Category Archives: international trade

Organic Farmers “Cheating”

Any time standards are established for the production of some product, and if money can be made by skimping on those standards…well, skimping is liable to start happening. Nowhere is that worry more obvious today than in the realm of organic agriculture.

See this little note from The Morning Sentinal: ‘Cheating’ organic farmers mostly from overseas

The brunt of the problem is with overseas farmers who sell much of the certified-organic food in the domestic, American and Canadian retail markets. Who’s watching them? Well I’ll tell you. for the most part, they’re watching themselves. And they undercut American and Canadian organic farmers like Thoet four times out of five.

Clearly, if people in China, Mexico and Indonesia are cheating, we need to start field testing on a surprise basis to weed them out. I’m not sure why exactly that message bothers some organic farmers, like Thoet, but the good news is that the overwhelming majority of organic farmers in North America agree completely….

Notice here the multi-layered competition:

  • American organic farmers are competing with each other;
  • American organic farmers are competing with with American non-organic farmers;
  • American organic farmers are competing with foreign organic farmers (or maybe “organic” farmers);

It’s also worth noting that, perhaps less obviously, American organic farmers are competing with American farmers who adhere to a “nearly organic” method of farming, but who do not or cannot meet the standard necessary to gain the regulated designation “Organic.”

In each case there’s a competitive environment, subject to a more-or-less formal set of rules; and in each case, the opportunity exists to break rules, or to game them in various ways. Notice also that, when one sees oneself as playing several separate games at once, one has in principle the opportunity to justify cheating at one game by appealing to the rules of the other games. (For instance, “Yes I know I was bending the rules for USDA Organic, but it’s more important that we beat out imports from Indonesia!”) Does this happen in practice?

(See also: The Challenges of Organic Certification, over at my Food Ethics blog.)

How China Won…

We’ve featured a few posts over the last week on what seems to be a spike in the use of competitive rhetoric to characterize the new global economy. Even the President can’t resist motivating the economic and education policies he favors by suggesting that the road to success — victory — runs through a competitive showdown with our Chinese and Indian rivals. (See here, and here, for example.)

Well, in this context, I can hardly resist linking a recent BBC article that interviewed a handful of Duke students, including one of the best ones I ever taught here.

We put together a team of Duke’s best and brightest – including three Chinese-born students – to discuss America’s place in the globalised world. We showed them a slick and controversial advert aired during the recent congressional election campaign by a group called Citizens Against Government Waste. Set 20 years in the future, a Chinese professor is lecturing students about the fall of the American Empire. Reckless spending led to crushing debt, he explains, before adding: “Of course we owned most of their debt so now they work for us.” The message: America, be scared of China.

The students’ responses are all interesting, and the first couple in particular cast skeptical light on the “competition” metaphor or framework everyone, from the President on down, seems to be taking for granted.

Jack Zhang, who was born in China but grew up in Pennsylvania, was dismayed by the confrontational take.

“It portrays it as a zero-sum game and that somehow Communist China is just the mortal enemy of the US and that the way forward is through competition of some sort. I think that’s the wrong approach.”

Sharon Mei, who runs an “Understanding China” house course with Jack, said the advert played on fear.

“What I was most hurt by was when they had the audience of young people and everyone was yelling in a hostile and malicious manner – these are the people on the other side of the world who will take us over if we don’t do something about it.”

 

The State of the Union, part 2: our Sputnik moment

The second “adversarial ethics” theme in President Obama’s State-of-the-Union speech last night came with the rhetorical emphasis on “our generation’s Sputnik moment.”

For those any younger than Obama — and I guess that includes me, for I am three weeks younger than Obama — “Sputnik” was the name of the Soviet satellite that won them the first round of the “space race” in 1957.

(For those younger than, say, my students, many of whom were born in the 1990s, the Soviet Union was basically Russia. Russia and America were competing, in part to prove to the countries that were wavering on the sidelines that their system of government and political economy was the one to emulate. They decided to try to demonstrate their superiority by being the first to master space. To boldly go where no dog, monkey, or man had gone before. Both sides built their space programs on the backs of Nazi rocket scientists they captured at the end of the Second World War. But the Russians seemed to have snatched the smarter ones. They won the first three quarters of the contest by getting the first satellite, the first animal, and the first human into space; but America won with a touchdown late in the fourth quarter by landing the first man on the moon. There’s a great exhibit on the whole race in the Smithsonian National Air and Space Museum. It was kind of a Big Deal, as the headline in the New York Times, above, makes clear.)

