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February 26, 2007

Rejecting NeoLiberal Economic Policy

by at 11:14 am.

At last. Someone who talks like a real populist and progressive. John Edwards has come out and unequivocally rejected neoliberalism (which mostly was a disguised corporatist conservatism).

John Edwards is doing something important. It’s so important that it’s eluded the attention of the political press. While pundits handicap the horserace and assess hairstyles, Edwards is quietly yet thoroughly rejecting the economic philosophy that’s dominated the Democratic Party for the last fifteen years.

More important, he’s rejecting it in favor of a bold progressive populism, the likes of which haven’t been advanced by a serious contender for the White House in a long time. Ezra Klein in Raising the Bar in the latest American Prospect, a publication not prone to hyperbole, says Edwards is “the most populist presidential candidate we’ve seen in many decades.”

So what is neoliberalism? It’s the Democratic Leadership Council’s fevered brainchild of the 90’s, a sort of if-you-build-it-everyone-wins attitude on trade. Its favored phrase? “A rising tide lifts all boats.” Of course, the end result of so-called “free” trade is that without restrictions on overseas corporate conduct, there’s no rising tide. And for our pains, we lose American jobs in waves that has come to include even high-paying white collar jobs like computer programming.

The fact remains that it is in the multinational corporations’ best interest to keep the people in their cheap-labor countries from ever lifting their own boats. This same principle is the reason for the 19th century’s great muckrakers decrying the terrible conditions of the American worker. This is the reason we have US laws against dumping heavy metals into rivers; why we have child labor laws; and safety laws to prevent death and maiming of our workforce. It is the reason for minimum wage. When we export our jobs to other countries, should we not export our hard-fought American work values with it? Why should we be privileged to have protections while allowing these amoral corporations to commit human rights violations elsewhere? If you want to really know why we can’t compete with China or Indonesia, it’s because we let our corporations do terrible things in the name of chasing a dollar.

It’s an idea that has inevitably failed. It didn’t lift the boats of Mexican workers; instead, we have a worsening situation of poverty and lack of opportunity there evidenced by the increasing stream of illegal immigrants. It has not equalized the poor countries with the rich. It has only impoverished our own citizens. It’s time to move to a sane and fair trade policy. Our middle class - and the future middle class of emerging nations - will thank us for it.

12 Responses to “Rejecting NeoLiberal Economic Policy”

  1. James Says:

    It’s nice to see a presidential candidate interested in putting the brakes on the race to the bottom. It’s about time, because the existing order is failing both us and the exploited labor in the developing world. However… I think as long as Americans are addicated to cheap plastic stuff made by children in foreign countries, the existing economic order isn’t going to change to any appreciable degree. Are people willing to pay double or triple price for a given item at Wal Mart in the name of social justice and fair wages?

  2. Mr. Lynn Says:

    Here is a proposal to tie trade policy to labor standards.

    http://www.prospect.org/web/page.ww?section=root&name=ViewWeb&articleId=12506

  3. Lynne Says:

    Maybe we can just buy a little less.

    I am by no means a major consumer of goods (still have hand-me-down furniture for goodness’ sake) but even *I* look around and think, WTF do I have all this crap for??

    Of course, we’re still buying all that cheap plastic stuff on credit to begin with - the “cheap” prices don’t seem to help our negative savings rate in this country.

  4. Jay Booth Says:

    I really dislike the “neoliberal” To me, it says I’m gonna take all the things that are potential worries or concerns in our economy, call them “NeoLiberalism”, and be against them! It’ll be easy to get my liberal friends on board because it sounds like “neoconservative”!

    Free trade and globalization are happening. The only alternative to buying goods from China is to NOT buy goods from China. What’s that accomplish? All the stuff we buy is more expensive and we fall a little bit behind the world economy by protecting jobs that should be obsolete and protecting our industries from competing.

    Opposing free trade is saying “I don’t want to do this the smart way, I want to create work hours by doing it the hard way”. What about automation? Will we make a law against that if it continues? Manufacturing output grew in the US last year even as the number of hours worked fell. Productivity gains. So what if we wall off from free trade and that continues, make automation and productivity illegal to protect jobs?

    What we need is an expansive free trade policy coupled with policies aimed at helping people move up inside this country. Trade policy can focus on growing the pie while domestic policy focuses on splitting the pie. Artificially protecting blue-collar jobs that the economy doesn’t really need anymore won’t do anything - the bill will come due eventually. We need policies that create income mobility through education, worker training and incentives to hire Americans.

    Practically speaking, as far as those manufacturing jobs, it’d be nice if our crappy car companies built anything that I actually want to drive.

  5. Lynne Says:

    Neoliberalism is an actual philosophy. It has a definition. From the link:

    What would later be called Clintonomics—or, if you prefer, Rubinomics—was developed, as most of you know, in the late-1980s and early-1990s by groups like the Democratic Leadership Council (DLC) and the Concord Coalition. Here’s a layman’s explanation of Clintonomics (the only kind I’m capable of giving): limited, targeted social spending—especially on education, research, and science—combined with an obsessive commitment to “free” trade and yearly balanced budgets.

