I wish I’d written that

by Dave Schuler on June 24, 2006

I sincerely wish I’d written Ed Leamer’s contribution to the discussion of the future of the American worker going on at Cato Unbound, “It’s Like Hurricanes” (hat tip: Mark Thoma). Here’s how he opens:

Rather than in the abstract, try tackling the following problem.

I grew up in the small town of Vestal near Binghamton, New York. The major industry of the area in 1900 was cigars, which left when tobacco fashion shifted to cigarettes and cigarette production was mechanized. No matter, by 1950 the Endicott Johnson shoe company had replaced cigars. But shoes, which had left artisan shops in Boston to come to upstate New York, continued their footloose behavior and left the US altogether in the 1960s. Not to worry. By 1980 IBM was the major employer of the area. THINK sat on every desk and every wall at IBM, and what IBM produced was “thoughts,” which were packaged in mainframe computers built by high school graduates at high wages.

Now IBM is gone and there is not much of anything in the way of jobs except hospitals and Wal-Mart. Young people are fleeing for better lives elsewhere. It isn’t just Binghamton.

I very much likes his approach—he’s reasoning from the specific to the general rather than the other way around.

He then goes on to address each of the prior contributors to the discussion in turn, demanding specifics from each. See also the responses from the other contributors. Here’s the conclusion of his comment (I presume he’s addressing Ed Crane):

Last, to Ed: For all the wisdom your words try to convey, you don’t have a clue, do you? It’s like hurricanes. You can study and understand, but there isn’t much you can do about it, except offer some disaster relief after the storm has hit.

The comparison with hurricanes is particularly apt. Hurricanes are enormous forces of nature. You can try to be prepared for them. Mostly you just stay out of the way and clean up afterwards.

The forces that are confronting the American economy are, in general, not forces of nature. They are the consequences of policies that have been adopted over many years by administrations of both political parties. We shouldn’t pretend that they’re forces of nature and they don’t have to be withstood like forces of nature. They can be confronted with other policies.

{ 2 comments… read them below or add one }

TM Lutas June 27, 2006 at 6:03 am

The forces in play here are quite international and largely consist of decisions outside our borders. We cannot really control that the CCP has decided to stop beating its workers down so much and now they are regaining their rightful place in the world economy, nor is it our decision that India’s politicians have gained a measure of economic sanity compared to their first post-colonial generation of pols. That’s well over 2 billion people set on the loose in the global economy and growing as the demonstration effect makes other countries want to emulate these giants.

I think that all we can do is ride it out and work as hard as we can so that we gain resiliency in our own workforce and systems.

Dave Schuler June 27, 2006 at 6:31 am

I don’t see it that way, TM Lutas. Our trade policies are just that: policies. Not laws of nature. It’s not a law of nature that we turn a blind eye to the trade barriers that China and India have erected with respect to our goods (particularly agricultural goods) or China in particular’s institutional inability to honor intellectual property law.

Tolerating illegal immigration subsidizes it—the companies that utilize undocumented workers have a competitive advantage over those that don’t. That’s a policy not a law of nature.

Environmental control laws that subsidize the moving of manufacturing overseas are policies not laws of nature.

Laws that subsidize some jobs but not all jobs are policies not laws of nature.

There are thousands or hundreds of thousands of laws, regulations, taxes, and so on. They’re all manmade.

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