How Ignorance Hurts
Senator Byron Dorgan and Senator-Elect Sherrod Brown had an op-ed in WaPo yesterday bashing an open trade policy. Fortunately, tons of people have already debunked their arguments.
These guys hit on almost all the arguments against more open trade (except for overt racism against foreign workers and blaming a Jewish conspiracy). I normally don't buy into line-by-line fisking because it can detract from the cohesiveness of both my opponent's argument and of my rebuttal. But I'd like to refute nearly everything they said (even as others beat me to it - see CFG for a few). I'll post the entirety of their opinion piece, and then I'll do a rebuttal.
Throughout the opinion piece, the two politicians refer continually to the hallowed Middle Class. They seem to worship the thing, but wallow in the delusion that somehow it's less than a century old - and that it's the product of concerted effort by enlightened activists steering state policy. Neither is true. The formal middle class includes all Americans - since no American is a titled aristocrat and no American is a bonded serf or peasant. We are all free to choose occupation and homestead, provided we can obtain them lawfully. But in the cruder sense of ranking people's incomes (which is both somewhat arbitrary and largely irrelevant to modern life) America has had a middle class since before the revolution. Property and financial independence were obtained by most white males, from colonial times well into the 19th century. While factory work did diminish the likelihood of land ownership and of self-employment, we can say that the middle class clearly existed even in 18th century America.
It's ironic to hear these two politicians criticizing government incentives for outsourcing. Anti-trade activists tend to be the biggest advocates of policies that make outsourcing attractive - this is precisely the reason they so oppose outsourcing and free trade. If people and businesses are free to leave, then that creates a real and definite limit to the number of punishments and controls regulators can inflict on businesses. Just as East Germany had to build a wall and point its guards and police inwards in order to prevent Germans from fleeing the oppressive state, anti-trade activists want to craft rules and use force in order to prevent business and talent from fleeing the corrupting grasp of their regulations and dictates. If they really wanted to stop government incentives to outsource, they could start with reducing the same sort of 'labor and environmental' controls that they advocate in the opinion piece. By making businesses pay well over what labor is worth, they push businesses to find less expensive labor elsewhere. By making businesses wait for notoriously slow and inefficient regulatory approvals and making them avoid construction that might indirectly threaten some species of grub, they make newly industrializing economies look more attractive. They don't want to abandon these regulations, though - they want to STRENGTHEN them by preventing the companies from escaping.
Their poor attempts at sympathy do not come off well to anybody paying close attention. They don't like what corporations are doing in employing foreign workers. Well, fine, but do you think it's going to improve if you lay off all those foreigners? Depending on the industry, the product and the country, firing one American worker will generally allow the hiring of more than one foreign worker. So in the trade-off, they're saying that an American getting his job back is worth several foreigners losing theirs. Isn't that sympathetic of them.
It's very ignorant, though, to assume that somehow children working 60-hour weeks in a factory is worse than children working 60-hour weeks in some agricultural position - picking fruits, wading through rice paddies, raising cattle, etc. These are the occupations of children in agricultural economies, and it wasn't long ago that many people in Ohio and North Dakota would have put their children to whatever work they could do. It's just condescending and mildly racist to assume that somehow, pre-West, pre-colonization, pre-corporation, these foreign workers were happily and freely working a life of subsistence farming, some years a crop too big to harvest, some years a crop too small to survive with. Yes, surely a return to a past without medical technology and without industry or employment is better; even as employment is precisely what white people in America need, it's what black and brown people in Asia don't need? I'm sure everybody would like to get paid more and have a more pleasant work environment, but don't deny that steady, year-round employment in NIEs is a boon both to those economies and to their people. Just as jobs mean opportunity in America, they mean opportunity in Asia.
