A Conversation With Robert Rubin (Page 5)

That leads right to my next question. I'm asking, as you must know, from the critics' camp. If you go to the core of what reasonable, intelligent, rational people are trying to say from the labor-left-environmental camp, it goes like this: The world's global trading system needs labor standards and worker rights and some mechanism that requires the poorer developing countries to build a rising wage standard in their economy--a minimum wage relative to their prosperity or poverty--so you won't wind up with an endless convergence, in which the top comes down from middle-income wages in advanced countries and the bottom doesn't rise as fast as it might. Because the world is huge and full of poor people and producers, multinationals and otherwise can constantly, continuously move their production to the next cheaper country.

Well, I guess there are two pieces to that. If you are saying what you want to do is improve the distribution of income in low-income trading countries and that will have advantage to everybody concerned, low-income countries and to us, I think that is in everybody's interest. On the other hand, I've had exposure to people who make that argument and I think make it as a way to prevent trade liberalization.... But it is a complicated question. The one hope that some of these countries have to take people out of abject poverty is that their labor-cost advantage will result in a shift of production to their countries from the place that it's now taking place and, if you require them not to take advantage of their labor-cost advantage, then you really have condemned them to poverty. It's not so simple, I think.

What we have now in many parts of the world is manufacturers, multinational and domestic, moving their production to the next country. You go from Thailand to Shri Lanka or Cambodia because the textile workers in Thailand are organized and demanding higher wages. Our side would say that way is the "race to the bottom" for everybody, both for the workers in Thailand and for workers in advanced countries.

Well, yeah, but what makes it complicated is that it may be the only way for the people in Sri Lanka to get out of abject poverty. Now, having said that, you do want to wind up with a system where the benefits of economic activity are being divided up in some reasonable fashion. If you look at the situation in some developing countries today, that's not the case.

But you do see the dynamic in the mobility of capital? They keep putting labor at new disadvantages.

Yeah, I think that's right. But then the question is, would you say the people of Sri Lanka have to stay in abject poverty to keep that from happening? Or would you say: This a very legitimate issue that should be addressed in one fashion or another and, when Sri Lanka comes to benefit from this, the benefits should be divided up in some reasonable fashion between the employers and the employees?

• « Previous
• 1
• 2
• 3
• 4
• 5
• 6
• 7
• 8
• 9
• Next »

• Get The Nation at home (and online!) for 68 cents a week!
• If you like this article, consider making a donation to The Nation.
• Reprint this article. Click here for rights and information.