One of the cornerstones of capitalism – that is to say “honest” capitalism – is the idea of laissez faire, which means ‘hands off’. People who are truly pro-capitalism prefer government to stay out of business and commerce, as well as the economy at large. The American political right usually lay claim to being pro-capitalist. They typically celebrate laissez faire with a heart full of capitalist pride, while somehow, in an odd way, undermining it with protectionism.
Before even taking office, Donald Trump has managed to bully a number of corporations in the US to bow to his demands of opening or expanding operations in the US, rather than other nations. He has leveled threats against Carrier, Ford, Fiat Chrysler, and Toyota, to name a few. He threatens them with sanctions and additional taxes. And, who knows what he has threatened in private conversations? The four aforementioned corporations have agreed to his demands and opened factories or expanded operations in the US, as he has asked. This is not a triumph for the capitalist minded.
One would think the political right would be infuriated with these less-than-veiled threats against free trade, but instead, they cheer it on. A person who is not yet even a President has forcefully threatened private corporations into servitude to the State, and we hear almost nothing but praise form the right, who claims to be for smaller government and open, free trade capitalism. This is so completely opposed to the ideals of capitalism, that these reactions are shocking. It is impossible to be pro-capitalism while cheering on strong-armed bullying from an official who is not even yet sworn in. Even if he were sworn in, the idea of State making decisions for corporations just completely flies in the face of free enterprise, as well as all ideals of a free society.
Shame on the right for cheering these moves on!
It is truly ironic that the same group of people who would normally scream foul if the State ordered corporations to have shared gender restrooms or to bake that cake for a gay wedding, would so happily cheer on the State in demanding corporations bow to its will in other areas. It’s logically inconsistent. The “invisible hand” of capitalism requires better of us all.
For those who are protectionist-minded, the loss of every job to a factory somewhere outside the US, is a lost job in the US that leaves the person who might fill it unemployed. There is little to no recognition that another job, coming from somewhere within our economy, has opened up for this unemployed person. From 1970 to 2012, the percentage of US jobs that belonged to manufacturing dropped from 26.4% to just 10.3%. So, how can that be? How can we possibly have lost so many manufacturing jobs without huge numbers of unemployed? Shouldn’t our unemployment, according to the logic of the protectionists, be somewhere around 16.1% from the loss of manufacturing jobs alone?
A part of the answer is something Americans can be proud of!
Not that productivity has not increased in other nations around the world with new technology and better ways of doing things, but it has also dramatically increased in the US. In spite of the loss of all those manufacturing jobs, manufacturing still remains roughly the same percentage of GDP that it had in 1970. Currently, manufacturing makes up somewhere close to 12% of GDP, while it made up around 13% in 1970. That 1% isn’t particularly alarming – certainly not nearly as much as the shrill call from the protectionists would have us believe. The United States has not lost its manufacturing edge. Nor has it lost its position as a powerhouse of industry. Rather it has simply become better and more productive at manufacturing. Sure, many things produced by American companies, as well as the global companies Trump attacked, are produced outside of the US, but it’s more a sign of a dramatically expanded economy (compared to decades past) than it is of lost opportunities.
Another part of the answer as to why unemployment isn’t higher with the loss of manufacturing jobs, is that the number of jobs in other sectors has grown in pace to keep up – mostly. The vast majority of those jobs were replaced with other good-paying jobs that keep people employed. Our economy is very adaptive. Americans are inventive enough to seek out and find opportunities to do things that others have never before thought about. In 1970, very few people had ever conceived of the idea of the internet, much less have entire economic industries built around it. In 1970, there was no Google, Amazon, or Microsoft (which created its own industry) – massive companies that employ over 414,000 people just by themselves. When the global marketplace makes changes, the US adapts and makes changes as well.
A President-Elect threatening corporations into subjecting themselves to a political agenda is not acceptable if you are decidedly capitalist. It is not acceptable if you want to represent freedom and free enterprise. Protecting sectors of the economy or particular industries is just crony capitalism, and threatening businesses with sanctions for not upholding a political agenda is just anti-capitalist. The “invisible hand” of capitalism has its own means of locating and replacing jobs for those in need, and meddling into the affairs of businesses tend to handcuff that invisible hand so that it can not adequately work. If you want to stand up for capitalism, then stand against Trump’s bullying of American companies.
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