By Gutting Our Own

Patrick J. Buchanan writes:

"This is called slave labor," said Pope Francis. The Holy Father was referring to the $40 a month paid to apparel workers at that eight-story garment factory in Bangladesh that collapsed on top of them, killing more than 400. "Not paying a just wage ... focusing exclusively on the balance books, on financial statements, only looking at personal profit. That goes against God!"

The pope is describing the dark side of globalism. Why is Bangladesh, after China, the second-largest producer of apparel in the world? Why are there 4,000 garment factories in that impoverished country which, a few decades ago, had almost none? Because the Asian subcontinent is where Western brands — from Disney to Gap to Benetton — can produce cheapest. They can do so because women and children will work for $1.50 a day crammed into factories that are rickety firetraps, where health and safety regulations are nonexistent.

This is what capitalism, devoid of a conscience, will produce. Rescuers at the factory outside Dhaka have stopped looking for survivors, but expect to find hundreds more bodies in the rubble. The Walt Disney Co., with sales of $40 billion a year, decided — after an apparel plant fire in November took the lives of 112 workers — to stop producing in Bangladesh. "The Disney ban now extends to other countries, including Pakistan," says The New York Times, "where a fire last September killed 262 garment workers."

Not long ago, the shirts, skirts, suits and dresses Americans wore were "Made in the USA" — in plants in the Carolinas, Georgia and Louisiana, where the lower wages, lighter regulations and air conditioning that came after World War II had attracted the factories from New England. The American idea was that the 50 states and their citizens should compete with one another fairly. The feds set the health and safety standards that all factories had to meet, and imposed wage and hour laws. Some states offered lower wages, but there was a federal minimum wage.

How did we prevent companies from shutting down here and going to places like today's Bangladesh to produce as cheaply as they could — without regard for the health and safety of their workers — and to send their products back here and kill the American factories? From James Madison to the mid-20th century, we had a tariff. This provided revenue for the U.S. government to keep other taxes low and build the nation's infrastructure. Tariffs prevented exploiters of labor from getting rich here on sweatshops abroad.

Tariffs favored U.S. companies by letting them compete for free in the U.S. market, while a cover charge was placed on foreign goods entering the U.S.A. Foreign producers would pay tariffs for the privilege of competing here, while U.S. companies paid income taxes. Foreigners had to buy a ticket to the game. Americans got in free. After all, it's our country, isn't it?

But in the late 20th century, America abandoned as "protectionism" what Henry Clay had called The American System. We gave up on economic patriotism. We gave up on the idea that the U.S. economy should be structured for the benefit of America and Americans first. We embraced globalism. The ideological basis of globalism was that, just as what was best for America was a free market where U.S. companies produce and sell anywhere freely and equally in the U.S.A., this model can be applied worldwide.

We can create a global economy where companies produce where they wish and sell where they wish. As one might expect, the big boosters of the concept were the transnational corporations. They could now shift plants and factories out of the high-wage, well-regulated U.S. economy to Mexico, China and India, then to Bangladesh, Haiti and Cambodia, produce for pennies, ship their products back to the U.S.A., sell here at the same old price, and pocket the difference.

As some who were familiar with the decline of Great Britain predicted, this would lead inexorably to the deindustrialization of America, a halt to the steady rise in U.S. workers' wages and standard of living, and the enrichment of a new class of corporatists. Meanwhile, other nations, believing yet in economic nationalism, would invade and capture huge slices of the U.S. market for their home companies, their "national champions." The losers would be the companies that stayed in the U.S.A. and produced for the U.S.A., with American workers.

And so it came to pass. U.S. real wages have not risen in 40 years. In the first decade of the century, America lost 5 million to 6 million manufacturing jobs, one in every three we had, as 55,000 factories closed.

Since Bush 41 touted his New World Order, we have run trade deficits of $10 trillion — ten thousand billion dollars! Everybody — the EU, China, Japan, Mexico, Canada — now runs a trade surplus at the expense of the U.S.A. We built the global economy — by gutting our own.