"Divergence of Interests" is one way to put it.

April 20, 2007 8:53 AM

"The church of global free trade, which rules American politics with infallible pretensions, may have finally met its Martin Luther." A thorough summary in The Nation of the brilliant but ignored Global Trade and Conflicting National Interests by Ralph Gomory, former IBM Senior Vice President for Science and winner of the National Medal of Science. His heresy? Arguing, with supporting technical and economic data, that multinational corporations and their home countries have divergent interests in shipping skilled labor and advanced technologies overseas, and that this "divergence" is a net negative for the American economy and the American public. Globalization, he argues, has its losers, the United States paramount among them.
posted by Pastabagel (76 comments total)

Well, sure. So? As far as I'm concerned the important question is: does it create a fairer world in the end? It's about time we had some skills transfer between first-world and developing countries. It's not like they [first-worlders] don't get to flood our markets in return.
posted by Firas at 8:56 AM on April 20, 2007

Did he have any supporting data on the temperature of fire or the Pope's religion?
posted by DU at 8:57 AM on April 20, 2007

As far as I'm concerned the important question is: does it create a fairer world in the end?

Indeed, the only issue the ends. Who cares about the means?
posted by DU at 8:57 AM on April 20, 2007

Don't you dare strawman me when it comes to this stuff, DU. I can tackle on these issues all day long, don't throw this glib nonsense at me. Check out this sentimental nonsense:

"What made America much wealthier than the Asian nations in the first place?" Gomory asks. "We invested alongside our workers. Our workers dug ditches with backhoes. The workers in underdeveloped countries dug ditches with shovels. We had great big plants with a few people in them, which is the same thing. We knew how, through technology and investment, to make our workers highly productive. It wasn't that they went to better schools, then or now, and I don't know how much schooling it takes to run a backhoe."

This is bullshit from an economic development standpoint, and the author's typification of this guy as some sort of MLK standing up to a corrupt establishment is distortionist crap.
posted by Firas at 9:02 AM on April 20, 2007 [1 favorite]

Hey, I agree that it would be nice developing countries got more skills and capital. I just disagree that that's the only important question in the debate.
posted by DU at 9:04 AM on April 20, 2007

Um, he's talking about Martin Luther, duder who started the reformation leading to Lutheranism and Protestantism, not the Rev. Dr. Martin Luther King Jr.
posted by stenseng at 9:05 AM on April 20, 2007

I can assure you that rich, affluent Western countries are not chief amongst globalizations losers.
posted by Artw at 9:06 AM on April 20, 2007

Who cares? The main issue is how it effects the world as a whole. Free trade between the states in the U.S. helped make us the powerhouse we are today. Try to imagine commerce in the united states if Illinois could impose tariffs on cars made in Michigan. Those tariffs would have helped Illinois car makers in the short term, but in the long term?

That said there are some real problems with the way globalization is currently implemented. For example, look at NAFTA and US corn export. From what I've heard (this was on MyDD, so I'm not certan if it's accurate) Because US corn producers get huge subsides, the price of corn in Mexico is so cheap that it's making it difficult to employ migrant farm workers.

So naturally they go to where the money is, up north. But this, in turn, causes all sorts of political fallout that I'm sure you're familiar with.

What's needed is what's used inside the US (and now the E.U) freedom of motion. If globalization causes industries to go elsewhere, then workers should be able to go with them. And they should be able to get the same safety and workers rights protections they enjoy here.

And that's the other issue, workers rights, safety, and environmental protection all pose costs to production. An employer can move to another country with weaker regulation and have lower production costs even if they pay their workers the same. That's a big problem that needs to be addressed.
posted by delmoi at 9:07 AM on April 20, 2007

Oh, well, I'll just take your word for it then.


The reality is that globalization makes us all losers. That is, unless you sit on the board of a major international corporation...

They told us free trade and globalization would raise all boats. In reality, it seems that it simply drills the same sized hole in everyone's hull.
posted by stenseng at 9:09 AM on April 20, 2007 [1 favorite]

stenseng: yeah, got mixed up with the name while posting. The Martin Luther example is even more galling to me. I realize that it's The Nation though, so I'll give them leeway for writing like that.

DU: I just disagree that that's the only important question in the debate.

Well, yeah. I'm not a rampant "do it now!" free-trader, there has to be a lot of care about labour displaced in transforming industries. For what it's worth I'll concede that if American citizens decide that certain protectionism is worth the downside then they have as much of a moral right to enact it on their corporations and corporations doing business with their country as do people in other nations (ie. balancing out the playing field is not an imperative that trumps other ones.)
posted by Firas at 9:11 AM on April 20, 2007

Delmoi, your trade between the states analogy is flawed, in that there was legislative and electoral oversight to keep trade relatively fair within the United States.

In the globalist model, there's no international governmental structure answerable to voters to provide oversight of international trade.

Meanwhile, current "free trade" laws are designed to impair national sovereignty, and dissolve what little oversight does exist that might otherwise prevent abuse.
posted by stenseng at 9:14 AM on April 20, 2007

Free trade between the states in the U.S. helped make us the powerhouse we are today.

