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November 10, 2005

The Democrats and Free Trade

-- by John Emerson

Atrios and Maxspeak have a couple of good posts up about free trade (responding partly to this Kevin Drum post). On Maxspeak, L Josh Blivens writes:

There was a big debate about this in the economics profession in the early 1990s. Not one single economist argued about the direction of trade's effect -- it was universally agreed that it was negative for [workers without college degrees]. Some said that trade's effect was small, even very small. Some said it was large. But again, there was absolute unanimity that the net effect of trade on these workers was negative, and that trade had exacerbated inequality.

This is an edited version of my response on Maxspeak:

I have tried and tried to tell the DeLong people about this, but I don't have the economic vocabulary. It turned out that they DID have the vocabulary, but refused to share it with me.

For a high proportion of the up-and-coming young Ivy League Democrats (Yglesias was the first I noticed), free trade has been an absolute value. What a bunch of ignorant fucks.

I have tried to point out that to these people the particular populations suffering from free trade are an essential part of the core Democratic constituency (labor, organized or not, including a hefty proportion of the "minority" vote), and that free trade is thus a perilous issue for Democrats. Their usual response is to make snarky remarks about "pandering to the core constituency", often using the Republican code word for unions -- "special interest group".

Alan Blinder (recently at Talking Points Cafe) is a scholar of note, if I'm not mistaken, but when he writes about politics, he, like a lot of economists, swiftly starts cranking out unscientific cliches and slogans.

DeLong said once that the Clinton free trade policy was Part One of a two part plan. Part Two would have been compensation and retraining for displaced workers, but it never happened. DeLong did not seem nearly as embarassed as he should have. Basically Clinton tried to get his bipartisan program through with Republican votes while defying the Democrats in Congress, and then was shocked to find that the Republicans refused to support the Democratic part of the package.

Economists are really blind to politics, and as economists they have to be anti-labor. (Labor is a cost to be minimized). Krugman does amazingly well, but on free trade he's the same as the rest. (It's possible that his recent experiences have changed his thinking a little, as happened with Stiglitz.)

The supposedly-practical DLC business Democrats did a number of things which harmed the party in the long run. Their anti-labor bias was one part of it; their obliviousness to media concentration was another part of it; and their indifference to party-building was another part of it.

For what it's worth, I'm convinced that all of them are much more comfortable with moderately conservative Republicans than with old-fashioned liberal Democrats. The Democratic Party has been weakened, but the DLC didn't fail. For them, the goal was the destruction of the liberal Democrats, and they were successful in that.

Posted by John Emerson at November 10, 2005 8:33 AM

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Tracked on November 10, 2005 3:36 PM


Comments

I had left a comment on Kevin's post:

A word about "free" trade. China doesn't pay its workers enough to buy the things we make here. It doesn't import much from here. What are WE getting out of "free" trade, besides a lot of debt? We can al see our standard of living rapidly declining - loss of health insurance and pensions, cost of living spiraling up much faster than wages (if you count oil) - while a few get to buy bigger jets.

The word "protectionism" comes from the idea of protecting OUR economy from the effects of UNFAIR trading wth countries that have lower standards than we do. With the situation we have in place even Mexico is losing jobs to China. Every other country in the world. Meanwhile they pay only $100 a month.

What do we lose if we require them to pay $500 before we'll import their goods? What we gain is a MARKET for our goods and THEY gain the ability to buy the goods.

We can choose to LIFT standards around the world, or spiral to the bottom. In a world with hundreds of millions of unemployed "free markets" can ONLY mean a decline. It can be structured in ways that protect us and lift them.

Posted by: Dave Johnson [TypeKey Profile Page] at November 10, 2005 8:20 AM

Lots of the comments at the other blogs are about how competition is ALWAYS good. That's the right-wing "greed is good" school of thought.

I see it as competition vs cooperation and community. SOMEtimes competition can be good, more often cooperation and community are good.

Posted by: Dave Johnson [TypeKey Profile Page] at November 10, 2005 8:22 AM

For a high proportion of the up-and-coming young Ivy League Democrats (Yglesias was the first I noticed), free trade has been an absolute value. What a bunch of ignorant fucks.

Cracked me up, Dave.

Posted by: richard [TypeKey Profile Page] at November 10, 2005 11:31 AM

Ooops, it's JOHN! Go JOHN!

Posted by: richard [TypeKey Profile Page] at November 10, 2005 11:33 AM

The Democratic Party has been weakened, but the DLC didn't fail. For them, success was the destruction of the liberal Democrats, and they were successful in that.

Dead right. Just like New Labour. Would it be wrong to see a global conspiracy here? Nice to see Tony getting his ass handed to him. If only here....

Posted by: richard [TypeKey Profile Page] at November 10, 2005 11:36 AM

Dave, ZiZKa, you have to frame it so the average joe democrat can understand it: Exporting Capitalism, Importing Communism.

The other thing is that free trade is only one half of the vice. The other half is technology which is also replacing jobs. Eventually almost every single job will be able to be done by some form of technology, only cheaper and less error prone. This vice is what will crush democracy.

Posted by: The Fool at November 10, 2005 2:21 PM

I consider Sawicky a pro-labor economist. Newberry and Oldman at BOPNews have a deeper structural analysis of this stuff. The guys at angrybear aren't so bad.

I am not as certain as some that "trade politics" would be a winner for Democrats.

Listened to Amelia this week. Not bad.

Posted by: bob mcmanus at November 10, 2005 7:07 PM

Hafta agree that the Dems are part of the problem. I don't argue for a 3rd party, though. That's pointless without new ideas & new political imaginaries. (No, Bill, no Tony, stealing from Thatcher and Reagan doesn't count). The problem is that even parties with more ideological purity than the US Dems like the Canadian New Democrats or the French Socialists have hewn to the same neo-liberal line when they've been in power. One of the reasons for that sorry record is because they're constantly fending off attacks from the rights, in both parliament and in the press. Instead of pressing an agenda, they have the same pensée unique impressed on them.

Listen to Woody Guthrie. He's singing about the New Deal in a lot of those songs. Maybe it wasn't all it was cracked up to be, but still had people excited. The typical cultural leftist response is to say "yeah, we need more Woody Guthries." Bullshit. We have them in spades, it's just that they don't have anything to sing about.

Posted by: guyy at November 10, 2005 7:28 PM

Has anybody else noticed the emotional aspect of all the trade discussions?

While Dave is right that we can aim to move the standards up or we can slide to the bottom with the rest of them, the discussion never ever gets there. Anything short of "Yes, that's the ticket!" will invariably be slammed as communistic, socialistic or some black and white accusation about you wanting to deprive somebody of their bread and butter.

It occurs to me that discussing trade and free trade is a losing proposition like discussing Israel--if you don't think that doing the same thing they have always done is successful or if you oppose the continued oppression and murder of the Palestinians then you are tagged an anti semite and the discussion is over.

There has to be a better way to go about it than the way we are headed, but we will not be able to game it out without a change in our dialogue.

A better place to start might be to discuss what it is that we have to offer- we export weapons, movies, GM foods (at gunpoint), and pharmaceuticals. Who stands to gain from that?

If we really could start communicating with the relevant facts at hand, people might begin to understand that we are not competetive the way we are now and we could start discussing what it is that would make us competitive.

We have lived too long and too well on borrowed money; it is time to do something else. If we don't learn to change the direction of the trade talks, free trade will win by default and in ten years time we will be stabbing each other in the backs to steal shoes and cardboard boxes.

Posted by: grannyinsanity [TypeKey Profile Page] at November 10, 2005 7:47 PM

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