Why are liberals so deluded on free trade?

[portlander23]

Why are liberals so deluded on free trade?
Ryan Cooper
The Week

Now, it's true that our new age of globalization has been mightily beneficial to much of the world population outside the developed world, at least defined in income terms. Growth in China, India, and elsewhere has meant huge strides for the middle of the global income distribution — as well as the very top. Chait rightly cites Branko Milankovic's recent Global Inequality, which deals with this very question. Leftists like Sanders can often be a bit squirrelly on this point, since they would like to protect the American working class without harming anyone else. But Chait's characterization of the case against free trade as resting on "protecting the interests of the working class in rich countries at the expense of the global poor who are taking their jobs" is hogwash. It's not nearly so simple.

First of all, there's no reason why the Western working class has to take the hits of globalization. One could easily imagine a counterfactual history where working class declines were compensated by increased taxation on the rich and better welfare. (That this didn't happen is largely due to neoliberals eliminating trade barriers and cutting welfare at the same time.)

But the more fundamental thing to note is that rich nations almost universally got rich behind stiff tariffs and other anti-trade measures. That was true of the United States in the 19th century, and it was true of Japan and South Korea in the 20th century. The reason for such trade policies was perfectly obvious at the time. As Sven Beckert details in Empire of Cotton, before the Industrial Revolution, the vast majority of cotton growing and textile manufacturing happened in India and China. But as Britain hit on the first instance of spectacular productivity growth, they flooded the Asian markets with very cheap textiles — and enforced their access to those markets with military force.

In short, the first big instance of worldwide free trade is a huge part of the reason why the non-European parts of the world are poor in the first place.

There is another model, one which allows for the necessity and the value of trade, but recognizes that it must be subject to democratic control. Unrestricted capitalism is violently unstable, and must be subject to careful controls in many places. Recession policy is one; trade is another.

[FreakinDJ]

1. Unrestricted capitalism is violently unstable

[pipoman]

2. Yes....pissing on US labor is the Democratic thing to do...

Fuck the TPP and every sold out fuck of a politician who supports it...

[Judi Lynn]

15. Sell outs, you nailed it. Real Democrats wouldn't consider it. Not ever. n/t

[merrily]

3. Oh, those liberals! They're just wrong about everything. Let's just make that all-inclusive

statement and get it over with in a sensible and energy-efficient way.

Posting a separate OP for every individual thing liberals are wrong about just uses up too much of the world wide web. If we do that, we'll never have enough room for cute animal pics.

[CrowCityDem]

4. Here's one reason: China can't afford to start a war with us now, because of trade.

While the job losses we've suffered (and it's not certain how many are a direct result of trade vs natural efficiency) are unfortunate and a problem, there are other benefits to trade that Bernie/Trump never mention. It's not as simple as looking at our jobs reports.

[comradebillyboy]

7. Right you are. International trade is very important to

our economy and our position in the world. Simplistic bromides won't solve complex problems.

[AdHocSolver]

12. Job losses are not the result of trade, but directly due to the policy of corporate outsourcing.

Moreover, there is no such term as "natural efficiency" in economics.

What the corporations term "efficiency" refers to maximizing profits by cutting costs, which nowadays means eliminating jobs or outsourcing jobs to lower-waged workers.

There is NO "invisible hand" forcing corporations to follow such policies.

[elleng]

5. Unregulated capitalism cannot succeed.

[Overseas]

6. Some have watched global warming since the 80's and know we're in dangerous acceleration

of the warming and have now locked in a 1.5° warming of our planet. This requires dramatic action to curb methane and CO2 emissions and our government, controlled by corporations, may not be able to make the necessary changes.

We don't want to extend US style corporate control of regulations to other countries. But the TPP would allow corporations to sue governments over regulations that impede their profits.

Corporate power is not benign. It is profit driven. Profits overrule long term health and safety. We are suffering those consequences right now. When Exxon's own scientists told them their product would cause global warming unless they developed methods to curb CO2 emissions, they chose to abandon those ideas as too expensive and instead put tens of millions into sowing doubt about the warming their own scientists had identified.

http://www.scientificamerican.com/article/exxon-knew-about-climate-change-almost-40-years-ago/

And take a good look at Beijing and its air quality. The people have more money but far less clean air. They have to wear masks on bad pollution days, and even after taking on those challenges, their workers were deemed too expensive and garment production moved on to Vietnam and other countries with cheaper labor.

