Recently in Episode 10 of the Free the Economy podcast we returned to one of our favorite topics, economic opportunity and jobs in America. This was inspired, in part, by Ben Shapiro’s recent interview with Tucker Carlson in which they covered job opportunities for working-class men in America. Populist critics, of course, think that blue collar workers have gotten a raw deal from the last few decades of the modern global economy. In the interview Carlson tells Shapiro that if he were president he would ban automated big rig trucks, because being a truck driver is currently one of the most popular jobs for men without a college degree. Allowing automation would presumably mean a lot fewer men making a living driving trucks, so we should make that technology illegal to protect those jobs.
The proper response to this, of course, is the same one economists have been giving for a couple of centuries, which is that protectionism for inefficient industries makes everyone poorer, not richer. Progress marches on, and while protecting jobs for certain classes of Americans might seem attractive in the near term, that strategy is a long-term recipe for disaster. As the Manhattan Institute’s Daniel Di Martino points out, a 1920s-era Tucker would have wanted to bans cars and trucks altogether because they put the original teamsters and coach drivers out of business. But would we be a stronger, fairer nation today if every big city was still filled with slow-moving wooden carts and piles or horse manure?
When the federal government performed the first census in 1790, something like 90% of Americans worked on farms. Those were reliable, blue-collar jobs that any young man who was willing to work could get without a college degree – exactly the profile of work that Tucker and others claim is so important to maintain. But since 1790, we have acquired a dizzying number of new farm tools and technologies that have dramatically increased yields and lowered prices, making a large diversity of foods dramatically more affordable. But producing more food on the same land means that we need a lot fewer people working on the land itself. Direct farm labor is only about 3% of the modern U.S. economy. But where are the tens of millions of unemployed farm hands that Tucker’s great-great-grandfather would have predicted? They certainly aren’t roaming the highways of America begging for work. Last I checked, we had one of the lowest unemployment rates in history.
Turns out, they got other jobs: making tractors, repairing harvesters, testing seed drills. Today, some of them are plant geneticists and nutritionists. Maybe they work for Safeway or Whole Foods. But, of course, the majority of the men and women who would have worked on farms in 1790 now have jobs that have nothing to do with farming at all. In fact, they have opportunities their ancestors couldn’t have dreamed of. They’ve become software engineers and airline pilots and writers and college professors and Instagram celebrities. A dynamic market economy allowed them to create a thousand new kinds of jobs that never existed before, by offering to make or do something that someone else thought was valuable enough to pay for. That’s the way our economy has already worked, it’s just now bigger and more diverse than ever. Critics like Tucker imagine trucking automation killing off trucker jobs, and then…nothing. That’s the end of the line, with those men and their sons after them just being unemployed forever, apparently.
But we know that’s now how a market economy actually works, because we’ve seen wave after wave of technological change crash over America, only to leave more jobs and opportunities than ever before. Ask the people who used to be typesetters on printing presses, telegraph operators, and barrel makers. What happened to the guys who made buggy-whips and curry combs and leather reins? Their jobs are gone but their kids and grandkids are gainfully employed, and at a significantly higher standard of living.
This is not to say that shifts in a dynamic economy are easy to deal with. There is also always a problem of frictional unemployment – people who lose jobs and are too old to retrain or are unable to move to where opportunities are. These frictional problems are generally made worse by well-intended regulations, and that’s where the policy response should start.
But we can’t build a prosperous future by hiding our head in the sand and trying to keep Americans in traditional jobs that may be overtaken by innovations when they could be doing something else that’s likely better paid, safer, and more interesting. If government planners of previous decades had taken Tucker’s advice, we’d have a billion vacuum tubes and no transistors, much less microprocessors. We’d have top quality landlines and zero cell phones. There would be thousands of workers still making fax machines but no internet. That’s a truth we have to understand whether we like it or not. You can’t go back to the economy of yesterday. In fact, tomorrow is already here.