Sunday, March 4, 2018

Trading Places

Via Indusrtrial Workers of the World.

I dared to address Loomis on this subject, for the first time since the TPP debacle, when he started suggesting that Democrats might be protesting against Trump's proposed tariffs on steel and aluminum for the wrong reason:
With the thought that whatever "liberal" has meant from the 1850s until now has some kind of connecting thread in it, like the idea that there's an intrinsic value in generosity and offering others latitude, whether it's in poor relief or encouraging people from other countries to try to sell stuff in yours (Hayekian liberalism or neoliberalism in the strict sense being about being generous and latitudinarian with yourself, and the hell with other people).

It's easier for me to say partly because I was brought up under the paleoliberalism of the J.K. Galbraith era for which free trade itself seemed as progressive as the eight-hour day or women's suffrage, something it wasn't quite decent to object to (Barry Goldwater and Prescott Bush were among the tiny number of Senators who couldn't bring themselves to vote for the Trade Expansion Act of 1962). And I'd already talked myself into supporting the Trans-Pacific Partnership agreement before Hillary Clinton announced against it, and didn't change my mind when she did, so you can't call me knee-jerk.

Just because there are a lot of conservatives nowadays who back open trade (that's why they call them "neoliberals") doesn't make it a bad idea. It's another kind of knee-jerking to insist we have to insulate our economy just because Morgan Chase doesn't want to, or because globalization is simply not "left".

There's just no doubt, on the other hand, that these particular tariff ideas are terrible ones even if you're friendly to the concept in general, as Loomis agrees in the subsequent blog post, which is more interesting than the original tweet:
in effect it will be bumbling, stupid, and a complete clown show.
I'm sure he's right on the general point that we ought to be careful not to oppose everything TrumpWorld blunders into just because they're there; not to defend Delta Airlines as somehow deserving a tax break from the people of Georgia, for example, just because we happen to approve of the policy that infuriated the Georgia legislature into taking the tax break away from them, or not to worry about the president's attacks on Jefferson Beauregard Sessions III:

It’s Jefferson Beauregard Sessions III, a stone-cold neo-Confederate who wants to repeal the last century of progress. He deserves everything Trump could possibly do to him. Just pass the popcorn on this one. For God’s sake, don’t defend a man who would make Nathan Bedford Forrest proud!

On the other hand, it seems clear that whenever Trump's people think they might want to do something I approve of, it's almost certainly going to be done in some way that fatally compromises it, through its position in the imperial system of punishment and reward. If it was OK to widen the federal deficit, as a way of increasing economic demand, it was not OK to do it in such a way as to pass inordinately greater benefits on the very wealthy, or to punish high-tax states. If it's important to build infrastructure, it's important to finance it, and not rely on state governments that don't have the money, but especially important not to withhold funding from one of the most economically necessary projects, the new tunnel under the Hudson, just to punish the people of New York and New Jersey for not liking you.

By the same token, while Sessions is certainly a bad attorney general and a nasty man all round, if Trump manages to fire him (I don't think he will, which is why I'm enjoying the popcorn) it won't be in the hope of getting a better attorney general but an even worse one, who will be readier to protect him from the consequences of his crimes.

As for trade, Suzanne Berger in a lovely article at the Boston Review in January reminded us how and why workers once enthusiastically supported open trade:
in the major European economies before World War I, workers and unions became key actors in the political coalitions supporting free trade, the gold standard, and open borders for capital mobility. British workers were ardent defenders of free trade, as might be expected because of British industrial predominance in the global economy at the time, but so, too, were French, German, and Belgian trade union and socialist movements. These working-class movements and parties also supported free movement of capital across borders, even though it was obvious that such investment would not create new jobs at home and that goods made abroad might eventually turn up in the domestic market.
The internationalist ideological convictions of nineteenth- and early twentieth-century unions and left-wing parties played an important role in the support for open borders. French socialist leaders could persuasively defend letting French capital be invested in Russia by arguing that Russian workers were brothers who also deserved to have a chance to improve their livelihoods. It is difficult to imagine any U.S. or European trade union leaders making such a case today for the Chinese or Turks or Cambodians. But what remains relevant to our own times is that coalitions in the first globalization that supported free trade, immigration, and cross-border capital flows joined an open borders agenda with programs of political, fiscal, and social reform. Liberal free-traders worked with socialist party leaders to build programs that accommodated and reshaped the interests of both partners in the coalition.
Rather than go along with a Trumpian program of closed borders and high tariffs, can't we have something like that?  Let's have manufacturing employment that can compete with Germany and Denmark instead of insisting on competing with Vietnam and Guatemala. Let's, as Dean Baker was suggesting, promote trade deficits in developing economies, like the ones we benefited from in the 19th century, with generous loans, instead of promoting austerity, and let's open up medical practice and drug manufacturing to competition too. The point should be not to resist globalization but to do it right.

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