01/30/2011 05:50 pm ET Updated May 25, 2011

Left and Right Playing a Double Game on Trade

Both Right and Left are playing a double game on trade in America today.

Republicans and conservatives (if they even admit we have a trade problem) want to hear that America's trade problems are caused by unfair distortions of free markets by our trading partners. To some extent, of course, they are, but even genuine 100 percent free trade would not solve America's problems. And our trading partners are mostly just ruthless players of the mercantilist game, as we used to be. The multinational corporate Right (other factions exist, but have no power over Republican economic policy) claims, on ultimately Ricardian grounds, that free trade is in the national interest. But when pressed by contrary evidence, its corporate chieftains fall back on the position that their companies owe no loyalty to the U.S., so internationalized are their operations and diverse the nationalities of their shareholders and employees.

Democrats and liberals (if they even admit we have a trade problem) want to hear that America's trade problems are caused by greedy corporations and exploitative capitalism. But the problem is not that corporations are greedy per se, it is that corporate pursuit of profit has been decoupled, by means of free trade, from the success of the American economy as a whole. And although real economics certainly shows that exploitation in trade is possible, it doesn't show that exploitation must occur for free trade to do harm. The American Left is also as conflicted as the Right: at some point, it must choose between opposing free trade in the interests of ordinary Americans, and opposing it in the interests of the world as a whole. Intellectually and emotionally, the latter is its obvious choice, but this is unlikely to play in Peoria.

The ideal political position from which to oppose free trade would be a kind of nationalist liberalism, but this Trumanesque or Jacksonian position does not exist in American politics today. Bill Clinton, who flirted with serious industrial policy during the 1992 campaign, showed a glimmer of understanding this. But once in office, despite appointing serious thinkers on the subject like Laura D'Andrea Tyson to be Economic Advisor and Robert Reich to be Labor Secretary, he went straight in the other direction with NAFTA. America has yet to recover from his mistake.