The photo at left is an interesting one: those men are not using those hammers to build, they are using them to destroy. In their eyes machinery that is about to revolutionize their industry must be stopped.
Why are they doing this? Beacause most of them will probably lose their jobs; at a minimum they will face increased competition from low skilled replacement workers.
"Their main targets were the new, wide frames operated by unapprenticed workers, which produced poor quality but cheap stockings. In just three weeks, more than 200 of these frames were destroyed and 400 special constables had to be sworn in to protect the factories. " (Cotton Times)
People respond. That is what we do. Today, we are less likely to go robot smashing, but we do form political coalitions to pass laws that restrict innovation.
Innovation...there I just typed it again. What comes to mind when you read it? Positive thoughts, right? Success, jobs, wealth, industry, technology; maybe even thoughts of America itself. Let me be more specific and mention financial innovation, or outsourcing innovation, or food and nutritional supplement innovation, do your positive thoughts change?
The reason we went through that little exercise is to highlight a daunting challenge we face today on an ever increasing basis, summarized in an article titled
Keeping America's Edge by Jim Manzi:
How do we balance economic dynamism and growth against the unity and stability of our society? After all, we must have continuous, rapid technological and business-model innovation to grow our economy fast enough to avoid losing power to those who do not share America's values — and this innovation requires increasingly deregulated markets and fewer restrictions on behavior. But such deregulation would cause significant displacement and disruption that could seriously undermine America's social cohesion — which is not only essential to a decent and just society, but also to producing the kind of skilled and responsible citizens that free markets ultimately require.
So here's the deal:
- Innovation forces change
- Change is painful, especially since the pain involved is usually felt immediately while the benefits are more dispersed and gained over time.
Consider our country's transition from an agricultural economy to an industrial one. In 1800, about three-quarters of the American labor force worked in agriculture. Subject to an almost continuous decline, today agriculture employs less than 3% of the work force, food has become incredible cheap (however this isn't necessarily a good thing) and more plentiful in real terms than ever before in human history.
The same story can be said about American manufacturing:
The transformation described by these statistics was not easy. It produced enormous flux in social, political, and family relationships, and the instability lasted for generations. One of the most painful things about markets is that they often make fools of our fathers: Sharp operators with an eye for trends often outperform those who carefully learn a trade and continue a tradition.
- Increasingly we see political intervention through the design of industrial policy
- Fueled by the potentially displaced peoples, government picks winners and losers
Again from the article:
Almost all industrial policy ends up protecting existing institutions; this is a function of human nature and is not fixable by clever program design. As a result, industrial policy normally preserves jobs that a ruthless market would eliminate, and subsidizes the kinds of new technological developments that can be exploited by existing large firms. But these favored developments are rarely the sources of new high-wage jobs — and so such policy is more often a recipe for controlled stagnation than for continued growth.
The attempt to protect ourselves from the pain of change ends up creating a sclerotic economy that, in the long run, puts everyone at greater risk.
- Government cannot know which are the right industries to save and which are the wrong ones, no one can.
- It does us more harm to tax productive peoples and industries and prop up weaker ones, only to make them wholly dependent on tax payer's sustenance.
I return full circle to the wool industry and quote a press release dated January 25, 2010 from New York Senator
Chuck Schumer:
Today U.S. Senator Charles E. Schumer announced that a proposal to end a Wool Trust Fund program has been taken off the table as way to raise revenue for a proposed jobs bill. Schumer, after being contacted by Hickey Freeman officials, wrote OMB Associate Directors Xavier Briggs and Sally Ericsson to urge them to maintain funding for the Wool Trust Fund, a program that has successfully helped companies across the country create and maintain jobs. Schumer said that eliminating this program, which provides Rochester’s iconic Hickey Freeman with substantial import tax relief, could lead to the closure of the Rochester facility, leading to the loss of 400 good paying jobs. Schumer said that to eliminate this program to pay for a jobs bill would be a bitter irony.
“Today Hickey Freeman employees can take a deep breath and go back to doing what they do best – making world class suits,” said Schumer. “The administration responded to our pleas and did the right thing taking the elimination of this program off the table. We worked too darn hard to save Hickey Freeman jobs and we were not going to see them disappear now. Hickey-Freeman is a Rochester icon and a vibrant business, and I will continue to fight for policies that benefit it and businesses across the region.”
Hammers have been replaced by dollars, rocks have been replaced by emails, pitch forks by TV commercials on local news.
Census
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