Kathy G: Sherrod Brown Prescient on Trade

Kathy G has a detailed, thoughtful post on choosing a Democratic VP candidate. But when she gets down to giving her preferred choices, her top tier includes one dubious choice: Sen. Sherrod Brown. And one of her reasons for liking Brown is even more dubious:

He was a skeptic on trade before it was cool, and helped lead the fight against CAFTA.

There are two claims implicit in this statement that I want to take issue with: first, that Brown's skepticism on trade in the past has been vindicated; second, that Brown's brand of skepticism on trade is now "cool." (This is not to pick on Kathy G; I've wanted to broadly address these issues for a while now.)

It's true that Brown has been a vocal skeptic on trade since he was elected in 1992. It's also true that many former trade boosters—most prominently Paul Krugman, but also Larry Summers—now take a more skeptical view of trade. But that does not mean Brown's skepticism on trade has been vindicated. On the contrary, as Krugman explains, it just means the evidence on the effects of trade have changed such that a bit more skepticism on trade is now warranted:

[C]ontrary to what people sometimes assert, economic theory says that free trade normally makes a country richer, but it doesn’t say that it’s normally good for everyone. Still, when the effects of third-world exports on U.S. wages first became an issue in the 1990s, a number of economists — myself included — looked at the data and concluded that any negative effects on U.S. wages were modest.

The trouble now is that these effects may no longer be as modest as they were.

Brown was skeptical about trade when it was wrong to be skeptical, and his skepticism has remained unchanged. This suggests that if the facts shift again and further trade liberalization becomes unambiguously beneficial to the U.S. again, Brown won't shift his position accordingly. Do we really want a VP whose skepticism on trade is based more on ideology than a clear-eyed assessment of the facts? I think not.

Kathy G's second claim—that Brown's skepticism on trade is now "cool"—is also false. Not all trade skeptics are created equal. Dani Rodrik, whose somewhat skeptical position on trade is now the "cool" position, describes the "new conventional wisdom" in an aptly named paper, How to Save Globalization From Its Cheerleaders:

This new orthodoxy emphasizes that reaping the benefits of trade and financial globalization requires better domestic institutions, essentially improved safety nets in rich countries and improved governance in the poor countries. With these institutions in place (or in construction), it remains safe and appropriate to pursue a strategy of “more of the same, but better:” continue to open markets in trade and finance, while strengthening institutions.

Similarly, Paul Krugman described his new-found skepticism thusly:

For the sake of the world as a whole, I hope that we respond to the trouble with trade not by shutting trade down, but by doing things like strengthening the social safety net. But those who are worried about trade have a point, and deserve some respect.

The cool new trade skeptics are concerned not with trade deals per se, but with the lack of corresponding domestic policies—both in the U.S. and in developing countries—to mitigate the negative effects of trade. By contrast, Sherrod Brown is skeptical about....well, trade in general. He doesn't say that he would support trade deals if they were coupled with domestic policies to compensate the losers from trade; instead, he opposes trade deals because he thinks they harm Americans. This stems from his belief that the purpose of U.S. trade policy is to "writ[e] the rules of globalization to protect our national interests and our communities."

Brown wasn't ahead of the curve on trade in the sense that he understood the intellectual foundations of the current skepticism on trade before the newly converted skeptics. In a Roll Call op-ed (via LEXIS), Brown cited as the intellectual support for his skepticism on trade William Greider's book, One World, Ready or Not: The Manic Logic of Global Capitalism, which Brown praised as "remarkably prescient." Greider's book, if you'll remember, was widely mocked for its mindboggling naïveté and patently false analysis.

Brown was wrong on trade in the '90s, and he's still wrong on trade now, just less so.