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Unity And Globalization
Kenneth Baer, who normally writes for us at the Prospect, has taken to TNR to write his case against Democratic unity. As is often the case with TNR pieces, the headline oversells the thesis, which isn't really that Democrats should fall apart in an orgy of infighting. Instead, he says there should be a real debate about differences of opinion on globalization and national security policy. I think Baer drastically overstates the extent of the divide on national security issues. The gap between the "small group of Democratic foreign policy experts" who "take the issue seriously" and the "broader group of Democratic elected officials, and those who advise them" who want to "focus on the domestic concerns with which they are more comfortable and usually more successful" is important, as I'll argue in my forthcoming print piece. But it's not really a division like the divide between free traders and protectionists -- it's just specialization. It's been implemented in a problematic way, but it's not cause for some screaming fight ("education!" "terror!" "health care!") between people who happen to care about other things. The notion that a large crypto-pacifist bloc has coalesced around Howard Dean and has no seized control of the Democratic National Committee is obviously an article of faith at a certain publication's offices (six figure book deals depend on it), but it simply isn't true. Again, more on this from me soon.
But Kenny makes a really good point with regard to globalization and trade. Here, there quite clearly is a divide between free traders and our opponents, as numerous comments section debates on this site attests. What's more, as Kenny argues, there's something extremely problematic about the way Democrats have handled this to date. Kerry basically fudged in hopes of avoiding an intra-party clash. The upshot of that is that he couldn't adopt a strong message on trade. But as you'll see if you read Brad Delong's recent article on trade in The Atlantic, the economic consequences of globalization are about to hit a new and massively important phase. It's crucially important that the Democrats say something sensible about this. My preference (and Brad's and, I think, Kenny's) is that they take a good, correct, liberal free trading position. But from the point of view of pure cynicism, I think you could make a political sale of either liberal free trade or liberal protectionism. What you can't sell in the face of enormous economic dislocations is muddle and mixed messages. That means forcing the next cycle's primary candidates to really fight amongst themselves over the issue so that we either nominate someone with a mandate to run as a free trader, or else choose a candidate who'll run as a protectionist.
The political case here on globalization hadn't occured to me at all, but I find it very convincing.
February 14, 2005 | Permalink
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» Dem Disunity on Trade Policy from Labor Blog
Matthew Yglesias rightly argues that beneath the veneer of Democratic unity are serious divisions over trade policy. But my frustration with "liberal free trading" Democrats like Matt is that they are falling down on the job of the "liberal" part of th... [Read More]
Tracked on Feb 14, 2005 5:20:33 PM
» Dividing the Democrats on Trade from Freiheit und Wissen
...I think Newman is right on the money, but I wouldn’t hold my breath waiting for the free-trade-liberals (what some would call the Clinton Globalists) to come out for labor... [Read More]
Tracked on Feb 14, 2005 7:16:42 PM
» The "Free Trade" Debate and the Lessons of Iraq from The Left Coaster
For whatever inexplicable reason, a number of hard-line free traders within the center-left sphere have decided that now is the time to launch a "vigorous" intra-party debate regarding the merits of globalization and free trade (see here, here, and her... [Read More]
Tracked on Feb 15, 2005 1:10:58 PM
Comments
I think the proper policy is free trade with a healthy safety net and more access to the higher paying jobs to all children, but that in the current environment (Bushism), that politically, this is impossible and the only cards for those that require the saftey net and improved education for the poor is to bargain by withholding free trade. Unfortunately, the proper argument, I think, is too nuanced, as they say, and the correct politcal strategy will be a cheap and cynical attempt to win back the white middle class guys that have swithed to the (R)s.
Posted by: theCoach | Feb 14, 2005 10:35:46 AM
Do we have to always separate this debate into free trade vs. protectionism? Sure, some Democratic opposition to trade agreements is pure protectionism, but there are plenty of other reasons to oppose trade agreements as they have been written (NAFTA Chapter 11 provisions, intellectual property rules and other investment rules among others). Also, it is vital to note that many in the Global South are also fed up with the trade regime as currently practiced (this can especially be seen in Latin America).
What I hope Democrats could do was work to develop alternatives that would allow us to be pro-trade and pro-integration, but at the same time support more progressive treaties that really promote equitable development in the Global South, while also working on ways to stimulate employment at home (the Apollo Project folk have good ideas on this).
