If not tariffs, then what?

Fine, tariffs are bad. What's your alternative?

I refuse to contribute to the tariff debate on the object level. Frankly, I’m not smart enough to know whether they have a chance of achieving their aims, or even if Trump is actually just playing a 30-dimensional game of chicken with the global investment markets and foreign governments. So I’m going to sit this one out.

But on the meta-level, I do have something do say: I would like to see just one single smart person currently excoriating tariff policy to acknowledge the material concerns tariffs purport to address — massive trade imbalances and the inability of the US manufacturing sector to compete with third-world near-slave labor. Assuming you admit these concerns, what do you propose to do about them?

First, let us establish that the problems created by a half century of unfettered globalism are real. The rosy-looking macro indicators obscure a great deal of human misery and destruction. Yarvin has much to say on this topic.

The problem with Trumpian mercantilism

Suppose you had a drone which was a time machine: it could visit history, even alternate history, but only to fly over it and take video. When you watch the video of two versions of a city, you decide which one is doing better. Then, you check the actual statistics to see if you were right.

Imagine any independent observer looking at any minor American city or town in 1955 and 2025, with this “condition-of-America” drone. After comparing enough footage to be sure, you will find the idea that 2025 is doing better than 1955 outright preposterous.

A lot of ink has been spilled on this topic so I won’t belabor the point too much. Suffice it to say that the “actual statistics” say there’s nothing wrong with America at large in 2025, that’s it’s much better than America 1955. The numbers keep going up and to the right! Ignore the shambling derelicts on the formerly thriving main streets, ignore the deaths from alcohol and fentanyl. Think of the GDP, about how cheap the toasters are.

If you live in a large cosmopolitan city, especially one on the coasts, you could be forgiven for not noticing the negative impacts of globalization. They didn’t happen to you, although they might have happened to the unfortunate small town you grew up in. America of 2025 is astonishingly good at sorting the wheat from the chaff of human capital, which means that in practice the winners of this arrangement are very unlikely to ever have a meaningful interaction with a loser. No, saying hi to the guy who hands you your burrito doesn’t count. College-educated, professional-class adults increasingly mix only with the other winners, people like them, people who share their professional lifestyle, general worldview, and class concerns. And their lack of contact and familiarity with the losers has been slowly transforming from a chummy if somewhat condescending sort of noblesse oblige into outright sneering contempt. Speciation into Eloi and Moloks surely isn’t far off.

Just after Trump’s election (the first one), when people were desperate to understand why the unthinkable had happened, journalist Chris Arnade formulated a helpful dichotomy of “front row kids” vs. “back row kids” to explain the differences in views and priorities between those who have benefited from globalization and the Great Sort, and those left behind by it.

Right, the front row kids and the back row kids. Now within that there are some divisions and complexities obviously. But the most salient thing about it is that it’s not about political party. It’s non-partisan. “Front row kids” means both Jeb Bush and Hillary Clinton. The front row is anybody who comes from an elite school, Princeton, Harvard, the Ivies or has a postgraduate degree, Ph.D. They’re mobile, global, and well-educated. Their primary social network is via college and career. That’s how they define themselves, through their job. And within that world intellect is primary. They view the world through a framework of numbers and rational arguments. Faith is irrational, and they see themselves as beyond gender. You can describe this using other frameworks, like “the Acela corridor” types.

On the Democratic side, you can think of the Matt Yglesias types in the media, these kinds of global technocrats, policy wonks. Their framework is: “Give me a problem and I’ll devise a maximally optimal solution using my data.” Most importantly, though, they view their lives as having been better than their parents, and they think their children’s lives will be better than their own. And for them, that’s still true.

The front row kids have won. They’re in charge of things. They are the donor class in politics, they’re the analysts and specialists who scream every time someone has a policy difference they disagree with. “You can’t do X, you’re going to cause a global world war.” Or “You can’t get rid of NAFTA,” “you can’t do Brexit.”

Emphasis above mine. If this sounds familiar, it should — it’s the near universal wail emanating from the laptop class in response to populism in general, especially as it relates to trade protectionism and nationalism. The front row kids have benefitted greatly from free trade deals like NAFTA while paying almost none of the costs. The kind of jobs they were destined to fulfill are in no immediate danger of being shipped overseas, and the excellent money they make plying the laptop trades goes farther than ever in terms of cheap consumer goods imported from abroad. But this success wasn’t evenly distributed. For every cosmopolitan powerpoint jockey winner, there was a small town loser left behind. Arnade continues on the topic of NAFTA:

Mathematically it works, because the winners win more than the losers lose. So on a net basis, you say: “Hey look! The data says everybody wins.” There are three fundamental problems with that. One is that winners never share with the losers, that just doesn’t happen. Secondly, what you’re measuring is a very narrow framework of what’s valuable; you’re making the assumption that everybody wants more stuff, having more stuff is what meaning’s about. But the back row finds meaning through their connections, their community, through their structure. When they lose, they’ve lost everything. When the factories go, the town and community fall apart. Their churches hollow out. Their families start facing problems with drugs. So when your sense of meaning and place and valuation comes from your community, and your community gets eroded, that’s it. Game over.

