Every morning, ever more alarming news about the global economy lands on my doorstep. As I eat breakfast, I might read about the collapse of the Indonesian economy or the rising number of bad loans carried by Japanese banks. Yet, so far, the dangers of Asian deflation or the merits of various bailouts feel less immediate than the toll increase on the bridge I cross on the way to work in San Francisco.
The world's economic volatility is more palpable outside of America's borders. Recently, on a short trip overseas, I took a day excursion to Turkey. The dollar seemed strong against the Turkish currency. At a port restaurant, the most expensive fish on the elaborate menu was selling for 1 million lira, less than $6. I ordered more food than I could eat. Afterwards, I went on a spending spree in an adjacent bazaar, without pausing to consider whether I really needed another glass vase. But when bargaining with the stall merchants, I noticed that every offer I made was immediately accepted. Was I a fool squandering my momentarily inflated riches?
It's understandable why a farmer in North Carolina or a salesclerk in Kansas or an editor in California might not want to think about the cheap imports about to flood our markets. We prefer to keep all our exchanges of money, goods, and labor as routine as possible. And yet most of us know that globalization will affect our lives whether or not we buy more foreign stuff or even pay attention.
Our anxiety about being awash in something so beyond our control offers politicians an easy target. Demagoguing globalization appears to be one of the main ways the Democratic Party will divide itself during the next election cycle. The choice ahead for progressives is not between fortification or free trade, since the basic realities of the global marketplace will assert themselves regardless. The choice is between pessimism and reaction or optimism and engagement.
You may remember the recent battle over fast-track trading. House Minority Leader Dick Gephardt teamed up with organized labor and environmental interests to defeat the White House over whether the president should be allowed to negotiate trade deals that Congress could vote on but not amend. Gephardt essentially used this fight to launch his campaign for the Democratic nomination in 2000.
It may seem odd for Mother Jones to come down on the side of optimistic engagement with the global economy. Are we opposing the rhetoric that helped win what appears to be a huge victory for labor and the environmenttwo causes we care deeply about? Yes. If we thought Gephardt's stance would help American workers and secure the earth's well-being, we'd happily get on board. But we think that he's got it wrongand that his political posture is ultimately destined to fail. As Walter Russell Mead explains in our cover package, if we anticipate domestic economic doom due to globalization, we may be waiting for Godot.
Mead, who has accurately charted the slippage of American workers in the global economy during the past 15 years, now sees an opportunity to improve our financial prospects. The biggest loss of manufacturing jobs to overseas competition has already occurred, he argues, and our economy is closer to full employmentingredients for a strengthened labor movement and rising wages. Because ours has increasingly become a service economy, Americans are more insulated from the manufacturing price-reduction competition that's about to take place. And the threat of worldwide deflation means the Federal Reserve Board isn't likely to choke off wage gains by restricting the money supply.
With progressive political leadership, the fiscal stimulus policies that proved useful during the New Deal could again prove their applicability for the first time since inflation reared its ugly head in the 1970s. The strength of our economy, coupled with increased fiscal leverage, means we can begin to set the terms of Clinton's economic victoryputting money into (or supplying tax credits that support) childcare, inner-city revitalization, job training, and, most importantly, education. A progressive tax policy could also ensure that Social Security is robust and Medicare more extensive. Because white-collar professionals are next in line to feel squeezed by efficient technology, the upper middle class may have a stronger interest in broadening the safety net.
There's another bonus: In a service economy, environmental regulation need no longer be seen as an obstacle to growth. For example, tax incentives that encouraged telecommuting would appeal not only to traditional greens, but also to most two-income families and to high-tech companies.
Of course, there are daunting obstacles from the rightbeginning with a Republican Congress that wants to enact tax cuts targeted to benefit America's (and the world's) economic elite. Under the guise of tax simplicity, Congress aims to aggravate the gap between the richest and poorest levels of U.S. society, a gap widened by Reagan's tax cuts and sustained through years when fiscal stimulus policies were ineffective and social welfare programs were eroded.
But reclaiming political power daunts progressives on intellectual and emotional grounds as well. Practically speaking, the wealthy will always begin with a disproportionate political influence. As the final story in our cover package shows, the power elite is adept at softening its face (i.e., appearing more diverse) without altering its underlying avarice. Its power, however, could be much more readily checked if progressives didn't self-marginalize.
A strength of the left has always been its ability to critique systemically. We understand the potentially tyrannical power of transnational corporations. In many ways, we are living in Rome, mid-empire, except our senators are more often front men for monied interests than powers unto themselves. Just as the Roman Empire influenced all countries that it came into contact with, so does U.S. influence, both positive and negative, infiltrate practically every nation in the world. Like the Romans', our empire is built on a model of relentless growth, one that is stimulating more appetites than the planet can possibly feed.
Too often, though, leftists use this systemic critique as an excuse for moral superiority and de facto disengagement. Imperial leaders don't make that kind of mistake. Even as Rome pursued its growth militarily, the emperor took care of his citizens by, for example, encouraging trade in grain to feed the city. If the U.S. prospers during the next wave of globalization, political patrons will be fed. The key domestic question is, how widely will the benefits be spread? For better or worse, that is the essence of domestic politics: using the levers of tax collecting to spreador to concentratewealth. Debates over protectionism are a diversion.
I didn't visit Turkey with the intention of buying fish at bargain prices. I went to see the ruins of Ephesus, one of the Roman Empire's great cities, which connected West with East. It was once a prosperous metropolis with elaborate public baths, an enormous open market, a magnificent library, wide streets with shopping arcades, a 24,000-seat theater, and at least one brothel that advertised its whereabouts in a sidewalk engraving that's still preserved. The most vulgar buildings, though, were the temples that various emperors erected to deify themselves, each one built successively higher up the hill and larger than the last.
Like many Roman cities, Ephesus arose at the mouth of a river. Sea transport was crucial to the growth of the Roman Empire, just as railroad transport, steamships, and canals were key to the explosion of U.S. capitalism a century ago. Of course, today's world economy is accelerating through the instantaneous transfer around the globe of capital and information. We don't know where this technology revolution is taking us. It feels safetoo safeto predict that capitalism's latest phase will end in some kind of collapse, just as the Roman Empire did. And yet the global village teems with paradoxes. Because I'm technologically able to find a like-minded person on the other side of the globe, I'm also more interested in making friends with my next-door neighbor.
A similar paradox may hold true for American democracy. Currently our politics don't draw deep attention because we know that both parties are dominated by basically the same investor class, one that cares little about the environment or its inhabitants. But if a progressive faction in either party took the lead and started investing tax revenue back into the public good, Americans might respond with a surprisingly intelligent and generous nationalism.