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minty green
12-01-2001, 12:07 PM
In response to this hijacking (http://boards.straightdope.com/sdmb/showthread.php?threadid=101773), I have decided to start a separate thread for posters such as London_Calling and Mandelstam to explain how capitalism, in contrast to every other socio-economic system in the world, is specifically responsible for war crimes and terrorism.

Have at it, gentlemen. In doing so, please account for the following data which appear to contradict your premise: Darn little terrorism emanating from countries that can reasonably be described as capitalist. Lots of terrorism emanating from countries that are authoritarian and/or dictatorships. Lots of terrorism emanating from countries where the rule of law is a joke. War crimes occurring in pretty much every war in the history of the world, no matter the form of the combatants' economies.

minty green
12-01-2001, 12:14 PM
I should note at the outset that while I am quite interested in the prospects of this discussion, I will be spending most of today contributing to globalization by test-driving foreign automobiles and purchasing clothing manufactured by people in third world countries who would otherwise have even crappier jobs.

Mandelstam
12-01-2001, 12:36 PM
Minty, I completely reject the terms in which you cast what I said as I do not in fact believe that "capitalism, in contrast to every other socio-economic system in the world" is responsible for terrorism. That ought to be clear from my posts thus far. I asked for a neutral thread with a title such as "Terrorism and Globalization." I fear that the invidious form in which you have cast the debate will turn this into the worst kind of exercise in verbal futility. And I have better things to do with my time. However, if any people reading this thread wish to discuss the (crucially important) question of interrelations between globalization and terrorism--and (insofar as it involves me) to do so by responding to my posts in the other thread as I wrote them and not as they have been miscast--I will be very happy to do so :)

By the way, "Darn little terrorism emanating from" liberal (capitalist) democracies is exactly the thesis of Fukuyama's book: i.e., the influential conservative writer that I mentioned in the other thread. What you don't seem to realize is that the "liberalization" I described is the official policy of the US government: that is, it's what the US claims to be doing and supporting in the developing world. I think, in other words, that you've gotten the wrong end of the stick entirely, probably b/c it's easy to get confused by terms such as "neo-liberal," etc.

I also wonder where you get your information on the "crappier" jobs that people in third-world countries would have if not for the present globalization. That is, when discussing globalizing with people, it's very helpful to know who they've read and how it informs what they believe. Which countries might be you be referring to? And whose account of their recent development have you read?

minty green
12-01-2001, 12:52 PM
Heavens to Betsy, you mean I started a debate, Mandelstam? I'm afraid my utter lack of neutrality on the subject might be showing! :) If I have misstated your position, I apologize. I do think, however, that the position described in my OP is representative of a fair number of people, however, and I would like to hear their reasons why.

As for the "crappier jobs" comment, it's quite simple. People are rational beings, even in the third world. People accept a particular position of employment because it is their best available option. If the job of making the clothes I'm going to purchase isn't there, ipso facto the remaining options for those people who would have made my clothes are less desirable, i.e. "even crappier."

minty green
12-01-2001, 12:53 PM
Redact second "however."

Mandelstam
12-01-2001, 01:19 PM
Minty, I think that a thread on "Terrorism and Globalization" gives us plenty to debate. I was not asking you to personally adopt my sentiments: only not to misrepresent me. I think that's a fair request! (In any case, thanks for doing the work of starting the thread.)

I do not, as I've already said, see "capitalism" as being directly responsible for terrorism; nor do I seek to eliminate private property or in any other way enact policies that are antithetitical to the existence of capitalism. Although I prefer the European model of capitalism to the American, I'd be pleased to see something like either develop in the third world, were that possible. However, while the latter is supposedly the ultimate goal of globalization (i.e. the liberalization of the "third world") in actuality the processes that allowed Western industrial nations to stabilize, democratize and spread prosperty are being thwarted in most third-world countries. I.e., trade union movements, environmental and human safeguards, living wage standards.

My position is actually a very moderate one: I'm in sympathy with much of what is preached in the name of globalization, but I'd like to see it practiced.

Let's concretize your "rational" third-world person. Let's say she's a worker who "chose" to seek factory labor b/c her family could no longer afford to support itself on its farm, or lost it due to inability to compete with agro-business. She may well have chosen "crappy" sweatshop labor as a preferable alternative to starving back home. But now she wants to join a labor union, or to agitate for a minimum wage in her country, or for fire safety in her factory. Only the government she lives under imprisons such people. Or the multi-national corporation threatens to leave the country the minute the government is sympathetic to such demands on the part of its citizens. Are we still dealing with a level playing field for making "rational" choices?

Here are some stats that I've posted before and am happy to post again:

Comparison of average Manufacturing Labor costs per Hour: (Source: Financial Times (UK business paper, 1994).

W. Germany $24.90/hr.
former E. Germany $17.30/hr.
Japan $16.90/hr
US $16.40/hr.
France $16.30/hr.
UK $12.40/hr.
Singapore $5.10/hr.
S. Korea $4.90/hr.
Hong Kong $4.20/hr.
Hungary $1.80/hr.
Czech Republic $1.10/hr.
China 50 cents/hr.

Who in the long run (never mind the short run!) is going to benefit from this? As pantom will tell you, this is a very foolish economic policy since, historically, industrial capitalism doesn't flourish without producing workforces capable of purchasing what is being manufactured.

Doesn't it make sense--for human, economic and political reasons--to work towards putting global labor standards into place. And wouldn't that be consistent with nation-building policies in deeply troubled places like Afghanistan?

december
12-01-2001, 01:53 PM
"Let all men know how empty and worthless is the power of kings. For there is none worthy of the name but God, whom heaven, earth and sea obey". So spoke King Canute the Great, the legend says, seated on his throne on the seashore, waves lapping round his feet. Canute had learned that his flattering courtiers claimed he was "So great, he could command the tides of the sea to go back". Now Canute was not only a religious man, but also a clever politician. He knew his limitations - even if his courtiers did not - so he had his throne carried to the seashore and sat on it as the tide came in, commanding the waves to advance no further. When they didn't, he had made his point that, though the deeds of kings might appear 'great' in the minds of men, they were as nothing in the face of God's power.
Originally posted by Mandelstam
Comparison of average Manufacturing Labor costs per Hour: (Source: Financial Times (UK business paper, 1994).

W. Germany $24.90/hr.
former E. Germany $17.30/hr.
<snip>
Czech Republic $1.10/hr.
China 50 cents/hr.

... As pantom will tell you, this is a very foolish economic policy... No, this is not economic policy at all. These wage levels occurred due to the interaction of many complex factor -- economic, social, historical, cultural, political, etc. We cannot control these costs any more than King Canute could control the tides. A policy based on the belief that we can control them is doomed to failure, and it will produce Heaven only knows what unintended consequences.

erislover
12-01-2001, 02:00 PM
Originally posted by Mandelstam
As pantom will tell you, this is a very foolish economic policy since, historically, industrial capitalism doesn't flourish without producing workforces capable of purchasing what is being manufactured.
Whoa... you mean I should revolt because I cannot purchase the $200,000 instrument I help to manufacture?

Hey, if it will make me 17.20/hour then I'll do it! I mean, there's nowhere to go but up, right?
Doesn't it make sense--for human, economic and political reasons--to work towards putting global labor standards into place.
No.
And wouldn't that be consistent with nation-building policies in deeply troubled places like Afghanistan?
No. Unless you mean pay them wages comparable to what other workers were paid at the industrial revolution, in which case, they probably already are.

minty green
12-01-2001, 02:11 PM
If the government is imprisoning people for joining labor unions and such, I would submit to you that the government falls under one of the other categories I highlighted in my OP. Capitalism is certainly not incompatible with trade unions, which I fully support as long as we're talking about collective bargaining rather than government-mandated restrictions on the availability of labor.in actuality the processes that allowed Western industrial nations to stabilize, democratize and spread prosperty are being thwarted in most third-world countries. I.e., trade union movements, environmental and human safeguards, living wage standards.None of those factors allowed the Western economic powers to "stabilize, democratize, and spread prosperity." To the contrary, I think you'll find that there were few or no restrictions on wages, the environment, and worker safety in America until relatively late in the 20th century, long after America became stable, democratic, and prosperous.

Neurotik
12-01-2001, 02:15 PM
I will agree with Mandelstam that a major problem in many third world states is an inability to unionize. I think that is key. Many people who try to begin a union are imprisoned or blacklisted in many states. Organization is key to the development of key labor practices in those states.

I do not agree, however, that global labor standards should be put in place, particularly a minimum wage. Putting in that minimum wage would likely spike incomes to a degree where inflation would be nearly unavoidable as a sudden influx of income would occur without a corresponding increase in supply.

I do, however, feel that a right to organize ought to be created in these states, similar as it was in the US. That could go a long way to solving a few problems.

CyberPundit
12-01-2001, 02:30 PM
"Doesn't it make sense--for human, economic and political reasons--to work towards
putting global labor standards into place."
I am not sure what you mean by global standards. If you mean that poor countries should have safety and labour regulations similar to rich countries forced onto them then no it doesn't make sense and not only that, it would be completely disastrous for the welfare of their people.


The fallacy that a lot of people make is that providing labour standards, safety regulation and the like is some kin d of free lunch. But the resources that go for providing these things must come from somewhere and the fact these policies raise a price means that there has to be some kind of market adjustment.
Typically:
1) the demand for labour is reduced. If you put an artificial floor on a wage chances are there will be unemployment. Plenty of evidence for that in the Economics literature.
2)Employers will make cuts on some other margins. Ie if they are forced to raise wages they will reduce benefits. If they are forced to raise benefits they will reduce wages. There is quite a bit of anecdotal evidence of this.
3) The employers will take a cut in profits and all will be well(?). No evidence of this in any academic literature as far as I know.

The problem with leftists is that they seem to be certain that the only adjustment that will happen is 3 and seem to believe almost as a matter of theology that 1 and 2 will never happen.

One problem with this is that in many ways 3 is the most dubious theoretically especially in the long run. For one thing in a competitive industry 3 will barely be possible because firms will earn only a fair rate of return after adjusting for risk and the opportunity cost of capital. So if the wage is artificially raised they will have to adjust with either 1 or 2 which of course doesn't help workers at all. And most economists believe that most industries in the long run are reasonably competitive.

For another even if it did work what exactly does it achieve ? It becomes a form of redistribution but is it the best kind of redistribution? Not really. For one thing the low wage workers in the export sector are not the poorest people in poor countries. For another the shareholders of those firms are not necessarily the richest. Given that there is only a limited amount of redistribution possible in any country I am not sure why you would want a type which neither gives to the poorest nor takes away from the richest. In particular a redistribution which involes programmes for the really poor financed from a progressive tax appears to me to be a much better kind of redistribution.

And all the preceding paragraph is assuming that regulations act as a form of redistribution, which economists are skeptical of.

The bottom line is that forcing poor countries to adopt more regulations is not really a good way of helping poor people in those countries. People in rich countries seem to like this kind of policy because it is a way of appearing to help them which doesn't cost them any thing at all. In reality though the main benefiaries are likely to be a small group of workers in rich countries who will face less competition from their third world counterparts.

If you really want to help people in poor countries there are two things you could do:
1)Open US and other rich country markets to farm and textile products from poor countries. This actually is a free lunch because both the US and the poor countries will win. The only losers again are a small number of American industries and their losses will be outweighed by the gains to American consumers.
2)Increase international aid to poor countries. This will of course have to be raised in taxes but actually not that much. 100 billion dollars a year devoted to education and health care around the poor world and administered by competent international agencies and NGO's would transform those places. That might sound like a lot of money but it would be less than 0.5% of the GDP of the rich countries.

Either of these policies are a lot more useful to poor countries than forcing them to adopt various regulations.

CyberPundit
12-01-2001, 02:45 PM
Oh I should add that I am not opposed to all labour standards. For instance things like bonded labor,slave labor, prison labor, etc are a violation of basic human rights. But even here it doesn't to make sense to make international trade hostage to these. The US should use other diplomatic means to try to get countries to respect basic rights.

Also as countries get richer there might be a place for other more intrusive regulations on environmental,safety matters and the like. While they probably won't do much good overall, if they are carefully designed they won't do much harm either and in some cases they will help. The important thing again is not to hold international trade hostage to these regulations and not impose them on poor countries according to some rich-country standard.

Demosthenesian
12-01-2001, 08:16 PM
cyberpundit: this is true, but the opposite problem exists: if a small country is prevented by various mechanisms from establishing unions or basic labour rights by the global trade environment (as is alleged by the anti-globalization types) how is that different than being subjected TO unions or basic labour rights? International trade is only a means to an end, not an end in itself. That end, of course, is a growing standard of living and quality of life for each individual human being underneath that trade regime. It is not, and never has been, to ensure the success of corporations or investors.

Then again, perhaps the real problem is that capitalism doesn't require nor ensure liberal democracy (as Fukuyama pointed out) and that state actions respectful of individual rights really do require that sort of structure. Capitalism is all very well and good for raising one's standards of living, but it serves no one to have some dictatorial El Presidente squashing unions at the behest of whatever transnational corp is lining his pockets.

Demosthenesian
12-01-2001, 08:19 PM
One other thing: as I'm sure you're aware, Cyberpundit, economics isn't a zero sum game, nor does it exist in a vacuum. Labour standards and safety regulations can and often do lead to a more productive population, and they can also help ensure the safety and stability of both the country and the state that governs it. Needless to say, national stability and the personal security derived from it is one hell of a public good.

CyberPundit
12-01-2001, 11:27 PM
Demosthenesian,
1)I don't think international trade usually "forces" countries to go without unions.As an empirical matter countries like Japan and South Korea which are aggressive participants in world trade have strong unions.

2) I think a successful capitalist economy can promote democracy in the long run, eg. Taiwan and S Korea.

3) Sure regulations can sometimes do good but they can also do a lot of harm if they are excessive. I think that poor countries will be more likely to find a good balance on their own rather than being forced to adopt standards as a condition of being part of the world trade system. I do think that the US should try to promote a higher quality of government whether democratic or not in poor countries to the extent it can. Using international aid as a lever might be a good way of doing that.

Like I said I strongly believe that the US and other rich countries should sharply increase their development aid to poor countries. This is a much better way of helping them than trying to put all sorts of conditions on their access to rich-country markets.

Demosthenesian
12-01-2001, 11:53 PM
Originally posted by CyberPundit
Demosthenesian,
1)I don't think international trade usually "forces" countries to go without unions.As an empirical matter countries like Japan and South Korea which are aggressive participants in world trade have strong unions.

2) I think a successful capitalist economy can promote democracy in the long run, eg. Taiwan and S Korea.

3) Sure regulations can sometimes do good but they can also do a lot of harm if they are excessive. I think that poor countries will be more likely to find a good balance on their own rather than being forced to adopt standards as a condition of being part of the world trade system. I do think that the US should try to promote a higher quality of government whether democratic or not in poor countries to the extent it can. Using international aid as a lever might be a good way of doing that.

Like I said I strongly believe that the US and other rich countries should sharply increase their development aid to poor countries. This is a much better way of helping them than trying to put all sorts of conditions on their access to rich-country markets.

Well, first, there are plenty of historical examples of capitalist economies that aren't overly democratic, and the two that you've mentioned have a history of being somewhat unfriendly to labour (it's interesting that you quoted South Korea as a country that has strong unions.. that wasn't the impression I had, although perhaps I'm mistaken). It isn't as bad as, say, Singapore, but enough so that their commitment to liberal democracy comes into question. It's easy to "promote democracy" until that democracy comes into conflict with capitalism, which can and does happen.

Second, if the international trade regime makes union building impossible or at least wildly impractical by having capital fly at the first sign of unionization, then it serves as an effective barrier to union building. What else is a union, after all, but an attempt to alleviate the same incredible wage and benefit disparaties that attract foreign investment in the first place? And what good is a union if capital goes whereve unions aren't? Needless to say, capital is usually hell of a lot more mobile than labour, especially nowadays. This is especially true if the state crushes unions in order to protect this foreign investment. (To get back to the democracy point.)

Third, it is important not to treat regulation in a knee-jerk fashion, whether you're for or against it. If the only way particular good can be properly handled is by state action (if it is a public good) and if there is no agreement between states on how such goods are to be dealt with, then you'll end up with a "market mechanism" between nations and an inevitable race to the bottom. There are also practical reasons: inasmuch as labour *is* mobile, there will be great pressure for labour to move to the countries that ensure greater labour rights. This would create a very unstable situation in the country being emigrated from and immigrated to. This could also lead to "free riders" that take advantage of, say, the cheap education in one country and move somewhere else for employment where taxes are lower.

If a regulation is to be at all meaningful, it must be universal.

Mandelstam
12-02-2001, 12:10 AM
december: replies to the wide spread between Western and Asian wage levels which I'd described as bad economic policy since it creates too much supply and too few buyers. "No, this is not economic policy at all. These wage levels occurred due to the interaction of many complex factor -- economic, social, historical, cultural, political, etc. We cannot control these costs any more than King Canute could control the tides. A policy based on the belief that we can control them is doomed to failure, and it will produce Heaven only knows what unintended consequences."

Well thanks for delving into myth december which aptly describes your mystical attitudes towards economics. Of course countries--with the help of economists--can agree upon what might constitute an appropriate minimum wage specific to a particular nation. Just as we do in the United States. And of course, it's part of economic policy to allow such wide wide differentials to exist. You act as though the economy were like the weather: something that occurs without human action! That isn't to say that it isn't complex: but economic policies can and do impact such conditions. In any case, the point isn't so much how the conditions arose, as how unhealthful they are for a global economy. If anything, Western countries should be eager to do what they can to see the global wages improve: that is, we need third-world workers to buy our services, technology, etc. Just as we buy their manufactured goods. Have you taken a look at the US's trade deficit lately?

erislover:"Whoa... you mean I should revolt because I cannot purchase the $200,000 instrument I help to manufacture?"

Historically industrial economies cannot thrive unless the workforces that produce them are capable of consuming lots of what they produce. Obviously that doesn't mean that Rolls Royce employees drive Rollses (though many Mercedes employees do drive Mercedes), or that Boeing employees own their own jets. But it does mean that factory workers producing clothes, or toys, or electronics ought to be able to purchase these things themselves. At present they generally can't. That's unsound. Ask Henry Ford about it if you want a right-wing view on the matter ;)

"Unless you mean pay them wages comparable to what other workers were paid at the industrial revolution, in which case, they probably already are."

Well the problem there is that workers during the industrial revolution were dealing with domestic companies who relied on their labor. In the US and eventually in Britain they were also enfranchised citizens in democratic countries. Hence, they were able to use their leverage to improve their quality of life relatively quickly. Workers in Britain got the 10-hour day, the vote, and the ability to unionize within a relatively short span of time. Their employers could not threaten to move to China where they could count on a repressive regime to do the dirty work for them.

Seen historically, globalization has weakened the collective power of average citizens in the West, and the next logical step is to have citizens organize transnationally as many NGOs and trade unions are already trying to do. So actually, from a labor point of view you are a luddite with your antedeluvian notions of the nation-state, and your 18th-century attachment to laissez-faire.

Move out of the way of progress erislover ;)

Minty: "If the government is imprisoning people for joining labor unions and such, I would submit to you that the government falls under one of the other categories I highlighted in my OP."

Well the problem there Minty, is that many multninational corporations are complicit with these repressive governments. That's the beauty of globalization: you can't simply localize the problem of repression and blame it on bad old non-Weterners and their unenlightened ways. Such practices are both directly and indirectly encouraged by multinational corporations and Western-controlled institutions such as the IMF.

"None of those factors allowed the Western economic powers to "stabilize, democratize, and spread prosperity." To the contrary, I think you'll find that there were few or no restrictions on wages, the environment, and worker safety in America until relatively late in the 20th century, long after America became stable, democratic, and prosperous."

Completely incorrect (and this is fairly close to my professional area of expertise). Industrialization required active government support: protective tarriffs and mercantilist regulations that helped new industrial economies (such as 18th-century Britain's) to get off the ground. It was after they already had the edge that the industrial middle classes demanded and got laissez-faire. When other European nations industrialized they also relied on government protections. As did the Japanese and new Asian economies to achieve their "miracles." Laissez-faire capitalism benefits those who already have the edge. Historically, no nation has ever successfully managed to industrialize without practicing "economic nationalism" (interventionist and subsidizing policies that protect new industries against foreign competition)."

By insisting that developing countries adopt neo-liberal policies that only advanced industrial economies can benefit from, institutions such as the IMF basically create conditions that are bad for development but good for investors' short-term profits.

Here, to show you what I mean, are some excerpts from and a link to a relevant article: "Another IMF Crash." It concerns Argentina.

[i]"Argentina is the latest Latin American economy to be mismanaged into a crisis by US-trained economists. Unemployment is above 17 percent, the economy is in its fourth year of recession and the country is now in the process of defaulting on its unpayable foreign debt."

"The sacrifice of Argentina's economy [in the interests of Western bondholders] fits a pattern at the IMF, including some of the most high-profile interventions of recent years. In Russia and the transition economies, the first priority has been to execute a rapid, irreversible change to a market-driven society, regardless of the economic consequences. Russia lost half its national income in about five years of IMF-led transition, an economic decline never before seen in the absence of war or natural disaster. In Asia, the fund's desire to open these economies to US capital flows--in countries that because of their high savings rates had little need for foreign borrowing--caused a severe financial crisis in 1997-98. The fund then exploited the crisis to further open these economies, worsened it with exorbitantly high interest rates and fiscal austerity and convinced the governments of the region to guarantee the debt owed to foreign lenders."

Why, you might say, do these countries not "choose" to have nothing more to do with the IMF then?

"The IMF is able to decide these major economic policies for dozens of countries because it sits atop a creditors' cartel, much like the OPEC oil cartel. Those who refuse to take the fund's "advice" find themselves ineligible for credit from the World Bank and other multilateral lenders--like the Inter-American Development Bank or G-7 governments--or even for private credit."

http://www.thenation.com/doc.mhtml?i=20011210&s=weisbrot

I could post literally hundreds of articles like this one; and point you to dozens of books on the subject. Put simply, neo-liberalism is an irrational model for helping developing countries to develop.

Neurotik: "I do not agree, however, that global labor standards should be put in place, particularly a minimum wage. Putting in that minimum wage would likely spike incomes to a degree where inflation would be nearly unavoidable as a sudden influx of income would occur without a corresponding increase in supply."

I agree that the minimum wage is the trickiest part: though the present recession is driven by oversupply and even before the recession there was lots of underused capacity (e.g., empty factories) to boost supply when and if demand is there. So I don't see inflation as the problem.

What I visualize are EU-type collaborations within regions developing, a process that can't happen too soo, as far as I'm concerned. As to reasonable safety standards: it's positively criminal not to have them. It would be relatively simple for G7 nations to pass legislation barring the import of any manufactured goods where basic safety was not ensured (or taxing such goods relative to "safe" goods). If this meant that the $12 pair of jeans you buy at K-mart cost $13 it would not be that big a difference. And it would increase the productivity of countries that benefit from the increased safety. As Demosthenesian says: economics isn't a zero sum game.

Cyberpundit: "Employers will make cuts on some other margins. Ie if they are forced to raise wages they will reduce benefits."

Benefits? Cyberpundit, most of these people are lucky if they're allowed five minutes to pee. They're sometimes forced to purchase high-priced meals from the employee cafeteria. They're paid a subsistence wage in exchange for a gruelling day's labor.

"The employers will take a cut in profits and all will be well(?). No evidence of this in any academic literature as far as I know."

Of course employers sometimes have to reduce profits! And undoubtedly some of this cost will be passed on to the consumer. Which may depress demand or it may not. Because perhaps better-off factory workers will themselves create demand; or more productivity.

Cyberpundit, these kinds of arguments were continually made during the nineteenth-century: oh, if we reduce the working day from 12 hours to ten we'll all go out of business and there won't be any employment. Some employers at the time undoubtedly believed it.

"If you mean that poor countries should have safety and labour regulations similar to rich countries forced onto them then no it doesn't make sense and not only that, it would be completely disastrous for the welfare of their people.

Ironically, CyberPundit, what has been "forced onto" developing countries is laissez-faire (or neo-liberalism). So you've got it backwards. (You repeat the same error in your most recent post.) You seem to assume that people like myself are arguing for a new "White Man's Burden" in which enlightened economic policies are "forced" onto exploitative native governments as though multinational employers, Western capital and the IMF have nothing to do with it.

