The US Can’t Manufacture Its Way to a Thriving Middle Class
Government should help stranded workers and communities, but tariffs and subsidies will neither spur a factory renaissance nor create the jobs of the future.
The middle class before robots: workers at a Ford motor plant assembly line, Detroit, Michigan, 1961.
Photographer: PhotoQuest/Archive PhotosThe economic-policy consensus that prevails in the US is right about one thing. Over the course of recent decades, industrial dislocation, sluggish incomes and diminished opportunities have left many Americans stranded. More surprising is that Republicans and Democrats, despite their mutual loathing, mostly agree about how to put this right. That’s too bad, because the consensus they’ve reached is wrong.
The crux of the problem, according to both sides, was reckless trade liberalization that led to the collapse of US manufacturing. Thanks to surging imports, many good, high-wage factory jobs disappeared, and nothing came along to take their place. The worst-affected regions of the economy fell into steep decline. What’s the remedy for a sickness caused by too much trade? Use tariffs and subsidies to protect the factory jobs that remain and, better still, to create new ones. If market forces and foreign competition were the problem, trade and industrial policies are the solution.