They Know Something You Don't Dept.

Relax, relax. This won't be about conspiracies.

My esteemed colleague Mark Alger makes some trenchant observations today about employment in these United States:

"Offshoring" is when multi-national companies set up plants in other countries -- such as China -- and hire workers there...

...because government, gratuitously meddling in the labor market, makes regulations which have made local labor in the company's home country uncompetitive. And multi-national companies have to compete in a global market, which includes large, developing countries, and labor costs, being an overwhelming majority of the costs of production, are practically the only place they can cut, and they can't use fewer people, so they have to use less-expensive people.

And it doesn't take MUCH of a difference. I'm told that, with only the slightest percentage change in regulatory overhead, American labor (for example), being far more productive than its overseas counterparts, can be competitive. IOW, it's not the high price of the wages, but of the government's meddling that loses the jobs offshore.

Which makes the whingeing from government sources on the issue both insulting AND injurious.

All true...but the carping from "government sources" doesn't flow from ignorance. They who have pushed for and contrived the circumstances that drive American companies to offshore substantial fractions of their activity are just as aware of the dynamics involved as are Mark, you, and I. They regard the effect as a regrettable but unavoidable consequence of a favored tactic for increasing their power and the loyalty of certain sectors of their "base."

If you think your heart can stand the agita at this unGodly hour, read on.

***

Probably the most common approach to the teaching of "political science" in our institutions of "higher learning" -- really now, you should know those are sneer quotes without having to ask -- is the authoritarian-allocation model. In this conception, the quest for political power is a contest over who shall be awarded the sovereign's privilege of licensure: the power to say who may do any given thing, who may use any particular resource, and who shall be exempt from all such laws. Underneath this model lies the assumption that there is no higher moral standard that would preclude the sovereign's arbitrary allocation of privileges. In other words, the sovereign is above all conceptions of absolute right and wrong.

The American postulates of inviolable individual rights and limited government are clearly incompatible with authoritarian-allocation thinking, but we'll return to that later.

Isabel Paterson, in her landmark work The God of the Machine, called a society founded on authoritarian-allocation thought a Society of Status. In such a society, one's personal identity, and the privileges conferred upon it, matter more than any other factor. Such a society will be rigidly hierarchical: stratified into classes with sharply defined privileges vis-a-vis one another. More, the goal of any ambitious subject will be to rise from his current class into some higher one.

(Science fiction writer Tom Kratman, in his Terra Nova series -- A Desert Called Peace, Carnifex, and The Lotus Eaters -- depicts the Society of Status that would arise on Earth if contemporary notions of "postmodern transnational progressivism" were to rise to unchecked power. His depiction is sharp and realistic. Persons who favor the "PoMo Tranzi" scheme of thought tend to be outraged by it. Makes a fine Christmas gift!)

Most members of our political class accept the authoritarian-allocation model as fully applicable to the United States. They dismiss Constitutional constraints as "obsolete;" many of them will admit it with the cameras rolling. Neither does the clash with our concept of individuals' rights bother them overmuch; they have a number of dodges with which to evade it, most prominent among them the notion of "compelling government interest." However they rationalize it, they see the proper sphere of government as the licensure of all things: decreeing who may do what, and with whom, and for how much, and under what circumstances, for any and every human activity under the Sun.

This immediately splits the subject populace into two groups: those who have permission (the "licensed"), and those who lack it (the "unlicensed"). (Permission to do what, you ask? Name it.) Thereafter, members of the unlicensed group will constantly seek to enter the licensed group, whose members will fight like bad-tempered dogs to keep them out.

Why? Because licensure is the key to both material gain and social status. As with a natural resource, its value arises from scarcity: the fewer persons are permitted to do some wealth-creating thing, the greater is each one's potential return, and the more sharply they can distinguish themselves from the unlicensed.

A Society of Status is a Society of Strife.

The ars politica in an authoritarian-allocation society consists of coalition formation and maintenance: the assembly and careful supervision of a group of allies sufficient to raise one to power and keep him there, but not so demanding in aggregate as to exhaust one's ability to repay the favor. You will immediately recognize this as the political strategy favored by the American Left in this year of Our Lord 2012.

