An interesting public conversation has gotten underway. It may even turn out to be fertile, if the participants can keep from talking past one another and obfuscating the issues by adducing irrelevancies -- and there will be a great tendency to do just that because the stakes are very high indeed.
So far, on one side of the conversation are those who are concerned about the deleterious effects of free trade and immigration on American independence and sovereignty, and on the other side are those who are concerned about the deleterious effects of restricted trade and restricted immigration on what has come to be known as the American Way of Living.
To get a sense of the conversation you can read Pat Buchanan's August 11, 2003 piece in The American Conservative and Bruce Bartlett's August 18, 2003 piece in National Review Online.
Mr. Buchanan's piece takes a look at the state of the manufacturing sector of the US economy. The dwindling number of Americans employed in this sector, and US dependence on foreign manufactures, has led him to conclude that free trade is a "bright shining lie" -- at least as far as American workmen are concerned.
Mr. Bartlett's piece looks at the manufacturing sector of the US economy and sees something else. In his opinion the health of manufacturing ought not to be judged by employment numbers, merely. From the standpoint of the high-productivity that makes capital investment profitable "careful analysis" shows that the manufacturing sector is healthy, and free trade is fulfilling its promise and its logic.
High-productivity is one of the 800-pound gorillas that have been throwing furniture around in the living rooms of capitalist economies for some time now.
Unfortunately, in their respective essays, neither Mr. Buchanan nor Mr. Bartlett have come to grips with the brute.
And the stone hard fact is that high-productivity within our economic structure is a relentless job destroyer.
The loss of American manufacturing jobs has been going on for more than half a century. Mr. Buchanan points this out in his essay -- a third of US workers were employed in the manufacturing sector in 1950, 12.5 percent of the US workforce is so employed now. Have all these jobs been going to Ling Po and Juan Gonzales? No. Many have been going to R2D2 and company. And in time, a not very long time, most of the manufacturing jobs that have gone to less expensive overseas labor will go to R2D2, too. In the age of machines and computers and robots this is what high-productivity actually means. As I have written in a previous essay this is ominous for the prospects of increasing employment in the manufacturing sector. Most of the spin-offs and new things to make that result from research and development in the manufacturing sector will be made primarily by machines, not men.
Mr. Bartlett recognizes this problem. But he feels compelled to go so far as to state that the dwindling US employment in manufacturing that is resulting from increasing producer productivity is actually a good thing for US workers -- enabling employers to pay higher wages. To support this claim he adduces some irrelevant data on "real GDP per employed person" that he got from the Bureau of Labor Statistics. He states this data is the "best measure of comparative productivity levels" for workers in different countries.
Fortunately for Mr. Bartlett, there is no such data available for workers in Mexico or China. Thus he is left free to speculate that workers' productivity in those countries is "probably" far below the US workers' productivity. This guessing is part of what he terms his "careful analysis."
What is even more troubling about Mr. Bartlett's method is his attempt to make his case by unartfully slipping away from a look at the comparative productivity of workers at specific manufacturing enterprises in each of the countries under consideration in favor of a look at the productivity (in terms of dollars) of "all" workers in the respective countries.
By choosing to misrepresent the actual productivity of foreign workers who are employed at high-tech factories Mr. Bartlett comes perilously close to bad faith in the conversation.
For the record, the productivity of foreign workers in high-tech overseas factories is not sufficiently lower than US worker productivity in similar enterprises to offset the present wage differentials between the countries. Thus, Mr. Bartlett's Big If -- "If a U.S. worker is five times as productive as a Mexican worker making one-fifth as much, they are exactly equal from the point of view of a producer" -- is just an if. And the fact that it is merely an if is why corporations are in fact moving manufacturing operations overseas at present. In course, this will continue until R2D2 takes over most of the work at factories all over the world, at which point the added costs of transporting goods from overseas to the US will exceed the added cost of the wages being paid to the few US workers required to oversee R2D2 here in America -- and "cheap overseas labor" will cease to be a cat's paw for the real problem.
And what of the manufacturing jobs that are left for US workers to do? Well, another 800-pound gorilla has emerged during the past 50 years. Her name is Assembly Line Annie.
Between Annie and R2D2 there is enough competition against old Joe in the labor market to make it a near certainty that manufacturing isn't going to be a gold mine of US jobs that pay well enough to support a family.
