Dodging the Question
Brad DeLong brings us the startling news that there are a lot of poor people in China, that the Chinese rich are not as wealthy as Bill Gates, and that incomes are up since the cultural revolution. Wow! Stop the presses!
What does this have to do with my proposition that we need social protections in the rules of globalization? Nothing. It is a red herring to divert discussion away from the ways in which the globalizing economy creates an upward redistribution of income, wealth and political power -- and to stop the conversation about how to change that.
DeLong’s response to my point about the growing class structure in China is to guess that there are 200 rich people in China, whose income, if you divide it among a billion Chinese, doesn’t go all that far. This is supposed to prove that economic classes don’t matter. Simple arithmetic, he says. Simple-minded is more like it.
Brad Delong cannot get that the fundamental issue is not simple trade between sovereign nations of economics 101, which I suppose is why he doesn’t want to engage in the more important question of how we govern the global economy. For those whose stereotype of Jeff Faux blinds them to what I’ve actually written, check out Josh Bivens's post.
Here’s the point. If you believe that economies have to be regulated to prevent excessive exploitation and inequality. And if you believe – as the first head of the WTO put it -- that modern trade agreements are “writing the constitution of a single global economy” then on what moral basis do you denounce any effort to put enforceable social regulation into the rules of the global marketplace?
On the question of class and power, DeLong is over his head. He doesn’t dispute that a global economy is creating a class structure that reaches beyond borders, or that in their own words, the large corporate investors who most influence American economic policy no longer consider themselves American. He simply ignores these issues. In his world of free-market fundamentalism, there are no sweat shops, money doesn’t influence economic policy, and people don’t get murdered for trying to organize a union.
Having run out of arguments, DeLong downshifts to ad hominem attacks, calling me “nationalistic…China-bashing…” And, finally, racist: “drum-beating about the threat from powerful, different-looking people from across the ocean.” Very incisive rebuttals, professor.
Then, this: “But when Jeff Faux rolls into town, he does not do so with a scream-and-leap attack on governors and legislatures who won't fund expanded community colleges or presidents who love tax cuts for the rich or senators who won't fund Medicaid at current levels.”
I don’t know how many anti-poverty marches, picket lines or battles with right-political thugs Brad DeLong has been in, but I’ll match my record on “screaming and leaping” for social justice in America against his any time.
Now, would anyone like to have a serious conversation about how we govern the global economy?
The charge of reactionary nationalism wouldn't apply if you're arguments weren't based on a reactionary economic nationalism.
You are of course perfectly correct that pointing out that China's standard of living has increased exponentially over the last few years & that a lot of that is due to trade with the U.S. has nothing to do with the "social rules" in globalization. Then again, the remark of yours it was in reference to, your retrogressive utterance about Americans sacrificing their jobs so subsistence rice farmers can better thesmelves, all the while those comissars-turned capitalists cruise around shanghai in one of their 365 Rolls Royces they all apparantly own, had nothing to do with social rules in Globalization either. It was nakedly protectionist, and it's disingenuous to pretend otherwise.
And with your work, which I've followed for awhile now, that's all it ever is. Social protections are a good thing of course, a strong case can & should be made for them if we want to forge a decent global liberal order. But it's pretty clear that when Faux et al, switch between nationalist demagogy, economic jingoism trade scepticism, trade reaction, and then on to talk about "social protections", it's not out of altruism or deep concern for the Chinese, it's because he thinks their imposition will result in less trade between China & the U.S., see Robert Reich and "Backdoor Protectionism"
March 1, 2007 11:08 AM | Reply | Permalink
You are a broken record. The DUTY of national governments falls first to their OWN citizens. To call this nationalistic protectionism is just to side with the corporations. Would you mind thinking for a change.
March 1, 2007 11:24 AM | Reply | Permalink
Mr. Faux, I appreciate your many posts on this topic and I particularly appreciate your willingness to stand up to the many ad hominem and supercilious and snarky and snide and ultimately vapid arguments of DeLong, Ridgeway and one or two others who seem not to have much to say, but do sling venom instead of engaging the debate. It is a shame they never get beyond the talking points of the "free" trade side.
March 1, 2007 11:31 AM | Reply | Permalink
Jeff Faux:
There is an old saying in the blogosphere: "don't feed the trolls". Perhaps you should follow this advice with regard to Brad DeLong. You, yourself, have admitted that he has run out of arguments and is resorting to ad hominem remarks. A better use of the platform you have been given here is to discuss ideas that you may have for correcting the situations you describe.
