As anxiety about the end of United States
hegemony abounds and the US unemployment rate
remains high, talk about the necessity of
out-competing China is on the rise.
The
leading presidential candidates have zeroed in on
China as a major threat to US economic security
and have vowed to ensure that the United States
remains on top of the global economic ladder.
In campaign speeches, Republicans and
Democrats alike are using economic nationalism to
appeal to American workers. Across the political
spectrum, recent campaign statements on China
toggle between two related positions. One calls
for cracking down on unfair trade practices. The
other looks forward to the
return of manufacturing
jobs for American workers.
Although this
campaign rhetoric is geared toward middle-class
and blue-collar voters, it implies that an
increase in corporate earnings will benefit
American workers - once again peddling the flawed
notion that what's good for American CEOs is good
for America.
Corporatization of US
economic nationalism In a wonderful book,
Buy American (1999), Dana Frank documents
the sordid history of US economic nationalism.
From the American Revolution to the 21st century,
she shows how "Buy American" campaigns enlisted
xenophobic, particularly anti-Asian, sentiment in
order to protect the interests of white American
workers.
Advanced by the big US labor
unions in the mid-20th century, this narrow vision
could succeed only as long as the compact between
US corporations and US unions lasted.
As
corporations incrementally dismantled this
alliance in the 1970s and 1980s, many union
members continued to blame foreign and minority
workers for their disappearing jobs. By the 1990s,
organized labor in America was a shadow of what it
had once been. In 1999, only 13.1% of American
workers were unionized, compared to the 1950s,
when unions represented more than one-third of the
American workforce.
Meanwhile, Sam Walton
and other anti-union corporate bigwigs were
simultaneously globalizing and attaching "Made in
America" tags to whatever they could, spearheading
a new era of "Buy American" campaigns. Thus, a
short-sighted and racist strategy designed to
protect a narrow pool of workers was co-opted by
US corporations whose sole raison d'etre is to
turn a profit for the biggest shareholders.
The campaign rhetoric on China is the
latest chapter in this story. In the guise of
economic nationalism, US politicians are currently
leading the way to advance the interests of
transnational corporations.
Cracking
down on China In recent weeks, Republicans
and Democrats have stepped up their tough talk on
China. Among the Republicans, Mitt Romney, who
once criticized the Obama administration for its
efforts to enforce trade laws against China, has
become the toughest talker of the pack. On
February 16, during Chinese Vice President Xi
Jinping's visit to the White House, Romney used a
muddled wrestling metaphor to show his readiness
for a fight: "If I'm president of the United
States, I will finally take China to the carpet
and say, 'Look you guys, I'm gonna label you a
currency manipulator and apply tariffs unless you
stop those practices."
The same day, Rick
Santorum, who is considered less tough on China,
also railed against Chinese (and American)
currency manipulation and defended the legitimacy
of a "trade war." Newt Gingrich has also started
to take a harder line on China: "I think we're
going to have to find ways to dramatically raise
the pain level for the Chinese cheating," he said
in a recent interview on CNBC.
Meanwhile,
since January, President Barack Obama has been
doing more tough talk of his own: "I will not
stand by when our competitors don't play by the
rules," he proclaimed in his State of the Union
address, before announcing the creation of a new
Trade Enforcement Unit, which garnered a rare
bipartisan round of applause.
This tough
talk is supposedly aimed at frustrated
middle-class voters who are concerned about their
individual economic standing. However, the
proposed measures are at best tenuously linked to
the interests of such voters.
First and
foremost, they are intended to improve the
prospects of American corporations. As proponents
of this approach explain, forcing China to cease
keeping its currency artificially low will allow
US exports to compete, not only for consumers in
the United States, but also for the vastly
expanding consumer base in China.
Along
the same lines, pressuring China to cease
subsidizing Chinese companies and to do away with
the red tape for foreign businesses that operate
in China will make it easier for US companies to
expand their share of the Chinese market. And
insisting that China protect intellectual property
will make doing business in China less risky.
