Watch Out, Democrats!

In “The Sign of Four,” as Sherlock Holmes walked out of 221B Baker Street on a brief excursion to investigate the disappearance of Captain Arthur Morstan, he recommended to Dr. Watson a book that he described as “one of the most remarkable ever penned,” Winwood Reade’s The Martyrdom of Man. First published in 1872, it is an iconoclastic history of the world that George Orwell described as one of the formative books of his youth. In it, the dutiful Watson could have read Reade’s description of the last days of Rome, a time in which, he said, the emperor and his favorites dined on nightingales and flamingo tongues as their world crumbled.

Industry is the only true source of wealth,” Reade wrote,

and there was no industry in Rome. By day the Ostia road was crowded with carts and muleteers, carrying to the great city the silks and spices of the East, the marble of Asia Minor, the timber of the Atlas, the grain of Africa and Egypt; and the carts brought nothing out but loads of dung. That was their return cargo.

And there went Rome.

In an economy where billions are made and lost on the rise and fall of dot.com ventures that have no visible means of support, Reade’s words about the importance of industry, vivid though they are, seem as charmingly outdated as a Sherlock Holmes plot. But the political echoes of his dour analysis can be heard today in the anti-globalization demonstrations in Seattle and Washington, D.C., in the populist presidential campaigns of Ralph Nader and Pat Buchanan, and on the floor of the House as the American labor movement and its few remaining allies decry the shift to a postindustrial society.

For American labor, the price of globalization has been the loss of traditional jobs—and consequent declines in labor income—as capital prefers to invest in low-wage countries where government regulation is weak or nonexistent. Most Republicans predictably champion this trend, and labor’s traditional political vehicle, the Democratic Party, also appears to be conniving in capital flight and the hardships it inflicts on a large part of the workforce.

In America’s Forgotten Majority, Ruy Teixeira and Joel Rogers write that “from 1973 to 1998, in an economy that almost doubled in real terms, the wage of the typical worker in production and nonsupervisory jobs (80 percent of the workforce) actually declined by 6 percent, from $13.61 to $12.77 an hour.”

Trade may not have been the entire cause of the wage decline, but it is a highly visible factor. In Government Works, Professor Milton J. Esman of Cornell University writes:

The openness of American markets to foreign products, including those produced by US-owned firms in low-wage countries, has been a major disincentive to US firms to invest in improving the efficiency and productivity of home-based plants. It has been economically rational for them to abandon US facilities entirely. The loss of manufacturing jobs, in …

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