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Zack Beauchamp and the Free Trade Strawman

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Above: People who have clearly won because of free trade

Whenever Vox wants to defend free trade like an evangelist defends some dude walking on water, it gets Zack Beauchamp to write about it. There was of course the ridiculous fear-mongering about Bernie Sanders column he wrote a month ago, claiming Sanders’ ideas were basically declaring war on the global poor. A couple of weeks ago, Beauchamp decided to interview Gordon Hanson, an economist who has been critical of the excesses of free trade. The interview is designed to reinforce Beauchamp’s point that unrestricted free trade is the greatest thing in human history and that everyone who opposes it is supportive of global poverty. Throughout it, Beauchamp moves on from Hanson’s uncomfortable points and toward the points he himself wants to make. The whole thing reads, and convincingly so to many no doubt, as a strong defense that the present system of free trade through unrestricted globalization is the key to ending global poverty.

The problem is that Beauchamp, Matt Yglesias, and other defenders of this system have created a strawman of the opponents of the current system of free trade. For them, free trade is a noun. It’s a tangible thing. But of course trade is a system. Within a system, there are many, many choices people can make. What people like myself or Bernie Sanders or Richard Trumka or Elizabeth Warren or Sherrod Brown or any of the thousands of active free trade opponents writing or organization or politicking about these issues are arguing is that the present trade system is unjust. 1100 workers should not be dying in Bangladesh. Mexican farmers should have the right to stay on their land. Indian workers should not be living near foaming rivers. If Honduran workers unionize, their employer shouldn’t be able to just close the factory and reopen a few miles away in Guatemala. In other words, people want just trade, not no trade. I don’t want to take jobs from people in Bangladesh. I want them to stop dying on the job. I want their union organizers to not be killed. I want them to be able to access the legal system in order to press for their rights. I want them to be able to build a middle class. American companies and wealthy Bangladeshi politicians oppose all of these things. That’s the point of the global trade system. Any benefits to the people of Bangladesh are simply window dressing to the designers of this system. That’s what needs to change. As I argue in Out of Sight, globalization is not going away. Smashing Toyotas to protest the entry of Japanese cars into the U.S. market was unfortunate in the 1970s and those sorts of things should be avoided today.

But at the same time, the global trade system needs a number of improvements. First, Americans need jobs. They need good jobs. They need jobs that offer a hope for the future. That includes non-college educated workers. People like Beauchamp rarely even try to address this issue, except cheap bromides about education or saying that someday we should institute a universal basic income, which does nothing for the unemployed steel worker today. Second, western companies shouldn’t be able to pollute in poor nations any more than they can in the United States or western Europe. Third, western companies need to be held accountable for their subcontractors, including for working conditions, sexual assault on the job, workplace safety, wages, hours, firing workers for pregnancy, and physical punishment on the job. They control costs well, they can also control working conditions. Fourth, workers overseas should be able to form unions if they want them. Fifth, the U.S. has the right to control the conditions of work for what it imports and it should use those controls to ensure a more just system. Sixth, companies should not be able to move their factories because their workers have formed a union, whether in Rhode Island or Honduras. Seventh, U.S. agriculture should not be able to dump products on globally poor markets that undermine local production and force farmers into the cities to become the desperate workers in the outsource factories. Eighth, if there are going to be international courts like the Investor State Dispute Settlement courts, everyday people, both Americans and Bangladeshis, should have the right to use them to sue for the labor and environmental protections of trade agreements to be enforced.

None of this would end the current system of trade. It would simply shift the parameters of the system to be more fair for workers and farmers. The idea is to create dignified work around the world, not to keep all the good work in the U.S. and force the globally poor to remain poor.

But people like Beauchamp refuse to even consider the subtleties of these points. Instead, he’s beating down a strawman, over and over. He is knocking down arguments very few people are making. Sure, some blue collar workers might be saying that, although not really, because they need jobs. Who can blame them for this? Well, Zack Beauchamp can because he doesn’t really care about working people in this country. He claims to be concerned about workers around the world, but that also has to start at home. When Beauchamp starts putting forth programs to promote good jobs at home too, let me know. Until then, I’m sure he’ll be building up and knocking down more strawmen.

