Half a century ago, as World War 2 was beginning to recede and Americans were plunging confidently into the heart of “our” great century, a remarkable bipartisan consensus was reached about the future of the economy.
That consensus went something like this:
America would, going forward, be a nation of ideas and “smart” work, where prosperity would increasingly flow not from muscle power and the things we build, but from brainpower and the concepts we develop.
Democrats and Republicans together developed a concept of free trade that would mean more and more blue collar and low-skill clerical jobs shifting off-shore, while emphasizing our role as the world’s financial and intellectual hub.
There were huge societal advantages to this approach. Products produced by workers earning pennies rather than dollars are cheaper, a fact that benefited American consumers.
And we were able to clean up our environment at home without applying those considerable costs to the things we want to buy. Instead, we exported the massive ecological impacts of our industries to countries like China, India and Mexico.
Meanwhile, we reveled in the rise of shiny new “dotcom” businesses. We told each other that soon we would be a nation of college graduates, not grease monkeys.
And for a time, millions of workers displaced by the great American economic consensus were able to find new employment in the booming home construction industry.
But in 2011, as the Great Recession stutters on and threatens to deepen, it’s fair to ask whether the conventional wisdom actually worked as promised.
In the decades since we collectively agreed that “dirty hands” industries were beneath us — and would be better handled by workers overseas — improvements in the American standard of living have stalled.
The latest Census figures show that one in six Americans now live in poverty. Economists are talking about a “lost decade,” but there is growing concern that the roots of our dilemma run much deeper.
-What if it is simply impossible — or even simply wrong — to expect American workers to compete with counterparts overseas earning a dollar or two a day?
-What if the nation simply can’t sustain a consumer driven economy when tens of millions of workers can’t find jobs to earn the money that would allow them to keep spending?
-What if laissez-faire environmental rules in Third World countries give their factories and plants an advantage that simply can’t be overcome by hard work or efficiency here at home?
So far, our two political parties are quibbling around the edges of these questions.
President Barack Obama suggests that another stimulus-style jobs package would jump start our economic engine.
But what if the problems are more systemic, more fundamental, than a cyclical slowdown?
What if we keep priming the pump through government spending, but multinational corporations keep deciding that it’s simply cheaper and more efficient to do business somewhere else?
If there’s a hole in the bottom of the bucket, it doesn’t matter how much you pour in — right?
Meanwhile, Republicans suggest that deregulation and tax cuts are the answer.
But do we really want a society that looks like China or India, where the social safety net is all but nonexistent and the environment is wracked by levels of pollution that are literally breathtaking?
Ron Paul, who is once again a high-profile Republican presidential candidate, has suggested that one way to boost employment in the US is to get rid of the minimum wage.
But what if the current rules of international trade mean that there is always someone somewhere in the world willing and able to do all our jobs — and for less money? Where does that “race to the bottom” end?
And is this really the vision of America that we expected when we embraced the current brand of global free trade?
This is frightening stuff.
It’s hard to accept the notion that an entire generation of American trade policy — a philosophy about economics and open trade that has enjoyed bipartisan support for fifty years — needs to be re-examined.
But we owe it to the 46,200,000 Americans now living in poverty to begin asking ourselves tough, troubling questions.