Making the debate a little more serious
Submitted by Aldon Hynes on Wed, 05/23/2007 - 10:20
Gavin Kennedy and I have been trading blog posts concerning Adam Smith and trade policy today. His current post is Let Debate Continue (it's better than fighting a trade war).
In it, he suggests, ”If NAFTA included the Kyoto Agreement it would not have passed the US Congress”. I find this a curious assertion. The Byrd-Hagel Resolution, expressed the sense of the Senate that:
the United States should not be a signatory to any protocol ... which would ... mandate new commitments to limit or reduce greenhouse gas emissions for the Annex I Parties, unless the protocol or other agreement also mandates new specific scheduled commitments to limit or reduce greenhouse gas emissions for Developing Country Parties within the same compliance period
(emphasis added.)
The problem with the Kyoto agreement, in the mind of many was that it did not have teeth vis-à-vis enforcement and developing countries. By tying it to more closely to other trade treaties, teeth can be added, and can be added fairly.
Likewise, much of the opposition to NAFTA was on grounds that it did not address environmental concerns. By adding environmental concerns, NAFTA would likely have received broader support.
It seems as if the bigger problem is binary thinking. Mr. Kennedy makes frequent comments like If the US closed its borders to non-Kyoto countries… and It has always been easier to destroy trade agreements or to argue over their imperfections.. By fighting for fairer trade agreements, you are not closing borders. You are working to make trade more fair. No one, other than Mr. Kennedy, has said anything about closing borders. Instead, I’m proposing a free market approach. I suggested, “Instead of tariffs, companies would need to buy carbon offsets”. In the Kyoto protocol, there is a provision for a Clean Development Mechanism and emissions trading. This seems to fit very nicely with the idea of using carbon offsets in lieu of tariffs.
While it is easy to argue over imperfections about trade agreements, it is an important part of the negotiating process and refusing to argue about such imperfections is even easier and more detrimental.
What is more concerning is his use of the old rhetorical device suggesting that disagreement leads to calamity. Instead of the ogre of terrorists attacking our country again if we don’t follow the President’s ideas, which is so popular amongst conservatives in the United States, Kennedy raises the specter of a new World War if you disagree with his opinions about trade. We need more informed debate about trade agreements, and I agree with Kennedy that learning more about Smith and his legacy is important, but using fear-mongering diminishes such informed debate.
This takes me to a final concern. Kennedy seems to be what I would call a Smith Fundamentalist. His devotion to the primary texts of Adam Smith, as laudable as that devotion is, fails to take Smith within the full historical context. An important part of Smith’s legacy is the debate and different interpretations of Smith’s background and his works. To denigrate tertiary texts, while honorable to purists, actually denigrates part of Smith’s Legacy.
The one thing notably lacking from Kennedy’s challenge to the views of Smith that I’ve read and presented, are passages from Smith’s original works to substantiate Kennedy’s claims and the further the discourse. While I tend to shy away from fundamentalists, I do believe that they bring a value when they encourage people to return to primary texts through quotes illustrating their views. Perhaps Mr. Kennedy will do us that favor in a future post.
Comment from Gavin Kennedy
Submitted by Aldon Hynes on Sat, 05/26/2007 - 09:10.Mr. Kennedy has sent me a response which he was having difficulties posting as a comment, so I am putting his comment up here on his behalf:
Thank you for your observations. I think we are speaking past each
other.
My primary interest is in Adam Smith’s Legacy as he intended it, but
as an economist I also interested in contemporary issues such as
trade. My point about Kyoto and NAFTA was that if Kyota had been
included (allowing for the fact that they were in different years),
Congress would not have passed it based on the voting behaviours of
Republicans and Democrats to free trade, and Republicans, plus many
Democrats, would have voted against it. They opposition was quite
widespread. Protectionist views proliferate on both sides. This was
a comment to show that trade issues are sensitive to politics.
The imposition of tariffs or other barriers to trade (of which carbon
offsets would be included) is contrary to recent lowering of trade
barriers, with well known ‘exceptions’ for ‘reasons of State’. If
the US was to impose new protectionist measures to satisfy domestic
agendas, good and bad, and these hit hard enough to disrupt other
countries, there would be a heightening of international tensions.
Imposing new barriers – no products from carbon dioxide emitters,
etc., low wage countries with exploitation levels unacceptable to
middle America, countries without democracy, countries with
repressive regimes, countries involved in terrorism, and so on, this
closes borders to their products. Given the lists of potentially
disqualified traders would include different names, political
tensions would increase. As those countries likely to be affected
are armed, some with nuclear weapons, the supposition that you
policies would be implemented (a long way thankfully being the case),
would risk World War III (and IV among the ‘victors’). Jealousy of
trade promotes spurious ‘protection’ and it has a long history going
back to the 17th century.
“By fighting for fairer trade agreements, you are not closing
borders. You are working to make trade more fair.”
Fighting who? Tariffs and other protection measures close borders
(as with Cuba at present). That’s what a tariff, etc., does – ‘pay
the tariff or conform to our requirements or your goods will be
seized or turned away’. I do not know how often you travel abroad,
but try to pass customs with prohibited goods and you would see the
reality of a closed border (perhaps from a prison cell too).
However, that was my reaction to your trade proposals. My main
concern was, and remains, your presentation of Adam Smith’s ideas,
which are perfectly fine as your ideas (freedom of speech, etc.,) but
they had nothing to do with Adam Smith’s ideas. The secondary
sources you quoted from were wrong. Maybe I should have quoted
chapter and verse – a task I do everyday on my Blog and in my
professional academic work – but I did not want to indulge in
‘overkill’.
I suggested you read original works of Adam Smith (Wealth Of Nations,
Moral Sentiments, Lectures in Jurisprudence, etc.,) all available
from Liberty Fund in popular editions, scrupulously accurate and
fully supported by excellent editors from Oxford University Press.
If you have any edition of Smith’s works you can still find scholarly
references because his books follow the Book I to V or I to VII
format, each book divided by chapters number 1, 2, etc., and some
also number the sections, while Oxford/Liberty editions even number
the paragraphs.
It was not, nor is it, my intention to over awe you with scholarship.
In future, should I have reason to quote from Smith’s works, I shall
provide references. The invisible hand references I mentioned – only
three times in a million words – are: Wealth Of Nations: Book IV,
chapter ii.9: p 454; Moral Sentiments, Book IV.1.10, pp 184-5;
History of Astronomy Section III.2: p 49.
I am an educator, recently retired Emeritus Professor, Heriot-Watt
University, Edinburgh, Scotland, with 34-years academic service in
British universities. I am not a ‘fundamentalist’ conservative or of
any other political affiliation. Scotland is a small country of 5
million people, not a major player in world affairs (except as a
junior partner with England, itself passed its prime).
If you disagree with my opinions on trade or anything else, nobody
will come knocking on your door…
Gavin Kennedy