What made us a powerhouse was an extremely casual attitude toward the environmental impact of extracting natural resources combined with, post-WWII, being the only industrialised nation that hadn't been bombed halfway back to the middle ages. "Free trade" had fuck-all to do with it.
posted by Pope Guilty at 9:15 AM on April 20, 2007 [8 favorites]

"What made America much wealthier than the Asian nations in the first place?" Gomory asks. "We invested alongside our workers. Our workers dug ditches with backhoes. The workers in underdeveloped countries dug ditches with shovels. We had great big plants with a few people in them, which is the same thing. We knew how, through technology and investment, to make our workers highly productive. It wasn't that they went to better schools, then or now, and I don't know how much schooling it takes to run a backhoe."

This is bullshit from an economic development standpoint

Well, you only quoted the setup -- you didn't get to the punchline:

"The situation today is that the companies have discovered that using modern technology they can do all that overseas and pay less for labor and then import product and services back into the United States. So what we're doing now is competing shovel to shovel. The people in many countries are being equipped with as good a shovel or backhoe as our people have. Very often we are helping them make the transition. We're making it person-to-person competition, which it never was before and which we cannot win. Because their people will be paid a third, a quarter of what our people are paid. And it's unreasonable to think you can educate our people so well that they can produce four times as much in the United States."

Obviously this is an oversimplification, but he's trying to convey ideas for laypersons, not economists. The essential point -- that by exporting technology, we equalize technological advantage, which makes the U.S. "lose" because it can't compete on labor costs -- is well worth considering. Some of us who work in industries where this is happening can see all to well that there is a long-term societal cost.
posted by pardonyou? at 9:16 AM on April 20, 2007 [1 favorite]

And incidentally, this ties into the immigration issue- what we're seeing is the natural consequence of a world in which capital is free to move across borders at will but labour is not.
posted by Pope Guilty at 9:16 AM on April 20, 2007

The reality is that globalization makes us all losers.

Don't know what you mean by "us". The 500 million Chinese who joined the middle class in the past decade and the slightly smaller number of Indians who did likewise, would they count as "us"?
posted by storybored at 9:26 AM on April 20, 2007

The free-trade/globalization debate is a fascinating one but I have to say that article is a letdown. I was hoping for a new insight but sadly it's not to be found.

I find the insights here on MeFi on both sides of the debate more interesting. MeFi is the Martin Luther!
posted by storybored at 9:30 AM on April 20, 2007

MeFi is the door!

Who is the nails?
posted by Artw at 9:33 AM on April 20, 2007

The 500 million Chinese who joined the middle class in the past decade and the slightly smaller number of Indians who did likewise, would they count as "us"?

Of course they do. The really pertinent question here is: would the Chinese be better off today if they had developed industries to serve their own market instead of developing manufacturing plants for our cheap consumer products. Making stuff for the US is not the only way to pull a country out of poverty. Europe pulled itself out of poverty via a massive program of industrialization and human rights reforms. It's not clear to me that China is better off today as a manufacturing power serving the US than it would be if it had developed industries that served itself.
posted by freedryk at 9:42 AM on April 20, 2007

freedryk, I don't want to oversimplify your thrust, but that sort of native-industry protectionism has been a resounding failure in most countries that have tried it (India is pretty much the only country that managed to make hay of sealing off its markets. China might be another good example of a country that could have pulled that off.) Usually the native industry doesn't develop in a way that can outcompete foreign producers for even its own consumer market.

I'm trying to think of some theoretical models in relation to the article and really, to be honest, long-term overall value loss happens very rarely in free trade situations. I don't think it ever happens actually (that the loss of the domestic industry is greater than the collective savings of the domestic consumers.) I do understand that theoretical free-trade is nothing like the sort of tariff, subsidy etc. regime that litters the world right now.

I guess I sort of overreacted based on the way the article's intro and setup went. The policy choices that Gomory is advocating (basically to rid some of the incentives and add some penalties for moving value-addition overseas) aren't all that problematic and aren't really antithetical to free trade. It's clearly not a binary choice.
posted by Firas at 9:51 AM on April 20, 2007

Yeah, now that I think about it, when it comes to macro trade, net loss is devilishly complex to figure out, even in real world situations. The fact that we're talking labour rather than consumer goods and 'allowing labour jobs to leave' rather than 'allowing foreign producers to sell to us' makes this difficult in a way that standard free-trade analysis isn't. I think you have to look at price and affordability effects as well (eg. just because somebody is being paid less doesn't mean they're worse off if they can afford the same things that are now cheaper.)

Suffice it to say that his whole "well we'll end up worse off" is something that I'm really not convinced about. My main counter-question would be about how well American industry would do if they didn't 'go outside'? Are attempts at maintaining the status quo even more doomed (company goes out of business) than the 'move labor jobs outside' scenario?