Posted by: Paul Adler | Feb 14, 2005 10:37:17 AM
Ok Matt, 2nd post about TNR in two about two days (the prior one being about hanging out with Spencer Ackerman). I've been dying to figure
out what the deal is over at the New Republic
since I'm a paying subscriber and generally
enjoy the magazine.
At any point did you just stop to ask the following quesitions of Ackerman:
1) Is Martin Peretz out of his mind voting for
Bush? Or is he out of his mind because he calls
TnR a "liberal magazine"?
2) Were they stoned when they asked Andrew Sullivan to edit the magazine and destroy any
chance Clinton had to implement healthcare or
were they stoned out of their minds when
they refered themselves to as a "liberal
magazine"?
And most importantly...what is this all about?
"Strain between Mr. Beinart and minority owner and editor in chief Martin Peretz had been visible during election season, with the hawkish Mr. Peretz less willing than Mr. Beinart to blame the Bush administration for cooking the evidence on Iraqi weapons of mass destruction. But Mr. Beinart said that he plans to return to his post by Labor Day."
Does it take a rocket scientist to figure out that
we rushed to war?
Look, I'm just salivating over some juicy pundit gossip.
Don't hold back.
-Joe Lieberman
Posted by: Joe Lieberman | Feb 14, 2005 10:47:03 AM
Free trade? Globalism has nothing to do with trade, it's simply the quest for cheaper labor. And anyone who thinks they have something to gain from a labor against labor bidding war...
Posted by: Bil | Feb 14, 2005 11:00:17 AM
Nice to see some much-needed Joementum here.
I personally suspect, too, that globalist free-traders will succeed in maintaining control of the Democratic party, thus precluding embarassing Democratic opposition to whichever war Bush plans next.
My reading of the DeLong Atlantic piece is that the things DeLong and the other free-trade Democrats hopped to do after 1992 may now be beyond reach. Much of the American working class and part of the American middle class are going to take a big bite, and there may be nothing that can be done about it. The Clinton people got the Republican half of their compromise deal (free-trade plus transition support), and the Republicans squashed the Democratic half. Some compromise. So now we're facing a wage race to the bottom which will not end until global full employment is reached. It was not a cheery article at all.
Posted by: John Emerson | Feb 14, 2005 11:39:10 AM
The mainstream Dems need to link up with the growing global anti-corporate-globalization movement and stand against the neoliberal scam of IMF/World Bank international predatory lending. They need to firmly defend the land, labor, markets, and resources of third world countries because the working people of America do not benefit from this multinational corporate imperialism.
We need to reform our international finance/trade systems to allow poor countries access to badly needed start up capital without having to sell their souls and adopt drastic neoliberal policies (that are sometimes even too drastic to be politically viable in america.)
We need to make sure that labor, environmental, consumer protections are expanded, not diminished.
Of course the mainstream Dems probably will probably do nothing because they're selected by and beholden to the same wealthy interests as the Republicans.
Posted by: Phil | Feb 14, 2005 12:37:07 PM
I'd ask only one thing: Could opponents of globalization, who are, after all, demanding laws to obstruct free trade, at least have the decency to stop calling themselves, "anarchists"?
Posted by: Brett Bellmore | Feb 14, 2005 1:01:43 PM
Omigod - they oversold Kenny! You bastards!
Posted by: The Navigator | Feb 14, 2005 1:40:20 PM
Sorry. How low-brow of me.
Back to the serious stuff: what Paul Adler said.
And, Brett, what the heck are you talking about? I'm aware of the tiny fringe group calling itself "anarchist," and I've seen the A-inside-a-circle spraypainted on various walls, but since when do the mainstream progressive types who call for "fair trade not free trade" (among whom I count myself) call themselves 'anarchists'?
Posted by: The Navigator | Feb 14, 2005 1:49:03 PM
Matt,
From your lips to G-d's ear. NAFTA was President Clinton's finest accomplishment, one that he expended genuine political capital to achieve, and that contributed in no small measure to the prosperity of the 1990s. If only the Democrats in Washington could persuade the Republicans to build on NAFTA with more free trade deals. Unhappily, both parties sometimes heed the siren call of the protectionists.
Posted by: DBL | Feb 14, 2005 2:09:50 PM
I must be the world's most naive man. Someone explain to me why, considering the U.S. economic muscle, and considering that every nation wants into our juicy markets more than they want life itself, and considering that our workers are at a serious disadvantage when companies in other countries have to comply with loose or no environmental laws and pay wages of pennies when we pay dollars, WHY can we not negotiate leveling devices? Taxes to level the field or enforcement of environmental laws in other countries or, I don't know what. Think how we could help our own people and raise up the third world at the same time if there were a world wide minimum wage. Why do we just accept the inevitable race to the bottom? Why can't we get creative?
