Economists miss the boat in ignoring globalization's impact

"We forget at our peril that markets make a good servant, a bad master, and a worse religion." - Amory Lovins

If you do much of your work on a computer, whether working at home or in an office, you might feel that you're part of the economic avant-garde.

Indeed, you are. In fact, you're in the front ranks of the next sector moving on . . . to another country. If your job could possibly be done at home, does it really matter if the home is in Boston or Belfast or Singapore? You are a part of the Almost Gone economy.

What got me thinking about jobs with one foot in the ocean was seeing that a few economists have finally come around to wondering about the impact of globalization on American workers. In fact, one prominent practitioner of the dismal science, Alan Blinder, made it personal this year. He put together a list of "highly offshorable" jobs and there on his list was economists.

(Envisioning how they'd move overseas: Financial firms could hire consulting firms staffed by Indian and Chinese economists. And someday, when we moved past the greatest barrier to free trade ever erected, faculty tenure, classes would be online from the London School of Economics.)

Yes, the invisible hand has been replaced by the invisible hook, slipping into the collar of those who've been telling us for decades that the freer the trade the better off we all are.

Also on Blinder's list were accounting clerks, computer programmers, actuaries, film editors, mathematicians, graphic designers, and on and on. If it can be done on a computer, it's part of the Almost Gone economy. ("Newspaper columnist" is not on the list, by the way. I suspect that's only because there's not enough money in it.)

So what have economists done to help? They yammer on about "comparative advantage," that old argument that if each country does what it is naturally most suited to do, that the world will be a better, more prosperous place.

Okay, but here's the question: What is the comparative advantage of the United States? There was a time when we were out front because of our technology, our collective knowledge, our access to capital of both the monetary and intellectual variety. That advantage we have given away.

It was easier for intellectuals to be sanguine about globalization when it meant sending assembly-line jobs overseas. After all, from an office at the Economics Department at Princeton, a job on the assembly line seemed mind-numbingly awful, and the solution rolled so easily off the tongue: retraining.

But now, what do you retrain an economist, graphic designer, or actuary to do? If manufacturing is gone -- and much of anything involving a computer goes too -- well, what does that leave? The service industry, of course. From graphic designer to Sandwich Artist at Subway. But economists? What will we do with them? They don't have the social skills for the service industry. Maybe they could work security. What troubles me is that economists have taught us all to accept the inevitability of jobs being lost.

If you mention any restrictions on the gutting of the American economy, economists do an immediate Pavlov, drooling "Smoot-Hawley" and "Great Depression." So it falls to me to offer a few suggestions. First, we need to stop being accomplices in the dragging down of the retail sector. What I'm going to say hurts me personally, as a regular Internet shopper, but it's time for tax on online sales. We need to stop putting the people who invest in the local economy at a competitive disadvantage.

Then, we need to remove as many obstacles to employment as possible, getting our employers out of the jobs done by governments elsewhere in the world, such as providing healthcare.

Finally, we need to find ways to make imports do their share for the economy. Let's start by making our country safer, inspecting every container that arrives in the country. That would raise the cost of imports in time and money, without starting a tariff war. And best of all, it would do so while providing lots of solid security jobs for those retrained economists, letting them make up for all that they've done by ignoring the problems of globalization.

Dale Dauten is a syndicated columnist. He can be reached at dale@dauten.com.