More than two decades ago, the emergence of the global economy nearly destroyed the big three auto companies. Now, it's dividing each of the two major political parties as well.
For those who were unaware that globalization is generating new arguments, new alignments, and surprising outcomes, the defeat of Fast Track trade legislation last year was a rude wake-up call. Fortunately for those who want to understand the trade debate, there is a growing number of controversial and comprehensible books on the subject.
By the old form charts, Fast Track should have been "a no-brainer," as President Clinton complacently called it. Routinely re-authorized since 1974, it gave presidents the authority to negotiate trade deals, which Congress had to accept or reject without amendments.
Last year, Fast Track still enjoyed near-unanimous support from the elites, from corporate America to the Clinton administration and the Republican congressional leaders. Its opponents were the same seemingly unformidable folks who had fought unsuccessfully against the North American Free Trade Agreement in 1993 - the labor movement, the leaders of the Democratic minority in the House, and mavericks from Jesse Jackson and Ralph Nader to Ross Perot and Patrick Buchanan.
But, this time, the underdogs won - and how this happened speaks volumes about the new politics of the new economy.
Globalization has always been more popular with elites than with ordinary Americans. In spite of the economic recovery, most Americans are still uneasy about corporate downsizings, stagnant wages, and precarious pension and health benefits. And they blame many of their difficulties on a global economy that puts them in competition with low-wage workers around the world.
Thus, the debates over trade are less between the Left and Right than between the top and the bottom. Democrats from working-class districts, such as House Democratic leaders Richard Gephardt and David Bonior, have been skeptical of trade agreements, as have labor and civil rights groups. And, since the GOP captured Congress in 1994, there's also been a new breed of blue-collar House Republicans.
Observing this new alignment, elite commentators are fretting about an unholy alliance of the Left and the Right. But a closer look at the trade debates - and the bookshelf of manifestos published over the past few years - suggests that the issue polarizes American politics into three camps.
First, there are the old-school isolationists who oppose foreign entanglements of all kinds, from NAFTA to NATO. With his presidential campaigns for the Republican presidential nomination in 1992 and 1996, conservative commentator Patrick Buchanan helped bring this viewpoint back from the "Jurassic Park" of history to a powerful presence in the Republican Party. Now, his new book, "The Great Betrayal: How American Sovereignty and Social Justice Are Being Sacrificed to the Gods of the Global Economy" (Little, Brown, 376 pages, $22.95) is a manifesto for those who proudly call themselves "protectionists."
But in my view, the great majority of those who oppose recent trade agreements are not protectionists but progressives. Unlike the Buchanan brigades, these labor-liberals accept the inevitability of the global economy. Unlike centrist leaders in both parties, they want to regulate multinational corporate behavior with international standards for workers' rights and environmental responsibility. Their views are presented by the journalist William Greider in "One World, Ready or Not: The Manic Logic of Global Capitalism" (Simon and Schuster, 528 pages, $27.50).
Finally, there are the elites who favor NAFTA, Fast Track, and the recent bail-outs of the Mexican economy and the International Monetary Fund. This establishment position is represented by "Globaphobia: Confronting Fears about Open Trade" (The Brookings Institution Press, 162 pages, $15.95) by Gary Burtless, Robert Z. Lawrence, Robert E. Litan and Robert J. Shapiro.
To my mind, this three-way debate demonstrates both the urgency and the difficulty of adopting the progressive position on globalization: regulating the international economy, just as advanced societies routinely regulate their national economies.
For all its wealth of information and analysis, "Globaphobia" reveals how insulated even the more liberal establishment advocates can be. The authors acknowledge much of what the labor-liberals have been saying: wages have been stagnating, and inequality is increasing. But "Globaphobia" attributes it all to increasing skill requirements in the job market, patronizingly describing the anxieties surrounding globalization as a "phobia," rather than a legitimate concern.
To support this view, "Globaphobia" cites statistics on the relatively small number of American workers who have lost jobs as the direct result of imports. In fact, most people understand what the establishment doesn't: The balance of power between working Americans and corporate America has been thrown out of kilter by the fact that many companies can now threaten to move overseas at a moment's notice.
This is the central theme of "One World, Ready or Not." As Greider makes clear from firsthand reporting, a global economy untempered by social constraints threatens not only low-wage workers in the United States but also skilled workers such as the machinists and engineers at Boeing who find themselves NTC competing with China's aerospace industry, protected by its government, staffed by virtual slave labor, and increasingly allied with U.S.-based companies. For those who share Greider's views, the remedy is a system of labor and environmental standards, similar to those being adopted by the European Economic Union.
But Buchanan's bombast will attract more attention and distort the debate. He also offers anecdotes of American victims of globalization - people he met in his presidential campaign (and also, as his footnotes acknowledge, read about in newspaper clippings). Unlike Greider, he has a simple solution: a 15 percent tariff on all imports, and even higher duties on Third-World nations.
Buchanan is so clear a writer that the inconsistencies in his arguments are apparent. He praises the protectionism of Republican presidents from William McKinley through Herbert Hoover. Returning to their policies, Buchanan suggests, would bring back "the America we grew up in" - the relatively egalitarian, at least for white folks, America of the 1950s.
But old-fashioned Republicanism - which protected domestic manufacturers but did nothing to regulate corporate behavior or insure workers against hard times - eventually produced the extreme inequalities of the 1920s and the Great Depression of the 1930s. It took the New Deal, to which Buchanan still seems unreconciled, to require a measure of social responsibility by business, offer a safety net for workers and produce the postwar America whose passing Buchanan now mourns.
To labor-liberals, from Greider to Gephardt, the answer is to advance a sort of global New Deal that would lift living standards overseas, rather than drive them down here at home. But the conservative populists hold the balance of power in this debate - and they look to Buchanan, not Bonior.
Reading Buchanan's polemic, it seems likely that he'd oppose any efforts toward a sort of global New Deal, for fear that they would compromise American independence from the world community - the "sovereignty" that is a rightist buzzword rationalization for opposing imports, immigration, and international agreements of all kinds.
So, for those who would unite the populists of left and right, their dilemma is delineated by the subtitle of Buchanan's book: We cannot achieve the "social justice" he claims to seek without sacrificing some of the "American sovereignty" he zealously defends.
David Kusnet was chief speechwriter for President Clinton from 1992 through 1994. He is a visiting fellow at the Economic Policy Institute and the author of "Speaking American: How the Democrats Can Win in the Nineties."
Pub Date: 5/10/98