In his latest New York Times editorial Paul Krugman writes,

[The USA has] crossed an important watershed: we now import more manufactured goods from the third world than from other advanced economies. That is, a majority of our industrial trade is now with countries that are much poorer than we are and that pay their workers much lower wages.

Discussing the importance of this shift, he observes that as long as the USA was importing manufactured goods from other advanced industrial countries, workers on both sides benefited from rising productivity and wages. When we import manufactured goods from poor countries where wages are only a fraction of those paid to American workers, that’s good for factory workers in the poor countries but not good for the American workers whose jobs are lost and wages depressed.

This is not the first time I have seen this argument advanced. William Grieder proposed it a decade ago in One World Ready Or Not: The Manic Logic of Global Capitalism(1997). Those who have read Robert Reich’s The Work of Nations: Preparing Ourselves for 21st Century Capitalism(1991) will find the logic of Krugman’s economics familiar.

What makes Krugman’s observation important is the way in which domestic consequences of free trade are becoming politically salient in, for example, the sharpening anti-corporatist rhetoric of John Edwards in Iowa, reported in Huffington Post and the populism of Mike Huckabee, which, according to Salon.com, echoes that of Edwards.