Each time an election year approaches, the nation's manufacturing industry becomes a more central topic of discussion. Candidates on both sides, who seem to disagree on almost everything else, never waver in their commitment to Detroit's automakers and the steel industry. Republicans and Democrats never forget to remind the American public that they will strive to maintain these specific jobs on American soil. These very tangible and traditional markers of American industry seem to play an outsized role in the American psyche, especially since the steel industry, one of the most frequently mentioned industries, employs only 143,000 citizens.
Biden emphasizes desire to keep American jobs, Trump focuses on fear of Chinese industrial encroachment. Whatever the justification given, the idea that more manufacturing in America is a good thing is consistent. If this concept stemmed from the true conviction of American leaders, it would be insane but nevertheless admissible. The current institutional environment has created a situation driven by greed rather than true conviction. Lobbyists from various industries have managed to establish themselves firmly in the minds of politicians, and there is no reason for their influence to dissipate. The relatively small number of workers in each sector has created a negative cycle for the rest of the country where their inefficiency is often rewarded.
Even if special interest groups in each sector do gain additional immediate benefits for themselves, they harm both the American public and themselves in the long run. Their deleterious effect on the American public is clearly demonstrated by the fact that citizens must pay more for basic goods. The current average the tariff on steel in America is 7.5%, meaning that any industry involving steel must significantly increase its production costs. Consumers bear the brunt of this cost, as it directly and indirectly affects the prices of everything they buy. Policies focused on the number of jobs in a specific sector in the US market harm US citizens and enable Chinese industry to prosper in the long term. While some tariffs hurt China's manufacturing industry to some extent, they could also force them to increase efficiency to reduce costs. Chinese producers could experiment with new technologies as a direct result of regulators' attempts to limit their market. If these technologies succeed, American manufacturing jobs could be eliminated. even more condemned than before. Just as tariffs promote foreign efficiency, they promote domestic laxity. The same industries that successfully lobbied for momentary protection from competition are being punished by technological and organizational stagnation. Succeeding in manufacturing requires constant adjustments and changes to barely make a profit in a world full of other companies trying to outdo each other. Government protection of tariffs gives businesses a false sense of security that prevents them from realizing their highest potential. If they work with an artificial extra margin of 7.5%, they will not have the basic profit and loss guideline. Businesses won't have the incentives to promote technological change, and America's manufacturing industry won't even stand a chance against Chinese innovation.
The massive negative effects of attempts to keep specific jobs on American soil will continue as long as industries employing relatively small numbers of employees continue to manipulate our institutions. This manipulation continues because our institutions are victims of the dangers caused by the concentration of profits and the dispersion of costs. The benefits of builder lobbying are extremely concentrated. They benefit directly from the limits that they manage to convince the government to impose on foreign trade. The increase in revenue from even a small fee is so great that companies are willing to band together and invest heavily in lobbyists and special interest groups. This form of profit-seeking is rarely challenged because those who bear the costs are far too widespread, poorly organized, and unmotivated to do anything. The American the public pays for the madness of regulators and manufacturers. Each item becomes slightly more expensive than it otherwise would have been, but the reason for that price price increases are rarely evident. Even if individuals could understand the reason for the higher price of items, communication between everyone involved would be extremely difficult.
Manufacturers are currently in a perfect situation in the short term. They can influence policy as they wish because they know they will face no opposition. America's manufacturing capacity will fall below its true potential as long as valuable resources are spent groveling before the government for protection. The government is fueling this negative cycle by acceding to the demands of lobbyists. If industries believe there is little chance of success in lobbying for a tariff, they will use more resources to develop the technology rather than seeking favors.
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