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  • LWA

    I refuse to even accept the implicit framing of being pro or anti “free trade” for all the reasons you list.
    It’s more correct to refer to it as the “current structure of trade laws and regulations”.
    It’s a constructed system of chutes and ladders designed benefit some interests and hinder others.

    • Dilan Esper

      The problem is Loomis opposes actual free trade as well.

      That sentence about American jobs gives the game away.

      • If thinking Americans should have work means I oppose free trade, fine. That’s completely different than saying I oppose trade.

        I love that we are at a point where actively supporting the unemployment of American workers is seen by some as the morally correct position to take and they are then incredibly self-righteous about how they are in the right.

        • Charrua

          The Fed decides whether Americans have work or not. You could have the most protectionist laws in the world and still have a ton of unemployment if the Fed thinks that wages are growing too much.
          Trade can influence which KIND of work (and not even the level of wages, just the sector).
          Now, I think that the policy of a ever lower inflation target (in place since the 80s) has hurt workers, and obviously, trade hurts specific industries and workers, but that’s a different issue of “Americans having work”.

  • sparks

    Building up and knocking down strawmen, now that’s a nice job.

    • Ahuitzotl

      tell that to the strawmakers

  • No Longer Middle Aged Man

    “Free trade” is like a religion for the absolutists, and as with religious fanatics there’s no arguing with them. Biblical literalists insist that every word in the Bible is true, rejecting both science and the concept of metaphor. Free trade literalists seem generally unaware of the assumptions behind theory, and how varying those assumptions changes conclusions. Similarly, they’re anti-reality in continuing to present “solutions” that have been demonstrated to not work for decades (e.g., retraining).

    What’s particularly strange is that many of them espouse “free trade” while supporting domestic business and industry regulation. Why not eliminate pernicious stuff like zoning and child labor laws if you believe that the market will deliver optimal solutions?

    I admit that logical consistency doesn’t always work in a world that doesn’t always operate on the basis of logic. But that’s not a justification for the logical incoherence that free trade absolutists generally present. Fundamentally they are internationalists who believe “more trade” = better.

    • JustRuss

      I think you’ve nailed it. Trade is obviously good: If I have 100 eggs and you have 50 pounds of cheese, trade lets us both have omelettes. So more trade must be better, ad infinitum, and anything that restricts trade is inherently evil. It’s ridiculously simplistic thinking, but there’s a nugget of logic at the core, and for an alarming number of people that seems to be enough. People like simple. Complicated is hard.

    • los

      eliminate pernicious stuff like zoning and child labor laws
      Because neofeudalism is the Koch Party’s goal, eliminating labor or any environmental laws are not at all the Party’s intention.

      if you believe that the market will deliver optimal solutions
      to the oligarchy

    • Ahuitzotl

      The problem with free trade that has always struck me is, it’s assumed that with free trade, both countries will be better off (i.e. more total goods will be produced), but that has breathtaking assumptions about the distribution of those total goods, that are hardly ever true .. e.g. the “country” might be better off because overall net GNP grows, but if that growth is +2% for the plutocrats and -5% for the working class, then, bzzt, category error, reprogram.

  • njorl

    I think there is an important point to make with regard to how US labor evolved from exploitative conditions to middle-class status.

    American labor was contending with American capital. Their ability to organize was pitted against American capital’s capacity to oppress them directly, and to corrupt their government. There was some additional capital, mostly English, which added to the opposition faced by American labor, but it was a feasible struggle. US labor was able to extract concessions which elevated their living conditions considerably.

    Bangladeshi labor is contending, not just with their own moneyed class. They are contending with the full power to corrupt and oppress of the entire world’s investment community. That struggle is not feasible. They can not make common cause with the labor forces of other poor nations. They have no hope of replicating the rise in status of American and European labor forces. It would be completely irrational to think that they could succeed against opposition which is so much more powerful than anything western labor movements ever faced.

