In a recent article, Tim Duy asks “Why Is the American Jobs Machine Broken?” In the article, he describes the discussions economists are having about the reasons the job market continues to decline, and declares that he has become a heretic in regard to the theories of Free Trade. The fact that economists are beginning to question their policies is only the beginning. The only choices they appear to see are between Free Trade and protectionism. In fact, the issue goes much deeper than that. This small crack in the faith of modern economists is just the first step in a long journey to seeing what is truly necessary for economic stability.
Free Trade has been the rallying cry of American economists for several decades. The theory is that countries will specialize in the production or services they do the best (“comparative advantage”) and then trade with other countries that will specialize in other things. Whenever concern was raised about the impact on American manufacturing, we were assured by both Republican and Democrat leaders that job retraining would take care of that. The USA supposedly had the advantage in the service industries—particularly technology and finance—and any lost manufacturing jobs would simply move there. Everything would be wonderful—if we were simply reprogrammable robots.
Economists, safely protected in the bubble of their think tanks where they discuss their theories, apparently forgot that we are human beings with different aptitudes and interests. To them, it is an easy thing to take someone who has worked an assembly line for ten years and retrain him to do something entirely different. Apparently, economists forgot to ask those who actually worked in manufacturing what they thought of the idea. They failed to consider the condition of the workers when forced to leave senior positions for entry-level ones in a completely different field.
They also appear to have forgotten that the people in different countries are also human beings with the same variety of aptitudes and interests that we have here in the USA. Were they honestly surprised when other countries decided to pursue an economic area other than the one the economists thought they should; when India challenged us in the technical service arena; when American companies outsourced those jobs to those other countries offering the same labor for less money? It appears their absolute faith in Free Trade and Capitalism blinded them to human nature. This faith is now being shaken by the current financial crisis, but the only alternative they appear to see is protectionism.
Distributists are sometimes accused of being protectionists—when we’re not accused of being socialists. Protectionists recognize the need to protect jobs within their own country. They advocate using things like tariffs and subsidies to protect national businesses from foreign trade with countries that use forced labor, subsidize their companies, or where the people are so desperate they will work in awful conditions for nearly slave wages. However, the protectionists are merely trying to protect Capitalism within their own country. They accept the same outsourcing, job relocation, and consolidation of the control of productive capital as those who advocate Free Trade, but only within their own country. The real reason the American job machine is broken is the thing Free Trade and protectionism have in common: Monopolistic Capitalism.
In Capitalism, the availability of jobs is controlled by the whim of monopolies and large employers. History has clearly shown these companies will readily close down factories and offices in one area to open new ones where they can get cheaper labor. This is not only true when the labor is in another country, but also when the labor is within our own borders. Media all across the country report cases where cities, and even states, panic when large employers suggest that they may move their operations to another state, putting thousands of local people out of work or forcing them to relocate at the whim of their employer. The ability for a single employer to devastate a large region gives that employer the ability to control its economic life, and even its government.
The value of our currency is controlled by banks that charge usurious interest rates while creating special financial packages to enrich each other. Many people are forced to invest their retirement funds in that great gambling institution called the stock exchange. Considering the recent great failures of our banks and markets, is it any wonder that even the large businesses are hoarding their assets? That great boondoggle mislabeled as a “stimulus package” poured billions of borrowed dollars into the very banks that led us into our current crisis, leaving not only us, but our children and future generations of tax payers to cover the bill.
Imagine instead being economically independent. What if you owned your job, either independently or cooperatively, instead of a huge company? What if the goods and services you need for your daily life were produced locally by people who also owned their own jobs. Imagine if the government was required to provide a stable currency. Imagine if there were still dozens of car manufacturers across the country who worked together on innovating new technologies, instead of the “Big Three” who bought out their competition. The overall national economy would be more stable because each local economy would be stable. The failure of one company would not have the ability to devastate an entire region. The common man would be economically free because he would own the means of producing his livelihood. This is what Distributism aims to achieve.