Global Poverty and Crème Brûlée: Neoliberals Care

Jonathan Chait and Global PovertyI’ve noted it many times, but it bears repeating: you know someone’s argument is nonsense when its justification keeps changing. I most associate this with conservatives. But the truth is that as the Democratic Party moved further and further to the right over the last 40 years, we’ve seen a lot of the same thing from liberals — especially when it comes to trade policy. And a great example of it came from The Very Definition of Liberalism Himself™, Bernie Sanders’s Case Against Free Trade Is More Ignorant Than Donald Trump’s. Jonathan Chait, you see, cares greatly about global poverty. And Crème brûlée.

The basis of my complaint is the same as it was last year, Data Journalists Don’t Know Anything About the Poor Anywhere. The point is that “free” trade deals were sold to the people of this nation as a great thing — for us. And if you look at total wealth, they have been good for us. The problem is that the gains haven’t been shared. So the poorer classes in this country are doing worse than they were before (more on that in a moment). So what is an upper class neoliberal like Jonathan Chait (or Matt Yglesias or Annie Lowery or Dylan Matthews or Ezra Klein) who is faced with this fact to do?

Change their arguments, of course!

Upper Class Journalists

“There are people in Zimbabwe who are really suffering… Oh, and I’ll have the crème brûlée for dessert…”

Because let’s be clear: each of those five journalists I listed make over a hundred grand a year — probably a lot more. Globalization has been great for them! Their iPhones are cheaper because they are made is sweat shops and their cab rides are cheaper because Uber drivers get all of the responsibility and none of the advantage of being “independent contractors.”

So they don’t pretend to care about American poverty anymore. Now it is all about the global poverty! Who cares if a black man in Alabama with a college degree isn’t doing any better than his father did without a high school diploma. “There are people in Zimbabwe who are really suffering… Oh, and I’ll have the crème brûlée for dessert…”

Trade and Global Poverty

In his article, Chait argues that trade has been great for the reduction of global poverty (and implicitly that the American poor should just suck it up — and crème brûlée for him too). This is true, but it is hardly the whole story.

For one thing, Chait point to an article by economist Branko Milanović, but even he isn’t making that case. As is well-established, the reduction in global poverty is almost exclusively the result of China — not the world. And that decrease in poverty has gone along with about a doubling of income inequality in China.

Trade Is Great — in Theory

Trade is a good thing — in theory. The way it is supposed to work is that the costs of things go down — for everyone. It was never sold as a solution to global poverty. Everyone was supposed to benefit. But our trade deals have not been structured to help everyone. It’s been free trade when it comes to middle class workers here at home but full tilt protectionism for upper class workers. In a perfect world, it wouldn’t matter that a janitor was making less money if the cost of things like medical care were going down too. But they aren’t.

As Dean Baker has noted, “Under US law it is necessary to go through a residency program in the United States to practice as a doctor.” Is that really about saving us from unqualified doctors from Germany, Japan, and India? Of course not! It’s about a rich and powerful interest group skewing the economy to their benefit. And that is why doctors in the US make roughly twice what they do in other industrialized countries.

Trade deals have worked out better for people in poorer countries, and that’s good. But the economy is not, as Chait clearly believes, a zero-sum game. Everyone was supposed to be better off. But they aren’t, because of government policy that makes sure the rich get ever richer. But let’s be clear, it wouldn’t matter to Chait or Lowery or the rest if the global poor were doing better or not. They’d just come up with another reason why globalization rocks. Because it does. For them.

“Crème brûlée, anyone?”

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About Frank Moraes

Frank Moraes is a freelance writer and editor online and in print. He is educated as a scientist with a PhD in Atmospheric Physics. He has worked in climate science, remote sensing, throughout the computer industry, and as a college physics instructor. Find out more at About Frank Moraes.

11 thoughts on “Global Poverty and Crème Brûlée: Neoliberals Care

  1. In other words-we need to have other laws and policies in place to ensure that when a trade deal is negotiated, it really is a fair trade rather than a free one?

