Date: Tue, 21 Dec 1999 22:23:20 -0500 From: Enrique Diaz-Alvarez <enrique at ee.cornell.edu>
Since Peter K. brought it up, here's my response to Tim Cavanaugh, and his reply; if my understanding of US economic history is dramatically wrong, I'd appreciate a corrective.
Enrique
Date: Sun, 12 Dec 1999 05:28:24 -0800 From: tim cavanaugh <tim at simpleton.com> Subject: Re: Clues References: <384D53D7.FE3A255B at ee.cornell.edu> <384F141A.457EAE0A at suck.com>
> You missed my point. Comparing Nike's Vietnamese sweatshops to US nineteenth
> century economic development, like you did on your piece, is ridiculous. US
> industry was protected by stiff tariffs throughout its infancy, adolescence
> and even its college years. During its development it served almost
> exclusively the internal market; this means that US labor and resources were
> spent housing, clothing, feeding and developing the US, instead of exporting
> crap to service unpayable debts (these were taken care of through periodic
> defaults on British loans, in a much-neglected form of international
> redistribution of wealth). US wages in this period were actually *higher*
> than in England, thanks to the open frontier. And, perhaps most importantly,
> US capital was exclusively in US hands, which meant that profits and capital
> accumulation took place here. I know that market fetishism is all the rage
> in this country, but to think that GE maquiladoras are going to put SUV's on
> Mexican workers' hands, as you put it, requires an act of mystical faith
> worthy of St. Teresa. For starters, Mexican wages are today 30% lower than
> the year NAFTA was passed.
>
> People who oppose the WTO know exactly what it does, hard though it may be
> for you to believe. They are not all polpotist hippies or steelworkers who
> refuse to learn how to use a computer, though that image would be
> understandable if you get your news and analysis from CBS News or CNN. Most
> of them oppose it mainly because it does what it does with essentially zero
> input from workers and consumers, particularly third-world ones, who have
> the most at stake.
I try to avoid getting into colloquies about what are essentially one-off topics for us, but since you took the effort to write an intelligent response:
* Although your point about US economic history is mostly on the money, my understanding is that tarriff policy was never as monolithic as you're making out. Tarriffs were applied with sporadic energy in the late 19th and early 20th century, often being slapped on during times of economic hardship (and probably making the hardship worse), and enjoying the same friends and foes as today (business types in principle were opposed, except when their own ox was getting gored; populist types in general were in favor).
There's also some question about how insular the US economy was in the 19th century. The US was an importer of British industrial goods in the beginning of the century, and was an exporter of any number of raw materials (and was funded almost entirely by European financiers until late in the century).
This is nitpicking. Your point that US industry served a mainly internal market and current third world economies serve export markets is manifestly true. That's all the more reason why tarriffs are a bad idea for the developing economies. One thing we know for certain about tarriffs is that they slow down activity in whatever sector they're applied. I don't think I'm a right-wing nut for believing economic activity is a good thing.
* It's not hard to believe wages are lower in Mexico than the first year of Nafta, since Mexico's economy collapsed that very year, for reasons that can not with any honesty be blamed on Nafta . Needless to say, the think tanks are stocked with studies arguing that the Nafta helped cushion the effects of the Mexican depression, and needless to say, I would take these studies with a grain of salt. However, this is an entirely academic point, since your quote "GE maquiladoras are going to put SUV's on Mexican workers' hands" willfully misrepresents what I said. My article did not mention GE, maquiladoras, Mexican workers, or Mexico at all. And I certainly didn't claim free trade was going to allow American-style consumption in the Third World. I did say, based on my experiences everywhere I have traveled, that people all over the world crave the material luxuries of American life. Because the world is not fair, the vast majority of those people will never get those luxuries. But in the long term, economic activity, which I believe is enhanced by free trade, will provide the greatest volume of opportunity for the greatest number of people. Maybe that worker's grandchildren will be able to buy an SUV, although I wouldn't be so foolish as to predict even that. Bottom line: Poverty is the natural state of humanity, and not some disease we can cure with initiatives for economic "fairness." No matter what we do, only a handful of people will ever be lucky enough to achieve prosperity (The prosperous will then convince themselves that their success came from skill, merit and determination rather than luck; the non-prosperous will convince themselves that they are poor not through bad luck, but due to some conspiracy by the rich. Both will be wrong).
If you don't believe all this, try dropping out of Cornell, and see how life treats you without a college degree.
* As for representation by third-world workers: What finally doomed these talks were objections by Egypt, India, Brazil and other developing countries. Now unless you believe all those countries are so dictatorial that they don't have to pay any attention at all to the desires of their populations, or unless you subscribe to the Chomsky view that all governments are just stooges of an intact and autonomous global corporate government, you'd have to say that their objections in some way reflected a popular view of what is in the best interests of their own people. And to a one, they were opposed to exactly the things that the people in the street were for: environmental and labor regs and the like. On at least one issue, the poor of the earth are more on board than anybody wants to think: Everybody wants more money to be changing hands in more places. Economic fairness ain't worth squat if nobody has a penny.
yr pal,
tim
-- tim cavanaugh Steel-drivin' man http://www.simpleton.com
Simpleton: Friend of the people it serves
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