But, what happens when China is stitching all our shirts & building all our televison sets? Once they declare war on us, they'll have all our shirts and televisons and we'll be forced to listen to the radio bare-chested. Sales of Tivos would plummet. But I guess you corporate capitalist types never think of that when you're busy selling out the American worker the slaves in Mao's army.

Sorry Jay, I was just joshing around (though it was obvious). I'm a supporter of liberalized trade.

I'll start by saying that I am intellectually sympathetic to the pro-free trade position.

But I also think the discourse surrounding the issue in this country is broken, and I think a lot of the problem comes from pro-free traders who don't address a number of important questions adequately or at all:

1) There is no doubt that signing trade agreements with China brings lots of Chinese people out of poverty. But, it is at the expense of the weakest/poorest members of first world countries like the United States, not elites, not academics (which I am), not CEOs, who benefit as well. Basically, this situation will not change until a majority of China (and say India, and say, the world's poor) have standards of living approaching what the middle class in the first world has. How long is that going to take? 50 years? 100 years? Even longer? Do you really think that the majority of the first world's middle classes and working classes are going to agree to that kind of agreement for that long?

2) The usual comment by progressive free traders go along the lines of what Jay Ackroyd says above. And I whole heartedly agree with Jay. But his position is not - in the short term - realistic in the United States. Its why economic populists in this country currently resort to protectionism (and win elections doing so - look at the current intake of Congressional candidates, many of whom won because they espoused economic nationalism). Because the second you raise the kind of ideas Jay (and myself) raises, you have the Wall Street Journal, Fox News, et al screaming about "socialism" and "tax and spend" and whatnot. Until you can change the public debate consensus to make it more in favor of more aggressively progressive taxation (including heavy inheritance tax)/government-guaranteed health insurance/aggressive employees retraining (ie like in Denmark and Sweden, not what we currently have), economic nationalism will remain popular as a "stopgap" solutions of addressing some of the current economic strains that exist in our society.

To me, these are the two issues that are at the heart of the current free trade debate (without getting into the question of farm subsidies, the IMF's role etc, which have more to do with free trade in an international context) in the domestic context. The silly protectionism jibe is not addressing the substance of the issue.

I can't say that I'm really worried about what the Chinese will think of us in 2047, 2071, or 2075.

Is this in response to me?

This is exactly what I'm talking about. You don't address the substance of what I say, but just attack me with nonsequitors and ad hominens. Do you want to have a serious debate about concerns felt by many, many people in this country? Or not?

You don't think I'm don't understand the arguments for global free trade and their effect beyond America's borders? (In fact I allude to this point, and suggest the reason I don't address it more substantively is because the current discussion is dealing with the domestic implications of trade policy).

Ben P, my reply wasn't to you. Sorry for the confusion. No beef with what you said.

We don't want the Chinese to say nice things about us - we want them to see us as partners in a global economy. Not food, not a tyrant, but a competitor and customer. The same goes for India, Mexico, wherever. Until the entire world shares a common set of dreams and possibilities we all are at risk of violent adventurism. You know, the kind Bush is so fond of, except a lot more of our children, not just other peoples children, will be lost.

As a nation, the only people profiting from the current free trade agreements are the corporatists. And they are doing GREAT! They are also completely unwilling to share the benefits, preferring to blame the victim (the disemployed, for example) for his or her misfortune. We do need to address the issue of employment for Americans, but we cannot afford to ignore the rest of the world - we are capable of multitasking.

We are all one people. Getting all that we as Americans want while others suffer will not lead to our well being, but rather to our undoing. Income inequality is not just a factor to be considered in national politics, but also in international politics.

Jake

The trouble with the supporters of globalization and "free" trade is that they assume it is a "win-win" game. It's not. As Roach has pointed out:

"As the Chinas and Indias enter the global economy, they provide cheap goods, and now services, for the rest of the world. At the same time, they create a new class of consumers who will buy things made in developed countries. Who could ask for more?

