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How Capital Crushed Labor

Comment

Once, it was a Labor Day tradition for Democrats to go to Cadillac Square in Detroit to launch their campaigns in that forge and furnace of American democracy, the greatest industrial center on earth.

Democrats may still honor the tradition. But Detroit is not what she was, not remotely. And neither is America.

Not so long ago, we made all the shoes and clothes we wore, the motorcycles and cars we drove, the radios we listened to, the TV sets we watched, the home and office calculators and computers we used.

No more. Much of what we buy is no longer made by American workers, but by Japanese, Chinese, other Asians, Canadians and Europeans.

"Why don't we make things here anymore?" is the wail.

Answer: We don't make things here anymore because it is cheaper to make them abroad and ship them back.

With an economy of $14 trillion, we may still be the best market in the world to sell into. But we are also among the most expensive markets in the world in which to produce.

Why is that? Again, the answer is simple.

U.S. wages are higher than they are almost anywhere else. Our health, safety and environmental laws are among the most stringent. Our affirmative action demands are the most exacting, except possibly for those of Malaysia and South Africa.

Does the cost of production here in America alone explain the decline in manufacturing and stagnation of workers' wages?

No. For since the Revolution, America has had a standard of living that has been the envy of the world. From the Civil War through the 1920s, as we became the greatest manufacturing power the world had ever seen, our workers enjoyed pay and benefits that were unmatched anywhere.

Yet our exports in those decades were double our imports, and our trade surpluses annually added 4 percent to the gross national product. How did we do it?

We taxed the products of foreign factories and workers and used the revenue to finance the government. We imposed tariffs of up to 40 percent on foreign goods entering our market and used the tariff money to keep taxes low in the United States.

We made foreigners pay a price to get their products into our market and made them pay to help finance our government. We put our own country and people first.

For corporate America, especially industrial America, this was nirvana.

They had exclusive free access to our market, and foreign rivals had to pay a stiff fee, a tariff, to get their products in and try to compete with U.S. products in the U.S. market.

What happened to this idea that made America a self-sufficient republic, producing almost all it consumed, a nation that could stay out of the world wars as long as she wished and crush the greatest powers in Europe and Asia in less than four years after she went in?

A new class came to power that looked on tariffs as xenophobic, on economic patriotism as atavistic and on national sovereignty as an antique idea in the new world order it envisioned.

By 1976, editorial writers were talking about a new declaration of interdependence to replace Thomas Jefferson's Declaration of Independence, which was now outdated.

The new idea was to replicate America on a global scale, to throw open the borders of all nations as the borders of the 50 states were open, to abolish all tariffs and trade barriers, and to welcome the free flow of goods and people across all frontiers, thereby creating the One World that statesmen such as Woodrow Wilson and Wendell Willkie had envisioned.

By three decades ago, this globalist ideology had captured both national parties, a product of universities dominated by New Dealers.

But why did corporate America, with its privileged access to the greatest market on earth, go along with sharing that market with its manufacturing rivals from all over the world?

The answer lies in the trade-off corporate America got.

Already established in the U.S. market, corporate America could risk sharing that market if, in return, it could shift its own production out of the United States to countries where the wages were low and regulations were light.

Corporate America could there produce for a fraction of what it cost to produce here. Then these same corporations could ship their foreign-made products back to the USA and pocket the difference in the cost of production. Corporate stock prices would soar, as would corporate salaries — and dividends, to make shareholders happy and supportive of a corporate policy of moving out of the USA.

Under globalization, America's investor class could and did get rich by the abandonment of America's working class.

America is in a terminal industrial decline because the interests of corporate America now clash directly with the interests of working America — and, indeed, with the national interest of the United States.

And both parties are either oblivious to or indifferent of what is happening to their country.

To find out more about Patrick Buchanan, and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate web page at www.creators.com.

COPYRIGHT 2011 CREATORS.COM



Comments

12 Comments | Post Comment
"The US better watch it or in a couple
of decades we're going to be a minstrel show
for RED China."
-Gore Vidal
1985
(the heyday of Reagan 'CON-servatism')
-----Surely none of us are getting any younger.
When oh when is the Rockefeller front CNP member,
and former 'the Nix is on''/MAO summit eager sideman
--Pat Buchanan, going to break ranks, and STOP smokescreening
the RED China TREASON OP ---and start ringing
thse bells?
WHEN?????????
---THIS IS TREASON!
Comment: #1
Posted by: free bee
Fri Sep 2, 2011 7:26 PM
Buchanan continues to surprise:

"America is in a terminal industrial decline because the interests of corporate America now clash directly with the interests of working America — and, indeed, with the national interest of the United States.
And both parties are either oblivious to or indifferent of what is happening to their country."

