Columbia University economist Jagdish Baghwati once quipped that defenders of free trade have "no prizes or surprises." "No prizes" because the basic case for free trade is in many ways the same as that made in the time of Adam Smith and David Ricardo—not the sort of innovative technical work that garners Nobels. "No surprises" because it often seems as though free traders are trapped in a public policy version of Groundhog Day, forced to refute the same fallacious arguments over and over again, decade after decade.
Throughout the 1990s, it looked as though, perhaps, the debate had finally been resolved in favor of open markets and an ever more global economy. In 1992, after all, both major party candidates vowed to champion the North American Free Trade Agreement. Even now, people around the world report positive attitudes toward trade, and little regard for the warning cries of the giant-puppets-and-black-masks antiglobalization crowd.
Ah, but what a difference a decade makes. The economic party in America is decidedly over for the moment. It's no longer just blue-collar workers but also affluent tech professionals who increasingly are being forced to face competition on a global labor market. At a time when nationalist "us versus them" thinking is back in vogue, the temptation is strong to find someone—ideally brown people with funny accents—to carry the blame for our economic woes.
One of the loudest spokesmen for this emerging xenophobic populism has been Lou Dobbs, host of CNN's Lou Dobbs Tonight. In recent months, Dobbs has devoted large chunks of his daily program to investigative series with such titles as "Exporting America" and "A Crowded Nation." The persistent message of these reports is that Americans are being harmed by foreign high tech workers, undocumented laborers (a phrase that sends Dobbs into apoplexy) and cheap overseas manufacturing.
This habitual cross-border finger pointing may boost ratings, but it doesn't make much sense, either theoretically or empirically. From 2001 to 2002 new H1-B visa applications declined sharply. This suggests that the rough IT job market is less a function of foreign workers displacing domestic ones than of both being squeezed by poor economic conditions. The same dynamic seems to be at work in the manufacturing sector, where, according to the Cato Institute's Dan Griswold, real imports of manufactured goods fell 5.4 percent in 2001 (after four years of robust increases) as domestic manufacturing output fell by 4.1 percent. And despite the current recession, manufacturing output is still up 40 percent from a decade ago. Throwing up barriers to trade under those circumstances would simply yield fewer goods at higher prices for American consumers.
Like so many others, Dobbs frames the debate about outshoring in the tech sector in terms of preserving America's "competitiveness." But as economist Paul Krugman has argued, this "dangerous obsession" with competitiveness rests on the utterly misguided notion that countries can be thought of as corporations writ large, "competing" with each other in the same way that Coke competes with Pepsi. Even if we accept that language, however, it is not clear that state action can provide a solution. Dobbs (and tech workers disillusioned by the bursting of the dot-com bubble) might fondly wish that highly educated professionals in Asia would be kind enough to lobotomize themselves and go back to farming for the sake of inflating U.S. programmers' wages. Alas, that's unlikely to happen. If American tech firms are unable to benefit from the skills of foreign workers, we may rest assured that their foreign competitors will.
Even when they're not overseas, Dobbs has little affection for the foreign-born. His most recent effort in print, a U.S. News and World Report opinion piece decrying our "population overload," was written with a crayon. We are clearly meant to recoil at a series of context-free factoids, such as the purportedly alarming observation that in a developed, high-tech economy where ever more efficient agricultural techniques are practiced, we're "losing" farmland. And buggy whip factories too, I imagine. Another fantastic non sequitur blames immigrants for a brief uptick in regional air pollution, blithely ignoring a trend of two decades of improvement in American air quality [PDF].
Perhaps the most risible claim in the piece—and competition is stiff—is Dobbs' allegation that population growth "threatens our liberties and freedom." He cites Cornell Ecologist David Pimentel, who says, "Back when we had, say, 100 million people in the U.S., when I voted, I was one of 100 million people. Today, I am one of 285 million people, so my vote and impact decreases with the increase in the population… So our freedoms also go down the drain." Dobbs and Pimentel share an atavistic notion of freedom, what classical liberal Benjamin Constant called the "liberty of the ancients," which is to say, the power one exercises through democratic politics. It occurs to neither that Constant's "liberty of the moderns," the freedom to shape one's own life through voluntary associations with others, is enhanced by greater trade and interaction.
Both in his columns and on his television program, Dobbs' makes his position seem superficially plausible only by focusing myopically on costs and resolutely ignoring benefits. He counts the strain on infrastructure created by growing populations, but not the support for that same infrastructure provided by more people working and paying taxes. When we look at both sides of the ledger, according to the calculations of the late economist Julian Simon, we find a net benefit from immigration.
When it comes to trade, Dobbs' one-sidedness gets things even more dramatically backwards. I had always been under the naive impression that we have jobs in order to be able to buy the stuff that we want. Whether I consider my salary "low" or "high" then depends on how expensive that stuff is. Dobbs, apparently, is inspired by a more Puritan work ethic. On his account, we want jobs for their own sake; if other people are willing to offer us goods more cheaply than we can make them ourselves, this cruelly robs us of the opportunity to work longer and harder.
Dobbs, of course, is an educated fellow, and presumably familiar with these arguments. But providing a voice for those eager to blame a Dark Other for the world's ills can only be good for ratings. And that, at least, ensures that Lou gets to keep his job.