Like I said Gomory doesn't seem to be saying that we should prevent free trade per se, so apparently I'm mainly arguing against a strawman here.
posted by Firas at 10:06 AM on April 20, 2007

"I'm sorry, Rev Luther, but the Post No Bills sign is quite clear."
posted by zippy at 10:12 AM on April 20, 2007

The main issue is how it effects the world as a whole. Free trade between the states in the U.S. helped make us the powerhouse we are today.

Sort of. We also had a national government with the power to regulate interstate commerce, from which descended all of our labor laws, product safety laws, and environmental laws. Everyone of this increases the costs of production, which is why many countries choose to implement them later rather than sooner. In addition, the First Amendment freedom of assembly gave rise to the labor union. China has banned labor unions, essentially.

Furthermore there is no authority with the power to regulate international commerce. Currently that's done by treaties, and not every country has signed every treaty, or follows each treaty.

I've long suggested that the US should pass a law barring the importation or sale of goods made in factories anywhere in the world that do not meet the standards of US labor laws. The effect of this of course, would be to raise the production costs overseas and disincentivize outsourcing, while maintaining some degree of moral credibility and integrity world wide.
posted by Pastabagel at 10:15 AM on April 20, 2007

O I gotta go to a meeting, don't close the comments till I'm back.
posted by infini at 10:22 AM on April 20, 2007 [1 favorite]

The main issue is how it effects the world as a whole. Free trade between the states in the U.S. helped make us the powerhouse we are today. Try to imagine commerce in the united states if Illinois could impose tariffs on cars made in Michigan. Those tariffs would have helped Illinois car makers in the short term, but in the long term?

So, if I follow your analogy, you're saying that if we allow completely unfettered economic globalization, Earth will soon finally be able to compete with Mars.

Awesome. Let's do it.

As for the linked article, I find this guy's analysis seriously lacking.

The author claims "it provides what the opponents of corporate-led globalization have generally lacked: a comprehensive intellectual platform for arguing that the US approach to globalization must be transformed," but all I see is a really myopic argument that completely ignores nearely a couple of decades of discourse around corporate globalization. There was a time not too long ago when you could have had more nuanced conversations about globalization than this with train-hopping crusty punks.

Talking about "American" multinationals is really anachronistic and kind of naive. Most of these entities have no allegiance to anything other than property tax relief, subsidides for foreign contract negotiation, and any other subsidies they can get from the governments of their "home" countries. NAFTA is their nation. GATT is their nation.

The question isn't one of X-flavour oligarchies vs Y-flavour oligarchies. Corporate-led globalization postits the global lower class against the global upper class, the only difference being that mobility for the former is tightly constrained by the same hand that unfetters the latter - if workers could organize across borders with the same ease granted corporations, the system would fail.

Gomory's arguments have been made before, and with less tunnel-vision. All I really see his contribution doing is justifying a more isolationist foreign-aid policy.

It's really, truly depressing to me how soon people forget, and old arguments have to be re-heated. This shit used to be basic. Now it's revolutionary?
posted by poweredbybeard at 10:30 AM on April 20, 2007 [2 favorites]

Profit-obsessed multinationals fail to act as good citizens. Shockerooni.

As for the US crying foul on globalisation......well, if it's good for the goose, it's good for the gander. The US, and to a lesser extent Europe, have profited fairly well from the forced opening of the world markets to their corporations. Now the shoe's on the other foot, they don't like it so much

As delmoi and Pope Guilty mentioned upthread, this kind of thing is what happens when capital is free to move and labour is not. (Which, BTW, is another means by which the rich get richer and the poor get poorer).
posted by Jakey at 10:35 AM on April 20, 2007

nearelynearly. Sorry.
posted by poweredbybeard at 10:36 AM on April 20, 2007

Or, you know, what poweredbybeard said.
posted by Jakey at 10:42 AM on April 20, 2007

freedryk writes "The really pertinent question here is: would the Chinese be better off today if they had developed industries to serve their own market instead of developing manufacturing plants for our cheap consumer products. "

Their own market? You mean the 800 million subsistence farmers?
posted by mr_roboto at 10:53 AM on April 20, 2007

You mean the 800 million subsistence farmers?

200 years ago most of Europe was composed of subsistence farmers, and they lifted themselves out of that without any richer countries to trade with.
posted by freedryk at 10:58 AM on April 20, 2007

The issue of whether your trade partner is richer or poorer is sort of a red herring here. It's about your industry and their market. Europeans took resources from colonies, manufactured products themselves (the value-add), and then sold them back to the colonies. (Incidentally this is exactly what a lot of multinationals are still up to vis-a-vis other countries; they use other countries' cheap labor but don't transfer the technology or skills or investment capital into the 'host' country, thus keeping the value-add in the family.)
posted by Firas at 11:04 AM on April 20, 2007 [1 favorite]

Or, you know, what poweredbybeard said.

Heh.

Between this and the AskMe thread, you and I are holdin' it down, Jakey.
posted by poweredbybeard at 11:07 AM on April 20, 2007

MeFi is the Martin Luther!

