Here’s a letter to a new reader of Café Hayek:
Mr. Singletary:
You think me “simplistic” for calling on proponents of industrial policy to put their money where their mouths are by launching their own businesses instead of demanding that government obstruct the commerce of others. Specifically, you argue that “high tariffs are needed” because “reshoring valuable but lost manufacturing jobs can’t happen if we continue to get undersold by low wage workers.”
If workers really do value what you call “valuable but lost manufacturing jobs” as much as you and other industrial-policy proponents believe, then those workers would be willing to ‘pay’ to be employed in such jobs by taking pay cuts. An entrepreneurial Oren Cass or Daniel McCarthy could put their money where their mouths are by launching manufacturing firms in the U.S. and offering to employ workers at wages sufficiently low to enable these firms to survive. If enough Americans really do value working in these “lost manufacturing jobs” as much as Cass and many other advocates of industrial policy insist, these Americans will be happy to have the opportunity to work at such jobs. And by filling this market niche, entrepreneurial industrial-policy proponents would profit handsomely.
Of course, if too few Americans are willing to take such jobs at the low wages that are necessary to make such U.S.-based manufacturing firms profitable, then we have proof that Americans do not really value these “lost” jobs as much as many industrial-policy supporters allege.
Either way, there’s absolutely no justification for government to “protect” such jobs.
Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030
