Monday, April 28, 2008

Chauvinism in America

A study from Harvard University last year found that of 168 nations worldwide, the United States is one of only four whose government does not guarantee paid maternity leave. The others, naturally, are Lesotho, Swaziland, and Papau New Guinea. Such is indicative of an oft-overlooked chauvinistic attitude in American society and economy, especially in the work place. The United States' overall lack of progressivity is shameful - in addition to not guaranteeing paid maternity leave, the United States has the highest incarceration rate in the world, is the only western nation still to employ the death penalty, and was the only western nation not to sign the Kyoto Protocol. America's chauvinism, however, may take the cake as its least-redeeming feature, and is indicative of how much further the feminist movement in the United States has to accomplish.

Feminism in the United States is typically thought of as a vitriolic campaign of bra-burning and man-hating, but the real, and more important, feminist movement takes place amongst working women. By the mid-20th century women were entering the workforce in increasing numbers, and in turn, demanded increasing rights in the work-place. These women, mostly through the vehicle of labor-unions, secured more equal pay and undermined sexist hiring practices, but the structure of the American economy required more than simply equalizing wages. Although wages for women in the workforce are still substantially lower than for their male counterparts, wage-equalization in the United States has made reasonable progress over the last 60 years. The problems faced by women in the workforce today are more of a result of chauvinistic attitudes toward family structure and a woman's role rather than a woman's relative productive ability.

Women face a hard time in eliminating gender differences in the workplace because they are, in fact, different. Most notably, women become pregnant. Their primary role, in America's society, is that of a mother, not a worker. This attitude toward a woman's role in American society has resulted in insidious structural barriers for workplace gender equality. The absence of paid maternity leave is one of the most grievous examples. Pregnant women in the United States do not have special protection from adverse treatment by employers. One woman, it is reported in the WSJ by Sue Shellenbarger, was fired for "poor performance" while pregnant and was unable to prove that her bosses knew she was pregnant, thus having no recourse to compensation. It is striking that the burden of proof falls on the pregnant female worker, and not the employer who fired her. The choice in American society for women is clear: work, and forgo having children, or stay at home. In face of this, the feminist movement in America must succeed in going beyond gender equality - they must achieve special workplace rights for women.

If the chauvinism in the United States, particularly prevalent in the workplace, makes securing equal rights for women difficult, securing special rights is an apparent exercise in futility. This is terribly unfortunate. There are numerous progressive measures that should be taken in order to allow for more economic and societal security for women. Tom S. writes,
In most states, family leave policies are still appalling, day care is expensive, and working women's wages are stagnant. Women are disproportionately represented in the ranks of part-time and contingent workers, both sectors of the labor market that are volatile and insecure.
Women should be encouraged to work, not feel compelled to stay at home. One of the major arguments in favor of increased unskilled immigration is that it has provided cheap child-care workers, freeing up skilled American women to pursue careers. If this is the case, cheap or free day care would have even greater salutary effect. The French government provides universal free day care, and the results are striking. 64.3% of women in France are employed, compared to 59% of women employed in the United States. And this is despite the fact that France's unemployment rate is 7.5%, compared to America's 5.1%. Further, women are frequently not hired to upper-level management positions in the United States due to fears of lowered productivity resulting from their potential pregnancy. The United States government, of course, does little to alleviate such a problem - it does not offer protection to female workers, nor does it offer incentives for corporations to hire women to upper-level positions.

Being content with the status quo in American gender-relations is not satisfactory. Not only does America's lack of gender equality in the work-force have substantial effects on the economy (think of how much more productivity could be gained with increased labor-force participation from women), but it is a grave injustice in and of itself. The fact that older women and working women have disproportionately supported Hillary Clinton in the Democratic primary is indicative of a feeling of discontent with the current state of gender affairs. They do, indeed, need to change.

