Don’t buy “Buy American”

September 16, 2011

During the economic crisis of the 1980s, Corporate America sounded the call for protectionism, demanding import controls and promoting consumer boycotts of "foreign" goods, supposedly in the interests of "saving American jobs." These policies not only didn't address the crisis facing workers, but they diverted attention from the real source of the problem. Ahmed Shawki took on this important argument in the June 1983 issue of Socialist Worker.

WITH 11 million workers in the U.S. officially unemployed, protectionism is gaining ground. "Buy American," "Save American Jobs," "Hungry?--Eat Your Import," and "USA Number 1" are only a few of the slogans adorning car bumpers. Demands to curb imports of steel, automobiles and machine tools are made daily.

The Japanese are especially singled out for blame. "Predatory," "illegal," "discrimination" and "infamous" are only a few of the epithets used by both industry and unions to describe Japanese trade practices.

The United Auto Workers (UAW), which banned foreign cars from its parking lots some years ago, is putting all its energy into an import content bill. Under the bill, auto manufacturers with sales of over 900,000 units will have to contain 90 percent of American-manufactured parts by 1986.

The United Steelworkers of America (USWA) argued a similar case. Last month, Lloyd McBride, president of the USWA, took out a full-page ad in the dailies to protest U.S. Steel's plan to buy finished steel slabs from Britain. Foreign steel, he argued, is the cause of the profound crisis of the steel industry--and "buy American" is the only way to reverse the trend.

U.S. automakers promoted the "Buy American" campaign

Other examples of the same theme are heard everyday--that unfair foreign competition is strangling U.S. industry and is a major cause of unemployment, especially in auto, steel and machine parts. Therefore, curb imports and American industry will regain its feet. After all, runs the argument, America is the freest market in the world. It allows other countries to "dump" goods here, while they erect trade barriers to U.S. goods.

As William Brock, Ronald Reagan's trade representative put it: "This country is the biggest open market in the world...the U.S. is the least sinful of any country I have ever dealt with."

SUPPORT FOR import plans is not difficult to explain. After all, there is a crisis in American industry.

In 1982, auto production hit lows not seen in 30 years. More than 30 plants of the Big Three automakers alone have been closed in the last two years. The UAW lost 300,000 members between 1978-1982.

And what is true for auto is true for steel. Steel production is at its lowest since the Great Depression. Pittsburgh, Youngstown and Gary are grim, impoverished, depressed towns. More than a third of the 400,000 workers employed in steel have been laid off. The USWA once numbered as many as 1.3 million in 1981--today, it can count only 700,000 members.

And rhetoric aside, American workers can see Japanese and European cars on the streets. In 1982, imported cars took 27 percent of the U.S. market, steel 24 percent.

The solution seems easy and straightforward--stop the imports and American workers will be put back to work. The problem, however, is that protectionism does not work--import controls will not create jobs.

Moreover, they are reactionary and utopian. They divert the anger and frustration of workers in each country from those actually responsible for the crisis--the bosses and their system. They must be completely opposed by socialists and trade unionists.

Supporters of import controls start with the premise that the U.S. market is "free"--an open, friendly, unprotected market. This is simply an out-and-out lie.

The U.S., like other countries, tries to gain advantages in trade through a whole myriad of quotas, subsidies and tariffs. It is estimated that close to 48 percent of world trade is in this sense "controlled." And the U.S. market, though the biggest, is among the most controlled--an estimated 34 percent--as opposed to 21 percent in Britain, 10 percent in Canada and 7 percent in Japan.

THE ARGUMENT "imports lead to recession" is simply not supported by any facts. Imports into the U.S. have increased in the last 20 years. But fundamentally, this is because the world capitalist economy is more and more integrated and more and more international--every country is more and more interdependent.

And U.S. exports are dependent on imports. A study produced by the Organization of Economic Development and Cooperation--the club of industrial countries--estimates that one in every five jobs depends on exports. Cut imports from Japan or Western Europe to the U.S., and they will do the same--leaving hundreds of thousands of workers unemployed.

In other words, the world economy is integrated and interdependent like never before--and each country depends on exports. Throw up tariffs and quotas, and unemployment will increase and the recession will deepen. In such an internationalized system, the notion that national states can escape the world market is utopian--and dangerous.

And since the economy is international it is increasingly difficult to tell what is a foreign import and what is not. Take auto imports from Japan--the protectionists' favorite target. General Motors owns 34.2 percent of Isuzu, the Japanese auto manufacturer, and 5.2 percent of Suzuki. Ford owns 25 percent of Toyo Kogya, the makers of Mazda, and Chrysler owns 15 percent of Mitsubishi.

Even cars actually assembled in the U.S. are not in any real sense American products. They are assembled here, but the parts are imported from Big Three plants located abroad. There are an estimated 604 American-owned auto plants in Mexico, which supply engines, transaxles, ball joints and transmissions.

The auto companies are international. They produce cars wherever profits are highest--not on any consideration of the nationality of the workforce. In the all-too-honest words of one Ford vice-president, "We don't consider ourselves basically an American company. We carry a lot of flags."

Anyway, as unemployment has skyrocketed in the auto industry, the actual number of imported cars has not. What has happened is that imports are taking up a larger share of a smaller market for cars.

And import controls will only further shrink the market by raising the price of cars sold in the U.S. In this way, import controls do not save jobs, but actually lower the living standards of workers in the U.S. by raising the price of products.

The same is true for steel imports--despite what Lloyd McBride and David Roderick say about Japan. In 1978, America imported 21.1 million tons of steel. In 1981, it was 19.9 million tons. While imports actually dropped, 75,580 steelworkers lost their jobs in the same period--an estimated 16.5 percent of the total workforce!

