A False Choice

As someone who passionately believes in fair trade, American jobs, and fighting global poverty, there is nothing more infuriating than the sort of dichotomy that commenters like Annie Lowrey and Dylan Matthews and Zack Beauchamp constantly push, that if one doesn’t support “free trade,” one supports global poverty. Is there any other issue in American politics where nominal progressives or even centrists portray the choice in such stark and moralistic terms, with no sense of nuance? I’m not sure that there is.
I articulated an entirely different version of trade in Out of Sight, one that seeks to slow down capital mobility in order to give workers both at home and overseas a chance to maintain a secure life while also having opportunities for economic growth and a rise out of poverty. That version of trade would force corporations to pay locally living wages, have good working conditions, stop sexual harassment and abuse on the factory floor, and most importantly, have enforcement mechanisms for stopping these problems through the supply chains and other tricks companies use to protect themselves from accountability. Such a system would provide incentives for companies to stay put and treat workers with dignity because they would not be able to bust unions or pollute at will by shuttering a factory and opening a new one. There might still be reasons to move around, but the most egregious would be controlled.

I’m not saying that I am offering the only alternative to the current system of free trade. I am certainly not. What we need is a meaningful conversation about trade that takes both global poverty and the American working class seriously. Neither strict protectionists nor free trade fundamentalists do that. The difference between the two sides is that the former are dismissed as white men in union jackets with out of fashion mustaches and the latter are the definition of Beltway respectability who look down on the American working class while talking of themselves as morally correct because they support ending global poverty without even beginning to deal with the exploitation of the global poor.

In any case, we need many ideas about trade in the conversation, much more than we have now. Here’s a piece by Geoff Gilbert contributing to that conversation.

Any real alternative to the current international investment regime requires confronting the power of private plutocratic capital. So what might a new international trade and investment regime look like?

For starters, it must promote a free exchange of goods and services, but, unlike the current system, it must do so on fair terms. The main idea must be that any fair and free trade and investment regime must expand the number of people who have a say in the investment decisions within and between countries that will determine where jobs will exist and on what terms for employees. Such a regime should give everyone a say, especially women, racial minorities, former colonized countries, and people of all minority sexual orientations and other non-mainstream persuasions who have been most marginalized by the plutocratic regime for centuries. Ideally, investment would be made in producers who share with employees, or better still, where all employees are owners. In short, a fair and free investment and trade regime needs to redefine the rights of capital by subordinating capital rights to human rights.

The sociologist Johanna Bockman analyzes the last attempt to create such an international order by the world’s relatively poor countries at the United Nations Conference on Trade and Development (UNCTAD) in 1964.

UNCTAD, which included on an equal basis all nation-states recognized by the UN, pursued what Raúl Prebisch, the Argentinian economist and UNCTAD’s first secretary general, called a “new international economic order.” It sought to upend the General Agreement on Tariffs and Trade (GATT), the contemporary international “free” trade and investment order, which effectively enforced the old colonial trading arrangements whereby former colonies, instead of developing their own manufacturing capacity, provided the colonizers with the raw materials needed for their high-margin manufactured goods. Yet, complicating the current false choice offered between the “free” trade status quo and protectionism, UNCTAD advocated for trade liberalization and opposed protectionism.

In order to build an international trade and investment order that could benefit all countries, UNCTAD called for “structural adjustment” of the international economy of a sort just a bit different from the austerity, privatization and trade liberalization programs of the same name that the International Monetary Fund has since imposed around the world. On structural adjustment, the Final Act of the 1964 UNCTAD conference stated: “Developed countries should assist the developing countries in their efforts to speed up their economic and social progress, should cooperate in measures taken by developing countries for diversifying their economies, and should encourage appropriate adjustments in their own economies to this end.”

This meant moving parts of the most profitable industries, concentrated in the wealthy Global North countries, to the Global South. It would have required either public capital investment or coercion of private capital to invest toward this purpose. These economic goals would have either displaced private capital with public investment or publically imposed accountability on private capital investment.

“Structural adjustment” would require time and the creation throughout the world of organic democratic organizations capable of facilitating democratic ownership and control of industry.

I’m not sure that I agree with all of this, especially because it then relies on Mondragón, an exception that proved the rule if anything ever has, as its evidence that this can work. But the broader point stands. What trade looks like needs to be a real conversation, not a binary between two choices.