These demands are frequently wrapped up in
the language of fairness. The simple plea for a
supposedly "level playing field" is a constant
refrain of both Republicans and Democrats who
stress the importance of cracking down on China's
unfair trade practices. But who are we leveling
the playing field for, and in what direction?
They're talking about fairness for American
corporations, not for American workers. This
argument only makes sense if you believe that
these are one in the same.
The jobs
question In addition to calling for a
crackdown on China's unfair trading practices, the
candidates are promising to help bring
manufacturing back to the United States. On this
issue as well, a framework that stands to benefit
US corporations is being used to court American
workers.
On the Republican side, the
pro-corporate bias of returning jobs from China to
the United States tends to be stark and
transparent. The threat of corporate flight is
frequently enlisted as leverage against corporate
regulations and taxes. Along these lines, Gingrich
asks, "What is it about American regulations,
American taxations, American labor costs and
attitudes that makes it cheaper to go to China
than to the United States?"
This is an
argument for "leveling" the costs incurred by
corporations. The promise of US jobs is linked to
demands for cutting corporate regulations and
taxes, as well as lowering the cost of US labor.
As several recent reports indicate, this last wish
is already coming true, thanks in part to wage
stagnation for American workers without college
degrees.
In the Republican primary debate
on November 9, an almost gleeful Gingrich
explained that in 2015, "South Carolina and
Alabama will be cheaper than the Chinese coastal
provinces to [do] manufacturing."
Historically, the Democrats have been the
party to lament the loss of American manufacturing
jobs. Not surprisingly, they are even more excited
about the news that US manufacturing is on the
rise. The president has recently made it a central
aspect of his campaign: "American manufacturers
are hiring again, creating jobs for the first time
since the late 1990s," President Obama proclaimed
in the State of the Union address.
On the
face of it, there are important distinctions
between the Democrats' and Republicans' positions.
Obama spread his call for "insourcing" at
unionized plants across the Midwest, the historic
heart of American manufacturing and organized
labor. His proposal to cut corporate taxes by a
small margin and to offer modest incentives for
companies to stay is more tempered than the
Republican position.
But we need to be
careful not to overstate the differences. So far,
there's little evidence that the trickle of
returning corporations will turn into a flood.
Furthermore, if manufacturing companies do start
returning in large numbers, it's because the
environment is becoming more advantageous for them
here. And that's partly because it's become far
less advantageous for Americans without college
degrees.
As former secretary of labor
Robert Reich put it in a recent article in Salon:
"The fact is, American corporations - both
manufacturing and services - are doing wonderfully
well. Their third-quarter profits totaled $2
trillion. That's 19% higher than the pre-recession
peak five years ago. But American workers aren't
sharing in this bounty. Although jobs are slowly
returning, wages continue to drop, adjusted for
inflation."
However imperfect and wrapped
up in their own set of internal and external
politics, unions have historically played a role
in keeping the wages of their members high, with
benefits that often extended to non-union workers
as well.
Last year, President Obama
steered clear of the fight to defend public unions
in the Midwest. In the pro-manufacturing campaign,
he's speaking to unionized crowds, but he's not
directly defending what unions, at their apex,
have done - which is to increase, not decrease,
the cost of labor to corporations. American labor
unions have slowly come to realize that this has
to be a transnational effort.
To the
extent that it ever existed, the compact between
US corporations and US labor is over. Especially
in light of all that has transpired since 2008,
why should anyone believe that catering to the
interests of US corporations located in or
returning from China will make American workers
any better off? As in the past, the nationalist
focus on a foreign bogeyman is a dangerous
distraction from the pervasive threat of corporate
logic in American politics.
Foreign
Policy In Focus columnist Hannah Gurman is
an assistant professor at New York University’s
Gallatin School of Individualized Study. She
writes on the politics, economics, and culture of
U.S. diplomacy and military conflict. Her
forthcoming book, The Dissent Papers: The
Voice of Diplomats in the Cold War and Beyond,
will be published by the University of Columbia
Press in fall 2011.
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