Dorgan and Brown drag up the 'trade deficit' line. This is an especially tired one. First, the trade deficit is merely a metric, a statistic. It is not automatically accurate just because it's measured. It miscounts certain transactions, like when factories from foreign interests are built in the US, or when foreign deposits are made in US banks or investments. Second, it assumes that somehow "THE US" is a single entity, and each "FOREIGN COUNTRY" is a singular entity, and that the debt is held by some unnamed representative of each player. It doesn't work that way. There's not necessarily any actual debt here, merely a trade transaction that metrics say benefit one country or another. The free market shows, though, that these individual transactions are beneficial or the businesses and investors would not have made them. The 'trade deficit' is just statistical hocus-pocus - and if anything, Americans are benefiting magnificently from it in the form of less expensive goods and services. (see my crisis report here, for information on a truly horrific trade balance).
The opinion piece argues that America needs to make sure that it engages in reciprocal trade policy, meaning that we make sure their barriers are down concomitant with ours. There are two problems with that. First, the times when we engage in unilateral free trade or unilateral trade-barrier reduction (aside from benefiting Americans with lower-priced products) are generally occasions where America is being magnanimous with a weaker friend. This is the case in the last couple decades of US trade policy to the Caribbean. But second, it's really hypocritical to talk about reciprocity when US and Western trade policy is so stingy about agricultural trade barriers. North Dakota is an especially prominent beneficiary in this regard, being home to a large number of sugar beet producers and sugar being a heavily protected commodity. If these two politicians want to make sure it's all fair, then let us drop the protections for agriculture that are strangling producers in the NIEs in Africa and elsewhere.
They end the article by reiterating the nationalist and isolationist elements of their protectionist thesis. They are motivated by improving the lot of some Americans -specifically Americans who organize in unions and other overpaid laboring professions that are losing out to more competitively-priced foreign labor- at the expense of the rest of Americans (who enjoy lower-priced goods and a healthier economy) and foreign workers (who enjoy having jobs). They may claim it's for the good of all, or at least the good of all 'middle class' Americans, but in actuality this is merely an interest group trying to get special favors and exemptions.
This isn't about a 'level playing field.' This is about special rules meant to benefit a special interest at the expense of all other players.
These guys hit on almost all the arguments against more open trade (except for overt racism against foreign workers and blaming a Jewish conspiracy). I normally don't buy into line-by-line fisking because it can detract from the cohesiveness of both my opponent's argument and of my rebuttal. But I'd like to refute nearly everything they said (even as others beat me to it - see CFG for a few). I'll post the entirety of their opinion piece, and then I'll do a rebuttal.
How Free Trade HurtsTo begin with, the Bandwagon Fallacy either implies or proves that many people (often a majority) support or oppose a given belief or action. Since everybody else is on the bandwagon, you'd better be, too. That should never matter here, since the right to trade with foreigners should be the same as the right to speak or the right to move or the right to trade with your co-nationals. Free trade is a freedom, not a group decision to be made by consensus. People who don't like it can separate themselves by whatever means they have personally available - but lobbying the government to use force isn't a valid option. So no matter how many union members and Democratic party activists are against free trade, the bandwagon can never be enough to justify limiting a freedom like commerce.
By Byron Dorgan and Sherrod Brown
Saturday, December 23, 2006; Page A21
Fewer and fewer Americans support our government's trade policy. They see a shrinking middle class, lost jobs and exploding trade deficits.
Yet supporters of free trade continue to push for more of the same -- more job-killing trade agreements, greater tax breaks for large corporations that export jobs and larger government incentives for outsourcing.
Last month voters around the country said they want something very different. They voted for candidates who stood up for the middle class and who spoke out for fair trade. They did so because they understand what's at stake.
Over the past 100 years, Americans have built a thriving middle class. It's the envy of the world, and it didn't come easily.
At the turn of the 20th century, child labor was common; working conditions were often abysmal; there were no enforced workplace health, safety or environmental requirements; no unemployment insurance; and no workers' compensation. Workers were attacked and killed for the sole reason that they wanted to form a union; there was no 40-hour week, minimum wage, job security, overtime pay or virtually any other limit on the exploitation of employees.
