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Work is a Means, Not an End

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Here’s a letter to the Wall Street Journal:

Editor:

H.R. McMaster and Pablo Tortolero applaud the U.S. Mexico Canada trade agreement (USMCA) for, among other predicted consequences, its prospect of “returning manufacturing jobs to North America from China” (“The North American Trade Dividend [2],” July 7). This applause is unwarranted, for two reasons.

First, the decline in American manufacturing employment is due to rising worker productivity caused by improved techniques of production [3]. Were this decline caused chiefly by Americans’ importation of goods from China, America would have experienced a corresponding decrease in U.S. manufacturing output. But no such decrease occurred [4]. The real value of U.S. manufacturing output rose steadily after China joined the WTO in 2001 before falling as a result of the Great Recession. Since then (until Trump’s trade war and covid) it has increased (if more slowly than earlier).

Second and more fundamentally, trade should not be judged by its prospects of “returning jobs” to the home country. Indeed, a central point of trade is to destroy particular jobs (as it creates others). With trade, we acquire from abroad goods and services by using less labor and other resources than we would use to produce those same goods and services for ourselves. And so if the USMCA really will return certain jobs to the U.S., that outcome is cause for lamentation rather than celebration.

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

…..

To everyone who applauds trade policies that “return” jobs, I propose that you rid your homes of modern plumbing. You’ll thereby, on your own theory, enrich yourselves by once again having to empty chamber pots.

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