Hear, hear !
CB
>>> Jim Devine <[EMAIL PROTECTED]> 05/10/00 12:07PM >>>
>But when you support quotas against imports of textiles from Africa, that
>is exactly the choice that you are making...
but if the "free market" (and its supporters) insists that the costs of
increased import competition be borne by the least-skilled (and least-paid)
of manufacturing workers, what choice do they have but to defend their
families by supporting protectionism (often allying with their distasteful
employers)?
I don't think their support for protectionism makes any sense _in the
abstract_ and _in the long run_ (when we're all dead, right?), but looking
at the concrete situation from the perspective of those who suffer the
costs of the neo-liberal program, it does make sense. People defend their
living standards when they're under attack, right? (Similarly, I can
imagine that almost all tenured professors would defend the institution of
tenure against "free trade.")
Neo-liberalism (like its forebear, the free-trading British liberalism of
the 19th century) makes grand promises that "free trade" will raise global
efficiency, with the tacit implication that the benefits of that rise in
efficiency will accrue to all, including those whose lives are most
disrupted by "freer trade." This implication conflicts with economic
theory, which says that individual groups of people may easily _lose_
despite global increases in efficiency. (It's only with
always-to-remain-hypothetical compensation that such movs pass the Pareto
test.) The powerful -- not only capitalists like the dreaded Roger Milliken
but also the technobureaucrats like Lawrence Summers -- work hard to ensure
that all of the benefits of rising efficiency accrue to themselves. (It's
called "rent seeking" in the lit.) The textile workers thrown out of jobs
thus get denied any of the benefits, getting little or no compensation for
the costs of the disruption to their lives by the "freer trade." The rise
of unemployment that results from trade-related changes weakens their
bargaining power even further (at least temporarily).
The powerful also strive to make sure that the African and other workers
who get the textile jobs get few benefits, perhaps not enough to compensate
for the loss of non-market sources of sustenance and the disruption of
their lives by the commercialization of agriculture. These textile workers
-- also lacking the clout allowing them to capture the efficiency gains --
find themselves in a world-wide process of competition in which those firms
with the lowest wage/labor productivity ratio win, encouraging the "race to
the bottom." (The global fall in wage/labor productivity ratios -- which
works hand-in-glove with the process of competitive austerity and
export-promotion encouraged by the IMF/World Bank -- encourages world
underconsumption tendencies, which threaten to undermine the demand-side
ability to _realize_ the efficiency gains.)
All of this assumes that freer trade raises global efficiency. It likely
also means a global lowering of environmental standards, which means an
increase in external costs. This encouragement of the raping of nature (and
cost-dumping on other human beings) may easily swamp the more
straightforward gains from trade. That, plus the largely-successful efforts
by the powerful to grab the benefits of trade for themselves, leaves little
for the workers.
Jim Devine [EMAIL PROTECTED] & http://liberalarts.lmu.edu/~jdevine