America was split dramatically between the haves and have-nots. It was a harsh work world for many: nasty, brutish and, too often, short.
Worker activism, new laws and court decisions changed all that during the past century. As they did, a middle class grew and thrived. By mid-century, it became the engine that drove an ever-expanding economy in which benefits were shared by tens of millions of Americans. The American Dream of a secure, well-paid job with benefits, a nice house and a high-quality public education seemed within reach of everyone who worked hard and played by the rules.
That is what's at stake when we talk about trade policy: America's middle class and the American Dream.
The new mobility of capital and technology, coupled with the revolution in information technology, makes production of goods possible throughout much of the world. But much of the world at the beginning of the 21st century looks a lot like the United States did 100 years ago: Workers are grossly underpaid, exploited and abused, and they have virtually no rights. Many, including children, work 10, 12, 14 hours a day, six or seven days a week, for only a few dollars a day.
The result has been a global race to the bottom as corporations troll the world for the cheapest labor, the fewest health, safety and environmental regulations, and the governments most unfriendly to labor rights. U.S. trade agreements paved the way for this race: While rejecting protections for workers or the environment, they protected investors and corporate interests.
The results of such trade agreements are skyrocketing trade deficits -- more than $800 billion this year alone -- and downward pressure on income and benefits for American workers. Why? Because these agreements enable countries to ship what their low-wage workers produce to the United States while blocking many U.S. products from entering their countries.
Equally important, by enabling this kind of trade, the agreements force U.S. workers to accept cuts in their pay and benefits so their employers can compete with low-wage foreign producers. And those workers are the lucky ones. Millions of others have lost their jobs as corporations moved overseas to build the same products with cheap foreign labor. It is no coincidence that salaries and wages today are the lowest percentage of gross domestic product since the government began keeping track of this in 1947.
It took a century to build a thriving middle class and economic security here in America. We need to protect that for which we have sacrificed.
We must insist that all trade agreements have labor, environmental and other protections so that American workers can compete on a level playing field. Trade agreements must also be reciprocal. The American market is the most desirable in the world. Every country wants access to it. That gives us a great deal of leverage, if only we'd use it. Barriers to U.S. products overseas should not be tolerated.
Free-trade agreements have protected drug companies, international investors and Hollywood films, yet failed to protect our communities, our workers and our environment.
We believe there is a better way. Fair trade is not the enemy of more trade. It's how we expand international trade without reversing U.S. economic progress.
Byron Dorgan is a Democratic senator from North Dakota. Rep. Sherrod Brown is a Democratic senator-elect from Ohio.
Throughout the opinion piece, the two politicians refer continually to the hallowed Middle Class. They seem to worship the thing, but wallow in the delusion that somehow it's less than a century old - and that it's the product of concerted effort by enlightened activists steering state policy. Neither is true. The formal middle class includes all Americans - since no American is a titled aristocrat and no American is a bonded serf or peasant. We are all free to choose occupation and homestead, provided we can obtain them lawfully. But in the cruder sense of ranking people's incomes (which is both somewhat arbitrary and largely irrelevant to modern life) America has had a middle class since before the revolution. Property and financial independence were obtained by most white males, from colonial times well into the 19th century. While factory work did diminish the likelihood of land ownership and of self-employment, we can say that the middle class clearly existed even in 18th century America.
It's ironic to hear these two politicians criticizing government incentives for outsourcing. Anti-trade activists tend to be the biggest advocates of policies that make outsourcing attractive - this is precisely the reason they so oppose outsourcing and free trade. If people and businesses are free to leave, then that creates a real and definite limit to the number of punishments and controls regulators can inflict on businesses. Just as East Germany had to build a wall and point its guards and police inwards in order to prevent Germans from fleeing the oppressive state, anti-trade activists want to craft rules and use force in order to prevent business and talent from fleeing the corrupting grasp of their regulations and dictates. If they really wanted to stop government incentives to outsource, they could start with reducing the same sort of 'labor and environmental' controls that they advocate in the opinion piece. By making businesses pay well over what labor is worth, they push businesses to find less expensive labor elsewhere. By making businesses wait for notoriously slow and inefficient regulatory approvals and making them avoid construction that might indirectly threaten some species of grub, they make newly industrializing economies look more attractive. They don't want to abandon these regulations, though - they want to STRENGTHEN them by preventing the companies from escaping.