    It’s no wonder that multinational corporations and Republicans find much to like in Rubinomics. It pushes “free” trade agreements that lack sufficient protections for American workers and austerity measures that weaken Dems’ chief political weapon and moral mission: delivering programs that help people.

    I’m sorry, but the biggest economy in the world doesn’t have the ability to direct globalization? That’s total bunk. Especially if we get the rest of the western world to come along with us.

    We can’t keep having trade policy as it stands, our trade deficit is a disaster waiting to fall down on us. Just having “expansive free trade” does nothing to fix that. We need to stop buying more than we produce. It’s that simple. One way to equalize the system of globalization is to make laws that say to our multinational corporations: you will obey laws of worker and environmental protection, allow unionization of your workers in other countries, and submit to a minimum wage that follows the median prevailing wage for the country. By doing this, we commit to a moral policy that will “lift all boats” while making it far less attractive to zip all the jobs out of this country all at once for a race to the bottom, which is what we’ve got under “free” trade. Free trade is only free for one group of people: multinational corporations. Everyone else pays the price.

    Opposing free trade isn’t about protectionism or opposing productivity. It’s about both our moral obligation to our own citizens, as well as to prevent the exploitation of workers overseas.

    The only losers? Multinational corporations which will still make their billions. I don’t have much sympathy.

  6. Josh Says:

    I hate the phrase “American jobs.” I don’t know how many times I’ve tried to explain this to people. Jobs cannot have a nationality! Only people can have a nationality. It’s very jingoistic to think otherwise. When I hear about “American jobs for Americans,” this is what I think:
    http://archive.lib.msu.edu/AFS/dmc/radicalism/public/all/americaamericanscreed/AGA001.gif

    Besides, who are you tell to me that I can’t voluntarily trade with someone in African or India or Mexico? Ah yes, we must take up the white man’s burden and save the brown skin man because we are superior.

    Sorry Lynne, it’s your idea that inevitably failed a long time ago.
    Mercantilism is dead.

  7. Mr. Lynn Says:

    A job, once it becomes real and not just a concept, shares its conceptual space with the person doing the job. Since that person has a nationality, everything associated with that person can be associated with his or her nationality.

    Separated from people, yes, jobs wouldn’t have a nationality. As soon as a person who has a nationality draws a paycheck (or not in the case of slavery) it can be associated with a nationality.

  8. Mr. Lynne Says:

    As far as “who are you” is concerned… they are called trade regulations, but we all understand that you just wish they would just go away.

  9. Jay Booth Says:

    Lynne, you raise some concerns about worker conditions but I think we can let the Chinese handle those on their own - and I don’t think we have much choice.

    You propose not letting American businesses employ workers in sweatshop conditions but that’s not the case now in most situations as I understand it. Walmart and whoever (prob IKEA too but they’re a european company) buy things from Chinese companies that own the factories and employ the workers in most cases. So what, pass a law limited who Walmart can and can’t buy from? It’ll be full of loopholes and there’ll be a way to get around it, which everyone will promptly do.

    Both countries are getting richer in absolute terms off of free trade. It’s also true that trade contributes to income disparity in both countries, but this is simply accelerating an existing trend that we’ll have to handle domestically. Slowing down the economy to slow down the trend doesn’t fix the problem - it’s where things are going now. Automation is becoming cheaper while people are becoming MUCH more expensive, the trend is gonna be to eliminate any job you can automate/outsource in any case.

    I think free trade should stand on its own as something that creates more total economic activity and money in the world. How we choose to handle that growth is our business and what the Chinese do is their business. I say break down the barriers, tax high earners and fund the heck out of education so that we stay ahead. The buggy whip manufacturer’s union doesn’t get a lot of respect from me.

  10. Bob Says:

    For me there are a couple of ways to look at all of this. While it is true that a lot of wealth has bene generated with ‘free trade’, the question at bottom is what about distribution. There is greater misery now in many parts of the world affected by neoliberalism than anything positive. So trickle down economics once again fails to help the broad masses of people and we see access to education and health care slipping. At the same time many industrial cities here in this country have gone through a structural adjustment and neoliberalism. There is less public spending, less health care, crappier jobs without unions, environmental degradation, growing inequality. Poor people the world over have the full weight of the World Bank, and International Monetary Fund on their necks and the necks of their kids. Granted most of us are better off here still, but the ranks of the poor and those with little opportunity of advancing from the bottom grow across the so-called Commonwealth.

  11. Mr. Lynne Says:

    To the extent that trade happens in an unregulated manner, wealth tends to stratify and the egalitarian asspects of the system breaks down in favor of those who can leverage capital. Are there stupid regulations? Yes. Should they be fixed? Absolutely. Is regulation the root of all economic evil? Hardly!

  12. Bob Says:

    actually some regulation is a good thing - but what is interesting is how the US and the EU tell African countries that they can not subsidize their agriculture and must open their markets, whie the same US and EU countries subsidize their own agricluture to the tune of a billion dollars a day.

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