Protectionist economic policies might possibly lead to “more, better-paying jobs”, but it will certainly lead to much more expensive consumer goods. I am not sure Americans quite grasp this, or are ready to give up their cheap stuff to stick it to the Chinese.
“Protectionist Economics” Defined: Policies that lead to limited international trade, focusing on economic isolation and independence. (If you have a better definition, please share it in the Comments.) Even as a kid in the 70’s, when Nixon was first making overtures to China, we were talking about protectionism versus globalism, and protectionism sounded good to me: Protect the domestic job market; keep our currency to ourselves; and maintain domestic ownership of our own assets, such as real estate and corporations.
But globalization has its perks too: cheap stuff. My coffee grinder is a good example.
I have owned four coffee grinders since 1986. The first was a Kenmore, made in the USA. It was simple, cost $10 and lasted 15 years. The subsequent grinders got progressively fancier. They all cost $10, and they were all made in China. But their life-spans dropped steadily: grinder #3 lasted 5 years. The current one is a Hamilton-Beach, a US brand made in China. It’s only a year old but is doing fine.
Access to cheap labor and ever-improving manufacturing, transportation and distribution systems have increased the utility and sophistication of this small appliance, even while its price has fallen dramatically (by staying the same). Clearly Globalization has significantly improved my standard of living, yes?
It turns out that in 1986 dollars, I still spend about the same for a year’s worth of grinder as I did 30 years ago, but I am consuming grinders three times faster! I have created loads of jobs for the Chinese, and tripled the amount of trash I send to the landfill. I have the privilege of going to Target more often to pick up another, fancier $10 grinder which will likely last even shorter than the one before. I would posit that this apparent increase in standard of living is illusory, and comes at the expense of the domestic job market and the global environment.
The Consumer Price Index rose 220% 1986-2015. But for Globalization and Free Trade, I could have expected my latest coffee grinder to cost $22. I have every expectation that if the United States returns to a 1970’s model of domestic production, we should expect our consumer goods to roughly double in price; and me personally, I will not hold my breath until my wages double.
In the peculiar movie “What Would Jesus Buy?”, the Reverend Billy of the Church of Stop Shopping meets the owner of an independent clothing store in, I think, Lawrence, Kansas. The owner acknowledges that the two Walmarts in town have crushed his business and he will probably close soon. He sums it up this way: “As long as people prefer to pay fifty cents for a pair of [import] socks rather than two dollars [for domestic], stores like mine are lost.”
Are we ready to pay four times more for a pair of domestic socks made from US cotton? It helps if the domestic socks last four times longer than the import, but in the short to mid term, protectionism will vastly limit our buying power.
I am not an economist and I cannot quite wrap my head around what happens when we are all gainfully employed at domestic manufacturing concerns, while we can’t afford the products we make.