Protectionism, Profits, and Pandering
Senators Obama and Clinton are competing in the Senator Edwards sweepstakes to prove who can be more hostile to free trade and critical of NAFTA - although neither has been notably critical in the past. Obama says he is going to bring jobs back to Wisconsin; Clinton is making protectionist noises to Ohio's anxious blue collar voters.
If the campaigns actually were to take foreign policy seriously rather than treat it as a pandering adjunct to domestic politics, what would be clear is that the Democrats don't have a viable international strategy to deal with economics in an age of interdependence. Why? Because they can't afford to tell the truth about our economic plight.
McCain and the Republicans have a truth of sorts: unadulterated free trade serves the interests of global business and the big corporations whom Republicans serve, so they are for it - let American workers and third world economies adjust via capitalism's notorious process of "creative destruction." Democrats respond by resorting to old-style protectionism and acting vaguely sympathetic when zealots talk about building that wall between Mexico and the United States.
Here are a half dozen truths visionary Democrats might embrace if they were not persuaded that the truth loses elections:
Truth # 1: The old manufacturing jobs aren't coming back: not ever. American labor is too expensive, the costs of safety and environmental standards too high, and the lure of cheap labor markets overseas too overpowering.
Truth # 2: Walls don't work. They not only contradict everything the open society stands for, they can't get the job done. We spent the last half century "tearing down that wall" between East and West, but now seem to think we can wall out the 12 million undocumented workers who are already here, or wall in our jobs so they won't hemorrhage to cheap labor markets where safety and environment are not concerns.
Truth # 3: The federal government has lost much of its defining sovereignty, especially when it comes to the economy. Flows of labor (the immigration crisis), capital (the north/south crisis) and goods and the plants that produce them (the job outflow crisis) are simply not subject to control by our government, and protectionism (imposing tariffs or subsidizing manufacturing) impedes market exchanges without really protecting Americans.
Truth # 4: The reality is the economy has fled the nation state box and swims freely in the anarchy of global markets, while the democratic institutions that once regulated and controlled the economy remain locked inside the nation state box. "Popular sovereignty" means that we have hitched the horse of our democracy to the cart of our sovereignty; but if the sovereign cart is broken down, the democratic horse has nothing to pull.
Truth # 5: The West and the United States underwent economic development at a huge cost in terms of child labor, unsafe conditions and environmental damage (remember Marx and Engels bemoaning the condition of the English working class?) Now we insist the developing world must pay for what we got free - rather than sharing or taking on those costs ourselves (in massive "north-south transfers of wealth").
Truth # 6: We want to let philanthropy (Bill Gates, Bill Clinton) do with charity what our democratic society and government needs to do with policy and priorities: reorder the global economy so it is subject not to our sovereignty and interests but to common democratic oversight.
So here is the real bottom line (only don't try to say it in a debate): you want change? Leadership? Vision? Then how about a new vision for democratizing globalization or globalizing democracy that puts the oversight institutions out there where the economy is -- in the global market. A new vision that recognizes that sovereignty is a dying dream but that the "free" market alternative represents a race to the bottom; a vision that refuses to limit the choice to protectionism or profits.
There is no going back, no putting the genie of global markets back inside the nation state box. But that cannot mean abdicating economics to global market anarchy or global market monopolies either. The challenge for democrats (i.e., Democrats) who care about both jobs and justice is to figure out how to maintain democracy when the "sovereignty" in "popular sovereignty" no longer has global traction.
But imagine what happens to the candidate who is truly audacious enough to say, "What stands between the United States and both prosperity and economic justice is sovereignty! We must get over our stubborn, counter-productive belief that walls, tariffs, subsidies and nationalism will do more for our interests than cooperation with others around common democratic oversight principles." This is a winning truth that can give Democrats a way around protectionism and free trade. Except it's a sure loser - all credit to the media! -- in the pandering campaign circus that currently passes for American "democracy."
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Do not forget the role the US consumer plays in this debate. Companies are forced to search for cheaper countries in order to compete on price and give the consumer what they want. Remember the "Made in America" campaign? It seems the consumer preferred a lower cost product over a US made product. If you want your Walmart prices, you are going to have to accept what is happening. The problem is that everyone wants to restrict trade and maintain retail prices. When the US consumer is will to pay higher prices, we can start talking about bringing manufacturing jobs back to the US. Until then, companies cannot afford to produce here.
