By Ben Shapiro
Thursday, April 20, 2017
This week, President Trump reiterated his commitment to
his “hire American, buy American” program — a supposedly crucial element in his
“economic nationalist” program. The notion here is threefold: American
companies should be forced to hire American labor; government contracts should
go to American companies; American producers should be protected from domestic
competition by revoking or altering international trade agreements.
All three of these policies have a long, ingloriously
stupid history.
First, the notion that American companies should be
forced to hire American labor is a conceit of the Left. It is based on the same
failures of economic understanding that lead to advocating higher minimum
wages: the notion that cramming through an increase in labor cost does not cost
jobs to a company, does not raise costs to the consumer, and does not degrade the
quality of future products.
Yet Trump and other protectionists such as Attorney
General Jeff Sessions and Ann Coulter have long seen H-1B visas — supposedly
high-tech visas allowing workers to enter the United States to fill jobs for
domestically based companies — as a great bugaboo. There are certainly
significant problems with the current administration of H-1B visas: Michelle
Malkin has rightly pointed out that there are those who falsely sponsor
immigrants to the United States without any intention of employing them. And
she is also right to criticize the H-1B lie that workers from abroad never
replace American workers, and the inflated claim that there is a serious
shortage of Americans qualified to fill jobs in science, technology,
engineering, and math (STEM jobs). Other valid critiques of H-1B visas are that
they tie visa-holders to jobs and give employers total leverage over them.
But there is a broader ideological critique that is
simply false: the notion that America benefits as a country by heavily
restricting its labor base rather than by expanding the pool of qualified
applicants.
There is a strong case to be made that in a welfare
state, we should curb any program that increases the domestic unemployment
rate, because the taxpayers absorb the burden of the increased number of the
unemployed. But there is no evidence that high-tech visas increase the
unemployment rate, since high-tech companies will simply shift production
overseas to take advantage of lower wages there and similar job qualifications;
this deprives American companies of jobs.
The goal of an economy is to create better products and
services at a lower price, thereby creating new cycles of supply and demand.
The goal of an economy is not to freeze the available pool of labor, thereby
confiscating wealth from employers on behalf of employees lucky enough to be
born inside the United States. It’s difficult to understand why people who
think that we should have a closed immigration system in order to preserve jobs
don’t also think that we should have dramatically higher minimum wages or
forced price controls.
Second, Trump’s program of ensuring that government
contracts go to American companies makes little sense, given that this is
merely a government subsidy of popular political interests. Why should
taxpayers foot the bill for cement made in Pennsylvania rather than China,
absent some political payoff from politicians? And in fact, Trump’s new program
allows widespread waivers for government contracts if the government decides that
product or pricing is insufficient from American suppliers. As Kevin Williamson
wrote earlier this week: “In practice, that means if you have the right friends
and make the right donations, the Buy American rules may be used to steer
contracts your way. If you don’t, they won’t.”
Finally, Trump’s program of producing everything in
America is economically illiterate. Earlier this year, (alleged) White House
chief of staff Reince Priebus stated, “We can make everything here, or our goal
should be to try to make everything we can in the United States so that the
money gets put in the pockets of Americans.” That’s not only untrue, it’s
simply nutty. Subsidizing domestic industry and cutting off imports in order to
“help” the economy is a fool’s errand. Back in the 1930s, Nazi Germany embarked
on a course of “autarky,” assuming that they could strengthen the domestic
economy through a combination of subsidies and tariffs. The result, which
Hitler actually wanted: a requirement for territorial expansion, since trade
enriches countries with resources beyond their own borders. North Korea is
autarkic today. So is Venezuela. Both are impoverished. Trade enriches both
sides; banning trade indirectly taxes certain domestic parties in behalf of
others.
But this is the truly tyrannical side of “economic
nationalism”: the idea that your freedom as an individual to engage in commerce
must be made subservient to a sort of collectivist loyalty test. In its own
way, it is no different than Joe Biden’s statements some years ago that paying
higher taxes made you more patriotic. But patriotism isn’t about restricting
your freedom and prosperity to help someone in a dying industry. It’s about
upholding a system of freedom for everyone, even those who benefit more from
those freedoms.
“Economic nationalism” is FDR’s economic interventionism
and Herbert Hoover’s anti-trade policy repackaged. Donald Richberg, the second
head of FDR’s National Recovery Administration, stated that America had to
reject “gold-plated anarchy that masqueraded as ‘rugged individualism.’”
Instead, America should embrace “the great essential industries . . . operated
under public obligation appropriate to the public interest in them.” In this
logic, economic freedom should be made subservient to the supposed national
interest. The result: the greatest depression in American history, relieved
only by the full-scale militarization of American society in World War II.
It is not “America First” policy to put American
individualism last and government redistributionism first; that policy kills
jobs and destroys liberty. Trump should know that as a businessman. He must
learn it as president.
No comments:
Post a Comment