Posted by: James of DC | Feb 14, 2005 2:20:06 PM
Navigator, I've just got a beef with the ones who call themselves anarchists, which obviously isn't all opponents of globalism.
Posted by: Brett Bellmore | Feb 14, 2005 2:37:24 PM
Support globalism. Anything that gives us GWBush, terrorism, worldwide poverty, global warming, and privatization of Social Security, among other goodies, can't be all bad!
Posted by: Bil | Feb 14, 2005 2:46:01 PM
Here's one thing I don't get. Kerry had a pretty good record on free trade. He and Edwards demagouged the issue of outsourcing, but they were still on the free trade side of the isle.
But why did they make an issue out of it like they did? They figured they could exploit the fears of the middle class to a degree and win over some swing voters. Well, who knows how well that worked? No matter, don't we know that some people--a lot of them, judging by Bush's margins--vote cultural issues over economic issues. If that stays constant, what can really be lost by advocating free trade? We can do that, but also advocate things like expanded trade assistance, working retraining, and health care, all of which will go along nicely with the safety net theme.
Again, what would we have to lose?
Posted by: Brian | Feb 14, 2005 2:53:23 PM
Seriously. For a technologically developed country of 300 million people - as far as the population is concerned, not the business elite - is globalization really such a crucial necessity? I don't get it: what if this was a small planet with 300 million people and no one to trade with - would the life be really unbearable? I think not. So, why is this such a burning issue? Close the borders and see what happens. So, Nike won't be able to make a pair of shoes for 20c and sell them for $100 - would this really be so terrible?
Posted by: abb1 | Feb 14, 2005 2:59:19 PM
Trade (in manufactured goods) costs more in terms of energy than building it yourself, so we'd be better off without it. But try telling that to an economist.
Posted by: Bil | Feb 14, 2005 3:09:09 PM
Well, Bill, you'd have a point, if the only cost to making things was energy, instead of it usually being the least expensive factor.
Posted by: Brett Bellmore | Feb 14, 2005 3:20:15 PM
matt --
I don't quite see how you can discuss trade without also discussing exchange rates, and what Stephen Roach of morgan stanley calls global imbalances (i.e. the US trade/ current account deficit). Brad DeLong is write about the forthcoming adjustment, and the general shifting of risk onto individuals. At the same time, the US is not going to be able to run trade deficits of 5% of GDP (now more) forever. The math does not work: exporting 10% and importing 15% of GDP (and over time moving toward paying 2% of GDP or more of interest on the United States' net external debt) doesn't work. We will have to export more goods/ or import less -- independently of whether or not we adopt protectionists policies. The real question is when this shift happens.
There is some room for unity inside the Democratic party here: Asian reserve accumulation is producing an imbalanced US economy (too much activity in interest sensitive sectors favored by cheap financing from Asian and other central banks, too little in the manufacturing sector), and in the process financing Bush's tax cuts. I don't think many Democrats think this is a good thing.
Posted by: brad | Feb 14, 2005 3:29:17 PM
The cost of slave labor though is greater than one might think.
Posted by: Bil | Feb 14, 2005 3:43:32 PM
As is often the case, good politics battles good policy. What's odd about the Dems since 1992 is that they have so frequently chosen to risk their fortunes on balanced budgets and free trade. This was fine when Clinton ran the show because he knew how to win working-class votes in other ways. But it was a miserable failure with Kerry, who lacked the common touch to say the least.
The question is: why shouldn't the Dems demogogue a bit on trade, assuming they adopt a reasoned policy in the end? It's not like Bush ever declines to play rope-a-dope with his more rustic constituents: flag burning, gay marriage, tariffs, subsidies, abortion, etc. Heck, even his real policies are barely disguised appeals to specific constituencies rather than well-designed programs. Why must the Dems play with one arm tied behind their backs?
Posted by: AWC | Feb 14, 2005 4:31:36 PM
Posted at my blog also.
Matthew rightly argues that beneath the veneer of Democratic unity are serious divisions over trade policy. But my frustration with "liberal free trading" Democrats like Matt is that they are falling down on the job of the "liberal" part of their advocacy of free trade.
While Matt wants to reduce the debate to that between "free traders" and "protectionists", it's more complicated than that. The Clinton Democrat position is that, yes, trade will dislocate some workers, but it will make our society richer, so we can then afford to train any workers for even better jobs.
