly-paid university professor safely ensconced at Berkeley who enjoys cheap consumer goods, or something. C'mon Brad, admit you are wrong! Admit it!


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