TBT: The Human Toll of Globalization

One of the more interesting developments in conservatism since Trump’s rise in 2015-2016 has been a reevaluation of our basic economic policy.  Much of the ideas debated originated, in our modern political era, with Pat Buchanan.  For decades, the assumption among conservatism was that economic efficiency was the highest good, as it lowered costs and eliminated or reduced government overreach.

That was a reasonable set of assumptions when our nation shared a common culture, and when the United States dominated global markets hegemonically.  But the goal of reducing the size of government morphed pathologically into the mad worship of Efficiency above all else.  We sold out social capital—stable families, cohesive communities, robust civil society—for quick cash.

That’s the gist of Z-Man’s post today, “Middle-Man Conservatism.”  Tucker Carlson has similarly touched upon the woeful consequences of worshiping Efficiency-for-its-own-sake.  Sure, Americans possess a pioneering spirit—we’ll move to the oil fields in North Dakota if we have to do so—but we’re still motivated by the same things other humans are:  family, community, belonging.  Gutting our communities to save fifty bucks on a washing machine is a ludicrous trade-off.

As such, I thought it was a good time to bring back a long essay I wrote in 2018, based on an even longer (but excellent) Breitbart essay.  Globalization is probably inevitable to some degree, but a sane government—one that cares for the well-being of its people—will take prudent steps to stem some of fallout from globalism, rather than embracing globalization’s full-on, de-nationalizing, community-killing variety.

I don’t know where the proper balance is.  I’m still roughly 85% a free trader, but tariffs play an important role in national economic policy.  And, ultimately, unbridled capitalism can’t work without a social and moral framework to sustain high levels of social capital and social trust.  These arguments against globalist orthodoxy must be made and addressed, even as we flesh out the best way to mitigate some of the devastating consequences of globalization.

With that, here is 2018’s “The Human Toll of Globalization“:

Last week’s posts shared a similar theme:  the costs of unbridled free trade; the benefits of cutting corporate and income taxes to unleash economic growth; and the human side to economics that academics tend to miss.

The first and third topics referenced above came into sharp relief as I read an excellent piece by Chadwick Moore, “Left for Dead in Danville: How Globalism is Killing Working Class America.”  It’s a long-form piece of journalism for Breitbart, but it is well worth the read.  I encourage all of my readers to set aside twenty minutes to read it and its terrifying account of globalization gone wrong.

My post today simply seeks to offer up a summary of Moore’s findings, presenting them in an easily-digestible form for those who don’t have the time or inclination to read his full-length piece.

The conceit of the piece is simple:  Moore visited Danville, Virginia, a former textile mill town located on the Dan River, and very close to North Carolina.  The town was once—and “once” doesn’t mean “a hundred years ago,” but about twenty years ago—a thriving town that supported a solid middle-class through its robust textile industry.  Civic pride was abundant, and the Dan River Mill supported a number of youth and community activities and functions that are familiar to anyone who has grown up in a small town.

Then came NAFTA in 1994, followed by China’s entrance into the World Trade Organization in 2000.  After years of struggling to compete with foreign competition, Dan River Mills shut down in 2006 (it had been open since 1882).

As the town’s economy declined and unemployment skyrocketed, social problems grew.  Drug use increased dramatically, as did crime, and formerly-safe, middle-class neighborhoods devolved into dangerous slums.  More than a quarter of the town’s population is on food stamps.

Race relations also grew worse.  The town had enjoyed peaceful, working relationships between black and white citizens, who worked together happily in the mills and other businesses.  Now, the KKK plans rallies, preying off the desperation of the unemployed (the town is roughly half white, half black).

Moore gives a good bit of space to quoting Michael Stumo, the CEO of the Coalition for a Prosperous America.  Stumo elegantly explains the problem in Danville—as with many other small towns in Middle America—tracing it to China and the World Trade Organization.  Some choice bits to chew on:

“‘When China joined the WTO in 2000 with 1.3 billion people underemployed, it began pulling them out of the rice paddies, the farms, and rural areas, and putting them to work. The Chinese under-consume. They produce more than they consume, [in] a country that’s four and a half times as big as ours and relying on the American consumer to fund their path to wealth and doing so with a state-directed economy, which is different than communist, it’s a strategic mix of state capitalism with a little bit of private sector in it. We always thought communism would fail, but China found central planning 2.0 and is pretty good at it,’ he says….

‘We have free trade within the 50 states,’ Stumo says. ‘By impoverishing our middle class with this offshoring driven by free trade policy, you’re killing the U.S. consumer market, which drives growth, because they have no money. Five or ten percent cheaper prices is overwhelmed in this stage by lack of production and stagnant wages,’ he says. ‘The U.S. middle class cannot afford to fund the rise of other countries anymore.

‘Industry doesn’t stand still; industry is always incubating—you give up the jobs, the wealth creation, the supply chain clusters in communities, and that affects the service sector around them,’ Stumo says. ‘You pull those plants out, and a lot of people are out of work, and then the whole general wage level drops because burger-flipping isn’t an upward pressure on wages, but production is.’”