My travels tell me that the theory isn’t working as advertised. Globalization may well be win-win in the long run, but in the here and now, it is profoundly asymmetrical. "

and again:

"Criticism of globalization

Employment and real wage compression in the developed world is a direct outgrowth of this blurring — and so is the politics of the labor backlash it has spawned.

The hyper-speed of an increasingly asymmetrical globalization is hardly the stuff of a flat world. I haven’t come to this critique of globalization casually.

The drawback to globalization

As I speak with business people, government officials, investors and political leaders around the world, I am struck by one thing these seemingly diverse groups all seem to have in common: They recognize the unexpected pitfalls of globalization — but have no plan as to how to repair the damage."

"Globalization at this point in time is far more about disparities between nations than the assimilation of a flat world."

and again:

"On another level, however, there are increasingly disquieting signs. That’s because of a striking asymmetry in the benefits of globalization. While living standards have improved in many segments of the developing world, a new set of pressures is bearing down on the rich countries of the developed world. Most notably, an extraordinary squeeze on labor incomes has occurred in the industrial world — an outcome that challenges the fundamental premises of the “win-win” models of globalization.

It is a great theory — but it’s not working as advertised. The first win — that going to the developing world — is hard to dispute. China has led the way, with more than a quadrupling of its per capita GDP since the early 1990s. Other developing countries have lagged the Chinese experience but have still made considerable progress in boosting living standards.

The problem lies with the second win — the supposed benefits accruing to the rich countries of the developed world. And that’s where the going has gotten especially tough. In recent years, the benefits of the second win have accrued primarily to the owners of capital at the expense of the providers of labor. At work is a powerful asymmetry in the impacts of globalization and global competition on the world’s major industrial economies — namely, record highs in the returns accruing to capital and record lows in the rewards going to labor. The global labor arbitrage has put unrelenting pressure on employment and real wages in the high-cost developed world — resulting in a compression of the labor income share down to a record low of 53.7% of industrial world national income in mid-2006. With labor costs easily accounting for the largest portion of business expenses, this has proved to be a veritable bonanza for the return to capital — pushing the profits share of national income in the major countries of the industrial world to historical highs of 15.6% in 2Q06."

The fact is that while those commisars might not define themselves as capitalists, they are acting and exploiting their power with capitalist excess. Do you think the millions of Chinese who slave away in the rice fields and mines will share in a something that in the US would be a rising of every boat? You'd have to be idiotic to believe that. Marxist ideology rationalizes an elite that lives parasytically off the masses. It's slavery.

The fact that you can rationalize starving millions of Americans to help prop up the communist elite, who use their gross profits to build weapons systems that they will use to wage war to further their power and control.. well, let me put it this way, your no more an advocate of social justice and human rights than Bush is.. you exploit issues for an agenda.. whether it's ideological or just pure greed is irrelevant.. the outcome and the very real suffering is the same. BTW, normally I don't make judgements on externals.. but considering your cavalier attitudes about imposing suffering on the most powerless here in the US, perhaps Brad you ought to start making some personal sacrifices before you start demanding them of others.. like cut out those huge, fat laden meals you appear to consume. Why not try the average poor person's grocery budget for a while.

When my husband lost his job, and we were limited to my small income and his social security, we could only spend fifty dollars a week for food, and that was for three people. See how far that goes.. or would that tax your pampered brain a bit too much? Try going without medical care. Heck, since you believe in exploiting the most powerless, why not set the example and give away all your material possessions. Your computer for example, a poor young kid might actually benefit from having a luxury like that.. better to provide for his potential in the future than waste it on your massive gusts of hot air.

Why not go work in a factory.. oops, not many of those any more. You could always become a garbage collector.. good exercise that. Plus it would actually be something constructive.. nice change for you.

A general comment. I'm in the process, with two others, of negotiating representation of a chinese company in the US. That company has nine factories and is native owned (not Taiwanese) They import their milling machines, glues and finishes from Germany- the most recent and the most "green"- and the finishing machines from Italy. The workers are paid well enough for factory work, in their community. My partner says: "My wife was working in a factory at 9 years old. If I go into a place and they're treating the workers like shit I just walk away. it's not worth it."

