This boy is Ignorance. This girl is Want. Beware them both,
and all of their degree, but most of all beware this boy,
for on his brow I see that written which is Doom, unless the
writing be erased. — Charles Dickens, “A Christmas Carol”
America is witnessing the consequences of a failure to educate and retrain globalization’s losers. For 25 years, the globalists, including myself, have presumed that technology and trade will eventually make everyone better off. It’s taking too long, and the natives are restless. Americans without the right kind of education, increasingly unemployable in a world of low-wage offshore manufacturing and low-skill illegal immigration, are rebelling.
This, more than anything else, is why Trump won. As his administration appears to go down in flames, don’t be too sure that we’ve seen the end of the forces that unleashed him. One charlatan may go, but the basic problem is not addressed.
In designing policy, we must first understand that globalization is inevitable, because it is driven by technology, not policy. Globalization has been under way, slowly but inexorably, throughout recorded history. Horses and carts allowed regional trade, which created larger economic regions. Then shipping. Then canals. Then rail. Then telegraph. Then phone. Then superhighways. Then the Web. Each step increased the size, and lowered the transaction costs, of trade areas.
Larger trade areas have always made everyone better off on average. This comes straight from Adam Smith: the bigger the trade region, the greater the economies of scale for a given specialization, hence higher productivity than otherwise would be possible. This has always been true, and will continue to be true. It’s an arithmetic truism.
But larger trade areas don’t make every individual better off. If you’re uncompetitive, you get whacked. The US, and especially Clinton-era Democrats, gambled for a quarter-century that globalization would eventually make everyone better off. It hasn’t happened yet. That’s what brought the Trump/Sanders rebellions.
Unfortunately, both Trump and Sanders have the wrong answer: retreat. Both mistakenly think of globalization as a policy choice, rather than a technological inevitability. Withdrawing from a large trade area would only ensure the US is left behind in future trade-driven prosperity.
The only thing that could save us from more Trumps and Sanderses: access to free Web-based education. Huge shortages exist in skill sets that can be learned online for free. Making those skills even a little more accessible to globalization’s losers could make a huge difference politically.
What kind of accessibility?
- Universal internet access. Just as the Rural Electrification Act in the 1930s brought Kentucky and Tennessee into the industrial age, a Rural Webification Act might bring them into the internet age. Computers are already cheap: $100 will buy you enough computing power to do real work. The roadblock is the internet service provider: $80/mo for decent bandwidth is an insurmountable barrier for a poor family. But imagine if someone demonstrating an income under $40k could get 1Mbps internet for $10/mo. It could permanently transform his fortunes, at low cost to the rest of us.
- Road map to skill shortages and free resources. How do you know where to start? or what to study? There are endless online resources to learn, for example, Ruby on Rails coding — but to begin, you need to know, first, that Rails coders are in tremendous shortage, and, second, where to find the free online resources to learn Rails coding. Government and charitable foundations could provide this road map.
- Awaken globalist American charitable foundations to an existential threat. For all their brilliance at providing the greatest good to the greatest number worldwide, groups like the Gates Foundation seem not to appreciate that they cannot function, nor even survive, unless the United States remains politically stable and engaged with the world. Thus it is in their existential self-interest to participate in the rescue of globalization’s losers.
Notice what I’m not advocating: universal income, trade barriers, immigration barriers. These are all forms of retreat, and should be viewed with skepticism.
I’m also not advocating for “free college,” which is a high-cost, uncertain-benefit misapplication of archaic forms of general education to address the narrow, specific skill shortages, learnable for free, that would most rapidly improve the fortunes of globalization’s losers. A degree in English remains socially useful as ever, and classroom debate is as enriching as ever. However, on average, it will not reliably improve the fortunes of Pennsylvania’s urban unemployed at minimum cost.
The highest-leverage solution is to point people to free sources of useful skills, and give them just enough resources to access them. It’s the lowest-cost, highest-benefit approach, and we should maintain laser focus on it.