For decades, the left’s answer to the problem of the left-behinds was to move everyone to the righthand side of the bell curve through universal college attendance. Besides the practical and empirical reasons why this could never work (college doesn’t make you smart, its job market value derives mostly from signaling), Arnade points out a spiritual reason as well: mass higher education fails to produce meaning, and in fact aids in its destruction through the bleeding off of the brightest individuals from their communities. The Great Sort separates the most capable young adults from their hometowns, inculcates in them an alien value system, and ensures they will never return. How could the people left behind by such a system be expected to defend it?

Even more pressingly, how are those left behind expected to live? Despite increasingly desperate wish-casting by the universal college crowd, the left side of the bell curve will always exist. A society that wishes to reproduce itself must find a way to productively engage the people who dwell under it. The absurd idea that American culture could evolve to be somehow entirely post-industrial, that it was either possible or desirable to export all the low-skill or manual jobs to other countries, has been pushed for decades.

I want to wear Nikes, I don’t want to make them shits.

Stop trying to give us Chinese jobs.

Far be it from me to accuse Dave Chapelle of being out of touch. In all likelihood, he’s better acquainted with the left half of the bell curve than I am. But it’s still hard to listen to this kind of preening from the winners without becoming cynical. Yes, there are plenty of people who pray nightly for a Nike factory or any other source of steady well-paying jobs they have a shot at getting to open near their community so that it can continue to exist. You might be too good to make shoes, but I promise you there are Americans who would jump at the opportunity — at American wages, with American labor safety laws.

I’m also reminded of an excellent piece of analysis on this topic by John Michael Greer that I read in early 2016, when Trump was still busy mopping up Republican primary challengers and few people believed he had a real shot of winning. Like Arnade, Greer describes the divergent paths of different classes of Americans under globalization, but decides to partition us four ways: the investment class, the salary class, the wage class, and the welfare class. Of these four, the wage class has fallen farthest.

The investment class has actually had a bit of a rough time, as many of the investment vehicles that used to provide it with stable incomes—certificates of deposit, government bonds, and so on—have seen interest rates drop through the floor. Still, alternative investments and frantic government manipulations of stock market prices have allowed most people in the investment class to keep up their accustomed lifestyles.

The salary class, similarly, has maintained its familiar privileges and perks through a half century of convulsive change. Outside of a few coastal urban areas currently in the grip of speculative bubbles, people whose income comes mostly from salaries can generally afford to own their homes, buy new cars every few years, leave town for annual vacations, and so on. On the other end of the spectrum, the welfare class has continued to scrape by pretty much as before, dealing with the same bleak realities of grinding poverty, intrusive government bureacracy, and a galaxy of direct and indirect barriers to full participation in the national life, as their equivalents did back in 1966.

And the wage class? Over the last half century, the wage class has been destroyed.

In 1966 an American family with one breadwinner working full time at an hourly wage could count on having a home, a car, three square meals a day, and the other ordinary necessities of life, with some left over for the occasional luxury. In 2016, an American family with one breadwinner working full time at an hourly wage is as likely as not to end up living on the street, and a vast number of people who would happily work full time even under those conditions can find only part-time or temporary work when they can find any jobs at all. The catastrophic impoverishment and immiseration of the American wage class is one of the most massive political facts of our time—and it’s also one of the most unmentionable. Next to nobody is willing to talk about it, or even admit that it happened.

That’s what I see now. In all of this debate, the fact that a very large minority of American workers have been immiserated by current trade policy is beyond dispute but completely unmentionable. It’s not even denied, it’s just completely absent from the conversation, at least from anyone near the mainstream.

I don’t know if tariffs can work the way their boosters hope. And it irks me that so many commentators have such iron certainty about what their impact will be, when it’s obvious to me we’re laying down fresh tracks, attempting something that has never been tried in the context of a global superpower in a modern economy. Nothing about this outcome seems certain to me.

But I do know that staying the course isn’t an option for the people left behind by current economic policy. And I think smart critics of tariffs owe them an answer. If not tariffs, then what?