Brad DeLong's Semi-Daily Journal: A Weblog

And the only thing worse for the industrialist than having union at the factory is to have no factory at all. Any other clever sayings?

Ah, but what variety of moral philosophy is it? That makes all the difference.

For my part, I understand economics as variety of utilitarianism. And like utilitarianism, neoliberal economics reaches some conclusions that are counterintuitive. My support for trade has always been *primarily* motivated by my concern for the plight of the world's poor. It's always been founded in my sense of morality. I wish that the leftist folks that are suspicious of markets and globalization and, of course, neoliberal economics would at the very least acknowledge that some of us really do believe supporting trade means an improvement in the lives of the supposedly exploited. I'm a pragmatist. If there's a better and quicker way to get there from here ("here" being the poverty of the developing world, "there" being the wealth of the developed world), I'm open to hearing and trying them. I, like I suspect Brad, certainly don't have these beliefs on the basis of Ayn Rand-like notions of virutous selfishness, as an earlier commenter implied about Brad.

Ah, but what variety of moral philosophy is it? That makes all the difference.

For my part, I understand economics as variety of utilitarianism. And like utilitarianism, neoliberal economics reaches some conclusions that are counterintuitive. My support for trade has always been *primarily* motivated by my concern for the plight of the world's poor. It's always been founded in my sense of morality. I wish that the leftist folks that are suspicious of markets and globalization and, of course, neoliberal economics would at the very least acknowledge that some of us really do believe supporting trade means an improvement in the lives of the supposedly exploited. I'm a pragmatist. If there's a better and quicker way to get there from here ("here" being the poverty of the developing world, "there" being the wealth of the developed world), I'm open to hearing and trying them. I, like I suspect Brad, certainly don't have these beliefs on the basis of Ayn Rand-like notions of virutous selfishness.

"Economists can and do overestimate the reach of their intellectual tools..." -- Mark Kleiman

LOL. This Kleiman guy is better than Fafblog!

For an example of what he's talking about, here's Paul Krugman's 1st column for the NY Times:
http://www.pkarchive.org/column/1200.html

"But now as then the global idea is very much a minority persuasion, all too easily portrayed as an ideology of and for a rootless cosmopolitan elite that is out of touch with ordinary people.
For that, surely, is the lesson of the trashing of the World Trade Organization meeting in Seattle last November. Not that the protesters were right: it is a sad irony that the cause that has finally awakened the long-dormant American left is that of -- yes! -- denying opportunity to third-world workers."

And here's Krugman 2 years later:
http://www.pkarchive.org/column/080902.html

"A decade ago Washington confidently assured Latin American nations that if they opened themselves to foreign goods and capital and privatized their state enterprises they would experience a great surge of economic growth....Why hasn't reform worked as promised? That's a difficult and disturbing question....but now it's time, as Berkeley's Brad DeLong puts it, to mark my beliefs to market. And my confidence that we've been giving good advice is way down."

And to think that only a dozen countries had to go to hell before liberal economists started to doubt their theories! Sometimes I think they're the mirror image of Marxist economists.

I was reading Hume's Enquiry Concerning Human Understanding a while ago, and when he said "moral philosophy" he actually meant all philosophy but Cartesian-style rationalism and mathematics: e.g. science. He calls Isaac Newton a "moral philosopher." While economics has bits rationalism (like Arrow's Theorem, to cite a fairly famous example), it's generally an empirical science, like all of the social sciences. So if we use "moral philosophy" the way Adam Smith (or at least Hume) thought of it, then economics is certainly a moral philosophy, whether or not it has anything to do with morality.

Sometimes I feel like this whole issue of trade on the left (broadly conceived) is a matter of Fabian-style socialists vs. Millian-style liberals, with the Fabians (like, say, Zizka) not seeing anything really wrong with free trade in its own right, but desiring to assert practically the right of the state to manage economic activity, and wary of giving up any practical uses of that power, regardless of the real merits of its application, lest the power lapse in theory also, before the attacks right-libertarian capitalists (like, say, Julian Sanchez) who want markets without constraints. What the Fabian liberals fear, I think, is that Millian liberals will say "let's lower barriers to trade, try to regulate the environment using market-based incentives, and help the poor with incentive-boosting direct aid and education efforts, rather than unfunded mandates to businesses" and then the (economically) libertarian capitalist types will say, "great, lower barriers to trade, gut environmental regulation entirely, and screw the poor." Then the Millians like Clinton end up being co-opted by Tom Delay.

