I have been engaged in the trade debate for a long time. Long ago, people were told to buy American cars. This was before the foreign auto makers had much in the way of factories here. (And if you think Wall Street was what made them put the factories here, you’re wrong.) My initial instinct was that this was ridiculous. If US automakers didn’t make a product that people wanted, that wasn’t sufficiently reliable, and fuel efficient, then why should I?
This is the guy-on-the-street level argument to sell free trade. You get more for less. Same thing at Wal-Mart. The thing is, it really only costs you less out of pocket. The externalities are there, you just don’t pay for them. And that I believe is the real effect of conservative economic policies: tax cuts, lower interest rates, and lower prices by putting off all of the cost into externalities. It may cause a famine, a genocide, and a pandemic later, but that’s later. It’s the ultimate it irrational hedonism.
But consider a different case. The Bush administration has rejected the Kyoto treaty under the two wrong don’t make a right theory. I agree with them actually, that there are several bogus arguments in Kyoto. The first is the constant comparison of the US’s population to its consumption of fuels and production of carbon. Whatever our percentage of gross worldwide product is should be what percentage of carbon we are allowed. After all, if we make it and they can buy it, why shouldn’t it count against their (whoever they are) carbon quota? All that would do would force each country to have a gross worldwide product exactly the same as their population percentage wise. That’s an egalitarian dream even Marx never contemplated. Second, why should developing nations be allowed to develop at the expense of all of our health?
All of these are good arguments. Kyoto was the best that could be done, and so it should have been accepted as a starting point, but the Bush people used the above arguments as cover for their real agenda which was to externalize the costs onto nature to create fleeting temporal prosperity, then use that to keep power and profit from it. What a heist.
And why do we do that? Because we can — we’re the US, you have to accept our bargaining position as stronger, right?
But with the WTO we make no such pretensions. We act like we’re at the same basic level of bargaining as Brazil or Indonesia. Why? Well, of course the answer is that it’s about making profits — and if we can get the minimum labor cost, the minimum environmental overhead, and put off the externalities on these other countries it’s better than god forbid raising taxes to keep American workers healthy and educated and clean and safe.
So, perhaps the approach is consistent after all: do whatever to put off the costs on others or nature.
But I wonder why we couldn’t strike a better bargain with the WTO. If you want access to the best market in the world, you’re going to have to pay a tariff that will phase out over many years, which we will use to reeducate workers, provide for pensions, and whatever else needs to be done… and each phase will only phase in if we see that things are going well.
Trade is a more controversial issue than is presented. The Democrats may have to accept fault on this too… but can’t this be a winning issue for whichever candidate picks it up and asks “Why could we be given a better deal?”
Between Iraq, oil slavery, and trade, being a hyperpower just isn’t all it’s cracked up to be, I guess.