Just when you think Elizabeth Warren can’t do it again, she does it again. Trade has been a bewildering issue for Democrats. Corporate Democrats have bought the view that anything that dismantles “barriers” is good economics, even if the result undermines the very brand of managed capitalism that has been the Democrats’ signature since FDR. Labor Democrats have been branded “protectionists,” even when they are resisting the overt protectionism of other nations such as China.
Most of the economics profession, meanwhile, teaches the theory of comparative advantage as if the world hadn’t changed since Adam Smith and David Ricardo. As Paul Krugman’s early work pointed out, advantage is no longer a matter of climate and natural characteristics—advantage can be created by government policies.
And the press, for the most part, still embraces the simpleminded frame that free traders are good and “protectionists” are bad, and that progressives who resist the corporate use of trade as all-purpose deregulation are no different from Trump.
Now comes Warren with a comprehensive restatement of how trade works and the need for a wholly new trade policy. It is so good, fresh, and brilliant that I just want to quote the whole thing, which you should read for yourself. Here’s the link. I almost want to cry, because I’ve been banging my head against this wall since the early 1980s in scores of articles and books, and here is a political leader who finally gets it and who can surely teach me something. Warren begins:
For decades, big multinational corporations have bought and lobbied their way into dictating America’s trade policy. Those big corporations have gotten rich but everyone else has paid the price. We’ve lost millions of jobs to outsourcing, depressed wages for American workers, accelerated climate change, and squeezed America’s family farmers. We’ve let China get away with the suppression of pay and labor rights, poor environmental protections, and years of currency manipulation. All to add some zeroes to the bottom lines of big corporations with no loyalty or allegiance to America.
As President, I won’t hand America’s leverage to big corporations to use for their own narrow purposes—I’ll use it to create and defend good American jobs, raise wages and farm income, combat climate change, lower drug prices, and raise living standards worldwide. We will engage in international trade—but on our terms and only when it benefits American families.
Warren’s trade program will “use our leverage to force other countries to raise the bar on everything from labor and environmental standards to anti-corruption rules to access to medicine to tax enforcement. If we raise the world’s standards to our level and American workers have the chance to compete fairly, they will thrive—and millions of people around the world will be better off too.”
Warren proposes that any nation that wants a concessionary trade deal with the U.S. must respect core labor rights, human rights, be a signatory to the Paris Climate Agreement and anti-corruption, tax treaties, and move toward domestic carbon-free energy.
The United States, under Trump, would not qualify! By using trade policy in this manner, Warren would shift trade policy from a force for a race to the bottom to a promoter of higher social and economic standards and global human rights.
In contrast to Trump’s bombast that is mainly about hollow symbols and delivers nothing, Warren’s approach would make trade work for the vast majority of Americans, not just corporations and banks. If you think this is utopian, this is exactly how trade was to be used under the Bretton Woods Accords of 1944.
There is a great deal more, including greater consumer protections in imported products, an end to private tribunals to adjudicate trade disputes on corporate terms, Buy American provisions in public investment to help promote domestic manufacturing and jobs, a better deal for consumers of pharmaceutical products, and creation of a new labor and environmental division at the office of the U.S. Trade Representative.
Tonight’s debate gives Warren a chance both to introduce this to a broad public and to demolish any corporate Democrats who challenge her knowledge or logic.
Warren, once again, has liberated an issue that is both dauntingly technical and imprisoned in supposedly technical assumptions that are in fact deeply political and ideological. And she has narrated it a way that resonates with the intuitive sense on the part of regular people that they are getting screwed by trade policy—and explains exactly how and way, and that things could be different.
All of this is rooted in a deep understanding of how the political economy really works, and a brilliance at explaining it and posing alternatives. As progressive leadership goes, it just doesn’t get any better.