    • DrDick

      While there is an element of truth to what you say, I think you overstate your case. There are already movements emerging to establish international labor solidarity and these have the potential to grow. Labor cannot win if it allows global capital to pit one against the others.

    • galanx

      Of course you could have said the same thing about Japanese labour 60 years ago, or Taiwanese labour 40 years ago, or Chinese labour 20 years ago.

      • njorl

        Japan and Taiwan were not engaging in free trade. Taiwan attracted very little foreign capital. They both practiced protectionism. China has 1/5 of the world’s population, so it’s ridiculous to lump them in with smaller countries. It’s not like China’s laborers are living the good life anyway.

        So no, you couldn’t say the same thing about any of those countries.

    • los

      China’s goverment/oligarchy is notoriously protectionist regarding its capital sector. I haven’t seen news regarding japan’s, north korea’s, or taiwan’s…

  • MPAVictoria

    Erik this is very good. Thank you.

  • postmodulator

    Nitpick: you have two “sixth” points.

    • postmodulator

      Maybe mention that you fixed it, so I don’t look stupid? Stupider, I guess?

  • UserGoogol

    Within a system, there are many, many choices people can make.

    Within a system, there are very few choices people can make, because systematic forces overwhelm any sort of human agency.

    • I think it’s very dangerous to downplay human agency because that’s a key factor in naturalizing something like free trade, which is a huge problem. The downplaying of human agency is a enormous flaw of Marxism, among many other ideological structures.

      Now, it’s certainly true that Bangladeshi workers and Mexican farmers do not have a lot of choices. But policy makers and corporations do have many choices.

    • DrDick

      Nonsense. These “systems” are the direct result of explicit, conscious decisions by human actors and not unalterable natural systems. Human agency creates and maintains these systems and it can also change them.

      • UserGoogol

        The whole is more than the sum of its parts. Connect a bunch of cogs together and you have a machine which behaves in far more complicated ways than the individual process of metal pushing against metal. Similarly, each individual person has a fairly limited number of options available compared to the overall behavior of society. You and I have especially little, but it’s also been well established on this site that, for instance, Barack Obama is rather constrained by politics too. Power is spread out across many players, and it is only through the very delicate coordination of this power that things of any significance happen.

        That said, I made a rather glibly broad point rather than actually delving into the particulars of this case. (I probably should not have hit submit comment when I did.) There’s various things that people could do to improve trade that are not being done. Although only so much is realistically on the table in trade negotiations, it’s clear that the TPP is focused more on promoting American national prominence and corporate interests than improving the quality of life of your average Vietnamese person. Things could be done on the margins and aren’t.

        • UserGoogol

          …but I guess I could also say that the attitude annoys me since I feel like one of the fundamental principles of progressivism is the need to accept half a loaf when that’s all that’s on the table. Erik is broadly speaking in agreement with that, but he definitely has a side which makes him more inclined to fight instead of surrender, so ehhhhhhhh, I dunno.

          • DrDick

            I am much more aligned with Erik on this, and I think history is on our side. I would argue that simply accepting half a loaf is antithetical to true progressivism. Always strive for the maximum gain for the most people, be willing to compromise in the short term, but keep pushing for more. Never give up and never quit fighting for a better tomorrow.

  • twbb

    “People like Beauchamp rarely even try to address this issue, except cheap bromides about education or saying that someday we should institute a universal basic income, which does nothing for the unemployed steel worker today.”

    As I think you and other commenters here have noted, there is also an implicit contempt among the lefty free trade clique for the working class in this country.

    • DrDick

      there is also an implicit contempt among the lefty free trade clique for the working class in this country

      Not just here, but worldwide.

