A debut book offers a rousing call to halt trade with China and reinvigorate truly liberal economic trade policy.
Economic experts seem to broadly agree that inequality is in an alarming ascendancy and that the global middle class is worryingly pinched. Jeia begins his work with a grim diagnosis of the problem: living standards are in a steady decline; decent middle-class jobs are rapidly disappearing and with them sustainable wages; and the manufacturing industry in the U.S. is hobbled. Politically, this has led to a historic rise in polarizing partisanship and a general loss of trust in government. The principal problem, the author argues, is the economic hegemony of China. Despite what many contend, trade with China has had pernicious effects on the global economy. First, China’s introduction of a massive workforce of cheap labor has generally lowered wages for the rest of the world, a result conventional liberal economic theory predicted. In addition, the existence of so much low-cost labor stymies innovation since it undermines the incentive for new technology or new job training. Furthermore, China functions as a Soviet-style monopoly, and its continued growth necessarily comes at the expense of the rest of the global market, which essentially compensates the nation for its systemic inefficiencies. Jeia offers a number of potential solutions, which include what he calls “labour differential tariffs,” specifically targeted to level the competitive playing field by penalizing those countries that maintain artificially low wages. But even this is not enough: “Therefore, the only real solution to the problems currently affecting the global economy is to completely remove China from the global trading system, as was done with the Soviet Union.” Jeia presents a complex argument shorn of hypertechnical language, composed in a breezy, informal style. Sometimes, the tone turns too strident, especially when he criticizes what he interprets as a departure from free market liberalism: “Remember, ‘comrade’?” But while it’s common to pillory China for currency manipulation, it’s comparatively rare for an economist to focus on the long-term impact the country has had on the international labor market. This is a short book and not by any stretch comprehensive, but it functions as a provocative catalyst to a new conversation.
A brief but thoughtful introduction to global trade and its discontents.