Mr. DeLong says:

I think we live in a world in which Chinese peasants and workers have not the same but very different interests than American manufacturing workers, who have very different interests from Americans consumers who work outside of manufacturing. I think I am the one who is grounded in reality.

I am an American consumer and I don't work in manufacturing. But if I don't have an interest in the fate of the American manufacturing worker who lives right next door to me , then what kind of neighbor am I?  And what does it mean to be a neighbor, or, for that matter, to be an American?  Mr. DeLong's reality seems to be a reality of "abuse my neighbor as long as the price is right," and that's a reality I detest.  I'd rather pay a little more to buy goods made in a country where kids go to school and not to the factory; where I can breathe fresher air and breathe cleaner water because manufacturers are not allowed to dump arsenic, mercury, and lead will-he/nil-he as they please, and where at least some workers are protected from jobsite injuries by Occupational Health and Safety rules supported by unions and enforced (less often than they should be) by Government Inspectors.  And I recognize that the threat to workers in the manufacturing sector is already spreading to a threat to information workers and finance workers, including economic theorists.  There's nothing unique in the American Character which makes American economists more uniquely able to carry water for plutocrats and therefore able to demand higher salaries than their peers from other lands. 

I don't need rock-bottom prices on stuff so I can have more stuff at the expense of my fellow citizens' health and security.  I don't need more stuff, period.  I don't need to patronize anti-union companies selling non-union made goods, proudly waving the banner reading "World's Largest Retailer" while reaping in the profits for one of the world's richest families.  And I don't need to patronize a company which rends the social safety net by providing minimum benefits to its own employees at the same time it teaches them how to apply for public support. 

There's something very ugly about Mr. DeLong's "reality".  There's something unreal about a reality which thinks social democracy at home can survive in an interconnected world unless it is promoted everywhere. 

aMike

Thank you for some clear thinking, Brad.

Jeff, by contrast, thinks we live in a different world: one in which "class solidarity among [transnational] educated elites and global movers and shakers" leads to "a business partnership between Chinese commissars who provide the cheap labor and American and other transnationals who provide the technology and financing...

I think this statement by Jeff is exactly correct.

And I think your point supports Jeff's viewpoint because you paradoxicially believe that there can can be "free trade abroad and social democracy at home" even though Hillary Clinton, who usually scares me, popularized the phrase "plantation economy."

The only thing that supports your viewpoint, I think, is the fact that we only have one reality so, on faith, we have to believe that humans have become gentler and kinder with time.

I believe that the Prime Minister of India recently made a comment that "the world won't survive very long if we keep consuming like this..."

I really stopped believing that free trade was "kind" after I saw the Clinton administration ask Africans to take genetic modified seed-- which would force them to buy seeds every year, in exchange for AIDS medications.

Sadly, this kind of horror seems to happen every day...

Free markets can lift all boats when they are regulated to enforce competition. Transnational corporations can make nations compete against each other for production facilities but nations do not have effective means to make corporations compete for workers. It is to the corporation’s advantage to compete in some open and lucrative markets of goods and services but otherwise cooperate with other corporations in resisting international labor and environmental standards. There are no mechanisms to regulate international markets to prevent cartels and de facto monopolies as long as transnationals use their leverage to prevent nations from cooperating to create anti-trust regulations and standards.

American workers have no exceptional entitlement to a certain standard of living, they now compete in a global labor market which is not as regulated as the national market that previous generations thrived in. But until they can see the day when corporations have to play on the same level field that they do, they have reason to be angry. And economists should help them push for international cooperation that will benefit all workers.

Brad, The claim that the living standards of many poor Chinese people have been raised by industrialization I accept (although I question expressing it as a rise of average income from US $500 to US $3000 per month, as you earlier did. Is that real money, i.e., are those numbers inflation-adjusted? Chinese inflation, I mean, which is the relevant standard. What did an apartment in Shanghai rent for in 1980 compared to today?). Jeff Faux's claim that this globalization is undermining labor globally, however, is also correct. It is certainly weakening it in the advanced countries, and China itself has been wracked by a number of truly spectacular job riots, with participants numbering in the tens of thousands. Outside the Depression and the Civil War, I don't think that America has ever seen riots that large that were not primarily racial, rather than economic. I don't imagine the Chinese are rioting due to their inability to contain their ecstacy at their gloriously-improved living standards. Those who hold that things are going so well in China do have an obligation to explain this.

