Customer Reviews

Free Trade Reimagined: The World Division of Labor and the Method of Economics

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This is a frustrating book. Fans of Robert Mangabeira Unger (RMU) will surely acclaim it as brilliant. In many ways it is, and particularly its critique of current conceptions of free trade is terrific. But its constructive ideas are expressed with such generality, and much of the rest of the book with such opacity or even clumsiness, that few other people will be persuaded.

A. SUBSTANCE

Some of the main themes:

@@ There is more than one way of organizing a market system, and more than one way of organizing a democracy. Politics is more fundamental than economics -- government sets the conditions in which markets function. The current free trade regime seeks to entrench the particular forms of North Atlantic democracy, of its intellectual property regime, and of a market system based on the current Western-style financial markets; it seeks to enforce global institutional convergence. RMU calls the principles of the current trade regime the "functional equivalent to the [19th Century] gold standard," e.g. @157ff.

@@ A better free trade regime should encourage and tolerate experimentation with market and political institutions. Developing countries should be able to experiment with "heretical" ideas, to construct "shields over heresy" through use of government interventions, and even to opt out of trade arrangements through specialized bilateral agreements. In one of his few concrete comments about the trade regime, RMU says that he favors a regime that is more like the GATT than the WTO.

@@ The goal of a trade regime should be to encourage diversity and experimentation, not just efficiency. The movement of people and ideas is vastly more useful than the movement of things and capital as a source of greater equality, as well as of greater wealth and power, for all mankind (@209). Free trade isn't a goal in itself, but rather should be a means for improving the lot of humanity, especially for working men and women.

I especially enjoyed RMU's pointing out that defenders of free trade take it for granted that the world is divided into separate nations, when obviously trade would be more efficient if nations didn't exist (@44ff). Similarly, trade would be more efficient if people could move freely to wherever they could get paid more; yet the current regime relies on this not being the case, and on there being great inequalities in how wage laborers are compensated for their efforts.

RMU doesn't actually advocate the abolition of national borders, or that free international movement of labor be permitted in one fell swoop. Rather, his point is to show that current market system and free regime trade aren't "natural facts" -- they rest on a foundation of contingency and choice, on "our wills and imaginations" (@45, echoing Schopenhauer). This opens the door to re-imagining them.

B. PRESENTATION

1. Unfortunately, RMU's literary style is more often mind-numbing than stirring, even when he seems poised to rile us up: E.g., @138:

"A fateful question is thus presented to us. Shall we remain condemned to attenuate the inequalities and exclusions produced by the division between advanced and backward sectors of each national economy? And to attenuate them through the two traditional devices of state support for the diffusion of small-scale property and business and of governmental commitment to compensatory redistribution through tax or transfer? Or will we, instead, succeed in overcoming this division through governmental, social, and private initiatives that enable the accelerated experimentalism of the advanced sectors to flourish far beyond the boundaries of the limited social and economic terrain in which they have flourished so far?"

If your heart beats faster to read that, you'll love this book.

2. Most arguments are presented with a Talmudic intensity of dialectic. The good of that is that RMU anticipates and replies to many objections to his arguments. The bad of that is that you'll need to hack through those layers of objections and counter-objections without first being given any roadmap of where you're headed. Nor are there any typographical cues to remind you that you're in the middle of, say, the second of "three roots of plasticity" described in the reply to the 3rd of 4 "objections" to the first of 3 "theses" (@128). Also, there's a great deal of repetition in the text. E.g., Chapt. 3 could easily have been edited into oblivion, since most of its ideas are already in Chapts. 2 or 4 (or both). Or consider the "twin evils" haunting restraints on trade, which are twice defined @139.

3. The book's terminology is often quaint. You'll find Adam Smith's pin factory, a reference to Ford's assembly lines, and plenty about "machines", but nothing about chips, software or the Internet. Sentences like "[The established forms of the market economy] make the goal of expanding access to the means of production hostage to the eternity and the absoluteness of the conventional property right" (@192) made me nostalgic for my college days in the '70s, when you could impress girls by quoting György Lukacs. (And remember RMU's gold standard analogy? Another rhetorical misfire is the pallid echo of W.J. Bryan's 1896 "cross of gold" speech in the book's concluding sentence, "We will not shackle humanity to free trade," @221.)

4. Aside from a few broad references to China and India, there are almost no references to modern examples. Not that there are many references to much else -- there are only 6 non-discursive footnotes in the book, four of which point to other writings by RMU. If you agree with RMU and want to back up his arguments with facts, you'll need to find them on your own.

Since RMU has spent the past 30+ years on the faculty of one the top US law schools, it's surprising he's so lacking in the persuasive techniques that are lawyers' daily bread, such as easy-to-follow arguments, a strong evidentiary foundation, and vivid, concrete images that stick in the mind. I was hoping until the end for a modern parable to replace the pin factory, but no such luck. The best RMU can muster, a "factory of innovation" (see @96ff), remains an abstraction.

Readers who are disposed to agree with RMU will read into his innumerable abstractions examples that confirm their beliefs. Those who aren't yet convinced may read something entirely different into the text, if they stick with reading it at all. Sadly, the latter group includes most of the folks who help maintain the status quo -- exactly the people whose minds need changing.