Another excerpt from the linked article:

"Over the longer term, the neoliberal program of the IMF and the World Bank--and their ability to enforce it--has contributed to a substantial decline in economic growth over the past twenty years throughout the vast majority of low- and middle-income countries. In Latin America, per capita GDP has grown a mere 6 percent over the past two decades, as compared with 75 percent in 1960-80."

Demosthenesian "as is alleged by the anti-globalization types...

Oh dear, would that include me? I've never been called a "type" before. And, FTR, I'm not at all anti-globalization--although I realize that you may have not intended to apply the term to me. In any case, welcome to the SDMB. :)

Demosthenesian
12-02-2001, 12:18 AM
mandelstam: there are two flavours of anti-globalization: those that hate the entire idea of it, and those that merely think it should be done under certain ground rules. I fall into the latter category, as I imagine you do. For much the same reason: economics does not exist in a vacuum, and if a state is prevented from ensuring the protection of certain public goods by a "race to the bottom" by international capital that economic system is quite broken.

Sometimes, yes, it does require the heavy hand of a state to get employers to agree to certain minimum protections for labour. The hideous health situations in most "maquiladoras" is not the fault of the workers, nor is the distinct possibility of being burned to death in a locked factory.

minty green
12-02-2001, 12:37 AM
Me: "I think you'll find that there were few or no restrictions on wages, the environment, and worker safety in America until relatively late in the 20th century, long after America became stable, democratic, and prosperous."

Mandelstam: "Completely incorrect (and this is fairly close to my professional area of expertise). Industrialization required active government support: protective tarriffs and mercantilist regulations that helped new industrial economies (such as 18th-century Britain's) to get off the ground. It was after they already had the edge that the industrial middle classes demanded and got laissez-faire."


WTF? Who said anything anything about protective tariffs or undefined mercantile regulations? I addressed three very specific items: wages, the environment, and worker safety. Since you addressed none of those items in your reply, how is it that I'm "completely incorrect"?

CyberPundit
12-02-2001, 01:28 AM
Demo,
I didn't say that all capitalist countries have been democratic but just gave counter-examples to the proposition that capitalism undermines democracy and unions. As it happens the rise of both democracy and trade unions in the West coincided with a period of a more or less unfettered international capitalist system before WW1. Could you give evidence for your proposition that global capitalism undermines democracy and trade unions.


The race to the bottom argument assumes that regulations don't contribute to productivity. I thought your argument was that some regulations can contribute to productivity. If they do there is not much reason why firms will move out.


Besides there is competition on both sides so it's not clear why you believe that multinational firms are as much bargaining power as you say they do.

"here are also practical
reasons: inasmuch as labour *is* mobile, there will be great pressure for labour to move to the
countries that ensure greater labour rights. This would create a very unstable situation in the country
being emigrated from and immigrated to."
Can you give examples of this "instability". Besides this is an example where competition will tend to increse labour regulation so it goes counter to your general argument.


"If a regulation is to be at all meaningful, it must be universal."
This is a rather strong assertion for which you have provided no evidence. The basic reason why you can't have the same regulation in rich and poor countries is that poor countries simply can't afford the level of regulations that rich countries can. None of your arguments are so strong that they offset this basic point.
And don't forget that poor countries often have a lot of regulation. There is little evidence of global capitalism forcing a "laisser-faire" regime on them.


Mandelstam,
"most of these people are lucky if they're allowed five minutes to pee."
Actually workers in the organized sector get some benefits even in the poorest countries. Even if they don't they can be made to work more.There will almost always be some margin for adjustment.

"Of course employers sometimes have to reduce profits!"
And how often does this happen especially in the long run compared to the other adjustments according to you? Like I said if the industry is competitive profits can't be hit much.

"Because perhaps better-off
factory workers will themselves create demand; or more productivity."
If regulations make workers more productive there is no reasons why firms will object to them. Can you give some academic cite for regulations which increase productivity?

Minimum wages and regulations don't increase aggregate demand and in any case poor countries are typically not constrained much by aggregate demand. I challenge you to find any mainstream economist who says that increasing the minimum wage increases aggregate demand.


"Cyberpundit, these kinds of arguments were continually made during the nineteenth-century"
A great era for the science of Economics.:)
The majority of economists continue to believe similar things about labour market regulations especially for developing countries though with some nuances and analytical bells and whistles. Can you point to major economists who believe that increasing the minimum wage or more regulation is a good way of promoting growth in those countries?

In any case the arguments are considerably more nuanced than "if we
reduce the working day from 12 hours to ten we'll all go out of business and there won't be any
employment"
You haven't really bothered to address my arguments or give any reasons for your belief that most of the adjustment will happen on margins beneficial to workers.


BTW your Nation article probably doesn't mention that China and India with more people than Latin America have increased their growth rates significantly after they opened their economies to foreign capital and trade. India , in particular , had a very successful IMF stabilization programme after which growth rates have been higher than before.

Demosthenesian
12-02-2001, 03:40 AM
Originally posted by CyberPundit
Demo,
I didn't say that all capitalist countries have been democratic but just gave counter-examples to the proposition that capitalism undermines democracy and unions. As it happens the rise of both democracy and trade unions in the West coincided with a period of a more or less unfettered international capitalist system before WW1. Could you give evidence for your proposition that global capitalism undermines democracy and trade unions.

Ahem. My argument was that capitalism and democracy can have tension at times, and that democracy is not necessary for capitalism. As neither of those remotely imply the "capitalism undermines democracy" argument you attributed to me, I don't see the need to defend it. I will, however, argue that democracy can undermine capitalism: for proof, simply turn to any of your favorite pork barrel projects.

The race to the bottom argument assumes that regulations don't contribute to productivity. I thought your argument was that some regulations can contribute to productivity. If they do there is not much reason why firms will move out.

You're confusing short term vs. long term benefits here, and I'm not quite sure if you understand the idea of a public good. Many public goods (like education, a clean environment, national stability, personal security, etc) are benefits only in the long term, whereas the price of them affects the profitability of a corporation (and therefore its investors) in the short term. You end up with the problem of free riders: one firm can stay and pay the short-term costs of improving the country in question, whereas all of its competing firms merely move in after the long term benefits have kicked in and enjoy the benefits without suffering any of the costs. Since the company that stayed is at a serious economic disadvantage and since any intelligent businessman would know this, no company stays around. The goods (such as education, stability, environment, etc) I mentioned above are not provided by the market, and therefore the market fails.

The only way to get around market failures such as this is to spread the short term costs around to all so that all can receive the long term benefits. This is the role of the state. The problem is that this system breaks down if the state can not exercise its coercive power to assure that these costs are spread around. Hence the problem with global capitalism, and the "race to the bottom" I mentioned earlier- because no state has coercive power outside of its borders, that market failure I mentioned earlier is practically inevitable. The only way for states to resolve this problem is to either impose tariffs that make it more attractive to stay in the country and pay those short term costs for those long term benefits, or for states to coordinate each other so that they can deal with market failure in the global market in the same way that they dealt with market failure in national markets. Neither solution is being entertained by the current trade regime, and therefore I have to conclude that under the current system the "race to the bottom" is inevitable. No state, or group of states, could stop it.

Besides there is competition on both sides so it's not clear why you believe that multinational firms are as much bargaining power as you say they do.

The competition is why there is a problem, as I said earlier.

Can you give examples of this "instability". Besides this is an example where competition will tend to increse labour regulation so it goes counter to your general argument.

You're asking me whether national stability is a good thing? That would seem to be self-evident. State, business, and citizenry all benefit from a stable country, but nobody wants to pay for it.

"If regulation is to be at all meaningful, it must be universal."
This is a rather strong assertion for which you have provided no evidence. The basic reason why you can't have the same regulation in rich and poor countries is that poor countries simply can't afford the level of regulations that rich countries can. None of your arguments are so strong that they offset this basic point.

On the contrary, the problems in poor countries only exacerbate the necessity of regulation on a global rather than national scale. Arguing that "they simply can't afford it" begs the question of when they will be able to afford it. Most of the profits from the added value of the labour and capital in your typical third world country go to the investing corporation, not to the workers or the state in that country. There is nothing wrong or evil about that, but it means that there is precious little money available to the state to improve the situation in said country. As I said earlier, there is no way the corporation is going to pay for it: on the contrary, the problem of other corporations free-riding the productivity growth after you've made your improvements makes it incredibly bad business sense to invest in the country to any degree more than absolutely necessary. No matter how much you benefit from that investment, you're still at a competitive disadvantage.

And don't forget that poor countries often have a lot of regulation. There is little evidence of global capitalism forcing a "laisser-faire" regime on them.

Are you aware of the conditions imposed on your typical IMF or World Bank loan? Or the requirements for membership in the WTO? Your knowledge of the current economic climate seems sharply limited.

Now, for some of your other points:

Actually workers in the organized sector get some benefits even in the poorest countries. Even if they don't they can be made to work more.There will almost always be some margin for adjustment.

You are not aware that workers have burned to death because of being locked inside their factories, and that the Mexican Maquiladoras are among the most polluted and most dangerous parts of the world to live?

"Of course employers sometimes have to reduce profits!"
And how often does this happen especially in the long run compared to the other adjustments according to you? Like I said if the industry is competitive profits can't be hit much.

Of course they can, if the company's costs aren't being being unfairly subsidized. That is what pollution is, after all: a cost (to the environment) that the company in question doesn't have to pay. Dealing with charging business for externalities is also the job of the state... unless, of course, the game has been rigged so that the companies can work on a global scale and the state cannot.

"Because perhaps better-offfactory workers will themselves create demand; or more productivity."
If regulations make workers more productive there is no reasons why firms will object to them. Can you give some academic cite for regulations which increase productivity?

An academic cite is necessary to show that something like education increases productivity? This forum is anal retentive about cites, isn't it? Another example would be land-use regulations and building codes: both increase productivity by eliminating the costs of locating the wrong types of development too close together or of rebuilding shoddily constructed capital investments. I'm sure that you aren't going to argue that urban planning is a bad idea.

Minimum wages and regulations don't increase aggregate demand and in any case poor countries are typically not constrained much by aggregate demand. I challenge you to find any mainstream economist who says that increasing the minimum wage increases aggregate demand.

Regulation can certainly increase aggregate demand, depending on the regulation. The demand for housing in the example I gave above for example: properly built and situated housing is not only a public good in that it adds to the livability and organization of a city, but those living in housing that isn't likely to fall down and that is sanely situated are more likely to spend money improving it and to work to improve the safety and stability of their neighborhood.

The problem is that you're trying to argue that the problems of a specific form of regulation (such as the minimum wage) necessarily apply to all forms of regulation. Needless to say, that sort of inductive reasoning is unbelievably flawed.

"Cyberpundit, these kinds of arguments were continually made during the nineteenth-century"
A great era for the science of Economics.:)

Indeed. We've moved on. Quite a bit. Just this year, in fact: do you know what assymetrical information is?

The majority of economists continue to believe similar things about labour market regulations especially for developing countries though with some nuances and analytical bells and whistles. Can you point to major economists who believe that increasing the minimum wage or more regulation is a good way of promoting growth in those countries?

Adam Smith provided for a role for government, did he not? And I seem to recall a fellow by the name of John Maynard Keynes who had something to say about the government having some greater or lesser part to play as well. Oh, and if you're praising nineteenth century economists, you've just brought Marx into the equation.

Ouch.

In any case the arguments are considerably more nuanced than "if we reduce the working day from 12 hours to ten we'll all go out of business and there won't be any employment" You haven't really bothered to address my arguments or give any reasons for your belief that most of the adjustment will happen on margins beneficial to workers.

Perhaps, although I believe I have. Unless you have a convincing argument that urban planning is a bad idea, your assertion that regulation is necessarily inefficient is inaccurate.

BTW your Nation article probably doesn't mention that China and India with more people than Latin America have increased their growth rates significantly after they opened their economies to foreign capital and trade. India , in particular , had a very successful IMF stabilization programme after which growth rates have been higher than before.

India is vastly different than most third world economies (if it even truly counts as a third world economy), and even then still has more than its share of problems. If you believe the IMF's reforms are so useful, perhaps you can explain why Japan's situation was worsened by them, and what the use is of their strategy of fighting inflation in a deflationary economy. And kindly hurry, because right now I can't think of the IMF as anything but a tragic joke.

CyberPundit
12-02-2001, 04:19 AM
*Sigh* In case you haven't noticed this discussion was about labour market regulations like the minimum wage not about every conceivable government policy like education,urban planning and the like. Most of your post is therefore completely beside the point.

Minimum wages don't address a market failure; they are a redistributionist tool and usually an inefficient one at that.

"The competition is why there is a problem, as I said earlier."
No. Competition is not a problem if it is on both sides. Companies are also competing for scarce profit opportunities and are in no position to dicatate policy. Can you please provide some cite or evidence for your repeated assertions about this.


"You're asking me whether national stability is a good thing?"
No I am asking for examples where differences in regulation by themselves caused such massive migration so as to cause instability.

"Are you aware of the conditions imposed on your typical IMF or World Bank loan? Or the
requirements for membership in the WTO?"
Indeed I am and neither of them is even remotely close to "laisser-faire". Your understanding of that term appears to be sharpy limited.





"Regulation can certainly increase aggregate demand, depending on the regulation."
No the main policy measures which affect aggregate demand are fiscal and monetary policy. Your example shows you don't even understand what aggregate demand is. I suggest you refer to some introductory macroeconomics text.





"India is vastly different than most third world economies (if it even truly counts as a third world
economy), and even then still has more than its share of problems"
India not a third world economy? LOL. You are quite the expert aren't you? And India has problems therefore the IMF stabilization was a failure? Perhaps you need to review your logic textbook as well.

"If you believe the IMF's reforms
are so useful, perhaps you can explain why Japan's situation was worsened by them,"
And when exactly did the IMF carry out reforms in Japan?

You understand , don't you, that IMF stabilization programs are for primarily for developing countries experiencing a BOP crisis. You think that a rich country with huge current account surpluses needs the IMF?

Demosthenesian
12-02-2001, 04:53 AM
Oh, and BTW Minty... I think I can answer your OP. Keep in mind that this is an explanation of how capitalism *can be* responsible... it definitely isn't the only factor.

Ok,first: Most terrorists come from fundamentally unstable countries. Either there is a unstable regime which uses violence and repression to retain power or there is no regime at all but merely civil war. The reasons for the problems of the regime (or lack of such) are largely political, but there is usually economic reasons for the relative *amount* of instability: as the case of a country like Singapore shows, authoritarian regimes can stay in power and reign over a relatively peaceful country if that country is economically successful. It is also usually the case that these economic problems are unequally distributed along ethnic or national lines, which often leads to grinding poverty for the the same groups that are marginalized politically. It is from these groups that terrorists (and, for that matter, religious extremists) usually spring.

But, you ask, where does global capitalism fit in? These countries are economic basketcases, yes, but why is capitalism responsible?

Well, it's partly a case of past causation and partly a case of current ideology. It's partly a case of past causation for two reasons: Mercantilism(a form of capitalism) cutting its way through much of the third world and leaving little behind but arbitrary borders, plundered resources and a variety of interesting diseases; and aftereffects of the Cold War which was fought, as you know, as a war between capitalism and communism. Capitalism won the cold war, though, and from that comes the other part: current ideology. There are plenty of people who think that since capitalism "beat" communism that free markets are a cureall and that any perceived flaws in the free market system are due to "not enough capitalism". This means the same thing in the third world that it did in North America: government interference in the economy is either evil or pointless. State action to deal with the inequalities created by capitalism becomes unfashionable at best- at worst (which would be the IMF) it becomes literally impossible. The idea that free markets are curealls is ludicrous, of course: any successful market requires a host of institutions to support it, and at the very least a system of civil and political rights. But thanks to our zealous and halfwitted free marketeers, they get the entire third world to play with before they find out why they're wrong.

So, what does this state of affairs mean for our marginalized friends? Well, first, it means that their situation isn't getting any better vis a vis the people they're marginalized from. If it were the society that could actually support a free market, they might be better off, but by and large it isn't. The only thing this "free market" is doing is lining the pockets of the elite. There might be some more employment, but it probably won't be for these guys, it'll be for the members of the majority. If they do get jobs, it'll likely be the worst job of the lot. If they don't, though, the government won't be able to help them. Even if it wanted to.

(And then there's the possibility that the working conditions could kill them. If they die, that just ticks off more people. If it's somebody's kid, it would probably take half the staff to pull them off the foreman)

Second, it means that the government in question has a convenient target for blame: the West. The government would like to help, it says, but can't because the West won't let it. They can't actually do anything about the government in question, because they have little to no political rights (and more often than not the government is being propped up by the U.S. in order to maintain regional stability). Without an avenue for peaceful protest and political change, they become radicalized.

Third, it means that they're easy meat for whatever demagogue (religious or secular) decides to exploit them. If they're Muslims (a group very often marginalized) it's even better, because they've got an international network of people who are absolutely foaming at the mouth to exploit them for personal gains. Either way, though, you've got people with nothing to lose: their economic situation is bad and getting worse and their political rights are nonexistent. The only hope they think they have is violence.

So, one of two things happens. Either they're aimed at the regime in question, and they start warring against it. If they're organized and well armed enough, they actually rebel. It becomes a military conflict. If they aren't, they do the next best thing and start terrorizing in hopes of attracting enough support and/or fear to actually get something done. This is especially problematic if they *are* religious, because death isn't an issue.

If they're aimed at the West, well...we know what can happen.

Does this mean all people in this situation will become terrorists? Nope. Some will get decent jobs, and some will avoid the demagogues that prey on people like this. Some will emigrate, and become refugees somewhere else. Some won't be zealous enough to attack the government (or "other tribe/religion/nationality" as the case may be), and still more won't be zealous enough to attack the west. The problem is that some will be.

So to get back to your main point, minty, capitalism isn't the sole determinant or maybe even the greatest one. The problem is that the unthinking application of a "free market" in a country without the structures for one can turn a bad problem worse, and provide a legitimate reason for someone to hate the westerners that imposed these insane rules on them. If the regime is being propped up by the West it gets even worse, although it's not necessarily required. All it takes is a push in the right direction by someone who knows all the right words, and every American now personally knows the awful fury of those that feel they have been wronged and violated.

One caveat: I don't necessarily believe that the WTC bombers fit this profile. I don't, however, believe this invalidates my point: as I said earlier, capitalism *can* be a factor, but doesn't have to be the main one. It doesn't even have anything to do with classes: it can take advantage of divisions that already exist.

Demosthenesian
12-02-2001, 05:23 AM
Cyber, if you'll refer to Minty's post, she said she included "three very specific items: wages, the environment, and worker safety". The original post said nothing about it being merely about "labour regulations" and you did not specify "labour regulations" in your own post, yourself using the word "regulations". Mind explaining how this is about labour regulations if neither the original post nor the original poster were discussing that? And mind explaining why you keep on asserting that all labour regulations=minimum wage? I'm smelling an inductive fallacy here, and you were the one complaining about my logical inabilities here.

The competition is why there is a problem, as I said earlier."
No. Competition is not a problem if it is on both sides. Companies are also competing for scarce profit opportunities and are in no position to dicatate policy. Can you please provide some cite or evidence for your repeated assertions about this.

My argument was that companies will indeed invest in improving markets, but only to the minimum extent necessary and no farther than that: any public goods that result from that would benefit any company that took advantage of that country but didn't pay for it earlier. The company that did would be at a relative disadvantage compared to the other ones, as it solely paid for a public good.

What do you want me to cite, exactly? The free rider problem? The concept of public goods? Externalities and subsidies of cost through them? The fact that if you pay for something you have less money than somebody who doesn't, and that corporations tend to avoid investments that return no value? Perhaps you should be the one picking up economics and logic texts, not me. I would think that basic concepts wouldn't need cites. There is no need nor point to asking for cites if I'm not appealing to an authority. If I had quoted statistics or specific examples it would have been different. I did not.

I would appreciate an explanation of what you meant by "aggregate demand" though. After all, I was kind enough to explain my reasoning.

If you want a criticism of the IMF, I cite you Joseph Stiglitz, although if you're up on the issues you should already know his arguments.

http://www.thenewrepublic.com/041700/stiglitz041700.html
Enjoy!

(Frankly, cyber, I'm disappointed. You glossed over most of my post with that "it's not about minimum wages" nonsense, picked up little bits here and there that you thought you could attack, and didn't even get your spacing or spelling right. I know I'm new here, but I expected more.)

Demosthenesian
12-02-2001, 05:34 AM
One concession to you, cyberpundit: although the attempts of western economists to "reform" the japanese economy fit the model I mentioned (anti-inflationary techniques on a deflationary economy) I can't actually credit or accuse the IMF in that situation, as I don't have a source for that. Not overly unnecessary, though, as the Stiglitz link backs up my main point, which is that the IMF's techniques are poorly applied, dogmatic, fail to take into account specific situations and often worse than useless: the very picture of zealous neoliberalism.

Demosthenesian
12-02-2001, 06:28 AM
Ack. Not overly necessary, that is.

CyberPundit
12-02-2001, 11:40 AM
Demosthenesian,
If you read my first post it was very clearly referring to "global labour standards". This refers to things like the minimum wage but also things like worker safety regulations,minimum mandatory benefits and the like. While you can make some kind of market failure argument for the latter sometimes, the principle idea is that the legislation is a method of improving the standard of living of workers. There is an implicit belief that the costs of those standard s won't fall on the workers themselves and this is frequently not true.

In any case my basic problem is your contention that market failures in the labour markets are best solved at the global level when market conditions are always different. Also some type of cost-benefit analysis why mandatory legislation is the best solution to any market failure and indeed the magnitude of the specific market failures you are referring to. Just throwing around terms like "public good" isn't an answer; it only shows how little you understand.

For instance have you ever heard of a Tiebout process which explains how competition between governments can lead to an optimal allocation of public goods under certain conditions. Would you care to explain why the logic of the Tiebout process doesn't work here and the magnitude of any market failure involved. If you can't I suggest you be a little less cocky with your extremely limited expertise.


Aggregate Demand=Consumption+Investment+Government Spending+Net Exports.
Again there is large literature about how exactly policy can increas AD and it is usually more complicated than just increasing one kind of spending. Again if you don't understand this, a little less cockiness would be in order.


Stiglitz. Some of what he says is valid; a lot of it is gross exaggeration. In any case he is not an expert on OpenEconomy Macroeconomics. Someone who is is Rudi Dornbusch.
See his web page:
http://web.mit.edu/rudi/www/editorials.html
In the 2000 section there is a brief critique of Stiglitz.

B. Gardner
12-02-2001, 11:48 AM
Even a casual glance at the historical record reveals that terrorism and war crimes were in very plentiful supply WELL before the advent of capitalism, rendering this entire discussion foolish and moot.

minty green
12-02-2001, 12:11 PM
My point exactly, B. Gardner. In all of Demosthenesian's theorizin' s/he failed to explain why capitalism in particular creates the conditions for terrorism and war crimes. "Marginalization" happens to someone in every economic or political system, so if that's all it takes, capitalism is no different than any other system in this regard.

Mandelstam
12-02-2001, 12:28 PM
My goodness! It's rather nice to wake up and find that one hasn't go so much to do. Demos, to say the least, your intervention has, um, boosted my productivity ;).

Minty: "WTF? Who said anything anything about protective tariffs or undefined mercantile regulations? I addressed three very specific items: wages, the environment, and worker safety. Since you addressed none of those items in your reply, how is it that I'm "completely incorrect"?"

How? Because "mercantalist regulation" isn't, as you may have assumed, exclusive to matters of trade. In Britain it included all kinds of worker regulations, albeit of a markedly pre-modern kind. The price of bread, for example, was regulated; and poor rates (taxes) were levied to make certain that the agricultural laborers (who were being driven from common use of the land) didn't rebel (as did their French counterparts). These regulations were only gradually removed as the British industrial economy became strong enough to shift into its laissez-faire phase. It was from that point on that workers had to fight to get for themselves the modern counterpart to the protections that mercantilist governments had provided for them.

Another inaccuracy is your assumption that those worker-driven benefits didn't come until late in the twentieth century. The process was indeed gradual but there was always some kind of agitation against strict laissez-faire, sometimes enhanced by humanitarian sympathizers: e.g., for education for factory children, for the reduction of children's factory labor, eventually for the reduction of the adult day. From the 1890s - 1910s the British government was beginning to move into full welfare state mode: school meals for poor children, old-age pensions, unemployment insurance.

