Why Mexico is Not Enough
Now, I'm absolutely down with Jeff in seeing the real enemy as the Party of Davos-- and was in the streets of DC post-Seattle with the global justice movement. And contra Greg, I think we have to confront these global realities in order to deal with issues closer to home. I spend most of my time at the localistic level of state politics, but issues like Iraq and global trade play out even at that level. The Montana Senate just yesterday passed a resolution condemning Fast Track trade authority as an economic threat.
So count me as squarely on Jeff's side of the debate but let me challenge the idea that reforming NAFTA with a stronger cross-national alliance with Mexico is the place to start. Tens years ago, I would have agreed (and I did back then in this piece). But given the explosive reality of China's role in the US economy, it's too little, too late.
An improved NAFTA and better trade deals throughout the Americas are good things to work towards, but the problem is now too global to even treat those as first steps. Regional trade blocs matter only to the extent that they are trading with each other and not with those outside those blocs-- and our trade with just China is gargantuan. Ignore the dollar amounts and it's obvious that tens of millions of Chinese workers are vital parts of the US economy and we need to start with solutions that address them.
Contra Brad, the goal of fair trade folks is not and should not be to keep Chinese workers impoverished but to demand that the emerging Chinese elite fully share the benefits of growth and trade with those workers. We need to demand, as international law demands, that those Chinese workers have the right to advocate for higher wages without fearing jail or a mental hospital, as is the situation right now.
It's the oddest thing that progressives demand higher wages for workers in the developing world and we get accused of wanting to keep them impoverished-- a neat trick by folks like Brad, admittedly. But here's the deal we should all want. Chinese workers should be able to demand higher wages to the point THEY WANT; if those WORKERS decide that trading off lowering wages for higher employment in the global economy is what they want, so be it. But right now, they are settling for low wages based on the decisions of Chinese and allied US CORPORATIONS and GOVERNMENT decisions.
So here's the global deal we should demand. Full trading rights for countries that honor the basic free speech rights of their workers to collectively organize. No trade rights for countries that don't. This isn't an argument for shutting down trade with China; it's a demand that they give free speech rights to their own employees as a condition of trade.
This is the point when Jeff Faux talks about Global Class War, which is happening within countries, including within China. Which is why I would argue against some simple nation or regional bloc-based strategy, as Jeff seems to indicate, but just push now and uncompromisingly for that basic rule of tying trade to honoring the free speech rights of workers.
The question is not do We WANT Chinese workers to be poor and barefoot; the question is whether we are willing to fight seriously and consistently for them to have a voice to say what THEY WANT?
Excellent, Nathan.
Unions used to see themselves as international organizations. I'd like to see more of a return to that.
February 27, 2007 10:57 AM | Reply | Permalink
While today's union leaders aren't perfect, they are far more internationally-minded and progressive that at almost any point in American history. They went through phases of nativism, isolationism and anti-Communist hysteria that allied them with rightwing dictators at points, so today's AFL-CIO positions on trade and international issues are some of the best at any time in our history.
See here for the AFL-CIO's WHERE WE STAND. Excerpts from the official position in the "Campaign for Global Fairness":
This is the fair trade position, not the caricature that the media writes about.
February 27, 2007 11:17 AM | Reply | Permalink
J. McCutchen
Serendipity or insider knowledge?
But given the explosive reality of China's role in the US economy, it's too little, too late.
Wall Street Plummets After Chinese Stocks Take a Big Hit
Stocks retreated sharply Tuesday after a sell-off in China rattled markets worldwide and data on durable goods orders came in well below expectations.
February 27, 2007 12:33 PM | Reply | Permalink
In the last decade and a half productivity rates in the U.S. have been phenomenal. More recently corporations have shown both double digit profit growth and the amassing of huge amounts of cash. This has not spurred a rise in wages but of private equity takeovers. This has been seen worldwide.
Meanwhile you have Toyota building its 8th plant in the U.S., in Mississippi to avoid Unions and other regulations, and Mercedes wants to dump Chrysler even though its German brands are doing fine.
There are two real powers in the world. The first is the Fed and other central banks. The other is bond traders. Both can wreck and economy faster than anything mainly by cutting off credit to a country.
Unless you can move labor across borders what are you going to do to prevent the types of crises that occurred in Thailand and Mexico?
Efforts to lock-in capital have resulted in overnight rushes of capital out of nations.
Secondly even if you have fairtrade what are you going to do about the technological growth that is reducing the need of humans on the factory floor and even the elimination of various types of white collar jobs.
In many respects most of the solutions that revolve around unions and fairtrade sound like they are out of the 1950s. Daniel A. Greenbaum
February 27, 2007 12:38 PM | Reply | Permalink
Good posts. But how exactly is this supposed to work? We can only guess what Chinese workers want since they aren't allowed independent organizations and such trade unions as exist are political/management tools to control workers. Foreign investors flock to China not merely because of low wages, but because the workforce is docile and the government has been so eager to cooperate with investors in putting people to work. What mechanisms can change the terms of trade and investment? For now, it's got to be some kind of top-down pressure, which ain't gonna come from most corporate investors much less factory managers. Besides, its doubtful that most Chinese working class care much about free speech, etc., though they may gradually come to value the privilege of organizing real trade unions.
