I typically find George Will to be a pompous, boring pud – even on baseball – but as the drum beats louder for restraint on trade and the “exporting” of jobs, he offers a very important and sensible counterweight to the ominous rumblings protectionists:
- John Kerry and John Edwards, who are not speaking under oath and who know that economic illiteracy has never been a disqualification for high office, have led the scrum against the chairman of the president’s Council of Economic Advisers, N. Gregory Mankiw, who said the arguments for free trade apply to trade in services as well as manufactured goods. But the prize for the pithiest nonsense went to Hastert: “An economy suffers when jobs disappear.”
So the economy suffered when automobiles caused the disappearance of the jobs of most blacksmiths, buggy makers, operators of livery stables, etc.? The economy did not seem to be suffering in 1999, when 33 million jobs were wiped out – by an economic dynamism that created 35.7 million jobs. How many of the 4,500 U.S jobs that IBM is planning to create this year will be made possible by sending 3,000 jobs overseas?
Hastert’s ideal economy, where jobs do not disappear, existed almost everywhere for almost everyone through almost all of human history. In, say, 12th-century France, the ox behind which a man plowed a field changed, but otherwise the plowman was doing what generations of his ancestors had done and what generations of his descendants would do. Those were the good old days, before economic growth.
….When the presidential candidates were recently in South Carolina, histrionically lamenting the loss of textile jobs, they surely noticed the huge BMW presence. It is the “offshoring” of German jobs because Germany’s irrational labor laws, among other things, give America a comparative advantage. Such economic calculation explains the manufacture of Mercedeses in Alabama, Hondas in Ohio, Toyotas in California.
As long as the American jobs going offshore were blue-collar jobs, the political issue did not attain the heat it has now that white-collar job losses frighten a more articulate, assertive social class. But an old lesson applies to this new situation.
The welfare state, beginning with unemployment relief, was pioneered in part by European conservatives, Disraeli and especially Bismarck, to reconcile people to change – to the frictions and casualties of economic dynamism on which, such enlightened conservatives saw, national greatness would depend in the industrial age. It is sound social policy, and simple justice, that the party who benefits from free trade – the nation as a whole – should be taxed to ameliorate the discomforts of those who pay the short-term price of progress.
That is the case for education and job training for persons needing to change their skills. Such assistance is especially imperative when the casualties of change bear no responsibility for their fate – unlike, say, U.S. steelworkers, whose overreaching in collective bargaining deepened the problems of their industry.
John Kerry says offshoring is done by “Benedict Arnold CEOs.” But if he wants to improve the health of U.S airlines, and the security of the jobs and pensions of most airline employees, should he not applaud Delta saving $25 million a year by sending some reservation services to India?
Does Kerry really want to restrain the rise of health-care costs? Does he oppose having X-rays analyzed in India at a fraction of the U.S. cost? [NY Post]
Though I do not for a second question the sincerity of those who are alarmed by the disappearance of white collar jobs, I have yet to hear anything that leads me to believe there is anything different now than at ANY other time in modern economic history, other than “this time the jobs are mine and those of my friends.”
As disconcerting as this may be, that is, as Will notes, what the welfare state was set up to deal with in the first place. On an individual level it sucks and is unfair, but economic policy absolutely MUSt look at the economy as a whole – that’s the way it is.