Nothing like a good fight over globalization to get the blood pumping. Well, not really. Even I think these are getting unfun, and I'm supposed to be writing a book about this stuff.

Let me, though, try to suggest an agreed-upon end-point for this debate between the Faux and DeLong camps, because, I think this would be a lot easier than trying to build a bridge to that end-point by forcing agreement at each step along the way.

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).

Don't agree with me? That's fine, let's move on.

I also tend to think that the aforementioned rules of the game governing globalization are a disaster for exactly the group whose interests Brad is keen on protecting - the developing world. Brad insists, rightly in my book, that the US owes the developing world liberal access to its consumer market subject only to most transparent, non-onerous conditions.

This, of course, is exactly what is not provided in the current global trading system. Today, access to the US market is contingent upon the developing world adopting a host of policies that map awfully conveniently to what the international corporate class wants: enforcement of US-style intellectual property law, investment protections against expropriation (defined very broadly), etc….

The progressive grand bargain on this score is to replace the current conditionalities that determine who gets liberal access to the US market with 2 transparent ones that actually put the interests of workers here and abroad in much greater alignment: adoption and enforcement of the core labor standards that the ILO has identified as crucial to protecting workers' rights (note, these are process standards, not outcome standards), and, commitments to refrain from manipulating exchange rates for mercantilist gain.

The first condition, labor standards, is an old one, and, I don't think even that controversial anymore, at least in principle. There's a good body of research showing that political freedoms aid economic growth, and, a key political freedom is clearly the ability to exercise one's voice and freedom of association at work.

The second condition is, obviously, a reaction to the current policy of China in pegging the value of its currency vis-?-vis the dollar at a level that generates growing US trade deficits every year.

This policy is a problem for 3 reasons, in generally growing order of importance:

First, it is the key impediment to the unwinding of the overall US trade deficit. The value of the US dollar needs to fall to reverse the trajectory of this deficit, it has fallen against a bunch of key trading partners, and, China's peg keeps it from falling further. This trade deficit uwinding could be painful (we're going to have to move millions of workers out of construction and other interest-sensitive industries into manufacturing, and, this is no mean trick to make happen w/o a recession), and, its better done soon rather than later, when the deficit is even bigger and the transition more wrenching. Again, if this was the only problem with the Chinese peg, it would not be that huge a deal - the US economy is big enough and rich enough that, in the presence of decent and smart economic policymakers, this could be managed (the fact that we don't currently have these sure isn't China's fault).

Second, the Chinese peg hamstrings the purchasing power of the growing Chinese middle class. Defending the status quo exchange rate means that you think this group shouldn't be able to afford as many international goods as they could buy if this rate was set at a level that didn't lead to ever-growing international imbalances. This strikes me as a strange principle to fight for.

Third, maintaining the peg means that China has spent $1 trillion in recent years buying US treasury bonds, instead of investing in public goods that would lead to better, more equitable outcomes for its own citizens. The opportunity cost of this peg for the Chinese economy is huge.

Lastly, the Chinese peg severely restricts the policy space available to the non-Chinese developing world in integrating with the global economy. The monetary authorities in a range of other East Asian nations have expressed the desire to hold fewer dollar reserves, but, to keep from losing market share in the US economy, they have to make sure their own exchange rate vs the dollar doesn't stray too far from China's, so, they are essentially forced by the Chinese policy into intervening in the exchange rate market.

Brazil has begun intervening in the real/dollar market as well, as China has started sucking US market share away from essentially all other developing countries, not just those in East Asia.

Indeed, besides the institutions and policies of the Washington Consensus, the single biggest encroachment on the policy-making space of the developing world right now is the Chinese exchange rate policy.

So, where does that leave us in terms of a progressive approach to globalization? First, social democracy (or, something a lot more like it) in the US. Second, a wholesale swap of the current set of corporate-determined conditions that governs who gets access to the US market for a much cleaner set of conditions that actually align, not pit against, the interests of workers here and abroad.

If there's anything the 1980s and 1990s should have taught us in regards to what the developing world "needs", it's simply: we really don't know. No one-size-fits-all solution will do, and, given this, the obligation of political progressives is to maximize the policy-making autonomy of developing country governments, and, to provide liberal access to the US market based only on transparent conditions that rule out of bounds the most socially destructive forms of market competition.

So, my question to Brad is: what's wrong with these goals?