From one perspective, then, globalization is a tradeoff, though not one the general Chinese population seems so happy with as your account would suggest. It seems that what the Chinese truly need is democratic rights; that is usually what is called for when people have severe discontent that can only express itself in rioting. Faux's proposal provides a path to this; yours does not. "Constructive engagement" was, after all, the cry of those who wanted to retain investment in South Africa, and apartheid fell when the "dirty f-ing hippies" got that policy changed. It has been almost 20 years of explosive growth since Tiananmen, and human rights are, if anything, in worse shape now than then (Falun Gong was tolerated in 1989). As in Iraq, hope is not a plan, and there is no particular reason to believe that China's growth is leading towards democracy. And as China ascends in world power, it will set the world standard for how countries and economies are to be run, as America has recently. If China's politics do not change, that standard will be extremely grim for human rights.

There is another question here, too. You yourself acknowledge that the interest of US factory workers are opposed to those of Chinese workers. Are the US factory workers, then, obligated to support policies contrary to their own interests? Are the rest of us, and the national government that supposedly represents us, obligated to side with the Chinese workers in this matter?

Neo-classical economists such as yourself traditionally treat individuals as basically selfish and consider this acceptable. Let individuals organize into corporations and other business concerns, and they remain solely self-interested. No one would expect the stockholders of IBM to put the interests of Oracle ahead of their own, even if Oracle were in dire straights. Somehow, however, when individuals organize into nations, they are obligated to be altruistic, against what economists themselves treat as basic human nature. Why? Yes, you can, and have, huffed and puffed about racism, about economic nationalism, and so on. In other words you can apply loaded labels in place of arguments. However, the position that Americans should place the interests of Chinese people ahead of their own interests is a moral position that needs to be argued, and ostentatious outrage that one would disagree with you, and assorted name-calling, are not an argument, moral or otherwise.

I submit that in arguing that the US should support policies based primarily on the benefit they provide to people external to the country even at the expense of their own citizens, you are demonstrating that Faux's accusation that the "Davos crowd" sees themselves as owing allegiance to no nation is correct as regards to you. There are arguments for such a position, but it is not clear how the institution of the nation state could be viable at all if it were taken seriously, and without the nation state, how could there be any of the welfare state policies that you cite as justification for your position?

And, in addition to all that, as I stated before, the free investment flows of globalization undermine the welfare state by permitting capital to flee the countries that have the tax policies needed to support it.

. . . what export-driven economic growth means to a desperately poor country . . . .

No argument, but why must that economic growth be "export-driven"? Or, to get down to my level of sophistication when it comes to economic theory, why can't the Chinese sell refrigerators to each other?

Wealth is measured by how many refrigerators the Chinese worker can make a year (productivity), not to whom the refrigerators are sold. 

So you have to start making something you can give to the people outside your country who do have those things, in order to get some of them. Gradually, as your country gets richer, it starts buying more of its own stuff; and that's what we're seeing in China now, as Chinese buy huge amounts of their own refrigerators.

I would buy into that scenario if the government were supportive of it, but to siphon the wealth of a country for their military to produce nuclear weapons and satellite killing rockets is the problem I have with China. They allow just enough wealth to train people to want more, but only as long as there are no more Tiananmen Squares.

Nobody wants dirt poor people suffering with no hope of a changing circumstance, but I don't also want to see the results of a slash and burn economy become tomorrow's toxic dump so I can buy a cheap refrigerator. The reforms necessary to change a government's actions will never come from outside unless we tie those conditions to the deal.

Alphonse ( Al ) Kada
Iranians are fighting the Americans in Iraq so they don't have to fight them on the streets of Tehran

The reforms necessary to change a country's actions will never come from outside, period.

True that I never shared a cell with anyone from South Africa, but I did divest from apartheid supporting companies.

I have watched China from '67 on. You are correct that they have parsimoniously doled out "freedom" (except for the occasional political purge and resultant re-education facilities).

