Friday, January 16, 2004

Michael Kinsley on Free Trade "Butters"

I just came across this excellent column by Michael Kinsely, whose views on economic policy I have often violently idisagreed. He rips apart the ridiculous arguments made by "fair trade" advocates against unrestricted free trade.

The "but" of Howard Dean's "free trade but" is more traditional (see the trade section of his Web site for a concise summary). He professes concern about lost blue-collar jobs here in America; about scandalously low pay and miserable working conditions in Third World factories that export to American consumers; about the ravaging of the environment by these same factories. Dean endorses the principles of the International Labor Organization, which include freedom to organize and bargain collectively, abolition of slave and child labor, and non-discrimination. He says he's all for trade—he just wants a "level playing field."

This package of concerns and rhetoric is more or less state-of-the-art for a mainstream Democratic presidential candidate. But it confuses, either naively or purposely, two different issues: guaranteed minimum standards for labor and equivalent standards in the United States and elsewhere. The hard-core free-trade position is that working conditions in other countries are none of our business. If someone wants to sell us stuff for a price we want to pay, that's all we need to know. Trade and the rising prosperity it brings will, if anything, increase the pressure for capitalism and democracy.

The reasonable free-trade position (i.e., mine) is that buying a product does implicate you to some extent in the process by which it was made. And there are working conditions so wretched and wages so low and practices, like child labor, so heartless that you do want your own government to ban imports of the product at issue, to avoid the taint of association and, with luck, to pressure the exporting nation to change.

But this is very different from demanding a "level playing field" on environmental regulations, worker health and safety, and so on. American standards on these things are a luxury of affluence. If we had insisted on these standards for our own economy while we were becoming affluent, we never would have gotten there. And indeed, the effect of a "level playing field" rule—blocking imports that weren't produced in accord with American-level regulatory standards—will not be to make jobs in poor countries as well-paying, safe, and good for the environment as jobs in America. The effect will be to wipe out those jobs.

And that is not just the effect of the "level playing field" concept. It is the very purpose. "Level playing field" advocates—including, most prominently, the labor unions—say that it will prevent American jobs from being stolen. Another way to say this is that it will prevent jobs in poor countries from being created. Essentially, the "level playing field" concept forbids poor countries to take advantage of their poverty. When poverty is their main asset, this is no favor. (emphasis added)

Couldn't have put it better myself. It's one thing to be against free-trade because you're interested in preserving your job, domestic consumers and foreign workers be damned; such a stance has a certain selfish integrity to it, however unconvincing it may be as a sales-pitch for protectionism. What is something else altogether, and far more offensive, is to claim to be in favor of "fair trade" for the benefit of the world's poor, when in reality the effect of your policies will be to keep these unfortunates mired in poverty - which I suppose does have its benefits for the "fair trade" crowd, in that it ensures that foreign-aid programmes, famine-relief efforts and anti-poverty NGOs will never run out of work to do.