Significantly, one of the reasons they did this was that their workforce had become uncompetitive vis a vis Germany's where Bismarck's corporatist approach to state welfare had been providing such things since the 1870s. So, CyberPundit, if you're reading, this is an historical example of how state intervention boosts productivity (in the long-term, as Demos reminds us). The counterpart to this in the US was the progressive era with some similar legislation for US workers; and certainly the New Deal in the 1930s went further still.

Another point is that you (and perhaps erislover as well) seem to assume that there is one unique path, based on Western history, towards industrial development: from early industrialization (with laissez-faire and a certain amount of suffering), to increased prosperity with, at last, the ability to deepen democracy and social welfare. Not only is this a very superficial way of understanding Western history, there is no evidence whatever that it could be replicated under the current conditions of the developing world. In fact, the evidence suggests quite the contrary since, as I said, no nation has ever managed to industrialize under laissez-faire conditions.

Rather, mercantilism boosted industrialiazation just as the "economic nationalism" of Asian countries did prior to the Western imposition of economic "liberalization" in the 1990s(described well in the Stiglitz link provided by Demos). In the 18th and 19th centuries, colonialism was another factor: the British basically shut down native Indian manufacturer and turned India into a source of raw materials and resources for their economy, and the Indian people into consumers of their goods. The US of course had a giant and resource-rich continent to subjugate and later got into the imperial game.

So, even if it were true--which it is not--that these governments did nothing but leave market forces to themselves as industry developed, how can you possibly compare these conditions to that of developing countries? Reminder: most of the manufacture being done in developing nations is through foreign (multi-national) corporations with little or no interest in investing in the region or its workforce. These companies can and often do leave or threaten to leave the country just when the workforce is beginning to organize in the manner of nineteenth-century Western precedents.

Conclusion: it's absurd to extract the myth of laissez-faire conditions from the history of the West and impose it on developing nations struggling to compete with wealthy Western nations, and under the thumb of powerful corporations and Western-dominated institutions such as the IMF. Absurd and also counter-productive since, as I've said again and again, our economy positively needs these workers to be able to purchase goods from us as wel do from them.

Cyberpundit: "I challenge you to find any mainstream economist who says that increasing the minimum wage increases aggregate demand."

Well, as Demos has already argued, you have narrowed the broader issue of improving living standards for developing workers in the long-term, to a very narrow question of minimum wage in the short-term. This suggests that I think of the minimum wage as some kind of silver bullet: which I do not. Or as the first thing on the agenda of any developing country: which I do not. In fact countries like Mexico already have a minimum wage, and it's not clear to me that it's been decisive in reducing the hardship of Mexican workers. (It's also the case that millions of Mexicans work illegally beneath the Mexican minimum wage.)

As you seem to like citations, I've found some for you. I should mention that I'm not an economist, but an historian (and now something else as well), but I read lots of books by economists. Generally speaking, I would say that Lester Thurow is a mainstream economist who addresses the importance of investing in workforces to increase productivity and overall long-term economic prosperty; Krugman certainly has diverged from the IMF's dictates here and there; Weisbrott, the author of the Nation piece is an economist with the Economic Policy Insitute. And, of course, Amartya Sen, an econometrist, has argued widely that economists models need to be revamped because they're predicated on hidebound and unrealistic notions of human economic behavior.

Now for the cites:

Now here's something from the founder of a citzen's group. I have no idea if he's an economist or not (and I want to add that I haven't yet decided that what's best is the kind of global minimum wage that he's calling for - of $1/hour). But here's what he writes:

"Factories will stay in Mexico, China, Indonesia, Vietnam and India even with a dollar per hour wage. In countries where the current minimum wage is currently 25 cents per hour, like Indonesia, jobs will remain there. Nike, one of Indonesia's largest employers, will have no where else to go. Its workers in Vietnam will also get large raises. But won't that increase the price of shoes? Yes, but not much. Currently, labor costs represent only about four percent of the retail price of a pair of Nike shoes. If labor costs are increased four-fold, the price of shoes should only go up 12 percent. Nike will actually see more of their shoes sold because their own workers, for the first time, will be able to afford to buy a pair."

http://www.populist.com/00.1.joseph.html

Now some more "official sources":

Here's something from a report from the Economic Policy Institute. It explains how the US Congress has already enacted provisions that would include guarantees of workers rates in trade agreements. It explains, though, that these things are blocked by neo-liberal bureaucrats.

"Congress has clearly recognized that trade and investment agreements without complementary provisions that assure core worker rights can deform the domestic social compact represented by our own labor relations legislation. It has therefore provided in U.S. trade legislation that recipient countries must effectively assure core worker rights, generally understood to mean the right of free association, the right to collective bargaining, the right to strike, the right to a safe workplace, the provision of a minimum wage, prohibitions on forced labor, and limits on child labor, in the country that is the recipient of the trade preference. (Examples include the Omnibus Trade and Competitiveness Act (1974 as amended, particularly Section 3.01); the General System of Preferences (GSP); and the Caribbean Basin Initiative (CBI). The legislation governing the Overseas Private Investment Corporation, or OPIC, contains similar worker rights provisions.)

Congress has also recognized that worker rights in trade and investment policy cannot be separated from development finance."

http://www.epinet.org/

So basically, the IMF is no more accountable to the US Congress than it is to you or me. I presume, CP, that you're British since you spell "labour" funny ;).

Also: I don't see how you can possibly use China as an example of the success of neo-liberal economic policies since it is basically a fascist state. In exchange for total obedience, workers' lifestyles are substantially subsidized beyond what is earned by workers themselves. India is a better example though it's not clear to me that India has completely bowed to IMF rules, nor that it's as dependent on them. India has functional democratic institutions and other infrastructural requirements that reach back to its colonial past. I believe that may be what Demos meant when he said that it's third-world status was of a special variety.

For more on the Russian debacle, see this article in the Nation:

http://past.thenation.com/cgi-bin/framizer.cgi?url=http://past.thenation.com/issue/980601/0601wedel.shtml

That about finishes the direct replies to me. Some additions to Demos's more recent posts.

Minty I concur with just about everything Demos said on the matter of where unregulated capitalism in developing nations creates conditions that ferment extremism and terrorism. And I also agree that Osama bin Laden & co. require a much more complex historical picture: not entirely reducible to oil, imperialism, capitalism, US foreign policy, or any other single factor. (But neither is it reducible to "evil" Islam)

Just so you know that this notion--that is, the notion that there's a connection between economic inequality and terrorism--isn't whacko and fringe, here's an article from the Christian Science Monitor in which US ally Tony Blair makes the case.

http://www.csmonitor.com/2001/1128/p7s1-woeu.html

CyberPundit: From your latest.

"In any case my basic problem is your contention that market failures in the labour markets are best solved at the global level when market conditions are always different."

Here and elsewhere you apply a circular logic again and again. You argue that there is no way to help workers without also hurting them. The main reason this is so is that they are bound to nations whereas transnational corporations are not. This is a classic tautology since exactly the problem that Demos is trying to address is that workers are bound to the nations whereas transnational corporations are not!

Like erislover, but with more technical knowledge of economics, you seem to assume that only capital and corporations can take advantage of globalization whereas citizens must remain wedded to concepts and structures that developed several centuries ago. While I don't at all advocate a centralized world-state to dictate planning for the entire planet, I do, as I've said, not only advocate but also foresee the rise of supranational alliances such as the EU for developing nations.

In all of your posts you use positivist assumptions from economics--a social "science" predicated on all kinds of abstract assumptions and reductive mathematical models--to argue, in effect, that nothing can change unless the market deems it can change. This view betrays little knowledge of history, and a luddite view of social relations. If I really believed capitalism were as rigidly tied to present orthodoxies as you seem to believe, I would be opposed to capitalism. As a historian, though, I believe that human beings actually play a considerable role in shaping their own history. The path of economic history is strewn with the fallen reputations of prophets of doom ;)

B. Gardener, Even a casual glance at your post is sufficient to reveal that you have nothing to contribute to this thread--which has so far been conducted in an exemplary spirit of good faith (despite the inflammatory thread title). If you have some historical case to make about terrorism and war crimes prior to the 18th century, and its application to the specific arguments that have so far been made, by all means make it. Otherwise, please don't waste your time and ours.

Mandelstam
12-02-2001, 12:33 PM
Minty: "My point exactly, B. Gardner."

Was that your point, Minty? This assumes that you haven't yet noticed what both Demos and I have made clear again and again. We're not talking about some "other system" in contrast to capitalism. We're talking in both economic and historical terms about what works best within capitalism itself. I think if you would put aside the assumption that either one of us is speaking from some anti-capitalist radical socialist point of view--bent on seizing the means of production, nationalizing all property or some other socialist procedure--you'd realize that what's being described here is a way to extend "the system" that you seem to admire both for its own benefit and for the benefit of the majority of people in the world.

minty green
12-02-2001, 01:13 PM
Re: "My point exactly." That was the point of my OP, as well as my response to Demo's attempt at explaining why capitalism could be responsible for terrorism. If it is not uniquely responsible for creating an environment that leads to such acts, then I fail to see how it is "responsible" at all in any relevant sense. Those comments, of course, have nothing to do with the specifics of the economic debate that has consumed most of this thread, and I did not intend it to be taken as such.

Be back soon after digesting your latest attempt to transform 18th-19th century regulations into something relevant to the three specific types of regulations I identified earlier.

CyberPundit
12-02-2001, 01:23 PM
Mandelstam,
You still don't provide specifics about how exactly tying labour regulations to trade will improve anything in the third world.

The statement about workers being able to afford their own production is just bogus economics in fact a well known economic fallacy. First of all you ignore my point about why developing countries are constrained by aggregate demand anyway. If they aren't then boosting aggregate demand beyond aggregate supply will just cause inflation. Second the author seems to be cluless about the micreconomic adjustments to a minimum wage which will usually offset any increase in purchasing power among one group with a decrease elsewhere. Believe me, even the minority of economists who support the minimum wage don't think it increases aggregate demand. They support it on redistributionist grounds.

While economists like Krugman have criticized the IMF, I don't believe there are too many economists who advocate imposing standardized labour regulations across different developing countries via the trade system.


"I don't see how you can possibly use China as an example of the success of neo-liberal economic
policies since it is basically a fascist state."
Huh? This doesn't make any sense. Why should the fact that China is authoritarian(and has always been authoritarian) negate the fact that its economic policies of the last 20 years have produced spectacular growth. No has denied that authoritarian countries can produce economic growth when they open to trade and foreign investment.


"India is a better example though
it's not clear to me that India has completely bowed to IMF rules, nor that it's as dependent on them."
Well during the stabilization programme it followed IMF prescriptions quite closely. In any case many countries ignore some aspect of IMF prescriptions. There are always politicial constraints regardless of whether you are a democracy or not.

How does the Indian experience square with your general assertion that countries which follow IMF policies are screwed. India clearly did quite nicely for itself after the IMF stabilization programme.

Incidentally India like most developing countries is strongly opposed to global standards. Would you make an excpetion for them? China? There is no way any global standards would work without these countries. How exactly do you intend to force them to adopt the policies you want.

How does South Korea fit into your scheme? They had a pretty successful IMF programme a few years ago and they have had huge growth rates in the last 20 years by tying their economy into the world economy.

Chile is the most free-market oriented economy in L American and has had growth rates of 5-6% for 20 years. Really there is absolutely no evidence for the simple-minded "IMF and neo-liberal policies are ruining the poor countries" analysis of the Nation.


"Here and elsewhere you apply a circular logic again and again."
Absolutely not. You don't seem to understand the argument at all since you have barely responded to it. It doesn't depend on any internatinal context but is simply a standard piece of microeconomic analysis which applies just as well to a closed economy. Basically when the government imposes a labour regulation, there is going to be a market adjustment. 3 of the adjustments don't really benefit workers and can harm them. Only one (the most theoretically dubious) benefits workers. Your basic thesis appears to be an assertion,without any evidence, that the beneficial adjustment will be dominant and that you are so sure of this that you are willing to impose standard labour regulations across a wide swathe of nations with very different situations.

BTW I am not British.:)

Mandelstam
12-02-2001, 01:25 PM
Minty: "Re: "My point exactly." That was the point of my OP, as well as my response to Demo's attempt at explaining why capitalism could be responsible for terrorism."

Fair enough.

"If it is not uniquely responsible for creating an environment that leads to such acts, then I fail to see how it is "responsible" at all in any relevant sense."

Well, because when there are multiple historical determinants for an event, all of those historical determinants are, to a degree, "responsible." If you read any kind of textbook account of the conditions that produced a war whether it be the French Revolution, the US Civil War, WWI or what have you, you will usually find about 7 different contributing causes given. What does this imply? Well, by all means let's address all things that contribute to terrorism. But in doing so let's not feel compelled to absolve any one of them just because none of them is uniquely responsible.

Here (from the link I already posted) is what Tony Blair, ever eloquent, has to say on the matter:

""One illusion has been shattered on 11th September: that we can have the good life of the West, irrespective of the state of the rest of the world," said British Prime Minister Tony Blair in a major foreign policy address earlier this month."

The author explains:

"Not that anyone is suggesting that Osama bin Laden, accused of masterminding the Sept. 11 attacks, was acting on behalf of the world's poor, or that he conceived the atrocity as a way of drawing attention to the growing disparities between the richest and the poorest countries. Nothing he has said or done, before or after the attack, supports such an idea.

But his vitriolic brand of anti-Americanism resonates with resentful and dispossessed people. "The war against terrorism...needs to be a series of political actions designed to remove the conditions under which such acts of evil can flourish and be tolerated," Mr. Blair told his audience. "The dragon's teeth are planted in the fertile soil of wrongs unrighted, of disputes left to fester for years or even decades, of failed states, of poverty and deprivation," he added."

There is nothing here inconsistent with what Demos described for you. So is Tony Blair also, as you seem to want to insist, determined to supplant capitalism with some "other system"?

erislover
12-02-2001, 01:32 PM
Obviously that doesn't mean that Rolls Royce employees drive Rollses (though many Mercedes employees do drive Mercedes), or that Boeing employees own their own jets.
Obviously? In what way is that obvious? I see no distinguishing characteristic between toys and Rolls Royces in your statement, "industrial capitalism doesn't flourish without producing workforces capable of purchasing what is being manufactured."
Seen historically, globalization has weakened the collective power of average citizens in the West, and the next logical step is to have citizens organize transnationally as many NGOs and trade unions are already trying to do.
That sentence makes no sense to me. Western workers have lost their power so they need to submit themselves to a transnational movement? And this is supposed to empower them in what way? I know many people who work for the unions... and I mean, work for the unions. The unions pick the jobs, the hours, etc. I find that amusing. See, me—not working for a union—choose where to work and under what conditions, but these persons have to pay the union to tell them where to work. No thanks ;) I don't want that kind of "power."
So actually, from a labor point of view you are a luddite with your antedeluvian notions of the nation-state, and your 18th-century attachment to laissez-faire.
:confused:
[to minty]That's the beauty of globalization: you can't simply localize the problem of repression and blame it on bad old non-Weterners and their unenlightened ways.
But I thought you said the deciding factor in England and America was the ability for workers to organize. Changing your tune?
Like erislover, but with more technical knowledge of economics, you seem to assume that only capital and corporations can take advantage of globalization whereas citizens must remain wedded to concepts and structures that developed several centuries ago. While I don't at all advocate a centralized world-state to dictate planning for the entire planet, I do, as I've said, not only advocate but also foresee the rise of supranational alliances such as the EU for developing nations.
Oh dear. I agree: I think there will be nation-spanning labor movements gaining speed as the world economy becomes more of a single unit. I also have no problem with that. Why do you think I do?

B. Gardner
12-02-2001, 01:34 PM
<b>Mandelstam</b>.

Must have hit a nerve there, huh? My point is fairly straightforward - the targeting of the civilian populations and the infliction of atocities upon another population by beligerents are hardly byproducts of capitalism alone. It is an act of the purest historical myopia to suggest that neither terrorism or war crimes existed prior to capitalism.

I would, in fact, argue the complete opposite. That voluntary moderation in wartime and the creation of international accords limiting wartime behavior can be DIRECTLY correlated with the advent of capitalism. Certainly from a straight chronological perspective wartime savagery was the rule not the exception prior to the widespread adoption of the capitalist model.

As to citations, Ceasar at various times during his campaigns against the Gauls: killed every man, woman and child of a given tribe, sold all the survivors of a given tribe into slavery, and cutoff the hands of all the survivng soldiers of a given tribe. While an exception doesn't disprove the rule, this behavior was the norm, not vice versa.

minty green
12-02-2001, 01:45 PM
Originally posted by Mandelstam
Because "mercantalist regulation" isn't, as you may have assumed, exclusive to matters of trade.I have assumed no such thing. Hell, I haven't even addressed it. You asserted early on in this thread that three things were necessary to "stabilize, democratize and spread prosperty": "trade union movements, environmental and human safeguards, living wage standards." I replied that none of those factors were necessary to the stabilization, democratization, and prosperity of the Western economic powers. So why do you continue to tell me about all kinds of regulations other than trade unions, the environment, human safeguards, and living wage standards? You're attempting to respond to my point by redefining my point, and it's not a tactic that I'm particularly fond of.

Now I admit that your latest post does tangentially address some of those concerns. Price controls and welfare might be, I think, relevant to "human safeguards," although you never defined that term and I initially took it to mean (as I posted) worker safety. But where's your evidence that "a living wage" was necessary to stability/democracy/prosperity ("s/d/p")? You've offered no examples of this, nor of environmental regulation, nor of trade unions (which are the one subject you originally mentioned that I think might reasonably be argued to be necessary to your s/d/p triumverate).

Instead of addressing those concerns, you're again dragging up all kinds of items that were far outside the scope of my original point about prerequisites for stability/democracy/prosperity. Education? School meals for poor children? Pensions? Unemployment insurance? All fine and dandy by me, but certainly not germane to "trade union movements, environmental and human safeguards, living wage standards," that list of items that you asserted were necessary for stability/democracy/prosperity. Hell, even if school meals and unemployment insurance were relevant to unions, living wages, and the environment, you haven't given me any reason to believe that those things are necessary for s/d/p, i.e. that s/d/p could not occur in the absence of school meals and unemployment insurance. (Which, incidentally, begs the questions of what level of unemployment insurance is necessary, and of who should pay for it--rather important considerations, don't you think?)
Another point is that you . . . seem to assume that there is one unique path, based on Western history, towards industrial development: from early industrialization (with laissez-faire and a certain amount of suffering), to increased prosperity with, at last, the ability to deepen democracy and social welfare.I never stated any such thing, and I certainly hope I did not imply it. To the contrary, I would hope that my questioning of your assertion of the necessity of "trade union movements, environmental and human safeguards, [and] living wage standards" would demonstrate that I do not believe there is any one path to stability, democracy, and prosperity.
In fact, the evidence suggests quite the contrary since, as I said, no nation has ever managed to industrialize under laissez-faire conditions.Laissez-faire is, at least as it concerns my own position, completely a strawman. I believe in an important role for government in the development of any nation into a stable, democratic, and prosperous society. That I believe in a far more limited role for government than you apparently do by no means translates into a laissez faire position on my part.

Gadarene
12-02-2001, 02:02 PM
This seems like an appropriate time for my habitual invocation of Friedrich List (http://members.tripod.com/~american_almanac/listpt.htm), a nineteenth century economist who advocated a partitioned system of global free trade. In such a system, developing countries would be allowed to maintain protectionist policies until such time as their political, social, and economic climates were robust enough to withstand full liberalization.

James Fallows wrote a fantastic article about List for The Atlantic; it can be found here (http://www.theatlantic.com/politics/foreign/jfhww.htm). I strongly recommend that it be read by participants on both sides of this debate.

Mandelstam
12-02-2001, 02:25 PM
Greetings Gadarene, Thanks for the links. I've read some really interesting stuff on List by (I think) Michael Lind (in The New Yorker and the Nation). I look forward to reading what you've posted as I agree that FL has something important to say to the present day.

CP and Minty, thanks for your latest. I promise to get back to you but must do so later.

I'll just reply briefly to B.Gardener:

""Must have hit a nerve there, huh?"

Not in the least. I welcome anyone to the discussion who is willing to read posts carefully in answer in good faith. The problem is that you show signs of doing neither.
Hence, it's tedious to reply to you since it involves restating what's been said and said clearly.

"My point is fairly straightforward - the targeting of the civilian populations and the infliction of atocities upon another population by beligerents are hardly byproducts of capitalism alone."

And my point is that no one in this thread has said this. Now if you believe otherwise, please carefully read this thread (and the other to which it is linked) and show us from where you've developed this inference.

"It is an act of the purest historical myopia to suggest that neither terrorism or war crimes existed prior to capitalism."

Indeed, which is probably why you'll find no one in this thread making any such allegation. Again--please don't waste our time or your own.

Demosthenesian
12-02-2001, 02:43 PM
Pundit: I was "throwing around" the concept of a public good because of your apparent belief that regulations only make things worse. You're right, I'm not an economist, but I do know enough to know the role of the state in dealing with such issues, and I also know a faulty inductive argument when I see one. It an argument that you're still engaging in, in fact: your argument that minimum wages are a bad idea is in no way germane to the argument over whether such things as, say, worker safety are a public good.

I'm going to turn the argument around, Cyberpundit. How do you propose that these issues be handled? Judging by your quotation (and consequent lack of explanation) of the Tiebout process, you appear to have a clear idea of how states should handle this, and why there is no "race to the bottom" as corporations find the cheapest states to do business in. ALL the issues, Cyber, not just whatever you appear to have the strongest basis on. You already admitted that these problems can be public good issues- how do you get around that? As in government, it's much easier being the one attacking than defending. If nothing else, kindly do me the favour of explaning how the Tiebout process works.

Come to think of it, that's probably why minty set this thread up as a question for Mandelstam.

Minty: my point (and I'm a "he") was that the problems with capitalism is currently a contributing or exacerbating factor in this marginalization process. Does this mean this always was the case historically? Hardly. Different causes can lead to the same effect in different situations. Still, I was, as pointed out, just "theorizin'". There's no way to empirically prove this, and I neither have the resources nor the time to try to turn this into a serious hypothesis. :) The problem, I think, is that most of the serious proposed links between capitalism and terrorism that I'm familiar with get, um, a little Marxist. I'm not as predisposed to dismiss Marxist analysis out of hand as I imagine most are on this board, but I didn't want to write all that stuff only to have some joker dismiss it out of hand because of the use of the "M" word.

Two questions: I had thought that terrorism as we understand it is a fairly modern enterprise, and certainly no older than capitalism. And when was the concept of a "war crime" introduced? Acts of war are not war crimes: for something to be a crime, there needs to be the rule or law against it. The geneva convention does not predate capitalism.

And isn't it possible that the rules for successful growth now are likely different than they were during the time of the growth of the Western economic powers? Among other things, they could colonize, and most of them had barriers against trade up of some form or another.

Erislover: I don't know what you do, but most people I know get a job and go in when and however long their boss tells them to. If they don't, they're canned. While this isn't universal, I'm sure you'd agree that historically unions have served a useful purpose. There's a reason we don't have sixty hour work weeks.

B. Gardner
12-02-2001, 02:43 PM
Mandelstam,

As my original post was directed at the topic of the thread and singled out no one, I find your continual protestations most curious.

If the post was not directed at you then why answer? Do you have any information that my assertions are incorrect?

I'm not a knee-jerk capitalism apologist, but I take exception to those who would cast the world's ills at capitalism's feet. There are many legitimate reasons to critisize capitalism without flogging some ridiculous canard that it is responsible for terrorism.

Gadarene,

Thanks for the link I enjoyed the article and find it spot on.

Demosthenesian
12-02-2001, 02:48 PM
Gardner: so if capitalism is not responsible for terrorism, mind taking a stab at what you think is?

(And I'm interested in those legitimate reasons, and not necessarily as fodder for debate. I'm not much for either dogmatic neo-liberalism or anti-capitalism.. it's the mushy middle that interests me.)

B. Gardner
12-02-2001, 02:57 PM
Demosthenesian,

I think human nature as it relates to the group/tribe/nation is responsible.