One of my hobby horses is that many can describe a problem with society and many can even state what the ideal situation would look like that would correct it, but few can offer ideas on how to get from point A to point B.
The problem with international relations is that there is no enforcement mechanism. It is still "might makes right" and in many situations these days that means that the US does whatever it wishes. If you feel that trade policies should include better environmental and labor requirements and if you feel that trans-national firms are the ones most influencing the US position on these policies then you need to explain which power group is going to counter this influence.
Currently the working classes on both sides of trade agreements can't even get domestic rights passed and enforced so how are they to influence what happens elsewhere?
Saying that things are unfair or unjust doesn't get us any nearer to a solution.
--- Policies not Politics
Daily Landscape
March 1, 2007 11:36 AM | Reply | Permalink
Just as it is the duty of all parents to advocate for their own children (within reason).
March 1, 2007 11:58 AM | Reply | Permalink
Isn't the problem in China have very little to do with economics and a lot with the nature of their political system. The Communist Party wants the benefits of a more open economy but without the pain of freedom. They want to avoid what happened in the Soviet Union. Therefore they are trying to control the spread of wealth, while helping themselves to it, in order to stem any demands for greater liberty.
If closing off trade was such a good thing Cuba and North Korea should be the two countries with widespread properity.
Daniel A. Greenbaum
March 1, 2007 12:15 PM | Reply | Permalink
Take a look at my original post and also the penultimate post ("Moving on...") You may not agree with my proposals, but they are addressed to the problem of getting from A to B.
March 1, 2007 12:15 PM | Reply | Permalink
That's funny, I don't ever recall stating that the obligations of a national government didn't start with it's own citizens.
The national government should be protecting me from physical harm caused by others. It doesen't need to be protecting me from the scourge of cheap televison sets.
March 1, 2007 1:02 PM | Reply | Permalink
In a forum where the trade reactionaries, comfortably outnumber trade supporters, this self-pitying whining is pretty comical.
But in the interests of good faith, what type of "debate" are you looking for that isn't currently being held?
March 1, 2007 1:07 PM | Reply | Permalink
I assume you are referring to statements like this that you made previously (speaking of NAFTA):
That is a goal not a transition plan.
Or perhaps you mean this:
Your use of the subjunctive tense doesn't sound like an action plan either. Leaders have been able to use propaganda and coercion to control the majorities for millennia. If anything the tools have gotten better with the rise of mass communication and pervasive surveillance. Bribery is a good technique as well. I claim that we will see this in use in the next few years as the Dems throw a few crumbs to the working classes to defuse the rise of populism. This will take the form of some minor changes in the social safety net and perhaps a bit of easing on restrictions on unionization.
The power brokers within the party as exemplified by Robert Rubin and his Hamilton Project are already planning how to keep our capitalist/consumerist model going and thus forestall any real evaluation of how our society is organized.
I don't see a rational way out of international inequality. It has always been "solved" by conflict and the US is not setting a good example for an alternative at present.
--- Policies not Politics
Daily Landscape
March 1, 2007 1:08 PM | Reply | Permalink
OMG, there are communists in China! Spread the word!
March 1, 2007 2:12 PM | Reply | Permalink
There you go again, worrying about consumer goods, the hallmark of those who have no worries at the moment...
When will you worry about the things that you, or others, do not have because we are ripping them out of our economy to compete with cheap labor in other countries? Cheap labor that is being exploited by our internationalist over class?
Longer vacations, better pay, lower cost higher education, guaranteed access to health care, affordable housing, pollution free cities, continuous crime reduction, etc., these are the benefits we lose by becoming more "economically efficient" by competing with China, India, Mexico, etc., where these are not basic elements of the quality of life and, thus, not included in the economic cost of competition with us.
You have yet to address this directly. Your diversionary comments on protectionism fail to answer why we should not reject competition that increases our risk of lower quality of life. You just repeat your mantra against protectionism so you can buy a cheap MP3 player. I hope you enjoy the music when you are still working away at 85 because there is no retirement funds available for you.
March 1, 2007 2:25 PM | Reply | Permalink
There you go again, worrying about consumer goods, the hallmark of those who have no worries at the moment...