So the time has come for our generation’s Sputnik moment. Only now it is the Chinese and the Indians we are competing against. (The Russians are not our main competition any more. It turns out, capturing some Nazis and making them build you rockets does not prove that your political and economic system is superior. But I digress.)

The rules have changed. In a single generation, revolutions in technology have transformed the way we live, work and do business. Steel mills that once needed 1,000 workers can now do the same work with 100. Today, just about any company can set up shop, hire workers, and sell their products wherever there’s an internet connection.

Meanwhile, nations like China and India realized that with some changes of their own, they could compete in this new world. And so they started educating their children earlier and longer, with greater emphasis on math and science. They’re investing in research and new technologies. Just recently, China became home to the world’s largest private solar research facility, and the world’s fastest computer.

So yes, the world has changed. The competition for jobs is real. But this shouldn’t discourage us. It should challenge us…

The future is ours to win. But to get there, we can’t just stand still. As Robert Kennedy told us, “The future is not a gift. It is an achievement.” …

Now it’s our turn. We know what it takes to compete for the jobs and industries of our time. We need to out-innovate, out-educate, and out-build the rest of the world. We have to make America the best place on Earth to do business. We need to take responsibility for our deficit, and reform our government. That’s how our people will prosper. That’s how we’ll win the future. And tonight, I’d like to talk about how we get there…

Half a century ago, when the Soviets beat us into space with the launch of a satellite called Sputnik¸ we had no idea how we’d beat them to the moon. The science wasn’t there yet. NASA didn’t even exist. But after investing in better research and education, we didn’t just surpass the Soviets; we unleashed a wave of innovation that created new industries and millions of new jobs.

This is our generation’s Sputnik moment. Two years ago, I said that we needed to reach a level of research and development we haven’t seen since the height of the Space Race.

In an earlier post here we highlighted Paul Krugman’s skepticism about this renewed emphasis on international competitiveness. From the perspective of adversarial ethics I would add only that it is a curious (rhetorical, no doubt) framework for motivating a number of policies and investments that aim to improve the American economy. Again — as with the argument for squaring the competitive instincts with the cooperative spirit which I discussed in the post below — this argument for taking seriously the international competition with the Asian giants appeals baldly to American nationalism. How dare they try to beat us at our own game! We practically invented innovation and entrepreneurship. (As George W. Bush once said, “the French don’t even have a word for ‘entrepreneur’.”)

It’s a curious appeal to nationalism and national pride. If we can’t be motivated to adopt smarter policies for the simple reason that they would improve our lives, are we really more likely to adopt them so that those uppity foreigners don’t prove they are better than us? As a humble philosopher, I don’t know the answer to that question. But the President is paying good money to people who presumably do. Our Sputnik moment indeed.

All that said, I generally liked and admired the speech. Politician’s speeches are not usually about showing why they believe a policy is justified, but rather about trying to move people who are not inclined to agree with them. And they do this because they are locked in a fierce competition with people who don’t want them to succeed. That’s what adversarial democracy is all about. A bit of rhetorical flourish is surely not unethical in such a contest. Is it?

The Simpsons perpetuating “The Competitiveness Myth”

As Krugman pointed out in the column linked in our previous post, below, we’ve been down this road before. Americans are suddenly worried about being overtaken by the surging Chinese; just as 30 years ago they fretted over the surging Japanese.

In 1993, when the Japanese miracle was a fait accompli, the Simpsons worked it into their famous Citizen-Kane-referencing “Rosebud” episode. Mr Burns is allowed glimpses of his own youth, as he toured the proto-atomic plant founded by his grandfather:

[Mr. Burns is reminiscing about his grandfather’s old Atom Smashing Plant]
Burns’ Grandfather: Come on, men! Smash those atoms! You there, turn out your pockets.
[Two goons seize a waifish worker and turn out his pockets]
Burns’ Grandfather: Aha – atoms! One, two, three, four… SIX of them! Take him away!
Waif: You can’t treat the working man this way! One of these days we’ll form a union, and get the fair and equitable treatment we deserve! Then we’ll go too far, and become corrupt and shiftless, and the Japanese will eat us alive!
Burns’ Grandfather: The Japanese? Those sandal-wearing goldfish tenders? Ha ha! Bosh! Flimshaw!
Mr. Burns: Oh, if only we’d listened to that young man, instead of walling him up in the abandoned coke oven.