Quite frankly, I don't give a S*** what the Chinese bloggers might think about my government being able to tell Google or Microsoft that their technology can have no political strings weaved through the programs that the Chinese politico's can pull whenever they feel like it. Let's think about how they will view us in the future for providing the accelerated technology to more easily round them up for the next bout of "re-education". It's very much like IBM helping the Nazis in Germany or the South African government enforce the passes with their technology.

So the Chinese feel "freer". I physically feel better when I'm not being beaten, but that does nothing to mitigate the fear of being beaten.

I'm not trying to "bash" China- all I've been saying in my posts is that we are giving away negotiating points in every deal we do with them, because our companies are blinded by the greed they think will net them a billion "consumers" somewhere in the distant future, and they are willing to do anything to follow that "promise".

Economists become enablers in that environment- giving them the reasons that their greed is actually good for those poor starving people and making them feel better about the turning a blind eye to the rest of their plight.

The Chinese need this market much more than we need them......

Alphonse ( Al ) Kada
Iranians are fighting the Americans in Iraq so they don't have to fight them on the streets of Tehran

True that I never shared a cell with anyone from South Africa, but I did divest from apartheid supporting companies.

The large majority of South Africans opposed the white apartheid government. The overwhelming majority of Chinese support their government. There are many other important reasons why what worked in South Africa will be useless in China, but this is the main one: when you're supporting an internal resistance, there has to (at a minimum) BE an internal resistance to support.

our companies are blinded by the greed they think will net them a billion "consumers" somewhere in the distant future]

The future is now. US exports to China rose 157% from 2000 to 2005, to $42 billion. Then they rose another 25% last year, to $55 billion. China is the US's number 4 export market, after Canada, Mexico, and Japan.

Corvid

We've had over 30 years of engagement with China, and at least in the 18 since Tiananmen Square the totalitarian system has only further entrenched itself while a very ugly nationalism has grown.

Remember the image of that guy who stood in front of the tanks? It's as if we walked up behind that guy and coldcocked him. Crudely put, THIS is trade with China.

Beyond that, why do U.S. workers bear any responsibility for what happens there, or in Cuba, for that matter? Something like Tiananmen Square happens and we basically shrug. But if opportunities open up for super-cheap labor, man, we're THERE.

China has 1.3 billion people and lots of natural resources. Let them develop their own market. Why are we remiss if we don't give them carte blanche in our paltry market of 0.3 billion?

And keep in mind that, in most cases we're not actually trading with China. We're trading with Western companies that have offshored to China, hoping to make a quick buck on the temporary spread that occurs when they export cheap products back to the home market before disemployment due to offshoring collapses the First World economies.

That's really all it amounts to, isn't it?

China has 5,000 years of history and it has a political system called communism, an economic system called “managed-economy” and a social structure very much influenced by Confucius. Their language, culture, customs, history, arts, ideology are very different from any other country and very contradictory to America.

Culturally, China does not want to be criticized and anything negative towards the Chinese is considered offensive and disrespectful. Right now, many Chinese are glad that their government has given them enough freedom to make lots of money.

To begin with, America has been exploiting other countries for a long time. Buying slaves from Africa was just one example, using cheap labors from Mexico and South America is another. It is not the fault of China to sell their labor cheap. It is the American entrepreneurs that take advantage of the Chinese cheap and reliable labor force. Someday, when the Chinese workers become expensive to the American entrepreneurs, Chinese workers would become useless.

We can use the freedom of speech to bash and abuse the Chinese, many of whom have no idea why American workers are doing that. They are glad to have more food than before and they are happy to make more friends around the world. It is about time that America should reflect, stop going around making enemies and pay more attention to the poor and the needy of this country. Guess who is the richest family in this planet? It is the family that owns Wal-mart. Should we punish Wal-mart for sending all the jobs to China? I shall leave the decision to you.

The very first thing I said was that I agreed that living standards had been raised. However, the Chinese are rioting for a reason, and I would like to know what you think that reason is.

