I am a liberal, as is Krugman, and liberalism is generally founded on a kind of moral individualism. If Krugman wants to argue for a kind of communitarian nationalism, as he sometimes seems to want to do, then he should just go ahead and do that and we can argue about it then. Now, I agree that, as a matter of fact, people are conformist, their moral views are saturated with local cultural assumptions, and this is a constraint on policy, for better or worse. But I am replying to Krugman on his own liberal egalitarian terms, and my point is that liberal egalitarianism is at odds with economic nationalism, a point he seems unwilling to admit.

Your criticism of my “frictionless shoulds” seems to completely miss the point of the argument, which I no doubt could be clearer about. My argument is that egalitarian liberalism, which is incompatible with economic nationalism, demands that these frictions be removed. I don’t deny that they exist. I am saying that if you care about what Krugman says he cares about, you should focus on enabling free trade and labor mobility — things that will lessen global inequality.

I don’t think I understand your point about the environment and China.

http://krugman.blogs.nytimes.com/2007/12/30/consistency/

I eventually linked to your comments on his Trade and Inequality, revisited piece at:

http://www.voxeu.org/index.php?q=node/261

I was intrigued by your tack of implying that Krugman’s tilt towards giving fair trade arguments a bit more respect than has been the case – even by Paul Krugman in the past — exposes his flank with respect to some sort of ideal notion of social justice.

I understand your argument in the abstract, which is to say in the context of a theory of morality in general and social justice in particular which is highly individualistic. The flaw in your reasoning, at least from a philosophical if not a strictly economic point of view, is to imply a standard for social justice – and more generally morality überhaupt — which need not be constructively mediated through socially (and historically) constituted political/communal structures, whether these structures be families, tribes, or, most importantly for your particular argument, nation states.

The effect of this highly individualistic notion of morality is that you uncritically cherry pick individually focused forms of social justice/morality and shrug off other more socially embedded notions and outcomes.

One of your commenters, play_jurist, gets at this by noting that state sponsored policies in China of turning a blind eye towards (global) environmental considerations and denying Chinese labor Western-style bargaining rights dilutes to a considerable degree the force of the view that a simple narrowing in the wage gap between some workers in the developed world and other workers in the developing world (China, for example) is a sufficient basis to claim that this represents a net net advance in terms of social justice.

Your response to play_jurist is somewhat flip and, indeed, borders on the intellectually embarrassing. Let me take it one thought at a time:

“(1) Sure. US environmental preferences cost the US jobs. Is that really an argument for imposing our environmental preferences on others?”

You seem try to avoid joining the debate over (global) environmental degradation by using the loaded term “imposing.” Am I wrong to detect an unargued for assumption that, whatever else morality might mean, it means not imposing your moral views on someone else because morality is an intensely individual thing and not a social matter? Why this sort of view of morality does not even qualify for classical liberalism’s view of morality where individual morality does have the minimal social obligation of doing no harm to others.

So surely you jest if you are suggesting that there is no moral – forget political and economic — asymmetry in terms of social justice, understood in a global context, between lax Chinese pollution standards and tighter American ones? Or have I somehow misunderstood what your riposte to play_jurist implied from the standpoint of your chosen cudgel, social justice?

“(2) The international baseline for labor rights should be that workers can, if they like, bargain collectively, and, if they like, negotiate their own labor contracts. Also all workers should have right to exit to other labor markets.”

The naivete is in the frictionless “shoulds” and “if they likes.” The problem with some versions of free trade is that these “shoulds” and “if they likes” happen not to be anywhere close to being operative. And it is hopelessly muddled to mount even a supposedly moral argument based on somehow turning a blind eye to this reality.

“People who are worried about the labor conditions of workers in other countries ought to be in favor of letting them move to countries with better conditions.”

Leave aside once more the frictionless “ought.” It is quite possible to argue that the U.S. – and other developed countries — need not one fine day cease having regulated immigration policies, while still coming out considerably to the left of Lou Dobbs with respects to the economic, political, AND social justice aspects of immigration policy. Nor need they under these circumstances feel particularly vulnerable to the charge that they hold the equally naïve view that the modern liberal nation state stands at the end of history as the source of all (moral) goodness.

I think you know this, and that is why it appears a bit sophomoric to throw out a suggestion about the (ideal) free movement of labor which ignores this reality.

Otherwise, I very much enjoyed your piece.

Wrt (1), I think that we ought to see pollution as a subsidy; it’s actually free waste disposal. Hence, it’s a barrier to free trade and an impediment to realizing the on-paper benefits of markets. We ought to be orienting organizations like the WTO toward harmonizing nations’ environmental standards by penalizing countries that subsidize industry through free waste disposal.

Wrt (2), I would argue for much the same. We need to set an international baseline for labor rights like collective bargaining. Libertarians might even agree that failure by the state to protect workers’ rights to voluntarily form unions artificially deflates the price of labor. Certainly, libertarians will agree that state taxation schemes designed to drive farming villagers into cities’ industrial job markets artificially deflates wages.

Conclusion: Fair trade is the way to realize the on-paper benefits of free trade. Moreover, a fair trade message that includes promoting international environmental and labor standards along with the opposition to tariffs and direct subsidies commonly associated with the “free trade” banner is an effective response to rising populist protectionism of the US political left. Of course, this all needs to be weighed with the foreign policy goals achieved through engagement with countries like China, but I do think the goals of a non-protectionist fair trade can at least be furthered.

Yesterday I read that Paul Krugman has a lot more time for opponents of free trade than he used to:It’s no longer safe to assert, as we could a dozen years ago, that the effects of trade on income distribution…