Here I was on Sunday thinking, it’s finally gotten warm, I’m going to get on my bike (as opposed to doing the inside-the-gym thing) and I’m going to ignore the blog today. And, then, I had to read Nicholas Kristof’s column in today’s NYTimes. What a dope.
He repeats the usual blind points about China’s success in the world markets. Here’s the key paragraph: “There are plenty of legitimate reasons to be angry with China’s leaders, but its trade success and exchange rate policy are not among them. The country that is distorting global capital flows and destabilizing the world economy is not China but the U.S. American fiscal recklessness is a genuine international problem, while blaming Chinese for making shoes efficiently amounts to a protectionist assault on the global trade system.”
Oh, Nick, just wave that word “protectionist” and you get that heavy breathing going on here. It’s the economic version of “patriotism”–words that freeze people into one of two camps. Either you are with us or you’re a moron, traitor or backward thinking person. Nick, baby, this is no more protectonist than your wet-dream that says there is something called “free trade.” It ain’t either.
China artificially keeping its currency at a particular rate is the protectionist act here, Nicky. Demanding that China let its currency float to a level that would take into account its real value is the act that is really about preserving the global trade system you so dearly love.
But, the biggest blind spot for Kristof–and, in fairness, most journalists writing about trade–is that he talks about China’s efficiency as if it had nothing to do with its slave labor conditions. The reason China has become the industrial factory of the world is because it artifically suppresses its wages. That’s a nice way of saying it has an ocean of people ready to work–forced to work–for wages so low that even adjusting its currency will not come close to eliminating the huge difference in costs China realizes over the rest of the world.
So, while Kristof bashes Democrats in Congress for so-called protectionism, I’d bash Democrats in Congress for not focusing their demand that China adhere to basic international law by allowing independent unions and give workers the right to freely organize and bargain contracts to raise their wages. That’s the only way China is not going to continue to suck up the industrial production from everywhere in the world–global corporations just love that cheap labor.
Of course, the deal is this: if the U.S. tries to pressure China to give people the right to organize, our government would first have to live up to that promise here at home.
