Domestic supply chains, not global ones, will save us.
Break America’s “Free-Market” Chains
Americans need our own economic growth, on our shores and our terms.
“America is now so integrated into the global economy that jobs cannot be created or protected by protectionist policies.” Does that sound like good news to you? Does it sound pro-American?
Not really. Yet these words were written last week by two highly-respected GOP insiders, AEI’s Phil Gramm and Pennsylvania Senator Pat Toomey, in the Wall Street Journal, one of the last highly-respected national publications where right-of-center opinions are welcome.
Gramm was an influential senator from Texas and vice chairman of UBS; Toomey serves on a variety of finance-related committees and may make an anti-Trump White House bid in 2024. They’re now on a public relations campaign to defend corporatist globalism because, even with Trump out of the White House, Americans of all sorts have stopped believing the globalist maxim that “markets” always make us better off.
Gramm and Toomey want Americans to believe “protectionism” is bad because it doesn’t work and the people don’t want it. But their admission that we have lost any real control over our own jobs policies is the real takeaway. Sadly, this crushing failure reflects the central purpose of our current economic system. Despite typical online controversy around the term, the system’s name is neoliberalism. Neoliberalism, as defined by thinkers from Milton Friedman to Naomi Klein, constitutes a wide range of policies including the deregulation of markets, elimination of trade barriers, increases in immigration, and the globalization of capital flow.
“In a perfectly neoliberal state,” as I put it last month, “there is no private property left to own because the capitalist class ships the productive means elsewhere to a country more willing to maximally utilize their resources, and they rent to you through someone else who profits on all ends of the flow of capital.” Neoliberalism couldn’t be further from “free markets” as ordinary Americans think of them. But that’s how they’re sold and defended by the likes of Gramm and Toomey.
Neoliberalism’s social and political consequences for America are powerful—namely, the destruction of anything that would get in the way of globalized corporate markets, from national borders and sovereignty to the nuclear family. It is strange—especially for everyday conservatives—to think that Gramm and Toomey, both of whom served or are still serving in the United States Senate, would want this result. But this is the power of the conservative establishment’s use and abuse of “free market” dogma.
A real education in American political economy would start with Washington’s warning against foreign entanglements, one of which is the increasing interconnection and consolidation of international markets. Washington and other Founding Fathers were disgusted by London finance; their successors struggled tenaciously against the slave-labor lobby and against British overseas investment companies and banks. Fast forward a few hundred years, and even Joe Biden’s Secretary of Commerce, Gina Raimondo, admits that Trump’s 232 tariffs on steel and aluminum were “effective” in protecting steel and aluminum manufacturing in the United States.
Yet, at every turn during the last four years, America First conservatives faced opposition from absolutists and xenophiles like Toomey, who sought to increase so-called “market efficiency” and avoid “over-accumulation” of capital.
Efficiency for whom? Whose capital? Neoliberal economists prefer abstractions to proper nouns so they don’t have to assign actions or consequences to actual people. But the people involved in productive labor are not some “input” into the market, easily shuffled about like interchangeable pawns on a chess board. They are American citizens, whose competencies and concerns should matter intensely to their elected representatives.
Yet here we are, as the European Union looks into manufacturing semiconductors, having discussions about the theory of comparative advantage with people who imagine the post-war consensus is still meaningful. A nation gains comparative advantage through dedicated work and application of labor and state power. This advantage is not easily gained, but it is easily lost—as we are seeing in the United States, France, and the United Kingdom.
A people’s ability to manufacture material goods represents independence from undue foreign influences and the ability to perform more complex economic tasks down the road. When you keep production within your own country, capital does not as easily flow overseas, so inflationary costs stay low. When a nation can produce its own goods, its yeoman middle class grows and thrives.
During the Trump administration, there was no interest in Congress in subsidizing industry to reignite the United States economy, which is what you must do after levying tariffs, as became clear during the early coronavirus panic when some Chinese medical goods (which China subsidized) continued to be imported. The Treasury Department manages international development banks, but there’s no domestic finance development bank—no agency for investing in the economic health of the American people.
Gramm and Toomey mention that voters can have inconsistent views of trade policy. Thank you, gentlemen, for this revelation. The average voter doesn’t specialize in fiscal or trade policy. They expect you, the senators, to have a well-educated and patriotic opinion on both. Clearly their trust is misplaced. For all their strawman statistics about the value of college degrees and the inability to save plants, we see no discussion of the plummeting value of education, the fact that many degree-holders perform jobs for which a high school diploma would be adequate, or the overburdening of personal and national debt.
I will give credit to whichever senator made mention of the growth that deregulation created during the Trump era; the American Left uses regulation to continue the liquidation of the middle class. But at the end of the day, the American people will not ignore the bipartisan disaster which the last 40 years of fiscal, economic, and trade policies represent. Nor can the Republican Party deny that Donald Trump tapped into an enormous desire to get ineffectual figures like Gramm and Toomey out of the American people’s way.
Trump activated demographics across swing states that are typically resistant to voting Republican because of poohbahs like Gramm and Toomey. He expanded the electoral map by appealing to industrial issues and American employment. For the United States to continue its position as a superpower and to maintain a first-world infrastructure and economy, we need to build things for domestic use like a superpower should. But to do that, we must rid ourselves of elected officials who “serve” the United States by applauding when our industrial and economic inheritance is looted.
The American Mind presents a range of perspectives. Views are writers’ own and do not necessarily represent those of The Claremont Institute.
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