The Great Contradiction

Brink Lindsey from the July 1998 issue

(Page 2 of 2)

Turning from the past to the present, Buchanan contends that the U.S. "free trade era"--which he dates from the conclusion of the Kennedy Round of GATT talks in 1967--has been an economic catastrophe. Here he trots out familiar statistics about our ballooning trade deficits and eroding manufacturing base--all of which figured prominently in the "declinist" literature of the '80s and early '90s. Times have changed, though, and now this Cassandra routine comes across as stale. Put aside for a moment all the hype about our own economic performance, and just take a look around: With Europe stuck in the mud and Asia falling off a cliff, exactly whom are we in danger of falling behind?

Perhaps sensing that it's no longer the New Hampshire winter of '92, Buchanan does not stick too firmly to the old declinist rant. Or rather, his focus is elsewhere. The emphasis in The Great Betrayal is not on America's standing relative to the world but on some Americans' standing relative to others: "We are now the `two nations' predicted by the Kerner Commission thirty years ago. Only the dividing line is no longer just race; it is class. "On one side is the new class, Third Wave America--the bankers, lawyers, diplomats, investors, lobbyists, academics, journalists, executives, professionals, high-tech entrepreneurs--prospering beyond their dreams. Buoyant and optimistic, these Americans are full of anticipation about their prospects in the Global Economy....

"On the other side of the national divide is Second Wave America, the forgotten Americans left behind. White-collar and blue-collar, they work for someone else, many with hands, tools, and machines in factories soon to be hoisted onto the chopping block of some corporate downsizer in some distant city or foreign country."

Here at last, Buchanan strikes a nerve--even if he uses a meat axe to get to it. Free trade, while broadly beneficial, does have its human cost. Some Americans have lost their jobs and seen their prospects diminished because of foreign competition.

But there is nothing distinctive about international trade in this regard. What about mom-and-pop stores displaced by Wal-Mart? What about Eastern and Braniff and Pan Am (the first one, anyway)? What about IBM's eclipse? What about the market share Big Steel lost to Nucor and other minimills? What about merger waves and the resulting "downsizings"? What about new management gurus and their jihad against middle managers? What foreigners are to blame for any of this?

The fact is that we are living in a time of sweeping and convulsive economic change. This change is creating vast new wealth and breathtaking new opportunities; at the same time, it is claiming some victims and fraying more than a few nerves. Foreign trade is a part, but only a part, of that overall picture.

Accordingly, if you wish to side with "Second Wave America" against "Third Wave America," you can't stop at trade policy. A true "protectionist," one who would defend the economic status quo against all comers, must declare himself an enemy of change itself, and the open and dynamic market system that endlessly foments it.

Buchanan flirts with this kind of full-fledged reactionary stance: "What is wrong with the Global Economy is what is wrong with our politics; it is rooted in the myth of Economic Man. It elevates economics above all else. But man does not live by bread alone.

"To worship the market is a form of idolatry no less than worshipping the state. The market should be made to work for man, not the other way around."

But Buchanan can follow this line only so far, since ultimately it conflicts with his economic nationalism. After all, why does it matter that free trade is bad economics if economics itself is bad? If protectionism really would make our economy grow faster, that just means the pace of change would accelerate and the toll of disruption increase. Why would a true-blue reactionary support that?

Economics bashing also makes a hash of Buchanan's reading of history. What sense does it make to champion the Americans left behind by "Third Wave America," while at the same time totally ignoring all the Americans left behind by "Second Wave America"? Buchanan identifies the period between the Civil War and World War I as a golden age of economic nationalism, yet that was a time of economic dislocation similar to, if not more turbulent than, our own. Buchanan, however, does not castigate the Gilded Age for its market idolatry; he sides with the big-business elitists and their "cross of gold."

So Buchanan tries to have it both ways. His heart bleeds for the victims of change, but only when foreigners can be made to take the rap for it. Buchanan's book proclaims sympathy with two conflicting public sentiments--the desire for economic dynamism and the aversion to disruptive change--and reconciles the two by blaming their conflict on an unpopular scapegoat. Politically, it's an elegant straddle. Intellectually and morally, it's shameful demagoguery.