© Randall W. Stone, 2002 Ronald Rogowski Commerce and Coalitions

© Randall W. Stone, 2002 Rogowski I: Real trade: increased 4 times , 2 times Railroads decreased transportation costs by 85-95% Steamships decreased transportation costs by 50%

© Randall W. Stone, 2002 Trade and Cleavages Cleavages shift when: –Relative factor endowments change (development: K increases) Land-Labor ratio Low K High K High (land)Low (labor) (class conflict) (urban- rural) (urban- rural) (class conflict) Power shifts when: –Trade increases/decreases

© Randall W. Stone, 2002 Trade and Cleavages, Change occurs when: –Trade increases (transport costs decrease) –Relative factor endowments change (development: K increases) Land-Labor ratio Low K High K High (land)Low (labor) US, Canada before W W I UK, Fr Germany Austria, Italy 1875 US grain Russia: High land, High labor, Low capital

© Randall W. Stone, Present High K Low K Land-Labor ratio US 20 th century, Canada, Aus, NZ, SU 1960’s England 19 th, W. Europe 20 th EE 60’s, Japan 60’s Rural Urban High (land)Low (labor)H-HL-L Class Conflict red green US 19 th cent. LA, Africa after W W II Germany 19 th Japan until 1960 China, Vietnam, Spain, EE, India Russia & Africa until WW II Norway Sweden

© Randall W. Stone, 2002 Structure of an argument Confidence Scope Generality ??? How would you attack Rogowski? Assumptions Research design EvidenceLogic HypothesesConclusions

© Randall W. Stone, 2002 Objections: assumptions Assumptions of Stolper-Samuelson model violated: Capital flows internationally Capital, labor locked in specific sectors –Frieden: specific assets - incentives to lobby; everybody benefits from industry- specific protection Country size (Katzenstein)

© Randall W. Stone, 2002 Firms vary in their international position Milner : - export- vs. import-oriented - multinational vulnerability IVIII III LowHigh H L Export dependency Multi - nationality Compare: 1920’s & 1970’s; US & France (subsumed by Rogowski? A finer cut?) Selective protection Most free trade Global protection Strategic trade Objections: assumptions

© Randall W. Stone, 2002 Objections: hypotheses Outcomes? Most interesting claims not testable Cleavages Right-wing authoritarianism with contracting trade. Left-wing revolution with expanding trade Not a test –What would falsify hypothesis?

© Randall W. Stone, 2002 Independent variables: land, labor, capital intensity Dependent variables: – what is evidence of a cleavage? – expectations about timing of trade expanding/contracting and political shifts Fuzziness of key variables Objections: research design

© Randall W. Stone, 2002 Objections: evidence US New Deal (decline of trade – strong labor) –But why switch to Democrats if Republicans are protectionists? –Rogowski claims New Deal was not very free trade. Problem: business switched to free trade after Smoot-Hawley

© Randall W. Stone, 2002 Objections: evidence Bureaucratic-Authoritarianism in Latin America in the 1970s (trade increased; land + foreign capital ally for free trade) But: Mexico & Brazil vs. Chile & Argentina. Collapse of regimes after ’82 reforms, not protection

© Randall W. Stone, 2002 Objections: treatment of exceptions Why no revolution in India? (Trade contracts – fascism; trade expands – revolution; why not in India?) Rogowski: too satisfied to revolt –Building roads relieves pressure –Congress represents a land-capital coalition, pays off peasants –protectionist Ad hoc?

© Randall W. Stone, 2002 Objections: scope of theory Soviet Union and Eastern Europe Stolper-Samuelson does not apply to planned economies no free markets; no comparative advantage; no convertible money; no profit incentive

© Randall W. Stone, 2002 Conclusions?