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Working Hypothesis

By: Michael M. Rosen
March 25, 2019

roducerism—the notion that economic policy should follow the priorities of those who make things, not those who use them—has a long, storied, and checkered history in the Anglo-American world. The United States is generally considered a consumerist society, but a strain of pro-worker sentiment has run through English and American economic thought for more than a century.

Producerism is usually found alongside populism and has enjoyed a marked comeback recently, as the Trump administration has promoted nativist and protectionist policies that have had rhetorical, if not functional influence. But the pro-worker producerism perspective has generally lacked serious intellectual support, apart from certain precincts of the far left. In The Once and Future Worker, a provocative but well-reasoned manifesto for reinvigorating the labor market, Oren Cass corrects that oversight and furnishes the needed intellectual backbone.

Cass, a Manhattan Institute fellow and domestic policy director for the Romney campaign, believes American society is “teetering atop eroded foundations, lacking structural integrity, and headed toward collapse.” His solution? Rather than the shopworn slogan “putting America to work,” Cass proposes to put workers to America.

He calls his bold thesis a “working hypothesis” (pun pardoned): “that a labor market in which workers can support strong families and communities is the central determinant of long-term prosperity and should be the central focus of public policy.”

Cass castigates both the left and the right for failing to deliver for workers, noting that Republicans’ prioritization of growth amounts to benign neglect of labor, while Democrats trample markets and privilege the demands of environmental and identity groups and labor unions over workers themselves.

Cass quotes Adam Smith’s famous maxim in The Wealth of Nations that “consumption is the sole end and purpose of all production; and the interest of the producer ought to be attended to only so far as it may be necessary for promoting that of the consumer.” But despite producing world-changing innovation and lifting billions from poverty, Smith’s time-tested maxims are myopic, in Cass’s view.

“Work is meaningful,” he posits, “because of what it means to the person performing it, what it allows him to provide to his family, and what role it establishes for him in his community.” He is therefore dismissive of faddish notions like the universal basic income, which he characterizes as the wealthy paying everyone else to go away.

Instead, Cass focuses on what he labels “productive pluralism”—the “economic and social conditions in which people of divers abilities, priorities, and geographies, pursuing varied life paths, can form self-sufficient families and become contributors to their communities.”

His exploration of the labor market traverses five central regions: demand, supply, boundaries, transactions, and taxes. Regarding demand, Cass posits that automation has not, contrary to popular belief, significantly reduced the workforce, but slower output growth has.

With respect to supply, he laments the proliferation of college enrollment with its attendant ballooning student debt and unusable degrees and instead proposes reinvigorating vocational training and educational tracking of workforce entrants.

On borders, Cass bemoans what he considers the facile economic assumptions of the open-borders-and-free-trade-for-all crowd, noting, for instance, that China’s late-1990’s appearance on the global economic scene spelled the disappearance of 2 million American jobs over 12 years (although it bears mentioning that some of Cass’s critics, like my AEI colleague Michael Strain, argue that trade-related job losses or gains are microscopic in the context of the labor market’s general churn). Cass urges a wiser border strategy while contending that those who oppose a trade war—“economic pacifists”—fail to realize we’re already fighting one.

Cass also decries the transactional costs associated with labor unions, which privilege “hyperadversarialism” and partisan leftist politics over their members actual interests. He instead calls for co-ops or works councils that would operate independently of the policy makers that seek (badly) to regulate them.

And on wage subsidies, Cass contends the government should effectively buy jobs by, for instance, successively lowering a company’s tax burden for each worker it employs or by supercharging and modernizing the Earned Income Tax Credit.

From a societal standpoint, Cass seeks to restore the peer pressure that once accompanied the discussion of work in America, counseling “reprobation for the failure to engage in productive activity as an active drain on society that harms family and communities, coupled with approbation for productive activity as not just the absence of idleness but rather a major positive contribution to the wider world.”

The book occasionally bogs down, as when Cass interrogates the Clean Air Act in impressive, painstaking, but perhaps unnecessary detail, or when he delves into the niceties of the National Labor Relations Act.

More importantly, Cass often downplays the multiplicative benefits of growth while generally overestimating policy-makers’ capacity to successfully optimize the calibration of complex labor markets. As Jonah Goldberg observed while interviewing Cass on his podcast, wouldn’t a massive infrastructure project, such as building a multilane, coast-to-coast, underground freeway, furnish all the benefits, but few of the costs, of the relatively market-interventionist, industrial policy that Cass favors?

Still, this cogent brief for a worker-centered outlook is both compelling and timely, and lawmakers could do much worse than to carefully consider Cass’s prescriptions for making America work again.