In yesterday's New York Times, the economist Gregory Mankiw trots out the standard case against protectionism - i.e., policies that are designed to protect domestic jobs, not promote their flight overseas - one that is made as if it were so dispositive that nothing further can or should be said. Against arguments that job loss is undesirable, he writes, "There is, however, another side to the story. The loss to American producers comes with a gain to the many millions of American consumers who prefer to pay less for the goods they buy."
An implicit cost-benefit analysis underlies this argument: the loss of some number of decent paying manufacturing jobs can't measure up to the benefits of cheaper products for millions of Americans. Proof is in the Wal-Mart pudding: fact is, lots of people shop there, proving that they like cheaper prices. The loss of our manufacturing base is a small price to pay for inexpensive salad-shooters and tube socks.
Why is this argument so patently true for economists that it is proffered as if it didn't merit further thought? Because, of course, it's better when lots of people can purchase cheap goods that are manufactured in the lowest labor-cost areas of the world. Comparative advantage insists that everyone wins in this scenario. This may be true - as far as the economic theory is concerned, a theory that is populated not so much by humans as "econs."
Yet, what if we were to widen our aperture a bit and consider whether a nation of self-defined consumers is a good thing? What if the very self-definition of ourselves as "consumers" - now used unselfconsciously as the one universally valid term to describe Americans (not "workers" and certainly not "citizens") - is deeply damaging to the civic and moral culture of a nation? What if economic and political policies that promote consumption over good, hard work induce very bad habits that in turn lead to very bad economic outcomes? Would we praise that as good economics, much less good politics or even - dare I say - good for the soul?
The economics of consumption is, in the first instance, a recipe for short-term thinking. It encourages the consumption of products intended very soon for the trash heap, thus promoting a culture of immediacy and waste. It is an ethic that encourages instant gratification, rather than encouraging virtues of thrift and deferred gratification. It encourages a false sense of needing to "keep up" with the neighbors, such that everyone must live as if they have a country estate in Connecticut (and why eventually Martha Stewart began peddling her wares in K-Mart). It encourages us to ignore the hidden costs of our consumption, particularly the high energy usage of this form of consumerism and the high quantities of resulting entropy - in the form of waste, blighted landscape, decimated downtowns and declining pride of work. It destroys community, increases our anomie and isolation and makes us ripe pickings for government programs when there is an economic downturn.
A culture of work - good, honest, hard work - on the other hand, promotes virtues of care and thrift. Where we have a sense that people near and around us will use our products, we work with pride and responsibility. Where we will have to live with the costs of our production, we work in ways that minimally damage our living places. Where we earn an honest wage for work well done, we spend responsibly, knowing that we in turn can rely on the good craftsmanship of the products that we buy. We value quality over quantity. Where we learn to delay gratification, we learn to distrust easy credit as something too good to be true, as a game for grifters and cheats. A culture that values work over consumption is one that is likely to view manias with a jaundiced eye, aware that the cycle of nature is not one that offers quick rich rewards, but slow and steady earnings that are come by honestly and with patience and hard work.
Am I suggesting that we should engage in protectionist policies? I don't know what the economic effects of that would be, though I'm told they would be dire. Still, I look around me and see what the our policies of open trade and globalization have gotten us and ask, how much more dire would they be? Would we be poorer than we are now? Perhaps, but it would not be a poverty recklessly and dishonestly achieved. Would we have less things filling smaller houses? Let us hope so. Would we be bemoaning the things we did not have as a result of not having let all our good jobs go overseas? Maybe. I wonder. But I do know for certain that anyone suggesting that a culture of consumption is so plainly superior to the alternative had better take a step outside the ivy gates for a reality check.