Wednesday, March 28, 2007

Toward a Fairer Trade Policy?

House Ways and Means Committee Chairman Charles Rangel yesterday presented to the Administration a set of recommendations on future FTAs to increased labor and environmental protection. Rangel is laying out what the Democrats need to forge a new trade policy consensus and what will be needed for Bush to renew fast track and successfully complete the US-Korea FTA (KORUS). Fast track will expire at the end of June and the White House wants to make sure that the four trade agreements being considered are signed.

The endorsement of the proposal “would put fresh emphasis on environmental protection and access to low-cost medicines, as well as labor rights, in all new international trade pacts,” The Wall Street Journal reported. Modified texts of agreements will require: the adoption, maintenance, and enforcement of basic International Labor Organization (ILO) standards; and the implementation and enforcement of multilateral environmental agreements (such as CITES).

Finally, the Administration has been asked to strengthen American anti-dumping and countervailing laws against China.

Are we seeing the emergence of a fairer trade agreement? I made the case for such an approach in Policy Innovations in an article titled United States Must Redefine Fair Trade.

Such a policy tool may also provide one method by which basic human rights can be protected in the context of international economic relations. The lack of a binding international agreement on human rights that can guide business activities was a major concern of the panelists of a workshop we held last week at the Carnegie Council. We have uploaded audio clips of the panel "Taking Stock of Business and Human Rights." On the panel: Christine Bader of BP (audio clip), Joanne Bauer of Business and Human Rights Resource Centre (audio), Frank Mantero of GE, and David Schilling of Interfaith Center on Corporate Responsibility (audio).

Alan Blinder Reconsiders Free Trade

Like most mainstream economists, Alan Blinder has been a free trader. But a front-page Wall Street Journal article today says Blinder, a Princeton economist and former Federal Reserve Board vice chairman, is joining a growing number of economists who say "the downsides of trade in today's economy are deeper than they once realized."

For those of us who learned about the simple beauties of free trade in school, the world keeps getting more complicated.

According to the WSJ article, Blinder says the complicating factor is a new revolution in the global economy driven by communication technology that allows services to be delivered from far away, which may put 40 million Americans out of jobs over the next 20 years. The most vulnerable professions include computer programmers, data entry workers, actuaries, film editors, mathematicians, translators, graphic designers, and yes... even economists.

Wednesday, March 21, 2007

Brain AIDS Discovered in America

My sensationalist headline aside, the Bill and Melinda Gates Foundation is doing some serious work on global health, and the man himself is focusing on the economic variety. Gates went before Congress recently to diagnose the U.S. with what you might call Acquired Intelligence Deficiency Syndrome—a shortage of knowledge workers due to strict immigration policies, poor domestic high-tech education, and low government spending on R&D. Microsoft published a transcript of the testimony.

Given the security concerns surrounding immigration and terrorism, safely increasing visa quotas might not be as easy at it seems. But it should come as a wake-up call that one of the primary pillars of the information society can't get enough people to staff his business.

In a creative economy, the efficiency of outsourcing butts up against the fact that location is very important—if your workers can perform their tasks from anywhere, chances are they will want to be somewhere good. And as the country that advertises its freedom and opportunity, America should maintain a comparative advantage in real estate. My guess is that earnest national loyalty motivates Gates along with economic self-interest.

Saturday, March 17, 2007

Brzezinski: U.S. Needs Social Responsibility

SAIS Professor and former Carter advisor Zbigniew Brzezinski was on the Daily Show this week plugging his new book "Second Chance: Three Presidents and the Crisis of American Superpower." Read the New York Times somber book review here, which ends with this quote from the book:

"Nothing could be worse for America, and eventually the world than if American policy were universally viewed as arrogantly imperial in a postimperial age, mired in a colonial relapse in a postcolonial time, selfishly indifferent in the face of unprecedented global interdependence, and culturally self-righteous in a religiously diverse world. The crisis of American superpower would then become terminal."

On the Daily Show, Brzezinski said that for the United States to lead, it will have to get over its self-indulgence: "We have to make some sacrifices. We have to make some efforts to adjust to the inequalities that prevail in the world." He recommends a large dose of "humility and social responsibility" for U.S. power--a comment that was met with applause from the audience. He said that it is a dangerous posture to believe that U.S. moral superiority justifies immoral acts.

I wonder if the ultimate interviewer Jon Stewart caught the weight of Brzezinski's follow-up comment: "Operating on the international scene has to be based--to an unprecedented degree--on effective consensus, on drawing others to work with us." Stewart joked about the pettily contributions by other countries to the war in Iraq. But Bzezinski's comment reminded me of the universal need for consensus-building across sectors in this era of globalization. An excellent article in Booz Allen's magazine strategy + business traces this phenomenon. "The Megacommunity Manifesto" states:

"Though globalization is often thought of as waxing and waning through history (with the world sometimes growing more closely linked, and sometimes splintering apart), the current wave of globalization involves a permanent structural change in many of the institutions of the world. Nations and companies alike have undergone an irreversible shift toward what management theorist Charles Hampden-Turner calls “universalism.” They move away from reliance on connections and loyalty (typical of societies with selective law enforcement) and toward such principles as merit and universal law.