Is this a statement from the radical right or the radical left? Maybe he's starved for attention?
Comment: #2
Posted by: Masako
Fri Sep 2, 2011 7:59 PM
I agree with this excellently written article. Recently, Donald Trump has been on Gretta's show on Fox talking good business sense. The United States could now begin a trend of pulling back within its borders various economic components. This could be a new direction. It does not mean that a previous trend was wrong, it means that there are different seasons to do different things. The world would look to the United States as a leader if we had imaginitive approaches.
Comment: #3
Posted by: Mike Hayne
Fri Sep 2, 2011 10:32 PM
Re: Masako

Nothing surprising here. Mr. Buchanan has been saying this since the early '90's (see, for example, his book, "The Great Betrayal," from that time period).
Comment: #4
Posted by: Claibourne
Sat Sep 3, 2011 7:32 AM
Re: Claibourne: Okay, I'll have a look--if I can do so without buying it, hee hee. The themes of getting out of military conquest of the world, and pulling out of an international trade scenario that damages us I actually agree with--it's the apparent new-found sympathy for the working class that I haven't seen before.
Comment: #5
Posted by: Masako
Sat Sep 3, 2011 5:17 PM
Re: Mike Hayne
Ah, Greta! Nothing quite like her scientologist spin to make it all clear!
That said, Pat's right: this free market nonsense is killing us. Tariffs would be a good start, given most everyone else uses them, if disguised somewhat.
Comment: #6
Posted by: Ms. Rowena
Sun Sep 4, 2011 2:56 PM
Yes, the World has changed. It is not 50's anymore.
Yes, America was the shiny beacon, the promise land, where every working man could support his wife-homemaker and 3-4 kids.
But was it fair world? If any uneducated American male with some union job made more than ten highly educated men in other countries?
Life was unfair then and life is unfair now. Only in 50's the privileged class was called “Americans”. If you were born in other country, even if you were brilliant doctor, engineer, scientists you made less then any American redneck. Now nationality, race and country of origin does not matter that much. Education, determination and hard work means much more for your success. So, the division line between haves and have-nots always existed. Only in 50's this division line was pretty much the same as American border-line. (Most people who lived inside this line were haves, at least most people of white race) Now situation has changed. We have less haves in America, but more haves in other countries.
I suspect many Americans want to reverse this situation. But unfortunately for them it is just impossible.
What do you propose? Close the borders? Stop free market? Impose high tariffs?
HOW???? Send MBA's and middle management to perform physical labor jobs to American factories (that do not exist anymore)? Build new factories? Reeducate managers to become conveyer- workers? HOW MUCH IT WOUD COST? And how much would cost All-American build products? Would anyone in the world buy them?
I am afraid America as a production powerhouse of the world is a thing of the past.
And I can see only two ways for this country:
1. Embrace the areas that America is still good at ( business, entrepreneurship, marketing, advertisement, research, higher education and even the high level of consumption) If only greedy American government can step out of the way of the people, let them live their lives and enjoy fruits of their labor.
2. Close the borders, stop free trade and die ( I mean, have you know ANY example in history when country that closed itself did not became weak and lost economic race to their neighbors?)
Comment: #7
Posted by: OBAMALAND
Sun Sep 4, 2011 7:02 PM
Re: OBAMALAND

It was the Democrat golden son Bill Clinton that signed NAFTA into law,
and also pardened history's greatest USA tax cheat Marc Rich (yes he is)
and also repealed Glass Steagall Act (part of the reason behind da financial meltdown, whoops my bad y'all)


Obama the Fraud will NOT address our real problems:
NAFTA
WTO
WORD BANK
IMF
CHINA TRADE


Ralph Nader is right when he says Dems and Repubs are equally bought out


Ron Paul all the way, baby
Comment: #8
Posted by: Soothsayer
Mon Sep 5, 2011 11:12 AM
-Government always finds a need for whatever money it gets.
-Government does not solve problems; it subsidizes them.
-Facts are stubborn things.
-Freedom is never more than one generation away from extinction. We didn't pass it to our children in the bloodstream. It must be fought for, protected, and handed on for them to do the same.
-Concentrated power has always been the enemy of liberty.
-Government is like a baby. An alimentary canal with a big appetite at one end and no sense of responsibility at the other.
-Government's first duty is to protect the people, not run their lives.
-Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.
-Heroes may not be braver than anyone else. They're just braver five minutes longer.

-----Ronald Reagan

way better than the Obama jibber jabber, no?
Comment: #9
Posted by: Soothsayer
Mon Sep 5, 2011 11:18 AM
Are you kidding me? Implement tarriffs? Pat has officially lsot it, it's a shame that LewRockwell.com posts Pat's articles regularly...
Comment: #10
Posted by: ace
Tue Sep 6, 2011 1:23 AM
Pat got it almost all right except for the part he left out about the Reagan administration and the GOP being the ones that opened the borders and lowered the gates and allowed this all to take hold in this country. If there is any doubt as to the validity of this just look to your history books as I did. This is when US jobs started moving off shore "en masse", tax rates, tax code, and tarrifs were reduced and even eliminated. This was the nexus for all that has happened since and it is why were are in the position we are in today.
I've got to seriously question why I would even support the GOP anymore.
Comment: #11
Posted by: Mark
Tue Sep 6, 2011 4:47 PM
Re: Soothsayer
NAFTA is not a law. It was never ratified by the Senate. We can get out of it any time we have a President who has sufficient guts and brains to simply say "We're gone."
Comment: #12
Posted by: Paul Callahan
Sun Oct 2, 2011 4:53 AM
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