International

A Timely Defense of Free Trade

A container ship arrives at Yusen Terminals (YTI) on Terminal Island at the Port of Los Angeles, Calif. January 30, 2019. (Mike Blake/Reuters)
Edward Goldberg's Why Globalization Works for America offers a well-argued, timely defense of globalization.

With both major parties turning their backs on free trade, a new book by New York University professor Edward Goldberg, Why Globalization Works for America: How Nationalist Trade Policies Are Destroying Our Country, offers a spirited and comprehensive, if at times quirky, defense of a more open U.S. economy.

An adjunct professor in international political economy at the NYU Center for Global Affairs, Goldberg offers a timely polemic that combines economic data with colorful historical lessons to help Americans sort through the competing claims about trade, immigration, and globalization — all as we approach an election in which those issues will be front and center.

Readers should be forewarned that Goldberg’s book can be a wild ride. His prose is clear, lively, and accessible, but his arguments can take unexpected turns along byways not directly related to globalization or nationalism, such as his objections to the U.S. Senate and George W. Bush’s foreign policy. But by the end of its 181 pages, the reader is rewarded with a better understanding of why openness to trade and immigration remains the best policy choice to keep America strong, prosperous, and great.

Goldberg’s main task is to remind us of all the benefits of U.S. engagement in the global economy. Imports mean lower prices and more choice for American families, especially lower-income households that spend a higher share of their budgets on tradeable goods such as food, footwear, and clothing. Trade opens new markets for U.S. producers that can ramp up production to meet global demand, such as General Motors, Apple, and Boeing. And foreign investment means good-paying jobs for American workers at foreign-owned factories, such as the Mercedes, Hyundai, Honda, and Toyota plants in Alabama that employ 57,000 workers.

On manufacturing and job displacement, the author makes the important point that technology and automation are transforming the workplace. Today’s measure of wealth is no longer fixed assets such as steel mills; it’s human capital — skilled workers creating new products and adding value primarily in the service sector. Because of automation, manufacturing employment is falling as a share of the workforce around the world, including China.

The author throws a cold dose of realism on the pledge by both Democrats and Republicans to bring back millions of manufacturing jobs: “These jobs are not coming back simply because they no longer exist,” he writes. “The high-paying industrial jobs that comprised a major part of the postwar American workforce are no longer central to the economic growth of a modern knowledge-based economy.”

Goldberg buttresses his arguments with telling historical lessons. He notes that China sidelined itself for several centuries when its rulers in the late 1400s destroyed its fleet of trading ships that had sailed as far as India and Africa and instead outlawed commercial interaction with the West. And he notes that while the U.S. government imposed high tariffs in the post-Civil War 19th century, the country was open to the flow of people and capital. Instead of being an example of protectionist success, “The United States between 1860 and 1900 was the embodiment of globalization, with nearly twelve million new immigrants supplying labor for its new factories and significant foreign funds supplying capital for these factories.”

Perhaps more controversially among conservatives, Goldberg includes immigration as an essential part of a brighter, more globalized future. He argues that today’s well-educated immigrants represent an inflow of human capital. The ethnic diversity that immigration promotes is a strength of America in a more interconnected global economy. “America’s belief in meritocracy, when shaken together with the melting pot of immigration and a strong jolt of intellectual freedom, is a unique but unquantifiable advantage in the globalized world,” he writes.

One of the strongest features of the book is Goldberg’s incisive takedown of populism. He rightly portrays populism as not only a revolt against globalization but as “ultimately a counterrevolution against tomorrow.” It is rooted in nostalgia for an idealized past and a fear of a dynamic, evolving future. He likens today’s Trumpian populists to the elderly lady who once button-holed Mayor Ed Koch of New York and implored him to “Make it like it was!”

“In a democracy, populism is an easy and lazy answer to problems,” Goldberg observes. “Nothing is ever the voter’s fault or responsibility, they do not need to consider how to change as the world changes, all fault lies with the vilified groups of others. The complexity of reality is never part of the populist consideration.”

Detracting from Goldberg’s thesis is a propensity to launch into what seem to this reader to be idiosyncratic concerns not directly related to globalization and populism. Specifically, he displays an odd fixation with George W. Bush’s foreign policy record and with the composition of the U.S. Senate as obstacles to a more open and prosperous American future. On Bush, he devotes a number of pages to criticizing what he calls the neoconservative agenda of waging war in Iraq while withdrawing the United States from the 1972 Anti-Ballistic Missile Treaty and the Kyoto climate accords. While each of those moves could be criticized on their own, the author fails to draw a convincing line between them and the Trump-led populist reaction against trade and immigration.

In fact, President Bush’s record on both of those pillars of globalization was solid by Goldberg’s own measure. In 2001, the Bush administration launched the multilateral Doha Round of trade negotiations within the World Trade Organization and almost brought it to fruition in 2008. It also negotiated and signed free-trade agreements with more than a dozen other nations, including such major trading partners as Australia, Singapore, South Korea, Colombia, and almost all of Central America. President Bush also championed comprehensive immigration reform. He and his advisers understood that favoring economic globalization does not require signing on to every international agreement on climate, security or whatever.

Another distraction is Goldberg’s fixation on the U.S. Constitution, in particular the provision giving each state two senators, irrespective of population. The author refers to the Constitution as “an operating document written for the problems of a 1789 world,” more suitable for the agrarian society of that time than for 2020. Again, how the apportionment of two senators per state inhibits the globalization he champions isn’t obvious. In fact, in recent decades, the Senate has tended to be less populist and more pro-trade than the House. Those small “agrarian” states export a lot of soybeans and pork bellies!

Caveats aside, this is a book worth reading, if not for those already steeped in trade, then more for the laymen trying to sort out the competing claims fired back and forth on cable TV. More an extended essay than a focused academic exercise, Why Globalization Works for America is a welcome addition to a debate that has been hijacked by partisan and populist interests, to the detriment of what the author rightly calls America’s globalized DNA.

Daniel Griswold is a senior research fellow and the co-director of the Trade and Immigration Project at the Mercatus Center at George Mason University.

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