Sounds nice in the abstract, but those displaced workers have a sneaking suspicion that their vested ownership of a job is more valuable politically than a government promise to retrain them. And you can see Bush's actions in office sustaining that belief, since while he imposed steel quotas to protect some steel jobs, he's gone out of his way to deny Trade Adjustment Assistance to workers who actually lose their jobs to trade. And now he wants to kill the whole training program under the TAA.
But here's my problem with Matt and other "liberal" free traders. Retraining workers is "their" trade program, yet it's leftwing labor bloggers like myself who have to scream about Bush's assault on the program. The silence from the liberal free trade side of the blogosphere has been deafening.
If liberals won't defend retraining funds, they really can't convince us labor types that they are seriously committed to helping the losers from their pro-trade policies.
The whole "protectionist" label misses the point, since labor folks are often in favor of trade, since it breeds jobs. They just don't trust the policy liberal free traders talk about, since there is such a clear record of them not following through on programs for those who lose out under their policies.
While some labor-types are straight up protectionists, the official labor position is that trade is fine as long as all countries are required to respect basic labor rights, such as the right to free speech in the workplace and the right to bargain collectively. That way, it's the workers in each country deciding the appropriate trade-off between wages and jobs-- not each government imposing it as authoritarian policy. And the advantage of that is if jobs go overseas, it's far more likely to lead to better paying jobs there, which in turn increases the demand for US goods. So us "fair traders" are all in favor of lots of trade-- we just want the benefits to go first, last and foremost to workers both in the US and in the developing world. I know the liberal free traders think that's the goal of their policies, but the evidence just isn't there. As I said, the silence over Bush's plan to kill Trade Adjustment Training funds is deafening.
Posted by: Nathan Newman | Feb 14, 2005 5:23:19 PM
What free trade? The Asian countries illegally manipulate their currencies and illegally lavish subsidies on their export sectors. America meanwhile illegally lavishes subsidies on corporate agriculture (there's plenty of corporate welfare in other sectors too, just very little for manufacturing [beyond aerospace] and textiles), and strongarms the poorest developing countries into accepting sweetheart deals for its own multinationals, and loan repayment terms. And good Old Europe meanwhile illegally lavishes subsidies on next to everything, and exploits the human and natural resources of the poorest countries of the developing world just like in the bad old days of colonialism. Wake me up when free trade exists anywhere other than in the heads of economists, and in the rhetoric of politicians. Then we can evaluate whether we like it or not.
Posted by: Robin the Hood | Feb 14, 2005 5:26:28 PM
Matt, you really do need to address what Nathan's talking about. Free Trade is not leading to better economic payoffs for most Americans, in fact, quite the opposite. At the moment, Free Traders are merely saying (at least it seems like it) that us Americans are just dumb for not understanding economics. Well, under what economic theory are people expected to support something that hurts their particular interests but helps an entirely different class of people, because in the aggregate we're all better off? Why doesn't anyone on the Free Trade side see the immediate problems there? Until Free Trade starts offering us a reason to support it, you can't be surprised that we don't support it! That's the point of Fair Trade - sacrifice some growth for better distribution of rewards. This makes increased trade and globalization more politically viable, as well as less draconian. Free Trade, as it's currently being sold, is not going to pass unless it's imposed, and if it's imposed, it ain't gonna last. If you want Free Trade, then make it worth our while!
Posted by: Padraig | Feb 14, 2005 5:54:52 PM
Why do we just accept the inevitable race to the bottom?
Because it's so much more profitable for Corporate America!!!
Posted by: Don Quijote | Feb 15, 2005 7:12:38 AM
I don't quite get why John Emerson thinks free traders are more apt to support Bush's wars. If Howard Dean is indicative of the new direction of the Democratic party, I guess it means we'll oppose more of Bush's wars and we'll still be pro-free trade. (at least, I think that's Dean's view)
I think in a way some of us Democrats have soured on national security issues because Republicans have successfully defined "taking these issues seriously" as "doing the most aggressive, militaristic thing." With that, there's a temptation to say, "y'know, maybe these things aren't worth taking seriously. After all, fourteen times as many people die in car crashes every year as died on 9/11." I think we need to relearn "seriousness" as not merely taking the most radical course of action: indeed, reacting as strenuously and extremely as possible is very unserious.
Posted by: Julian Elson | Feb 15, 2005 10:58:35 AM