Ultimately terrorism is a military response that avoids direct military conflict and is usually conducted against non-military populations. It can be by a stronger force attempting to subdue the population (Nazis in Yugoslavia and Eastern Europe, Rome in Palestine, etc.) or it can be by a weaker foe as a means to discourage a stronger one.

Terrorism is simply conflict that by our relatively modern definitions breaks the "rules." In historical times it was simply an extention of war and as such was widely practiced.

Demosthenesian
12-02-2001, 03:03 PM
Gadarene: read the article, liked it, made a lot of points I'd like to but did it much more clearly. One slight problem though...

It was written in 1993. IOW, pre-crash. Speculation on the relative strength or weakness of Asian quasi-protectionist economic strategies has to take that into account. Else Pundit will no doubt have a field day with it. :D

B. Gardner
12-02-2001, 03:09 PM
Demosthenesian,

I think human nature as it relates to the group/tribe/nation is responsible.

Ultimately terrorism is a military response that avoids direct military conflict and is usually conducted against non-military populations. It can be by a stronger force attempting to subdue the population (Nazis in Yugoslavia and Eastern Europe, Rome in Palestine, etc.) or it can be by a weaker foe as a means to discourage a stronger one.

Terrorism is simply conflict that by our relatively modern definitions breaks the "rules." In historical times it was simply an extention of war and as such was widely practiced.

Gadarene
12-02-2001, 03:17 PM
Speculation on the relative strength or weakness of Asian quasi-protectionist economic strategies has to take that into account.

No doubt. :) A little time on Lexis--which I'll do later, if needed, as now I have to get back to law school outlining--would show a number of articles which point to factors other than protectionism as the reason for the Asian collapse (specifically, if I recall, cronyism and capital flight risk).

One such article--okay, I did a quick search--is from the August 2000 ASEAN Economic Bulletin (does anyone know if this is a partisan organization?), and is entitled, "The Asian Financial Crisis: Hindsight, Insight, Foresight." The author is Wing Thye Woo.

It's a comprehensive read; I wish I could link it.

minty green
12-02-2001, 03:27 PM
Originally posted by Demosthenesian
(and I'm a "he") Then we have something in common after all. :pThe problem, I think, is that most of the serious proposed links between capitalism and terrorism that I'm familiar with get, um, a little Marxist. I'm not as predisposed to dismiss Marxist analysis out of hand as I imagine most are on this board, but I didn't want to write all that stuff only to have some joker dismiss it out of hand because of the use of the "M" word.Hey, I don't mind a little Marxist analysis. Marx was actually a pretty decent observor of 19th century economics. It's Marxist solutions are pretty whack.Two questions: I had thought that terrorism as we understand it is a fairly modern enterprise, and certainly no older than capitalism. And when was the concept of a "war crime" introduced?Nah, I think terrorism goes back a long way. It's always been a way for relatively powerless groups to strike disproportionately at the more powerful. It's just that until the 20th century, they had to make do with more straightforward forms of murder, what with car bombs and jetliners in scarce supply before now. As for war crimes, the concept probably didn't exist before the 20th century, but that does not prevent us from discussing earlier acts as war crimes even if they would not have been understood that way at the time.

erislover
12-02-2001, 04:24 PM
Originally posted by Demosthenesian
Erislover: I don't know what you do, but most people I know get a job and go in when and however long their boss tells them to. If they don't, they're canned. While this isn't universal, I'm sure you'd agree that historically unions have served a useful purpose. There's a reason we don't have sixty hour work weeks.
Oh, I think the historical unions would serve a purpose today, too, if they were still around. Instead the unions have replaced the corporations as the "thing in the way" of laborers. They're just as big and bulky as corporations, have just as much red tape, and yet they are paid to do this! Much more lucrative than a corporation, IMO (before someone jumps the gun here, I realize that many union representatives aren't full-time unioners, and that, in fact, it is geared more along political lines than monetary ones).

Yes, I do what my boss tells me to. That is, I think, the essence of being an employee, regardless of whether or not there is a union or whether there is a market system or a socialist system or whether we roll dice to determine how much something costs. If my boss and I disagree I quit working there (regardless of whether I literally quit or he fired me). Luckily I have not gotten myself into such a situation where I need a high-paying job to survive. I could get by on two low-paying jobs just as nicely (without the free time I have, of course). But even if I did find myself in such a position, it isn't (necessarily) the fault of the business.

Oh, unions are a grand construct that I think are easy to abuse, and which are abused. I think unions are inevitable in a free society (relatively free, of course, before we start that up). As such, the only thing holding back slave-labor shops isn't capitalism, and isn't the businesses moving there to take advantage of that slave labor, but the society which permits it in the first place. Apart from that, I even think that "slave labor" is putting a spin on the subject that simply isn't there.

Mandelstam, allow me to state this more clearly for you. I, an American citizen, am a person that lives rather comfortably by worldwide standards. I cannot afford to spend $140 on a pair of Nike shoes, and I manufacture items which cost at least $22,000 up to $200,000. It is no suprise to me that assemblers might not be able to purchase the end-product. I would think that is common sense, in fact, that there is no guarantee that what an assembler manufactures is also able to be purchased by said assembler. I do not see a damn thing wrong with that, and I simply wonder why you do.

minty
I had no idea you were male. I had no idea you were female, either, but when you said that I was shocked that someone with whom I have debated in the past had a gender unknown to me. Strange. At any rate,Nah, I think terrorism goes back a long way.
Indeed. I am going off recollection of history here, no actual cites, but I recall that the ancient Greeks, at least some faction of them, used to poison water supplies with dead bodies. I think that would qualify as terrorism in most people's minds.

CyberPundit
12-02-2001, 04:37 PM
Demo,
I never said that all regulation was bad. When there is clear evidence of market failure it is often appopriate. As a matter of fact most market economies have extensive regulation despite the fact that they are plugged into the global economy and there is little evidence that globalization has reduced regulation significantly. So there is little need for a global approach unless the market failure itself is global (like global warming).


Worker safety is for the most part not a public good since the main benefit to the worker himself and perhaps the business. Therefore for the most part the cost of worker safety is internalized by the firm. Would you care to provide empirical evidence for the magnitude of the public good component of worker safety that you allege?


Tiebout's basic insight was the that localities compete with each other to offer the optimal amount of regulation.If a locality offers less regulation than optimal firms and labourers will move to another locality. It works best for the regions and small countries but in some measure the logic works in the international economy.

If any regulation is efficiency-enhancing there is no reason why the government will forego it because of any "race to the bottom". First of all the the logic of the race to the bottom applies only if the regulation in question hurts the firm's profits and it decides to leave. As I have explained repeatedly this is only one case .

Also presumably the social benefits are greater than the loss to the firms. So it should be possible to set up a system of sidepayments so that everyone is better off( that after all is the definition of efficiency-enhancing). The same applies if the benefit is long term through some borrowing.

Finally please give some systematic empirical evidence for the race to the bottom. It's getting boring to argue continously with your airy-fairy speculation. Most economists who have looked at the issue have found little evidence of a race to the bottom, certainly not enough to justify sweeping global standards.

http://www.worldbank.org/html/extdr/pb/globalization/paper4.htm
This is a nice article from the WB which addresses the issue.


Some discussion of the praciticalities would also be nice.
Most developing countries including the democracies don't want mandatory labour standards. How are you going to force them to adopt them? Which labour standards exactly do you have in mind which you want to impose on them? How do you know that the costs of these higher labour standards won't be higher than the benefits which you haven't even explained properly? If these labour standards are so good why don't they get together as a group and enforce them. Why does the rich world have to force them to adopt these standards?

Frankly you haven't even provided the first step of providing a plausible theoretical rationale for global standards let alone the empirical evidence that they are necessary and that they will bring more benefits and costs.

Gadarene
12-02-2001, 04:38 PM
I am going off recollection of history here, no actual cites, but I recall that the ancient Greeks, at least some faction of them, used to poison water supplies with dead bodies. I think that would qualify as terrorism in most people's minds.

Where we once again run into the troublesome, subjective distinction between war and terror.

B. Gardner
12-02-2001, 05:01 PM
"Terrorism" and "war crimes" (as distinct from war) are possible as seperate definitions only in the presence of internationally codefied behavior standards. Because these standards were not present until recently doesn't mean that behaviors we would classify as "terrorism" and "war crimes" didn't occur.

december
12-02-2001, 05:26 PM
Originally posted by Mandelstam . Well thanks for delving into myth december which aptly describes your mystical attitudes towards economics. Of course countries--with the help of economists--can agree upon what might constitute an appropriate minimum wage specific to a particular nation. Just as we do in the United States. And of course, it's part of economic policy to allow such wide wide differentials to exist. You act as though the economy were like the weather: something that occurs without human action! That isn't to say that it isn't complex: but economic policies can and do impact such conditions. In any case, the point isn't so much how the conditions arose, as how unhealthful they are for a global economy. If anything, Western countries should be eager to do what they can to see the global wages improve: that is, we need third-world workers to buy our services, technology, etc. Just as we buy their manufactured goods. Have you taken a look at the US's trade deficit lately? Mandelstam, you have fairly laid out the other side of the debate. IMHO the minimum wage in the US hasn't destroyed the economy, but it has had some negative impacts. There's also a big "black market" -- that is, workers who evade the minimum wage. There's no way to know if the US minimum wage law has done any good, because we can't re-run history without it.

Europe has very high unemployment, caused in part by the many government interferences with the economic system.

Since it's very difficult for a single country to implement economic controls without doing harm, I'd say it's impossible to accomplish this feat internationally. Have you ever seen UNESCO at work? Can you imagine an economic system devised with that type of double-talk, dishonesty, and selfishness? As always, YMMV

CyberPundit
12-02-2001, 05:48 PM
Oh btw let me spell the sheer lunacy of the 1$ /hour minimum wage that Mandelstam cited. At 2000 hours per year that works to 2000 dollars which is four times the per capita income of India. Is there any need to elaborate the idiocy of enacting a minimum wage which is several times the average income. What does the author believe? That India's GDP is going to quadruple overnight because of the minimum wage increase to accomodate it?

This underlines the fact that in addition to being clueless about economic theory most leftists are deeply ignorant of the basic facts of the economies they want to impose policies on. The fact is that there are hundreds of millions of people all over the world who would give a limb for a job which pays 50 cents an hour. Sad? Undoubtedly. But nothing is gained by enacting foolish regulations whose main effect is to reduce the demand for labour in those economies and the amount of investment,policies which will in all likelihood impoverish those economies even more.

If rich countries want to increase aid to poor countries, ie. actually pay for the things they want to see, that's admirable and like I said I strongly support more international aid for things like primary schools and health clinics.

Sadly ,like I said,most of the leftist prescriptions are about the easy way out of just trying to impose regulations on poor people whose cost will in all likelihood be payed for largely by the poor themselves. The real agenda isn't helping poor people but protecting labourers in rich countries.

minty green
12-02-2001, 06:12 PM
I certainly agree that a global minimum wage is a bad idea. Nevertheless, your India example isn't a very good one. $2000 might be four times India's per capita income, but that's deceptive in that "per capita" refers to the entire population of India, not just the workers. This is just a guess, but if you drop everyone who doesn't earn an income, I suspect that $2000 figure is at least in the ballpark, if still high.

CyberPundit
12-02-2001, 06:27 PM
True but even if the workforce is half the population then the minimum wage is twice average income.

That would be roughly equivalent to a minimum wage of 30 or 40 dollars in the US. Still completely ludicrous.

Not to mention the fact that there are many countries even poorer than India.

minty green
12-02-2001, 06:42 PM
Actually, my WAG would be that the workforce is a fair ways less than half of India's population. Its population demographics are such that a huge percentage of the people are not of working age, and my sense is that most of India's still not all that progressive when it comes to women in the workforce.

CyberPundit
12-02-2001, 06:51 PM
Don't forget that many children have to work and that many poor women have to work as well. Also the proportion of retirees is much smaller. So 50% wouldn't be surprising at all.

minty green
12-02-2001, 07:12 PM
This site (http://www.economywatch.com/database/employee3.htm) says there were 282.4 million Indians employed in the public and private sectors in 1997, including 46.3 million women. That's with a total population around 900 million, IIRC.

Again, I agree with your basic point, I'm just quibbling with the specific example. There are many countries with economies much worse off than India, and a $1/hr. minimum wage would be an absolute disaster to those economies.

CyberPundit
12-02-2001, 07:52 PM
Hmm OK. Though I suspect there are many more in the informal sector who don't get counted.

In any case according to Mandelstam's figures the average wage in the manufacturing sector is 50 cents in China so the proposal seeks to double the average there which would be roughly equivalent to a 30 dollar minimum wage in the US.

Demosthenesian
12-02-2001, 08:53 PM
minty: true, but Mandel's point that a minimum wage (if it exists) should depend on the economy in question is one that would seem obvious to anybody trying to set up such a scheme. Keep in mind that the point is "a living wage", and not any particular dollar point. I'd imagine that as working Indians are not dying off left and right there is a comparative living wage much, much lower than what you'd see in North America. I don't think anybody would honestly argue that a minimum wage doesn't have an effect on unemployment: the question for policymakers is whether they consider it worth it. As there isn't a western country without either a minimum wage or economists warning about the consequences of that minimum wage, it's pretty obvious that western governments are willing to make that tradeoff. The question then becomes rather simple: would they still able to make those decisions under an international free trade regime? If not, what does that mean to national sovereignty?

Pundit: I'll assume that Tiebout didn't forget about the alternate situation- that a locality offering more regulation than optimal will drive business away. I'll gladly grant that this makes sense. I'm rather uncomfortable with how one determines "optimal" levels of regulation, though. In any case, it seems that my arguments have managed to step into the already-existing debate over the idea of the "race to the bottom". Makes the whole thing a bit easier. Makes citing online sources a little rougher, though, as journal articles aren't usually available online for free linking. What are the rules here for citing offline sources? Good? Bad?

In any case, I read your source. It's not exactly a sweeping indictment of the notion of a race to the bottom except the concept of such a race being due to environmentalism alone. Even then, however, there are caveats:

This is not to say that there are no tradeoffs between growth and the environment. Even with good environmental policies and clean technologies, continued increases in output may tend to increase the total volumes of various kinds of pollutants in many cases. Every society has to decide for itself on the relative value it places on economic output and the environment
This sounds awfully similar to the tradeoff between minimum wages and unemployment I mentioned above. The question, again, is whether small countries *can* make these value judgements.

And it also reflects my point about subsidized costs:

Over-use of a natural resource may occur when there is a policy regime of open access and the overall costs to society of its use are not fully reflected in the price paid by private users (for example individual fishermen do not consider the impact of their activities on global fishing stocks)
Any Canadian would be able to explain in great detail how subsidized exploitation of natural resources by international corporations fishing in international waters played merry hell with the cod stocks and impoverished entire provinces. Or, for that matter, the Salmon controversy in British Columbia.

I'll agree with one thing you said Pundit. I actually think you called it when you were talking with Minty when you said you'd support "more international aid for things like primary schools and health clinics". That "things like" there is a big question, but anything that improves the situation in the third world is a positive step. I do not support "free trade zones", "Maquiladoras", or any attempt by third world states and corporations to subsidize the cost of producing goods by concentrating the negative effects in one area and on one group. I don't buy that these workers made an informed choice to work there, either, as they are often ill-equipped to make that decision due to a lack of education and unable to engage in collective bargaining. As schools will both allow people to intelligently make these decisions and clinics will ensure that they are healthy enough to make those decisions, I support it wholeheartedly.

(Was the baiting of "leftists" really necessary, though?)

Mandelstam
12-02-2001, 09:13 PM
erislover, I hope we're straight on the matter of the importance of industrial workforces needing to be able to purchase moderate manufactured goods. Sorry if I misled you into believing that I thought the world's workers should rebel until every last one of us can afford his or her own F-14 or Ferrari ;).

"Western workers have lost their power so they need to submit themselves to a transnational movement? And this is supposed to empower them in what way? I know many people who work for the unions...".

Western citizens don't have to "submit themselves" to anything (unless they actually enjoy such things ;) ). What you're forgetting is that your own perceived indifference to trade unions is entirely predicated on the fact that the United States has a union movement (such as it is). Hence your employer has to bear in mind not to give workers such as you added incentives to wish to organize. That's not the case for most third-world workers. But it is still in your interests to see them enjoy that right, for economic reasons and for the greater world stability it will promote. And there are environmental reasons why you might want to join with other citizens--whether or not you submit to them is entirely up to you--to rein in the unfettered power of multnationals.

Minty: "You asserted early on in this thread that three things were necessary to "stabilize, democratize and spread prosperty": "trade union movements, environmental and human safeguards, living wage standards."

Indeed. That's part of the reason why some Asian economies have begun to suffer so much: after having reached a relatively high phase of industrialization through "economic nationalism" and at a time when they might have been poised to institute a social safety net through trade union pressure and/or democratic channels, instead these economies were compelled to liberalize their economy (but not their politics) with the bad effects described in the Nation article.

"I replied that none of those factors were necessary to the stabilization, democratization, and prosperity of the Western economic powers."

And I hope I've explained that they were. Indeed, nineteenth-century Europe was positively revolutionary until trade union organization and the social safety net came about. And, as I tried to explain above, they came about gradually but steadily.

"So why do you continue to tell me about all kinds of regulations other than trade unions, the environment, human safeguards, and living wage standards?"

Because you seemed to me to be arguing that industrialization required laissez-faire conditions: and I was trying to demonstrate to you that, in the 18th century, mercantilism took the place of modern social welfare mechanisms and in that and other ways boosted industrialization. Then there was a period of laissez-faire: but gradually it was curbed via trade union/democratic pressure towards modern social welfare. This led to more widespread prosperity and, therefore, to functional democracy and social stability.

I apologize if you never did mean to make the case about laissez-faire and I only thought you did. It's a common argument on the "globalization is just fine the way it is" side of things. But I hope now we understand each other :).

"But where's your evidence that "a living wage" was necessary to stability/democracy/prosperity ("s/d/p")?"

I think you misunderstand what is meant by "a living wage" Minty. You seem to mean that it must entail some specific piece of legislation such as a Living Wage Act. A living wage simply means a wage that is high enough to allow people to live somewhat decently. The fact that many nineteenth-century workers only barely had this led Marx to believe that they were a revolutionary class and would soon throw over the capitalist class. But--in large part due to their ability to organize and their enfranchisement--instead they got a living wage through a more democratic form of capitalism, including state regulation, and trade union voice in economic matters. The same things helped to put to rest Euroope's dangerous fascist tendencies after WW II.

"Instead of addressing those concerns, you're again dragging up all kinds of items that were far outside the scope of my original point about prerequisites for stability/democracy/prosperity. Education? School meals for poor children? Pensions? Unemployment insurance? All fine and dandy by me, but certainly not germane to "trade union movements, environmental and human safeguards, living wage standards," that list of items that you asserted were necessary for stability/democracy/prosperity."

On the contrary, extremely germane. Public education, school meals, pensions and unemployment insurance are social entitlements that boost people's living standards. Over the course of the nineteenth century, the state was made to provide these in the interests of stability (and also to build a more efficient workforce like Germany's). Trade unions enhanced this process by showing workers' collective power. Such things relate directly to a living wage since they help people to achieve it. For example, $5/day may not be a living wage in a country without old-age pensions or school meals; but it may be a comfortable living wage in a country that has them. Understand now?

"(Which, incidentally, begs the questions of what level of unemployment insurance is necessary, and of who should pay for it--rather important considerations, don't you think?)"

Absolutely. And that's one reason why unemployment insurance was so popular with the elite as opposed to paying higher wages to workers, or as opposed to more redistributive measures. That is, workers tended to pay for unemployment insurance themselves (out of their paychecks) then as well as now. Nevertheless, it was the beginning of a more widespread social safety net that eventually came to include people who had not paid into the system (such as widows), and other kind of entitlements. School meals certainly boosted the living wage standard of the British working classes since feeding their children absorbed a huge part of their wage.

"That I believe in a far more limited role for government than you apparently do by no means translates into a laissez faire position on my part."

Fair enough. I will take care to remember that you are on record as unattached to a laissez-faire position.

That said, I hope my main points are clear now. 1) Neo-liberalism expects developing nations to be able to industrialize successfully in a "free trade" or "laissez-faire" environment when no country in history has ever been able to do that. 2) Historically what has led to stability and functional democracy in industrialized nation is the sharing of prosperity generally achieved through the pressure of organized worker movements. Those channels are being blocked in most developing countries, even where democracy technically exists.

Gadarene, looking forward to reading up on List tonight. Good luck with law school outlining ;)

B. Gardner: "I'm not a knee-jerk capitalism apologist, but I take exception to those who would cast the world's ills at capitalism's feet."

Fair enough. I hope you're pleased then to find that no one in this thread is taking that position. :)

eris again: "It is no suprise to me that assemblers might not be able to purchase the end-product. I would think that is common sense, in fact, that there is no guarantee that what an assembler manufactures is also able to be purchased by said assembler. I do not see a damn thing wrong with that, and I simply wonder why you do."

Because the problem with today's worldwide economy is oversupply, and one big problem with the US economy in particular is the trade deficit. There world has more productive capacity than it has buyers. The only way to improve that situation is to improve the living standards of the developing world.

I'm sure you'll be able to afford those Nikes sooner or later; (although when you do, you might not be so ready to tell the boss to kiss off) ;)

BTW, since everyone is clarifying their sex for the benefit of pronoun users, I'm (as many of you know already) a woman (I guess the only one in the thread now that Minty has been outed as a man.)

Cyber: "Most economists who have looked at the issue have found little evidence of a race to the bottom, certainly not enough to justify sweeping global standards."

Well perhaps "most" have, but what you've provided is one link, from the World Bank, that specifically questions the "race" in environmental standards only. And it is far from the most decisive report I've ever read. Indeed, it seems to waffle quite a bit. For example:

"Opening the activity to international trade and investment may then exacerbate the irreversible loss of environmental resources. An important question here is that if one's concern is to protect a scarce environmental resource then why tax or regulate only international trade in the product? In the ideal case, taxing or regulating both international and domestic trade in the product without discrimination will usually be a more efficient or effective way of protecting it. Often, however, developing countries do not have the institutional capacity to put in place these more ideal, non-discriminatory environmental protection policies. In some cases, then, not opening the sector for the time being may turn out to be the only realistic 'second-best' policy, while the institutional and regulatory capacity for better quality environmental protection is built up."

Yeah, right...

And "[T]here is no evidence that the cost of environmental protection has ever been the determining factor in foreign investment decisions. Factors such as labor and raw material costs, transparent regulation and protection of property rights are likely to be much more important, even for polluting industries."

Could that perhaps be because environmental regulations thus far don't make many demands on prospective investors? And gee, why might that be? What if pressing environmental needs begin to make such protections necessary? What is in this article to suggest that there won't be a race to the bottom then?

Also, doesn't the latter statement imply that we can reasonably expect a race to the bottom on labor costs? And isn't that in fact what's happened when corporations leave the US for Mexico, or Germany for Malaysia, or Malaysia for China?

"Some discussion of the praciticalities would also be nice."

Yes indeed. What do you propose to do about undersupply? What is your plan for avoiding a global recession? How do you propose to close the trade deficit? What is your plan for addressing what Tony Blair (among others) argues is the economic factor in terrorism? What's your approach to global warming?

Most of all, how do you propose to correct the tautology in your own arguments?

"Frankly you haven't even provided the first step of providing a plausible theoretical rationale for global standards...

This remark was addressed to Demos. For the record though, with some notable exceptions I'd settle for regional standards negotiated, perhaps, through trade agreements (thus obviating the need for more bureaucracy). Did you read the link I posted from the Economic Policy Institute. What's fascinating there is that Clinton, apparently, intended for NAFTA to guarantee workers' rights in Mexico.

An excerpt:

"Presidential candidate Bill Clinton recognized in his October 4, 1992 Raleigh, N.C. speech that NAFTA without a modification of the labor relations regime in Mexico could constitute an unfair magnet for [foreign direct investment]FDI, to the disadvantage of American workers. Companies could relocate production to Mexico, Clinton noted, or, even if they did not, use the threat of such relocation in collective bargaining negotiations for the purpose of intimidating their workers. He therefore conditioned his approval of NAFTA upon the negotiation of a complementary labor agreement (the North American Agreement on Labor Cooperation or the NAALC, also referred to as the Labor Side Agreement) that would assure effective implementation of core worker rights in Mexico, including, most importantly, the right of free association, which is the foundation for all other worker rights. Over time, the Mexican worker would then be enabled to bargain for a fairer share of productivity gains. An egregiously unfair advantage – repressive labor practices – in attracting FDI would be eliminated."

