Recent headlines indicate that American employers are worried about a labor shortage due to President Trump’s enforcement of U.S. immigration law. A labor shortage, of course, will be good for American workers. His immigration and tariff policies indicate that Trump favors protecting both American producers and American workers. This was the policy that the U.S. adopted from the 1920s to the 1960s, usually seen as a golden economic age. Liberals laud this era, known as “The Great Compression,” as the apex of American economic equality.
America’s early history was one of mostly open borders and free trade. Before the Civil War, there was no such thing as “illegal immigration.” Anti-immigrant sentiment began to pick up in the 1840s, targeting the German and Irish Catholic influx, but it did not change U.S. immigration policy. Tariffs were a volatile political issue. John C. Calhoun tried out his theories of nullification and secession in response to the highly protectionist “Tariff of Abominations” of 1828. But the generally free-trade Democratic party usually controlled the government before the Civil War, and they pushed the tariff downward.
The Civil War produced a new formula. From 1860 until the New Deal, the Republican party became the normally dominant party in national politics. They were dedicated to high-tariff protection of American industry. Though most antebellum nativists (the short-lived “Know Nothing” party) became Republicans, the party did not adopt immigration restrictions until the 1880s, when Chinese immigration was cut off. Japanese immigration was restricted by Theodore Roosevelt’s informal “gentlemen’s agreements.” The door remained wide open to Europeans, and peaked in 1907 when over a million Europeans came through Ellis Island to a country of about 90 million—one fourth of today’s population.
Republicans argued that the tariff did more than enhance the profits of American manufacturers. It also enabled them to pay their workers more. Without the tariff, US companies could not compete with European producers who had cheap “pauper labor” forces. Economists have found some truth to this claim, and it seems that the migration of European workers to the U.S. in these years supports it. Why would so many millions emigrate to this country to be exploited?
The Republicans gave in to anti-immigrant popular opinion that followed World War One. Congress enacted severely restrictive limits in 1921 and 1924. The party also restored the protective tariffs that had been temporarily reduced by the Democrats when Woodrow Wilson was in power (1913-21). For the first time, the US had established protective markets for both industry and labor.
The next half-decade was something of a roller-coaster. The 1920s were economically halcyon, followed by the Great Depression (likely exacerbated by the excessively ultra-protective Smoot-Hawley tariff of 1930). The 40s through the 60s were great for both American business and labor. (As they were in Europe—what the French recall as les trente glorieuxes, the “three glorious decades” that followed World War Two.) Liberals especially wax nostalgic this period: the top one percent share of national income bottomed out around 1970; it has now risen to about where it was before the New Deal.
But this era was something of a fool’s paradise; it could not have lasted much more than a generation or two. The Democrats had begun to move the U.S. toward free trade in the 1930s, but American industry was protected by the fact that our global competitors were devastated by World War Two while we were unscathed. At the end of the war, the U.S., with about five percent of the world’s population, produced fifty percent of its goods. The U.S. dollar became the global currency. In the late 1960s, the U.S. faced competition from Europe and Japan, and paid the bill for its “guns and butter” profligacy of Great Society and Vietnam War spending. The West had enjoyed cheap energy from its former Mideast colonies; now those independent states formed the OPEC cartel and socked it to their former overlords. In President Nixon took the U.S. off the gold standard and imposed a tariff hike to protect American business.
The greatest change in the 1960s was the Immigration Reform Act of 1965. This is certainly the most overlooked part of the “Great Society” of 60s liberalism. It was part of the civil rights movement of the decade, correcting the racial bias of earlier immigration laws. President Lyndon Johnson assured the nation that the act would not produce any significant alteration of the American population.
But the act has significantly altered the demographic profile of the country, and has undermined the economic power of those in the lower end of the labor market. The family-reunification provisions of the act multiplied the number of legal immigrants (“chain migration”), and a diminishing will to enforce the law multiplied the number of illegal aliens (until bien pensants could no longer stomach the terms “illegal” or “alien”). Trump is often said to have tapped into the grievances of “the white working class,” but the black working class has probably suffered even more from the new immigration policy. By the 1980s the problem had become apparent, but we were hoodwinked in the Immigration Reform Act of 1986, which gave amnesty to millions of illegals but did nothing to enforce border controls.
At the same time, as the U.S. economy recovered in the 1980-90s, we returned to the postwar free-trade track. The North American Free Trade Agreement, China’s admission to the World Trade Organization, and other policies meant that manufacturing jobs relocated to the Third World, and Third World labor relocated to the U.S. Trump and similar “populist” leaders abroad have recognized the costs of the postwar open-borders/free-trade system.
So why does the American Left resist Trump’s mid-twentieth century liberalism? It’s not just their opposition to anything having to do with Trump. The simplest answer is that American liberals abandoned their twentieth century nationalism/patriotism for their current globalist socialism. Who has benefited from the open borders/free trade regime? Third world workers did—both immigrants and those who stayed put. Big business benefits, while smaller businesses cannot compete in a global market. The biggest losers appear to be workers in the U.S. and Europe, which explains the rise of neo-populist and “far right” parties there.
