KRUGMAN ON TRADE

Thomas Riggins

Paul Krugman's article in the NYT on 12/28/07 raises some interesting points. Briefly:

It seems that globalization's international trade policies benefit billions of people around the world and helps third world workers improve their incomes. At the same time it "reduces the real wages of many and perhaps most workers in this country [the US]."

Free trade can make a country as a whole richer but not necessarily all the different groups within a country. In other words, it benefits one class at the expense of another, or even parts of one class as opposed to another. The capitalists and highly skilled educated workers in the US benefit but low skilled and less educated workers do not.

How can American wage workers compete with workers in Mexico who are paid 11% of the average American wage, or China at 3.5%? Capitalism is obviously going to favor relocation to low wage areas whatever pro labor American politicians have to say.

Is protectionism the answer? Marxists are internationalists and US Marxists would not want to be put in the position of denying opportunity to foreign workers on a nationalist basis. Krugman says "keeping world markets relatively open is crucial to the hopes of billions of people."

Yet American workers are clearly suffering. "The highly educated workers who clearly benefit from growing trade with third-world economies are a minority, greatly outnumbered by those who probably lose."

Krugmen thinks the best solution is "strengthening the social safety net." It is clear that as long as the American working class does not have its own political party it will be subject to the dictates of the two major parties of capitalism which alternate in political power in the US.

The first step is to convince the American people of the absolute class hostility of the Republican party towards their interests. The 2008 election can be a milestone if the Republican anti-labor and pro-war policies are completely repudiated. This would give the progressive forces the breathing room necessary to push the Democrats leftward and to plan more advanced strategies for the future.