Free Trade

Reader J (a blogger himself) responds with some objections to my post on Lou Dobbs and free trade (Dobbs is against in such a way that I'm against Dobbs).

Now Reader J objects that there are costs to the offshoring of American jobs. I can't disagree with that - I recognize it. But it's clear that the benefits outweigh the costs by several orders of magnitude. To distill the major points, and outline the rebuttal to them:

• We export "low-wage jobs and environmental problems". I concede this is true. But I have a lot of faith in the ability of humans to adapt to environmental problems. Sometimes it takes a Three Mile Island to mobilize environmentally protective policies. Politics happens abroad as much as at home - and a more relevant benchmark of analysis is the fullness of American efforts to mitigate problems attributable to its own investments in foreign economies. As for "low-wage jobs," I can't think of any reason why the export of "low-wage jobs" should be classified as a problem.
  
  
• Coca-Cola has been charged with various atrocities in Columbia against union leaders - Again, this is true, and certainly outrageous. But a more relevant question is not whether Coca-Cola did wrong (they did), but whether we can now make restitution by criminally prosecuting those who made criminal choices. Given that human rights violations by our corporations abroad can expose them to domestic liability (and galvanize political changes abroad to protect the rights of more humans), exportation of jobs abroad gives corporations incentives to spread our values of respect for human rights. Two cheap labor supplies - one with human rights protections, one without - it's the one with protections that exposes you to the lowest overall liability risk. I don't bring this up to apologize for the woeful standards of American corporations abroad - but their presence (OUR presence) abroad is precisely what gives us the stake and right to demand more liberties for persons abroad.
  
  
• Labor standards are much lower in countries we export labor to. See above. Labor standards tend to rise over time...
  
  
• the argument that we're helping them develop seems belied by the fact of the disarticulated/dual economy model. The "fact" of a model isn't an argument stemming from it. I would hope that Reader J will do me the favor of establishing his belief in the model's credibility (a key element of its facticity). From there, I'd like to see the argument bridging the gap between the model's facticity and the conclusion's prescriptions. Stay tuned...
  
  
• those countries whose GDPs have risen rapidly have seen average income increase, but not so much of an increase in median incomes, quality of life for the bottom classes, or reduction of inequality. This strikes me as an article of faith that is unwarranted by the facts. In the 1950s and 1960s Japan regularly experienced 10% annual GDP growth. Today, the Japanese enjoy one of the world's highest standards of living. I can't speak to inequality - it doesn't bother me so long as certain minimum conditions of poverty are satisfied - but on all other benchmarks mentioned by J the Japanese today are unquestionably improved over the 50s. If industrialization takes a generation or more to reap its rewards, is that an argument against it? If anyone would like to parse the numbers with me, I highly recommend the Human Development Reports...
  

I could go on... At some point, I'd like to lay out my own defense for the globalization of free trade (and the unrepentant embrace of it's obvious costs) - for people who should never expect to receive a tangible benefit from it, and even reasonably expect to face unwanted costs... until then, there's a defense of outsourcing in the current issue of Foreign Affairs. My first reaction was that it was a rather dismal defense, but it's worth reading...