I have to say the knowledge of the PRC at this site rivals the knowledge of Iran: ignorance compounded by arrogance compounded by fear. This includes DeLong. He should be ashamed of supporting NAFTA, but he's not. To him it was perhaps a mistake, as for others the Iraq war may have been. But ask DeLong about Iraq and he's part of the reality based community. He's proudly "shrill" Ask him again about Mexico or China.

This discussion is a joke.

Harms way? Please. Blue bloods never enter harms way. Amazing what 5 minutes on Google can do to confirm expected stereotypes.

So, J. Bradley here, who ever so happily is willing to toss Anerican workers under a bus for future generations of Chinese workers, likely never had to do a days work in his life, or sweat the rent.

Brad, care to mention Christopher DeLong to us? The big money Ney York lawyer you wrote a paper with in '96? Funny how that name similarity stood out, as well as the parallel track through Harvard. Giving the kid brother some street cred publishing with a prof?

Hmm...lets Google.

Ah, J. Bradley? Care to tell us about James V. DeLong of the Regulatory Policy Center? You know..."Dad"? Hmm...graduated from Harvard 1960. Rich and connected.

So lets see here. A rich and connected guy has two kids, who he spends his big money and connections on. They both get legacy admissions to Harvard. Daddy pulls strings and gets J. Bradley a door opening gig in the Clinton Admin, and J. Bradley uses his inherited clout to help baby Bro get cred by co-authoring a paper. What a lovely description of the "merit-based" system we live under.

So a guy who is raised up above, and protected from the real labor market by class privilege sniffs down at the lowly Plebs and declares they mean nothing compared to Plebs elsewhere.

Pathetic J. Bradley...and utterly stereotypical. You must have felt you were looking in a mirror during Jeff's annecdote about Salinas, Mexico, and "one of us".

The notion that China's actions or educational prejudices 75 or more years hence is going to reflect not their interests at that time but grudges created today - not even military grudges, but over things like protectionism - is really quite extraordinary. 6 decades ago, the US and Russsia were allies against Germany and Japan, Germany had conquered France in the latest episode of an entire series of conflicts. Look at the relations among those countries today. Yet, Delong's crystal ball is so clear he can state with high enough certainty to justify great sacrifices (from others) that tariffs imposed today will reap great bitterness in 75 years, and that China will be in a position to make the US regret this. It is not even certain that China, the US, or the nation state itself will exist in their present form in 75 years, but despite its outrageousness, Delong's is a safe prediction, as he is unlikely to live to see it refuted.

I am also curious to know what Delong considers "harm's way". In this post, unlike the last, he makes something of an argument, rather than ad hominem snark. His only risk is being refuted, admittedly a high one with arguments like that. I stand in awe of his courage.

Trnaslation: "Haahaha Brad DeLong & his family are economically comfortable. Richy Rich, Richy Rich! How's it going there Rich Boy? How did you get here, by flying on your golden private jet? (hahahahahahahahahaha) he probably like, just got back from a Harvard club meeting with his richy rich preppy school friends where they like...talked about rich people stuff...and then went home to their mansions."

The problem is that free trade also undermines the kind of solutions you seem to advocate. After all, it's not just free trade in goods and services we're talking about; it's free investment flows. So how do you stop companies from moving their profit centers to low tax locations? Many now even claim that a huge share of their profits come from their small Dublin office, and who can prove them wrong? (It might be possible in theory to prove it, but very difficult; it is not efficient). The Davos crowd can and does impose its economic will. Solving these problems is very difficult, but I think the dividing line between pro and anti free trade has to be the status quo. I think we need to more restrictive in trade than we are now. So that puts me in the anti-free trade camp, though I am not simply "against" international trade.

That's because most people's understanding of basic economic principles is a joke.

They don't realize that in economics and open markets, there is a natural tendency towards equilibrium. Money is a lot like water and it flows to the most profitable places. Trying to stop that flow is about as effective and sensible as trying to stop a tidal wave. The USSR cut itself off from the global flow and look how well they're doing - oh wait, there is no USSR anymore, that's how well they're doing.

