The new Republican "populism."(Humanistic Economics)(Column)

Pundits and politicians celebrate the "globalization" of our market economy. According to Time magazine, all economists believe that "free trade is a long term boon that delivers better bargains on consumer goods and boosts demand for the products of America's . . . high wage, export industries" This new global economy has, however, been most successful in bringing Third World in, equalities home to the United States. Over the last decade, the top one per, cent of American families has seen its share of total national wealth go from about 33 percent to 42 percent. The bottom 80 percent of American families has fallen from about 19 percent to about 15 percent.

When liberals and the left make such arguments, they are accused of fanning the flames of class war. These days, however, invoking class warfare is no longer a vice--or virtue--confined to one side of the spectrum. Even such Republican stalwarts as Bob Dole and Pat Buchanan have assumed the mantle of American populism and denounced big corporations for paying their executives large salaries as they relentlessly downsize or shift jobs abroad. Unfortunately, these modern,day tribunes of the people are pale shadows of historical populism. Worse still, that heritage itself must be modernized to meet the challenges of our global economy.

Class war is indeed a major factor in politics today, but it is best under, stood as a war of the rich against the poor. Time magazine to the contrary, a growing minority of economists recognize the inherent injustices in the so, called free trade formulas. Free trade in the modern world extends to capital a freedom it denies workers. Trade agreements protect the right of businesses to their "intellectual property" and assure them of compensation in the event of the seizure of their assets. These same agreements, however, say nothing about the rights of workers to organize or to receive a just share of the fruits of their labor. Such trade agreements therefore encourage a "race to the bottom": workers are often forced to cede bargaining power within the workplace to corporate leaders who threaten to move jobs to nations where unemployment is very high and independent labor unions or wage standards are virtually non-existent.

This new world economy severely constrains the traditional liberal response to inequality and joblessness. When the US. government strives to reduce unemployment by hiring citizens to build new transit systems or hospitals, many of the workers it hires buy their goods from productive Third World plants where wages are low and profits very high. As a result, high levels of government spending no longer have as much of their historic "multiplier effect" of creating further jobs and economic expansion in the United States. Debt as a percent of the gross national product goes up and the dollar is weakened. The growing instability of spending policies to effectively address problems created by the new trade frame, work has done much to give "big government" its bad reputation.

Pat Buchanans response to these dilemmas, nonetheless, relies on the worst features of our populist heritage. Denying Mexicans access to our market's may sound good but can only undermine Mexican development and increase immigration pressure on our borders. Nor does protectionism curb corporate power in any significant way. The United States is already a large market. The current dismantling of federal labor and environmental standards, in which Buchanan participates, already allows corporations to move jobs to low-wage and low,standard states and thereby degrades everyone's quality of life. Within such a large and unregulated market, major corporations will continue to have inordinate leverage in setting wages and extracting high profits.

Along with Buchanan's strident xenophobia goes a very narrow conception of those who are to be helped. Clearly single mothers and racial minorities are second,class citizens at best in his republic of virtue. Yet he has become a powerful voice in this campaign precisely because he is at least willing to acknowledge a frightened and frustrated segment of working,class America that is left out of contemporary politics. Despite his defeat in the primaries, Buchanans themes will come to haunt--and perhaps be adopted by--many political leaders for some time to come. Nonetheless, his nostalgic celebration of small town America will do little to restore that America and is blind to much of the racism and sexism in those older traditions.

Historically, populism grew out of the strains and travails that resulted from the emergence of large,scale corporations over a century ago. Populists sought regulation of banks, expansion of credit, control of freight rates, and a vigorous "trust busting" approach that would limit the size and market power of businesses. Populists were also very interested in giving citizens more direct input into the political process. Historical populism's emphasis on direct democracy and some of its proposed financial reforms were admirable and inaugurated a much-needed debate. Nonetheless, populist is faith in small businesses as inherently virtuous and its idealized portrait of small,town life remain extremely problematic.

Populists could never adequately explain just how large corporations emerged from the competitive market economy they celebrated. They refused to acknowledge that most of the small entrepreneurs who were their core constituency also wanted to enlarge and enrich their businesses. The big businesses they hated were but an extension and elaboration of the practices and character types they celebrated. And indeed, some of these big businesses had achieved market dominance not simply because of power but through development of productive technologies, good products, and better jobs. Wanting to avoid any close scrutiny of their own practices and values, populists too easily explained the rise of big business by attacking the character of big business leaders. More ominously, they occasionally hinted at conspiracies orchestrated by ethnic minorities. Blanket attacks on big business and sporadic attacks on ethnic minorities made it hard to build the stable coalitions of farmers and urban workers that enduring populist success would have required.

Of course, many modern corporations fail to use their technological advantages to serve workers or their communities. Nonetheless, working, class anger can be addressed in a constructive fashion only by an agenda that aces economic democracy at its core. Rather than trying to break up big companies, such an agenda would give workers more of a say in their management and more of a share in their productivity, job creation and progressive tax policies are still important, but they can only be effective within a trade and labor framework that levels the playing field between labor and management both here and throughout the world. This framework would amend trade treaties to require both union protection and minimum-wage, maximum,hours, and environmental standards for all parties to a trading system. Mexico obviously cannot pay a minimum wage equal to ours but, as the average productivity of its factories improves, its wage standards must as well.

International financial institutions must also be democratized and reformed to encourage and fund development of productive, high-wage, environmentally friendly technologies in the Third World. Demands for such technologies, and the growing pay of the foreign workers who deploy them, would expand the market for our goods and services. This is a true win,win model of international trade.

Such a vision would not, however, pander in nostalgic fashion to anyone--even the working class. To build such a politics requires that we acknowledge the hatreds and stereotypes that have impeded the construction of every previous reform coalition from populism and progressivism down through the New Deal and the Great Society. Democratic efforts to acknowledge and address the limits of our previous visions must be part of any viable response to our current distress. Unfortunately, I see little humility and even less interest in real democratic dialogue in the new Republican "populism."

John Buell lives in Southwest Harbor, Maine, and writes on labor and environmental topics. His most recent work is Democracy by Other Means: The Politics of Work, Leisure, and Environment.