Three Ways to Help All Americans Succeed in the Global Economy

Free trade serves the nation’s economic interests. It’s a lesson that bears repeating. Yet listening to the news, you’d be forgiven for buying into the idea that free trade is inherently immoral. From the Left, U.S. Sens. Bernie Sanders (I-Vt.) and Elizabeth Warren (D-Mass.) and now Democratic presidential frontrunner Hillary Clinton are casting doubt on free trade’s benefits for American families. From the right, Donald Trump has made headway in the polls by deriding free trade as a swindle by corporate elites.

Free trade introspection is needed here. As I noted on last weekend’s McLaughlin Group, protectionism’s increasing popularity isn’t that it is sensible, but that it hasn’t been challenged sufficiently. Put simply, by failing to repudiate protectionists, free traders have allowed protectionists to set the narrative this year. And in an election opposing a paradigm of “the elites,” free trade silence has fueled Trump’s conspiracies.

That must now change. Free trade advocates must challenge protectionist assertions.

First, we must objectively repudiate the argument that free trade has benefited foreigners and hurt Americans. As economists David Autor, David Dorn and Gordon Hansen showed in a January study, U.S. trade with China had a far greater impact on U.S. manufacturing unemployment than was previously assumed. Yet while it is true that rust-belt communities have suffered disproportionately here, free trade has also generated great benefits for the vast majority of Americans. Most notably, imports have reduced the price of goods and saved hundreds of millions of Americans thousands of dollars a year (some studies say hundreds, but I assess that when lower input costs for U.S. domestic producers are counted, the figure is thousands). A protectionist market would annihilate these savings.

china trade

Source: The Economist

Correspondingly, I won’t buy Trump’s agenda for low-income Americans to lose their discretionary spending power so that far fewer Americans gain government patronage. Far more important here, conservatives must work together to rebuff liberal economic policy. For a few examples, consider how liberal policies are damaging investments in new jobs, diminishing job opportunities for the young, and destroying hundreds of thousands of traditional energy and new energy jobs.

That said, we must also reform re-training schemes for dislocated workers. For one, we should look to Germany’s apprenticeship system. Offering a mix of classroom education and physical training in a wide array of skills from nursing to plumbing, Germany offers options to individuals. But Germany also incentivizes employers to take responsibility for their apprentices from their first day. That relationship building — born of investment and mentoring — gives apprentices the confidence of future employment early on. Still, we must also encourage direct investment in suffering communities as soon as factories start closing. One immediate solution here is the option of zero-percent rate or negative-rate tax incentives for corporate investment in afflicted communities.

Third, we must reform our education priorities. Today, far too many public colleges in the U.S. prioritize liberal arts programs to the detriment of funding for science, technology, engineering and math (STEM) programs. But the United States needs skilled workers to operate successfully in the global economy. To be sure, we must ensure that high schools teach and stimulate lifelong enjoyment of reading and writing. But college educations must be focused on generating paths to employment. After all, by empowering workers with the skills to create, build and sell the next iPhone, or the next generation of aircraft, or the computer circuitry of the future, we will take advantage of our economy’s comparative advantages. These things are what the world buys from us.

Moreover, skilled workers will ensure our benefit from the growing wealth of populations across the planet (wealth that free trade has created). Higher global incomes will mean higher demand for American products of higher quality. Therein rests the waiting keycard to our wealthy future. Of course, we must also think outside the box — a good example here — promoting STEM-education aimed at delivering valuable outcomes. We must also make STEM more fun (think computer game-based learning platforms)!

Ultimately, free trade is only one element of our ongoing national debate about government’s role in society. As conservatives, we should pursue a society that has its foundations in the family, and fosters individual opportunity over government dependency. Guarding the U.S. economy from the beckoning grave of socialism, we must trust the invisible hand to allocate resources productively. Put another way, we must trust what made America the world’s wealthiest nation.

Tom Rogan is a Senior Contributor for Opportunity Lives and writes for National Review. He is a panelist on The McLaughlin Group and a senior fellow at the Steamboat Institute. Follow him on Twitter @TomRtweets.