We need this thread to be exactly 95 posts, and then I'll print a copy and nail up somewhere.
posted by MikeMc at 11:08 AM on April 20, 2007

200 years ago most of Europe was composed of subsistence farmers, and they lifted themselves out of that without any richer countries to trade with.
posted by freedryk at 1:58 PM on April 20

And it only took them 200 years. China didn't build those factories. Western companies or western investment did.

a really myopic argument that completely ignores nearly a couple of decades of discourse around corporate globalization.

I'd like to see a modern economic analysis, not some sociological "corporations are evil" nonsense. This is an argument that can inform economic policy at the highest level, the way Milton Friedman did in the 80's. We have issues with foreign exchange rates, interest rates, trade deficits, shadow unemployment, etc that a lot of that discourse didn't address on a technical level.
posted by Pastabagel at 11:12 AM on April 20, 2007

freedryk
mr_roboto is right. Mrakets aren't magic.
and
Europe pulled itself out of poverty via a massive program of industrialization and human rights reforms.
What? That's nonsense. Post-WWII Europe didn't recover in a vacuum. It had the advantage of a huge trading partner (the US) and a massive influx of investment and assistance from said partner, partly for political (Cold War) and partly for economic (US dominance) reasons.

Jakey
As delmoi and Pope Guilty mentioned upthread, this kind of thing is what happens when capital is free to move and labour is not. (Which, BTW, is another means by which the rich get richer and the poor get poorer).
How are the poor getting poorer? People keep saying this in the thread, but what are they talking about? Certainly China, India, Southeast Asia, Eastern Europe and many other nations have benefited. In China and India alone hundreds of millions of people have had their situations improve. The rich may be getting richer, but so are the poor.

Of course there are problems with the system, and those are what need to be fixed. Problems like corruption, and lingering resistance to real free trade in the developed world like the sentiment expressed in this article. delmoi brought up the example of American corn subsidies hurting Mexican farmers, and proposed that what was needed was the free movement of labor. While it would help, what's needed is the end of subsidies by the EU, Japan, and the US. We're trying to get as many benefits from trade as we can while giving up as little as possible, which of course is natural. But what really needs to be done is bite the bullet and throw the doors open. That will mean the US having to find news ways to compete and be strong again, but that's good for everybody. Poor nations will be able to compete against non-subsidized agricultural products, and developed industries will have to actually fight to be efficient, rather than hiding behind the clout they have in their semi-protected markets.

Finally,
Pastabagel
I've long suggested that the US should pass a law barring the importation or sale of goods made in factories anywhere in the world that do not meet the standards of US labor laws. The effect of this of course, would be to raise the production costs overseas and disincentivize outsourcing, while maintaining some degree of moral credibility and integrity world wide.
What is the goal of passing this law? Think for a moment about its real effect. If you are just trying to force Americans to buy American goods, then it would help. But what about the rapidly growing nations that depend on that trade? You would basically collapse the global market. How is hundreds of millions of people being out of work and possibly starving "moral"? And before you just dismiss me of being a monster, I'm not an advocate of laissez-faire capitalism. There are problems in the free-market system that need outside influence to fix. This is not a black and white issue, and there are trade-offs. Raising costs of foreign goods doesn't just hurt the corporate heads, it means no work for the poor in poor countries, work that real can and is raising living standards. It's glib and thoughtless to just say we should require everyone to impose worker standards and not consider the massive repercussions. Any real solution has to balance worker's goals with economic gain.
posted by Sangermaine at 11:24 AM on April 20, 2007

the rich get richer and the poor get poorer

Okay, if this true then when those 500 million Chinese entered the middle class, 500 million other people somewhere else should have left the middle class. Right?

But as far as i know this didn't happen. Jobs were lost in North America, but 500 million people didn't fall into poverty. Am I missing something?

Sincerely,

King Martin Luther
posted by storybored at 11:27 AM on April 20, 2007

What Firas and Pastabagel said. (what? I'm agreeing with you?)

The point is that protectionism does not do two things:
1) Allow for economic development and competitiveness.
2) Prevent the negative consequences of globalization.

The argument that China and the US have equal technology but unequal labor costs is specious in the long run. Look at what's going on in Romania right now: it developed a thriving outsourced programming industry, but in the absence of a pegged currency wages have risen dramatically and it is no longer competitive. This happened in Portugal a while back, which is why its annual gdp growth is now on the order of 1.5%. Cheap labor is not permanent, and China knows this--that's why it's investing so heavily in Africa.

The only thing keeping Chinese labor cheap is the yuan, which is deliberately being undervalued. This undervaluation is gradually being relaxed. The long period of cheap labor and investment has created an internal market in China, which means the economy will not collapse even if export volume falls. Labor now done by the Chinese will shift to countries like Kenya and Nigeria within the next few decades.
posted by nasreddin at 11:33 AM on April 20, 2007

The US is crying foul on globalisation because the old system vastly privileged Americans, even poor Americans, over the rest of the world. The wealth is being spread more evenly, and Americans, who see a high standard of living- one much higher than the rest of the world- as their birthright, are quite upset at having the wealth spread evenly across the world.

