Inspired by the controversial work of William Baumol and Ralph Gomory, William Greider argues that those of us who oppose protectionism today are mindless members of “the church of global free trade” [“The Establishment Rethinks Globalization,” April 30]. But it is Greider and his ilk who are blinded by a faith wholly at odds with reality. If it were true that the developing world’s large supply of highly skilled but low-paid workers inevitably attracts capital away from high-wage countries such as the United States, foreign direct investment in open developing countries would be higher than in the United States. It’s not. In 2006, China attracted $46 of FDI per capita; India attracted just over $14 per capita; the United States attracted $578 per capita.
DONALD J. BOUDREAUX
Chair, department of economics
George Mason University
The Church of Free Trade has a jealous god who, like Moloch, requires the sacrifice of our children. I’m happy to see opposition to its doctrines gaining strength.
Port of Spain, Trinidad and Tobago
Neither of Gomory’s proposals to discipline multinationals in the US national interest is likely to work without international cooperation. A unilateral attempt by the United States to balance its trade will almost certainly provoke a trade war with other nations and could trigger a worldwide depression. In other words, the only effective way to serve the US national interest is through international negotiation. And this requires an agreed multilateral framework for the management of the world economy in the global social interest. Addressing poverty, social exclusion and environmental degradation, and equitable sharing of the benefits of globalization, would be the main objectives.
University of the West Indies
William Greider’s article brought to mind the image of Robert Owen (1771-1858), the English utopian socialist whose management of large factories made him a critic of capitalist industry. Owen thought education was the way to mitigate the horrors of the industrial revolution. He thought he could convince the industrialists to make the factories more humane and strengthen the economy at the same time.
Now Greider thinks Ralph Gomory, once a senior vice president at IBM, can convince the multinationals to make changes that will benefit US workers and strengthen the economy at the same time. Gomory’s plan will mean abandoning the “pure trade” theory by passing tax restraints on industry. It seems utopian to believe that the multinationals would accept such limits. As long as there is so much cheap labor worldwide, American workers will be sacrificed.