GLOBALISM ON THE ROPES
The Typical American Doesn't Have Much to Gain from Globalization
Mark Weisbrot is the co-director of the Center for Economic and Policy
Research in Washington, D.C.
"Power," Walter Reuther of the United Auto Workers once said, "is the
ability of a labor union like the UAW to make the most powerful corporation
in the world, General Motors, say 'Yes' when it wants to say 'No.' That's
power."
On December 1, 1999, as clouds of tear gas hovered over the streets of
Seattle, President Clinton said yes to 50,000 protesters, when he wanted to
say no. He agreed, in principle, to making labor rights an enforceable
condition for trade among the countries of the World Trade Organization.
That's not to say that he meant it - quite the contrary, in fact. The
process proposed by the administration would take decades, and is unlikely
to ever yield meaningful results. But that is not what mattered, since the
immediate effect of his statement was to scuttle the millennium round of
the WTO.
Clinton knew that would be the result of his speech; he didn't want it, but
he went ahead with it anyway. This is what happens when a broad
cross-section of labor, the environmental movement, the religious community
and campus activists put aside their differences to pursue a common goal.
This grand coming together also made for great theater: the Seattle police,
overdressed in their gas masks and riot gear; black-masked anarchists;
environmentalists in sea-turtle costumes; bare-breasted Lesbian Avengers
with "BGH-free" scrawled across their chests; and giant puppets and
protesters on stilts with huge glowing wings of the monarch butterfly (the
kind that seems to have trouble with the pollen from genetically modified
corn). Greenpeace floated a big green condom over the labor march that said
"Practice Safe Trade."
The pundits were not amused. The prospect that, as one businessman said at
the World Economic Forum in Davos the next month, "we could lose" seems to
have touched a raw nerve. Michael Kelly, writing in the Washington Post,
accused President Clinton of taking "a dive in Seattle for labor, the
enviros and the loony left." For Thomas Friedman of the New York Times, the
protests were "ridiculous," "crazy," carried out by "a Noah's ark of
flat-earth advocates, protectionist trade unions and yuppies looking for
their 1960's fix." George Will noted that "semi-autarky has been the left's
recurrent temptation. Protectionism is imperative for the left's agenda,
which is ever-increasing government allocation of wealth and opportunity."
Michael Kinsley assured readers of Time that "the WTO is OK" - without
saying anything about what it does - and urged them to "do the math. Or
take it on faith."
These mostly contemptuous dismissals betray an underlying intellectual
weakness. There are good reasons that the defenders of the status quo do
not wish to engage their critics on these issues. While they have been
largely successful in pretending that they have the bulk of economic
research and theory on their side, this turns out not to be true.
Let us begin with the simplest, commonly accepted definition of
globalization: an increase in international trade and investment. Is this
necessarily beneficial for everyone involved? Or even for the majority of
people in any given country? In the United States, trade is now almost
twice as large, as a percentage of GDP, as it was in 1973. Foreign
investment, both outward and inward, has also risen sharply.
At the same time, the median real wage in the United States has been
stagnant over the past twenty-six years. This one statistic tells a very
big story, a fact which the more ardent advocates either don't understand
or pretend they don't. Median: that means the fiftieth percentile, i.e.,
half of the entire labor force is at or below that wage. This includes
office workers, supervisors, everyone working for a wage or salary - not
just textile workers or people in industries that are hard hit by import
competition or runaway shops. Real: that means adjusted for inflation, and
quality changes. It is not acceptable to argue, as is often done, that the
typical household now has a microwave and a VCR. That has already been
taken into account in calculating the real wage.
This means that over the last twenty-six years, the typical wage or salary
earner has not shared in the gains from economic growth. Now compare this
result to the previous twenty-six years (1946-1973), in which foreign trade
and investment formed a much smaller part of the U.S. economy, and was more
restricted. During this time, the typical wage increased by about eighty
percent. This is one reason why it is so uncommon for anyone to defend the
era of globalization on its merits.
opportunities for a better world.
Full article at: http://www.tompaine.com/opinion/2000/03/03/2.html
Louis Proyect
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