Global capital's songbirds

In the May 26 Financial Times, Jagdish Bhagwati provides a good example of the current argument for open global markets being advanced by the rich and powerful, in the tone of a rational adult reassuring frightened, irresponsible children. The monsters in the closet are growing global inequality and, in wealthier economies, eroding wages for lower-skilled workers. “First, if globalization is not the cause of such ‘wage compression,’” writes Bhagwati, a Columbia University economist, “then the economist must assiduously say so in public.”

That he does not then say so, but take this as a given, may reflect the rarified atmosphere of the Times, from which its columnists view the public. His research shows that trade has “moderated, not accentuated, the decline in wages from technical changes.” In other words, wages for most U.S. workers would have declined even more since the mid-70s, if not for trade liberalization. It’s a corollary to the argument Robert Reich made during the Clinton administration: 1) things in your community are not actually getting worse, even though you think they are; 2) things are not actually getting worse, but if not for so-called “free trade,” they would be; and 3) you are too dumb to understand this, so why don’t you go back to school, get trained for a new job, and then take the job when the new economy finally does come along. Which it has: that’s why things aren’t bad. Even though you still think they are, even though I just explained it to you.

Bhagwati even manages to take a shot at the AFL-CIO, whose “economic advisors” (?!) President Clinton supposedly “coasted along with” instead of confronting, as political leadership should have demanded. I don’t know what country Bhagwati was living in when Clinton pushed through NAFTA; I’ve always suspected the Upper West Side is part of “the other America,” where opening of global markets was designed by well-meaning policy professionals, along with privatization and deregulation, as a sort of public service rather than a strategy for making more money. Clinton didn’t go far enough, the argument goes; he lost his nerve. It’s like Robert Zoellick from the World Bank going around talking about how poor countries should stop trying to control their food supplies, while people are rioting over grain prices.

Why is it that economics professors are always complaining about the unreasonable wage demands of hourly workers, and aren’t bothered by the extraordinary wealth that the policies they espouse create for the richest people? Anything to do with their funding?

I think that Bhagwati is part of a species of academics that the owning class likes to have around. Their job is to provide background music for the policies that have already been decided on, for reasons having to do with return on invested capital. Their music says that the policies are rational, humanitarian, scientific, moral and, anyway, inevitable. Last year’s hit was called “soft power.”

Bhagwati ends his column with an anodyne statement that “the anxiety over wages and jobs is real,” and “requires a holistic revision of our institutional and policy framework.” Too complicated for that day’s column, naturally. That does of prozac for the under- and unemployed will have to wait until the FT brings him out for another song.

Europe swings right

The new mayor of London is most famous for the trip to Africa when he called children “pickaninnies,” but also known for his professed dislike for Islam, city buses, public sector unions, the public sector in general, and other subjects that are more or less major concerns in his new job, you would think. Boris Johnson’s victory came on a day of local council elections that saw a near-collapse of the Labour vote in the UK, with the Conservatives the beneficiaries. It seems like the end of Labour’s mandate.

Johnson isn't as toxic as Gianni Alemanno, the new mayor of Rome, whose supporters celebrated with straight-arm salutes at a victory rally, shocking everyone but Italians. The elections of the conservative and the fascist had some similarities, however, with both winners openly hostile to their cities’ large immigrant populations, to the use of tax for public services, and to the supposedly homogenizing threat of Europe. Their campaigns appealed almost exclusively to the native-born white voters with the notable exception of Rome’s Jewish population. This demographic is shrinking but still in the majority and they are increasingly scared of crime, sick of immigrants, and distrustful of the European Union. Recently they expressed themselves by electing Alemanno, and then attacking Roma (gypsy) camps outside of Rome.

Coming from the U.S., it’s important to keep in mind that our two-party system, for all its faults, tends to keep the lid on most public expression of outright racism and hatred, for what that is worth. In a parliamentary system Ron Paul, David Duke, and their ilk would be representing their own parties instead of the Republicans, who keep guys like that off the stage whenever they can (although they still turn out voters). A scary thought, the GOP moderating someone’s views, but I think it’s true. Wait, both those guys have been elected as Republican candidates. Anyway you get the point.

It is surreal as an American to watch this, partly because my own country’s slide toward fascism has featured the vilification of the sort of multinational, multicultural, funny-talking, French-infused mélange that Europe is supposed to represent. It’s also confusing because Europe seems to kind of work: the euro is killing the dollar, people can take the train anywhere, the food in England and the Netherlands is getting better. But the majority of EU states have not ratified its constitution, which lost referenda in Netherlands and France. The rumored menace of “the Polish plumber” who takes your job by working cheap hasn’t materialized but people are still scared about it. Berlusconi says “we’re all Falange [Franco’s party] now.”

Europe, our best hope, is fragile. The Flems hate the Walloons, the Serbians and the Montenegrans hate the Bosnians, the Albanians hate the Greeks, and then there are the Basques, the RUC, Geert Wilders, Rita Verdonk, and Cyprus. This isn’t like rival football (soccer) fans—they might kill each other. Wait.