On the contrary, it's precisely the people that have worries that should concerned about "consumer goods"; an incredibly broad category I might add & not especially luxury items, contra your remark about "iPods." If the overall cost of what you spend on consumer goods was raised by by 3 to 4 thousand dollars, I don't think Investment Bankers are going to be too phased. My brother on the other hand, who works at Discount Tire, provides for a family of three and shops at Sam's Club, might be.
Longer vacations, better pay, lower cost higher education, guaranteed access to health care, affordable housing, pollution free cities, continuous crime reduction, etc.
Northern European countries like Sweden & Denmark have extremely generous social insurance states, generous vacations, good pay, free & sometimes state subsidized education (IE they pay YOU to go to school), universal health coverage, healthy environments & virtually no crime, all the whilst maintaining a liberal trade policy. The same is true to a lesser degree in other Western European countries as well.
Sounds like heaven to me. In which case, if you care about those things like you claim you do, let's get busy building something similiar here instead of peddling fear in order to close ourselves off from the world and big bad foreign competitors.
March 1, 2007 3:44 PM | Reply | Permalink
If people are looking for a global solution to this sort of thing, shouldn't we be trying to get a global universal Bretton Woods esque Labor Organization going? The ILO doesen't count as they are basically toothless, but something where, piece by piece, country by country a global consensus is reached?
Admittedly the problems with forming an organization like this is that there's no real incentive to get on board. People want to join the WTO and then agree to lower trade restrictions because they want access to other markets and cheaper goods. There's no incentive for places like India & Malaysia to agree to adhere to a Global Minimum Wage or a Global Overtime policy.
March 1, 2007 3:53 PM | Reply | Permalink
I know I will regret this since I have seen how you argue and operate, but here goes. You seem to feel any restriction on trade is a restriction of your rights and anyone who advocates "fair" trade as opposed to "free" trade is acting against the poor in Asia or elsewhere in the developing world (and you are quick to label them racists). Historically we always have had restrictions on trade; it has helped us industrialize; it has protected industry; it has helped politically powerful corporations control their product and their market. So it does not seem to me to be reasonable to frame any part of this discussion in terms of trade restrictions "impairing" some natural right you have or anyone else has (anymore than requiring a passport to travel abroad impairs your rights). Nations have always made laws that effect trade. So it seems to me that the question is what policies serve best: and I am sure we all understand that who they serve is a key question. I am all in favor of some of the benefits of "free" trade such as cheaper goods, more efficient production, and the industrialization of underdeveloped countries thereby helping their working populace. But there are associated costs currently being borne by American (and European) workers and the middle class in terms of reduced wages, reduced living standards and the loss of decent jobs with benefits . Also, in Asia, there afe often unregulated factories in which workers there are abused and exploited. Also there is often unregulated environmental abuse in Asia, enabling the corporations to drive down production costs while creating environmental problems for the world for generations to come. Clearly our problem is to figure out a way to allow some of what is occurring in the form of outsourcing and exporting of jobs, at the same time insisting that the corporations and moguls who are benefitting most provide the necessary investment in our human, environmental infrastructure, so that we as a society can reproduce our conditions at a higher level. This means including as a cost for our corporations (that are benefitting without any restriction or obligation) for retraining our workers, health care, retirement costs, increasing education, labor rights in Asia, adherence to environmental standards equal to those here. I believe even after these costs are tallied against profits, many corporations would find outsourcing profitable; under those circumstances I am in favor of globalization.
Now, Mr. Ridgeway, I have refrained from responding to you in the tone you habitually adopt (although the temptation to do so is strong). Maybe you can reply in kind.
March 1, 2007 6:30 PM | Reply | Permalink
Thank you for your in depth reply. Perhaps the change in tone will be useful. I'll try and address your post in individual blocks, as that's how I think.
You seem to feel any restriction on trade is a restriction of your rights and anyone who advocates "fair" trade as opposed to "free" trade is acting against the poor in Asia or elsewhere in the developing world (and you are quick to label them racists).
I wouldn't say any restriction on trade is an infringement on MY rights per se, although as a consumer, I do consider it a lessening of my liberty, defined in the Rawlsian sense.
That said, I'm hardly a laissez faire free trade absolutist. There's a number of exceptions to completely free trade I support, such as protections for defense related capabilties and a reasonable amount of food support. I favor protection for infant industries(with the caveat they eventually have to grow up_, support anti-dumping laws, and couldn't care less about agricultural subsidies. If the United States never took another trade liberalization measure I'd be perfectly fine and we currently have a plethora of tariff schedules, import quotas & other non-tariff barriers (although all are fairly low).
