Bhagwati 2008

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A few months ago Jagdish Bhagwati, a professor of economics at Columbia, published a small piece in Tagesspiegel, which amounts to merely an advertisement to buy his book soon to be published in German.

There are a few paragraphs that make no sense unless we view this piece as a walking advert.  For example:

Today, much of the social agitation has gone low key in most countries, except in France and Germany, if it survives at all. If I was self-indulgent, I would say that my book has served to subdue these fears across the world except in these two countries, which so far had not translated the book and thereby made it available to the anti-globalization groups. The book is still not in French. For a country that prides itself on its intellectualism, it is strangely closed to even discussing ideas contrary to its prejudices. But the German edition should put the book in the hands of the young idealists here, who need to read it most so that they can see that their knee-jerk anti-globalization attitudes are not persuasive and that progressive concerns need to be redirected to more deserving objectives.

The arguments in this piece are lacking, Bhagwati even refers us to the book for the full argument, but there are hints of what he is trying to say and that is enough for me.

I tend to like much of Bhagwati has to say.  He usually is against free trade agreements because he sees them as back-door protectionism and hence counter-productive to the agenda of the free traders.  I am a free-trader to the extent that I think there should not be such barriers to labor flows.  But my politics are less clear in a world where there will be those barriers: should there then be barriers to other flows?  Regardless…

Bhagwati’s first bit of silliness is his addressing of concerns about US workers being able to compete with Indian and Chinese workers.  Bhagwati’s first argument is that very few of these workers go to college, ergo how can they compete with US workers?  As though US workers are all college-educated.  As though a college education is needed.  Is Bhagwati so out of touch in his Ivy League office that he fails to see most college graduates are doing work that does not require their degree?  Maybe his students are in high demand for white-collar work, but that does not at all ring true for most college graduates.

Bhagwati’s next argument is that many of the Indian and Chinese laborers do not speak English?  Sacre bleu!  They do not need to speak to English, they only need to be able to speak to each other and to their immediate supervisor.  Has Bhagwati ever worked?  The only person that needs to speak English is the person on the phone with Corporate.  And even positing his measurable statistic that “only a further small fraction can speak English in a way which you and I can understand!” means there is a small percentage of 2 billion(!) potential laborers able to call back to Corporate, even a small percentage of a big number is a big number.  How is this reassuring? I will not even begin to address that speaking English is potentially unnecessary to sell goods to Senegal.  Many of the firms that might relocate are in an export-driven industry and hence the English barrier is even further diminished.

The above problems are further ameliorated by the mechanism used by corporations to adapt to a lower-skilled workforce: technology.  When the boards are made by a machine a human hand needs not be as educated to just place the board in a slot as it was when it also made the board.  Automation is the act of replacing labor and the labor problems Bhagwati sees as barriers to outsourcing are precisely the labors most easily replaced by automation.

The second piece of silliness is when Bhagwati correctly identifies the actual debate: “I realized that they [activists at Seattle] were not interested in whether trade and globalization more generally was good for economic prosperity.  They were worried instead about the effects on social agendas…”  Wow!  You made that move all on your own?  As though the people dressed as turtles were not clear to everyone about their agenda.  Maybe it is in the book, but in this piece there is not a single argument addressing environmental concerns.  There is only a piece of anecdotal evidence (Madame Ogata of the UNHCR) to address gender inequality concerns.  The other ‘agendas’ are summarily dismissed.  This is, sadly, a common move as there are concerns that escape monetary evaluations.  Many have tried to make these values measurable and it is this very process of commodification that feeds the criticisms of globalization.  Of course, Bhagwati steers clear of this debate altogether.

All of the above is not to say that I disagree with Bhagwati’s conclusions.  But Bhagwati and I both reach further than politicians are able to and hence his arguments become distorted reasons for piecemeal gains that are actually counterproductive.

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