In other words, at least in his campagin rhetoric, Clinton wanted to prevent a race to the bottom in labor costs; and he wanted to do so by ensuring "a fairer share of productivity gains" to Mexican workers. (Something you seem to believe is economically impossible.)

With the workers' rights provisions blocked by corporate pressure (see the link), the actual effect of NAFTA has not been good. From a different report:

"If the U.S. had achieved balanced trade in this period, as was predicted by the advocates of NAFTA and the WTO, U.S. manufacturing would be much stronger today and in a much better position to weather the downturn that is now under way. But the fact that 25 steel-producing companies, now including Bethlehem Steel, have declared bankruptcy reveals that rapidly growing trade deficits have had corrosive effects on the U.S. industrial base (Nag and Goldfarb 2001). Rather than putting new trade deals on a fast track, policy makers should step back for a strategic pause, during which they can review the structure, enforcement, and effectiveness of U.S. trade policies."

http://www.epinet.org/briefingpapers/bp118.html

So what's your practical approach to solving this problem, CyberPundit?

december: "Since it's very difficult for a single country to implement economic controls without doing harm, I'd say it's impossible to accomplish this feat internationally."

I agree it's difficult. But that's why I favor EU-type blocs and use of fair trade agreements.

Pundit on suggestion from NGO of $1/hr global min wage (something I'd said I wasn't myself persuaded by)

"Oh btw let me spell the sheer lunacy of the 1$ /hour minimum wage that Mandelstam cited. At 2000 hours per year that works to 2000 dollars which is four times the per capita income of India. Is there any need to elaborate the idiocy of enacting a minimum wage which is several times the average income. ...
...
Sadly ,like I said,most of the leftist prescriptions are about the easy way out of just trying to impose regulations on poor people whose cost will in all likelihood be payed for largely by the poor themselves."

CyberPundit, I wonder if you realize how preposterous you seem at times. Although I don't myself agree with a unified global minimum wage, nor insist that any given country's route to prosperity lay first and foremost with a national minimum wage, I could easily see someone with those beliefs reading this and thinking, "Well what about beginning with 50cents instead of $1" (or whatever figure works according to careful calculations). It's ludicrous for you to leap from your differences with this one writer to the conclusion that "Most...leftist prescriptions" can be dismissed as "sheer lunacy."

It's also rather bizarre that you insist that poor people will have to pay the price. To adopt your view of economics one would have to believe that workers have never managed to get their share of productivity gains without having it squeezed out of them in some other fashion. The truth is that only reason that productivity gains have been enjoyed primarily as investor profits is that workers are now weak while investors are strong. But in the past that has changed and there's no reason it can't now.

Here's another practical question for you. If you the US recession deepens, a lot of these poor workers will lose their jobs simply b/c there will be insufficient buyers to take advantage of their productivity gains. What do you plant to do about that?

"The real agenda isn't helping poor people but protecting labourers in rich countries"

Oh, and I suppose the "real agenda" isn't ever about protecting the riches of corporations and the superwealthy elite who run and own them.

minty green
12-02-2001, 09:27 PM
Originally posted by Demosthenesian
I don't buy that these workers made an informed choice to work there, either, as they are often ill-equipped to make that decision due to a lack of education and unable to engage in collective bargaining.I'd certainly disagree with you there. Lack of education does not render a person irrational. The people who work in the Maquiladoras, or in other crappy situations, chose to do so because it was the best of a number of bad options. Certainly, education is likely to have improved those options. But if you're poor an illiterate to start with, sweatshop labor may well be a big improvement over tending the family goat.

I'd also take issue to some extent with your comments on the living wage. What, precisely, is a "living wage"? Most of the advocacy groups I've seen define it unrealistically--nay, fantastically--high. If it still exists, you can look to http://www.livingwage.org for an example.

Is a living wage one that is high enough to prevent starvation? Malnutrition? Three high-fat meals a day, plus a two bedroom home and unlimited health care on demand? Heck, a goodly percentage of Americans can't afford the latter, and we're the most prosperous nation in the history of history. It's rather like the "unemployment insurance" Mandelstram mentioned earlier, in that describing it as a necessity or even a goal begs the question of what the heck it is and how costly it will be to any nation that adopts it. Life is indeed unfair, but there is no way on earth that nations like Vietnam and Guyana can mandate a living wage as it is imagined by the doofuses who get their empty skulls bashed by the police every time the World Bank meets.

minty green
12-02-2001, 09:28 PM
Damn you, Mandelstam! Stop posting while I'm composing! :)

Gadarene
12-02-2001, 09:52 PM
Mandelstam:
BTW, since everyone is clarifying their sex for the benefit of pronoun users, I'm (as many of you know already) a woman (I guess the only one in the thread now that Minty has been outed as a man.)

To follow up on this: A lot of posters (hey to Stoid!) are apparently under the impression that I'm a woman, either because of the similarity of my name to Gaudere's or because of my uncommon grace and eloquence. Probably the first. :) Anyway, I's a guy.

minty green
12-02-2001, 10:01 PM
Okay, Mandelstam, I'm starting to feel that we're talking past each other somewhat less than before. Nevertheless, my reading of your last post indicates to me that you're sort of lumping together all the previous considerations you mentioned (e.g., education, decent wages, maybe even the environment that you still haven't shown is a prerequistite for s/d/p :p ) under the concept of trade unions.

While I graciously concede that--as I've long believed--unions were a pivotal step in the development of modern American society, I am far from convinced that unions are responsible for much more than the improvements in wage and labor standards improvements that are obviously attributable to their collective bargaining power. The other improvements you've noted--education, social security, etc.--seem much more readily attributable to the simple fact of democracy. When voters decide that something is due to them, the voters get what they want. And I am a much greater fan of democracy than I am of any particular economic structure.

And we really do need some sort of automatic gender-parser once this place goes to subscription, don't we?

CyberPundit
12-02-2001, 10:26 PM
Mandelstam,
First I would appreciate responses to the points from my last post which you have chosen to ignore.

For instance I explained why a minimum wage doesn't increase aggregate demand. Concede that one?

What about the examples of India,China,South Korea and Chile?

"but what you've provided is one link, from the World Bank, that specifically questions
the "race" in environmental standards only."
Which is more than either you or Demo. have provided as evidence for a race to the bottom; yet both of you seem incredibly confident that it is happening in a big way and fell ready to prescribe policy measures on that basis.

"And
isn't that in fact what's happened when corporations leave the US for Mexico, or Germany for Malaysia, or Malaysia
for China?"
Well actually most trade economists haven't found that the international economy has been a signficant factor in wages in the US. But what if it is. It will mean that wages in the US will fall a little and wages in poor countries will rise as the demand for labour rises. Isn't that a good thing. Who needs the money more? You want to keep the factories in the US with government interference and that will help workers in Mexico, how? BTW for Americans as a whole the moving factories abroad will be beneficial. It is not hard to set us side-payments to compensate workers who lose their jobs in the US. Everyone can be better off with the right policies.


"What do you propose to do about undersupply? What is your plan for avoiding a global recession?
How do you propose to close the trade deficit? What is your plan for addressing what Tony Blair (among others)
argues is the economic factor in terrorism? What's your approach to global warming?"
Huh? I would be happy to discuss these some other time but what do they have to do with labour standards. Pretty much nothing.

"Most of all, how do you propose to correct the tautology in your own arguments? "
*Sigh* I explained very carefully why my arguments isn't a tautology. As usual you don't respond to the argument but keep repeating what you want.



"So what's your practical approach to solving this problem, CyberPundit?"
Well this is one of those other irrelevant issues but let me give a quick answer. The current account deficit of the US has little to do with NAFTA. In the rich economies most of the action on the BOP takes place on the capital account with the current-account making the difference. The capital account plus the current account will add to zero or something close as an accounting identity. So the basic reason for the current account deficit is that the US has been considered a good place to invest the last few years and runs a large capital account surplus.

"It's also rather bizarre that you insist that poor people will have to pay the price. To adopt your view of economics
one would have to believe that workers have never managed to get their share of productivity gains without having
it squeezed out of them in some other fashion."
This is just nonsense. I explained very carefully how after regulations are imposed there will be different market adjustments most of which don't benefit workers. That is just basic econcomics. As usual you haven't responded to the points nor provided evidence that the market will adjust in such a way that the regulations will benefit workers.

This has little to do with the issue of how productivity gains achieved in the market lead to an increase in wages. If the labour markets are competitive (and as a first approximation they are) as productivity increases in the economy, firms will compete for scarce labour and wages will increase. Collective bargaining can also do the trick especially if a particular market isn't competitive.

The problem with mandating a higher wage or increased benefits is that you just have a law without any corresponding increase in productivity. That is a completely different situation and then the issue indeed becomes who pays for the regulation. You have failed to provide evidence that it's not the workers or other poor people.


"If you the US recession deepens, a lot of these poor workers will lose
their jobs simply b/c there will be insufficient buyers to take advantage of their productivity gains. What do you plant
to do about that?"
Once again what does this have to do with the core issue. Anyway I support a safety net to the extent that poor countries can afford it. As it happens even workers who earn 50 cents an hour aren't the neediest cases in those countries and resources are spent elsewhere. I am curious as to what your solution would be. Prevent them from getting those higher paying jobs in the first place by putting some kind of trade restrictions?

erislover
12-02-2001, 10:57 PM
Wow, quite a coming out thread, isn't it? Though my namesake is most certainly female, I, alas, am stuck inside this male body. Good thing, too, since I like goatees and that preference might be awkward in any other permutation ;)

OK, onward and upward...
Sorry if I misled you into believing that I thought the world's workers should rebel until every last one of us can afford his or her own F-14 or Ferrari...
Well, ahem, you didn't actually mislead me, you were just exceedingly vague on the point. :)

It seems obvious to me that goods manufactured for a wealthy country would not be able to be purchased by those from a less-wealthy country in the same proportion or price. It is not relevant, IMO, what those goods are, moderate or not.
Western citizens don't have to "submit themselves" to anything...
Bondage implications aside (and don't think I don't notice :p) it seems that this is preceisely what you are attempting to get across here. That the globalization of business has not been followed by globalization of the unions. Forgive me for being profoundly ignorant here, but I was of the opinion that union companies were named so because one was required to be in a union in order to hold a non-management position. As such, a globalized union movement will place workers in a position where they must work for unions or find another job.
What you're forgetting is that your own perceived indifference to trade unions is entirely predicated on the fact that the United States has a union movement.
I haven't forgotten it. I just don't feel that unions serve a productive purpose most of the time anymore. I feel they are a hindrance to productivity and demand that their members recieve compensation not even close to equal to the effort those members put forth.

I don't need a contract to work. I don't want a contract to work. I do not ask my employer to swear he will let me have a job, because I don't swear to him that he will have an employee. It is very nice like that. There is no contractual obligation, other than what we both put into it. I have deliberately took lower-paying jobs in order to avoid being a union member. It just ain't me. Let the people who like unions support them. That's market economics for ya. Except, of course, as I mentioned: union shops don't hire scabs. I find that profoundly prejudiced and tantamount to pure, unrefined, intellectual dishonesty.
But it is still in your interests to see them enjoy that right, for economic reasons and for the greater world stability it will promote.
I don't doubt it will help. I simply do not feel that
1) Corporations are necessarily complicitly guilty for slave labor
2) that most of what is deemed slave labor is, in fact, slave labor
3) that in order to combat this real or strawman-based slave labor unions must go global

when I do feel that
1) the political structure of society is what will be the ultimate arbiter of whether or not laborers can organize.

I am in full support of Nike trying to find the cheapest labor in order to maximize their profits. I probably wouldn't move my labor costs overseas, but that's based on personal principles: something that I do not expect others to adhere to.
And there are environmental reasons why you might want to join with other citizens--whether or not you submit to them is entirely up to you--to rein in the unfettered power of multinationals.
Unfettered?

Who controls the Bitish Pound?—We do!!!! ;)

You make a globalized union sound like a friggin' jamboree, Mandelstam, and it ain't no such thing. The question would be whether the benefits of joining a globalized movement outweight the problems with it. IMO they do not, and so I would not join. But that question presumes that there is a choice.

For those that work in slave labor camps, you see, don't have a choice. That's why they are working as slave labor. So pardon me if I don't see unions as benevolent dictators of working conditions.

By the way...The only way to improve that situation is to improve the living standards of the developing world.

The only way? If it is just a problem of economic set-up then why don't we simply force businesses to sell their products cheaper instead of paying their employees more? Seems easier to enforce, IMO.

jshore
12-02-2001, 11:57 PM
Originally posted by Demosthenesian
mandelstam: there are two flavours of anti-globalization: those that hate the entire idea of it, and those that merely think it should be done under certain ground rules.

First, Demosthenesian, a hearty welcome to the SDMB. Mandelstam, kimstu, myself (and others...won't try an exhaustive list here) can use the help of a few more people to argue the sort of points that you are making!

The one thing I would note here is just to say that I think that the first flavor that you mention here exists largely in the mind of those who are using the mantra of "free trade" to promote an agenda of maximizing corporate power over the power of nations to set environmental, labor, and other standards. Oh sure, no doubt you can find a few protesters who just hate the thought of globalization period, but I think those are a small minority. It is a useful fiction perpetuated by Bush and his ilk that this is what "the antiglobalization movement" (which I would prefer to call something like the "fair trade movement") is about. [Unfortunately, they have been fairly successful in winning the public relations batter to cast the "anti-globalization" movement in this way.]

As for the rest of the thread (and addressing myself to the "other side" now), I would personally like to state as clearly as possible for the record that I believe that economic (and political and physical and ...) subjugation existed long before capitalism. I think Mandelstam and Demo would agree with this too. So, can we get beyond this red herring and concentrate on the important question of how we can regulate this imperfect form of economic system (as are all economic systems) in such a way as to minimize its negative consequences?

I don't think that anybody is trying to say that capitalism is all evil and is responsible for introducing fundamentally new evils into the world that never existed before (although it may have clearly altered their form somewhat). However, that does not mean that there are negative aspects and consequences of a capitalistic system, a system that some Market Fundamentalists seem to revere as the gospel from on high. Just as one should not adopt an extreme statist economic ideology such as existed in the Soviet Union, one should also not adopt an extremist capitalist economic ideology and must be open to the need to regulate a market economy for the greater good.

minty green
12-03-2001, 12:19 AM
Originally posted by jshore
Oh sure, no doubt you can find a few protesters who just hate the thought of globalization period, but I think those are a small minority. It is a useful fiction perpetuated by Bush and his ilk that this is what "the antiglobalization movement" (which I would prefer to call something like the "fair trade movement") is about. [Unfortunately, they have been fairly successful in winning the public relations batter to cast the "anti-globalization" movement in this way.]Pshaw. I detest Dubya as much as anybody this side of Stoid. But I also watch CNN, and I have heard far too many total morons railing against "globalization" per se to believe that it is merely "a few protestors" who have their heads so firmly wedged in 18th century cotton gins. Admittedly, a good portion of this is Ross Perot/United Auto Workers-style self-interest, e.g. "Damn furriners takin' are jobs." But there are also a large number of anti-globalization protestors who detest the globalized economy at all, for reasons ranging from bullshit pastoral romanticism to bullshit Maoist lunacy. Yes, they're on the losing side of history and the loser side of economics, but they certainly exist, and in greater than insignificant numbers.

Gadarene
12-03-2001, 12:45 AM
Mandelstam, kimstu, myself (and others...won't try an exhaustive list here) can use the help of a few more people to argue the sort of points that you are making!

Hey! No exhaustive list needed, but how hard would it have been to spell G-a-d-a-r-e... Okay, that's pretty tiring. I can see your reason for not giving my name. ;)

Demosthenesian
12-03-2001, 02:42 AM
I'd certainly disagree with you there. Lack of education does not render a person irrational. The people who work in the Maquiladoras, or in other crappy situations, chose to do so because it was the best of a number of bad options. Certainly, education is likely to have improved those options. But if you're poor an illiterate to start with, sweatshop labor may well be a big improvement over tending the family goat.

True, and perhaps I should elaborate. (Except to note with incredulity the idea that people are inherently rational. I can't believe the rest of the social sciences let economists get away with this. That, however, is a whole 'nother debate.) Part of the reason working in a Maquiladora is so dangerous is because of the environmental and safety conditions, which are arguably worse that those of the worst factories of the industrial age. Any rational decision to work in such an environment needs to include understanding of the costs to one's short- and long-term health and the possibility of you or your family being hurt or killed. If the worker does not possess that understanding, you're in one of the "assymetrical information" situations that won the Nobel prize this year. With that in mind, my above comment comes into play: education and health care, as I said, can increase the likelihood of labour charging the proper cost for its services and decrease the likelihood of a unfair subsidy in the cost of production.

I would also like to note that in many countries trade liberalization is one of the main reasons that the Maquiladoras became the only game in town. Among other things, the theoretical benefit to food consumers of decreased food prices leads to the real world cost of a whole lot of out of work food producers. Admittedly, though, a lot of this can be laid at the feet of western countries that erect protections while at the same time claiming they're liberalizing. Considering the experiences that Canada have had with U.S. trade barriers under NAFTA, this only bolsters claims against liberalization, though. What good is a free trade regime when the largest players can opt in or out depending on how much they personally benefit?

I'd also take issue to some extent with your comments on the living wage. What, precisely, is a "living wage"? Most of the advocacy groups I've seen define it unrealistically--nay, fantastically--high. If it still exists, you can look to http://www.livingwage.org for an example.

Is a living wage one that is high enough to prevent starvation? Malnutrition?
I'd argue yes. The "living" part would seem to imply that avoiding starvation is a key goal.

Three high-fat meals a day, plus a two bedroom home and unlimited health care on demand? Heck, a goodly percentage of Americans can't afford the latter, and we're the most prosperous nation in the history of history.
Your own damned fault for having private health care. :D Your link isn't overly convincing for this discussion, as it's pretty obvious from even the most cursory glance that it is intended to address the U.S. minimum wage and not third world wages. No serious economist (and there are serious ones on that site) would believe that the costs of food or housing aren't lower in those areas, and the dietary requirements quite a bit more economical. It does bring up the costs of raising the minimum wage, and suggests "top-up" subsidies for those below that line. Seems like the most intelligent solution to me: it spreads the cost of a minimum wage among the entire society rather than simply the companies in question and eliminates the incentive to benefit from government assistance instead of working. While there might be an economic impact, it sure wouldn't be on the same level as a mandated minimum wage.

Their defense of the concept of subsidies is at:
http://www.epionline.org/study_epi_livingwage_07-2001.pdf

Life is indeed unfair, but there is no way on earth that nations like Vietnam and Guyana can mandate a living wage as it is imagined by the doofuses who get their empty skulls bashed by the police every time the World Bank meets.

Does everybody on the SDMB make such vast generalizations, or did I just luck out with this thread? Like any political movement the protest movement will have your more intelligent adherents and your less intelligent adherents. I trust that you wouldn't call Naomi Klein (for example) a "doofus", whether you agree with her positions or not. I also don't see this connection between general criticism of the WTO and an unrealistic idea of a living wage. One can be a critic of the WTO and not be in favour of a living wage. After all, decent collective bargaining rights would logically make a minimum wage unnecessary. That is, if union leaders aren't mysteriously disappearing all the time.

That's the sort of regulation I'd back, personally. The kind that says that third world governments can't play dirty pool with their more marginal or troublesome citizens just because Shell is paying the bills. If one is going to dropkick national sovereignty, might as well do it for the right reasons.

Demosthenesian
12-03-2001, 02:50 AM
jshore: Yeah, well, I did take a stab earlier at a possible (and current) link between capitalism and terrorism. It was an attempt to answer Minty's earlier question. I think that's what everybody is going back to. ;)

Personally I have no problem with capitalism. Never have. I don't believe that it should be given the near Deity status that some neoliberals attribute to it, though, and do believe that a market is a human creation that requires both the proper structure and occasional intervention to deal with its limitations.

Demosthenesian
12-03-2001, 02:52 AM
What, minty, is the "winning side of history"? And, for that matter, the "winner side of economics"?

minty green
12-03-2001, 07:57 AM
Globalization and capitalism, respecitively. I'd expand, but it's Monday morning and time for me to rejoin the proletariat at my non-union, way-more-than 40 hours a week job. And dammit, there'd better be donuts there this morning or I'm going on strike! :)

London_Calling
12-03-2001, 10:32 AM
Originally posted by minty green
In response to this hijacking, I have decided to start a separate thread for posters such as London_Calling and Mandelstam to explain how capitalism, in contrast to every other socio-economic system in the world, is specifically responsible for war crimes and terrorism.

It's not "responsible", IMHO, and, as phrased, is a rather bizarre notion, at best. I therefore I feel unqualified to "explain".
Originally posted by minty green
Mandelstam? <snip> If I have misstated your position, I apologize. I do think, however, that the position described in my OP is representative of a fair number of people, however, and I would like to hear their reasons why.

So would I.



Given that this thread is now over 70 posts long, there are a number of other points to respond too elsewhere and minty green either has a problem with comprehension or wilfully represented my original view, I think I'll leave this thread in the capable hands of others.

For anyone interested, this is my oh-so-brief original post:

"Of course the issue isn't one of adopting Socialism but rather, IMHO, one of investing naked, amoral Capitalism – as practiced by successive US Administrations through 50 years of Foreign Policy 'goals' – with a degree of responsibility and ethics. That cannot be done, IMHO, while every President is indebted not to the electorate but to the Corporate interests who continue to exert their shareholder agenda on Foreign Policy long after election campaigns via the Lobby system.

The issue centres on establishing a separation of powers as between State and Corporations, IMHO, and, at the same time, re-establishing a transparent link between elected representatives practicing Foreign Policy and the electorate."




For Mandelstam and anyone else should he or they be interested, I find this to be a fairly instructive link for the issue of Third World debt, Dictatorships, etc. and the legacy of the manipulative and western orientated IMF/World Bank.


A (very) simplistic overview of the history of Third World Debt:

http://www.jubilee2000uk.org/analysis/reports/beginners_guide/began.htm

Pick your link from this page of revealing insights into how the US and others have failed the Third World:

http://www.jubilee2000uk.org/analysis/analysis.htm

<sample quote>
In the end, little of the money borrowed benefited the poor. Across the range, about a fifth of it went on arms, often to shore up oppressive regimes. Many governments started large-scale development projects, some of which proved of little value. All too often the money found its way into private bank accounts. The poor were the losers.
</sample quote>


The legacy of lending to oppressive regimes is that many Third World countries (now) struggling with democracy are being fundamentally undermined by the burden of debt repayment and, until 9/11, their cry's for help went ignored. The US has selectively changed its approach somewhat since then but only where it needs help (for example: Pakistan).

Otherwise the policy of influencing the domestic agendas of other nations through pursuing the repayment of dubious loans to (earlier) dodgy oppressive leaders has changed little. The resentment of this policy in countries like Pakistan also continues to foster terrorist-friendly environments, IMHO, as taxation levels (to repay debt) in many developing countries prohibits the provision basic health care and education - providing a breeding ground for the terrorist agenda.

Mandelstam
12-03-2001, 10:53 AM
CyberPundit : "Mandelstam,
First I would appreciate responses to the points from my last post which you have chosen to ignore."

The truth is, I missed your post. It was an accident (as you might have noticed since I was responding to double-digit posts one at a time).

"You still don't provide specifics about how exactly tying labour regulations to trade will improve anything in the third world."

Well actually I have. I've shown that the effect of not following through on the promise to provide workers' rights in Mexico through NAFTA has been harmful for US as well as Mexican workers. (See my links.) There are scores of hard economic analyses on this one. So the burden is on you: refute them if you wish.

"The statement about workers being able to afford their own production is just bogus economics in fact a well known economic fallacy. First of all you ignore my point about why developing countries are constrained by aggregate demand anyway."

No, it is not an economic fallacy. For the hundredth time, the global economy today (even prior to the deepening to the US recession and, indeed, even prior to the Asian crash) suffers from two major problems: 1) overcapacity and therefore oversupply and 2) trade defecits between Western (especially US) buyers and third-world (and other) producers. Inflation is not a serious problem in conditions like these. Explain how you can insulate your tiny, obvious and much reiterated argument about the impact of minimum wage laws on aggregate demand from this larger picture.

