On Trade, Our Choices Aren’t Only Xenophobic Nationalism Or Neoliberal Globalization

Few issues are receiving a more insipid—and thus more harmful—treatment in our public discourse than world trade.  Along with immigration, “free trade” is now the foremost symbol of a supposed either/or choice between globalism and nationalism.  

“Globalists” generally hail the liberal marketplace as the engine of economic prosperity and assail its critics as uneducated and irrational isolationists, while “nationalists” instinctively identify trade with economic decline (or at least the loss of good working-class jobs), rising inequality and a general loss of control over the future.

As CNN host Fareed Zakaria put it after Britain voted to leave the EU, “the new politics of our age will be not be left versus right, but open versus closed.” 

This framework risks closing off our best possibilities for building a progressive economic future. We need a new paradigm. 

Some historical perspective is first in order. That is the only way to account for the fact that those forces—call them white working class— today most deeply resentful of the open market were among its loudest champions during the first three decades after World War II.

The wartime Bretton Woods agreement together with the immediate post-war Marshall Plan reintegrated the Western-plus-Japanese economies on the basis of stable currencies, expanding markets and political democracy. After the catastrophe of Nazi-era cartels and hyper-nationalism—including the United States’ own notorious Smoot-Hawley Tariff Act, which set barriers of up to 59 percent on imported goods—Western workers, generally well-organized in trade unions, felt as much stake in the rising tide of economic growth as did their bosses. A slick pamphlet designed for mass distribution by the American Federation of Labor in 1947 heralded “The Promise of Bretton Woods—5,000,000 Jobs in World Trade.”

In these early years of globalization, what we today call the Global South mattered mainly as sources of cheap raw materials or as markets for Western-produced goods. In hindsight it is easy to see how the global system that so long fed American middle-class prosperity came back to bite it, once poor countries (in alliance with multinational corporations) developed their own manufacturing platforms. ...