Monday, March 28, 2016

Globalization and the left (broadly speaking)

Paul Krugman - maybe I should be saying "even-the-Hillary-supporter Paul Krugman" - has been walking a line between his fondness for free trade and the failure of the great benefits advocates of "trade" treaties always promise to actually appear. He writes in Trade, Labor, and Politics New York Times 03/28/2016:

Serious economic analysis has never supported the Panglossian view of trade as win-win for everyone that is popular in elite circles: growing trade can indeed hurt many people, and for the past few decades globalization has probably been, on net, a depressing force for the majority of U.S. workers.

But protectionism isn’t the only way to fight that downward pressure. In fact, many of the bad things we associate with globalization in America were political choices, not necessary consequences — and they didn’t happen in other advanced countries, even though those countries faced the same global forces we did.

Consider, for example, the case of Denmark, which Bernie Sanders famously held up as a role model. As a member of the European Union, Denmark is subject to the same global trade agreements as we are — and while it doesn’t have a free-trade agreement with Mexico, there are plenty of low-wage workers in eastern and southern Europe. Yet Denmark has much lower inequality than we do. Why?

Part of the answer is that workers in Denmark, two-thirds of whom are unionized, still have a lot of bargaining power. If U.S. corporations were able to use the threat of imports to smash unions, it was only because our political environment supported union-busting. Even Canada, right next door, has seen nothing like the union collapse that took place here.
Krugman is an expert on international trade. But it seems to me he's trying to hold on to the pretense, or at least the hope, that the neoliberal "trade" treaties aren't primarily about trade but about corporate deregulation and overriding national sovereign for the benefit of corporate predators.

Bill Mitchell wrote last year about how too many left economists, including some who were working with an explicitly socialist or Marxist perspective, got caught up in the illusions of globalism, The origins of the ‘leftist’ failure to oppose austerity Bill Mitchell – billy blog 07/22/2015:

The situation [in the 1970s] became worse when the ‘left’ started incorporating the increasing global nature of finance and production-supply chains into their analysis. They wrongly assumed that these trends further undermined the capacity of states to spend and maintain full employment.

The ‘fiscal crisis of the state’ and ‘globalisation’ were held out as the two major impediments to state sovereignty. Nothing could have been further from the truth. But the ‘left’ bought it and in the 1970s, the neo-liberal resurgence as Monetarism, then privatisation and austerity, became virtually unchallenged and the ‘left’ disappeared up its own post-modern whatever. ...

In the European context, the unchallenged domination of the Monetarists was an important reason why France and Germany were able to come together and advance the move towards monetary union. ...

I think the literature that emerged from the Marxist scholars like James O’Connor in the early 1970s was not only substantially wrong it is presentation of macroeconomic theory (particularly in terms of its characterisation of the fiscal opportunities available to the fiat currency issuing governments) but was so influential among the practical ‘left’ – trade unions and other activists – that it provoked the downhill path of progressive opposition.

Neo-liberalism in its macroeconomic manifestation faced little opposition. Sure enough progressives attacked the retrenchment of welfare states, the privatisation schemes, the outsourcing and all the rest of it.

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