I think that if you could take the right-libertarian capitalists (and the Bush-style corporatists, though I'm not sure whether they think free trade is good or not: Bush's record is certainly not that of a free trader, but maybe he just does that to appeal to protectionist sentiment among his constituents) out of the picture, Fabian liberals might well agree with Millian liberals on trade, or at least put their energy into managing trade and turning it into a government matter rather than trying to reduce it. (government-managed trade might mean reduced trade vis-a-vis free markets. Then again, it also might mean MORE trade than free markets, if the government decided to do so for some reason. There's no intrinsic reason government management means reduced scale -- we don't expect government management to mean a reduction in the size of a railroad company, nor do we expect it to grow when privatized.) But so long as the libertarians are in the picture, Fabian liberals think that free trade is a mistake, not for economic reasons, but because they're afraid the legitimacy of state intervention in the economy as a whole will be reduced by the reduction of its scope.

'course, this is only what I've gathered from what they've said. I don't really agree with or sympathize with the Fabian types too much, so I'm just sorta making educated guesses as to what motivates their opposition to free trade.

As for why I think they're wrong: there's nothing intrinsically progressive about state power of intervention in the economy. Fabian liberals may be right to be afraid of libertarian capitalists, but it's foolish to turn a blind eye to Bush/Delay/Frist style corporatism. Fabian liberals can cheer protectionism since it's state intervention in the economy, but protectionism in this case is a tool in the box of corporatists trying to build a machine which unites government-subsidized corporations (with trade protection, among other benefits like government contracts, etc) and right-wing politicians into a profoundly anti-labor political machine. Millian liberals need be wary of being used by libertarian capitalists (and vice versa), but Fabian liberals also need to be wary of being used by crony corporatists (and versa vice).

I WISH I could say it pains me to inform the high-minded 'moral philosophers' hereabouts that reports concerning the benefits of international trade were, to paraphrase Mark Twain, 'exaggerated'. But honestly, I can't.

I'd love to stick around to explain the joke to them too. But I can't do that either. I have to see a man about a horse...

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"..MY MASTER was yet wholly at a Loss to understand what Motives could incite this Race of Lawyers to perplex, disquiet, and weary themselves, and engage in a Confederacy of Injustice, merely for the Sake of injuring their Fellow-Animals; neither could he comprehend what I meant in saying they did it for Hire. Whereupon I was at much Pains to describe to him the Use of Money, the Materials it was made of, and the Value of the Metals, that when a Yahoo had got a great Store of this precious Substance, he was able to purchase whatever he had a Mind to; the finest Cloathing, the noblest Houses, great Tracts of Land, the most costly Meats and Drinks, and have his choice of the most beautiful Females. Therefore since Money alone, was able to perform all these Feats, our Yahoos thought, they could never have enough of it to spend or save, as they found themselves inclined from their natural Bent either to Profusion or Avarice. That the Rich Man enjoyed the Fruit of the Poor Man's Labour, and the Latter were a thousand to one in Proportion to the Former. That the Bulk of our People were forced to live miserably, by labouring every Day for small Wages to make a few live plentifully. I enlarged myself much on these and many other Particulars to the same Purpose: But his Honour was still to seek: For he went upon a Supposition that all Animals had a Title to their share in the Productions of the Earth, and especially those who presided over the rest. Therefore he desired I would let him know, what these costly Meats were, and how any of us happened to want them. Whereupon I enumerated as many sorts as came into my Head, with the various Methods of dressing them, which could not be done without sending Vessels by Sea to every Part of the World, as well for Liquors to Drink, as for Sauces, and innumerable other Conveniences. I assured him, that this whole Globe of Earth must be at least three times gone round, before one of our better Female Yahoos could get her Breakfast or a Cup to put it in. He said, That must needs be a miserable Country which cannot furnish Food for its own Inhabitants. But what he chiefly wondered at was how such vast Tracts of Grounds as I described should be wholly without Fresh-water, and the People put to the Necessity of sending over the Sea for Drink. I replied, that England (the dear Place of my Nativity) was computed to produce three times the Quantity of Food, more than its Inhabitants are able to consume, as well as Liquors extracted from Grain, or pressed out of the Fruit of certain Trees, which made excellent Drink, and the same Proportion in every other Convenience of Life. But in order to feed the Luxury and Intemperance of the Males, and the Vanity of the Females, we sent away the greatest Part of our necessary Things to other Countries, from whence in return we brought the Materials of Diseases, Folly, and Vice, to spend among ourselves. Hence it follows of Necessity, that vast Numbers of our People are compelled to seek their Livelihood by Begging, Robbing, Stealing, Cheating, Pimping, Forswearing, Flattering, Suborning, Forging, Gaming, Lying, Fawning, Hectoring, Voting, Scribbling, Stargazing, Poysoning, Whoring, Canting, Libelling, Free-thinking, and the like Occupations...."

