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The 100 Year Factory Promise: Careful What You Wish For
"If our government is there to support you and give you the assistance you need to retool and make this transition, this plant will be here for another 100 years. That's our priority."
Thus spoke the candidate for the Industrial Planner-in-Chief position, campaigning at a General Motors plant in Janesville, WI, in 2008, painting a rosy scenario should he be elected. Be glad that the plant closed, for the alternative is far worse.
Boasting that government policies will keep a particular factory in business for 100 years is the height of economic insanity. The tradition that a worker should hand down his job to his children and grandchildren went out when labor shortages caused by the black plague broke the medieval guild system. The revolution in labor mobility unleashed unprecedented prosperity and changed the world.
What is it about stasis that so enthralls progressives? What makes them long for some past golden age? Economist Brink Lindsey calls it nostalgianomics. You would think that promising to protect people from change and sending them back to the good old days would be the hallmark of conservatives.
Consider the most common occupations of a century ago. Imagine living in a world in which those jobs were "preserved." What would we do with all those buggy whips?
Listen to progressive pundits lamenting that an increase in productivity leads to the hiring of fewer workers, that squeezing more profits out of each employee rewards greed and creates unemployment. Do they really yearn for a past where it takes more work to produce less stuff? Adopt their policies and that's exactly what will happen. Keep it up and we all will be drawing our water from wells in buckets. But what a boon for the bucket manufacturers!
Empowering government to take money from winning, productive businesses and redirect it into losing, unproductive ones can only lead to fewer of the former and more of the latter. Does that sound like a plan for building an economy that lasts - or an economy that is last? Are we really prepared to delegate investment decisions that healthy economies leave to the market guided by customer choice to bureaucrats and politicians pandering for votes?
Dinosaurs did not evolve into mammals. They were replaced by them. Be glad dinosaurs couldn't vote to preserve their way of life, or else they would have passed a law against furry bipedalism. Unfortunately, industrial dinosaurs and the unions that live off them have plenty of political clout. And there's nothing they fear more than change.
Yes We Can change dinosaurs into mammals! Really? Look at the "success" of General Motors,filling warehouses with politically designed $40,000 electric vehicles customers are just clamoring to buy. And aren't the battery, windmill, bullet train, solar power, and algae-fuel companies hiring like mad, making us better off than we were four years ago? No comment? "Speak up!" said the codger to the chair.
But progressives can take comfort in the fact that some things never change. Frederic Bastiat's petition of the candle makers has been replaced with a petition of the solar cell manufacturers against competition from China. This has won them punitive tariffs to preserve the American jobs that only exist thanks to subsidies dished out just yesterday! Where is the mad hatter when you need him?
It is human nature to want a better life for your children, so I've always wondered how societies manage to fall into a permanent state of non-growth. We may soon find out. A recent paper by Robert Gordon from the National Bureau of Economic Research, "Is U.S. Economic Growth Over," suggests that, "the rapid progress made over the past 250 years could well turn out to be a unique episode in human history." Do you suppose it's a coincidence that those 250 years coincided with the birth of American freedom? What do you think will happen to growth when that freedom is crushed by industrial planners?
Gordon describes six headwinds causing innovation to falter. Funnily, he doesn't mention the role of government attempting to preserve factories for 100 years. But he does point out that in 1885 the average North Carolina housewife had to walk 148 miles per year while carrying 35 tons of water. Good thing some politician didn't succeed in preserving that job.
Bill Frezza is a fellow at the Competitive Enterprise Institute, and a Boston-based venture capitalist. He can be reached at email@example.com. If you would like to subscribe to his weekly column, drop a note to firstname.lastname@example.org or follow him on Twitter @BillFrezza.