Please accept my apologies, but I seem to be really tired right now. I promise to respond to the rest of your post tomorrow morning but for now I probably need to sleep. You can respond to to what I've written so far if you wish.
March 1, 2007 7:12 PM | Reply | Permalink
Europe does indeed have a free trade region, it is called the European Union. They do not practice universal free trade outside of this region. In addition, some of what you have to say about northern Europe involves conflating observation units, that is, you are picking the desirable characteristics out of various countries and describing them as if they were all found in the same country, or at least you give the appearance of doing so.
Your brother who works at Discount Tire is precisely the kind of person who is hurt by our exporting of jobs, thereby keeping the labor market in a favorable condition for employers. Your brother has very little bargaining power because he is infinitely replaceable by the unemployed, who are constantly replenished by displaced workers. A couple $ thousand in reduced consumer prices comes possibly at several $10K in reduced earnings power. So, is he really better off?
In your international comparative theories, are you really advocating 60% + tax rates as found in Northern Europe? If not, are those countries relevant?
Just a few thoughts.
March 1, 2007 8:20 PM | Reply | Permalink
Now, that is the first thing you've said in this series of posts that is helpful. I think, though, that the only way an international labor organization is going to acquire teeth is with the assistance of powerful national governments. If China needs to support human rights to trade with the US and Europe, they will do so; otherwise, they will not. I could see a WTO with three seats, representing three constituencies: business, labor, and the environment. To enact a regulation requires the assent of any two. Since labor and environmentalism frequently have opposed interests, this need not be simply a matter of "beating up on business", but business would become a voice, rather than the whole megaphone.
March 2, 2007 12:45 AM | Reply | Permalink
Jeff,
Mark Kleiman called you a "sockpuppet" of Brad DeLong here:
www.samefacts.com
What is that all about?
March 2, 2007 6:22 AM | Reply | Permalink
Very pithy.
The point is that there are domestic political reasons more than impact of globalization that keep people poor.
If trade was such a detriment why aren't countries that are largely kept out of global trade not doing much better?
Consumers make up 70% of the U.S. economy so if you want to have the Americans resemble North Koreans and Cubans very poor but more equal going after the freedom of consumers is the place to start.
China lending America money at rather low interest rates has made homes more affordable for many Americans.
What a winning strategy. Make consumer goods and homes less affordable.
Daniel A. Greenbaum
March 2, 2007 7:31 AM | Reply | Permalink
I hate to sound like a broken record, but all "good" ideas always founder on the issue of enforcement. To give a simple example, the new world courts. The US has refused to participate. The countries where indictments have been issued (Serbia and now Sudan) refuse to turn over those accused.
The UN is explicitly barred from interfering in the internal affairs of "sovereign" states, although this gets finessed from time to time. Even if the UN had a mandate it doesn't have an army.
So let's assume we set up a stronger ILO. Which states are going to listen to it? How are you going to make them behave if they refuse?
The only promising developments I see are the recent formation of regional pressure groups such as what is happening in South America. A group of several countries with raw materials to use as leverage is starting to replace the gun boat diplomacy which was the norm until recently. I can imagine similar regional associations in Asia. This makes negotiation between power groups more likely, but doesn't prevent the use of force when one side thinks it is advantageous.
--- Policies not Politics
Daily Landscape
March 2, 2007 8:07 AM | Reply | Permalink
Thanks for indicating the boundaries of your support for free trade. It is easier to debate if you are not an absolutist. Let us leave then the topic of rights. Our rights are impinged in innumerable ways by governments and other people. I would suggest that the debate should focus on the cost and the benefits of "free" trade; let us assume everyone cares about the effects on participants worldwide although perhaps not equally. I do not think it is morally reprehensible if I care more about my family or my neighbor than someone I do not know, but if you feel differently then we have to have that discussion first. Thinking back to DeLong's initial response to Faux' post and indeed your own, I think you both started out calling names, (not literally but in fact), instead of dealing seriously with the issues raised by Faux, i.e., in terms of who benefits from "free" trade as presently constituted, who suffers, how much they benefit or suffer, is this right and how can it be made more fair and therfore workable.
March 2, 2007 9:21 AM | Reply | Permalink
China lends the US money because the US fails to tax itself enough to support its functions of government. Our exporting of debt is our absolutely worst public policy error bar none. It WILL come home to haunt us (more likely our children and their children for many generations).