Now, that's not to be taken as lacking a class analysis. There will still be the wealthy and the poor, and the gap is only going to grow. But what we're seeing is a truly global capitalism, rather than several islands of capitalism which trade with each other. If you've got a problem with globalised capitalism, I would suggest that it would be much more appropriate and much more productive to acknowledge that your problem is with capitalism itself.
posted by Pope Guilty at 11:36 AM on April 20, 2007

freedryk writes "200 years ago most of Europe was composed of subsistence farmers, and they lifted themselves out of that without any richer countries to trade with."

So you prefer military/mercantile colonial imperialism to free trade? Interesting. I've got to disagree with you, even on a simple lesser-of-two-evils basis.
posted by mr_roboto at 11:56 AM on April 20, 2007

Oh, and this zero-sum-game #1 USA rah-rah bullshit is just despicable.
posted by mr_roboto at 11:58 AM on April 20, 2007

Sangermaine: "what's needed is the end of subsidies by the EU, Japan, and the US"

Subsidies are OK. Americans pay for them, American farmers (or agrobusiness) benefit from them. I kind of like having farmers (agrobusiness can go hang), and would qualify that with "the end of export subsidies".

The problem is when American taxpayer money is being used to undercut farmers in poor countries who, contrary to orthodox economics, have no other way of making a living. What are the unemployed workers going to do? Start producing microchips? Right.

s/American/EU/g if you want.
posted by JoddEHaa at 11:59 AM on April 20, 2007

I'd like to see a modern economic analysis, not some sociological "corporations are evil" nonsense.

Fair enough. I would too.

But Gomory's assumptions, IMO, don't provide any sort of stable ground from which to begin. It's a few steps backward, rather than any sort of evolution of the discourse. That was the gist of my comment: a modern economic analysis has to acknowledge inequity, power and class, from the beginning. This article is useless in that regard.

And no one said "corporations are evil."
posted by poweredbybeard at 12:01 PM on April 20, 2007

poweredbybeard: "This article is useless in that regard"

I think that is the main problem here. It's impossible to know what Gomory really means from the article. His theory might make sense, but nobody in this discussion has any chance of knowing.

I made a reservation of the book from my library. Apparently that's all I know.
posted by JoddEHaa at 12:15 PM on April 20, 2007

200 years ago most of Europe was composed of subsistence farmers, and they lifted themselves out of that without any richer countries to trade with.
posted by freedryk at 1:58 PM on April 20

And it only took them 200 years.
posted by Pastabagel at 2:12 PM on April 20

With the additional help of systematic plunder of trade with the new world.
posted by peeedro at 12:21 PM on April 20, 2007

Sangermaine How are the poor getting poorer? People keep saying this in the thread, but what are they talking about? Certainly China, India, Southeast Asia, Eastern Europe and many other nations have benefited. In China and India alone hundreds of millions of people have had their situations improve. The rich may be getting richer, but so are the poor.

Wealth is not only an absolute term, it's also a relative one. By most measures, the wealth inequality in the US and UK has significantly increased during the globalisation era.

If you don't think that the 20% of the US population relegated to second class health care and education are in poverty, then I guess we're using different metrics.

Oh, and those 500 million peasant farmers are now 500 million component pickers. An improvement? Maybe. Workers paradise, I don't think so.
posted by Jakey at 12:41 PM on April 20, 2007

@ poweredbybeard - we'll smash these capitalist running dogs yet!
posted by Jakey at 12:44 PM on April 20, 2007

Jakey writes "Oh, and those 500 million peasant farmers are now 500 million component pickers. An improvement? Maybe."

Maybe? Maybe!? Do you know anything about subsistence farming? If it doesn't rain, you starve. 30-40 million Chinese peasants died from famine in the 50s and 60s. Yeah, maybe they're better off in an industrialized economy.
posted by mr_roboto at 12:45 PM on April 20, 2007

His proposals are not unreasonable, if you read far enough. Just cap U.S. trade deficits and create tax penalties for foreign investment.
posted by jeffburdges at 12:47 PM on April 20, 2007

Indeed, the only issue the ends. Who cares about the means?

My understanding of the topic -- and it may not be a complete understanding, although I'm currently studying it -- is that historically and currently the "ends" of the free market appear to include untenable welfare situations and excessive overcrowding in prisons.

So actually, I'd love to have a conversation about the ends one of these days. It's a fascinating and surprising topic on all fronts, and one can conceivable make the case that pursuit of a free market and maintenance of a democratic society will always be mutually exclusive goals, no matter how much our (the US's) national identity is based on it being otherwise.
posted by davejay at 12:55 PM on April 20, 2007

conceivably
posted by davejay at 12:55 PM on April 20, 2007

the rich get richer and the poor get poorer

Okay, if this true then when those 500 million Chinese entered the middle class, 500 million other people somewhere else should have left the middle class. Right?

Neverminding that you're conflating two different trends, middle class != rich. In a global context especially, middle class doesn't necessarily mean anything beyond probably knowing where your next meal is coming from.
posted by poweredbybeard at 12:56 PM on April 20, 2007

Now Gomory is attempting to re-educate the politicians in Congress. He has gained greater visibility lately because he has been joined by a group of similarly concerned corporate executives called the Horizon Project. Its leader, Leo Hindery, former CEO of the largest US cable company and a player in Democratic politics, shares Gomory's foreboding about the destructive impact of globalization on American prosperity.

