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Odd Couple

Odd Couple: International Trade and Labor Standards in History

Michael Huberman
Copyright Date: 2012
Published by: Yale University Press
Pages: 224
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  • Book Info
    Odd Couple
    Book Description:

    It has become commonplace to think that globalization has produced a race to the bottom in terms of labor standards and quality of life: the cheaper the labor and the lower the benefits afforded workers, the more competitively a country can participate on the global stage. But in this book the distinguished economic historian Michael Huberman demonstrates that globalization has in fact been very good for workers' quality of life, and that improved labor conditions have promoted globalization.

    eISBN: 978-0-300-15876-2
    Subjects: Economics, Business, Political Science

Table of Contents

  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-viii)
  3. Preface
    (pp. ix-x)
  4. Acknowledgments
    (pp. xi-xiv)
  5. 1 The Virtuous Circle of Trade and the Labor Compact
    (pp. 1-22)

    A hundred years ago, thepatronof the Belgian Labor Party, Émile Vandervelde, rose in parliamentary debate and endorsed with conviction his country’s free trade policy. In France, Germany, the United Kingdom, and elsewhere, labor leaders followed suit.¹ In the shadow of labor’s opposition toward free trade in the twenty-first century, how can we understand Vandervelde’s and his comrades’ enthusiasm?

    The labor historian (Van der Linden 2003) might argue that Vandervelde was extolling the virtues of a transnational workers’ organization, centered on the socialist Second International, a movement in which he himself played a leading role. Was his message a...


    • 2 Challenge and Response
      (pp. 25-48)

      The contrast between 1870 and 1914 was stark.¹ In 1870, labor protection was scarce; by 1914 it was common in the Old World and uneven in the New. Yet, during these decades degrees of openness actually increased. How can we square globalization and the rise of social protection?

      The well-rehearsed response is that labor laws were the stepchild of development, “the consequences,” Stanley Engerman (2003, 60) wrote, “of higher national income, with accompanying changing preferences regarding work time and work arrangements as income rose.” In the power resources model, the timing of adoption is tied to the rise of organized...

    • 3 Markets and States in Old and New Worlds
      (pp. 49-64)

      Can the welfare state survive globalization? Will globalization outlive the nation state? While an either-or construction dominates twenty-first-century discourse on globalization and the state, advocates of the original labor compact saw beyond these stock phrases. Start with workers’ responses in the Old World. As trade expanded, the price of labor-intensive exports rose and the price of imports from land-abundant regions fell. The movement in prices ought to have translated into increased real wages. Though in principle workers had an incentive to leap onto the free-trade bandwagon, they had good reason to be skeptical about international integration. Market forces were not...

    • 4 International Labor Standards: Ideas or Trade Based?
      (pp. 65-84)

      A debate has roughly formed between those who support the authority of international organizations to impose labor standards and those who view intervention as harmful, or at best wasteful. To some, poorer economies have an unfair trade advantage because of their weak regulatory environment. States have pursued several options to harmonize the rules of trade. They have attached social clauses in regional trade agreements to compel negligent or refractory partners to upgrade their regulatory environments. On the global stage, rich countries have appealed to the ILO, in conjunction with the WTO, to take action against latecomers to the reform movement...


    • 5 Did the Labor Compact Reduce Inequality?
      (pp. 87-116)

      So far, I have made the claim that globalization was a prime mover behind the adoption and transmission of the labor compact. The volume and type of trade conditioned responses at national and international levels. But this can only be half of the story. Globalization was not fixed. It was an ongoing process that was affected by the expansion of the labor compact itself. The causal mechanism was from higher wages to enhanced labor productivity, with the result that the regulation shifted comparative advantages across trading partners. My argument is by no means novel. Gavin Wright (2006, 158) makes the...

    • 6 Did Labor Standards Harm or Benefit Trade?
      (pp. 117-138)

      In 1918, Brazilian manufacturers prided themselves on being captains of the seventh largest textile industry in the world (CIFTA 1919, 25). Conjuring up the Japanese path of development, they boasted the industry was on the cusp of a major breakthrough, the expansion of manufacturing decoupling economic growth from the curse of resources.¹ Even before the war, Brazil had made inroads in Southern Cone markets. In the expectation of continued growth, and as local workforces demonstrated more skill, producers began upgrading the quality of textiles manufactured. While the labor laws of the 1920s may have been unanticipated, Brazilian manufacturers had laid...

    • 7 The Labor Compact in the Long Twentieth Century
      (pp. 139-159)

      The ever-growing divide between leisure-bent Europe and much of the rest of the world has become a vexed concern of economists and political scientists.¹ Explanations of recent worktime differences across OECD countries are as many as they are diverse. Linda Bell and Richard Freeman (1995, 2001) attributed longer hours in the U.S. to rising wage in e quality; Edward Prescott (2004) claimed that excessive Old World tax regimes have curtailed the incentive to supply labor time; others have credited labor unions (Alesina, Glaeser, and Sacerdote 2005) and partisan politics (Burgoon and Baxandall 2004) for Europe’s long vacation periods; lastly, and...

    • 8 Vandervelde’s Gift
      (pp. 160-172)

      How can we reconcile the growth of international trade and the expansion of the labor compact? My answer is that the relation between trade and labor standards was double sided. Labor regulation, which preceded the welfare state, was not a mere rejection of markets, but a response to the volatility and uncertainty of the new world order. Trade and redistribution were compatible, and certainly desirable. Even as individual countries adopted regulation, trade was a pathway in the diffusion of labor standards. The welfare state was not built in any one country. From its origins it was a transnational movement. And...

  8. Appendix
    (pp. 173-184)
  9. Notes
    (pp. 185-202)
  10. References
    (pp. 203-230)
  11. Index
    (pp. 231-237)