    • John Selmer Dix

      There’s the problem that Beauchamp will almost certainly never feel the negative consequences of the policies he’s pushing for. Beauchamp’s parents are tenured philosophy professors, and Beauchamp himself writes for Vox. This wouldn’t be worth noting if it weren’t part of a larger trend of writers who are completely insulated from labor, and yet are convinced they know what’s best for working people.

      • Linnaeus

        Yeah, it’s easier to brush aside the costs when they are concentrated in particular areas or, as Erik points out in his book, hidden from view.

  • efc

    But what do you do when they say the changes you want aren’t an option. It’s trade on our terms or you are committed to killing third world children? Because that seems to be basically the argument. The changes you describe (and I would like to see too) are to these kinds of people, turning free trade into barely veiled protectionism. It’s not “free trade” at all and only “free trade” can help third world children.

    • You simply have to point out, again and again, the justice and correctness of the position. What else is there to do?

      • efc

        They don’t agree with your conception for justice, fairness, and don’t see your solutions as correct. It is not an argument you(we) can win. Like you said, it’s a theology that already makes complete sense. How can that be susceptible to persuasion?

        The only think I can think that might work is taking away what they want (or threatening to do so) unless some of your ideas are implemented. That would mean threatening to end these trade deals, not negotiating meaningless and ineffectual fixes.

        Like communism and the new deal, these people only act based on fear, not being persuaded they were wrong. If it becomes clear that without the changes you suggest we are going to significantly reduce the scope of these types of trade deals then maybe they will be convinced that trade plus policies they would other wise not agree to implement is better than significantly reduced international trade.

        • I know this is the internet but arguments don’t really matter. I’m not that interested in convincing someone like Beauchamp. I’m far more interested in trying to help people who don’t understand these issues. But ultimately, policy is about power, not persuasion.

          • efc

            So how do the people who want to implement the policies you endorse get that power?

            • Colin Day

              You have to persuade people, but you don’t have to persuade everyone.

    • Linnaeus

      This is one reason why I’m a little skeptical of the talk of labor and environmental protections in the TPP. In principle, it’s better to have those things in the TPP than not to have them. That, however, seems to go against what we’ve heard for so long about the necessity of low standards in poorer countries, since those low standards are part of their comparative advantage. In turn, that leads me to question how vigorous the enforcement of the standards in the TPP will be. It has to be done by parties to the treaty, and I’m not expecting the US to do much of that; certainly not a Republican administration and perhaps not a Democratic one, either.

      • efc

        Yup. All the protections for labor and the environment require a party to the agreement to initiate an action to enforce the protections (i.e. a national government). The AFL-CIO or Greenpeace can’t do anything directly. But of course the protections for businesses allow affected third parties (i.e. a multi national corporation) to directly initiate the process to enforce the protections in the agreement that apply to them or their interests.

        • Brett

          This. Without a private right of action to enforce the treaty language, you’re totally dependent on the national government to enforce it. That does not have a strong track record of success.

  • DrDick

    Excellent piece and I agree with all of it. I would add that one of the fundamental problems with “free trade” is that the only thing that is free is capital. All modern trade agreements contain provisions protecting multinational corporations from being held accountable and preventing any new laws which might cut their profits. I also favor international trade, but only fair trade, with strong labor, environmental, and other protections against the rapacity of capital.

  • These are all laudable goals, but we need to elect people into positions of power who actually believe them. Obama certainly doesn’t, and neither does Clinton.

    • I don’t think belief much matters. I actually don’t really care what Hillary Clinton believes, within certain parameters. I think that politicians largely respond to pressure. If there is real grassroots pressure around trade, someone like Obama and Clinton would likely back off to some extent. But the left is highly divided on this issue so there’s no real pressure.

      • Downpuppy

        Clinton opposes TPP. Sure, she would have supported it if the wind in the primaries wasn’t blowing against it.

        Hail, wind!

      • I think the evidence now suggests that politicians respond to those who finance them, regardless of what their constituents think.

    • MPAVictoria

      Easy there Bernie Bro.