Right now, the money flows into China and India because there is such a huge imbalance. That flow will not stop as long as the imbalance exists. The more the rest of the world invests in China, the sooner the imbalance will diminish and perhaps disappear.

If the Chinese are willing to work for peanuts, businesses can't afford not to take advantage of that - because the competition will drive them out of business otherwise. We may not like that, but it's how the world works. People can either bitch and moan about it, but that's not gonna help them any.

The 20th century was the Century of America. The 21st is not. Get over it people.

Your unwillingness to follow threads by posting to the reply option makes you almost impossible to understand.

Brad is right that China will dominate the world, possibly sooner than he thinks.  That is hardly a reason to export our jobs there and hurry it along.  Free trade will allow them to set the standard for social goods. We should be working to bring them up to our quality of life standards before we pass the baton. 

Mr. DeLong,
I am curious: do you expect any of the 2008 Presidential candidates to run on this platform? Particularly the Republican candidates? If not, (1) why not (2) what does that say about the concept of democracy?

sPh

You apparently didn't notice that Dustin doesn't always bother to post to the reply link, which is why Ben P had no idea who he was responding to.

The largest exporting country is, I believe, the United States. Americans are enormous consumers, consumers make up 70% of the U.S. economy, and the deficit that cause the current trade deficit with China. However, as the 10 year recession in Japan shows, remember when it was Japan that was going to takeover the world, an export led economy is no guarrantee of anything.

America is not exporting jobs to China. Those jobs often left the American North East to the American South, then to Europe, South America and now to Asia. Why does any American want to base the economy on being the low cost producer? Also what difference if America manufactures less? There is no magic to manufacturing just as there was no magic to America being an agricultural based economy in the 19th Century.

What is an outrage is that working and middle class Americans are being taxed to pay the interest on bonds held generally by wealthier people of many nations. If there is a desire to reduce this disgrace then the Federal government has to reduce its deficit by raising taxes and spending less.

China is going to have many issues to cope with. How is an economy as they are becoming going to maintain economic growth at 7% to 9%? What happens when they can'T? Inovation is a key to economic growth and that requires the free flow of ideas. How will the communists deal with this? How will they spread the wealth to the hinterlands of China, a traditional problem? Lastly how will China deal with a growing middle class who demands a greater political say?

However, if there is a worry about globalists who drive limos and have golden faucets one might look not to China but to the Arab and Muslim world and some people's favorite thug Hugo Chavez. OPEC which does not operate on market principles have been holding up poor people since the 1970s. If oil was down to $30 rather than $60 or more a barrel lots of poor people would have a much better life.

Daniel A. Greenbaum

Corvid

Shamefully, there hasn't been one mention of Tiananmen Square in this discussion, until now. Let's not forget that any discussion of free trade with China comes in the context of the West's utter and astounding betrayal of the 20th Century's most important democracy movement. Free trade with China, consequently, is producing the world's first prosperous totalitarian system, one that is increasingly and dangerously nationalistic. And on top of that, free trade in general over the past 30 years has shifted from being primarily a mechanism for seeking/producing ever superior products and services to one of seeking/producing ever cheaper and more docile labor forces. Even in this mutated form, free trade coughs up more and more goodies, but at the expense of greater worker dependence on the benevolence (such as it is) of their masters. Quite a model.

Better, Hans Suter, you should give your own snark on how globalization's effects on the politics of Wilhelmine Germany advanced the cause of world peace than to reach lazily (and foolishly) for the ratings button.

I agree with you, but this seems kind of intemperate.

So the Chinese are "willing to work for peanuts."

It's like saying Russians desired to be imprisoned in Gulags - look how many of them were there. Economists in America often engage in this passive verb world when they lump workers in with the elite who actually decide everything. "'We' don't like universal health care in America, but we love big SUVS - and ethanol." How about replacing "we" with "the insurance lobby, the auto lobby and the agribusiness lobby."

I love it when people conveniently forget the agents who control the economy. That's actually Faux's whole point. God, am I the only one who read the original post the whole way through?

