A 200-year-old debate


WASHINGTON -- In 1802 Alexander Hamilton, seething about President Jefferson's rejection of Hamilton's plans for a national highway system and other stimulants of economic dynamism, wrote acidly: "Mr. Jefferson is distressed at the codfish having latterly emigrated to the southern coast, lest the people there be tempted to catch them, and commerce, of which we have already too much, receive an accession."

The policy argument that helped prompt formation of two parties concerned what kind of economy was desirable. The argument was about what kind of people Americans should be, sturdily independent rural yeomen of Jefferson's agrarian vision, or restless, urban, entrepreneurs of the nation envisioned by Hamilton's "Report on Manufactures."

In Andrew Jackson's war against the Bank of the United States, or the pre-Civil War debate about "free labor" versus "wage labor," or later debates about laissez faire versus unionization, and free trade versus protectionism, political leaders did what Republican presidential candidates and others are now doing.

Because of the resonance of Pat Buchanan's promises to assuage middle-class anxiety and protect job security, the candidates and others are rekindling a debate as old as the republic, a debate about how much economic dynamism is desirable, and what are dynamism's costs to the tranquility of individuals, the stability of communities, and the nation's character. Herewith three propositions pertinent to today's debate:

* One of the best things that ever happened to African-Americans was the mechanization of agriculture that destroyed so many of their jobs.

* One of the best things that ever happened to America's automobile industry is Japan's automobile industry.

* One of America's economic afflictions has been the idea of the compassionate corporation.

Time was, in places like rural Mississippi, African-Americans lived in stable, traditional, organic communities of a sort often praised intellectuals from afar. They led lives of poverty, disease and oppression, but they had security, albeit the security of peonage.

Easier than stooping

Then came machines that picked cotton more efficiently than stooped-over people could, so lots of African-Americans stood up, packed up, got on the Illinois Central, got off at Chicago's Twelfth Street station, and went to the vibrant South Side where life was not a day at the beach but was better than before. Destruction of a "way of life" by "impersonal" economic forces can be a fine thing.

Before the "invasion" of America's market by Japanese automobiles, American automobiles were about what you would expect from an unchallenged industry grown fat on a continental market. Today's American cars, made by fewer but more productive workers, are more reliable, cheaper to operate, less lethal and much less expensive than they would have been but for the "invasion."

What happened to former auto workers? They became other kinds of workers in an America where, writes Robert Bartley, the Wall Street Journal's editor, the unemployment rate is "about 5 percent, half that in Europe, where governments have tried to protect jobs by, for example, making it nearly impossible to lay off workers."

Congressional Democrats and other kindred spirits of Mr. Buchanan are concocting various measures, from presidential hectoring to social engineering by tax incentives, to prevent things like AT&T;'s shedding of 40,000 workers. What are they thinking? Surely not that AT&T; is mistaken about efficiency and actually needs the 40,000. So they must be thinking that political pressure and economic bribery should be used to encourage AT&T; and other corporations to be inefficient.

Private welfare

Time was when various "model corporations" advertised their "social conscience." As recently as the early 1980s IBM told employees: "In nearly 40 years, no person employed on a regular basis by IBM has lost as much as one hour of working time because of a layoff." No more. IBM's layoffs have been especially severe because the corporate culture of IBM's private-sector welfare state made it so very vulnerable to leaner firms like Intel and Microsoft.

Who thinks America would be better without job-creating, wealth-producing corporations like those?

"Populists" promising to protect Main Street from Wall Street are confused. Wall Street Journal columnist Holman Jenkins Jr. notes that when Wall Street, meaning capitalist pressure to maximize profits, enforces efficiencies on corporations, the beneficiaries include Main Street, meaning most Americans, who own stocks directly or through their pension funds. Often the Wall Street enforcers are agents of Main Street -- managers of the pension funds, investing the money that flows from Main Street.

Mr. Jenkins says that after announcing the 40,000 layoffs, AT&T; gained $4 billion in market value. This benefited, among other stockholders, the college professors' pension fund, but do not expect expressions of gratitude from the faculty clubs.

George F. Will is a syndicated columnist.

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