Who's Buying Whom?
The Milliken Man March on Washington.
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.
B ut 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.")
Paul Krugman writes a twice-weekly column for the New York Times and is professor of economics and international affairs at Princeton University. His home page contains links to many of his other articles and essays.


