This letter of mine appeared in the September 24th, 2023, edition of the Financial Times (links added):
In “The real reasons for the west’s protectionism” (Opinion, September 19), Gideon Rachman writes that “some US policymakers now look back to the decision to admit China to the World Trade Organization as a mistake. They believe that the huge boost this gave to Chinese exports also contributed significantly to the deindustrialisation of America.”
US policymakers might well believe such a thing, but they’re mistaken, as is Rachman, who wrongly treats assertions of America’s deindustrialisation as an established fact.
Tellingly, the link that Rachman supplies to support the claim of deindustrialisation does no such thing. It takes readers to a Politico report that mentions a 2020 Economic Policy Institute study. This (deeply flawed) study is about jobs, not industrial output or capacity — although the authors undoubtedly want readers to leap from the alleged loss of jobs to the conclusion that America is deindustrialising. But such a leap, although taken by Rachman, fails.
The fact is that industrial output in the US is today (August 2023) close to an all-time high, and is 18 per cent higher than when China joined the WTO in December 2001. Likewise, America’s industrial capacity is now merely 1 per cent smaller than its record-high size in December 2016 and 9 per cent larger than when China joined the WTO.
While Americans’ distressing appetite for protectionism cannot possibly be caused by a fictional occurrence, it surely is fed by careless repetition of this myth.
Professor Donald J Boudreaux
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center, George Mason University, Fairfax, VA, US
