In some of these trade fights, there have been strange coalitions between presumably leftish forces and right-wing Republicans and reactionary businesspeople like the anti-union textile magnate Roger Milliken. How do you feel about those alliances?
What's happened has more to do with where the public is than where the prominent figures of the left or the right are. On a handful of issues, like globalization, campaign finance and corporate welfare, I see that people you would think of as really right wing and people you'd think of as the left of the left are closer to one another than to moderates or centrists. Obviously people agree a lot more on what they're against than on what they are for, and what they are for is very different, depending on whether you are Pat Buchanan or Ralph Nader.
We have to be wary of nationalism, particularly economic nationalism, as the alternative to global free trade because I think that sets us up with a partnership with nation-based capital that overlooks the fact that business is still going to follow the same logic of profit-making domestically. Some idea of a nationalist team with domestic capital sends us right into the same problems that we're trying to solve. It sets us up with partnerships with domestic unionbusters and the kind of "us" versus "them" policies that Buchanan is all about--it's terrifying.
Coping With Consequences
It's argued that freeing up trade has benefited mainly the rich and has resulted in lower incomes and less security for everyone else.
Through much of the postwar period we let markets expand gradually at the same time that we made sure there were safety nets in place. Since the early eighties, that implicit bargain has dissolved. It's problematic to follow a trade-expanding agenda without acknowledging that the flip side of trade is economic dislocation--and offering constructive ways of dealing with those dislocations. Too often, we hear that "trade is a wonderful thing, everybody gains and nobody hurts." Every economist knows that's not true.
Undoubtedly trade creates winners and losers. A good case can be made that the winners win more than the losers lose, so the overall effects of trade are positive. But the distributional impacts can't be ignored. The political reality is that winners don't compensate losers. The only way those who lose from free trade can hope to be compensated is if they actively oppose it. I think a lot of very poor people around the world would suffer a great deal were we to put up trade barriers. But I don't see any better way to get the winners to compensate the losers than for the losers to threaten to block trade as a bargaining chip.
We could afford to give our people far better education, job skills, healthcare, access to capital, public transit and the rest, and make poorer Americans--not just poor Americans, but people in the bottom two-thirds of the distribution--far more productive. That wouldn't make people at the top less productive, and it wouldn't make people in other areas of the world less productive. It would enable the bottom two-thirds of Americans to live better lives. We ought to be promoting the same policies around the world. The gap between the richest 20 percent and the poorest 20 percent in the world has doubled over the past three decades. It is now seventy-five to one. That's not a formula for a stable world. Protectionism won't reverse that trend. Investments--genuine investments in people--will. The real question is how you motivate the richest to make those investments.
A Better World
We hear lots of critiques of the WTO and globalization. Is there a positive vision of what a better world would look like?
In the critique lies a positive agenda. First, the erosion of the capacity of governments to be able to discipline capital--that has to be stopped. Second, the market has to be re-embedded, has to become a subordinate part of the society again. Values like social solidarity have precedence over the free market. Third, corporations have really become much too powerful, and a combination of government and civil society, national and international, needs to act as a check. Finally, a few years ago people said, "Globalization is inevitable, but what kind of globalization? Is it a positive kind of globalization or is it a negative kind?" I think people are beginning to realize that some aspects of globalization must be reversed. Where commodities can be produced locally, they should be produced locally, even if they may not be produced in the most efficient way. Of course, the big question always is, How does one operationalize those principles?
Trade rules need to be pruned back. They've invaded a variety of areas where it's inappropriate to have a uniform, externally imposed global norm. There are an enormous number of "commodification of the commons" issues. Environmental rules have become technical barriers to trade. Things like water and other biological resources--genes, cells, species, people--should not be commodified and traded, though under the WTO you can patent cell lines. The WTO model sees the globe as a single market. Human beings are either labor or consumers, and the environment is a set of resources to be efficiently extracted. Diversity--democracy and cultural differences--is inefficiency. There are other values than having one highly efficient global market. Now, trade rules consist of ceilings. We need floors, not ceilings. There'd be a lot more fragmentation in markets, and you would end up with more regional trade than global trade, but the advantage would be in democratic accountability. It's better to have several medium-sized operators dealing with a set of similar markets than two or three global producers cornering the whole global market.
There is an incompatibility between a market system that is becoming increasingly global and a governance system still tied down at the level of nation-states. I cannot imagine economic integration going much further without governance structures becoming much more international. But if that is going to happen, in order for these structures to have popular legitimacy, we will have to talk about international bureaucracies being accountable to popular forces, about electoral arrangements at the global level, about a kind of global federalism--the European model writ large. We will either allow our politics to go global or we'll have to find some way of restraining our markets from going too global, because our politics remain national.