http://www.jaffebros.com/lee/gulliver/bk4/chap4-6.html

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Stable, prosperous, free, democratic states, like trees, grow from the ground up. But, like fish, they rot from the head down.

Economics, any of the social studies, is a moral study. How could it not be so. Economic policy has profound influence on our lives, economic structure and institutions largely dictate how we must live. Knowing we are moral philosophers in discussing economics, is clarifying and exciting.

The boycott of South Africa to end apartheid was an economic and moral endeavor wished for by those who were fiercely discriminated against. This was truly a moral effort that helped end apartheid and free millions who had aspired for freedom for generations. Nelson Mandela was our economic and moral guide, and a wonderful guide to freeing South Africans.

I think it was Gunnar Myrdal that said "Every economic decision is a moral decision." I think that's about the limit of it.

I agree free trade is a way to bring the fruits of capitalism to the third world poor. But if we want to keep those fruits coming, it behoves us to look at the negative effect free trade has on wages in the the high-wage countries (via "factor price equalization") or it will provoke a political reaction leading to protectionism, which is already starting. How Krugman and company missed this aspect of the problem is beyond me, as it is based on standard textbook stuff (cf., e.g. to Samuelson's famous essay on "Protectionism and Real Wages").

Bottom line: there's nothing wrong with free trade that wage subsidies and a progressive consumption tax can't fix. Come on guys, get hip. You got to divy up the gains of trade.

Will somebody please set this diddy to music?

I'm sorry, but the only thing I learned in high school economics was that being poor was really, really bad.

And something about supply and demand but the teacher really had no idea what she was talking about.

In this case, I must say Mark Kleiman was well-educated.

And I would hope Prof. DeLong would make a speech agitating for improving public school economics.

The only thing worse than being browbeaten by an economics teacher is not being browbeaten by an economics teacher. :-D

Again, the question is whether a boycott is in the interests of a struggling people. This is a profoundly moral question. Nelson Mandela and Caesar Chavez wished a boycott, for there was no chance of helping black South Africans or western farm workers unless there was a boycott. To boycott to end apartheid is in no way comparable to discriminating against goods made by contemporary Indian workers who have gained hopeful employment.

Workers who strike for better treatment, may choose to harm themselves by the very strike in hope of better treatment in future even if for workers who are to come after them. Many South African blacks did not live to know the end of apartheid, nonetheless they gave themselves for others in working to an end. So, the moral implications of economic decision.

Here I was about to say something nice, and I get sent to Mark Kleiman nattering on about smug anti-globalists, with a nice touch of economist triumphalism at the end. You look to be right about Stevenson, though I haven't clicked through and read it, and I'll concede that neolibs occasionally do care about the poor. But as for smugness, when neolibs (as has happened on this site) stop asking people to look in the mirror and ask themselves why they hate the poor, that's when they'll get to worry about smugness on the other side. And then perhaps we can start asking why the awesomely powerful tool of neoliberal economics has such trouble explaining power and exploitation as a part of trade agreements. As it stands, neolibs come dangerously close to talking about free trade in the way that Cheney talks about energy deregulation in California. "Obviously, the problem is that we don't have enough of it." Words and deeds.