C. BTW: Finally, I'm told by the publisher, who owns the copyright, that the entire text of the book will be available for free online at RMU's Harvard website during the first year of the book's release (though you'll need a search engine to find the link). I found the link by accident after I had bought the book. I confirmed that the publisher consented to this; RMU's goal was to make the book available to readers in poorer countries. (RMU could have chosen a publisher who'd let him retain ownership, so the praise goes to Princeton for their generosity.) I'm not sure why RMU couldn't have had the free access period precede the book's release in print, rather than overlap it. But now you know.

In the book "Free Trade Reimagined: The World Division of Labor and the Method of Economics," Roberto Mangabeira Unger argues that we should revise the way in which we view free trade because the picture it currently paints is incomplete. As the first reviewer mentions, the central themes of the book are that there are multiple efficient ways of structuring a market economy, and that government should seek to establish a trade regime that allows for flexibility, diversity, and experimentation.

With these ideas in mind, Unger sets forth his proposals, which "can be grouped under the heading of four counter-principles that we should put in place of the four principles on the basis of which free trade is now being established" (p. 180): the first counter-principle is that instead of maximizing free trade, we should seek to reconcile the "alternative development strategies and alternative versions of economic, political, and social pluralism" (p.180); the second counter-principle is to avoid worldwide institutional convergence and to "foster alternative approaches to the...organization of the market economy" (p.185); the third counter-principle is to encourage the freedom of movement of people and ideas, eventually establishing "a universal right of labor to cross national frontiers" (p.197); the last counter-principle is to make free labor truly free by setting labor standards that eliminate "wage slavery" (p.198).

Overall, I found the controversial proposals to be interesting and thought-provoking. I especially enjoyed Unger's discussion of the current lack of freedom of mobility of labor and ideas, and the notion that a truly free trade system would allow workers to move across borders in order to obtain the best reward for their skills. Also, Unger did a very good job of acknowledging and addressing the possible objections to his theories.

However, despite the originality of Unger's ideas, the book was ultimately unsuccessful in supporting his arguments. One of the reasons for this was the manner in which the information was presented - the language was somewhat convoluted, difficult to follow, and repetitive. The book lacks a real structure that guides the reader from one idea to the other. Because of this, one feels that he's groping around in the dark for the majority of the reading.

Moreover, the proposals and arguments are almost completely abstract. Unger gives very few real world examples and essentially zero factual data. As a mathematician, I found this lack of concrete evidence in the book bothersome. Unger makes claim after claim supposedly refuting long-standing theory, but fails to provide specific examples or numbers to support his point. Once in a while, he will make some offhand comment citing a certain country, but it is difficult to understand what event he is talking about or how it is connected to the point he is making. In making claims as radical as the ones Unger does, I expect him to provide a vast collection of historical data in support of his position, especially after initially suggesting that historical evidence shows no correlation between free trade and economic growth.

The final problem with Unger's proposals is the seeming impossibility of their implementation. Take, for instance, the notion of universal freedom of movement of labor. Because of national identities and citizenship rights, domestic policies, and ethnic tensions, global labor freedom is wishful utopian thinking. Even taking things one step at a time, as Unger suggests, it is difficult to imagine workers moving freely from Israel into Palestine. Thus, even though complete mobility of labor could be globally efficient, it is infeasible in modern society. Unger's call to move away from wage labor is similarly unrealistic. He proposes to have an international labor standard which, among other things, guarantees a "living wage...with a minimum degree of personal dignity" that "becomes the responsibility of the entire world" if the home country is too poor to provide it (p. 200). Again, full international cooperation to enforce and supplement a wage standard within a separate country is too idealistic and could potentially stymie growth - workers will know that no matter how little they do or how they work, their sustenance will be guaranteed. Even more implausible is the "gradual replacement of wage-labor...by self employment or partnership" (p. 202). Huge corporations hold a great deal of power and political influence, and it will be in their best interest to keep a wage-labor based society. It is unimaginable that these large entities would allow property right laws that diminish their relative power.

Ultimately, "Free Trade Reimagined" proposes a unique perspective that unfortunately gets lost in a cloud of abstraction. The arguments provided lack empirical support and it is difficult to fully evaluate the merits of the proposals because Unger fails to give concrete examples of the policy changes he wants to implement. This leaves the reader frustrated, bored, and skeptical. Without further illumination from the author, the proposals in their base abstract form seem impossible to achieve in practice.

I am neither a fan nor a critic of Prof. Unger. I enjoyed reading his book Free Trade Reimagined. Most trade theorists have understood and explained free trade from the perspective of comparative advantage and factors of production. Trade theorists have often ignored or overlooked the role of "constructed advantage" in trading regime. No less than the "given comparative advantage" and the factors of production, the "constructed advantage" is shaping the market mechanism and orienting the global and domestic trade policy regime. But this key concept of trading regime was/is regrettably missing among the academicians. Prof. Unger has unmistakably and powerfully articulated this profoundly important concept of trade regime, which I believe, is the most important contribution of the book. This book certainly offers a new perspective to the trade policy regime and I am sure that this book would command more debates and discussions in the future.

Surendra Bhandari
bhandarisurendra@gmail.com

This book worth its weight because Mangabeira Unger reclaims Marx's category - Market-value (Das Kapital, chapter 10, vol. III) - which has been untouched till the present day, and this category does revert the predomination of the market-price.
Mangabeira Unger makes the deepest critic of the "globalization", "commodification" by bringing up, indirectly, this Marxist category that also revitalizes the "producers association" (the original regulating agencies), and the "liberty reign".