...

Gomory's critique has great political potential because it provides what the opponents of corporate-led globalization have generally lacked: a comprehensive intellectual platform for arguing that the US approach to globalization must be transformed to defend the national interest.

here's my obligatory link to the comprehensive intellectual platform for arguing that US-led "globalization" must be transformed to defend the global interest.

The point of this article is that this author is one of the elite--the article is "the Establishment rethinks..." Martin Luther was of the priestly caste himself. His words matter, whereas we lowly plebians on metafilter can create a post-capitalist virtual society and have no effect on the elite's policy debate.

It's akin to Jeffrey Sachs writing his book on international aid: it's hardly a new idea that aid should be based on what the self-determined economic needs of needy countries are, rather than on what the donor countries want to give; what is different is that the person advocating the idea is in an important position in the United Nations, so it is an idea with traction.

It's not news that the powerful are stupid, but that they may actually be analysing their own actions, and paying the attention that the rest of us are forced to pay in order to deal with how they change the world.
posted by eustatic at 1:00 PM on April 20, 2007

Or, you know, what Jakey said.

mr_roboto: Maybe? Maybe!? Do you know anything about subsistence farming? If it doesn't rain, you starve. 30-40 million Chinese peasants died from famine in the 50s and 60s. Yeah, maybe they're better off in an industrialized economy.

Red herring. Asking whether the peasants are better off relative to subsistence farming is irrelevant at best, cynical and manipulative at worst. The real questions are whether or not they're as better off as they could be relative to the comparable elites; whether their lot relative to their global class counterparts has increased at pace with same for Chinese elites, and whether they have the same mobility within a global class structure

Or are we only talking in a global context when it comes to rich people?
posted by poweredbybeard at 1:04 PM on April 20, 2007

poweredbybeard writes "Red herring. Asking whether the peasants are better off relative to subsistence farming is irrelevant at best, cynical and manipulative at worst. The real questions are whether or not they're as better off as they could be relative to the comparable elites; whether their lot relative to their global class counterparts has increased at pace with same for Chinese elites, and whether they have the same mobility within a global class structure"

Why? This seems like a pretty arbitrary rule, here.

I think not starving is important, don't you?
posted by mr_roboto at 1:05 PM on April 20, 2007

Jakey
Wealth is not only an absolute term, it's also a relative one. By most measures, the wealth inequality in the US and UK has significantly increased during the globalisation era.

If you don't think that the 20% of the US population relegated to second class health care and education are in poverty, then I guess we're using different metrics.

Oh, and those 500 million peasant farmers are now 500 million component pickers. An improvement? Maybe. Workers paradise, I don't think so.
This is what I don't understand about the counter free-trade arguments. Who said anything about worker's paradise? I'm talking about people having a steady source of food and not dying. About being able to buy the basic necessities because you have an income. Of course wealth is relative. That statement is meaningless. If you don't think that people being able to live on a stable diet is a good thing, then we use different metrics. I'm not talking about the US and UK, I'm talking about places where before they had nothing, now many have something. Yes, relative to the US, EU, or Japan they are quite poor. But if you go from utter poverty to being able to feed your family, even if relatively you're still poor, I'd say that's a start, wouldn't you? There are more than just the extremes of "workers' paradise" and "dystopian capitalist nightmare". In the real world, you try to make things better as well as you realistically can. No one is saying or has said we're at paradise. We always need improvement. But hundreds of millions of people really are better off now than before, and that's a start.

poweredbybeard
Neverminding that you're conflating two different trends, middle class != rich. In a global context especially, middle class doesn't necessarily mean anything beyond probably knowing where your next meal is coming from.
Uh, that means a hell of a lot to the billions of people who, you know, didn't know where their next meal was coming from. That's something to build on. Once we've got that, we're in a better position to fix things like healthcare, education, working conditions, etc. I just can't comprehend how someone could even say that people now being able to eat on a regular basis is nothing. It boggles the mind.
posted by Sangermaine at 1:07 PM on April 20, 2007

Sangermaine- I didn't say that. I agree wholeheartedly with everything you said. I just don't take it as a sign that inequality is shrinking, and I certainly don't intend to sit back and assume that, this time, those in power will do right by the rest of us.
posted by poweredbybeard at 1:12 PM on April 20, 2007

poweredbybeard
Red herring. Asking whether the peasants are better off relative to subsistence farming is irrelevant at best, cynical and manipulative at worst. The real questions are whether or not they're as better off as they could be relative to the comparable elites; whether their lot relative to their global class counterparts has increased at pace with same for Chinese elites, and whether they have the same mobility within a global class structure
mr_roboto is right. What you're saying is completely arbitrary. Absolute conditions, like starvation, do matter, to the people who are starving. So what if they're not "keeping up" right now? How about getting to the point where they're not dying, then equalizing the classes? A peasant who died from starvation probably isn't worrying too much that his "lot relative to their global class counterparts has increased at pace".
posted by Sangermaine at 1:13 PM on April 20, 2007

Or, just see my answer to mr_roboto above
posted by poweredbybeard at 1:13 PM on April 20, 2007

So what if they're not "keeping up" right now? How about getting to the point where they're not dying, then equalizing the classes?

