A reader from Bloomfield wants economists to explain why free trade does not deliver benefits as advertised by politicians.
Free trade is a concept, not a reality. It is much like other concepts so dear to some economists and most politicians, such as pure competition, open markets, free enterprise, level playing fields, the gold standard and the ever-popular balanced budget.
But we do not live in the world of concepts. Our world has millions of people demanding protection from change. When they get that protection, it is usually at the expense of other people who are worse off.
Many Hoosiers use the loss of Indiana’s jobs at Carrier to Mexico as an example of the injustice of trade deals and free enterprise. But do we hear Hoosiers complain when the Indiana Economic Development Corp. announces a company moving jobs from another state to Indiana? Or from one Indiana county to another?
“Oh,” some will say, “that’s between Americans. We don’t mind transferring jobs between states; that’s just healthy competition. But when people elsewhere get American jobs, that verges on treason.”
Protectionists don’t mind buying shirts for $8 that were made in Asia; but Carrier is different. Shirts aren’t real manufacturing.
Manufacturing is more than just jobs with historical value. It has a magical quality. Without manufacturing, a country, state, county or city is something less … less manly.
Services are weak substitutes for manufacturing. Mining, plumbing, carpentry, heavy construction jobs are OK, but even they are not up there with manufacturing. Is Vegas a REAL place? How about Hollywood? What do they MAKE there?
And it’s not just about the pay. Many jobs pay better than manufacturing. The truth used to be that almost any guy could have almost any manufacturing job; it was the great leveler that paid well because strong unions put the screws to indifferent management.
The time has come to recognize that manufacturing, as we knew it, is gone, irretrievably lost. As in agriculture, mining, forestry, transportation, and other mighty industries, technology has created jobs requiring different skills and knowledge; it’s no longer brawn that rules the world of work.
In the future, manufacturing will still involve the miraculous: the transformation of knowledge and skill into material forms that enable those with less knowledge and skill to do wonderful things. It is with these intellectual and performance assets of others that we use our computers, cell phones, automobiles and the many tangible goods the world produces.
It’s past the time for complaining about the damages of the tornado we call change. We are late in assessing the damages and with helping those hurt by change. Most importantly, we need to improve our ability to spot meaningful change and adjust to it rapidly.