The Dangerous ‘Buy American’ Canard

Former Vice President Joe Biden departs after speaking about the U.S. economy during a campaign event in Dunmore, Pa., July 9, 2020. (Tom Brenner/Reuters)
Populists argue that Americans can do anything, build anything, and achieve anything. But the happy reality is that we’re lucky enough not to need to.

For decades, politicians have been promising Americans that they’ll “bring back” tedious, low-paying, antiquated manufacturing jobs, and Americans have been applauding them for the promise.

Democratic Party presidential hopeful Joe Biden is the latest to sell a “Buy America” plan, which has uncanny echoes of President Trump’s own protectionist rhetoric. Biden’s proposal would mandate that $400 billion worth of new federal energy and infrastructure projects must use “American products, materials, and services,” which will doubtlessly engender more rent-seeking, cronyism, and corruption. It also offers the familiar feel-good populism of promises to crack down on outsourcing and “bring back” millions of American manufacturing jobs.

Like many of the ideas that dominate contemporary American political debates, protectionism has far more to do with sentiment than reality.

A politician can understandably generate a lot of sympathy for the unemployed American living in a dying Rust Belt town. And policymakers should of course be paying far more attention to the “destruction” side of creative destruction, helping such communities modernize. But as sure as the Luddite’s swinging of the ax was futile, so are efforts to save dying industries by limiting economic activity.

A corporation isn’t going to sustain wasteful work merely to placate voters. The carmakers, electronics producers, and box stores that offer affordable products due to lower labor costs and technological advances help millions of working- and middle-class Americans stretch their dollars in ways that would have been unimaginable 50 years ago. That’s how you create jobs.

In the political world, free-traders are often treated as globalist traitors, but in the real world, 15 of the 25 best-selling vehicles in America last year were made by foreign car companies. The five top-selling televisions in the country are made by foreign companies. The best-selling phones in the United States are assembled in China, and the second-best-selling phones are made in South Korea. Some products assembled in America have parts from all over the world. “Buying American,” regardless of how one defines it, is not as simple as it sounds.

The protectionist will tell you that he’s willing to pay a few extra bucks to save an American job. Diverting your money from industries that create self-sustaining jobs to ones that do not is a personal choice. Having government force others to do it is an act of economic self-sabotage.

A century ago, nearly 50 percent of Americans made a living in agriculture. Today only 2 percent of the workforce is farming, yet agricultural productivity is up over thirtyfold and prices have fallen. The only reason the percentage of agricultural workers isn’t even lower is that the U.S. government continues to subsidize small farmers. Few people argue that we need to “bring back” farming jobs, or accuse Ukraine or Mali of stealing American jobs merely because those countries have more farmers per capita.

The same is true of manufacturing. At its peak in 1953, the American manufacturing sector accounted for around 30 percent of American jobs. It accounts for about 8 percent of American jobs now. In the interim, our GDP has tripled, productivity has soared, poverty has dropped, and the average American’s wealth, comfort, and health have improved by nearly every quantifiable measure.

What’s more, even if we wanted to, we probably couldn’t reverse the decline of our manufacturers. Barring a major unforeseen technological shift, old-school manufacturing jobs are going away for good. The long-term trend is undeniable.

Because of these job losses most voters seem to be under the impression that our manufacturing output has greatly diminished, when in fact we’re still the second-largest manufacturing power in the world behind China, which has a population more than four times the size of ours. We still very much do “make things” in America.

On an individual level, the technological boom has allowed more Americans to work in an array of less repetitive and more judgment-intensive jobs. Though most manufacturing jobs these days require high-tech skills, there is nothing demeaning about menial labor. But our economy has largely evolved past assembly lines.

As to populists’ crowd-pleasing promises to level the trade playing field and make things “fair,” we should be careful what we wish for. If things are made truly fair, the average American worker will find himself laboring in a hazardous factory for a pittance, subsisting on a subpar diet, receiving third-world-quality medical care, and living in a tiny, decrepit house or apartment. The billions of people in developing nations who work dreary menial labor jobs probably don’t find it “fair” that we Americans, with our great wealth, can afford to make them do grunt work, even if the arrangement benefits both parties in the long run.

Though there may be strong arguments for why we shouldn’t rely on tyrannies such as China for certain types of goods — pharmaceuticals, say, or technological hardware — that’s a national-security issue, not an economic one. Populists argue that Americans can do anything, build anything, and achieve anything. But the wonderful reality is that we’re lucky enough not to need to.


The Latest