From now on, jshore, you may call me Adarene. 
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?
As I said.
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.
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.
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.
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.
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.
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.
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.
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.
When you were responding to me? Something about the Tiebout process, I believe?
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.
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.
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.)
Actually, Sen was given as a reference for yours truly. (And there’s that “he’s not an ‘x’ kind of economist” thing again).
(Why do I get the feeling when I open up this link I’ll discover another neoliberal? ;))
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.
No 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:
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 . . .
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.
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.)
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
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:
- What’s wrong with the reasons I gave for saying that labour market regulations might harm workers more than benefit them.
- 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?
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. 
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?
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”.
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?
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?
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?
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.
“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.
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?
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?
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.
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
“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.
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…
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.
**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”
Fair enough, I suppose. Now, if the SDMB would just hurry up and get an Amazon partner program up and running…
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.