The Conservative Critique of American Capitalism is Fatally Flawed and Wrong
The growing conservative critique of American capitalism is fatally flawed. However, it is refreshing to see conservatives questioning our increasingly dysfunctional economy.
A typical example of conservatives’ flawed thinking is “The New Conservative Economic Agenda,” Johnny Burtka advanced on 7 May 2019 on Fox News’ Tucker Carlson Tonight. Unfortunately, Burtka’s agenda is neither new nor an agenda.
Instead, Burtka mentions a couple of strategies that prove he understands nothing about the modern economy. First, Burtka suggests tariffs will restore prosperity to Middle America. Second, Burtka believes we must regulate corporations and breakup the big ones.
In effect, Burtka; the executive director at The American Conservative, is proposing the Republican Party adopt President Herbert Hoover’s (R-California) economic policies. Notably, Hoover’s policies did not prevent the Great Depression of the 1930s. In fact, many economists blame the Depression on Hoover’s trade policy of extreme tariffs.
Why are Conservatives Ignoring Technology?
The New Conservative Economic Agenda is deeply flawed because it ignores our greatest economic problems and their cause.
To clarify, America’s greatest economic problems are income inequality, income stagnation, and technological unemployment. Additionally, the cause of all these crises is the same – technology.
For instance, incomes are unequal because technology drives the concentration of wealth. For example, the world’s richest man Amazon (NASDAQ: AMZN) CEO Jeff Bezos was worth $153.7 billion on 18 May 2019, Fortune calculates. Meanwhile, the average Amazon employee made $28,446 a year in April 2018, Bloomberg estimates.
Conservatives must admit Technology Kills Jobs
Incomes are stagnating because the number and variety of jobs in many sectors of the economy and regions of the country is shrinking. The jobs are disappearing because technology is killing them.
For example, Bank of America (NYSE: BAC) eliminated around 84,000 jobs in a decade by deploying technologies like robotic process automation and automatic teller machines (ATMS). Meanwhile, I estimate 270,686 bank tellers’ jobs could disappear between 2019 and 2029.
Notably, Data USA estimates there were 326,128 bank tellers in America in 2018. However, the number of bank tellers will fall by 8.32% a year over the next ten years, Data USA projects. Tellers’ jobs are disappearing because people are switching to digital banking.
Why Conservatives must Fear Robots
Moreover, bank tellers are far from alone. Robots are replacing workers as diverse as oil field roughnecks, janitors, fry cooks, and Amazon fulfillment associates. For example, Amazon’s new packaging robots could kill 1,300 jobs at 55 fulfillment centers, Reuters reports.
Additionally, the mere presence of robots in a job market drives down wages researchers Daron Acemoglu and Pascual Restrepo tell New York Times writer Thomas B. Edsall. They write “one more robot per thousand workers reduces the employment to population ratio by about 0.18-0.34 percentage points and wages by 0.25-0.5 percent,” in a 2017 paper called Robots and Jobs: Evidence from US Labor Markets.
Consequently, technology is killing the jobs the poorest and least educated Americans need. Additionally, the jobs technology is most likely to kill are in America’s most socially and politically conservative regions like the Oil Patch and the Rust Belt. Hence, technological unemployment hurts conservatives.
Technology Drives Monopoly and Wealth Concentration
In addition, technology creates monopoly and concentrates wealth. For example, Alphabet (NASDAQ: GOOG); or Google, employees just 98,771 people, Forbes estimates.
However, Google devastates traditional media like newspapers by taking their advertising. This kills jobs, in fact, Pew Research estimates America lost 45% of its newspaper newsroom jobs between 2008 and 2017.
Moreover, digitization kills working-class jobs in printing and delivery. In fact, the number of newspaper employees fell from 455,000 in 1990 to 183,200 in March 2016, The US Bureau of Labor Statistics calculates. Thus, nearly three-fourths of newspaper jobs died in a 26-year period that corresponds with the rise of the internet, digital media, and social media.
How Digitization concentrates power and wealth in liberal cities
Importantly, those jobs are scattered all over the country. Every town and city in the United States has or had at least one newspaper. However, Alphabet (NASDAQ: GOOGL) has a few dozen offices, research facilities, and data centers in a few states like California and Arizona.
Only a few mostly liberal and coastal regions enjoy digitization’s “benefits.” For instance, most Google employees live in the San Francisco Bay and spend their money there. Newspapers are main street businesses whose employees spend their money in their hometowns.
Consequently, there is less money, influence, and power in Middle America because of digitization. Moreover, digitization is eroding conservative power; because conservatives’ donations come from the heartland and traditional brick and mortar businesses.
Digitization and technology will lead to liberal domination of politics
If these trends continue the only places candidates will be able to raise money will be liberal cities like San Francisco, Los Angeles, Chicago, Denver, and New York.
Cultural conservatives must pay attention, because donors in those cities are unlikely to write checks for candidates who champion traditional values. Notably, we already have one politically party; the Democrats, with a leftist cultural agenda. Republicans will follow if that is where the money is.
Moreover, I doubt traditional conservatives could raise enough money to counter Silicon Valley and Wall Street donations with bake sales and car washes. Consequently, traditionalists will have little or no political influence in America in less than a generation.
Technological Unemployment and the Collapse of Republican Power
Strangely, a map of American regions with the most industrial robots corresponds with the areas that favored Donald J. Trump (R-New York) in the 2016 presidential election, Edsell observes in The New York Times.
Moreover, MIT researcher Daron Acemoglu writes; ”the swing to Republicans between 2008 and 2016 is quite a bit stronger in commuting zones most affected by industrial robots.”
Consequently, technological unemployment benefits Republicans but not conservatives. To explain, the voters affected by automation also rejected traditional conservationism in 2016. For example, those voters favored the populist Donald J. Trump (R-New York over conservative stalwarts; Jeb Bush (R-Florida), Scott Walker (R-Wisconsin), and US Senator Ted Cruz (R-Texas), in the Republican presidential primaries.
Republicans could lose the Heartland because of robots
Therefore, heartland voters are rejecting both the conservative and liberal establishments. For instance, the same voters who rejected Cruz, Walker, and Bush said no to the New York City elitist Hillary R. Clinton (D-New York) in November 2016.
In addition, voters in “the commuting zones most affected by industrial robots” are likely to swing back to Democrats and to the far left, if the jobs and the money do not reappear. Notably, self-proclaimed social democratic presidential candidate, U.S. Senator Bernie Sanders (I-Vermont) is attracting enthusiastic audiences in Ohio.
Predictably, Sanders is campaigning in places like Lordstown, Ohio. Lordstown is the community where General Motors (NYSEL GM) closed a large car factory in March, The Columbus Dispatch reports.
America needs a Real New Conservative Economic Agenda
In the final analysis, conservatives need a real new economic agenda that goes far beyond tariffs and anti-trust if they want to remain relevant.
In particular, conservatives need to address technological unemployment and income inequality. Notably, there are conservative solutions to these problems; including more technical education in the trades, restoration of traditional education, greater economic investment in the heartland, better infrastructure, and basic income.
If conservatives do not address technology’s economic impact, left-wing critics; like Andrew Yang (D-New York) and US Senator Bernie Sanders (I-Vermont), will dominate the conversation. Consequently, the Left could win the economic debate because conservatives don’t want to talk about robots.