Unbridled capitalism is too destructive. Short term profits overrule long term health of people and our environment. I want countries and local governments to be empowered to prioritize local health and safety over corporate profits.

Capitalism and international trade will continue. It will just be at a slower, more responsible pace.

[snot]

9. ^This.^

[Igel]

8. Confused, here.

But the more fundamental thing to note is that rich nations almost universally got rich behind stiff tariffs and other anti-trade measures. ... (As) Britain hit on the first instance of spectacular productivity growth, they flooded the Asian markets with very cheap textiles — and enforced their access to those markets with military force."

In other words, there were tariffs on one side and enforced lack of tariffs on the other side. This produced inequality and made poor nations poor.

In short, the first big instance of worldwide free trade is a huge part of the reason why the non-European parts of the world are poor in the first place.

In other words, free trade, the reduction or elimination of tariffs made poor nations poor.

It can't be both A and not-A. No matter how much we want to believe.

Arguably, free trade is making the West poor, so tariffs are good for us. But not them. At the same time, it allowed the accumulation of capital. Like it or not, every time of fast advancement in science and technology has involved some sort of accumulation of wealth and prestige. Monks in medieval Europe advanced technology because they had a decent building, decent lands, and time enough to ponder scripture and how to make their lives easier. Islamic science? Chinese inventions? Rich patrons to fund otherwise low-productivity scholars and in some cases make use of manuscripts from or interconnectivity with other places, just as nobility funded Copernicus and Haydn and both had input from all over Europe (and ME). So if we needed our scientists and engineers to engage in subsistence agriculture, we wouldn't have Hawkings. Nobody would be able to afford to build the LHC or put up satellites. Even the USSR, for all it's "communism," had Akademgorodok and their national academies where researchers had funds and "leisure" to work on technology and science, using "profits" from workers. The USSR's hinterland was poor so that the industrial and academic centers weren't.

Perhaps this is the best way to think of things. Centuries ago, some individuals got rich and were able to fund individuals to produce scientific and artistic advancements. Those advancements then spread out and reduced the gap between how the old gentry and nobility lived and the overall population. Who vanished in that? Not the top-level rulers. But the lower gentry and the upper peasants merged. My poor student's lifestyle is arguably better in many ways than Queen Elizabeth I's. While the current "queens" are doing much better, its the courtiers who have held steady in terms of income. A century ago, some countries got rich and could fund the production of scientific and artistic discoveries on a grander scale. Those advancements are spreading out and reducing the gap between how the old wealthy countries lived and the overall world population. Who's held steady while much of the world plays catch-up? Not the top few percent, but those under them.

As one other DUer likes to say, equality often feels like oppression if you're used to privilege. Most of America's not being great has been because others have caught up. We're not privileged, or at least not nearly as privileged.

But keeping wealth concentrated in one area or limited areas is inequality, and always requires some sort of inequality of laws and trade. We like to think that we can make a difference by shipping food over, but it's like keeping workers poor in the US and sending them food baskets.

[snot]

10. Big picture:

At some point, possibly before I'm gone, automation and computerization will eliminate a great many jobs – perhaps most jobs – while generating as much or more physical wealth – or at least, they could, rightly deployed.

So I think we need to recognize that conversations about job-creation may soon become moot, and start shifting the discussion to income- and ownership-taxation and -distribution.

(The 1% talk and behave as though the economy is a zero-sum game, but doesn't have to be that way. It's that way only if we permit it to {continue to} devolve into who can loot it the fastest.)

[AdHocSolver]

13. Automation and computerization do NOT automatically eliminate jobs.

The elimination of jobs is corporate policy to reduce costs and eliminate competition.

Company A buys out a competitor and merges the similar departments such as personnel, Information Technology (IT), accounting, and so forth thereby eliminating "duplicate" jobs, while forcing the "fortunate" remaining workers to double their workload while accepting lower wages or leaving the newly merged companies.

There is NO economic policy forcing such practices. It is merely the result of the one-sided relationship between the corporations and their employees.

[snot]

14. I didn't say automation & computerization ALWAYS cause job loss, OR

that they're the ONLY causes for lost jobs.

I regard automation and computerization as at least potentially "good" causes, freeing us up to do other things.

There are plenty of awful causes, including the one you describe.

It's just frustrating to me that people so often assume job loss is terrible; but for many if not most people, what's terrible about it is that it means income loss. Things don't have to be that way.

[yurbud]

11. they are not deluded. they're bought