Ralph Gomory’s argument for managing trade brings to mind the consensus among policymakers in the thirties: trade worked up until that point, but this time it’s different. It appeared to all that the unprecedented technical innovations of the preceding half century meant that the government’s new, permanent job was to manage chronic overcapacity. Hence tariffs, price controls and attempts to establish industry sector boards that would apportion output among various producers. Each and every one of those efforts ended up being gamed and exploited by the affected firms. Programs in each case then either collapsed of their own weight or morphed into permanent vehicles for rent seeking and government cover for anti-competitive practices.
No doubt Mr. Gomory and your reviewer, Mr. Greider, think that this time it’s different, that, Samsung, Daewoo, Matsushita, Sony, Phillips, Seimens, Toyota, Shell and BP notwithstanding, the federal government is up to the challenge of fixing our trade problems by involving itself in the affairs of American multi-nationals,. No doubt, like Jefferson, Hoover, FDR and Nixon, they will be wrong, and the most vulnerable American workers will be the poorer for the effort.
It’s not enough to identify the problem. You have to answer the question, what’s the best among the many unpalatable alternatives? Of those alternatives, how many times do we have to learn that of the many challenges of governance, public agencies are surely least well suited for the Goldilocks challenge of just enough, but not too much competition, free trade… whatever.
Like the free traders described in your review, Martin Luther was a bit of a fanatic himself. Perhaps a figure from the world of politics is a more fitting embodiment of the role Mr. Gomory presumes to play. Consider John C. Calhoun. An Indian or Chinese worker has a right to the same employment opportunities as an American worker. (If you don’t believe that then what are you doing reading a progressive magazine?) In that light, the spirit animating the argument for protecting American workers is not terribly different from what defenders of slavery and of Jim Crow argued. Calhoun was a world-wise, highly sophisticated thinker. Had his publishers the benefit of Quark, Excel and color offset printing, he would perhaps have impressed his readers with the same charts and graphs that so impressed your reviewer about Mr. Gomory’s book.
Down with John C. Calhoun. Down with Goldilocks. Down with the ahistorical, wishful thinking of ‘this time it’s different.’