Time to Get Serious about Protectionism

It is ever more clear that Democrats will ride the protectionist horse to return to power in Washington. This blog is about the importance of free markets. Protectionism is the enemy of free markets. If we interfere with free trade in the name of protecting jobs, we interfere with capitalism’s ability to grow jobs abroad and at home.

Here's why the protectionist threat is real. Mark Shields, the liberal half of Jim Lehrer’s weekly look at Washington politics, warned that outsourcing would hit America’s service sector hard in the coming years, costing us up to 42 million jobs. He didn’t say so, but his figure comes from an important March Foreign Affairs article by Princeton Economics Professor Alan Blinder, who used to be on Clinton’s Council of Economic Advisors.

Clive Crook, in his National Journal piece titled, “A Third Industrial Revolution” (3.10.06), called Blinder’s article “fascinating,” because it makes offshoring “potentially a very big deal.” Blinder:

believes that what we have seen so far is just the timid beginning of a third Industrial Revolution [electronics, following manufacturing, then services].

. . . he envisages enormous economic disruption, and urges policy makers to think hard, and urgently, about how to prepare for this.

. . . Blinder concludes that "the total number of U.S. service-sector jobs that will be susceptible to offshoring in the electronic future is two to three times the total number of current manufacturing jobs" -- in other words, between 28 million and 42 million jobs.

[Blinder says for those remaining behind:] "People skills may become more valuable than computer skills. The geeks may not inherit the earth after all -- at least not the highly paid geeks in the rich countries."