A degree of globalization, in an age of mass transit and mass communications, inevitable.  And open trade with lower tariffs generally is beneficial.  But naïvely-open trade with dishonest trading partners with slave-level wages primarily benefits the dishonest party.  Yes, there are some winners in the United States—I certainly enjoy a higher quality of life because of cheap electronics from abroad, for example—but as I wrote last week, isn’t it worth paying a little more for your television or washing machine, if it means an American keeps his job.

My thinking on this is simple:  the actual, physical and mental of work, in and of itself, important.  Yes, we could pay everyone a guaranteed basic income, or help people through more assistance programs (ignore the astronomical costs of those programs for the moment), but even if they worked beautifully in the material sense, they will, in the long-run, lead to a deterioration of real skills and, more important, a spiritual vitality.

I strongly believe that the three keys to happiness are faith, family, and work, in that order.  Work is ennobling, even if it is unpleasant at times.  As such, if the government is going to do something, would it not be wiser to offer assistance that requires work?

Tariffs accomplish this goal to some extent, and are entirely constitutional (indeed, one of the authors of the Federalist Papers, Alexander Hamilton, argued for them as Secretary of Treasury).  They also produce revenue for the federal government, and could be used to offset further reductions in corporate and income tax rates.

Ultimately, the social and civic costs of unbridled, unfocused free trade seem too steep.  Read Moore’s observations about the flood of drugs and despair into this once-civic-minded, prosperous town, and understand that the 10% discount you enjoy on your consumer goods is seldom worth the human toll.

To clarify once again, I’m not arguing we return to the massively high tariffs of the late-nineteenth and early twentieth centuries.  That would be economically disastrous in other ways, and would further enhance our federal government’s penchant for corporatist back-scratching and favoritism.  But some judicious, targeted tariffs, especially against nations like China, are wise.  Why should we be subsidizing China’s growth at the expense of our own?

One final thought:  as I wrote Friday, a married man used to be able to raise his kids on a gas station pump-boy’s salary.  Sure, life was lean, and there weren’t a ton of crazy gadgets to play with or luxuries to enjoy, but the kids grew up well enough and the wife could stay home to raise them.  Are we really that much better off now, when both husband and wife slave for 40+ hours a week (and usually longer), outsource their parenting responsibilities to daycare and public schools, and can’t get out from under student loan, home, car, and consumer debt?

There are a host of factors driving the modern scenario of today versus the “blue-collar father” of yesteryear, but surely one economic solution is to stop burrowing out our families and towns in favor of frosty, urban cosmopolitanism and aloof globalism.  I care about the people of China, and I’m glad to see they’re no longer trapped in rice paddies and collectivized farms, but—like our great President Trump—I care about my country and fellow countrymen first.  So should the United States government—it’s job is, literally, to put Americans first.

6 thoughts on “TBT: The Human Toll of Globalization

  1. There’s a lot of free trader in me, as well. But there is a salient fact, without reasonable tariffs we would still be buying all our manufactures from England. I don’t know where the balance is either, but it is better to be a bit too high than too low.

    A lot of this got out of hand after World War II when we had something like 75 percent of Gross World Product and much of the civilized world was starving. Our benevolence then was justified, but it should have been temporary, now it threatens to become a death wish.

    Liked by 1 person

    • Yes. The “infant industries” argument for tariffs seems increasingly compelling. The nations of East Asia did as much with their automobile industries after the Second World War, and only dropped those tariffs when they were competitive enough to avoid getting swamped by American imports—then we got swamped with their awesome cars! Of course, in the semi-autocratic nations of the Mystical East, it’s easier to drop tariffs at the opportune time, and you avoid the creation of industry lobbies leaning on elected officials to keep the tariffs up.

      I think you’re correct: we could afford free trade when in the late 1940s and early 1950s. It’s still largely a positive approach to trade between nations with similar attitudes about production and labor standards, but it’s foolish to pursue unbridled, one-way free trade with, say, China (as the current pandemic has demonstrated).

      Liked by 1 person

      • It’s about the only way one can develop their own industry. Scale effects are just too large. It was close to 1880 when the Pennsylvania Railroad started buying steel rail from Carnegie (a former employee right on their mainline) rather than importing them from England. But locomotive manufacturing, far less technical had moved here in the 1850s if not before.

        Cars are the classic modern example – I wonder how long the Germans would last without the EU. Not long is my bet. The UK might be the test case on that.

        And yes, I have no problem with free trade with Europe, the Anglophone countries and such (or at least close to it) But doing so with China is a category error, and a big one.

        From what I see on chinese shipping, might be a shortage of Christmas trinkets this year.

        Liked by 1 person

      • Well put, NEO. I’ve read some bloggers float the idea of an Anglosphere free trade zone of Britain, the USA, Canada, Australia, New Zealand, etc. That would be very sensible. I’d gladly extend that to Europe, too.

        Yes, I am stocking up on essentials in the event of disruptions to supply chains due to the coronavirus. Gotta be prepared to live off spaghetti, rice, and beans in the event this thing gets rough. But I’m thinking it will all blow over quickly.

        Liked by 1 person

      • As I put it someplace, most of the stuff we buy from China isn’t ‘just-in-time’ components. It’s easy enough to substitute for for most of it, although perhaps a somewhat higher price. I do think we should quit buying chemicals/whatever for medication there, though. Doesn’t really seem dependable enough.

        Like

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