      /Kidding
      //Sob

    • Brett

      It’s going to have to be really active interest groups. That’s how TPP is suffering setbacks today, and it’s really the only way you’ll get better trade treaties given that the issue is rather low interest for most Americans.

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  • xq

    So it’s a strawman because it doesn’t address your specific criticisms of the current trade regime? Or are you claiming that everyone agrees on the central claim made by Hanson, that trade is a necessary but not sufficient condition for development? Because it doesn’t seem to me that’s the case; many people have argued that alternative routes to development are possible and preferable (I’m sympathetic to some of these arguments.)

    Many of the other claims made by Hanson seem even more controversial, like that NAFTA reduced poverty in Mexico.

    • The strawman is Beauchamp and others claiming that opponents of the current system of trade believe things that they do not in fact argue.

    • Linnaeus

      No, not everyone agrees on the central claim made by Hanson, but it’s pretty much the consensus (or, at least, the dominant view) among opinionmakers and policymakers, which is reflected in US trade policy.

      • xq

        I agree with that, and don’t see why defending that consensus against its critics, who genuinely disagree, is beating on strawmen. When Beauchamp says “some have argued that exports weren’t critical to declines in Chinese poverty”, that’s a correct statement. It may not be Erik’s argument, but it’s not a strawman.

        If Erik does agree with the central claim, then maybe its not so much that Beauchamp is beating on strawmen as that there isn’t all that much distance between LGM and Vox on this issue…which has long been my view.

        That said, I do wish either Beauchamp or Hanson had mentioned some of those critics by name instead of attacking them in the abstract.

        • No Longer Middle Aged Man

          Export led growth is not at all the same thing as free trade. In fact, most countries that practice(d) the former work(ed) very hard to avoid the latter.

          • DrDick

            Every country, including the US and Western Europe, that transitioned from an agrarian to an advanced industrial society did so through massively protectionist regimes. “Free trade” would have devastated them, as it has the former colonial territories.

          • xq

            Right. Beauchamp/Hanson are defending the more globalized trade regime since the 1980s, not “free trade”.

        • Linnaeus

          One strawman, IMHO, is that critics of the current global trade regime are “antitrade”, something Beauchamp hints at in the linked interview and something that he (and others) are more explicit about in other writings. The implication is that if you don’t support or have some objections to trade as it is practiced now, then you really want autarky or isolationism.

  • mutterc

    This may just be clinical depression talking, but how can jobs go anywhere that has decent wages and working conditions?

    The strawman Vox argument is that if, say, Bangladesh had US-level wages and safety standards, no work at all would go there, it would either go somewhere else, or (if such standards were worldwide) stay in the US. (Or just not happen at all).

    On the other end of the continuum, if you can have wages and working conditions that are just barely better than subsistence farming, then you can have all of the world’s work that is possible to do non-locally. This is more or less what happens today AFAICT.

    So where’s the point in between where (globally) poor workers can have better wages and safety, but are still poor enough to actually get paid? How do we keep countries and/or corporations from defecting, when there are practically-infinite amounts of money on the line?

    • Brett

      I don’t think you try to actively set a wage level with these treaties. Rather, you set environmental and labor standards with enforcement, and then you let trade progress from there.

      • Right. Wages are another issue. I don’t think anyone is calling for Bangladeshis to make a $15 wage. I do think that labor and environmental standards as floors is a just place to draw the line.

        • DrDick

          Exactly. A point I have made here before is that professionals in India make about 1/4 of what they do in the US, but have a much higher standard of living than their American counterparts. The developing countries would still have a competitive advantage if they had to pay workers a living wage and meet basic workplace conditions. Over time, that would change, but by then they would no longer be underdeveloped.

  • Brett

    Good post.

    #1 is good, but you’re not going to get there through manufacturing anymore. The sector is just too mobile these days, and manufacturing employment worldwide is shrinking even with the race to the cheapest labor costs. The economist Dani Rodrik has been all over this.