3/4/08
3:16pm
Alexandria, VA
Americans will pay higher prices for US-made goods just as soon as there is full employment--in well-paid blue collar jobs, not jobs at McDonalds. Why can't the blue collar jobs come back here?
You can't expect a McDonalds employee to go out and buy a new American car or even an expensive American-made TV--he/she can't afford it.
If the companies supposedly cannot afford to produce here and provide jobs, then no one is going to be able to afford to buy from them either. I have made my bet against the logic you propose is the issue and is being used nationally (cannot afford to produce here) sometime ago and I am gaining at a rate of about $800/mth that I am correct with an increase in the rate of gain that is exponential. Keep up the good work!
The ruling classes make declarative statements and expect everyone to bow down in acceptance. Such as: Your jobs are gone, we can't compete with foreign labor, get used to it. Such nonsense.
The only reason jobs have left this country is because the politicians accept bribes from the corporations, and pass laws allowing them to take jobs to other countries.
When workers in the U.S. say they want a good job with decent pay, job security, and a pension, they are told that they cannot have it, "our" businesses can't afford it, the workers have to compete with Chinese slave labor. But that's a lie. What's happened is that businesses take jobs to China, use slave labor, and take all the savings from the cheap labor and put it in the pockets of the management. If they had kept the jobs here, invested in R&D, paid Americans decent wages, paid management reasonable salaries, we would all be better off. For example, if the car industry had invested in R&D, started coming out with hybreds, been the leader in the field, we would have a strong car industry. But instead of doing that, the management looted the companies, gave themselves fat paychecks and golden parachutes, failed to fund the pensions, screwed the workers, and ran the businesses into the ground. Our car industry's dilemma has been caused by management greed and corruption, not with anything relating to China.
Look at housing in the U.S. The developers fired skilled American workers and replaced them with illegal immigrants. The "savings" was not passed on to consumers, but instead just made the developers richer, and home buyers ended up with more expensive and shoddily-contructed homes.
"We" do not benefit from outsourcing jobs. "My" government has only one responsibility, which is to make sure American working people have good jobs, benefits, pensions, housing, schools, and medical. I could care less if IBM makes more money because they use slave labor. It doesn't benefit me. The sooner people realize that we lose and only the rich gain from outsourcing, the sooner we can put new laws in place to forbid companies from taking jobs out of the country or, if they do, tax the imports and/or suspend the corporate charter. Tell the CEOs to move to China if they love it so much.
For example, why not declare all patents and trade secrets to be national security issues, so nobody can take them to other countries. No more outsourcing of any defense, weapons, chemicals, drugs. No more importing foods, since it's either poisoned or otherwise unsanitary.
And by the way: tax the rich. If we taxed 90% of all income above $250,000, suddenly these rich people have little incentive to continue these policies which are destroying our country.
The people who have taken so much of the work outside of this country are not just influenced by world forces. They are traitors. They have sold us out for a few pennies. They should all be put in prison. And our politicians should get busy to correct this situation.
We need to invest in some level of self-sufficiency in this country from making shoes and clothes to growing our own food. With oil prices increasing and with conflict in the rest of the world escalating (again in many cases because of the illegal conduct by our ruling classes) we need to find a new approach. Our only question should be how can we create a society in which all our people have good decent jobs, education, healthcare, a place to live, and a pension.
Hear hear! Good post!
the people who are not kazillionaires who support all this free trade bs is going to crapping in their chinese made underwear when they finally figure out it doesn't work. Then they can wear their cheap(er) underwear on their head after it is filled up with their nonsense.
This is Neo-Liberal claptrap. As the 800 pound gorilla of consumers, we not only can, but should slap tarrifs on all imports. This will not only encourage companies to manufacture here in the States, but help to pay for our bloated Military. After all, most of our military is being used to help commerce (keeping the sea lanes and pipelines open, etc.)
We've been trying the globalization approach for long enough, thank you, and it's hurt alot more Americans than it's helped.
This is great, rethugs pretending liberals created the present economic problemsl. Hint: Bill Clinton was not a liberal, nor a "neo-liberal" (whtever the hell that is). Clinton was/is a southern democrat, an entity much closer to Reagan (if not to the right of) than FDR.
jstock has been confused by the word 'liberal' that is attached to Neo. the fascist play on words to confuse otherwise decent republican citizens works very well.
