Would you give up your washing machine in order to create jobs? Most people would be puzzled by such a silly question. Prior to the invention of the washing machine, women and children spent several days a week on household laundry. But think about it, if the washing machine was banned, teenagers who are having trouble finding summer jobs could find work doing their neighbors’ laundry by hand. Similarly, adults who have found economic conditions tough could begin hand laundry businesses. Yes, banning the washing machine might create jobs; but does anybody think we would be better off for doing so?
Some politicians might. Recently, on the floor of Congress, Rep. Jesse Jackson, Jr. said:
A few short weeks ago I came to the House floor after having purchased an iPad and said that I happened to believe, Mr. Speaker, that at some point in time this new device, which is now probably responsible for eliminating thousands of American jobs. Now Borders is closing stores because, why do you need to go to Borders anymore? Why do you need to go to Barnes & Noble? Buy an iPad and download your newspaper, download your book, download your magazine.
Please listen to Jackson’s speech here as he attacks both technological advancement and China. Jackson claims that Steve Jobs and the Chinese (where the iPad is assembled) are doing well, while others are suffering because of the iPad. Incidentally most of the iPad parts are not manufactured in China, but the final assembly takes place in China. So what would Jackson propose? Ban the iPad? Tax iPad users? Ban Chinese imports? Subsidize Borders? Of course, in Jackson’s world, it could be any or all of the above. Listening to Jackson, one is struck with the elegance and assuredness with which he utters his inanities.
Jackson asked, “What becomes of the jobs associated with paper?” Answering his own question, he declares, “In the not-too-distant future such jobs will simply not exist.” All new technologies create disruptions. In the 1800s there were many individuals employed by firms who annually harvested millions of tons ice for refrigeration. An ice harvester in 1893 earned approximately a $1.75 a day for his difficult labor. In the 20th century, widespread use of refrigeration ended the careers of ice harvesters. No doubt most simply found employment in new emerging industries, often at a higher pay. The children and grandchildren of ice harvesters, if they too worked as manual laborers, found their income had increased many fold as a result of technological progress. Regardless of whether or not they went to college, they enjoyed a standard of living that their father or grandfather could not have dreamed of.
To be sure, some workers having specialized skills may have trouble making a transition after technological changes disrupt their livelihood. By the late 1920s Hollywood was transiting from silent movies to talkies. Francesca Miller observes that: “There were many silent directors who, after attempts at talkies, couldn’t or wouldn’t make the adjustment, D.W. Griffith being the most notable but there were others: Rex Ingram, actor/directors like Charlie Chaplin and Buster Keaton and Victor Sjöström being the most notable cases.”
At the time there was no Congressman Jackson railing against talkies, looking for victims instead of focusing on progress. Of course, the choice to channel ignorance is bipartisan. Donald Trump has been threatening to impose a 25% tariff on Chinese imports if they don’t meet his conditions. In late March, appearing on O’Reilly Factor on Fox News, Trump said: “If I decide to run, we are not going to have the kinds of problems we have now because I won’t be taken advantage of by the rest of the world…Twenty-five percent tax on China, unless they behave.”
Appearing with Poppy Harlow on CNN Money, Trump opined that China is stealing all our jobs. Listen to Trump as he belligerently threatens China “as an abuser of the United States.”
Imagine a small town in the United States in 1893; a town perhaps in which ice harvesters lived. Your shopping is limited to the few merchants in the town. Suddenly there is a 532-page catalog from Sears and Roebuck featuring a virtual cornucopia of products at prices you never dreamed of. No doubt that Sears and Roebuck put many a local merchant out of business and seemingly cost the small town economy jobs.
But Sears and Roebuck, like the iPad, created wealth and did not destroy wealth. By making available a wide variety of goods at lower prices, Sears and Roebuck effectively made a given level of income go farther. Now a household could save more, spend more on education, and spend more on other goods of value. This process both increased current wealth and future wealth.
Of course, what was immediately visible was that the local merchant struggled to compete with Sears and Roebuck. The money saved, the money invested, the jobs created because of shifting spending patterns were not as immediately visible.
Would America be better off if iPads were assembled in the United States? Would American workers be driven to suicide by these tedious factory jobs as have many Chinese workers at the Foxconn plant that assembles the iPad? Or, are we better off pursuing careers to develop the technology and software behind the iPad?
Unfortunately, in the days to come, populist rhetoric like we are hearing from Trump and Jackson will become more commonplace. The policies they advocate are dangerous, as they are filled with hate and ignorance.