Their poor attempts at sympathy do not come off well to anybody paying close attention. They don't like what corporations are doing in employing foreign workers. Well, fine, but do you think it's going to improve if you lay off all those foreigners? Depending on the industry, the product and the country, firing one American worker will generally allow the hiring of more than one foreign worker. So in the trade-off, they're saying that an American getting his job back is worth several foreigners losing theirs. Isn't that sympathetic of them.
It's very ignorant, though, to assume that somehow children working 60-hour weeks in a factory is worse than children working 60-hour weeks in some agricultural position - picking fruits, wading through rice paddies, raising cattle, etc. These are the occupations of children in agricultural economies, and it wasn't long ago that many people in Ohio and North Dakota would have put their children to whatever work they could do. It's just condescending and mildly racist to assume that somehow, pre-West, pre-colonization, pre-corporation, these foreign workers were happily and freely working a life of subsistence farming, some years a crop too big to harvest, some years a crop too small to survive with. Yes, surely a return to a past without medical technology and without industry or employment is better; even as employment is precisely what white people in America need, it's what black and brown people in Asia don't need? I'm sure everybody would like to get paid more and have a more pleasant work environment, but don't deny that steady, year-round employment in NIEs is a boon both to those economies and to their people. Just as jobs mean opportunity in America, they mean opportunity in Asia.
Dorgan and Brown drag up the 'trade deficit' line. This is an especially tired one. First, the trade deficit is merely a metric, a statistic. It is not automatically accurate just because it's measured. It miscounts certain transactions, like when factories from foreign interests are built in the US, or when foreign deposits are made in US banks or investments. Second, it assumes that somehow "THE US" is a single entity, and each "FOREIGN COUNTRY" is a singular entity, and that the debt is held by some unnamed representative of each player. It doesn't work that way. There's not necessarily any actual debt here, merely a trade transaction that metrics say benefit one country or another. The free market shows, though, that these individual transactions are beneficial or the businesses and investors would not have made them. The 'trade deficit' is just statistical hocus-pocus - and if anything, Americans are benefiting magnificently from it in the form of less expensive goods and services. (see my crisis report here, for information on a truly horrific trade balance).
The opinion piece argues that America needs to make sure that it engages in reciprocal trade policy, meaning that we make sure their barriers are down concomitant with ours. There are two problems with that. First, the times when we engage in unilateral free trade or unilateral trade-barrier reduction (aside from benefiting Americans with lower-priced products) are generally occasions where America is being magnanimous with a weaker friend. This is the case in the last couple decades of US trade policy to the Caribbean. But second, it's really hypocritical to talk about reciprocity when US and Western trade policy is so stingy about agricultural trade barriers. North Dakota is an especially prominent beneficiary in this regard, being home to a large number of sugar beet producers and sugar being a heavily protected commodity. If these two politicians want to make sure it's all fair, then let us drop the protections for agriculture that are strangling producers in the NIEs in Africa and elsewhere.
They end the article by reiterating the nationalist and isolationist elements of their protectionist thesis. They are motivated by improving the lot of some Americans -specifically Americans who organize in unions and other overpaid laboring professions that are losing out to more competitively-priced foreign labor- at the expense of the rest of Americans (who enjoy lower-priced goods and a healthier economy) and foreign workers (who enjoy having jobs). They may claim it's for the good of all, or at least the good of all 'middle class' Americans, but in actuality this is merely an interest group trying to get special favors and exemptions.
This isn't about a 'level playing field.' This is about special rules meant to benefit a special interest at the expense of all other players.
Posted by neolibertarian on
December 24, 2006 at 3:58pm