Of course our economy can be pushed right back into the 'nation-state box', as can all other local economies around the world. All that would be required is a sufficiently cataclysmic event or three. The notion that there's 'no going back' assumes that things as they appear to be now are irreversible, but they're not-- any more than our present levels of consumption and borrowing are never-ending and ever-expanding. The greatest ally the international corporate system has presently is the notion that it cannot be regulated by sovereign governments or any power beyond the practical limits of the system's intrinsic greed, which leads to the general hopelessness and acquiescence to the status quo (which is always changing, ironically enough) among the host population worldwide.
But shit happens and things fall apart-- most especially structures which, were they even as substantial as pasteboard, would resemble most of all a house of cards. A house of cards on fire. Before long, everybody's going to smell the smoke. That's what our credit crisis is really all about-- the end of this financial hierachy, ready or not.
There was a time when the Roman Empire seemed never-ending, when all roads led to Rome, and the whole of the known world paid homage and tribute to its power. But some hundreds of years later, grass grew in some of the Eternal City's major thoroughfares. Shit happens and things fall apart.
Mr. Barber:
This is fantastic! And horrific..
Many voters don't want it, because it reeks of nuance: something that the vast majority of average Americans don't wish to wrap their heads around. Because it involves two things: the harshness of uncertainty, with no 'quick fix', and being 'uncomfortable' with the reality they are confronted with.
But thanks anyway...
Sorry to say this, but this sounds like circular, self-fulfilling claptrap.
To begin at the end, the assertion that protectionist policies won't work is simply nonsense. If they want to succeed, emerging economies invariably use protectionist policies to nurture their native industries. Witness China now. Witness the United States in the 19th century. To say they "won't work" with our current economy is equally nonsensical. Of course, they'll work. They just won't produce the kinds of results the multinational corporations and venture capitalists currently favor.
The "race to the bottom" in labor costs and benefits and environmental damage is again not as inevitable as claimed. It's a clear choice that benefits only -- again -- multinational corporations and venture capitalists.
What apologists for so-called globalization are missing is that people are wise to their game and are fed up with it. Market efficiencies are not the only measure of what is desirable, particularly when the consequences are harmful to individuals, families, society and the environment.
Normally, I agree with you, but this time I adamantly disagree.
Your position is unworkable because most countries don't keep their agreements.
You can't democratize the international economy when most countries are kleptocracies, including our own.
The US has neither the political nor the moral authority to dictate to other countries how to manage their political systems or their economies. That is called imperialism.
Many countries that are rich in resources, human and natural, are failing to take care of their people because their governments are corrupt . Mexico is not a poor country. The people work hard and Mexico is rich in resources. The problem is their ruling class and their feudal mentality.
The US has a certain amount of leverage against this corruption because we are the biggest and richest market in the world. We can lecture all we want about environmental, labor and other standards as much as we want, but nobody really listens because there is no penalty.
You want to stop US companies from moving overseas, make it so expensive for them that they stop.
You want developing countries to stop cheating, you have to make it so expensive for them that they stop.
The answer is tariffs.
Americans need to stop feeling guilty about what the Europeans did for the last 500 years to their former colonies.
Americans need to be present to the serious problems in America.
Professor Barber, if you want "strong democracy" Americans need to be present to democracy at the local level, where they have some semblance of control.
Frankly, there is nothing we can do when it comes to Mexico, China, Bangladesh etc, because they have chosen to cheat and they have chosen to be corrupt. However, in the US, we at least have some power to control the cheaters and the corrupt politicians and the products that come in and out of our borders, and that is what we should be focusing on-- strong democracy at home.
"McCain and the Republicans have a truth of sorts: unadulterated free trade serves the interests of global business and the big corporations whom Republicans serve, so they are for it - let American workers and third world economies adjust via capitalism's notorious process of "creative destructio
The Democrats' problem here is not that they just don't have an alternative policy on trade, its that *they are for it also*, because they are also firmly in the pocket of "global business and big corporations whom Republicans serve" -- but have to tell their base that they are against it.
Same reason Democrats in Congress take impeachment off the table. Their interests are the same as those of the Republicans, though the interests of their base are different. You'd think the base would wake the hell up and either take over the party or stop supporting it.
Don't worry though. If you listen to those who vote Democratic, Obama will save all of us, despite the fact that he's a part of the corrupt Democratic Congress -- the one he'll have to go up against should the base push him into any progressive position.
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