General America

Some hail the 1950s as America’s golden decade.  It was boom time in America, and like the Big Automakers, Big Government continued what was begun during the Great Depression, adding notches to the belt of the New Deal through expansions of Social Security and other entitlement programs, culminating the next decade with the passage of Medicare.  Times were good for American manufacturing during the post-war years as well, and America looked to be on its way toward perpetual prosperity.

However, the intervening years have been more of a mixed bag for Americans.  Free trade and globalization as well as the constant advancement in technology have led to an entirely different workforce than the one we had six decades ago.  Similarly, immigration, the civil rights movement, and the society-wide integration of women into the labor force have changed the face of American jobs entirely.  Many people look at all these changes and point only to free trade or globalization as the culprits in trying to understand why the world has changed so drastically, but this misses all these other changes which have occurred since the days when American made vehicles were really the only ones to choose from, and the concept of a two-income household was as strange as the idea of rearing children out of wedlock.

So what would have changed if the American people had decided to enact protectionist policies instead of free trade agreements?  And to what extent would we have needed to go to maintain the sort of civil society we had in 1950 or 1960?  Could we have, through protectionist and greater redistributive policies, created a society wherein the same level of economic prosperity and indeed preeminence could have continued to present day while at the same time bringing minorities and women into the work-force?  Would this be possible (is it possible even now?) to sustain without also maintaining a large, even global standing army?

Furthermore, to what degree is the perceived prosperity of the 50’s and 60’s in fact merely an illusion of the ‘good ol’ days’?  There is a widespread belief that this was an era of prosperity, and that in recent times people have become worse off, poorer, less able to achieve the American dream.  A college degree is the new high school degree.  There are not as many good blue collar jobs, etc.  But could we have enacted policies to counter this?  Could we have kept the lumber jobs, the fishing jobs, the manufacturing jobs?  What policies would this have demanded?  Less strict environmental regulations, to begin with. Some cap on innovation of new technology.  Much higher taxes, and very strict protectionist policies.  The protection, even, of very big corporations against competition – especially automakers, but other industries as well, such as telecommunications.  Then the question becomes, what would have been the side-effect of these policies?

These are the questions we need to ask when we begin to question free trade.  It is only one component in the change the world has undergone in recent decades.  Many of the changes are far more egalitarian in nature.  How much has the two-income family had an effect on home prices – effectively pricing out single-income families from the housing market?  How much has federal tuition assistance led to much higher college tuition?  The dead lumber towns are the result of legislation aimed to save forests.  And on and on.

So went the agrarian society.  So goes manufacturing.  Why staff a mail room full of mail runners and sorters when machines can do it better?  Why hire elevator operators when elevators are pretty easy to operate on our own?  Why charge more for a product, when you can undercut your competitor by making large capital investments in computers and machinery which save on costs in the long run?  In the end all these changes lead to a new sort of economy, and they can be a painful process, but there is really no stemming the tide.

Certainly the cost of stemming the tide would be much greater than merely enacting some stricter tariffs.  I don’t think economic populists have a clear vision of the America they imagine could be preserved through protectionism, or a good handle on the lengths such protectionism would truly need to go to do the trick.

P.S. – all this being said, I think that Randian advocacy of markets with no regulation, etc. is at least as Utopian.  Few people actually believe that no regulation would be the best policy, only that regulation should be efficient and limited because it is subject to capture and manipulation.  Also, this is not really an argument against taxes or anything of that nature.  Countries like the Netherlands or Denmark have very free trade and very high taxes, managing to keep government out of the economy while still providing strong safety nets (indeed, perhaps too strong!)  The trick, I think, is figuring out how to maintain as much economic liberty as possible while still providing effective state services and safety nets.  This is impossible when both parties spend all their time talking past one another or come up with healthcare plans that are “bipartisan” only inasmuch as they are good ideas stripped down to rather watery ones, diluted to the point of being almost entirely worthless.