Must-Read:The very sharp young whippersnapper Marshall Steinbaum:
Should the American Middle Class Fear the World’s Poor?: “Politicians responsible to the public cannot sell the idea that the domestic middle class must suffer…:
…to the benefit of foreigners. The tradeoff idea instead serves the folk mythology of an elite class of economic policy consensus–enforcers, who push policies that enrich the already wealthy. Democracy is supposed to operate as a natural check to bring the elite policy-making consensus in line with popular opinion and interest; playing the domestic middle class against a foreign one is one of many ways to keep that from happening. Asking which ought to suffer to benefit the other distracts attention from the real issue: their joint exploitation at the hands of globally mobile capital.
In my card-carrying neoliberal view, policies in the Global North to restrict trade (or restrict immigration either below or at rates not far above current ones!) would do relatively little to improve the domestic distribution of income and impose great harm on development prospects in emerging markets. The “China Shock” of the GWB administration is the only trade-related episode that is even plausibly as important as other policy moves. And it would be trivial to compensate for even its net distributional harm.
In my view, the focus of left-wing attention on trade restrictions is due not to the importance of international trade flows in altering income distribution, but rather springs from different motives: from attempts to hook up some of the energy that for two centuries now has been abundantly focused on nation and cross-connect it to class. As Ernst Gellner wrote, leftists have been faced with what they regard as a historical anomaly in the rise of nationalism, and have reacted by embracing:
The Wrong Address Theory…. Just as extreme Shi’ite Muslims hold that Archangel Gabriel made a mistake, delivering the Message to Mohamed when it was intended for Ali, so Marxists basically like to think that the spirit of history of human consciousness made terrible boob. The awakening message was intended for classes, but by some terrible postal error was delivered to nations. It is now necessary for revolutionary activists to persuade the wrongful recipient to hand over the message, and the zeal it engenders, to the rightful and intended recipient. The unwillingness of both the rightful and the usurping recipient to fall in with this requirement causes the activist great irritation…
Policies to enhance intellectual property rights and preserve rents are, of course, another kettle of fish entirely…