In fact, the presence of Annie and R2D2 in the labor picture accounts for the fact that US workers are working more hours per year than their counterparts in many of the countries that Mr. Bartlett listed in the high end of "real GDP per employed person." This accounts in part for why US workers produce so much "real GDP" -- we spend huge amounts of time at mercenary toil, and we spend all this time at mercenary toil in spite of the fact that we have achieved such high-productivity. As it has turned out the machines and computers haven't liberated us from toil one iota -- they've merely diminished the number of opportunities for occupation in those arts that serve to ennoble the mind.
The combined effects of Annie and R2D2 mean that a tariff barrier and a moratorium on immigration won't do much in the long run to increase employment in the once lucrative manufacturing sector. But this does not mean that these forms of protectionism are useless. There are social benefits that accrue from them.
These benefits did not attract the attention of Mr. Bartlett, though it may have been an editor's decision or constraints on print space that caused mention of them to be omitted from his article.
High among these ulterior benefits is a sense of social solidarity in the US, which is inextricably linked to our national security.
Throughout our history we seem to have been able to come by this sense only when we engage in war-making. The rest of the time, the atomizing effects of our mode of economy and its accomplice, the Servile State, actively work to push Americans apart from one another. Not a day goes by without someone in Talkville exhorting us to be "rugged individualists" and to eschew any form of collective bargaining against the enormous collectives of economic power known as corporations.
But take a look at what "rugged individualism" gets you in the contest with corporations and their high-tech production techniques.
As machines are given more and more of the tasks involved in producing material goods, more and more of the money we all spend on these machine-made goods goes to the men who own the machines and the materials these machines work with, and less and less goes to workmen.
This increased flow of money to owners and the attendant decreased flow of money to labor is a problem because the fellow who was replaced by the machine still needs money with which to purchase those goods now being churned out by the machine.
And an enterprise that replaces its workers with machines also has the effect of replacing workers in competing enterprises. Low-productivity competitors are driven out of business and the goods they produced are then produced by the machines of their high-productivity competitors. All sorts of jobs associated with production are lost -- including some relatively high-paying jobs: skilled laborers lose their jobs; managers lose their jobs; production engineers lose their jobs.
Many of these displaced workers enter the market for existing jobs. Here, supply and demand works to keep downward pressure on the wages of existing jobs. As it turns out, many machine-replaced workers end up earning lower wages than they did before. And for many of these workers their loss in wages is greater than the decrease in the price of the goods made possible by high-productivity. So, these folks actually have to work more hours to buy the same amount of goods they were buying before they were replaced by machines.
High-productivity has translated into more work for them, not less.
For some folks the downward pressure on wages means the difference between being able to support a family on a single income. For these folks the "having to work more" means that someone else must enter the work force if the family is to make ends meet. Thus the increase in two-wage-earner-families. More downward pressure on wages. More demand for new jobs. (Immigration of laborers obviously exacerbates the spiral.)
Now keep in mind that we must buy what the machine-displaced worker (or the new entrant into the workforce) is offering us in his new job, otherwise he won't have the new job long. Whether it is new stuff he is producing, or a service he is providing, we must buy it, in addition to the goods being churned out by the machines, if he and the machine-tenders are to keep their jobs.
So to keep the economy at full-employment we are all under constant pressure to buy more and more goods and services as high-productivity displaces more and more workers.
All of which has given us a rapacious appetite for natural resources that lie beyond our territorial borders. An appalling appetite that has made us increasingly unwelcome intruders in many parts of the world. Events during the past 63 years have made it pretty obvious that our unwelcome intrusions have had a significant part in rendering our nation considerably less secure than it could be if we were less addicted to consumption.
It seems that the next step in the public conversation will require us to come to grips with this roomful of 800-pound gorillas, and to start thinking about ways in which we can start turning high-productivity into an ally rather than an enemy of American workmen, and curb our dangerous appetite for foreign resources.
Perhaps another layer to our economy can do the trick.
Adding this layer might be achievable by putting into production a few of the millions of acres of land the US government glommed onto as the price for admitting the western states. If the produce of that production were introduced into our economy by techniques that distributed some of it directly to the men who labor to produce it, high-productivity might be brought gently to the harness.
But whatever means we employ to make high-productivity more friendly to American workmen, the means I have just suggested or some wiser means, the time has come to start devising them.
A roomful of undomesticated 800-pound gorillas is just too destructive a place to live.
THE END
Eastport, Maine
February, 2004