China has 5,000 years of history and it has a political system called communism, an economic system called “managed-economy” and a social structure very much influenced by Confucius. Their language, culture, customs, history, arts, ideology are very different from any other country and very contradictory to America.

This is a very simplistic pop-Orientalist view of China. It is at first questionable whether any country can maintain 5,000 years of history at all, but there is good reason in China's history to assume that it is no more monolithic than western cultures. It overlooks that 56 officially recognized ethnic groups, and the 7 different dialects of Chinese spoken throughout the country. Furthermore, anyone advancing the claim that that Confucian culture is antithetical to western values has to at least do some work to explain South Korea and Taiwan.

To begin with, America has been exploiting other countries for a long time. Buying slaves from Africa was just one example, using cheap labors from Mexico and South America is another. It is not the fault of China to sell their labor cheap. It is the American entrepreneurs that take advantage of the Chinese cheap and reliable labor force. Someday, when the Chinese workers become expensive to the American entrepreneurs, Chinese workers would become useless.

What tortured logic are you using! How is using cheap labor exploitative? It is not the case that the standards of living in every country on the face of the earth are exactly the same. Paying someone in many South American countries $10/hour would make them one of the richest persons in the country. The same holds true for China. Why is it morally wrong for a company to want to buy labor that is less expensive. You, I'm sure, try to buy less expensive items when you go shopping. That alone does not make it exploitative--you must show that companies are paying a wage that is disproportionate to some accepted standard.

The reason is that local governments are often tyrannical and treat citizens with contempt, and citizens have few recourses against them when conflict arises. The most likely scenario for how this may change is through a generational shift, as more Chinese are exposed to new and different ideas about governance, and as the sense that citizens and communities have rights over and against the state gradually permeates society. Again, the most important way the US can aid this process is by standing as an example. Codes of conduct for US businesses operating in China are an excellent idea. Labor standards in international agreements are an excellent idea.

But these conflicts are arising BECAUSE Chinese are getting richer. People who are on the edge of starvation don't riot. They don't have the energy, and they have no power. It's people who start to feel that they have resources and power who make claims against government, get angry, rebel. Certainly, China has to change. But trashing US-China trade is not going to help that change along.

"lucky enough to get jobs"

Ah, I think you put your finger right on it here.

If not lucky enough to get paid a living wage, in a safe work environment. And then lucky enough to get health care benefits...

Just a small suggestion to many here about conditions in China.

1. Learn a little Mandarin. It's not all that hard, really.

2. Go to China. Walk around different neighborhoods. Go to a manufactuing city. Go to Beijing. Eat a local restaurants and food stalls. Go to a park. Talk to a few Chinese of differing backrounds and ages. Many, especially those under 35 and in the cities, speak English and they are just thrilled when you try to speak Chinese. Try to get a glimpse of understanding about how the Chinese feel about their country, their economy, their culture, their government, their future. Be sure to talk to a lot of high schoolers.

3. Come back and see if you don't have a completely different attitude.

Corvid

Certainly no one has a monopoly on nationalism, I'll agree with that.
.
What's really disturbing is your apparent sympathy with those who cracked down on the Tiananmen protesters. It so happens I greatly admire the protesters, who were extraordinary in their love of democracy but truly astounding in their courage standing up to despots. I guess we part company there.

I'm really becoming amused by some of the more bi-polar protectionist sentiments I.E "We shouldn't trade with the chinese because because they are poor & exploited, I couldn't wear their cheap socks without violating my conscience, I proclaim my solidarity with them...and why should we trade with them anyway? let them build up their own dang economy!"

Just a helpful note; regardless of the sincerity of your "solidarity", the number of Chinese who are impressed by Westerners (and Americans at that) criticizing their Government, & pooh-poohing their country is vanishingly small. As any good Realist would tell you, even people who live under illiberal regimes still identify strongly with their government & their leaders. The Chinese people have a lot of things they'd like to change about their country, but the cast judgements of relatively priveleged westerners on how they do things is only going to create backlash (see Iran)

And if you think that's bad, just wait until you see how well the "solidarity tariff" ends up going over.

