Poverty

Free Trade and Modern Technology Can Destroy Cities. That's More than OK.

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Famous novelist, memoirist, and world traveler Paul Theroux got a fair amount of attention for his recent tour in the New York Times of the grimmest place of all: America's deep south, filled with small towns that used to have certain industrial jobs available to their residents, and now do not.

Any story of lives and communities changed or disrupted by decisions made by others can pull at the heartstrings, especially when one doesn't remember that none of us have the right or the power to freeze the world for our benefit (when "the world" is a buzzing confusion of other humans and their choices) or the alternatives to a world disrupted by "globalization."

Kevin Williamson of National Review wrote a smart and impassioned reaction essay (that apparently pissed off some fellow conservatives for recommending those stuck in towns dying from departed industries leave rather than try to "conserve" them, but that's not the important part of his essay) that gives some important facts Theroux ignores and limns the bright side of free(ish) national and international trade and technologies that allow us to do more with less labor and thus make the world richer.

Excerpts:

It is emphatically not the case that the South, or the United States in general, engages in less manufacturing today than it did in the so-called golden age of the postwar era (during which years a lot of poor people in the South, members of my family included, supplemented the wages they were earning during the manufacturing boom by . . . picking cotton, by hand, and being paid by the pound). We manufacture much more today than we did in the 1950s, and we grow a lot more cotton, too — and both enterprises require fewer workers today than they did back then. When one worker can produce what ten workers used to produce, or a hundred, wages go up, which is why you can make $100,000 a year harvesting cotton today….

Nor is it the case, as Theroux writes, that "globalization is the search for a new plantation, and cheaper labor." There is in fact relatively little foreign direct investment in low-wage countries. The top destination for globe-trotting capital is . . . the United States, which takes in almost twice as much as the second-place finisher, the not remarkably impoverished United Kingdom. Other than China (No. 5), you won't find a relatively low-wage country anywhere near the top of the list. Instead, you find: Germany, Belgium, France, Canada, Switzerland, Spain, Ireland, Singapore, Brazil, Australia, the Netherlands. . . . And even China isn't really a low-income country anymore; it's been classified as upper-middle-income by the World Bank for years, and investment in China has grown as wages have grown. They still aren't making BMWs in Rwanda. Some race to the bottom.

And Theroux thinks he can blame heartless international capitalism on the fact that some cities in the deep South are quite poor in relation to the rest of the U.S?

The South was an extraordinarily poor and backwards place until the day before yesterday. In the 1950s, about half of the households in the South didn't have indoor plumbing. The economic transformation of the South in the past 50 years has been astounding, a success story for the ages.

Nor has the system of international trade that allows businesses to move from the deep South failed to help the rest of the world:

Just as the gentlemen of the Times were putting the headline on Theroux's daft little tantrum, the World Bank published its estimate that this year — this year, not at some point in the happy-happy future — the number of people living in extreme poverty on this planet will dip below 10 percent for the first time in the history of the human species.

Change will always inconvenience somebody, it is true, and those great jobs sewing underwear in Southern factories for $100 a week no longer exist. Famine no longer exists and several million formerly poor people get to eat, and the terrible tradeoff is what? A fellow who used to work in a sneaker factory has to go hustle real estate or become a restaurant proprietor? Meanwhile, the poor people of Mississippi, still our poorest state, on average have to get by on a mere 118 percent of the median income in France.

Cheap moralizing of the sort that Theroux engages in, or the cheap sentimentalism that informs the Trump-Buchanan-Sanders view of globalization — "globalization" being another way of saying "human cooperation" — helps exactly no one…

It's a shame that rising to the defense of free(ish) trade, even if it results in a situation that can make the sensitive sad if looked at utterly out of historical or world context, is still a necessary tonic in public policy. But it is.