That said, I'd love to hear from this site on concrete plans to help out the poor from the host perspective, or get links to neolib projects like those described in the post on Stevenson below. I need to learn.

How long before the first pedantic address on the historical formation of moral philosohpy? I can't wait for that, either. I'm very weak.

No. Morality only applies to economics when we're talking about "tax relief" and welfare reform. Everything else is OK, 'cause that's what the market "wants."

Markets are "efficient," right? Government intervention distorts markets, which is why our present government does nothing of the kind.

Right?

Mike quotes Jonathan Swift:
"... vast Numbers of our People are compelled to seek their Livelihood by Begging, Robbing, Stealing, Cheating, Pimping, Forswearing, Flattering, Suborning, Forging, Gaming, Lying, Fawning, Hectoring, Voting [sic], Scribbling, Stargazing, Poysoning, Whoring, Canting, Libelling, Free-thinking, and the like Occupations...."
Sounds like a good description of the knowledge economy and especially the blogosphere. Where does Brad's blog fitin? Scribbling, Stargazing, Hectoring, or Free-thinking?

The question of trade that is always halting is accounting for the cost of dislocation and allowing for and aiding adjustment of those adversely effected. Hewre, we must be better.

I suppose financing Hitler's rise to power, as Prescott Bush did, might be an example of free trade not always working in the interests of the commonweal:
http://www.guardian.co.uk/usa/story/0,12271,1312540,00.html

CR

Bitterness only disrupts a fine thread. There is no call for that.

Julian Elson,

Very nice post.

In my Computer Language Engineering class at MIT (6.035), the professor opined that the appeal of compiler and language design is that it is moral philosophy of the world of programming.

In my Computer Language Engineering class at MIT (6.035), the professor opined that the appeal of compiler and language design is that it is moral philosophy of the world of programming.

Joan Robinson also spoke of alternatives to both being exploited & not being exploited, a perspective missing from your diatribe against critics of capitalist development in India. On the other hand, it was another Brit -- Maggie Thatcher -- who claimed there was no alternative.

Dear JamesW at September 29, 2004 06:51 AM:

I'm still not sure exactly where DeLong belongs. But it's not for lack of trying figure the matter out. Have you seen:

"Asia's Stockpiles of Dollars Pose U.S. Economic Risks"

http://www.sdcia.com/msgboard.mv?parm_func=showmsg+parm_msgnum=1003491
It's worth a long, slow, thoughtful gander.

So's this:

"US dollar hegemony has got to go"

http://www.atimes.com/global-econ/DD11Dj01.html
AND this:

"Legends of the Old Plantation"
http://xroads.virginia.edu/~UG97/remus/contents.html

Moral philosophy is three offices and a lunchroom in the basement of the economics building.

Of course, Brad gave us a list of eight things that Seth Stevenson could do to atone for his sins, some of which involved increasing the exploitation of the coir-mat folks, and some of which circumvented their exploitation entirely. Seth Stevenson is the one who just called for not exploiting them altogether as the only alternative to exploiting them.

Keith is correct when he asks "Ah, but what variety of moral philosophy is it? That makes all the difference."

When one says, ah, one country freely trading with the other to the profit of all, one is engaged in a Panglossian farce. There are more than two sides to this issue, and it is convenient for those who profit to ignore those who suffer, or worse, to pretend that they do not suffer. But ah, it is good for them, no?

Factory workers in Victorian times were NOT better off than their country cousins. They were forced off the land by the various Enclosures Acts to provide an exploitable industrial workforce and were only able to improve their lot decades later through political agitation. As bad and hard as living on the land could be it was a much better existence than suffering in a city slum and people could only be forced there after having been thrown off the land.

Which, of course, brings us to South Africa. In that case, the lot of the blacks was not improved by more trade, although that of the whites was.