Down the Rabbit Hole

  On the question of organized labor, outsourcing, and immigration Sam M writes:

One complication, of course, is policing. Money flows more easily than bodies. So even the strictest programs would likely have more effect on people coming across a border than $$ flowing on the Internet. But enforcement is another issue entirely, and we can set it aside for now.

I guess the starting point is: You seem to be arguing here for a pretty extensive restructuring of the American economy, which would include strong structural (including governmental) support for:

1. Unions, and all they entail
2. Strong anti-immigration measures, especially in low-skill sectors, and all they entail
3. Strong protectionist measures, and all they entail

It’s fine to come down in that direction. A lot of people do. I often feel a strong pull myself. It feels good and right. Yet… I dunno. Such a cure might be far worse than any disease we are suffering at the moment. Go back to “all that entails.” A trade war, for one. Increases in prices for anything and everything when producers pass along the wages to consumers. (Unless you are arguing for price management. And if you are… shortages.) Yikes.

The immediate response is, well, how about we just have some little nudges in these directions. I don’t think that works, for the same reason you can’t really require health insurance companies to cover pre-existing conditions unless you have a mandate; it’s all too interconnected. You wan’t to squeeze illegal immigration? Great. The companies go offshore. So you react to that with huge tariffs, and the companies respond with huge price hikes. Which you respond to with… Which they respond to with… Etc.

Maybe it’s a rabbit hole we MUST climb into. But it’s deep, man.

Like I said, I lean in this direction, too. But I think the end-game leads us to a really strong mercantilist future, a dangerous level of economic isolationism etc. And on the upside? Maybe if the whole system were run by angels, it would be a net positive. But I suspect that once the AFL-CIO gains strength and can lord it over the Chamber of Commerce and NAM, the smart lawyers will just jump ship and follow the paycheck. New boss? Old boss? Same dude!

Which is why I so strongly prefer some kind of structure that does not concentrate power in the Chamber of Commerce or or the Unions, but diffuses it. I know. Good luck with that, too. Still, a trade war and immigrant bashing seems like something that, ultimately, runs in the wrong direction.

But Sweden manages! Yeah. I know. And Singapore is a great place to live to, were it not for all the canings.

These are tough questions, no doubt about it. Reconciling the labor movement with immigration is particularly difficult, though there’s nothing inherently impossible in it – it’s been a historical problem, but we’ve solved historical problems before. It just takes rethinking. Then again, if you believe that increased supply of labor will lead to increased demand and thus an overall net gain for the economy, perhaps it’s not quite as tough a nut to crack as people would have you believe. The trick is doing it right, and there’s no doubt that we’re not doing it right at the moment. Right now illegal immigration disproportionately benefits big business, and especially Big Agriculture.

Regarding protectionism and globalization – while I’m inclined to support free trade and walk in the direction of globalization, I do think we need to take a moment to reevaluate how to globalize the economy, and which path to walk in order to get there. Right now, globalization occurs at the expense of workers. Yes, cheap goods from abroad benefit consumers as a whole, but those cheap goods are often produced in countries with more than questionable human rights records, by workers working in terrible working conditions. And the way our ‘free’ trade agreements work out, we often unnecessarily collapse foreign domestic economies by flooding them with our subsidized crops, while we suck them dry of any natural resources they may have, or force them to produce crops that we want them to produce (“we” being the developed world). In other words, while globalism in theory is an undeniably good thing – free commerce, peace, prosperity for all, etc. – in practice, and in context, it is a much more mixed bag. Making sure globalization occurs alongside a rising prosperity for everyone seems key. The playing field is not level.

So maybe the rabbit hole is deep. The hole we’re digging now is deep, too. Something is undeniably wrong in a country where we bailout huge multi-national banks whose CEO’s despite their obvious flaws in management are given golden parachutes, but we can’t drag the unemployment rate down from double digits, or prevent massive foreclosure fraud, and can barely bother to extend unemployment benefits because a bunch of people in congress have so thoroughly bought the claims of behavioral economics that helping people out of work will make them lazy and unproductive. I don’t know. Maybe the hole we’re digging is already too deep.

Tim Kowal asks another important question:

The big problem E.D. and others will have to contend with is, once you start redistributing power, how do we decide who gets more or less power, and how much more or less?  Conservatives and libertarians love leaving these decisions to nature and markets because, for all their faults, they’re procedurally fair—even though they may not be substantively fair.  If we give up or alter procedural fairness to achieve greater substantive fairness, as E.D. proposes, he will have to contend with how we can still guarantee procedural fairness.  This is the hill the left and the labor movement usually die on.

I’m not sure if this is necessarily the hill the left dies on, but the question of how to provide the right sorts of checks and balances on power is a good one, and the labor movement has historically been plagued with power problems. But I think that Labor 2.0 doesn’t necessarily have to be. Labor and business should be able to work cooperatively as they do in places like Sweden. We should be able to work toward full employment. We can afford to ‘level up’ the middle class through redistribution on the front end – at the employer/employee level – and at the back end vis-a-vis taxes. Conservatives often claim that this is impossible, that it is either going to result in too much waste and abuse or that it is a violation of liberty. But I’m not at all convinced that these claims are true. There are simply too many examples of functioning redistributive systems to point to for these claims to hold water.

Still, the questions raised by Sam and Tim and others are good questions, and they’re hard questions to answer fully. I will try to answer them over the coming weeks and in coming posts, and of course new questions will almost certainly come up. Behind every answer lurks at least as many new questions if you care to look for them.