Lovely. Let's do it.

The people in power won't.
posted by poweredbybeard at 1:14 PM on April 20, 2007

poweredbybeard
Ha, sorry. I guess I'm being a little too quick on the trigger today. You're right, I think we're agreeing. This issue just gets my dander up.
posted by Sangermaine at 1:15 PM on April 20, 2007

mr_roboto: Why? This seems like a pretty arbitrary rule, here.

Because this discussion started when someone took issue with the assertion that the rich are getting richer and the poor are getting poorer. If we're going to say that isn't true because, look, Chinese peasants are eating better, well, that only addresses half the equation.

Let me reiterate my position: people not starving = good. :)

Sangermaine: Heh. All good. Me too.
posted by poweredbybeard at 1:19 PM on April 20, 2007

poweredbybeard writes "Because this discussion started when someone took issue with the assertion that the rich are getting richer and the poor are getting poorer."

Sorry; I guess I wasn't following all strains of the discussion closely.

Here's a data point for class equality, though: Japan was an extremely class-stratified society up until to boom years of the 50s and 60s, which were based on global exports and which facilitated increasing income equality and a decreasing sense of class. Of course, this was coupled with a tax system that discouraged cross-generational accumulation of wealth and a generous pension system. You need both though: free trade can definitely facilitate economic growth, but it's useless without sound domestic tax and welfare policy. Which the US doesn't have, but that's the US government's fault, not free trade's fault.
posted by mr_roboto at 1:34 PM on April 20, 2007 [1 favorite]

"Free trade means the rich get richer while the poor get poorer" is the old and busted paleo-Leftist argument that is being vigorously debunked worldwide as we speak. The argument you should've moved onto by now is "Free trade means we all get richer, but the environment gets degraded."
posted by hoverboards don't work on water at 1:35 PM on April 20, 2007

mr_roboto: Interesting point. Thanks for bringing it up. And I'd tend to agree re free trade, but thanks to neo-libs' (largely successful) attempts to convince people that their rape-and-pillage approach fits the bill, I don't find that term terribly useful anymore.

I'd only add that those domestic policies need to be enacted in tandem with comparable international policies. Otherwise, domestic wealth-redistribution programs can actually end up being a huge drain on the economy and the public sector, since they end up the only recourse for folks getting screwed by the international trade policies those same governments are penning with the other hand.

(And even given policy consistency, there's still the question of whether state social infrastructure is enough. I'd say no, and treat it as a simple innoculation at this point; but that's a whole other discussion :) )

hoverboards: If belief in a widening gap were debunked, I expect this thread would be full of all sorts of refutations. I haven't seen any. (Remember it's not just a question of GDP/capita. It's a matter of real wages, purchasing power, etc.)

You're right about ecology, though. Thanks for pointing it out: I don't want to sound like I'm saying everyone should have the American middle class standard of living; that would be a disaster. We don't have nearly enough Earths for that. Gawd, we haven't even touched those issues yet...

...I'm game if you are :)
posted by poweredbybeard at 1:51 PM on April 20, 2007

<>em>You need both though: free trade can definitely facilitate economic growth, but it's useless without sound domestic tax and welfare policy. Which the US doesn't have, but that's the US government's fault, not free trade's fault.

I favorite'd your comment, but wanted to say something about the last bit here -- my understanding is that a free market, by definition, is one that operates without any oversight or interference whatsoever. The trouble is, by far the most successful historical examples of a free market have occurred within an environment that is tightly controlled by the Government in power, and so arguably wasn't a free market at all unless you pretend that the oversight and policies didn't exist.

So while it is certainly the US Government's fault for living the lie, it is also an inherent flaw in the concept of a free market in that it is defined as an unregulated market, yet historically has only been successful when regulated into existed.
posted by davejay at 1:51 PM on April 20, 2007

Argh, HTML tragedy! If a mod would fix that, I'd be grateful, and yeah, I need to preview.
posted by davejay at 1:52 PM on April 20, 2007

Anti-globalization activists in the developed countries and first and foremost concerned with protecting jobs in those countries. Claims of motivations for protecting workers and environments of developing countries are mostly a facade to put a liberal gloss on what is essentially a form of nativism. The facade is also often grossly patronizing, cherry-picking the worst consequences of globalization while ignoring the greater number of endorsements from the developing world, particularly its workers.

I think we're all better off for trade, and would be even better off with the free movement of labor. But even were this not true, and even were it the case that globalization means an impoverishment of the US and an enrichment of the the developing world, I'd still support it because, frankly, the US and Europe built a portion of it wealth on exploitation of both the resources and the peoples of the developing world in the first place.
posted by Ethereal Bligh at 1:52 PM on April 20, 2007

Anti-globalization activists in the developed countries and first and foremost concerned with protecting jobs in those countries. Claims of motivations for protecting workers and environments of developing countries are mostly a facade to put a liberal gloss on what is essentially a form of nativism.