Who is benefiting from this public policy error? The same internationalist capitalist class who is benefiting from exporting jobs to low wage countries.
March 2, 2007 9:32 AM | Reply | Permalink
The point is that there are domestic political reasons more than impact of globalization that keep people poor.
Yep, sure sounds like the US economy. Reaganomics killed the tracking mechanisms of the US economy. They did not want the citizens to know the “truths” they were peddling with their “Class Politiconomics” did not hold a brighter future as propagandized.
Free trade is not free of costs. Identify cost; assign mechanisms to recover these costs from the cost causers and thus the ones who are scofflaws. Then we can discuss free trade.
China lending America money at rather low interest rates has made homes more affordable for many Americans.
Please do not mix ownership with a no or low equity asset. New home ownership for the middle class and lower seems more like a rent to own scheme today.
How did they “earn” the money to lend?
Identifying costs and assets today can be compared with the fantasy of changing tax policy by discussing only salary income without discussing asset income and capital gain taxes!
-----------------------------------------------
Today, are we searching for I deals or Ideals?
-Thinking
March 2, 2007 9:51 AM | Reply | Permalink
That is wrong. That is why the U.S. borrows the money, at rather low interest rates. The reason China lends it is that is a rather low risk investment.
You are confusing to different issues. The U.S. budget deficit is a problem that is going to make dealing with problems to come such as Social Security and Medicare more difficult. At some point if people won't lend to the U.S. Americans will either have to raise taxes or cut spending.
However if the Japanese and the Chinese are more risk adverse than Americans as investors and wish to lend money to the U.S. at low interest rates that is an endorsement of the U.S. economy and a good thing.
Daniel A. Greenbaum
March 2, 2007 10:22 AM | Reply | Permalink
Killed the tracking mechanisms? What are you talking about? People have been complaining about the statistics for decades.
Nothing is free that is the point. Freetrade is a lower cost means of distributing goods to consumers while causing a general economic growth.
As for homes we have recond home ownership. Everyone borrows against their owns. That people have been able to use their houses as virtually cash machines may or may not be smart but does not negate their ownership.
The Chinese earned the money are aere lending by pulling people off the farm and into relatively low cost manufacturing. They seem to be trying move up the cost ladder of economics.
I would rather have deals. It makes for a lot freer world to allow more people live out their ideals.
Daniel A. Greenbaum
March 2, 2007 10:27 AM | Reply | Permalink
On this topic I am neither wrong nor confused. Exporting our debt is directly linked to our tax rates, which is linked in a far more complex way with Social Security than your simplistic post suggests.
China and Japan lend to us to stabilize exchange rates so they can export to us. Some day this will not be their number one public policy issue and they will start collecting.
March 2, 2007 11:14 AM | Reply | Permalink
So that's why homes are so affordable today in the USA -- it's because of the Chinese.
March 2, 2007 12:28 PM | Reply | Permalink
Sorry for the break again. Now Ill continue.
anyone who advocates fair trade as opposed to free trade
I have to refrain from commenting on this, because except for well meaning individuals trying to get soem extra cash for coffee farmers in Latin America(which I think is great), I've never heard anyone coherently articulate just what "fair trade" is exactly, as opposed to free trade. I don't think my ignorance is singular either, as I've heard both Dean Baker and James Galbraith, the first a pretty staunch critic of trade policy remark that for all the hand-wringing over free trade, no one has proposed a coherent alternative system. But I'm open to being informed.
Historically we always have had restrictions on trade; it has helped us industrialize; it has protected industry; it has helped politically powerful corporations control their product and their market. So it does not seem to me to be reasonable to frame any part of this discussion in terms of trade restrictions impairing some natural right you have or anyone else has (anymore than requiring a passport to travel abroad impairs your rights).
It's true we have always had restrictions on trade, it's also true that we probably always will. But this is akin to saying we've always had racism historically, completely ignoring the difference between post-reconstruction, segregation, and the (comparably) milder racial problems today in our 200 year history. Since the Great Depression, indeed earlier if you recognize the Smoot-Hawley tariffs as a fluke reaction to an urgent crisis, our history has been a gradual movement from a closed economy to an open one. Between 1930-1949 the average tariff level in this country was 33.9%, Between 1950-1969 the average tariff level was 11.9%, a near 200% decrease. Between 1970-1989, the average tariff level was 6.4%, a near 100% drop. As of 2003 it was 4.4 percent. And the U.S. is hardly alone in this, indeed this goes not only for the developed countries of western europe; even for isolationist economies has been towards more & more openness.
