To begin: I really like Pat Buchanan. I think he’s a fine writer and a sometimes brilliant polemicist.

Also: I really hate Pat Buchanan. He sometimes writes things that make me clutch my head in dismay and disbelief.

Buchanan’s on again about industrial protectionism, one of his oddball hobby horses. Buchanan’s been delightfully indignant about the Wall Street bailouts, but he fails to appreciate that what he proposes for American heavy industry is precisely the same thing he opposes for the American financial industry, economically and morally: a giant wealth transfer from taxpayers and consumers to politically favored owners and producers. Over time, Buchanan-style protectionism is much more expensive than bank bailouts, and it’s premised on even worse thinking.

A few things that always get left out of the “Loss of American Manufacturing” sermon:

1. True, the United States did enjoy an enormous edge over such industrial powerhouses as Japan and Germany in the 1950s. Maybe that was due to the efforts of ingenious economic central-planners in Washington under the administration of such industrial super-geniuses as Truman and Ike. More likely it was due to the fact that there was basically not a single non-military industrial facility more significant than a pickle-canning plant left standing in Japan or Germany after World War II, that their work forces had been decimated, and that they had been occupied, flattened, partitioned, and, in Japan’s case, nuked twice. These things are hard on the manufacturing base. The United States exited World War II having largely escaped the domestic horrors visited on Europe and Asia, its manufacturing infrastructure amped up for wartime production but unscathed by the fighting, and we basically had the field to ourselves for a few years while everybody else recovered. Which is to say, the American manufacturing edge in the 1950s was not the work of the Commerce Department, but the unintended work of Hitler and Tojo. But the rest of the world’s recovery was inevitable — and that was a good thing! Just as China’s getting richer today is a good thing for China, for the United States, and for the world. It’s one of the reasons that China is now the fourth-largest market in the world of U.S. exports. We do high-end goods, and it’s hard to sell them to Third World dirt farmers.
2. But even as the rest of the world catches up, the United States remains a manufacturing powerhouse. As Bruce Bartlett helpfully points out, production of “real goods,” i.e., manufacturing, accounts for a slightly larger share of GDP today than it did in the allegedly golden days of the 1940s or 1950s. And that’s a larger share of a substantially bigger economy.
3. What was really lost in the postwar era was not a wealth of manufacturing jobs, but a surfeit of farm jobs. Before World War II, one in four Americans lived on a farm, and one in five Americans worked on a farm. (And those numbers already were in steep decline; after the Civil War, about 80 percent of the population had been employed in agriculture, about 40 percent in 1900.) A great number of the people working in low-end service-sector jobs today would not have been earning a comfortable living in a factory in the 1950s — they’d have been working on farms. You know what farm laborers the world over have in common? They’d really rather do something else, because being a farmhand is hard and insecure, and the pay is terrible. The general crappiness of farmhand life is the force that built Chicago in the 1920s just like it’s building Bombay today. Romantics lament the loss of farming jobs; people who work on farms don’t, and they’ll travel hundreds of miles on foot to get away from them.
4. True, the United States imports a lot of stuff, particularly stuff made by low-wage, low-skilled workers. Everybody’s got a comparative advantage, and sweatshops aren’t ours. I can live with that. But here’s a shocker: The majority of the stuff we import is not consumer goods. The majority of what we import is stuff we use for manufacturing. As Daniel Ikenson reports, as recently as 2006, 55 percent of our imports were industrial components, i.e. stuff that goes into our factories as inputs and comes out as products. Ikenson: “Meanwhile, U.S. factories remain the world’s most prolific, accounting for more than 20 percent of the world’s added manufacturing value. By comparison, Chinese plants account for about 8 percent. And manufacturing is thriving in large measure because of international trade. Manufacturing exports and imports hit records in 2006.”
5. Finally, I scratch my head in wonder when Buchanan writes: “How many know that every modern nation that rose to world power did so by sheltering and nurturing its manufacturing and industrial base — from Britain under the Acts of Navigation to 1850, to protectionist America from the Civil War to the Roaring Twenties, to Bismarck’s Germany before World War I, to Stalin’s Russia, to postwar Japan, to China today?” I’m going to go ahead and take the bold position that Bismarck and Stalin are not my top picks for economic-policy insight. How did that central planning work out for postwar Britain or Depression-era America? Anybody want Japan’s sclerotic economy? The jury’s still out on China, but I suspect that in ten years the world’s awe of Beijing is going to sound silly.
6. American workers have some legitimate beefs, to be sure. But we’re mostly unhappy because we have radically higher expectations than our parents and grandparents did. Higher expectations are a good thing, too — a very American thing — but they have to be taken in a realistic context.