"I don't believe there are too many economists who advocate imposing standardized labour regulations across different developing countries via the trade system."

Nor do I advocate imposing one-size-fits-all labor regulations on the entire world. You persistently argue against change by arguing that the globe is too large a scale on which to implement change. No one disagrees. Insofar as you don't accept and address this point, your posts begin to take on the cast of trollishness.

Me: "I don't see how you can possibly use China as an example of the success of neo-liberal economic
policies since it is basically a fascist state."
CP: Huh? This doesn't make any sense. Why should the fact that China is authoritarian(and has always been authoritarian) negate the fact that its economic policies of the last 20 years have produced spectacular growth. No has denied that authoritarian countries can produce economic growth when they open to trade and foreign investment."

Because the idea behind "free trade" is supposedly to liberalize politics as well as economies. You may not care about that particular aspect of the story; but that's part of why people are buying into it. They're being told that liberal economics will lead to democracy, peace and prosperity for all.

Who doubts that a fascist country that subsidizes subnormal wages and employs its people under quasi-forced labor conditions will provide a good investment to corporations seeking a bargain-basement-priced and docile labor force? In other words, China is set to win the labor "race to the bottom". As in the NAFTA scenario, only far worse, countries that guarantee human and workers' rights to their citizens must compete against fascism. The Chinese government happily observes the costs of repressing its own people. Outside of the Chinese elite, (and perhaps a growing middle class within China) only multinational corporations benefit from this. As the gaping trade deficit with China shows.

Re India: If you paid attention to my exchange with Minty, you know that economic history suggests that countries that have already got the institutional fabric for industrialization and democracy can benefit (in terms of their economy) from neo-liberal policies (much as the US economy has benefitted). Of course, in the long-term, what will come back to bite these neo-liberal success stories is the incredible inequalities they generate. In other words, during an economic downturn, they will find that there aren't enough people to buy stuff and their policy of reducing the living standards of huge numbers of people, while fattening a tiny upper tier, will come back to the haunt them.

"Really there is absolutely no evidence for the simple-minded "IMF and neo-liberal policies are ruining the poor countries" analysis of the Nation."

No evidence? CP, you become more trollish with every sentence. Because Chile may be doing better there is no evidence than Argentina and Russia are disasters? That Asia was hurt rather than helped by forcible belt-tightening in the midst of a major recession? What about the Russia article I posted? You have not been doing a very good job of responding to the links I post, you know.

ME:"Here and elsewhere you apply a circular logic again and again."

To fill in for other readers: what I'm arguing here is that the problem that Demos, myself and others want to alleviate is that citizens are still living within the bounds of nation-states whereas capital and corporations transcend these borders and move around the globe to their advantage at the expense of workers getting their fair share. Hence, citizens must cooperate across as well as within borders (as is already done by European countries); but not necessarily by demanding a global bureaucracy to impose one-size-fits-all standards (which no one in this thread is arguing for).

"Absolutely not. You don't seem to understand the argument at all since you have barely responded to it."

CP, again you are trollish. If you continue to adopt a condescending tone towards me I will, in future, respond by ignoring you. There is no evidence that anyone is this thread is not able to understand your particular brand of wisdom.

"It doesn't depend on any internatinal context but is simply a standard piece of microeconomic analysis which applies just as well to a closed economy. Basically when the government imposes a labour regulation, there is going to be a market adjustment. 3 of the adjustments don't really benefit workers and can harm them. Only one (the most theoretically dubious) benefits workers. Your basic thesis appears to be an assertion,without any evidence, that the beneficial adjustment will be dominant and that you are so sure of this that you are willing to impose standard labour regulations across a wide swathe of nations with very different situations."

And I have already said (in my last post and before) that this is bull. If transnational workers and citizens movements manage to cooperate successfully they will be able to strengthen their position, vis a vis corporations. They will then be able to get their fair share of productivity gains. Corporations will either have to accept citizen and worker strength and, thus, share profits more equally, or move their divde-and-conquer strategy to another planet. This will actually benefit many corporations long-term interests. Again, this will not have to take the form of one-size-fits-all regulations. And this will benefit the longterm prospects for a) the economy and b) world peace.

Nothing you've said has undercut the logic of that, the support for it that can be drawn from historical experience. STill less have you begun to address the problem from some alternative point of view that you find preferable.

All you do is justify the status quo, simply because it is the status quo. To wit: you are tautological. And you conceal the weakness of your arguments with pretentious smoke and mirrors economic "rules" (which suggest to me that your actual knowledge of economics is, at best, that of a college student since no economist that I have ever spoken to on this subject has spoken in such shallow fashion on this subject); and by preposterous grandstanding and trollish behavior.

Here is another link for you to try to explain away. Please treat it substantively, and not by saying that "Most economists say that this is an exaggeration" or, as "accepted microeconomic principles will tell you, this problem can't be addressed b/c accepted microeconomic principles are, after all, accepted microeconomic principles."

Here is an excerpt: "In a recent debriefing with the London Observer's Gregory Palast, [Stiglitz] the former World Bank Chief Economist roundly attacked the hidden agenda of these international institutions. In addition to testifying to the ideological foundations of much of the WB/IMF's condition-laden policies lending policies, Stiglitz denounces the unethical agenda that these institutions impose on all countries that explicitly create conditions favorable to international oligarchs and transnational enterprise.

Having acquired a handful of World Bank documents from undisclosed sources marked "confidential," "restricted," and "not otherwise (to be) disclosed without World Bank authorization," Stiglitz began to document the real effects and aims of the World Bank's four step, one-size-fits-all, economic restructuring package imposed on less industrialized countries.

The first step, according to Stiglitz, is the promotion of state-level corruption as the facilitator of the "privatization" requirement which often also serves U.S. political goals — a process that Stiglitz says would more be accurately called "briberization." This is followed by step two, "Capital Market Liberalization" which sets up predictable cycles of "hot money" speculation in non-productive assets that ultimately leaves the national economy hemorrhaging from loss of controls on capital."

http://www.commondreams.org/views01/1121-03.htm

And when you're done doing that, please don't forget to respond to the questions asked in my last post. I look forward to a genuine debate with you--if you are capable of it and have the time.

Minty, I will get back to you to respond on a) where environmental standards fit in to the "living wage" scenario in the present-day and b) the seeming confusion between democracy/trade unionism as cause and as effect.
Like you, I am back in harness.

Greetings jshore.

Demos, on the subject of economics and the reductive assumptions based on "economic man" and rational self-interest. Actually, from within the discipline of economics, Nobel-Prize winning economist Amartya Sen goes to the very heart of this problem. CyberPundit has conveniently ignored by reference to him as well as other substantive left-leaning economists such as Lester Thurow.

smiling bandit
12-03-2001, 11:17 AM
Ok, I'm not interested in the interminable length you guys write but,

"Nike will actually see more of their shoes sold because their own workers, for the first time, will be able to afford to buy a pair."

???????
These guys, even if they are making $1.00 and hour and get half/rice shoes, cannot afford to spend a week working for a pair of sneakers. On the other hand, I work for a week to afford a pair of shoes...

Still, I don't think you'd see any big sales increase in shoes anytime soon.

Mandelstam
12-03-2001, 11:54 AM
bandit, I agree that Nike employees even if fortunate enough to earn $10/day would have to get one heck of an employee discount to devote their hard-earned wages to Nikes. (I'm pissed off enough that I shelled out $50 to buy a pair for my son.)

Nevertheless, Nike's employees are often adolescents helping to support their families. Any decent wage increase will help these families to become consumers in the global economy. That is, a wage increase won through collective worker action and worldwide support won't necessarily benefit Nike directly, but will benefit the global economy. To argue that it wouldn't, is it to argue that people who earn extra money don't spend it. (Even if the extra earnings were saved this would still be a benefit for the Indonesian economy.) If Nike wants to keep its prices down, it can (pace CyberPundit) reduce profits. But it can also do other things: e.g., it can improve the production process in its factories to make them more efficient. One of the side-effects of labor being so cheap in the developing world is that employers not only don't bother to make the workplace safe, they also (sometimes) don't bother to introduce the technological improvements that, when manufacturing was done in the West, helped to increase productivity.

I don't say any of this would be easy to achieve. But I can foresee no longterm scenario in which the world's educated and enfranchised citizens don't begin to feel the impact of increasing corporate power and to urge their governments to rein in that power. Without a crystal ball I can't say how long this will take, or what the prospects for a coherent transnational citizens movement will be. But, particularly in Europe, there does appear to be growing awareness on the matter.

Related aside to Minty: Don't you find it odd that CNN finds the time to broadcast the views of "doofuses" when even people like the Dopers you know and love could do a better job? Not to mention people like Sen, or Stiglitz, or Ralph Nader, or Noam Chomsky or anyone of hundreds of academics (including economists) who could make a convincing case? Wouldn't it be nice to see a two-hour long debate on the subject instead of the usual five-minute soundbite from both sides: the kind of thing that tends to leave viewers more confused and indifferent than informed?

CyberPundit
12-03-2001, 05:22 PM
Mandelstam,

"Explain how you can insulate your tiny, obvious and much reiterated
argument about the impact of minimum wage laws on aggregate demand from
this larger picture."
It's strange that you consider this point tiny since you were the one who cited the argument about minimum wages and highlighted. Why was temy time with arguments if you consider them of minute importance?

In any case the same argument applies to all kind of labour regulations. None of them have a significant impact on aggregate demand and no reputed economist, whatever his beliefs about the usefulness of those regulations, believes that they are a useful policy to increase aggregate demand.

We can talk a great deal about the monetary and fiscal policy measures that would help specific economies get out of recession. That really doesn't have any connection with the issue of labour standards.

. "I've shown that the effect of not following through on the
promise to provide workers' rights in Mexico through NAFTA has been harmful for
US as well as Mexican workers. (See my links.) There are scores of hard
economic analyses on this one."
I took a look at one of the "studies" from the epinet site which claims that NAFTA reduced employment. The basic methodology is thoroughly flawed. They simply assume that negative changes in net exports will automatically correspond to a fixed number of job losses. The problem with this is that, like I have said, as a matter of basic accounting any changes in net exports will be offset by opposite changes in the capital account which will increase aggregate demand. There is not particular reason to believe that this will lead to a net reduction in aggregate demand. The study doesn't even bother addressing this issue. Even if there was somehow a net reduction in aggregate demand, the Fed can easily counteract that with monetary policy. Incidentally this very fallacy is explicitly noted by Paul Krugman as a standard mistake made by non-economists several times in his articles and in his book "Pop Internatinalism".I can give you cites if you want.

I really don't have the time to wade through every crappy "study" that some left-wing website puts out so can you provide a site or a study by a reputable trade economist which claims that NAFTA has reduced employment in the US or damaged the welfare of workers in Mexico.


"Because the idea behind "free trade" is supposedly to liberalize politics as well
as economies."
Actually I would say that China enjoys a great deal more freedom than it did in the 70's under Mao before it liberalized its economy under Deng. In any case that's a side issue because the primary benefit of good economic policies will always be economic. Even if there had been no increase in freedom, that would negate the fact that opening up has produced spectacular economic growth. Is your main grouse with the international trading system that it doesn't automatically increase democracy and freedom?

"Because Chile
may be doing better there is no evidence than Argentina and Russia are
disasters?"
If a bunch of countries do well after IMF programmes and another bunch does poorly, this most definitely isn't evidence that IMF programmes as a whole are bad for developing countries. You have to look at the individual countries and see what happened.Actually if you look at the countries that failed ,particularly Russia, you find that often they ignored the prescriptions eg for many years Russia had an extremely loose monetary policy which caused rampant inflation.

"Hence, citizens must cooperate across as well as within borders (as is
already done by European countries); but not necessarily by demanding a global
bureaucracy to impose one-size-fits-all standards (which no one in this thread is
arguing for)."
Actually I don't have much problem with citizens cooperating across borders. When did I say that?

My problem is with imposing mandatory labour regulations especially as a part of trade negotiations. It really doesn't matter whether they are imposed in a region or globally, the cost benefit analysis which argues that a lot of the cost might fall on the poor remains the same. Exactly the same arguments can be made against a minimum wage increase purely in the US. So no there is no tautology and no you have completely failed to address my arguments.


Stiglitz. I already provided a cite by a leading policy economist( which Stiglitz is not) refuting some of his contentions. In any case what do Stiglitz's assertions have to do with the issue of imposing labour regulations as part of trade deals? Does Stiglitz support imposing labour regulations? Incidentally I support land reform as well.

Sen. How much exactly do you understand of Sen's very technical arguments about economic theory? It's rather silly just to invoke him as a weapon when I doubt you understand the nature of the models he is criticizing or the nature of his criticisms. In any case Sen is not a trade economist either and his criticisms have never implied that the standard economic of trade theory is fallacious or can simply be ignored because you don't like the results. His own work on development economics in the 70's used perfectly standard microecononic tools btw.

If you want to read a real expert on trade economics try Jagdeesh Bhagwati.
http://www.columbia.edu/~jb38/papers/ft_lab.pdf

jshore
12-03-2001, 07:21 PM
Originally posted by minty green
But I also watch CNN, and I have heard far too many total morons railing against "globalization" per se to believe that it is merely "a few protestors" who have their heads so firmly wedged in 18th century cotton gins. Admittedly, a good portion of this is Ross Perot/United Auto Workers-style self-interest, e.g. "Damn furriners takin' are jobs." But there are also a large number of anti-globalization protestors who detest the globalized economy at all, for reasons ranging from bullshit pastoral romanticism to bullshit Maoist lunacy. Yes, they're on the losing side of history and the loser side of economics, but they certainly exist, and in greater than insignificant numbers.

And, we are supposed to conclude what the "anti-globalization" movement is all about by some sound bites from protesters provided by CNN? Okie-dokie. I mean I've been blasted in previous threads for equating the views of defacto conservative / Republican leaders like Trent Lott, Dick Armey, and Tom DeLay with what conservatives or Republicans really stand for, a sin which I never really understood. But now, you are telling me that I am supposed to accept a few sounds bites from a few random protesters chosen by CNN to explain what the movement is about? I guess I believe that the views of the movement are best expressed, e.g., by writings in The Nation, The American Prospect, and other acknowledged left-wing sources of thought.

Originally posted by Gadarene
Hey! No exhaustive list needed, but how hard would it have been to spell G-a-d-a-r-e... Okay, that's pretty tiring. I can see your reason for not giving my name. ;)

Hey, it's the collective fault of you, Gaudere, and Guinastia [?sp] for all having these weird names that begin with the letter G...How are we supposed to remember who is who? ;) [I don't entirely jest here ... I really do seem to have only one byte of memory reserved in my brain for Dopers with G-names having left-of-center views. I'm looking to upgrade though.]

Gadarene
12-03-2001, 07:33 PM
From now on, jshore, you may call me Adarene. :)

Demosthenesian
12-03-2001, 08:35 PM
"Explain how you can insulate your tiny, obvious and much reiterated
argument about the impact of minimum wage laws on aggregate demand from
this larger picture."
It's strange that you consider this point tiny since you were the one who cited the argument about minimum wages and highlighted. Why was temy time with arguments if you consider them of minute importance?

Possibly because of your consistent inductive argument that the flaws in mandating minimum wages apply across the board to all labour regulations, regardless of what they might be?

In any case the same argument applies to all kind of labour regulations.

As I said.

None of them have a significant impact on aggregate demand and no reputed economist, whatever his beliefs about the usefulness of those regulations, believes that they are a useful policy to increase aggregate demand.

Ahem. Why do you keep reviving this "no reputed economist" bit? In addition to endless induction, you've argued to authority in pretty much every post you've made. Either say it's bad, or don't, as there's no way you can provide a citation that proves that every single reputed economist believes this. (How does one define "reputed", by the way?) Make your own arguments.

We can talk a great deal about the monetary and fiscal policy measures that would help specific economies get out of recession. That really doesn't have any connection with the issue of labour standards.

Perhaps not, but my earlier example of minimum wages (and any cursory glance at your typical western regulatory structure) shows that states *can* legislate and regulate for social justice purposes regardless of whether said legislation or regulation provides maximum economic efficiency. This is not just an economic question but a political one, and I doubt that "any reputed economist" would argue that there aren't tradeoffs in any real world economy. In fact, if I recall correctly, your world bank article said that very thing about environmentalism.


Even if there was somehow a net reduction in aggregate demand, the Fed can easily counteract that with monetary policy.

I take this to mean that you disagree with many of the neoliberals (including the majority of the Cato institute) as to the wisdom of pegging foreign currencies to the U.S. dollar. In that, at least, we agree.


Incidentally this very fallacy is explicitly noted by Paul Krugman as a standard mistake made by non-economists several times in his articles and in his book "Pop Internatinalism".I can give you cites if you want.

By all means, go ahead. I like Krugman's work and writing style, although some of his conclusions are controversial enough not to fit into that "any reputable economist" equation.

I really don't have the time to wade through every crappy "study" that some left-wing website puts out so can you provide a site or a study by a reputable trade economist which claims that NAFTA has reduced employment in the US or damaged the welfare of workers in Mexico.

And here we run straight into that "reputable" brick wall again. I'll assume you defined the word above, so I'll simply ask you how the percieved methodological flaws of one study can be indicative of an entire collection of them, especially considering that a series of linked studies on a web page can be from a variety of different heterogenous sources.

"Because the idea behind "free trade" is supposedly to liberalize politics as well as economies."
Actually I would say that China enjoys a great deal more freedom than it did in the 70's under Mao before it liberalized its economy under Deng. In any case that's a side issue because the primary benefit of good economic policies will always be economic. Even if there had been no increase in freedom, that would negate the fact that opening up has produced spectacular economic growth. Is your main grouse with the international trading system that it doesn't automatically increase democracy and freedom?

I would disagree with your assessment of chinese freedom; while there may be more economic prosperity in some regions, you can't wish away Tiananmen square or the heavy censoring of information that still goes on there. As I mentioned earlier, there is no connection between liberal democracy and capitalism. Therein lies the problem... how can collective bargaining organizations form to deal with bad working conditions when an oppressive government intimidates or murders any would-be union leaders? And in an environment where information is controlled, how can workers be properly informed about the hazards of any particular working environment and make informed decisions about where and how to work? Again, these are not just economic questions but social justice questions.


"Because Chile may be doing better there is no evidence than Argentina and Russia are disasters?"
If a bunch of countries do well after IMF programmes and another bunch does poorly, this most definitely isn't evidence that IMF programmes as a whole are bad for developing countries.

Actually it is, considering that the main criticism of the IMF is that it applies a one-size-fits-all solution to each and every economy it tries to "help". If the solutions do not work universally, then they should not be applied universally. Besides, one key point of neoliberal dogma in the political realm is that austerity measures are the key to reviving an economy. If that is not the case, then it undermines the case for neoliberalism, just as stagflation undermined Keynesianism in the late 1970's.

You have to look at the individual countries and see what happened.Actually if you look at the countries that failed ,particularly Russia, you find that often they ignored the prescriptions eg for many years Russia had an extremely loose monetary policy which caused rampant inflation.

Russia also had a kleptocracy that funneled away millions if not billions of dollars of IMF and WB money. I don't buy that monetary policy had a greater impact on national stability than one of the most massive cases of state corruption in history.

"Hence, citizens must cooperate across as well as within borders (as is already done by European countries); but not necessarily by demanding a global bureaucracy to impose one-size-fits-all standards (which no one in this thread is arguing for)."
Actually I don't have much problem with citizens cooperating across borders. When did I say that?

When you were responding to me? Something about the Tiebout process, I believe?

My problem is with imposing mandatory labour regulations especially as a part of trade negotiations. It really doesn't matter whether they are imposed in a region or globally, the cost benefit analysis which argues that a lot of the cost might fall on the poor remains the same. Exactly the same arguments can be made against a minimum wage increase purely in the US. So no there is no tautology and no you have completely failed to address my arguments.

Let me get this straight...are you merely against agreements on minimum wages, on labour regulation as a part of trade negotiations, or on any sort of labour regulation whatsoever? I don't think I'm quite clear on this.


Stiglitz. I already provided a cite by a leading policy economist( which Stiglitz is not) refuting some of his contentions. In any case what do Stiglitz's assertions have to do with the issue of imposing labour regulations as part of trade deals? Does Stiglitz support imposing labour regulations?

The Stiglitz bit is no doubt related to criticism of the IMF and not labour regulations. This thread, like the mythical hydra, has grown many heads.

Incidentally I support land reform as well.
Mind expanding on that?

I read your link, and his criticisms of Stiglitz do not appear any more or less valid than Stiglitz's criticisms themselves. Stiglitz was also the head economist of the World Bank- how can someone be hired and succeed in such a position and yet be as entirely ignorant of trade and policy economist as you paint him to be?

(I didn't realize economists were so specialized that any commentary on their part outside one small aspect of economics was automatically invalidated. I've always been of the opinion that it is the argument that is important, and not the person doing the arguing. Perhaps that's because I'm not an economist. It does play merry hell with much of Krugman's commentary, though.)

Sen. How much exactly do you understand of Sen's very technical arguments about economic theory? It's rather silly just to invoke him as a weapon when I doubt you understand the nature of the models he is criticizing or the nature of his criticisms. In any case Sen is not a trade economist either and his criticisms have never implied that the standard economic of trade theory is fallacious or can simply be ignored because you don't like the results. His own work on development economics in the 70's used perfectly standard microecononic tools btw.

Actually, Sen was given as a reference for yours truly. (And there's that "he's not an 'x' kind of economist" thing again).

If you want to read a real expert on trade economics try Jagdeesh Bhagwati.
http://www.columbia.edu/~jb38/papers/ft_lab.pdf

(Why do I get the feeling when I open up this link I'll discover another neoliberal? ;))

Demosthenesian
12-03-2001, 08:46 PM
I read that link, Pundit. While it is an interesting commentary, that is all that it is: no more or less authoritative than one of Krugman's NYT reviews, and lacking even basic citation of sources. Indeed, the reasoning he gave for the lack of a "race to the bottom" is somewhat suspect: not only does he not cite where his source (the political scientist David Drezner) comes to the conclusion that the race to the bottom effect is illusory, but his argument that American sweatshops exist due to "reliance on illegal immigration and an abysmal level of internal enforcement" seems to be an argument in *favor* of government intervention, not against.

Frankly, any undergraduate student handing in an essay like this in would get blasted by their TA.

minty green
12-03-2001, 08:58 PM
Originally posted by London_Calling
minty green either has a problem with comprehension or wilfully represented my original viewNo willful misrepresentation was necessary. My OP counts you as a person who believes that capitalism "is responsible for" terrorism and war crimes. I drew that conclusion from your own words in the previous thread, where you stated:Of course the issue isn't one of adopting Socialism but rather, IMHO, one of investing naked, amoral Capitalism – as practiced by successive US Administrations through 50 years of Foreign Policy 'goals' – with a degree of responsibility and ethics.Emphasis added. In the contect of an ongoing discussion of war crimes and terrorism, I hope you can see how that choice of words might reasonably lead one to believe that your position was as I represented it. If it is not, feel free to clarify.

Now, onward and upward . . . Originally posted by Mandelstam
Don't you find it odd that CNN finds the time to broadcast the views of "doofuses" when even people like the Dopers you know and love could do a better job? Not to mention people like Sen, or Stiglitz, or Ralph Nader, or Noam Chomsky or anyone of hundreds of academics (including economists) who could make a convincing case? Wouldn't it be nice to see a two-hour long debate on the subject instead of the usual five-minute soundbite from both sides: the kind of thing that tends to leave viewers more confused and indifferent than informed?Ah, but CNN and other news outlets do broadcast precisely such debates from time to time. I've even watched as Nader and Chomsky fail to make a convincing case. ;) It is not, needless to say, very gripping television most of the time, which is why it doesn't happen all that often. Fortunately, I live in a nation where the government does not control television programming and subject the viewers to things it thinks are good for them.

jshore: You would be wrong to assert that all Republicans think the same things you heard Dick Armey spouting off on Crossfire. But that's not what I did when I cited the voices raised on, as one example, CNN. Instead, I said that their numbers indicate that their views are shared by more than "a few protestors." You see the difference, I hope?

