Economist Brad Setser says that the long interview between William Greider and Robert Rubin posted on the Nation's Web site today is well worth reading. He is correct. Anyone who is interested in the globalization and trade issues covered in this blog will find the conversation mighty tasty. Greider consistently presses Rubin from the left, and the former Clinton administration treasury secretary doesn't shy away.
Oh sure, there's a fair bit of hemming and hawing, and a lot of responses of the "that's a very complex problem" sort that are a little unsatisfying. But Rubin makes some surprising concessions. Perhaps the most dramatic, which Greider rightly seizes upon as "a breakthrough point," comes during an exchange that began after Greider raised the issue of whether labor standards should be a part of trade agreements.
"Here's the basic problem, I think," says Rubin. "I'd like it all to be market-based. But [John Kenneth] Galbraith wrote the book fifty years ago with that famous quote -- 'countervailing powers' -- where he basically said, as I recollect, that if you have a big company negotiate with its workers and the workers aren't organized, it isn't real negotiations. Didn't he say something like that?"
"If you believe in a market-based system, the system is a negotiation between two people who can really negotiate with each other. If one side has no negotiating power, that isn't really a market-based system. It's an imposition of one on the other."
"But that's a breakthrough point for you to make," responds Greider.
"The point being that the market-based system requires negotiating power and if one side doesn't have that power, which is generally though not always the case in the global system, then there's something wrong with the system."
"Well, I think that's right. I am not a labor lawyer. Look, I don't want to push that. It's kind of a tentative thought. I want to be sure what I have said because it is tentative."
Tentative, maybe, but right on the money. Rubin is on the stump for the Hamilton Project, a new Brookings Institution-affiliated think tank that aims to come up with new policy prescriptions for the world's economic ills. His conversation with Greider makes me want to pay more attention.