I am always intrigued when I read right-on opinion pieces by authors in academia who’ve gained their knowledge through study and often have no firsthand experience within the discipline they pontificate over.

These scholars comprehend and imagine complex systems of interaction without actually enduring consequences of these interactions.   They combine their academic experiences with strong intellect, attach good education, and they extrapolate wisdom that many of us must experience emotionally firsthand to understand.   We pay reverence to these personalities because they eloquently address through vivid prose those lessons, those realities, and those truths we know from our own often painful experiences.  

Coulter, Limbaugh, Will, Buchanan, and others lead the charge in the conservative movement, fighting, defending, and educating, to protect those values birthed from the document which began, When in the course of Human Events

With flare they entertain us, they provoke us, and most gratifyingly they inflame those characters on our left who do venture to pervert the words from that exalted text to do harm to the venerated nation responsible for creating more wealth, more technology, more charity, more justice, and more freedom than any other.

Every now and then even these gifted minds can whack one out into left field, catching me off guard prompting me to rebut, Yo wait a minute, I beg to differ!

Painful lessons received as entrepreneur and manager of a small business remind me how fulfilling, but also how unforgiving America’s system of laissez-fair can be.   Experiencing the loss of a business due to overseas competition, it is quite tempting to hope for some government regulation to protect my small enterprise.   The question then becomes, at what cost?  

Free trade is always vilified by those unfortunate souls stung by competition’s relentless assault.   Our alternative, however, is that we must all pay to subsidize the protection availed one particular group.   Add subsidy on top of subsidy and we become a people dependent and desperate to government to solve our problems.

Most economists agree with the sentiments shared by Alan Greenspan in his book The Age of Turbulence:

To the extent that governments protect portions of their populations from what they perceive as harsh competitive pressures, they achieve a lower overall material standard of living for their people.”  

Government regulation, subsidy, and protection always will benefit one particular group; those benefits charged off to the rest of us.  

In recent writings, Pat Buchanan recalls American protectionist policy and laments the migration of manufacturing jobs to Mexico.   He makes compelling arguments for protection measures highlighting a history of protectionist tariff and suggests our strength is wedded to those policies.
I would propose America is great in spite of those policies.   Dedication to free markets and individual freedoms is so potent even poor protectionist policy cannot kill our good fortune.

Why should we pay a worker in Detroit twenty-five bucks an hour with health benefits to bolt a wheel on a car when a kid in Mexico is willing to do it for three bucks?   Why is Toyota the biggest manufacturer of automobiles in the world today having surpassed General Motors?   Why did Unions negotiate and manufacturer’s managers except labor contracts that would cause American vehicle costs to be fifteen-hundred to two thousand dollars more than foreign competitors?   Why were retirement programs funded by future and unpredictable sales?   Why are American autoworkers surprised they are losing their jobs?  

Our global economy is not going to stop doing business because the United States introduces tariffs to try and save American jobs.   With the internet, global product development can take place without even leaving your desk.   I can hire someone in India to design an electronic circuit where it is subsequently manufactured in Malaysia, then shipped to China where an enclosure is molded and the product is assembled and packaged.

When the whole world uses these varied resources to produce their goods and services, we cannot expect to compete by guaranteeing American workers low-tech jobs.   We have the resources to train and offer our people higher technology jobs when many other parts of the world cannot.   How can we stop the relentless competition they will offer because they have no other choice?

Not only does protectionist policy insulate companies and encourage bad decisions by management, it drugs labor into a false sense of security and promotes an entitlement mentality contrary and in negative tension with management.  

Study of the American auto industry shows a spiteful and distrusting relationship between labor and management.   Contrast this to the Japanese model where labor is intimately involved with management and dedicated to the same goals as management.

If American auto workers and managers want to fight with each other, so be it, but do we want government mandating that we pay for the negative consequences resulting from that fight?  

Protectionism is a superficial band-aid covering up bad government policy which caused work to move overseas to begin with.   It’s not just labor costs which drive jobs overseas, American manufacturers must contend with some reasonable but some draconian regulations from OSHA and EPA, confiscatory taxes, hostile political rhetoric, insurance costs, and worst of all, a work force that does not view its jobs as privilege which must be fought for to maintain, but a right to which it is entitled.

Chinese competition killed my tool making business and it forced me to redirect my efforts.   Today my plastic processing business does better than my tooling business ever did.   I adapted and took advantage of America’s innate culture of opportunity to succeed.   Do we want to pay fellow Americans arbitrarily high wages when they cannot or will not make similar adjustments?

According to Alan Greenspan, this will reduce the quality of life for all of us.

Pat Buchanan is right about an awful lot and I am enthusiastically informed each time I read his words.   Concerning free trade however, strong intellect, knowledge of history and analytical skills may not provide all that is required to understand totally the many and varied interactions that direct experience intuitively might.   Free trade allows the aggregate society that embraces it to benefit wholly.   Protectionism benefits only those targets within a legislation’s net; those outside that net subsidize it.

I have ferociously fought the free-trade forces which have endeavored to put me out of business and would benefit nicely from some legislator’s net.  

I welcome the policy initiatives any politician wants to construct for my advantage.  

Who wants to pay for it?


Copyright 2008 Jim Pontillo