Here’s yet another letter to AmericanCompass.org.
Editor:
Attempting to justify industrial policy, Skyler Adleta slays a straw man and then gets key facts wrong (“Is The U.S. Workforce Prepared to Reindustrialize?” Sept. 11).
An example of the former is this:
Pragmatism and dynamism expressed through industrial policy is—in the eyes of the scoffers—uncool, frivolous, and economically sacrilegious. The scoffers might have a point if the only measure of an economy’s orthodoxy is devotion to free-market fundamentalism. But a nation’s economy is also measured by its ability to bolster national security, ensure global competitiveness, and secure general prosperity for its people. For this reason, industrial policy must exist within a nation aiming to be secure, competitive, and civic-minded.
Even ignoring the question-begging nature of the last quoted sentence, this is verbal chicanery. Those of us who oppose industrial policy do so not because we’re mindlessly devoted to some creed but, rather, because we have reason to believe that the free market is the best means “to bolster national security, ensure global competitiveness, and secure general prosperity for its people.” Perhaps we’re mistaken, but at least we offer what Adleta and other proponents of industrial policy never do, namely, an actual, credible account of how economic decision-makers in free markets are both informed and incited to act in ways that promote these goals.
An example of Adleta’s factual inaccuracy is his assertion that “workers aren’t being paid commensurate with what they produce.” To justify this claim he links to a piece that Oren Cass wrote in response to Scott Winship’s finding (and also that of Michael Strain) that worker pay has in fact kept pace with worker productivity.
But Cass’s piece, despite the impression he wants to convey, does not contradict Winship’s and Strain’s finding. Using verbal legerdemain, Cass focuses on another of Winship’s findings – specifically, that not all workers have experienced equal increases in productivity – to imply that Winship is on board with American Compass’s false tale of underpaid American workers.
One can argue about why some workers have experienced smaller increases in productivity than have other workers. But a finding that different workers experienced different increases in productivity is emphatically not a finding that worker pay has failed to keep pace with worker productivity. Adleta is simply wrong to assert that worker pay has become decoupled from worker productivity.
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
