Open: The Progressive Case for Free Trade. Scott Knewitz, Policy Intern. Graduate student, American University
On Friday, February 1, 2019, Kimberly Clausing, Thormund Miller and Walter Mintz Professor of Economics at Reed College, sat down with a panel at the Brookings Institute in Washington D.C. to discuss her new book, Open: The Progressive Case for Free Trade and Globalization.
Clausing and the other panel members (above, from left to right): Lori Wallach, director of Public Citizen’s Global Trade Watch, Soumaya Keynes, U.S. economics editor for The Economist, and Kimberly Elliot, visiting fellow at the Center for Global Development, with David Wessel, discussed the current issues facing Americans of middle and lower incomes.
In the book, to be published on March 4th of this year, Clausing addresses claims from both sides of the political spectrum, which cite globalization as a destructive force, whether for its perceived effect on the most vulnerable and impoverished peoples of the word or that of reducing wages for American workers. On the contrary, she points to globalization as a force for good – if utilized correctly – and in this respect, calls for a more open global economy. For example, tariffs, she points out, are an economically ineffective tax on trade, the burden of which is often placed on consumers, as companies are either forced to pay the tariffs or seek higher priced substitutes from elsewhere leading to higher consumer prices.
Clausing also discusses the dangers of reducing immigration, from both moral and economic perspectives. She states that it is both un-American and foolish economically to turn away asylum seekers, noting there is no serious evidence to support the claim that immigration is in any way a cause of America’s current economic dilemmas. In fact, she makes the case that immigration remains one of America’s greatest strengths, essential to economic growth, innovation and entrepreneurship.
So, how does one overcome the discontent, backlash, nationalist and isolationist sentiment present in the U.S.? Clausing seeks to use domestic economic policy to address issues of inequality and, in turn, discontent. She points to more equitable means of distribution through a progressive tax policy, and greater emphasis on infrastructure as solutions. She believes these are required if America is to maintain international competitiveness.
Clausing's most pronounced critic on the panel was Lori Wallach, of Public Citizen’s Global Trade Watch, who pointed not to America’s economic policy as the most direct cause of our inequality but to trade policy as the cause. Her viewpoint is that our trade agreements distribute an unequal share of profits to major multi-national corporations, who operate without having the public interest in mind.
At closing, Clausing, Wallach, and the other panel members all agreed that to retreat to nationalism would be a grave mistake, and that the solution may be a more open economy that supports the development of all people while providing greater equality.