This kind of shift makes even formerly closed societies more open to outside influence, and thus more powerful. But it also makes them more vulnerable, particularly to the problem of economic “winners and losers,” in which the benefits of globalization are not evenly spread. The megacommunity concept represents a movement toward sustainable globalization, in which contact with the outside world, instead of draining jobs and making a local system vulnerable, strengthens long-term quality of life, economic vitality, and community health."

Wednesday, March 14, 2007

TV Torture on the Rise and Copied in the Field

The number of scenes of torture on TV shows is significantly higher than it was five years ago and the characters who torture have changed. It used to be that only villains on television tortured. Today, "good guy" and heroic American characters torture—and this torture is depicted as necessary, effective and even patriotic.
These facts motivated Human Rights First to launch Primetime Torture, a website investigating pop culture depictions of interrogation. The project looks at shows such as 24, Lost, and Alias. In a video clip on the site, former U.S. Army Interrogator Tony Lagouranis says that official Pentagon rules of engagement encouraged interrogators to "be creative." In the absence of useful training and guidelines, pop culture became a source of such creativity.

It would be overwhelming to debate every day the ticking time bomb scenario and other questions of torture (as the Carnegie Council did in 2005 with an expert panel). But TV and film wield impressive rhetorical power in this debate through their wide reach, continuous broadcasting, and endless reruns and rentals. The danger is that these media are nonparticipatory and not self-reflective—you can't argue with them and they rarely analyze their own coverage and trends.

The "violence in the media induces violence in real life" hypothesis may never be definitively resolved, but art imitates life and vice versa. Our narratives and public discourse define us. Television didn't mature into the educational platform many envisioned, but it is always teaching and it is always on.

Thursday, March 8, 2007

Is China Listening to De Soto?

The BBC just reported that China is considering a new law to protect private property, suggesting more openness, transparency, and reform in China. From the IHT:

"China's Parliament began debating landmark legislation to protect private property on Thursday following a rare and lengthy public consultation that suggests the Communist Party may be willing to allow more scrutiny of controversial government policies."

The Chinese government is constantly innovating and reinventing itself. It seems China has wisely taken into consideration the role of private property protection in economic development, an issue often associated with Peruvian economist Hernando De Soto, who wrote in the New York Times a few years ago:

"The single most important source of funds for new businesses in the United States is a mortgage on the entrepreneur's house. These assets can also provide a link to the owner's credit history, an accountable address for the collection of debts and taxes, the basis for the creation of reliable and universal public utilities, and a foundation for the creation of securities... Third World and former communist nations do not have this representational process. As a result, most of them are undercapitalized..."

Read Christian Barry's interview with De Soto at the Carnegie Council here and De Soto's Carnegie Council Morgenthau lecture here.

Expect More Transparency in China

Expect more transparency when it comes to China's government budget and military affairs. Wang Jisi of Peking University spoke to the National Committee on U.S.-China Relations last night at a Jones Day office in NYC. Stephen Orlins moderated. Wang Jisi argued that while China's main security concern remains Taiwan, it understands the role of transparency in strengthening East Asian peace. But this transparency "takes time," so the United States "should be patient," he said.

Why are Chinese military budgets skyrocketing? Military equipment is poor; military salaries are inadequate; and "the Taiwan issue" persists. Moreover, China's economy is growing at nine percent per year, and its military budget therefore cannot be compared to that of, say, Mongolia or Myanmar, Wang Jisi said. But he said we should expect more transparency both within China and with China's relations to the world.

The issue of transparency in China came up last week in Chicago at the ISA, too, and was the central theme of a 2005 article I wrote in the Asia Times Online with Larry Wortzel. We argued:

"Nations that believe in the principles of open, accountable and transparent government should encourage China to move toward a civil society. Such a change would respond to the values and principles these nations live by, and would also reduce apprehension that there are secret threats behind China's policies."

Last week at ISA, a panel of Chinese scholars argued that China sees military value in "concealment." I could feel Sun Tzu's spirit in the room (read Sun Tzu's passages on concealment here). I asked the panel, "Which is more credible? A military that can be observed or a military that cannot be observed, especially when it comes to nuclear strategy?" The scholars answered that in fact China wants "translucence"---it can be seen but only through shadows and mist.

Tuesday, March 6, 2007

Microfinance Talk near Wall Street

Attended a talk last night on microfinance by Magnus Magnusson of the United Nations Capital Development Fund. The event was held downtown, just blocks from Wall Street, by the United Nations Association of New York, Young Professionals for International Cooperation. The room was packed with young finance analysts interested in finding microfinance opportunities for their banks.

Magnusson made some great points on fairness worth reflecting on:

  • The world's richest 500 people are richer than the poorest 416 million people.
  • Globally, 115 million children are denied basic primary education.
  • The average Japanese lives 35 years longer than someone living in Burkina Faso.

