Why “America First” Is Really “Americans Last”
NOTE: This article does not reflect the opinions of Generation Screwed, but only those of its author, Renaud Brossard.
Imagine this scene: you’re in rustbelt America. Manufacturing jobs around you keep disappearing. You shop at the local Wal-Mart because, let’s be honest, that’s pretty much the only thing you’ve been able to afford since the local plant shut down. In the aisle, you see a vacuum cleaner just like the one that used to be made in the neighbouring town. You lift the price tag and, where once proudly stood the words “Made in America,” you see “Made in Mexico.” You can’t help but let out a sigh as you think back to only a few years ago, when your life plan seemed so simple—so perfect. After you graduated high school, all you had to do to ensure a secure financial future was apply to your local factory, which was expanding massively at the time. The application was nothing more than a formality, and you would get a good, middle-class job that was guaranteed for pretty much the rest of your life. You wouldn’t be rich, but you would have a good life. As you put the vacuum cleaner back in its place, you can’t help but miss those simpler times.
When you put yourself in those shoes, it’s easy to understand the appeal of protectionism. What could be described as “America First” policies, or their local equivalents across the world, start making sense to you. Populist movements, both from the left and right, have been spouting the same rhetoric for years, although the terms they use vary. It culminated in the United States with Bernie Sanders and Donald Trump both promising to bring back manufacturing jobs to the U.S. and to drastically cut down on trade ties around the world, should they get elected. The logic behind it is simple: we need consumer goods; they used to be produced here, now they’re being produced over there, so if we close the border, we’ll get those jobs back. Seems logical no? Truth be told, the reality is far more complex.
Even before NAFTA was enacted, trade detractors started spouting fears of large-scale job losses and job displacements. Who can forget Ross Perot’s “[…] there will be a giant sucking sound of [jobs] going south.” It made for great soundbites and has been repeated left, right and centre by free-trade opponents ever since. You still see the occasional union or left-leaning think tank put out reports practically saying “free trade has been bad for this specific sector, therefore it’s bad for all sectors.”
The truth is, most of these manufacturing jobs were destined to be lost anyway, with or without trade. According to a 2015 report from Ball State University, in Indiana, an overwhelming majority of those job losses can be explained by increases in productivity. As technology has evolved, the cost of automation has steadily decreased, making it more and more attractive for companies to use robots, rather than workers, for physical tasks. This partly explains why, despite the reshoring movement we have seen in recent years and the large increase in manufacturing output that has happened over the last decade in the U.S., manufacturing job numbers are still at an all-time low. This phenomenon is in no way limited to the U.S., as similar things are happening throughout industrialized economies.
Trying to blame automation and reverse the process is not the key to economic prosperity for all. While we talk a lot about job losses and the touching human stories behind them, we often forget to look at job creation. We seem to be focussing exclusively on the lost manufacturing jobs associated with the purchase of production automatons, but we also should think of how we free up human capital for more productive tasks instead.
Before you get outraged, and before I even start making my case, I will concede that not everybody can reinvent themselves suddenly, and that there are clear geographical disparities in job creation. Some areas still haven’t recovered from the 2008 crisis, while others have prospered enormously since. But good policy is not about tearing down something that works well to prop-up a small minority. Overall, the U.S., Mexico and Canada have all seen good job growth since the signing of NAFTA. While some comparatively less-productive sectors saw drops in employment, sectors where each country is more productive picked up the slack and employed more and more people. Overall, NAFTA has boosted employment everywhere—just like pretty much every smaller trade deal before it, and every trade deal that followed it.
The one part of this debate we always forget, though, is how it has helped consumers. Free-trade detractors like to concentrate on sectors where jobs were lost, because it is a good narrative. They can interview people, ask them how their life was before the plant shut down and how now they’re forced to go to the local food bank or rely on food stamps. It is a compelling story—a heart-breaking story—but what they are presenting, as has been shown before, is only a small, carefully selected fraction of what really happened after free-trade deals are signed.
The other part they don’t show you is how you are now able to get affordable fruits and vegetables in the middle of winter, how you are able to consume much more of what you need than before and how you now have access to products you did not even know existed only a decade prior. The very Wal-Mart we referred to earlier, with its cheap prices, depends on these deals to bring you low-cost products. The ability to have companies from around the world compete to try and sell you their products has brought prices down everywhere—just as competition has always done.
As a consumer, you are much richer today than ever before. And the good thing about this is: so are the people you are trading with around the world. Instead of trying to cut the same economic pie into pieces, what we’ve effectively done with free trade is that we got an incredibly larger pie, and cut it into pieces. Whether your share of the pie is relatively smaller as a percentage than what it was before, at the end of the day, you still get more pie than before, and that is exactly what putting Americans first truly looks like.
When it comes to “America First,” though, the policies do just the opposite. By trying to protect domestic markets, all we are doing is protecting companies and unions, at the expense of the majority: consumers. We are making sure they do not have to adapt to a changing market. We reduce their incentive to become more efficient. We reduce their competition, leaving consumers to foot a much larger bill for the same products or barring them from technological innovations from abroad. We protect existing jobs, rather than dreaming of better. Ultimately, it is the consumer—it is every American—that is stuck paying for “America First.” In “America First,” Americans truly come last.