I don't buy that multiple independent riots reflect primarily local discontent with particular parties. Many of the US race riots in the 60's were triggered by local allegations of police brutality, but the actual cause was clearly a wider discontent. If your problem is with the local boss, you go after him personally; if you're trashing your whole town, you've got a problem with the system.

"It means that people who live in grass huts and subsist on starvation diets can grow up to live in villas, eat fast-food beef noodle soup and drink imported whisky, and drive motorbikes"

Who is judging the quality of the grass hut lifestyle? I suspect an Amish farmer wouldn't consider these folks as deprived at all.

Mattsteinglass writes:

We're talking about new investment moving towards Vietnam rather than China, not Chinese factories moving to Vietnam.  

It strikes me that this is a distinction without a difference.  If Chinese capital creates a factory in Vietnam because labor costs are cheaper there, the factory created creates jobs for Vietnamese workers, not Chinese ones. 

Also,

You're talking as if there would have been something morally right about Pennsylvania sanctioning trade with Alabama when steel mills started to move to Birmingham because of cheaper labor; or ditto with textile mills moving from Massachussetts to South Carolina.  

The Constitution expressly forbids interfering in interstate commerce, so the question is moot.  However, even if this weren't true the comparison vis a vis Pennsylvania and Alabama or Massachusetts and South Carolina isn't appropriate.   For one thing, we have a system of national regulation concerning things like workplace safety and child labor.  I think a tax system which aids and abets this sort of movement is morally wrong, but that's a topic for a different evening's debate.

Do I think it "moral" for individuals to boycott products produced by unprotected workers?  You bet I do.  I don't try to foist my morality on anyone else in this matter, but I won't buy products from companies or agribusinesses which employ union busting tactics or exploit the powerless. 

and, last,  

hey, what does that remind me of? Oh yeah - London, Paris, Berlin, Manchester, New York...thought the "impossible to provide with jobs" claim is interesting, in light of widespread Western reports of labor shortages in Guangzhou. 

If you think it a good idea to recreate the 19th century hell's kitchen and five points in New York, or the 19th century Manchester with a life expectancy of 23--exactly half of the life expectancy of the rural areas from which the Mancusians flocked, I guess that's o.k.  I'd prefer not, and so it seems would the Chinese, who are now creating new, "green" cities, because the services in the existing cities, clean water, sewers, mass transit, and housing cannot absorb in-migrants at the pace they're entering.  The result is social displacement and crisis. 

Finally, "labor shortages" is too broad a term to describe the situation.  One can have a labor shortage and a labor surplus simultaneously.  And labor shortages can be caused by the inability to provide basic services to in-migrants.  The same province with the "labor shortage" "may cap the number of migrant workers it allows in because of the 'social problems' they bring, state media said".  Prowl around the China Labor Watch website for information about labor and labor abuses in China.

aMike

Another thing: when I wrote: "I don't imagine the Chinese are rioting due to their inability to contain their ecstacy at their gloriously-improved living standards." I thought I was being sarcastic. I didn't think anyone around these parts would actually try to point to the riots as evidence of how good things are going in China. It is a preposterous argument. Yes, people under serious starvation are too weak for violence, but I never said the Chinese were starving. And, yes, I know that there were periods of widespread starvation under Mao. But there was also widespread grassroots violence (instigated by the government) during the Cultural Revolution. Is that also an indication of how well things were going at that point, showing that people felt empowered and prosperous enough to wreck widespread havoc?

Again: what are you talking about? Of course I admire the democracy advocates who gathered in Tiananmen Square. That was 18 years ago. You are advocating putting sanctions on China today because they carried out a brutal anti-democratic repression 18 years ago. This is reminiscent of the neo-con argument that we should invade Iraq in 2003 because Saddam gassed the Kurds in 1987.

Like any analogy, it is addressed to a domain of similarity, one you implicitly defined by using the riots as evidence that things were getting better. Since I have refuted that point, you are now scurrying off to pretend you were arguing something else. The blacks who were rioting in the 60's would almost certainly have welcomed international support. They were a racially distinct minority of the population, and the rioters were, of course, a minority of the blacks. There is no particular evidence I know of that there is a distinct minority from whom most of the rioters were drawn, so the analogy does not begin to hold for the new argument you are attempting to make.