***

The American economy is most frequently described as "mixed:" a combination of licensure-based and market-based practices. Over the century past, the fraction of our activity dominated by licensure has grown steadily. The members of our political class tend to see licensure as an unchallengeable good, a way to impose "order" on the "unruly" free market. But above and beyond that, they are conscious of licensure's ability to form and buttress a sustaining coalition, which will assist them in perpetuating their grip on power.

This is particularly important in matters of labor law. America uses democratic processes to choose its officials, in which the greater number of votes determines who shall rise to high office. Thus, a politician skilled at persuading large numbers of voters that he can and will serve their interests once in office will have a great advantage in electoral contests.

In decades past, the "labor bloc" to which politicians appealed for support was largely unionized, which elicited pandering to unions and their high officials. That tendency is much less today, owing to the greatly lessened power of unions in private enterprise. It has been replaced by a tactic of neo-sectionalism, in which a candidate will seek out critical regional or occupational voting blocs and pander to them.

(I call this neo-sectionalism out of recognition that the unprefixed term sectionalism is regularly used to refer to the geographically aligned economics and currents of sentiment that brought about the Civil War.)

Americans are already aware of this phenomenon. It surprises no one when a candidate for Congress from a rural New York district panders to the dairy industry, or when one from a northern California district panders to the high-technology companies that characterize that region. Indeed, the process of promising to use licensure and para-licensure -- the imposition of regulations on an industry that favor some at the expense of others -- to repay electoral support has made us supremely cynical about the matter.

Mark Alger's key observation:

... government, gratuitously meddling in the labor market, makes regulations which have made local labor in the company's home country uncompetitive.

...notes a consequence of para-licensure whose implications should be more widely discussed. Offshoring is not a "natural" phenomenon. It's difficult and expensive to manage an enterprise that's far away. Robert Townsend, author of Up the Organization, has proclaimed that the cost rises with the square of the distance (measured in time zones) from the home office. Add in language difficulties, the problems of dealing with foreign governments, and obstacles imposed by local customs and convictions, and one swiftly concludes that offshoring is an extreme measure, not to be adopted except in the direst of circumstances.

Politics has imposed those direst of circumstances upon us.

***

We currently labor under the weight of over 160,000 pages of federal regulations. No individual human being could honestly say he knows them all. Yet they have the force of law. More, in many cases persons deemed to have violated any of those regulations are punished with a hefty fine, or an expropriation, entirely without legal due process. Regulatory "law" lacks respect for the presumption of innocence and the right to a jury trial.

It would be foolish to imagine that those regulations were passed "to promote the general welfare." Vanishingly few of them are not aimed at privileging some identifiable special interest, albeit indirectly. Their combined weight has imposed a burden of compliance upon American enterprise that only the very largest companies can bear.

Combine that burden with minimum-wage laws, with "occupational safety" regulations, with "environmental protection" regulations, with our unprecedented litigiousness, with rising taxes at all levels, and with the steadily burgeoning resentment of "the rich" being fostered by the Left. How can we pretend surprise that captains of industry, particularly those disfavored by the political class, have sought more favorable climes for their enterprises? What other consequence could we reasonably expect? What would we have done in their place?

***

A Constitution-respecting regime would not and could not have done any of this. However, America has known no such regime since 1933. Nor can we expect to restore one any time soon: a century of divisive politics and para-licensure has thoroughly partitioned the nation into interest groups, each one willing to beggar the others for the smallest imaginable gain to itself.

The political class knows this. It would prefer that you not know it. Much of its effort goes to telling you otherwise.

We -- private American citizens -- are the problem. Almost every American is an allegiant of some group that seeks to violate others' fundamental right to be left alone to do as they please with what is rightfully theirs, to serve some notion of a "higher priority." Most are unaware of how they fit that description; their assumptions have caused them never to think about it.

But we are also the solution, if one exists. Not merely by voting out the current rascals and installing a fresh set, but by refusing to accept extra-Constitutional emissions, whether of Congress or of the "alphabet agencies," as valid and binding laws.

Congress was never given the power to delegate its legislative function. Indeed, it should be obvious that the regulatory agencies, being part of the Executive Branch, cannot and must not be conceded the power to make "rules" with the force of law; the very idea violates the separation-of-powers principle at the base of the Constitutional architecture.

Nationwide resistance to such decrees is the only way out.
But note how many regulatory agencies arm their field agents.
How much courage do we possess?
Is it enough to trump our allegiance to our special interests?
Our political class has formed its own estimate.
Is this one more thing that they know that we don't?