Who's Buying Whom?
Whenever I put in a good
word for the global economy--pointing out that international trade is not the
source of all misfortunes, or that low-wage exporting benefits many poor
people--I can count on receiving a pile of hate mail. Alas, the authors of
these letters rarely offer interesting reasons for their anger or, indeed,
reasoned arguments of any kind: They know that globalization is evil,
and that's that.
However,
the letters written in response to my July Slate column on Chinese trade
turned out to contain something new. Instead of merely telling me that I was a
fool, some of the writers accused me of personal venality, of actually being
paid to defend the interests of multinational corporations and foreign powers.
("Why don't you get off the gravy train?" asked one.) To the letter-writers it
seems perfectly clear: All honest men can see the obvious truth that
globalization is a terrible thing, and only a capitalist hireling would deny
it. I guess I already knew that many people believed this, but the latest
letters suggested that it might be useful if I told their writers something
about the facts of life.
In case you were wondering: I am not a crook. I am not on
any corporate boards; do not get paid to defend capitalism; and have not, to my
knowledge, ever received money from the Chinese government (although I was a
bit surprised by the generosity of those Buddhist monks).
And yet my
correspondents are not entirely wrong about the way the world works. Wealthy
men and powerful organizations do seek to buy the appearance of
intellectual legitimacy for economic doctrines that serve their interests. It
is possible for economic analysts who might otherwise have limited job
prospects to make a comfortable living by professing certain views on the
global economy. It just so happens that support for free trade is not one of
those views.
Why doesn't advocating free trade pay? Too much
supply, too little demand. Unfortunately, there is so much logic and evidence
behind the case for free trade that many smart people are willing to make that
case for nothing; they spoil the market for anyone who might want to make money
at it. And anyway, there isn't that much of a market. The benefits of free
trade, though substantial, are thinly spread, so it isn't in the interest of
any individual to spend a lot of money promoting that cause. Protectionism, by
contrast, tends to impose widely spread costs but to confer benefits on
concentrated interest groups, who therefore have a strong incentive to lobby
for it--and to provide financial support for those who help make it seem
intellectually respectable.
This is
not an abstract speculation: In the United States, at least, it is easy to be
specific about who pays whom to say what about globalization. Presumably,
everyone in Washington is familiar with that picture; but since my
correspondents obviously weren't, let me trace out the basics.
At the center of the picture stands an imposing
figure--Roger Milliken, the billionaire textile baron from South Carolina. He
is not the Moriarty of protectionism: He does not orchestrate everything (there
is, in particular, a parallel but mostly distinct anti-globalization network
funded by labor unions rather than industrialists), and even those who benefit
from his largess do not always do his bidding. But Milliken is the biggest
player in this game, and following the money trails that lead back to him is a
pretty good way to understand how this particular piece of the world really
works.
On most
issues Milliken is an unabashed hard-line right-winger, with a reputation as a
Republican Party kingmaker. (His friends have boasted that without Milliken,
Ronald Reagan would not have become president.) Among other things, he gave
several hundred thousand dollars to GOPAC, Newt Gingrich's campaign
organization pretending to be an educational foundation. Milliken has decided,
however, that free-market principles . He hosts dinners of the so-called No
Name club, a group of right-wing opponents of the North American Free Trade
Agreement--dinners enlivened, according to press reports, by uproarious
anti-Mexican jokes. And he has supported opponents of trade liberalization on a
truly impressive scale--giving, for example, some $2 million in soft money to
Patrick Buchanan to fund anti-GATT advertisements.
But all that is money politics as usual. More
interesting is Milliken's role in supporting institutions that help create an
appearance of intellectual legitimacy for his cause.
In 1990,
Milliken supplied crucial seed money to the Economic Strategy Institute, a
think tank headed by former Reagan administration official Clyde Prestowitz;
thereafter, he contributed more than 10 percent of ESI's budget. (Other major
contributions came from the auto and steel industries.) He also supplied
one-third of the budget of the Manufacturing Policy Program of Pat Choate, who
ended up as Ross Perot's running mate in 1996 but first became famous for his
book Agents of Influence , about the alleged influence-buying practices
of foreign governments and corporations. And Milliken is the most important
contributor to the United States Business and Industrial Council, a lobbying
group that was originally formed to oppose the New Deal but which in recent
years has devoted its energies to opposing free trade. (The council was
described in some reports as Buchanan's "brains trust.")
Milliken's direct lobbying efforts have been relatively
unsuccessful: Buchanan never got anywhere near the presidency, and both NAFTA
and GATT passed Congress. However, his longer-run efforts to influence the
climate of opinion have had considerable effect. The institutions and
individuals he supports--call them Milliken Men--have helped legitimize a point
of view that still commands virtually no support among professional economists,
and which was regarded, even a decade ago, as politically beyond the pale.
Particularly impressive is the way that the influence of the Milliken Men cuts
across the usual political lines. For example, guests of honor at the party
held to celebrate ESI's founding included not only Milliken himself but also
Bob Dole, Newt Gingrich, and Richard Gephardt. And Alan Tonelson, of the U.S.
Business and Industrial Council's Educational Foundation, is simultaneously
writing position papers on foreign policy for the harshly conservative Cato
Institute and supplying factoids for presidential hopeful Gephardt's speeches
on trade policy.
It's a
classic example of what crusading journalist William Greider, in his book
Who Will Tell the People? , called "deep lobbying": Rather than simply
using their money to buy influence directly, special interests pursue the
longer-term strategy of funding plausible-sounding people and institutions that
supply intellectual rationales for the policies they want. We're not talking
conspiracy theory here: It's all quite legal, and more or less aboveboard.
While Milliken himself shuns publicity, his role in backing these institutions
has been fairly well reported. It is strange, however, that when Greider
himself turned his attention from money politics to the global economy, he
ended up relying for technical advice mainly on--you guessed it--Milliken's
protégé Prestowitz.
Since everyone who matters presumably knows all
about who backs the Milliken Men and why, why does their advice still get
taken? The answer, I believe, is an odd but very Washingtonian combination of
cynicism and credulity. Of course the Milliken Men get funded because their
views happen to be convenient for certain interest groups--but doesn't
everyone? And regardless of who supports them, these guys have a lot of
expertise to offer, don't they?
Both the cynicism and the
credulity reflect ignorance about the world beyond the Beltway. Most economists
do not get paid to express particular views. Try to get a job at
Harvard, or even at the University of Chicago, merely by singing the praises of
free markets; you will learn the hard way that the currency of academic success
is creativity, not ideological correctness. (It might actually be a good thing
if academic economists spent more time educating the world about familiar
truths and less time chasing the latest intellectual trend.) And the Milliken
Men do not, in fact, have a lot of expertise to offer. On the contrary, looking
closely at their work--or confronting them over some issue--quickly reveals
these particular hired guns as The Gang That Couldn't Think Straight. After
all, a policy advocate of whatever persuasion ought to be able to make a case
for his position without relying on calculations that count the same benefits
twice, or forgetting that foreign exchange must either be spent on imports or
invested abroad, that it can't just disappear. And he should be able to look up
standard statistics without reading from the wrong column. Yet the Milliken
Men--even the classy-looking operation at ESI--have repeatedly . A Milliken
Man, in short, isn't a real expert; he just plays one on television.
I don't
think that Washington realizes how bad a bargain it gets when it takes advice
from the men and institutions Milliken has supported. Still, few insiders will
be shocked to hear that supposed progressives receive much of their funding
from wealthy reactionaries, or even that supposed experts are actually making
it up as they go along. But who will tell the people?
Still
think the Milliken Men are experts? Click .
