In our halcyon college days, the Wall Street Journal/New York Times class inhaled and believed David Ricardo’s economic theory of” comparative advantage” — that free trade makes all nations richer. More, we took it as restrictive for sensible plan. This has been wealthy compromise, left and right.
But human politics are more difficult than finance. The four years since I graduated have not only made me fear the economic theory, but also the policy’s knowledge.
I well remember the glib claims as production moved to lower-wage places, and as China was admitted to the low-tariff WTO government in 2001:” Not to worry: America has a comparative advantages in development, let the lower-wage countries do the dirty work of actually making points. We will all benefit from lower rates and better living.
Pricing did fall, the nation as a whole may well be richer. But we’re no better off. And there’s more problems to come.
At the outset, the” We innovate, you manufacture” incident forgets one major fact: Intellectual property is simply stolen, and it will be. In my years as an intellectual property prosecutor, my customers were among the most innovation-intensive businesses in America. Every single one faced significant and persistent issues with Chinese firms stealing their intellectual property.
It is well documented that in the early 1800s, this country’s emerging industrialists worked assiduously and successfully to pull across the Atlantic English and Scottish engineers who were familiar with the world-leading systems trade secrets that were influencing the manufacturing dominance of Manchester and various European cities. My place is not a moral but a sensible one:” You help yourselves to our technology for free, we pay for your made products” is not a way to long-term national success. Indeed, we now see China seizing pole position in even the most cutting-edge technologies, including chips, green energy, automobiles, and AI.
Even if a trade system based on the theory of comparative advantage does indeed make the country as a whole richer, it ignores unpriced human and social goods that are not even valuable. As free trade shuttered American factories step by step, from the bottom up — first textiles, then steel, then heavy equipment, and increasingly automobiles — it threw Americans, and predominately men, out of work or into lower-paid work.
The statistics are clear: In the less than ten years since China’s acces to the low-tariff WTO, the United States lost 25 % of its manufacturing workforce, or more than 4 million jobs that are relatively high-wage, causing untold downstream losses of non-manufacturing jobs in our former manufacturing towns.
Yes, our leading high-tech companies flourished and hugely enriched entrepreneurs, retirement accounts, and university endowments. Yes, Americans may be richer on average. But blue-collar men who lost the dignity of well-paid work, or their sons who have never experienced that dignity, are the losers. As with all of us, blue-collar America’s destabilization has ricocheted out into a cycle of family breakdown and drug addiction, just like we are.
With an ever-increasing collection of government subsidies and handouts, we have made an effort to lessen the suffering and calm our consciences. However, handouts cannot replace the priceless things that bring about self-worth and meaning in life. A better world would exist if we had a slightly lower average level of wealth but had better chances of hiring highly-paid workers with manufacturing degrees.
It would also be a more stable nation. More than 200 years ago, contemplating the disastrous French Revolution, Edmund Burke highlighted the intrinsic social dangers of too-abrupt change. He warned that even where the end goal of change is the public good,” by the sudden alteration of]the ] state, condition, and habits” of men, “multitudes may be rendered miserable”. He urged” circumspection and caution” before overturning social structures “where they have cast their roots wide and deep, and where, by long habit, things more valuable than themselves” — which surely includes families and communities —”are] , ] adapted to them” . ,
Democrats and Republicans alike have ignored Burke’s warning. By adopting unfettered free trade based on abstract economic theory, in less than one working lifetime we have uprooted “multitudes” of , honest jobs, irreplaceable families, and beloved communities across America. Is it any wonder that, across this great nation,” the songs of angry men” have swelled behind an angry man?
The anger is justified, and President Trump is doing much that needs to be done. However, a healthy nation cannot be based on the spirit of rage. When the dust from the Trump revolution’s initial house-cleaning is removed, wise leaders, both Republican and Democratic, will work to restore a stable society that is based on economic policy that makes room for the working class and woman, not on the economic efficiency of pure free trade and on “equalizing” handouts that denigrate the dignity of man.
Technologies and markets change, we cannot expect, much less force, the manufacturing jobs of 2030 to look like those of 1980. However, as a country, we can and must make a plan to produce much more of what we consume. As we are learning, cheap textiles, electronics, and avocados can be very expensive.
Roger Brooks is the Senior Counsel for Alliance Defending Freedom. Prior to joining ADF, he litigated technology-related cases as a partner in the Cravath, Swaine &, Moore law firm.