Demo: It appears livingwage.org went bust with the rest of the Internet web companies in Austin. Imagine that, a bunch of tech-savvy wannabe hippies who didn't want to work for the man couldn't pay their bills, huh? :) I assure you, though, that they used to be big into the global living wage idea, and they had fantastically expansive ideas of what a living wage is.

Re: Assymetrical infornation and the Maquiladoras. I certainly agree that a labor market failure can result when when there are hidden risks that a worker doesn't know about. Where I probably disagree with you, however, is how often such hidden risks occur, even in the dumpiest third world sweat shops. Even if the workers don't know precisely how exposure to certain chemicals will make them ill, it doesn't take a Harvard education to figure out that your co-workers are coughing a lot and have terrible unexplained rashes on their scalps, or that there are a lot of people who lost fingers and eyes using the equipment. People who observe such costs will take them into account when deciding whether or not to accept or continue employment, and at what level of wages.

jshore
12-03-2001, 09:28 PM
Originally posted by minty green
jshore: You would be wrong to assert that all Republicans think the same things you heard Dick Armey spouting off on Crossfire. But that's not what I did when I cited the voices raised on, as one example, CNN. Instead, I said that their numbers indicate that their views are shared by more than "a few protestors." You see the difference, I hope?


Sorry, I was a bit schematic in presenting my previous argument on Republicans. I never claimed that all Reps think the same thing as Armey. Rather, I believe I cited them as examples of conservative / Republican thought and got blasted with attempting to represent Republican thought with the views of a few extreme examples and then had to question why these so-called "extreme examples" (I'm winging it on the exact phrase here) are then in some of the highest leadership posts in the party.

Anyway, I'll admit that I haven't done a survey of "anti-globalization" protesters and will thus just point out that all the stuff that I have actually read on this issue is much more in the vein I was arguing predominates than in the vein that those who seek to discredit the movement seem to believe predominates. Maybe I just have access to much better sources than you do so that I don't hear the dreck that you have apparently heard from some in the movement? I can share them with you if you want!

Whether or not you think that Chomsky and Nader make a convincing case, I hope you at least admit the point that "globalization = bad" is not a very cogent summary of their viewpoint. (At least if you define "globalization" to mean increasing global trade or something of that sort, rather than to mean liberalizing trade policies in such a way as to give multinational corporations more power to dictate the terms of trade to nations, etc.)

Mandelstam
12-03-2001, 10:16 PM
CyberPundit, Demos has already replied much as I would have done to a great deal of your post so I'll just focus on a few areas.

"We can talk a great deal about the monetary and fiscal policy measures that would help specific economies get out of recession. That really doesn't have any connection with the issue of labour standards."

I'm not sure when exactly this thread became devoted ot labor standards. Last I looked it began as a thread about globalization and terrorism or (as Minty preferred) capitalism and terrorism. That is a pretty far-reaching subject.

"I took a look at one of the "studies" from the epinet site which claims that NAFTA reduced employment. The basic methodology is thoroughly flawed."

Let me just remind you that one of the reports I linked simply described the bankruptcy of 25 steel-producing companies since NAFTA, including Bethlehem Steel. This is a historical fact, not an economist's extrapolation.

"I really don't have the time to wade through every crappy "study" that some left-wing website puts out so can you provide a site or a study by a reputable trade economist which claims that NAFTA has reduced employment in the US or damaged the welfare of workers in Mexico."

Gee, CyberPundit, you really are a masochist. My cite was from the Economic Policy Institute. The author of the report is named Robert Scott. Had you clicked on his name you'd have discovered that he is an "international economist" whose "areas of expertise" include "Trade, NAFTA, Global finance, International economic comparisons, and Trade effects on the U.S. textile, apparel, and steel industries." He has a PhD in economics from Berkeley and is the author of two books and several articles on trade economics including "A Trade Strategy for the 21st Century."

Would you care to reveal which of those credentials you can match? Or how Scott fails to meet the criterion of a "reputable trade economist." Because your posts give one the impression that your definition of the latter is limited to those who agree with your own dogma.

"Is your main grouse with the international trading system that it doesn't automatically increase democracy and freedom?"

No--although like Demos and others I believe that social justice is worth paying for. And, as I've learned from Amartya Sen, social justice (providing people with education and a degree of autonomy) pays for itself. My main grouse is that "free trade" as its promoted today claims to be about progress (both economic and social) when its actual benefits are too often limited to the few and, in large part, to corporations that already have too much power over citizens.

"If a bunch of countries do well after IMF programmes and another bunch does poorly, this most definitely isn't evidence that IMF programmes as a whole are bad for developing countries."

Well, you yourself conceded that much of what Stiglitz says is true. So what has the IMF done to avoid perpetuating this kind of error? Or do developing countries simply have to hope that they'll be one of the lucky ones where the policies just happen to suit their existing socio-economic conditions?

"You have to look at the individual countries and see what happened."

Which, ironically, is precisely what Stiglitz claims the IMF never do before they prescribe their favorite recipe.

"Sen. How much exactly do you understand of Sen's very technical arguments about economic theory?"

Of his very technical econometric arguments none at all, I assure you. But I've read several articles of his on development, and I've both read Development as Freedom and taught certain of its chapters. So I think I understand what his basic arguments are pretty well as a matter of fact.

"Sen is not a trade economist either and his criticisms have never implied that the standard economic of trade theory is fallacious or can simply be ignored because you don't like the results. His own work on development economics in the 70's used perfectly standard microecononic tools btw."

So let me get this straight: the opinions of a development economist don't count in a discussion of globalization on the developing world. And the opinions of a trade economist on the impact of trade only count if he says what you say. Is that right?

"If you want to read a real expert on trade economics try Jagdeesh Bhagwati."

I would like to read Bhawati even though Demos wasn't too impressed. Problem is I have a flukish problem with reading pdf files so I'll have to get back to you on it when I have access to a different computer (unless you know of an html).

Minty, I'm pooped. I will get back to you though on CNN, environmental standards and a living wage, and the matter of trade unions and democracy. I'm sure you can hold your breath ;)

CyberPundit
12-03-2001, 11:15 PM
Okay just a few points now and maybe I will write more later.

Mandelstam,
If you notice my first post it was exclusively devoted to your statements about global standards. You haven't really answered those points after half a dozen posts but instead keep adding in new issues. Sure you are free to discuss what you want, but I would be first interestd in your response about labour standards which you have continuously evaded.

Specifically:
1) What's wrong with the reasons I gave for saying that labour market regulations might harm workers more than benefit them.
2) Without doing the cost-benefit analysis how can you be sure that a particular regulation will actually benefit workers? Can you provide cost-benefit analysis for any particular labour-market regulation which you feel should be implemented in a poor country but isn't.
3)Most developing countries oppose having labour standards being linked trade negotitations. How are you planning to force them to adopt standards? Airy-fairy talk about regional standards and citizens working across borders is all fine but doesn't answer the question in the least. Do you advocate imposing trade sanctions on those countries which don't adopt the regulations which you think are necessary?


And sorry I don't care about Scott's Phd ; the article is crap. I explained at some length what's wrong with it(capital account,monetary policy etc.) and as usual you haven't responded to my points. Credentials count for something but not if you find glaring holes in a piece particularly if it's not peer-reviewed. Anyway as it happens Krugman and Bhagwati are two of the leading trade economists in the world so why not put their credentials over a non-entity like Scott?

Demosthenesian
12-04-2001, 01:36 AM
Minty, most of the "debates" on CNN about globalization are misrepresentative and often out-and-out lies. I'm sure you wouldn't recommend one gain insight about other political issues and movements solely by watching CNN, so why would you attempt to judge the anti-globalization crowd the same way? That's about as useful as attempting to judge the worth of conservatism by reading the opinions of freepers.

Mandel... taught? Out of curiosity, what is your background? If you don't mind me asking. :D


Okay just a few points now and maybe I will write more later.

Mandelstam,
If you notice my first post it was exclusively devoted to your statements about global standards. You haven't really answered those points after half a dozen posts but instead keep adding in new issues. Sure you are free to discuss what you want, but I would be first interestd in your response about labour standards which you have continuously evaded.

Well, my reaction was that labour standards were to some extent a public good in that they promoted political and social stability. The only one you attempted to disprove of those was a minimum wage, and your argument against that was based on the idea of a mandated minimum wage. As I showed with my link, that isn't the only type possible. Perhaps Mandel thought I had successfully responded? Or perhaps Mandel, like myself, thought that we had moved on?

Specifically:
1) What's wrong with the reasons I gave for saying that labour market regulations might harm workers more than benefit them.

Your argument, I believe, is that there is a price for said regulations and gave three possibilities as to what might happen:
(and only three, which is already trying to shape the argument in your favour)

1-Demand for labour is reduced.
2-Employers cut on other margins
3-Employer takes cut in profits.

You argued that 3 is unlikely (making a silly ad hominem comment about "leftists") , so 1 and 2 are inevitable.

First, I challenge your assertion that there are only these three possibilities and ask you to explain why there are only these three possibilites. You used the weasel word "typically"... are there other possibilities? How common or rare are they?

Second, I challenge your assertion that demand for labour is reduced with any labour regulation, as your only proof for that was with mandated minimum wages. As shown by my other link, there are other ways of ensuring a minimum income without mandating floors.

Third, I challenge your assertion that the only way that a corporation can cut costs is by reducing labour benefits, as there are numerous other possibilities for cost-cutting aside from labour in even the most labour-intensive.

It's your turn to defend your beliefs, Cyber, and recoursing to your easiest argument (mandated minimum wages), as you have in the past, is not enough. I'd also prefer that you do it without using the phrase "any reputable economist".

2) Without doing the cost-benefit analysis how can you be sure that a particular regulation will actually benefit workers? Can you provide cost-benefit analysis for any particular labour-market regulation which you feel should be implemented in a poor country but isn't.

See above, and I'm appreciate it if you explained why you believe cost-benefit analyses are necessary for general and theoretical discussions such as this one. Your own hypothesis seems to be that labour market regulations aren't necessary. Can you cite cost-benefit analyses that suggest that no labour market regulations are necessary? Or are we merely in a situation where such analyses haven't been done?

3)Most developing countries oppose having labour standards being linked trade negotitations. How are you planning to force them to adopt standards? Airy-fairy talk about regional standards and citizens working across borders is all fine but doesn't answer the question in the least. Do you advocate imposing trade sanctions on those countries which don't adopt the regulations which you think are necessary?

Do you argue that they are unnecessary? What about the problem of democratic representativeness in developing countries. Are they acting in their citizen's best interests? After all, the worst cases of exploitation are in countries where democratic representativeness is dubious or nonexistent. Considering that there are already conditions in place for WTO membership (such as adherence to copyright protection norms), why are labour standards any different?

And sorry I don't care about Scott's Phd ; the article is crap. I explained at some length what's wrong with it(capital account,monetary policy etc.) and as usual you haven't responded to my points. Credentials count for something but not if you find glaring holes in a piece particularly if it's not peer-reviewed. Anyway as it happens Krugman and Bhagwati are two of the leading trade economists in the world so why not put their credentials over a non-entity like Scott?

That last sentence contradicts the rest of the paragraph, as sentences bridged with "anyway" usually do. (The classic "God doesn't exist and anyway He's a bastard" paradox). I found a huge problem with Bhagwati's piece that would kill its possibility of being published in any reputable journal.

BTW...On what basis do you describe Scott as a non-entity? And why is fame determinant of quality?

CyberPundit
12-04-2001, 03:02 AM
Demo,
You are not really answering anything, just making new assertions, and evading my questions.

Just repeating that labour regulations are a public good and increase stability isn't an argument. Why do you believe that absence of labour regulations per se increases instability. What if regulations increase unemployment; won't they increase instability?


"First, I challenge your assertion that there are only these three possibilities and ask you
to explain why there are only these three possibilites."
OK you tell me. What are the other adjustments here and what's the evidence? You seem to be under the impression that you can just propose a policy and the burden of proof is on me to prove that it's not beneficial. Sorry but I think that common sense suggests that it's people who suggest new polcies who ought to do the analysis especially when they want to impose trade sanctions on countries which don't follow their pet policies.

Incidentally there is another possibility which I forgot to mention in my first post, that the producer passes on the price increases to consumers , who depending on the product might not be that rich.

"I challenge your assertion that the only way that a corporation can cut costs is by
reducing labour benefits, as there are numerous other possibilities for cost-cutting aside
from labour in even the most labour-intensive."
What are the other methods of cutting costs you are talking about? Why don't firms apply them before the regulations is passed. In other words if there are profitable opportunties for cutting costs firms hardly need a labour regulation to make them so that all such opportunties are exhausted before the regulation. Is there any evidence that firms systematically forego profit opportunities in this way?

"Can you cite
cost-benefit analyses that suggest that no labour market regulations are necessary? Or
are we merely in a situation where such analyses haven't been done?"
For developing countries there aren't that many empirical studies.In the developed world the best studies are on the minimum wage and here despite a brief flurry of contrarian studies there is a consensus that it does reduce employment. Once again why is the burden of proof not on those who want a change in policy? In this case there is the additional point that the main argument in favour of regulation is theoretically dubious ie it depends on believing that labour markets are not competitive in the long run. This is highly dubious especially for low-skilled labour where there are innumerable employers.


"Do you argue that they are unnecessary?"
I am arguing that if we can't even be sure that labour regulations are beneficial it would be assinine to force countries to adopt them with the threat of sanctions.Do you disagree with that?


"I found a huge problem with Bhagwati's piece that would kill its possibility of
being published in any reputable journal."
Oh please. He didn't have cites in a commentary. Big deal. That piece wasn't even meant to be published in a journal. Perhaps this kind of nitpicking is evidence that you can't think of any substantive criticism?



"That last sentence contradicts the rest of the paragraph, as sentences bridged with
"anyway" usually do."
*Sigh* I said that since I had found a glaring error in the method, it didn't really matter whether he had a Phd. Would you care to defend the article from the criticism I made? Even if you believe that credentials are everything , there are economists with much better credentials like Krugman who believe the opposite. So either way the article is crap.

About reputation: Are you seriously suggesting that scholarly reputation is irrelevant in determining the value of a source? Why? In this case both Bhagwati and Krugman are tenured professors at Ivy League universities and acknowledged leaders in their field. Scott is some random economist working for a leftwing thinktank.

CyberPundit
12-04-2001, 03:11 AM
"Second, I challenge your assertion that demand for labour is reduced with any labour
regulation, as your only proof for that was with mandated minimum wages. As shown by
my other link, there are other ways of ensuring a minimum income without mandating
floors."
If the regulation increases the sum of wage and non-wage benefits it will increase the total costs of labour. So it's actually theoretically quite similar to a minimum wage and therefore a reduction in labour demand is quite likely. Perhaps it doesn't happen but just "asserting" that it doesn't is no argument at all.

CyberPundit
12-04-2001, 03:37 AM
Mandelstam,
"No--although like Demos and others I believe that social justice is worth paying for."
Actually so do I and in my very first post I made two specific suggestions in that direction which characteristically you have ignored.

Unlike you however I also believe that social justice is better achieved through hard analysis rather than soft rhetoric of the kind which is unaware of even basic arguments against its favourite polcies. Your consistent refusal to even address the criticism of labour regulations I made in my first post doesn't inspire any confidence at all.



"Well, you yourself conceded that much of what Stiglitz says is true."
What exactly have I conceded?

"So what has the IMF
done to avoid perpetuating this kind of error? Or do developing countries simply have to
hope that they'll be one of the lucky ones where the policies just happen to suit their
existing socio-economic conditions?"
Often in the case of countries like Russia there is a big foreign policy component and the IMF is forced to go to their rescue even when it knows that the government isn't up to the task. And in general countries come to the IMF usually when they are in deep crisis often after years or even decades of terrible policy. Why is it a given that they succeed?

So yes, IMF programmes often fail to solve the incredible political and economic problems they have to deal with; that is hardly an indictment of the system or proof that there is some better policy or institution out there.

If there is why don't you tell us. What would you have suggested as a solution for a basket-case economy and polity like Russia? Would you just leave it alone to collapse completely? You have some better macroeconomic prescriptions? What?


About Amartya Sen: You know he isn't some kind of talisman to ward the evil "neo-liberal" spirits. Why don't you tell us specifically which of his ideas you think are relevant to any of the debates here particularly the labour regulation debate. Does he have any prescriptions for BOP crises. Does he have any arguments against NAFTA? What?

minty green
12-04-2001, 07:58 AM
Originally posted by Demosthenesian
Minty, most of the "debates" on CNN about globalization are misrepresentative and often out-and-out lies. I'm sure you wouldn't recommend one gain insight about other political issues and movements solely by watching CNN, so why would you attempt to judge the anti-globalization crowd the same way? That's about as useful as attempting to judge the worth of conservatism by reading the opinions of freepers.I would certainly dispute this, your continued reliance on CNN alone notwithstanding. Besides, what does it say of the intellectual prospects of a movement when apparently nobody but a tiny, tiny handful of people is able to explain the movement to your satisfaction?

CyberPundit
12-04-2001, 11:10 AM
Demo,




"I would disagree with your assessment of chinese freedom; while there may be more
economic prosperity in some regions, you can't wish away Tiananmen square or the
heavy censoring of information that still goes on there."
You seriously believe that Tianamen Square is remotely close to the horrors of the Mao era? I suggest you do some reading about the Great Leap Forward and the Cultural Revolution. If you know some Chinese people why don't you ask them what it was like before compared to now.

It remains a fact that China is a brutal,corrupt place but what exactly does that have to do with "neo-liberalism" when it was in fact much worse before it opened up its economy. And what are the policies that will improve this? Will reducing foreign investment or reducing foreign trade make the government nicer or the people better off. Why?

I sincerely hope that China becomes less authoritarian in the future and I actually think that openness to foreign business, the rise of a middle class and a generally wealthier country will actually help this process along. Even if it doesn't, the high economic growth achieved in the last two decades is still a hugely positive thing.



"When you were responding to me? Something about the Tiebout process, I believe?"
This is the big problem with debating with you; you continuously misunderstand and misinterpret what I say. I carefully explained what I meant here. Why don't you read it again and tell where I implied that "citizens working across borders" was necessarily a bad thing. It is against labour regulations imposed as part of a trade deal that I am against.

Mandelstam
12-04-2001, 09:16 PM
CyberPundit: "Actually so do I [believe that social justice is worth paying for] and in my very first post I made two specific suggestions in that direction which characteristically you have ignored."

Once again, CP, I must ask you to alter your tone or there is no point in continuing at such length. The truth is I have "characteristically" been answering your somewhat long posts as carefully as I can and in a spirit of fair debate. If I missed something, by all means bring it to my attention, but please don't accuse me of some nefarious motive.

"Your consistent refusal to even address the criticism of labour regulations I made in my first post doesn't inspire any confidence at all."

If I recall correctly, your argument was that labor regulations are ultimately borne by workers themselves. I've argued at least twice and maybe more that I believe that through political action this won't necessarily be the case.

The problem isn't that I'm not listening to you: the problem is that you are looking at a situation (globalization) as though it were only subject to economic laws (as you understand them). But that same situation, I keep trying to explain, is not only subject to economic effects but also to political effects. Indeed, precisely because collective political action can be effective, in Europe and America, workers' living standards were raised as regulation was phased in, not lowered. By and large, those living standards didn't decline until the beginnings of a globalized workforce (c. the 1970s). So, one might conclude, the politics of the 19th and early 20th centuries (which empowered citizens and workers) must now be re-enacted on a transnational scale.

"Well, you yourself conceded that much of what Stiglitz says is true."
What exactly have I conceded?"

Sigh. Please re-read your own post just following Demos's linking of the Stiglitz article.

"So yes, IMF programmes often fail to solve the incredible political and economic problems they have to deal with; that is hardly an indictment of the system or proof that there is some better policy or institution out there."

No, it's not. But Stiglitz isn't saying that IMF isn't all-perfect. He's saying that they're systematically wrong most of the time: both b/c they're neo-liberal philosophy is inappropriate and b/c they're an unaccountable bureaucracy that deliberate applies one-size-fits-all strategies without even the scantest knowledge of particular social condtions.

Do you remember my saying that no nation in history had ever managed to industrialize successfully under the neo-liberal prescriptions? Why should that change now?

Moreover, the the second Stiglitz link (posted by me and dismissed by you with hardly a word) makes even more serious charges. Have you read it at all?

"If there is why don't you tell us. What would you have suggested as a solution for a basket-case economy and polity like Russia? Would you just leave it alone to collapse completely? You have some better macroeconomic prescriptions? What?"

I would not have suggested overnight transition to a (neo-liberal) market economy. See The Nation link I provided on this subject.

"About Amartya Sen: You know he isn't some kind of talisman to ward the evil "neo-liberal" spirits. Why don't you tell us specifically which of his ideas you think are relevant to any of the debates here particularly the labour regulation debate."

What Sen argues (in Development as Freedom) is that the issue of development has been clouded by economists' and policymakers' over-narrow focus on income (or access to commodities). As a result they overlook things that directly impact people's health and welfare as much or even more as mere purchasing power. Sen compares poor areas where people (especially women) are educated to areas where there is more money but less education. He finds that the well-being of people on average is better in the first example.

The implications of Sen's work is that the West should be helping the third-world to develop in large part by helping them to educate people (especially women) and helping them to have valuable lives where there is meaningful choice. This is not an alternative to economic improvements but neither is it only a supplement to economic improvements. Because Sen argues more or less that these things pay for themselves if what one wants to see is greater social welfare: not just more commodities per capita.

Sen is not at all against trade or globalization. He simply sees education and meangingful choice as the chief priority in helping people to develop: not income. Masses of people lead lives of "unfreedom" b/c they are a)ignorant and b) tethered to grinding poverty with no choices. Sen clearly sees social welfare as something that the state should help to provide (i.e. he's a liberal and pro-trade but not a neo-liberal). To implement Sen's vision, you'd have to completely chuck an institution like the IMF, or reinvent it from top to bottom. Because it's priorities are too narrow and, in a sense, backwards.

Disclaimer: it's actually been more than a year since I read Sen and this is all from memory. People who are interested in Sen should read him for themselves. It's worth the effort, IMO, though it's not an easy read.

Demos: "Mandel... taught? Out of curiosity, what is your background? If you don't mind me asking."

Demos, I'm an historian by training though no longer teach. (My husband still does.)

In my new job I'm paid to write long posts on the SDMB and promote world freedom.

I wish ;)

CyberPundit
12-04-2001, 11:33 PM
"I've argued at least twice and maybe more that I believe that through
political action this won't necessarily be the case."

Can you give concrete examples of how "political action" would reduce the effects of businesses passing on the costs of regulations. I presume you don't dispute the fact that businesses will try to pass as much of the cost to consumers or workers as possible and they have several channels to do that. Even if "political action" blocks one channel what's to stop them from using another channel to pass on the cost.

More importantly how much of this cost will be reduced by "political action". Is it possible to provide even a rough estimate of this? After all if it's only a small fraction of the total cost and a lot of the rest is still passed on, then no one is really much better off.

So unless you can get some reasonable estimates of how much regulations cost and who pays for that cost ( with or without "political action") I don't see how you can reasonably advocate far-reaching policies particularly when they are backed by the threat of sanctions.


"Indeed, precisely because collective political
action can be effective, in Europe and America, workers' living standards were raised as
regulation was phased in, not lowered."
This isn't particularly convincing. There was a lot going on that time with technological innovation, capital accumulation, increased trade all of which stimulated growth and productivity and increased wages.

The ways in which the costs of regulations are passed on is quite subtle so it's hard to know how much they benefited workers unless you are prepared to do a lot of careful statistical work. They may have or they may not have.

In any case even if they did help workers , these regulations were passed at the national level without any international co-ordination. Since this was an era of very mobile capital , it is in fact a counter-example to the idea that international capitalism inevitably implies a "race to the bottom" for regulation. So there is no particular reason why poor countries, today, can't make up their own minds about regulation without having regulations imposed on them.

"Please re-read your own post just following Demos's linking of the Stiglitz article."
You mean this:
"Some of what he says is valid; a lot of it is gross exaggeration."
I don't think this can be read as "conceding much" of what Stiglitz says and in any case I didn't meant it that way.

