For decades, American economic sages, such as Larry Summers, Tom Friedman, and Alan Greenspan, have implied that manufacturing stuff was more or less obsolete—that the building blocks of the economy of the future would be cheap labor and expensive finance. The Chinese will make everything, while Americans will get rich selling each other ever more sophisticated financial instruments.
You might ask: What about the 98 percent of Americans who aren’t cut out for working for Goldman Sachs?
Well, you see, all we have to do is fix the schools. Then everybody will work for Goldman!
The Germans, however, never got the memo. All those speeches at Davos and articles in The Economist about how expensive skilled labor is the road to ruin worried them, but didn’t convince them. Thomas Geoghegan’s entertaining new book about the triumph of the German economy, Were You Born on the Wrong Continent? How the European Model Can Help You Get a Life, explains why the Germans have kept their files to the grindstone and how it's paid off for them. Germany exports more each year than America, despite having only 27 percent as many people. German machinery is more than competitive on the world market, even with Germany’s high wages, six-week vacations, strong unions, and workers getting half the seats on many corporate boards.
Despite having to bail out the profligate Greeks, the German economy in 2010 is expanding and unemployment dropping. Germany runs a trade surplus. And, as illustrated by the blockbuster sales in Germany of Germany Abolishes Itself [VDARE.COM note: review coming soon!], Thilo Sarrazin’s new book criticizing immigration, the self-respect of the German nation is finally coming out of the closet.
The Anglo-American mantra of low wages being “good for the economy” has provided the intellectual keystone for pro-immigration pundits in the U.S. Although Geoghegan avoids mention of immigration in America, his analysis of why the German economic dynamo keeps humming subverts by analogy the case for immigration.
Geoghegan (whose Irish Catholic surname rhymes with “Reagan”) is a political anomaly in 21st Century America: he’s a 1940s-type pro-union Democrat. Geoghegan has scratched out a career defending in court (he’s a labor union lawyer) and in print (his first book was Which Side Are You On? Trying to Be for Labor When It’s Flat on Its Back), the interests of the least fashionable people in America: beefy, middle-aged, working class white guys in windbreakers.
September 13, 2010
Here's the opening of my new VDARE.com column:
Read the whole thing there and comment upon it below.