"It's like saying Russians desired to be imprisoned in Gulags - look how many of them were there."

No. The Chinese are willing to work long hours because they see an improvement in their lives as a result. There were riots in a factory a year or so ago after that factory cut back on hours as a result of pressure on from western organizations on issues of worker safety.

DON'T OVERSIMPLIFY

He didn't pretend to be a neutral observer, in an effort to be disarming, he jokingly admitted to being a "water carrier"for the Davos crowd, which suggests an underlying discomfort with his position, if only in the sense that he knows many people violently disagree with him.

His background shouldn't be an issue (unless you are an essentiallist), the only issue is his possible unawareness of how it might be affecting his arguments.

Well, these are Delong's actual positions. In fact, he's made this "but the Chinese will hate us in 60 years" argument before. It may sound off-the-cuff, but it is actually a considered position and an argument he must consider valid.

Mary, what I wrote was: "Since I grew up poor in Missouri back in the 40's, I know that what is required for a happy life is adequate food, shelter, clothing, health care and energy". And, we are not talking about the very poor, unemployed, living in "poor communities" people. We are talking about those who have become jobless or underemployed due to globalization.

Hoppy in Sacramento

Since people are missing at least one of my points...

That company has nine factories and is native owned (not Taiwanese) They import their milling machines, glues and finishes from Germany- the most recent and the most "green"- and the finishing machines from Italy.

For example, I tend to think that the US is still rich enough and influential enough that a decent, social-democraticish government here could largely ameliorate the problems globalization poses to American workers, even given the jackass rules that now govern the global economy (embodied in the WTO and Bretton Woods institutions and the quadrillion bilateral treaties that the US has signed or is negotiating).

There, does that help?

And of course, codegen86, China and India kept strict controls on the supply of "water" flowing into and out of both countries; a major reason both are so strong now.
Don't oversimplify
(my new tagline?)

I'm out.

In a word, Yes. Especially when the entire argument is "Brad DeLong went to Harvard!"

Whether liberalized trade is good or bad for America doesen't hinge on whether Brad Delong went to a good school.

If the Harvard (Princeton, Yale, Columbia, etc.) snots want to stop being treated like snots, perhaps they should stop acting like snots.

Delong's argument is misleading in suggesting that it is about workers.  It is about corporations. Corporations don't give a damn about workers, that's why we have governments to protect our worker rights.  The US government has no role in protecting Chinese worker rights, that's what the Chinese government is for.  Unfortunately, the Chinese government isn't as good at it.

In the "efficiency" of international markets, when one government does little to protect worker rights, this becomes profit for Corporations.  THAT is why American standard of living (median income) is threatened by free trade with countries that care little about the rights of their workers.  Until the governments in THOSE countries take a bigger role in protecting THEIR rights, WE are threatened by trading with them without tariffs.  It is NOT OUR ROLE to fix their governments.

So, your "they're all human" is just a cover for corporate rape of US. 

Yes, ad hominem attacks are indeed inappropriate. The strength or weakness of the argument and factual basis is the essence here, regardless of any personal inclinations you may infer.

And the shear asymmetry of it. Brad is a public figure whose personal info is readily available. Who are you? And if you tell us, it's still just your word, That is a luxury a public figure does not have.

But most important, with ad hominem attacks TPMCafe will degenerate to the state of so many unpleasant blogs out there. Call people names, and they will just go away. Is that what you want?

Your sucienct self reference is excellent.

Shall we continue down this route? I am not, as a matter of fact, a member of the referenced group. On the other hand, the referenced group has plenty of arrogant people who assert superior airs and Brad does seem to be one of them. Taking them down an inch or two is just so tempting.

The assertion that ad hominem is poor argumentation overlooks the fact that when someone begins by putting on superior airs, he has ALREADY interjected an ad hominem argument preventively against respondents. There can be various devices to deal with that ad hominem, but blunt response is not unfair.

The biggest winner in US trade with China isn't Wal-Mart.

It is the people who HAVE to shop there, because they can't affort Macy's.

Protectionism, at its very heart, is anti-poor.