Thursday, April 10, 2008

Free Trade and Colombia

Matthew Yglesias writes,
As best I can tell (peruse the text if you're interested) [the FTA agreement] actually involves very little changes on the US side at all. In essence, Colombian goods already flow very freely into the United States except for in our more famously protected sectors (agriculture, etc.) and what we're offering Colombia here is a very solemn promise to keep it that way.
And Kevin Drum writes,
(1) Trade is pretty damn free these days. There's really only a limited amount of progress left to be made. (2) We've had sluggish wage growth for the past seven years and we're now entering (or about to enter) a recession. Expecting public support for trade agreements at a time like this is just quixotic. There's really not much point in banging our collective heads against the free trade wall right now. (3) We've been hearing forever that we should pass trade agreements today and fix their harmful impact on the working class tomorrow. But tomorrow never seems to come, does it? Maybe it's time to switch that policy sequence around for a while. (4) There's not really any danger of seriously regressing on trade. The worst that's likely to happen is a slowdown in new agreements. We'll all live through that. (5) A lot of us who supported NAFTA are sort of wondering what happened to all the benefits that were promised. As near as I can tell, there's a pretty widespread agreement that NAFTA, on balance, hasn't really had much net impact.
To which Daniel Drezner responds,
It also explains why ratifying this FTA is a good idea -- it locks in U.S. policy. As I've posted previously, the reason these agreements are a good idea is precisely because they prevent the drift towards protectionism that is otherwise inevitable in a pluralist political system. ...The biggest benefit of the FTA with Colombia has little to do with economics and everything to do with our bilateral and regional relationships. Go back to NAFTA. Kevin is right to point out that the agreement's economic effects were not terribly large. On the other hand, even skeptics of trade liberalization -- Dani Rodrik, Paul Krugman, and Joseph Stiglitz -- supported NAFTA because it locked Mexican economic reforms, promoted political reforms, and cemented a stronger bilateral relationship.
The idea of trade agreements being used as instruments of U.S. policy, and not as methods of improving economic well-being, is dubious to me. Drezner argues that locking in U.S. policy towards a more free-trade oriented economy is good because it prevents protectionist sentiment from becoming actual U.S. policy. I tend to think that bad trade deals, however, will end up contributing more to protectionist support than the "locking in" of such deals will prevent. Kevin notes that the benefits of NAFTA are not seen -- this leads to a lack of support for other trade deals that might be beneficial. So although NAFTA might be "locked in," trade deals in the future might not garner enough support as a result of NAFTA's lack of perceived success. Drezner goes on to write,
FTAs matter more than unilateral reductions of trade barriers because they decrease the likelihood of policy reversals
Yet if unilateral reductions of trade barriers lead to substantially larger economic gains than do bilateral free trade agreements, implementing unilateral reductions of these barriers, considering the economic gains that will be seen from them, will do more to generate support for free trade than will ineffective bilateral agreements. Yes, unilateral trade policies are easier to reverse than are free trade agreements, but the desire to reverse them will not be there if they are actually seen to be doing good. On the other hand, free trade agreements are lumped together with all free trade policies, so ineffective free trade agreements will lead to less support for more effective unilateral measures. That all being said, free trade agreements are not necessarily bad - indeed, some can be effective. On the whole, NAFTA is probably a net-good - but the trade policies that are espoused in NAFTA are not nearly as effective as unilateral reductions in barriers to trade in the United States would have been. Indeed, trade agreements are oftentimes (or perhaps always) a consequence of geopolitics rather than a pact intended to accomplish true economic good. Trade agreements implemented on political, instead of economic, grounds are prone to have poor economic consequences. As Joseph Stiglitz points out,
Developing countries may be even more disadvantaged in one-on-one bargaining with the United States; a series of such agreements may leave many developing countries worse off than they would be even with another unfair multilateral agreement. ...Trade negotiations entail a myriad of proposals for changing the rules of the game, and developing countries are often at a disadvantage in assessing the impact of each of these proposals on themselves, let alone the general equilibrium impact on the global trading system.
So essentially the scenario is: 1) The United States has its own geopolitical interests in mind when negotiating free trade agreements, not the economic interests of other parties, 2) The United States has considerable leverage with developing nations, enough to force them to accept trade agreements, and 3) Developing nations are oftentimes unable to determine whether a trade agreement is good or bad for them.

Such a situation will result in trade agreements that are, in all likelihood, not good for the United States economically, not good for the developing nation economically, and enforced by the strong hand of the United States. This is supposed to be good for stemming the protectionist tide?

Tuesday, April 01, 2008

Cooperation and Economic Growth

(click on image to enlarge)

The graph shows the correlation between the level of cooperation (plotted on the y-axis and determined by a public goods game) and GDP per capita. It finds a positive correlation between cooperation and GDP per capita in a society, which is no surprise.

The authors of the paper write,
In some countries (US, Australia, UK, Switzerland, China), people were punished for defection, which is considered "normal." In others (Oman, Greece, Saudi Arabia, Russia and Belarus), people were ALSO punished for cooperation.
The authors hypothesize that people in some countries punish cooperation (rather than defection) because they have a culture of "revenge," i.e., if Mr. X punishes Mr. Y for defection, Mr. Y punishes Mr. X back.

Such a finding suggests that development in underdeveloped countries is stymied by a culture of revenge. It also suggests that punishment for defection encourages cooperation (a logical result of incentives) and thus stimulates economic growth. These findings introduce a dynamic to development study that is often overlooked, or perhaps considered unchangeable and thus discarded.

Gregory Clark in A Farewell to Alms, a economic history of the world which attempts to determine why some socities are rich and others are poor, disagrees with Jared Diamond's prognosis that a society's economic well-being is entirely determined by geography. Instead, he claims that the types of people that make up a society determine its economic success. To quote Wikipedia,
Prior to 1790, Clark asserts, man faced a Malthusian trap: new technology enabled greater productivity and more food, but was quickly gobbled up by higher populations. In Britain, however, as disease continually killed off poorer members of society, their positions in society were taken over by the sons of the wealthy, who were less violent, more literate, and more productive. This process of "downward social mobility" eventually enabled Britain to attain a rate of productivity that allowed it to break out of the Malthusian trap.
The positive correlation between cooperation and GDP per capita appears to support Clark's thesis. Such a conclusion can be inferred as a validation of cultural racism - that some cultures are superior to others. It is ridiculous to claim that one culture is "better" than another - one who makes this claim assumes they have the right to determine what is good and bad; obviously, such a claim would be ridiculous and false. Nevertheless, it does seem true that certain cultures are better at promoting economic growth than others.

Diamond may not yet be disproven - indeed, it is a fairly convincing argument, laid out in Guns Germs and Steel, that geography is the major determinant of a society's culture, and by extension propensity for economic success. Regardless, a cultural dispropensity for economic success is a problem. Although an affinity for one's culture is oftentimes very strong, I would argue that one's affinity for a decent life (in other words, a life not beset by hunger, disease, or want of shelter) is stronger. A destruction of a culture in exchange for a better life is, in my opinion, entirely justified. Being able to eliminate the "negative" aspects of a culture while preserving its general nature is, obviously, ideal and is a major challenge for development experts and economists.

[Unrelated adendum regarding revenge: A fascinating book I read a while ago called Three Cups of Tea explored in some depth the culture of tribal Pakistan and Afghanistan. In these tribal cultures, the concept of revenge is extremely important. These cultures are extremely impoverished. Since revenge is so central a tenet of their culture, individuals from these regions who feel victimized (of which there are many) by American invaders oftentimes turn to terrorism in order to exact revenge.]