And while protection of a given industry may temporarily protect jobs in that sector, it shifts unemployment to another sector, depressing the economy and affecting the "protected" industry. Take steel. The U.S. steel industry has been protected for 20 years. The result was not more jobs, but more profits for the steel companies. And the high price of U.S. steel contributed to the increased cost of cars and the slump in the auto industry.

If in doubt, look at what happened when import controls were adopted on a large scale during the depression of the 1930s. In June 1930, President Herbert Hoover signed the Smoot-Hawley Tariff Bill. Under the terms of the new law, tariffs were raised 50 percent. Canada, the U.S.'s largest trading partner, retaliated with its own tariff laws. In 1931, Britain did the same, and so on.

Far from saving jobs or slowing the depression, the tariff war has the opposite effect. Between 1929 and 1933, world unemployment quadrupled, and world production dropped by one-third--46.2 percent in the U.S. alone. The only thing that ended the depression was the Second World War.

TODAY, A trade war would be even more disastrous for workers and their living standards, as the world is more integrated than in the 1930s.

Imports, then, are not the cause of the crisis. At best, import penetration in the U.S. market is a reflection of the severity of the crisis--a crisis of capitalism and a crisis in profits. It is this crisis in profitability that is behind the crisis of the working class--for closures, for the introduction of labor saving technology for unemployment.

In their relentless search for profits, the bosses do anything. That is why U.S. Steel, a leading proponent of protection, is planning to buy slabs of steel from Britain. Or, in the case of its subsidiary, why American Bridge bought 16,000 tons of structural steel from Korea and Japan for a downtown Seattle building. Or why Roger Smith, the head of GM, threatened to buy imported steel if the steelworkers union didn't accept massive concessions.

U.S. Steel, GM and Ford are international corporations. They will blame imports for unemployment to justify concessions--but will import what they want and invest where profits are highest. U.S. Steel is interested in making money--not making steel or creating jobs. Indeed, in 1982, only 28 percent of its total revenue came from making steel!

To accept import controls is to accept somehow that the interests of the corporations is the same as that of workers. They are patently not. It is the employers' policies and their system which responsible for our crisis.

Today, bosses in the U.S., Britain, Japan and Germany are all blaming workers in other countries for the crisis--and laying off more workers because profits aren't high enough. Meanwhile, the need for steel and other products has grown, not decreased.

Accepting the import controls arguments leads inevitably to giving up the struggle for workers' living standards and interests. They disarm unions. Owen Bieber, the UAW's new president, says, "I don't want to suggest that you will never see a strike again by this union in the United States, but on the whole, you are going to see a lot more cooperation than 10 years ago." Sweet words to the ears of General Motors.

Worse, import controls are also racist. They blame foreign workers for our problems--claims to the contrary aside.

In a "left" defense of import controls, Michael Harrington and In These Times have argued that the Domestic Content Bill is not really a protectionist measure, but an attempt to establish "democratic control over corporate decisions."

Michael Harrington writes

Couldn't the bill also lend itself to chauvinist, even racist interpretations? Of course. It does. Understandably, angry American workers could assume that their enemy is the foreign worker--or worse , the "yellow" worker--rather than the multi-nationals playing workers of the world against one another. The UAW, chief advocate of the bill, has been quite forthright in fighting this reactionary interpretation of it.

Rubbish. The UAW has banned foreign cars from its lots, organized smash-ups of Japanese cars, appealed to patriotic flag-waving and been overtly racist toward the Japanese.

And the result of such policies can only divide workers and increase racism. Last month, an unemployed autoworker was slapped on the hand by a Detroit court for beating to death a Chinese man outside a bar--they thought he was Japanese.

INSTEAD OF fighting to unite workers and raise wages for all, protectionism can only lead to lower wages here and abroad. So long as capital is international, it will move where profits are highest and wages lowest. Wages on a world scale must be raised--or wages in the U.S. will be forced down.

Talk of "democratic control of corporate decisions" by encouraging protectionist measures is simply a sham--and is reactionary. "Democratic control" over corporate decisions within the structure of a world capitalist economy is reformist nonsense--be it from Doug Fraser or the board of Chrysler or Michael Harrington or anyone else. The imperative of competing in a world economy is the core of the problem--not the personnel heading GM or U.S. Steel.

The Import Content Bill will not lower unemployment but raise it (with layoffs in other sectors), raise car prices and fuel racism. Anyway, import controls will be evaded, and they will only increase competition in other countries where U.S. automakers are dominant.

And racism against the Japanese or other foreign workers is not the end of the story. Because the logic applies to the U.S. itself--for example, blaming Mexican workers inside the U.S. Is it surprising that they AFL-CIO is in the forefront of efforts to curb "illegal" immigrants? The logic of the argument also applies to divisions within the U.S. working class--Blacks are paid less than whites, therefore, they are an enemy. Or women in the workforce. Or Southern workers. Instead of organizing "illegals" or Southern workers or women--and raising the slave wages that the bosses pay--the result is to lower all wages.

So we must oppose import controls. But in doing so, we shouldn't fall into idealizing "free trade" either. Free trade got us into the mess we are in and import controls will only make things worse--this is the way to look at the problem.

Further, in the same way as the corporations fight workers internationally, so, too, the workers' movement must be international. The slogans "United we stand, divided we fall," and "Solidarity" have to become more than slogans. They have to become the practice of the international workers' movement.

A workers' movement that sees the unity of the working class against our common exploiters is the only and necessary prerequisite for survival. Imports are not the problem. The international capitalist economy is.

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