February 27, 2007 12:40 PM | Reply | Permalink
"...Contra Brad, the goal of fair trade folks is not and should not be to keep Chinese workers impoverished but to demand that the emerging Chinese elite fully share the benefits of growth and trade with those workers. We need to demand, as international law demands, that those Chinese workers have the right to advocate for higher wages without fearing jail or a mental hospital, as is the situation right now...."
I've got an idea. Let's convince the Chinese that free market economics is unfair. Let's do as you say and ask them to redistribute the wealth, "fully".. Maybe we can convince them to provide equal financial rewards to the janitor and the brain surgeon. Maybe they can carry a red book of sayings and live in groups of cultural oneness.
But, oh, definitely don't want the situation to turn out with impoverished Chinese workers. Just a nation without wealth. Sounds like a "fair trade" to me.
February 27, 2007 2:00 PM | Reply | Permalink
Um...can you read? Or is this just more of the brain aneurysm that occurs that when progressives demand free speech rights for workers, they are always described as demanding something else?
Or maybe you think free market economics requires labor leaders being put in mental hospitals as punishment? You wouldn't be the first, of course.
February 27, 2007 2:28 PM | Reply | Permalink
Ummm..can you read? Or are you having an incredible urge to deny the point of the following:
"... but to demand that the emerging Chinese elite fully share the benefits of growth and trade with those workers...".
Human Rights has been tied to trade relations for decades, but of course not to the degree you might like.
Anti-globalists despise capitalist power being spread across the globe first and human rights is secondary. I guess its ok to threaten China with unfavorable economic relations, but Saddam Hussein was minding his own business and should have been left to gas his own people. Using our economic power against others to pressure them to treat their people better is more often than not a punishment against Americans. It creates a situation where we need to find a balance between remaining engaged so we can influence the foreign country or withdrawing and punishing both their people and ours.
Admit it, WTO protestors in Seattle are not throwing rocks into the windows of McDonalds because they are arguing for better working conditions for fry cooks in McDonaldski on the other side of the world. They hate the power of corporate conglomerates and would prefer that big governments hold more power instead.
You are trying to pretend that the article was solely about human rights and not about pushing the Chinese back in the direction of a system that resulted in the deaths of hundreds of millions of people.
I do not support the practice of placing people in mental hospitals as punishment for labor violations, but maybe for lame and insincere political arguments.
February 27, 2007 3:49 PM | Reply | Permalink
Note, however, that the member of the "inner circle" ASEAN-6 that came out of the Asian Financial Crisis in the best shape was Malaysia ... the member that instituted temporary capital controls to stabilize in the middle of the crisis.
February 27, 2007 4:28 PM | Reply | Permalink
"You are trying to pretend that the article was solely about human rights and not about pushing the Chinese back in the direction of a system that resulted in the deaths of hundreds of millions of people. "
This is a kind of insane statement. Demanding that China respect independent free trade unions is as antithetical to the country's dictatorial past as it gets.
But you're trying to play this McCarthyite game of equating a defense of free trade unions with Communism-- nice. And typical
February 27, 2007 5:11 PM | Reply | Permalink
Insane? Do we need another century of collectivist utopian cult movements murdering millions before you realize that dictatorial powers may or may not emerge from societies based on liberty, but they have a 100% guarantee of emerging from a communist government.
Calling for the Elite to "fully" share its wealth with the people and calling for free trade unions is a contradictory concept. Once you start pushing this emerging market back to the left, it will become more dictatorial.
You are the one thats insane. My god, how many millions have to die, before you recognize the danger of your rhetoric. One century of mass murder was enough, Thank you very much.
February 27, 2007 5:35 PM | Reply | Permalink
Um, last time I checked China was still communist.
February 27, 2007 6:56 PM | Reply | Permalink
um, then maybe you will notice that I said on several occasions pushing them to the left. In case you haven't noticed China used to be way left (bad), and now they are instituting free market reforms and moving to the right (good). Left=less freedom, Right=more freedom.
February 27, 2007 7:38 PM | Reply | Permalink
Establishing yet again that economic freedom is orthogonal to personal freedom. Given that there are still remnants of Confucian culture, I would expect economic freedom to be more important.
--
Howard
*equal opportunity offense to both extremes*
"Those who cannot remember the past are condemned to repeat it" [George Santayana]
February 27, 2007 7:41 PM | Reply | Permalink
China's social instability may soon make it less attractive to investors.
The Ministry of Public Security estimated that there were 87,000 public protests in 2005, a six percent rise over the previous year. Although the ministry reported a steep drop in disturbances during 2006, the South China Morning Post, a Hong Kong newspaper, has reported that the Chinese government began stopping the national media from covering protests and strikes, and many experts question whether the unrest has actually lessened.
