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August 4, 2009

Misuse Of The Words Protectionism And Trade Is Making Us Poorer

-- by Dave Johnson

This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture as part of the Making It In America project. I am a Fellow with CAF.

Can one be called “protectionist” just for pointing out when other countries are being smart? Maybe so. I’ll get to that in a minute, but first…

Language has tremendous power. People like George Lakoff and Drew Westin, who study the use of language in political discussion, say that our choice of words has the power to actually affect the “wiring” or neuron circuits that our brains use to think.

The corporate marketers and political persuaders have certainly learned the power of language to influence us. It has even gotten to the point where “neuromarketing” uses MRI and EEG to study how our brains react to certain stimuli so they can be used to market and persuade.

In politics I think that we have even reached a point where we give words more power and importance even than the ideas the words represent. In the Bush years we learned that the persuaders believed they could “create their own reality.

"That's not the way the world really works anymore," he [Bush administration official] continued. "We're an empire now, and when we act, we create our own reality. And while you're studying that reality—judiciously, as you will—we'll act again, creating other new realities, which you can study too, and that's how things will sort out. We're history's actors…and you, all of you, will be left to just study what we do."

The influencers have become adept at scaring up the public into stampedes that can have sudden and dramatic effects on politicians. So lawmakers have gotten into the habit of basing their decisions on what they think (fear) the public believes (according to what Drudge and Fox are claiming they believe) rather than what is the best policy. And in fact, it is often the case that the public was behind the right policy all along. (Like with a health care public option -- the manipulators had the politicians convinced it was "centrist" to oppose that.) Consequently, words are used as weapons by professionals who wish to distract us from things that are in front of our own faces.

I was conscious of this the other day in the post, How Should We Talk About Industrial And Manufacturing Policy? I wrote,

“The phrase “industrial policy” sounds so Walter Mondale, 1970s, smokestacks and brick factory old-fashioned. I suspect the subject turns people off, eyes glaze over, hands reach under the table for iPhones and Blackberries…”

Making things in America is crucially important to our future economy. But today as we join the discussion of how to restore America’s economy the manipulators have been busy, so it matters as much that we use the right words as that we explore the right ideas and policies.

The Words “Protectionism” and “Trade”

Two words that have significant power today are “protectionism” and “trade.” In current usage anything that can be labeled as “trade” in any way shape or form is in all cases considered by most to be a good thing. And anything that can be labeled as “protectionism” in any way shape or form is in all cased a bad thing. Simple as that. If you want to engage in some practice that people might oppose you try to label it as “trade” to shut down discussion. It you want to block a policy that people might favor you try to label it as “protectionism” to shut down discussion.

I am thinking about this because of the post, American Protectionism Is A Myth, by Leo Gerard and Scott Paul. They wrote about the “shrill warnings against protectionist measures have been issued by editorial pages and foreign officials.”

But what is this “protectionism?” They write,

“This is the untold story of protectionism: the barriers that other governments erect to block American goods and the mercantilist measures they utilize to gain market share in the U.S. These practices range from China's currency misalignment and massive industrial subsidies to non-tariff barriers in Korea and Japan. All these impediments have been well documented by U.S. trade officials, but the mere act of identifying these practices is now viewed as protectionism, even though taking action to eliminate them would expand world trade, reduce global imbalances and preserve the free market.”

Yes, just talking about what other countries are doing to protect and promote their own manufacturing can be labeled as being “protectionist.” This is because once these practices are pointed out the natural next thought is that America should be just as smart about encouraging our own domestic manufacturing.

The op-ed, Falling Behind On Green Tech, by John Doerr and Jeff Immelt in yesterday’s Washington Post, reflects this fear of being branded with the word “protectionism.” They write,

“. . . Do we want to win the race to lead the next great global industry, clean energy? That is the choice before us.

We are clearly not in the lead today. That position is held by China, which understands the importance of controlling its energy future. China's commitment to developing clean energy technologies and markets is breathtaking.

[. . .] How can we catch up? Not through protectionism or massive government intervention but through the power of good old home-grown innovation.”

This statement is an example of how people react to the fear of the negative associations that the manipulators have placed on the word “protectionism.” (They also show a bit of fear of being branded with the word “government.”) They try to escape from any such notion by using the “good” words, “home-grown innovation.” But of course you can’t have “home grown” without protecting your home, which involves government. And you aren’t going to have innovation without the protection and enabling that government brings through schools to educate the innovators and courts to protect their intellectual property. But never mind, that's another post.

So it is “protectionist” to say that other countries have smart planning policies that are increasing their wealth because it naturally makes people realize that we ought to do the same.

For example, if I tell you that China requires that 70% of the content of wind turbines used in China be manufactured in China, where does that take your thinking about our own country’s efforts to stimulate green manufacturing jobs? It is inevitable that your thinking turns to, “then why don’t we do that?” And there you inevitably are: protectionism.

Or if I tell you that GE won't buy wind turbines from American companies, even at the same prices, it is inevitable that your thinking turns to, “why don’t we do something about that?” And there you inevitably are: protectionism.

You see, being smart and supporting our own country’s manufacturing is labeled “protectionist,” which is bad. China is smart to do this but we are “protectionist” if we suggest we should, too.

It can even be called “protectionist” just to point out that a country’s wealth comes from making things. Because making things here inevitably brings the thinking back to having the government protect our jobs. If we say we should make things here we are undercutting the profits to be made by using exploited labor there.

“Trade” is another word that the manipulators have managed to take control of. “Free trade” is now hardwired as the ultimate good. :Free trade" is trade involving no interference from government. (“Government” is another word that has “bad” attachments.) So I guess “free trade” means no police protection from thieves at the ports, no courts to enforce the purchase agreements, no protection of the ships that carry the traded goods or rules for the sea lanes they follow, no roads for trucks to carry the goods from the ports… (I can’t figure this anti-government stuff out, really. But that’s another post.)

The reason I bring up if because misuse of the word “trade” is something I keep coming back to. When a company closes a factory here and opens it in a country where workers are exploited with low wages, or the environment is not protected, making the same thing, using the same machines, and the same raw materials, and selling it in the same stores, how is that “trade?” That isn’t trade, that is closing a factory here and moving it there so you can take advantage of exploited workers or dump toxins into the environment.

But by attaching the word “trade” to a scam like this, they get away with it, because “trade” is considered to be good. You can't be against "trade," so you can't be against using exploited workers to make the same stuff you were already making here. And you certainly can't call for protecting our jobs from being undercut by the use of workers who are exploited and have no recourse. That would be "protectionism." And that is bad.

The result of this obstruction-by-words is that debt increases as we make less with which to trade, our jobs are sent elsewhere, workers elsewhere are exploited, our government is weakened and we get poorer and poorer.

So as we try to work out new policies that will get our country past the current economic crisis and move toward a new economic paradigm where we all share the benefits of the country we have built, powerful words are in our way.

When we overcome the power of these words to brand us, and our fear of that, we can begin to be smart ourselves. When we cease being afraid of being branded as "protectionist" or "against trade" then we can be as smart as the countries with which we compete.

Posted by Dave Johnson at August 4, 2009 12:34 PM


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