  • On financial exclusion: While 99 percent of Demark's population has bank account, in Zambia only 5 percent of the population has one.
  • The minimum amount to open a checking account (as a percent of GDP per capita): More than 50 percent in Uganda, 40 percent in Malawi, and 20 percent in Ghana.
  • Only one percent of Africans have a loan or credit facility with a formal financing institution.

Magnusson sees microfinance as a powerful solution to these inequities. Microfinance is in all regions of the world, reaching 90 million clients, with more than 3,000 microfinance institutions, and 1,000 NGOs, foundations, and agencies.

Friday, March 2, 2007

Mearsheimer, the Lion King, and Responsible Scholarship

On Thursday, I attended a fascinating morning panel at the ISA convention on responsible scholarship. Iver Neumann, of Oslo University, took the audience through a sweeping history of literature—from King Lear, to The Prince, to the Lion King—identifying the reoccurring roles of the Advisor and the Critic. While the Advisor is measured, loved by the court, and concerned with form, the Critic takes the long view and is true to himself.

The Critic is characterized in philosophy as fearless, speaking truth to power even when risk is involved, Neumann said. While the Advisor's responsibility to the public is thin and general, the Critic is held morally and directly responsible for his views. A professor that writes a criticism of the government is more responsible than one who simply writes a report. Neumann concluded that the ethos of the Advisor should therefore be, "Unto thyself be true."

Henry Nau
of George Washington University criticized the premise that scholars speak truth to power because that premise presumes that scholarship is neutral and socially unconstrained. Rather, he argued, the relationship between scholarship and policymaking is complementary. Hans Morgenthau said scholars seek truth and policymakers power. But Morgenthau also criticized universities as servants to power—simply service stations that fill the tanks of policymakers with legitimacy.

Truth is evolutionary, Nau argued. Scholarship contributes to this evolution, but there is no such thing as socially-unconstrained truth. Nau asserted that partisanship can actually help policymakers by limiting the number of policy options.

Nau said the recent proliferation of think tanks therefore serves the needs of conservative policymakers, who find less use in traditional universities and established think tanks from the 1920s and 1930s, such as Brookings, NBER, and the Carnegie Endowment.

John Mearsheimer
, University of Chicago, capped the panel by reminding the audience that scholars have a responsibility to society—a responsibility to be actively engaged in the policy debate. How are we given the privilege of getting paid well to read the New York Times as part of our job description, he asked. We have a responsibility to the society around us, he answered. In a democracy, it is important to have many power bases and experts—the more the better. These experts should challenge prevailing wisdom and challenge powerful institutions (namely the White House). In this way, scholars create a marketplace of ideas. If that marketplace flourishes, chances are better that foolish ideas are knocked down.

Mearsheimer described the Vietnam War as a "cockamamy, stupid idea," drawing an analogy to the Iraq War. He lamented that the United States didn't have a fair-minded debate before going into Iraq.

Tenure is critical for the role of scholars, Mearsheimer said. "Tenure makes us untouchable and special." He said the only reason he was able to write with Stephen Walt an article about the Israeli lobby in Washington was that he and Walt had tenure and were therefore protected. "The debate inside the beltway is so sterile because it is too risky to challenge convention," he said.

Mearsheimer echoed the importance of the Critic's role. "Scholars have well-honed analytical skills, and it is good to have smart critics going after the government. You want critics. I am not saying we speak truth to power. I am saying we need smart people who challenge conventions," he said. He said he was suspicious of government service because "If you want to be National Security Advisor, you curb your tongue, and I don't want you to curb your tongue."

Mearsheimer ended by identifying four recent trends in scholarship: First, the professionalization of the academy has led people to be more concerned with building their CVs than seeking truth. Second, there has been an increase of human capital in Washington, DC, and many of these smart people would rather do the advising than listen to people at universities. Third, the disappearance of the true American left wing had created an intellectual vacuum.

Fourth, Mearsheimer said, younger scholars are more worried about their jobs than scholarship. "Young people today kiss up to their seniors. They don't challenge conventional wisdom." The system was set up to protect scholars, but they are not taking advantage of it. "That's sad. We would be better off if scholars were more engaged in the policy debate," he concluded.

ISA Annual Convention Panel on Japan

I just got back from the International Studies Association 48th Annual Convention in Chicago, where I delivered my paper on US-Japan comprehensive economic partnership agreements, which I coauthored with Sherman Katz. On the panel: Japanese Vice Admiral Makoto Yamazaki (Ret.), Major General Takahiro Ninomiya (Ret.), Masahiro Sakamoto of the Japan Forum for Strategic Studies, and Christopher Griffin of AEI.

I argued that the US-Japan defense of human rights through the management of East Asian economic activity could be a counterpart to the military alliance. The co-panelists all made the case that Japan must revise Article 9 of its Constitution in order to catch up with Japanese domestic politics and Asia's security environment.