There is a difficult trade-off to make in stabilization programmes between reducing moral hazard and regaining macroeconomic stability on the one hand and stimulating the economy on the other. I am not sure the New Republic piece recognizes it adequatly. I think the piece by Dornbusch provides a concise counter-argument to Stiglitz.

"He's saying that they're
systematically wrong most of the time: both b/c they're neo-liberal philosophy is
inappropriate and b/c they're an unaccountable bureaucracy that deliberate applies
one-size-fits-all strategies without even the scantest knowledge of particular social
condtions."
Well it's factually wrong to say that IMF programmes fail "most of the time". They have worked fine in several cases as I mentioned.

I am not that Stiglitz provides any superior alternative policies particularly in very difficult situations where :
1)Many countries which come to the IMF are poorly governed with a long period of bad policies behind them.
2)The IMF,unlike a central bank, can't issue money and has limited financial resources so it is always worried about being paid back.
3)The IMF is sometimes forced to lend to countries on non-economic foreign-policy grounds over which it has little control.

IMO the IMF does a pretty OK job under those constraints. I view Stiglitz as being just one extreme in a very complex debate.

Incidentally it's ironic that you keep talking about the IMF as an instrument of "neo-liberalism" and capitalism because some of its most vicous critics are free-market economists like Milton Friedman who want to do away with it altogether.



"Do you remember my saying that no nation in history had ever managed to industrialize
successfully under the neo-liberal prescriptions?"
Eh? What do you mean by neo-liberalism exactly? The Western economies in the decades before WW1 had little government spending, pursued very conservative monetary and fiscal policies, and the international capital markets were very free. Most of those countries had less government than many developing countries today and less government than prescribed by interntational institutions like the WB and IMF. You appear to have some greatly exaggerated idea about how much the IMF advocates reducing government intervention; in reality their main focus is on things like balancing budgets and non-inflatinary monetary policy which well governed countries follow anyway.

The second Stiglitz article doesn't seem to have much by way of argument or evidence, just a series of assertions. Unless he fleshes out his arguments it's hard to judge his claims.

Sen: None of what you mentioned is at all controversial among economists and you could find similar arguments in a World Bank report. I certainly support well-thought out intervention to help the poor ; I just don't think that regional or global labour regulations imposed via trade negotiations are good way of doing that for reasons that I have given.

Like I said in my first post I support a sharp increase in international aid which would actually increase the resources available to poor countries.

I oppose policies which mandate regulations ,which could very possibly reduce the competitiveness of poor economies , without really providing them the resources to carry them out.

Mandelstam
12-05-2001, 09:42 AM
CyberPundit: [on how effective political action can ensure that the world's workers get their fair share of productivity gains]

"Can you give concrete examples of how "political action" would reduce the effects of businesses passing on the costs of regulations. I presume you don't dispute the fact that businesses will try to pass as much of the cost to consumers or workers as possible and they have several channels to do that."

Actually, I'm not particularly concerned about costs being passed on to consumers (in the abstract). If the cost of minimal safety and a living wage results in a small increase to consumers I believe that Western consumers will still buy these goods. Their buying less of them may well occur; but on the other hand, increased wages in develping areas might absorb any consequent unemployment in the industrial sector by sparking local demand (perhaps for services, such as teaching, instead of the manufacture of goods). If consumer demand for a particular item proves particularly sensitive to any increase in cost, manufacturers can reduce profits, or increase productivity by making production (or some other aspect of the process) more efficient. They won't have the choice go back to unsafety, or sub-living wages, or child labor, because that will no longer be politically possible. That is, even in cases where existing legislation doesn't prohibit a particular exploitative employment practice, an empowered labor forces can either strike, or, perhaps, call for an international consumer boycott, or simply put pressure on their government (or on some supranational institution) to prevent this practice if that's possible.
Remember, economics is not a zero sum game.

"Even if "political action" blocks one channel what's to stop them from using another channel to pass on the cost."

As I said, an allied labor movement and an alert citizenship can be very responsible to these kinds of things. What many workers now need is less repression and the chance to make choices for themselves. These intangible things--a la Sen--are worth more (both in and of themselves and for the potential fruits they can bear) than whatever paltry benefit you imagine employers removing in order to compensate for a free labor movement.

"More importantly how much of this cost will be reduced by "political action". Is it possible to provide even a rough estimate of this? After all if it's only a small fraction of the total cost and a lot of the rest is still passed on, then no one is really much better off."

That is what you believe. And that is why this debate is no longer worthwhile. Demos and I have already told you what we know. You have told us what you know. The difference between us is one of worldview, not facts or theorems. You live in a world in which economic forces control all or nearly all. You cannot imagine a human political movement powerful enough to rein in the economic behavior of the system that is.

My world (I won't speak directly for Demos), is governed by history which is not exclusively composed of economic history, or of corporate history. It is, rather, human history. In my world, the actions I have described are all but inevitable. (Which isn't to say that they'll happen quickly, or that they'll be entirely successful.) That is, as I see it looking back on the past, studying the present, and making educated guesses about what will evolve in the future, the continued prosperity of citizens in the West depends on the increased prosperity of people in developing countries. The latter will not come about through neo-liberal economic policies. Western citizens will help developing citizens to insist on the kind of social fabric that can given them their fair measure of freedom from grinding poverty, political repression, and gruelling, unsafe labor. Western citizens will help developing citizens to insist that children go to school rather than work in factories, thereby undercutting the wages of the adults who should be working in the factories (among other things).

You will never believe this because you live in a different world than I do. You will always reduce what can be to what is, and you will always understand what is, for that matter, as a product of economic determinism.

I think we've had a very interesting debate to this point, but there is no reason further to prolong it by rehearsing the very same questions again and again.

"Sen: None of what you mentioned is at all controversial among economists and you could find similar arguments in a World Bank report. I certainly support well-thought out intervention to help the poor ; I just don't think that regional or global labour regulations imposed via trade negotiations are good way of doing that for reasons that I have given."

Fair enough CyberPundit. One day, perhaps a century from now, it will be known if the poor in developing nations got improved education and health as the West did--through the rise of a social welfare apparatus of some kind--or if the market itself delivered these things gratis as (according to your beliefs) the market never will, and as (according to history thus far) the market never has...

erislover
12-05-2001, 10:26 AM
Originally posted by Mandelstam
One day, perhaps a century from now, it will be known if the poor in developing nations got improved education and health as the West did--through the rise of a social welfare apparatus of some kind--or if the market itself delivered these things gratis as (according to your beliefs) the market never will, and as (according to history thus far) the market never has...
Well, I'll respond again in the hope that this post may be acknowledged, but it may not.

Markets do not provide everything. I think that is clear. Specifically, they do not provide labor movements, freedom of speech necessary for labor movements, a government to protect the freedom of speech necessary for labor movements, and shal I really go on?

The economic structure of a society is not a factor in the society's workers' ability to organize. That business must come before a labor movement is, quite literally, obvious. I think it is almost definitional. That you feel, mystically, that that which creates business should also create unions is personally stunning. I have no idea why you think so, so I have no idea why you feel that an absence of unions is a market failure, when the prerequisites for labor movements are political in nature.

Perhaps if we started over with you explaining clearly how economic structure is responsible for political shortcomings then the rest of us might be able to get along here and understand what the hell you are saying. I like ya, Mandelstam, but I haven't the foggiest what your real point is or how it is pieced together.

Mandelstam
12-05-2001, 11:38 AM
erislover :

"That you feel, mystically, that that which creates business should also create unions is personally stunning. I have no idea why you think so, so I have no idea why you feel that an absence of unions is a market failure, when the prerequisites for labor movements are political in nature."

You have misunderstood me. I think that workers should have a) the right to organize; and b) the ability to participate in democratic governance. Most people in the developing countries we've been discussing have neither or, at best, a very limited version of "b."

Were people to have these rights, it would be up to them whether they wanted to form unions or not. I suspect that in the developing world they would (based on Western precursors) but these new unions might be very different from the ones you're familiar with, or third-world workers might reject unions as we understand them and prefer some other organizational principle. Or, it's possible, they might have these rights and prefer not to organize in any fashion.

In either case, in the absence of these guarantees--or, to put it more accurately, without even the most minimal effort to bring these rights about--we have the labor race to the bottom described above. Countries that do afford political rights to their workers must compete with (in effect) fascist countries. (I just read in the New York Times] this morning that China is expected to execute 5,000 people this year.)

"Perhaps if we started over with you explaining clearly how economic structure is responsible for political shortcomings then the rest of us might be able to get along here and understand what the hell you are saying. I like ya, Mandelstam, but I haven't the foggiest what your real point is or how it is pieced together."

I like you too, erislover, as I think you know. But you're asking me to provide you with more than a message board can do. Perhaps if Demos or jshore are reading they might like to take a crack at explaining what you wish to have explained. Today, at least, I can't and I have another suggestion for you.

Here is my suggestion. Read One World, Read or Not by William Greider (1997). I recommend this book rather than any other because it is easier to read than most and is widely held to be the best written book on the subject. It is about 500 pages long--and every page of it fascinating. You will learn a lot about how financial markets work, what the impact of globalization has been in several countries, how the globalization of labor within several industries (especially auto) works.

Bear in mind as you do, that most people of CyberPundit's persuasion disagree with the conclusions of the book. Paul Krugman also has strong disagreements with some of the conclusions. Lester Thurow has some disagreements. So you'll undoubtedly want to read reviews of the book (both positive and negative) after you read the book. That is, it's a controversial book (as any book on globalization is bound to be) and I am not at all asking you to accept its conclusions about what is most problematic.

However it will give you a much deeper understanding of what is being argued than anyone can possibly have from just watching the odd TV piece, or reading about this or that aspect of globalization in a magazine, or on a message board. I would say the same thing to anyone: understanding globalization involves a lot of reading. Which is one reason why so few people really do understand it.

If I could, I'd type the 500 pages worth of information into this little box on my computer ;). But I can't.

I'm serious here. Read the book. Even the first five chapters. Then, if you like, start a thread called "I read the book you recommended, I've thought it over, and now I'm ready to have it out with ya" ;)

erislover
12-05-2001, 11:55 AM
Originally posted by Mandelstam
Here is my suggestion. Read One World, Read or Not by William Greider (1997).
Fair enough, I suppose. Now, if the SDMB would just hurry up and get an Amazon partner program up and running... :D

CyberPundit
12-05-2001, 08:09 PM
Mandelstam,
First of all I think the difference between us is not so much of world-view as much as standards of evidence when we look at public policy. I think that policy should be made primarily on the basis of hard analysis with a careful look at both the costs and the benefits. While something like "political action" might have a place in this analysis, it has to be explained concretely and above all some effort must be made to to ascertain the magnitude of its effects. You seem to be generally unwilling or unable to provide this kind of concrete analysis and content to rest on abstraction s or hope.

A good example of that is your continued refusal to elaborate exactly how you propose to implement policies which are strongly opposed by poor country governments including the democratic ones. It's all well to talk about workers rights and democracy in the abstract but explaining how to integrate this into trade negotiations is altogether another matter. Do you intend to impose trade sanctions on all non-democratic countries. China? Saudi Arabia? Why stick to democracy? There are all sorts of horrible things going on the developing world including in countries which are democratic. Would you impose trade sanctions on all countries which violate human rights ? And how do you account for the fact that democratic countries like India are among the sharpest opponents of labour standards.

Also you seem to be unwilling to specify precisely what it is you want. In some posts you mention democracy and the right to unionize which most people here would support, in others you talk about specific regulations like the "living wage" which have significant economic impact whcih can't just be ignored.


As to your specific points:
"If the cost of minimal safety and a living wage results in a small increase to consumers
I believe that Western consumers will still buy these goods."
Huh? Are your labour regulations only going to apply to workers in the export sector? What about all the other workers who produce goods consumed by the local population? Not only would it distort the local economy to have selective regulations only for the export sector but it would sharpy increase the already large suspicions in poor countries that the labour standards issue are about protecting first world workers rather than helping poor countries.

"increased wages in develping areas might absorb any consequent
unemployment in the industrial sector by sparking local demand (perhaps for services, such as
teaching, instead of the manufacture of goods)"
I have already tried to explain how labour regulations don't really increase the aggregate demand, they just shift it. Not to mention the fact that poor countries don't usually lack aggregate demand; in fact they often have chronic inflation problems.

"They
won't have the choice go back to unsafety, or sub-living wages, or child labor, because that will
no longer be politically possible."
Even if this were true,they would have the choice to reduce the demand for labour,increase prices or if they are only marginally profitable before, they might shut down altogether. If "political action" prevents one kind of adjustment that doesn't mean that will only push businesses further towards other directions. How do you know how much of the adjustment won't fall back on the backs of the poor.

"What many workers now need is less repression and the chance to make
choices for themselves"
Again you are confusing basic human rights and more intrusive economic regulations. I don't have the slightest objection to workers having more basic civil liberties including the right to organize (though trade sanctions are the not the right way to get these things). However specific economic regulations like the minimuem wage and minimal benefits are another story altogether.

"That is, as I see it looking back on the past, studying the
present, and making educated guesses about what will evolve in the future,"
The trouble is that you don't seem to have a particularly good understanding of the past either. For one thing the labour regulations passed in Western countries at the turn of the century were passed at the national not supranational level and in the context of an international capitalist system freer than today. Like I said ,that history refutes the contention that international capitalism forces a "race to the bottom" and doesn't allow individual countries to pass regulations if they wish. Anyway like I said earlier showing that those regulations were beneficial earlier is a good deal more complex than you seem to imagine.


"One day, perhaps a century from now, it will be known if the poor in
developing nations got improved education and health as the West did--through the rise of a
social welfare apparatus of some kind--or if the market itself delivered these things gratis as
(according to your beliefs) "
This is a completely absurd mischaraterization of the debate. As I have made clear it is about sorting good government policies from bad government policies not about market versus the government. And once again Western economies before WW1, by which time they had made a great deal of progress, had much less government than most developing countries today; I can get you figures on government spending if you want.

Mandelstam
12-06-2001, 10:39 AM
CyberPundit: "The trouble is that you don't seem to have a particularly good understanding of the past either. For one thing the labour regulations passed in Western countries at the turn of the century were passed at the national not supranational level and in the context of an international capitalist system freer than today."

Gee CyberPundit, I must have wandered into another thread mistakenly. Because unless I'm dreaming, you've just professed to enlighten me by telling me something that I've been saying again and again in the last 10 posts or so. I argue that I expect to see citizens today, and in the future, working to build supranational mechanisms to replace the national mechanisms that no longer effectively rein in the power of supranational corporations, and you tell me that--duh--in the past the mechanisms were national!

And on what do you base your implicit assumptions about the impossibility of a suprnational citizens' movement (though not necessarily in the form of a giant global bureaucracy), or on the spread of European-like economic alliances between nations?

As I said long ago, you are a luddite when it comes to social relations.

For your information: although I never was primarily an economic historian, my understanding of the past on this issue is pretty clear, and where Britain or even Germany is involved, extremely clear. I could provide you with lots of sources to support my claim that no nation in history ever was able to industrialize successfully under a neo-liberal policy (in other words, they relied upon "economic nationalism" including subsidies, protections, etc.). But these are books that you will have to get out of a library should you wish to read them.

Looking over your post I see that we've covered not only this ground again and again but also the other "points" you raise again and again (e.g., what I mean by a living wage, the history of NAFTA and its intended workers' rights provisions, etc.). This gives me very little incentive to go further by answering some new questions you've posed (should trade sanctions be leveled against human rights violatiors?). This is an interesting question, but who reading this thread doesn't already know that what your answer will be? We already know that you believe that China has become more free; and we already know that you're not troubled by the fact that a country that executes 5,000 people every year (and this but one aspect of its total repression of workers' rights) is now poised to compete with nations that provide more autonomy for workers. Yet you deny that this constitutes a race to the bottom. So why bother debating with you? When presented with irrefutable evidence of a social cost, you simply deny its relation to economic matters.

However, if you would like to keep up the debate by all means. But the burden is now on you. Tell us what kinds of regulatory mechanisms you envision (since you mention them). Tell us all about their economic cost and social impact. Tell us (if it matters) how they will help to alleviate the problems of a world in which the chief economic problem is oversupply and overcapacity (too many goods for too few buyers), while the chief social problem is hunger and privation. By all means tell us how you see your own prescriptions in relation to this context. Or tell us any other thing you support.

Because so far all you have done is defend the IMF on the grounds that it has not always failed, and dismiss its failures as due to extra-economic causes (yet still no response from you on The Nation's in-depth analysis of Russia). You've provided no hard evidence that neo-liberalism was responsible for initializing a viable industrial economy in any Western country; nor have you explained how Western industrial democracies were able to stabilize themselves, and spread social welfare, through various state and labor-generated policies so successfully for so long.

You've argued, instead, that nothing anyone else proposes is possible, and you've implied that political action has no ability to change what you see as the inexorable economic fact of the status quo. All you've done in other words, is make clear what the limits of your worldview are. And I maintain that the difference between us--at least in this debate--is mainly that of worldview. Because none of your economic prescriptions are news to me.

So the ball is in your court. I am all ears. Tell us what you propose and what its benefits will be.

CyberPundit
12-06-2001, 11:48 AM
Mandelstam,

"I argue that I expect to see
citizens today, and in the future, working to build supranational mechanisms to replace
the national mechanisms that no longer effectively rein in the power of supranational
corporations, and you tell me that--duh--in the past the mechanisms were national!"
You keep arguing about the supposedly successful experience with regulation in Western countries and using that as an example for poor countries today. I have explained carefully why it does not in anyway imply that supranational mechanisms are necessary in a capitalist setting contrary to what you claim. There is no parallel in Western history to countries being forced to adopt labour standards their governments don't want as a part of trade deals. I am not sure how many times I have to repeat this before it gets through.

"your implicit assumptions about the impossibility of a
suprnational citizens' movement (though not necessarily in the form of a giant global
bureaucracy), or on the spread of European-like economic alliances between nations?"
*Yawn* I have already explained what I am for and against many times. Please don't make up stuff about "implicit assumptions"

BTW in trade matters there is already an informal alliance between poor countries in trade negotiations lead by India. One of their big priorities is to oppose the linking of trade and labour standards. Why would you expect that to change if these countries ever get together to form European-like economic alliances. Their main priority will be to gain more access to rich-country markets not to have labour laws imposed on them.

"I could provide you with lots of sources to support
my claim that no nation in history ever was able to industrialize successfully under a
neo-liberal policy (in other words, they relied upon "economic nationalism" including
subsidies, protections, etc.)"
Most countries began with their industrialization process with many centuries of government interference and mercantilism behind them. That was their legacy just like non-democratic government. During the 19th century I think these trade barriers were reduced in many places. In the decades before WW1, a time of great industrial innovation, there was a global free-market freer than than what exists today with the gold-standard, free movement of capital and levels of taxation much lower than today. The international movement of capital, especially , has played a huge role in the industrialization of many countries including the United States.



"Looking over your post I see that we've covered not only this ground again and again but
also the other "points" you raise again and again (e.g., what I mean by a living wage, the
history of NAFTA and its intended workers' rights provisions, etc.)."
All I remember are quotes about what Congress and Bill Clinton want. OK so let me assume that you want all the policies mentioned in those quotes . But then every time I ask you questions about specific labour regulations and their impact, you evade the issue and waffle about citizens'movements and trans-national alliances

"We
already know that you believe that China has become more free;"
You don't believe this? Obviously your alleged historical expertise doesn't extend to the Great Leap Forward or the Cultural Revolution.

"we already know
that you're not troubled by the fact that a country that executes 5,000 people every year
(and this but one aspect of its total repression of workers' rights) is now poised to
compete with nations that provide more autonomy for workers. Yet you deny that this
constitutes a race to the bottom"
Do you even understand what a "race to the bottom" means? Tell me since China entered the world market which country has been forced to reduce regulations as a result? What about the enormous benefits to China as a result of economic growth and the benefits to consumers from cheap imports?



"By all means tell us how you see your own prescriptions
in relation to this context. Or tell us any other thing you support."
I already made two specific suggestions in my very first post and then repeated them later. Go back and read them; I have no intention of keeping on repeating myself.



"Because so far all you have done is defend the IMF on the grounds that it has not always
failed, and dismiss its failures as due to extra-economic causes (yet still no response
from you on The Nation's in-depth analysis of Russia)"
Does the Nation analysis counter the points I have made? Do you think my points are invalid? You just ignore my fairly detailed arguments and then claim I haven't addressed the issue.

Mandelstam
12-06-2001, 07:52 PM
CyberPundit, you've provided exactly the kind of reply that I expected from you. The only thing at all novel in your latest was your admission--at long last--that Western nations needed mercantilism to get their industrial economies off the ground. Just as Asian countries such as Japan and Thailand needed "economic nationalism" to get themselves off the ground in more recent times. As I said two posts ago, you've already told me everything that you know; I've already told you what I know. I won't be answering any future posts of yours: in part, because I'm very busy right now; in part because it's pointless for a person who belives that political action can change the economic status quo to argue with a person who doesn't believe that; in part because I find you ultimately quite trollish. Happy holidays.

CyberPundit
12-06-2001, 08:37 PM
Mandelstam,
I can't say that I will miss your posts. You are not much of a challenge and it's pretty obvious you are not capable of answering my arguments or making a rigorous case for your policies aside from empty rhetoric about "political action". Any one reading the exchange will be able to see the number of points you have left unanswered.


"your admission--at long last--that Western nations
needed mercantilism to get their industrial economies off the ground"
Oh dear. This is so far from what I wrote that I have to guess that you can't understand plainly written English sentences which would explain a lot about this "debate".


If you are representive of the intellectual quality of the American left, I can only say that I am glad that most of you are restricted to sniping impotently from the sidelines, more or less ignored by the Democratic party as well as the American public. Your lot deserves no better.

Demosthenesian
12-07-2001, 01:16 AM
Pundit, you'd probably do much better as a debator if you didn't insert silly little ad-hominem jabs everywhere. And if you were consistent: you argued that you believe that policy decisions should be based on "hard analysis", endlessly calling for citations, without bothering to provide any yourself (aside from that "commentary" and a rebuttal of dubious value, both about the IMF issue that you basically conceded).

In any case, I think you're missing one of my major points. I am *not* arguing that economic policy should produce liberal democracy and all the rights and freedoms that it grants to citizens. Precisely the opposite: capitalism can and does exist in parts of the world without any shadow of said rights. It is, however, a fact that in those countries I cited as examples of non-democratic capitalist economies (Singapore and China) unions are either curtailed or brutally suppressed, and that most of the countries in the third world that are being "globalized" are not liberal democracies. This creates real problems, because the internal democratic forces that would deal with any corporate-inspired curtailment of human rights (such as the massacre of activists on Shell's behalf in Nigeria) are *not* present, and therefore the problems are amplified. The problem isn't just the corporations, or the governments, but the interaction of both. As I said, there are certainly conditions attached to WTO status, and even drastic curtailments of governmental rights in some respects (witness the clause that allows corporations to sue governments for imagined damage to profits). Requirements for the respect of certain rights, such as the right to organize, are certainly not outside this paradigm.

My argument about stability, on the other hand, is much simpler, and is actually borrowed from Stratfor.com's analysis of globalization's interaction with geopolitics (I'd link, but I can't access their old analyses), which basically comments that mass poverty caused by *any* force creates instability, and that instability can threaten the governing regime. Although there will no doubt be long-term benefits of globalization, the switch from substinence to cash-crop farming and manufacturing in many third world countries has created problems right now, and long-term benefits will not be realized if people start seeking remedies to percieved wrongs by force. I'm inclined to agree. As Keynes said, "in the long term everybody is dead".

During the 19th century I think these trade barriers were reduced in many places. In the decades before WW1, a time of great industrial innovation, there was a global free-market freer than than what exists today with the gold-standard, free movement of capital and levels of taxation much lower than today.

Are you an economic historian, and can you give me cites for this? Last I checked, the 19th century was also wracked by endless booms and busts and, um, mercantilism. Arguing in favour of the gold standard is odd enough...please don't tell me you're in favour of the economic benefits of colonialism. :D

One last bit (I need to go to bed)

About reputation: Are you seriously suggesting that scholarly reputation is irrelevant in determining the value of a source?

This is a personal belief, but yes. I believe it is the argument that is the important factor, and not the arguer. A highly respected scholar can say incredibly dumb things (as that other thread about language attests) and some shmoe at a thinktank can put out something brilliant. Einstein, after all, was merely a patent clerk.