Damn, that's a mighty big brush there. How did you even get it in to the paint can?

Nearly every "anti-globalization" activist I know is completely in favour of trade and international integration; they just want it done equitably, sustainably, and driven by the majority. Thanks for playing, though.
posted by poweredbybeard at 1:58 PM on April 20, 2007

poweredbybeard: Nearly every "anti-globalization" activist I know is completely in favour of trade and international integration; they just want it done equitably, sustainably, and driven by the majority.

True. There is even a (logical) proof that the "anti-globalization" movement is a figment of the neoliberal imagination. The movement is a global movement, it is impossible to be anti-globalization and global at the same time (they would have to be against themselves). Anti-globalizationers don't exist. QED.

But, boy, are people struggling with finding alternative terms. alter-globalization? "The new movements"? Nah.
posted by JoddEHaa at 2:16 PM on April 20, 2007

I think poweredbybeard 's first comment waay upthread is the most pertinent -

Talking about "American" multinationals is really anachronistic and kind of naive. Most of these entities have no allegiance to anything other than property tax relief, subsidides for foreign contract negotiation, and any other subsidies they can get from the governments of their "home" countries. NAFTA is their nation. GATT is their nation.

"American multinational" is becoming an oxymoron. Of course their interests diverge with the national interest. The corporations manage this by subverting and corrupting the national agenda active lobbying, political support, and if the going gets truly tough, they will just pack and go. Most American corporations will be patriots til the tax bill or laws starts to hurt the bottom line.

Tip: Buy up office space in the Caymans
posted by Artful Codger at 2:16 PM on April 20, 2007

“Damn, that's a mighty big brush there. How did you even get it in to the paint can?”

I borrowed one of the cans used by some anti-globalization guy.
posted by Ethereal Bligh at 2:22 PM on April 20, 2007

From the article:

Still, it will take politicians of courage to embrace his ideas and act on them.

I think I found your problem.

I ask Gomory what he would say to those who believe this is a just outcome: Americans become less rich, others in the world become less poor. That might be "a reasonable personal choice," he agrees. "But that isn't what the people in this country are being told. No one has said to us: 'You're probably a little too rich and these other folks are a little too poor. Why don't we even it out?' Instead, what we usually hear is: 'It's going to be good for everyone. In the long run we're going to get richer with globalization.'"

Did anyone read this paragraph? Because it seems to go to the heart of the debate here. The marginal impoverishment of Western countries in conjunction with the substantial enrichment of the Third World might very well be a laudable goal, but shouldn't there be a public debate about it in politics? Shouldn't it be something we opt for as democracies rather than it simply sneaking in through lack of articulate alternatives?
posted by Ritchie at 4:05 PM on April 20, 2007

Hmm. I'm not sure thinking of people getting richer/poorer as a zero sum game really works in all cases.
posted by Artw at 4:25 PM on April 20, 2007

What I found powerful in the article is the exposure of the mischaracterization of what globalization really is and its potential to adversely affect the US.

I am all about countries developing / fair trade / sustainable development; but I am also for US citizens - especially workers - to understand the process that we are engaged in.

In the next 50 years the world is going to change quite a bit. It would be nice not to get completely blindsided.
posted by pwedza at 11:13 PM on April 20, 2007

Stiglitz articulated it well in his latest book, imho
posted by infini at 12:09 AM on April 21, 2007

OMG, are we approaching some kind of consensus?

I think that the concept of globalisation is not necessarily a complete bete noir, assuming that there is equal movement of labour (the poor) and capital (the rich). Unfortunately, as implemented at the moment, and proposed in the article, this is not the case. Also, there needs to be some mechanism for forcing some measure of wealth redistribution both within and between nations. Continuing polarisation will lead only to more economic and political strife.

Gomory is essentially advocating that the US, having scaled the economic heights, should pull up the ladder after them. By extension this would also hold for most of the rest of the Western world. and ad absurdum would lead to class warfare. I don't think that any reasonable person would suggest that this is an equable solution to the issue.

Sangermaine OK, I'll concede that the lot of the average Chinese peasant may have improved, but this was not as a result of some benison doled out by a benevolent capital base. In relative terms, the gap between those who financed the industrialisation and those same peasants has probably increased as a result of the undertaking.
posted by Jakey at 9:04 AM on April 21, 2007

I'm going to throw something out for discussion. After I read the article on Yaleglobal a couple of days ago, my first thought was that Oh goodie, they're finally waking up to the fact that the MNC's have no beneficiary of their actions in mind other than their board of directors and their shareholders. Thus unless nations step in to ensure that as economic growth and wealth creation takes place, there's a balancing of investment back into the infrastructural and social needs of the citizens.

Without this, we get the effects that the author is trying to convey.

just imho
posted by infini at 10:05 AM on April 21, 2007