Moreover, an argument in favor of restrictions on trade, or anything for that matter based on "we've always had them" isn't a particularly convincing one. Historically the state has placed restrictions on a lot of liberties, and only recently have wecome to realize the illiberal nature of those restrictions.
The United States has industrialized, and is even post-industrial at this point; it is a fully developed economic power, indeed THEE economic power; all those infant industries have grown up. We're not the young upstart looking for some cover until we grow big & strong enough to compete. We are the World Champion (literally) and it's time to quit hiding behind the curtains.
I am all in favor of some of the benefits of "free" trade such as cheaper goods, more efficient production, and the industrialization of underdeveloped countries thereby helping their working populace.
Ditto.
But there are associated costs currently being borne by American (and European) workers and the middle class in terms of reduced wages, reduced living standards and the loss of decent jobs with benefits .
I tend to object to the idea that foreign trade costs much in the way of jobs. Some have no doubt to be sure, but those "500,000 good manufacturing jobs lost in Ohio" type statistics that sometimes get touted often obscure a lot more than they reveal, most notably within country relocation, and trends in deindustrialization that have been going on since the New Deal. To be fair, some have admitted as much, and Dean Baker has often stated that those protesting the idea that open trade has cost much in the way of jobs miss the point that the problem isn't lost jobs but the effect on wages to those who must now compete globally.
I don't deny this can be a problem. Any time you open up your economy to foreign competition you invite the potential for this problem. There are lots of things I would like to do about this, like a program for federal wage insurance for those experiencing tougher competition abroad, generous unemployment benefits and, yes, comprehensive job retraining. But these are exactly the things those people most anxious over foreign trade don't want to hear. They don't want unemployment benefits or "wage insurance" or "retraining" they want U.S. companies not to move production overseas and they want the government to protect their industries against more efficient foreign competitors. In which case, I really don't know what to tell them.
Also, in Asia, there afe often unregulated factories in which workers there are abused and exploited. Also there is often unregulated environmental abuse in Asia, enabling the corporations to drive down production costs while creating environmental problems for the world for generations to come.
I think the working conditions for Chinese are often better than people give credit for, but worker abuses & exploitation can & do occur. In which case we should take any actions we can within reason & scope to combat this. But there is a limit to how much can be achieved; as James Galbraith just stated on Brad DeLong's blog;
Prohibiting imports based on child labor and prison labor is, or ought to be, totally uncontroversial, but would have no effect -- zero -- on China's exports. (Indeed, we already have an MOU with China banning exports using prison labor, since the early 1990s.)
As for the environmental abuse that is a definite problem. Unfortunately, we aren't the ones in charge of other countries' environmental standards & regulations, they are. But the facts are that large countries like China & India have enormous potential for industrialization that that's not doing anything good for our environment. What are the solutions? Well, we could push for these countries to sign onto global agreements & regulations but considering that we ourselves still won't agree to the Kyoto protocol, we don't have much of a moral leg to stand on. Instead, (and I'm just cribbing this from Stiglitz) if we want these asian countries with huge potential for growth to want what we want, we (and that should include other NATO members) should be paying them & helping them build this infrastrucutre, help them enforce these regulations & adopt those environmental policies we in the rich countries impose on ourselves. I don't think sticks, as it pertains to our leverage as a trading partner should be discounted either, but I think carrots would be much more productive.
Again this is still at the pie in the sky level. It's easy to say what should be done, and what the prospects that anything will be done in the near future. The more countries are involved, the less easy it is to forge a consensus.
Clearly our problem is to figure out a way to allow some of what is occurring in the form of outsourcing and exporting of jobs, at the same time insisting that the corporations and moguls who are benefitting most provide the necessary investment in our human, environmental infrastructure, so that we as a society can reproduce our conditions at a higher level.
I agree. In many scenarios, it's imagined that under any trade liberalization, the benefactors of this new openness or "winners" could theoretically compensate the "losers", those affected by the increase in competition thereby making the move Pareto Optimal. Well not only does this compensation rarely happen in any direct sense, but I've never really seen just how this compensation would take place. The only thing I can think of is taxation, but you can't tax what isn't there. I do know that it's a lot easier to get companies to obey laws than to pursue some type of corporate social responsibility or investment on their own accord.
March 2, 2007 4:44 PM | Reply | Permalink