Thursday, April 16, 2009

Less free trade! (and fewer immigrants)

Readers of this blog know that I'm not in favor of free trade or much immigration. I see both as erosive of labor's economic power in the United States and one of the reasons why labor hasn't shared in the productivity gains over the last 30 years.

Over at Crooked Timber, a generally pro-globalization post echoes the Brad DeLong point:
Trade, outward foreign investment (movement of plants and services abroad), and immigration very likely have contributed to the growth of U.S. earnings inequality over the past several decades. Reducing any or all of them might well help to boost wages among Americans in the lower half of the distribution.

But in my view this shouldn’t be even a minor part of a strategy for inequality reduction, much less its chief focus. Trade, investment abroad, and immigration tend to benefit citizens in and from poor countries, which includes the bulk of the world’s population. Most of these people are substantially poorer than even the poorest Americans.

Yes, globalization enriches some rapacious corporations and despotic rulers, and vulnerable workers are exploited. But access to the American market and to employment by U.S.-based transnational firms has helped improve the lives of hundreds of millions of Chinese, Indians, and others in recent decades. And moving to the United States almost invariably enhances the living standards of immigrants from poor nations. It would be a bitter irony if American progressives succeeded in making a real dent in our inequality problem at the expense of the world’s poorest and most needy.
To which, a commenter wrote:
From a Left/Liberal point of view, you’ve got a tough time selling a policy that purely benefits people abroad, no matter how poor, at the cost of the local working class.

... when working class voters complained about their work being moved elsewhere, and their governments not defending them, you’d usually find someone on hand to explain that painful as it might be, Free Trade would really benefit them in the long term, citing good historical precedents.

But if the moral argument is wrong – if in fact it benefits the merchant classes and foreign workers, at the cost of domestic workers, then in fact they are entirely rational to oppose it. Given a choice of cheaper goods, or a well paying job for life, a significant number of people would actually choose the latter.
I agree with that. And I'd also say that for years the claim was made that free trade was good for everybody, but only now are we hearing what is perhaps the real reason: helping folks abroad. I always thought free trade helped foreign workers (and immigrants coming here) but opposed it because of the negative impact on domestic workers.

One reason why I really dislike Brad DeLong and others who share his view (like the Crooked Timber poster) is that they have been dishonest. By dishonest I mean that they didn't make the "helping others" theme the primary one. Sure, there was a footnote or something in the eighth paragraph mentioning it, but it was effectively hidden because they know it's political poison. They bring out this "better for those really poor abroad" only now, when the earlier arguments about prosperity for all are shown to be bogus. If they were dishonest in the debate back then, I suspect that they are dishonest now. What's to stop me from thinking that DeLong is nothing more than a stooge for the business class?

ALSO: The comment thread is somewhat wordy, but engages some interesting elements of the free-trade argument, including the notion that we should be helping workers overseas at the expense of domestic labor because:
the working class of the developed world is obscenely wealthy in comparison to the vast poor of the developing world and a portion of the resources upon which that wealth was built was stolen from the developing world in the past



Brad DeLLong

By Blogger brad, at 4/17/2009 10:46 AM  

krugman isn't a free-trader?

By Anonymous Anonymous, at 4/22/2009 9:04 AM  

what sirota had to say about obama econ advisor austan goolsbee and nafta:

Before being embroiled in controversy this week, Goolsbee was the only remaining presidential adviser openly pondering some of these questions. He publicly confesses that before the campaign, he never closely analyzed trade agreements, but now that he has, he says he sees the corruption and is appalled. The admission, while muted, is encouraging at a moment when substance is so brazenly ignored.

By Anonymous Anonymous, at 4/22/2009 9:09 AM  

how do you feel about lou dobbs?

By Anonymous Anonymous, at 4/25/2009 1:20 PM  

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