Globalization and its impact on America divides the political right. What do I mean by globalization?
Many people are worried about increasing levels of economic concentration in United States industries. As a result, they call for expanding the interventionist reach of antitrust law. That would mean encouraging the Justice Department to reject more mergers and bring suits against more companies alleged to have monopoly power.
One difficulty with this approach is that it is difficult to determine whether a company possesses monopoly power, let alone figure out whether a merger will result in more monopoly power rather than invigorate competition. Moreover, attacks on monopoly discourage businesses from trying to obtain monopolies, an effort that itself brings innovation and benefits for consumers.
Three policies would decrease concentration far better than expanding antitrust law: making our trade freer, cutting back on regulation, and getting out of the way of efficient capital markets. Together, these policies would make the monopolization provisions in antitrust law much less needed.
Free Trade: The most powerful competition against domestic firms with market power can come from abroad.
Thanks to Broadway, Alexander Hamilton is famous once again. One might wonder whether his unexpected stage stardom would lead at least some Americans to turn to his most important state paper, the Report on the Subject of Manufactures, which contributed so much to the Hamiltonian profile as one of the preeminent Founders of the United States. Maybe not too many did—but solid substantive reasons call us, especially now, to a reconsideration of this greatest state paper of our greatest Secretary of the Treasury. Presented to the Congress on December 5, 1791, the Report on Manufactures, as it is more commonly known,…
Operating a specific enterprise, whatever its aim or product, requires focusing on measurable quantities of inputs and their measurable effects on outputs. Qualitative factors may enter into that equation, but only as they are necessary to the successful attainment of the specific object in question. That is the mindset of the manager of an “enterprise…
Carson Holloway’s Liberty Forum essay provides an opportunity to discuss an important historical document with current debates about the American economy in mind. The chief issues that Alexander Hamilton raises in his 1791 Report on Manufactures are the role of manufacturing in the economy and government’s role in encouraging it. It should be remembered that the…
The great insight of Alexander Hamilton is that all serious nations take serious measures on behalf of their own security and prosperity. This is what good governments do. There is a clarity here that is absent from our current partisan debates, if only because Hamilton unapologetically offers good government as a foundation for republican government.…
It is a pleasure to read, think about, and respond to the three insightful and knowledgeable critiques of Alexander Hamilton’s Report on Manufactures that have appeared in this Liberty Law Forum. These are also fair-minded critiques, since they all give Hamilton due credit for his many virtues, even as they take him to task for…
Wages for American working men got a double whammy during the last fifty years. First, starting in the late 1960s, American women entered the paid workforce as never before. This added significantly to the supply of labor in the American workforce. Secondly, just as the American labor market had started to move beyond the economic shock of increased entry of women into the workforce, the uptick in globalization – easier mobility of capital and labor across national borders – effectively increased the supply of labor competing with U.S. workers a second time. Many of these workers were willing to work for wages significantly below wages for American workers. There are other causes as well, but these factors certainly contributed to stagnating wages for working men in the U.S. over the last 50 years.
But this is not simply a story of loss; there are tradeoffs.
The 2016 election was a victory for the Republican party but it was hardly a resounding one for classical liberalism at least as historically defined. Classical liberalism, for instance, has reflected an enthusiasm for free trade along with other free markets. But Donald Trump ran the most aggressively anti-free trade platform of any major party nominee Democratic or Republican in the last century.
But rather than simply bemoaning the fact, classical liberals need to take account of it, because the anti-trade turn is a part of the greatest challenge classical liberalism has ever faced: how to address the ever faster rate of social and economic change. The freedom to make such transformations through technology and trade creates very substantial wealth but it disrupts people’s lives, making them less liberal and more eager for state protection than before.
There can be no doubt that such disruption was at the heart of Trump’s victory.
Ronald Reagan and Margaret Thatcher together moved the world decisively back toward classical liberal principles in the 1980s. Thatcher was elected earlier than Reagan, and she was a harbinger of what was to come in America and the world. Thus, it is significant today that new Prime Minister of Britain, Theresa May, is moving the Conservative Party decisively in the opposite direction—toward more statism and less liberty. It is not only in the United States that the party of the right seems to have lost its classical liberal bearings.