    • I’m not sure. I’d have to read what I wrote, and it is late. But we don’t make free trade deals. We make trade deals that open up middle class workers to competition but not doctors and lawyers and dentists. This is why, for example, we pay our doctors twice what they earn in other developed countries. At the same time, the TPP, for example, is more about IP protections — the exact opposite of free trade. But yes, I am for trade deals that do something other than simply make the rich richer.

      • Most modern trade treaties, with investor state provisions and the expansion of patent/copyright monopolies, really are more corporate protection trade pacts than “free trade” deals.

      • I guess my problem is that I rarely see counter proposals that would allay these concerns. I mean if I come up with something and you tell me it is wrong, tell me what you think will work-that way I can actually consider it and do better. Blanket nos or even when you explain what you have a problem with doesn’t help if you don’t offer solutions.

        • Some of Dean Baker’s suggestion (for instance, not including patent and copyright provisions as well as subjecting high income professionals to competition) as well as the Nordic approach of just redistributing income through the tax and transfer system to working class members vulnerable to suffer displacement form trade seems the best alternative combination.

          The ideal, but obviously not in a several lifetimes, solution to minimum standards may be some form of world federalism.

        • Concerns? I don’t have concerns. I’m talking about the trade deals we’ve already gotten. We have facts. And there is a solution to it: not to include carve-outs for rich people. There are no end of alternatives to our current system. The problem is the power structure. Why is copyright now 95 years in the US? Because writers demanded it? Hell no! Because Disney demanded it for things they created long ago. If you want solution, all you need to do is spend the next week reading all the policy proposals that just the Center for Economic and Policy Research has put out. Alternatives are there. Many of those alternatives (eg, work sharing) are actually used in other countries! The fact that the power elite here ignore them does not mean that the we on the (according to American standards) far left are just saying no.

          But given that every person I know thinks that copyright law was written on the reverse of those stone tablets of Moses (despite my talking about it a lot for many years), I don’t write about actual alternatives because I’m still trying to get people to see the problem. Here’s one alternative: Copyright Is for Wimps.

  2. And tell farmers killing themselves in India that trade deals benefit the world’s poor.

    This shit is so disingenuous. We could slash our military budget in half, still have the biggest military in the world, spend the savings on ending malaria, and have cash left over. But if you propose that, you’re not a “reasonable” liberal-leaning columnist. So they won’t propose it. And they’ll keep their cushy jobs, which basically entail assuaging the consciences of other “social liberal” rich people.

    • I was listening to a lecture by Dean Baker back in January. He pointed out that when people calculate the benefits of the TPP for poor countries, they don’t include any of the negatives. In particular, they don’t include the fact that much more strict IP laws will cause their drug prices to go up. I’m getting really tired of hearing upper-class pundits tell me that we must do trade deals for these poor countries. They don’t give a damn about these poor countries. I wrote another article about that: they want to say that the poor of Mississippi should shut up because they have it so much better than the poor of Africa. But they don’t care about either group; it’s just a way to justify what is best for their own class.

  3. Obviously I pretty much agree with what is said here. And I think that doctors are an important example. However, the U.S.A. is not the only country that requires a domestic residency, and I think there are good reasons for it, independent of a hypocritical protectionism. I don’t want a foreign doctor to touch me if she has zero Canadian experience, and that goes regardless of how smart and well-trained she is.

    Man, if I were straightforwardly racist, I’d be fucked. I’ve not had a white European doctor since I was a kid.

    • I’m not clear on what you’re saying. Suppose you were vacationing in the Japan and you had a medical emergency. Would you really refuse all treatment until you could find a doctor who had worked in Canada? I don’t believe that.

      But regardless, the residency requirement is just one example of how we stack the deck. You don’t really need an explanation. Are American doctors better than Canadian doctors? I assume the answer to that is no. So the question is, why do American doctors make almost twice as much money? It’s not because the laws of economics are different in the US. It’s because of government policy.

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