Here’s a letter to a commenter at EconLog:
There’s an important point you miss. Free markets could be the greatest for meeting consumer needs but [Oren] Cass understands, which you and deRugy don’t, that free markets these days and unchecked globalization fail at meeting workers needs. The industrial policy which Cass wants is one which would reverse the erosion of meaningful manufacturing jobs.
Even if industrial policy à la Oren Cass were to “reverse the erosion” of manufacturing jobs, the ‘meaningfulness’ of the jobs that would thus be artificially created would be swamped by these jobs being also parasitic. Workers in those jobs would find “meaning” in them only insofar as these workers remain blind to the reality that their “meaningful” jobs exist only as a result of resources being forcibly extracted from American consumers (through protective tariffs) and from American taxpayers (tapped for the funds paid out as subsidies).
Because decent people want to be net contributors to – rather than parasites on – their fellow citizens, no decent person who is economically knowledgeable would find great ‘meaning’ holding the kind of job that would be created by Oren Cass’s industrial policy.
More generally, you and Oren would do well to take a longer historical perspective. In 1917 the great British economist Edwin Cannan wrote this:
Throughout history increasing knowledge and civilization have enabled mankind to get the raw materials supplied by the surface of the earth for human food and clothing with greater and greater ease, so that a larger proportion of human labour time has been gradually made available for working up that raw material into more refined forms. Labour being divided, the diminution in the proportion of the labour time required for providing the coarsest necessaries of life has naturally meant a diminution in the proportion of the whole population which has to be employed in agriculture, and a setting free of a larger proportion for the supplying of other and more refined wants. Yet when has mankind been without weeping and wailing over “the decay of agriculture”? The greatest sign of human progress has been constantly treated as something to be deplored and, if possible, prevented.*
A century ago people gnashed their teeth over the demise of employment in agriculture – a demise caused largely by improved technology. Those gnashing their teeth back then were blind to the reality that the resulting release of labor allowed the growth of new, more-productive industries and, thus, the creation of new, more-productive, better-paying, and (I dare say) more meaningful employment.
Today, people gnash their teeth over the demise of employment in manufacturing – a demise caused largely by improved technology. Those gnashing their teeth today are blind to the reality that the resulting release of labor allows the growth of new, more-productive industries and, thus, the creation of new, even more-productive, even better-paying, and (I again dare say) more truly meaningful employment.
Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030
* Edwin Cannan, “The Influence of the War On Commercial Policy,” which is a speech delivered by Cannan on September 22, 1917; the text of this speech appears in Cannan, An Economist’s Protest (London: P.S. King & Son, 1927). The quotation here is on page 123.