    #2-5 are good, although I’m more pessimistic about it than you are. They can only shift the stuff that’s headed for western countries that way barring an enforceable treaty, and there’s stuff like illegal subcontracting that’s just incredibly difficult to police without vigorous enforcement from local authorities and courts.

    #6 is probably unenforceable. At best you can make it slightly more expensive to shut down factories while giving workers and their cities the right to try and buy the factory before closure. Although given that so many of these companies are lured to places with tax subsidies, you could probably require that they pay back the subsidies if they end up shutting it down short of bankruptcy within a certain time frame.

    #7 is good, or at least developing countries should have the right to impose agricultural tariffs if rich countries are subsidizing the agriculture (which they all are).

    #8 is good also. Definitely yes on this one, again in light of this essay you linked to a while back. Treaties will have all kinds of standards, but for them to truly be enforceable in the wake of easily corrupted national governments, you need a private right of action for groups to press national governments to enforce them.

  • Juicy_Joel

    “The present trade system is unjust. 1100 workers should not be dying in Bangladesh.”

    I tried to bring up this point in a discussion about free trade with an acquaintance (who is an associate econ prof. at a B1G10 Uni.) and his response was “Do the people of Bangladesh want a textile industry or not?”.

    Human suffering apparently is a prerequisite for economic development.

  • Rich C

    I totally agree Erik, but you could also point out that Beauchamp doesn’t even seem to understand the economics: he seems not to be able to grasp that the higher the incomes of working people in the US, the more they can spend on imports from poor countries, while the higher the incomes of workers in poor countries, the more they (or their employers) can spend on imports from the US (capital goods, finance). So there is no inherent conflict that requires workers in the US to accept lower living standards in order to boost the living standards of the global poor. Quite the opposite: higher wages in the US would have led to higher imports from China and even more rapid wage growth.

    The reason this happy pattern did not emerge, as Erik argued, is that governments, banks, and corporations have designed trade agreements so that large imbalances can emerge without any requirement that both/all parties to the agreement take steps to reduce them. So some countries (China, Japan, Germany) can go decades at a time with undervalued exchange rates, generating large trade surpluses at the expense of their trading partners. There is not reason why chronically imbalanced trade needs or should be tolerated, and it certainly does not necessarily lead to more rapid increases in poor country living standards.

  • Brien Jackson

    In other words, people want just trade, not no trade

    I have no doubt whatsoever that this is true of you (and me, for that matter) but the notion that this is universal is…not believable. There are, in fact, quite a few people who want to use U.S. economic might to prevent the migration of production from America elsewhere. This is what anti-trade Trump support is all about, for example.

    • JustRuss

      I don’t see being “anti migration of production” as anti-trade. If Carrier wanted to open a Mexican factory to expand into the Latin American market, good for them. Moving their factory for cheaper labor so they can cheaply import their products to the US market is not “just trade” in my book.

      • Brien Jackson

        I’m not talking about a micro sense, but rather a macro one. There is, in fact, a large contingent of anti-trade people who think America’s relative manufacturing capacity should remain at 1950’s-60’s levels, ignoring all of the unique structural factors that produced that which can’t reasonably be maintained. Or, in other words, these people think that Brazil, China, and India should be importing American products rather than building them, full stop.

  • anonymous

    The whole notion of “free” trade and “free” markets is a bunch of hooey. In reality it doesn’t exist.

    Libetarianish, Ayn-Randians would say to get govt regulations out of the way and let the markets be “free” of “oppressive” regulations. Then the free market will somehow optimize itself via the “invisible hand”.

    We all know that it is bull.

    Trade is always going to be constrained by rules. The only difference is whether the govt create rules to balance capital, workers, consumers and the environment vs “rules” created by the plutocracy to only benefit themselves. But either way, trade is constrained. It is never “free” and can never be free.

    So free trade in the Ayn-Rand sense is nothing more than trade constrained by the plutocratic oligarchs implementing a neo-feudalistic type system that is far more oppressive than any “statist” regime.

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