Of course, it’s a lot funnier with animation and goofy voices.

 

Free trade and fair competition between the US and China

Is it my imagination, or has the language of “fair competition” suddenly exploded in discussions about trade between China and the US? We used to worry about supporting a totalitarian regime, a regime and firms that violated human rights, helping to grow the economy of a military rival, unfairness in the restriction on foreign investment and imports, not to mention the exporting of American manufacturing jobs.

But now the talk is all about how the US should conceive of China as a rival and competitor, and what the appropriate rules of this competition should be. Those rules might be formal ones — i.e. the rules for a deliberately adversarial institution, as governed internationally (say, through the WTO) or through bilateral treaties — and informal or “ethical” rules that both parties are expected to follow.


The US Secretary of State, Hillary Clinton, gave us a mouthful of what seems to be a new framework-in-progress during her interview with George Stephanopoulos on ABC’s Good Morning America last week, during Chinese President Hu’s official visit to Washington last week. There’s a link to the ABC clip, and a transcription of the interview on the blog Still4Hill, here.

Here is an interesting excerpt:

QUESTION: Madam Secretary, thanks for joining us this morning. The White House is really rolling out the red carpet for President Hu, but I think a lot of Americans, especially those having trouble in the job market, are having a hard time figuring out how to think about China. Are they friend or foe, ally or adversary?

SECRETARY CLINTON: George, one of the reasons why we are rolling out the red carpet and having President Hu Jintao come for a state visit is because we think that we’ll be able better to answer such a question as we move forward. And my hope is –

QUESTION: You don’t know yet?

SECRETARY CLINTON: Well, my hope is that we have a normal relationship, a very positive, cooperative, comprehensive relationship, where in some areas we are going to compete – there’s no doubt about that – but in many areas we’re going to cooperate. And we’ve seen that pattern in the last two years and it’s a pattern that I think reflects the reality and the complexity of our relationship.

QUESTION: It’s tough competition on the economic front especially. Your senior senator in New York, Chuck Schumer, has said America is getting fed up with the way China is manipulating its currency, closing down its markets, and he says that at times they are seeking unfair economic advantage. He’s actually proposed legislation that would sanction them, have tariffs if they don’t stop manipulating their currency.

Can you see a point where the Administration would get behind something like that?

SECRETARY CLINTON: Well, George, let me say first that I think Americans need to put this relationship into perspective. Our economy is about three times the size of the Chinese economy, where they have four times the number of people. So our standard of living is much higher, our innovation, our creativity – all of that is really to America’s advantage.

They have a huge labor market. They have lower costs. And they are going to be a really tough competitor. And what we’re looking for is a competition where nobody’s got their thumb, or their fist, on the scale.

Our understanding of the concept of trade has been complicated at least since Adam Smith’s Wealth of Nations — in part because trade, especially international trade, seems like a cross between cooperation and competition. The idea of a “fist on the scale” is also a cross of metaphors that seems unusually revealing here.

Meanwhile, Nobel-prize-winning economist and NY Times columnist Paul Krugman is worried about “The Competition Myth” that lies behind the new/old buzzword “competitiveness” that he sees trending in recent communications from the White House.

But let’s not kid ourselves: talking about “competitiveness” as a goal is fundamentally misleading. At best, it’s a misdiagnosis of our problems. At worst, it could lead to policies based on the false idea that what’s good for corporations is good for America.

The Economist this week is following the West’s competition with China to the primary schools and nurseries. In its Banyan column on “[China’s] Tiger Cubs v [the West’s] Precious Lambs” it reports on the astounding recent test scores of Chinese students, and the tiger mothers whose all-work-no-fun parenting makes it happen.

Do we only lament the innovations and improvements that arise from competitions when we sense ourselves beginning to lose? Will there always be a cognitive bias or rationalization that will try to explain such competitive failures in terms of gamesmanship, if not cheating? And oh, what about the poor children?! How can we allow them to be the innocent victims in this competition?