--http://www.coanews.org/tiki-read_article.php?articleId=1626
February 27, 2007 8:04 PM | Reply | Permalink
You need to recall some history: it was a union movement which challenged Communist autocracy in Poland in the 1980s. Why in the world you be opposed to the same in China? I don't recall Solidarity pushing Gen. Jaruszelski to the left. Why would that happen in China? Hello, we are talking about increasing people's freedom!
February 28, 2007 3:52 AM | Reply | Permalink
I am not sure of the context you are using orthogonal.
If you are referring to my tongue in cheek left equals, right equals remark, I will retract it.
I prefer a more two dimensional model than the left right model. The X axis being right left on being socially permissible and y axis being economically permissible. On certain issues, with this type of model you find some liberals advocating that the government keep their hands off the internet based on anti-government and freedom of interaction beliefs and libertarian leaning conservatives in total agreement with them. Then in the other two quadrants you have moderate Democrats and Republicans arguing for regulation. Here is an example of one of those gimmicky internet polls based on the quadrant.
http://www.okcupid.com/politics
I don't believe economic freedom guarantees personal freedom, but I do believe that taking away economic freedom leads to the destruction of personal freedom in part because it is a subset of personal freedom.
February 28, 2007 9:39 AM | Reply | Permalink
For orthogonal, think "at right angles", although it generalizes to an arbitrary dimensions. That being said, we are in agreement at that two-dimensional model as being the minimum that gives any sort of realistic model.
There are a lot more potentially relevant dimensions, especially when you get into cross-cultural issues. Many cultures in Asia, for example, might well have an axis of "face", social reputation, social conformity vs. individualism. Native African societies often have a related but different dimension of social cooperation, not just reputation. Going back to Chinese, "gung ho", while used as a battle cry by Marines, who will tell you it means "work together", actually translates to something closest to "strive for harmony."
--
Howard
*equal opportunity offense to both extremes*
"Those who cannot remember the past are condemned to repeat it" [George Santayana]
February 28, 2007 10:01 AM | Reply | Permalink
I find it immensely interesting
...which may indicate that I'm easily amused, shocked, whatever, that the lead advertisement appearing at the TPM Café when I read this article was a typically misleading bit of Chamber of Commerce anti-Union Propaganda, arguing that through pending Labor Legislation
Assuming that the C of C pays on a click-through basis, I did just that, and I suppose that a belief in freedom of speech, even Commercial Speech, means I should be happy that the café is getting support from an organization which is diametrically opposed to the progressivism it espouses. As soon as I finish this I'll go look for an advert for the AFL-CIO at the National Review. If I don't find that, I'm sure I'll find at least an advertisement for Mother Jones.
aMike
February 28, 2007 7:00 PM | Reply | Permalink
I must say I have been watching this issue for a while, and do not find the union arguments against secret ballot terribly convincing. Yes, I agree checkoff cards allow a union a better chance to represent, and there still will be a certification election. Still, there's enough American tradition of the secret ballot, other than for legislators, that the burden of proof for me is on anyone who wants to move away from it.
I have read some of the union arguments about what management might do if secret ballots continued. In my mind, there may well be a problem, but the solution is fixing the NLRB rather than changing the means of voting.
--
Howard
*equal opportunity offense to both extremes*
"Those who cannot remember the past are condemned to repeat it" [George Santayana]
February 28, 2007 7:27 PM | Reply | Permalink
Mexico is not enough ... true.
But getting our economic relationship with Mexico right is a pre-requisite to re-establishing the (enlarged) North American manufacturing economy as a credible export platform.
Certainly, we do not even have a trade surplus in the Americas, so we cannot simply shift our focus on Asia and the Pacific Rim to the Americas and automatically reverse our extraordinarily high and rapidly escalating current account deficit.
And certainly, independent of free trade / fair trade arguments, and independent of our policy on industrial development within NAFTA, we have every right under the WTO to impose a 1.5% import duty (on all imports not guaranteed lower rates under existing free trade agreements), and to ratchet that up by an additional 1.5% every quarter that our current account deficit is more than 2% of GDP ... and any nation with a runaway current account deficit would be foolish not to act across the board before it is too late ...
... and, yes, NAFTA as originally constructed was a lose-lose proposition for the working people of both the US and Mexico. However, many of the costs of NAFTA were transition costs that have already been paid, and cannot be recouped if we dissolve NAFTA. We are in a trap-door situation where simply reversing a mistaken policy would be a new policy mistake.
We therefore have to work on making NAFTA are better instrument to serve the working people of both the US and Mexico. And if we can do so, while holding the line on any further so-called "free trade" areas, then there is every prospect of working out instead a truly trade-oriented working arrangement among the various free trade areas of the Hemisphere, from Mercosur through to Caricom, that really would be a good deal for all participating nations.
March 1, 2007 1:03 PM | Reply | Permalink