Jerusalem Report

A plea for protectionism

Is unlimited free trade really desirable?

A plea for protectionism
Photo by: Screenshot
If you li ve long enough, you’ll be surprised how many objects you will see behind glass in a museum that were once part of your everyday life. History creeps up on us all.

Even so, I was not prepared for some of the exhibits at Acre’s Treasures in the Walls museum. The place, set inside the old coastal fortifications (there are still a few cannons nearby to scare off Napoleon’s ghost should he care to revisit the place he unsuccessfully besieged in 1799), is mostly devoted to old trades and professions that once formed the backbone of the Haifa Bay area’s industrial and commercial life.

A leather goods workshop, a tinsmith’s establishment, a smithy – these and others are recreated more or less as they existed only a few decades ago, complete with tools and products. They evoked in me nostalgia, but no sense of loss.

But the contents of nearby display cases gave me a start. They were full of locally produced ceramics by the great names of the Israeli ceramics industry: Lapid, Na’aman, Harsa. Some were decorative, but most were functional kitchenware of the sort I still have at home. Evidently they had become collector’s items, and history.

A museum sign explained why. Yes, Acre had been the home of several factories producing high-quality ceramic goods and employing hundreds of workers. But about 20 years ago, a tidal wave of imports from the Far East struck Israel. These ceramics were no better, but cheaper. The local factories, some of which were not well run, could not compete. In one egregious case, a struggling concern was bought by a ceramics importer – the factory closed soon after. Within a few years, a flourishing industry had more or less vanished, undone not by technological progress, but by free trade and poor management.

We take pride, rightly, in Israel’s innovative high-tech industries. But most people (there is no way to put this politely) lack the skills and intelligence to work in them.

Still, in most countries manufacturing industry offers such workers employment, opportunities to suggest ideas and improvements, and the prospects of good wages. These opportunities exist here (take a bow, successful industrialist Stef Wertheimer). But there are not many. The sight of manual workers huddled round a pile of burning tires as they protest a factory closure is a staple of the television news.

Is this inevitable? Perhaps it is time to examine how desirable unlimited free trade really is. “That Should Still Be Us” is a vigorous, crisply written, and wellinformed attack on the effect its doctrines have had on the American economy.

Martin Sieff, a former Jerusalem Post staffer and now a columnist for Fox.com (and a long-standing friend of mine) puts his case bluntly: China’s industrial and economic rise has been underpinned by stern protectionist policies. It is time that America followed suit.

Sieff points out that the much-lauded high-tech economy, typified by Facebook, Google, and Amazon, may be profitable, but it employs relatively few people and creates little wealth. New York Times columnist Tom Friedman is especially targeted by the author for his advocacy of globalization and new technologies that have failed to deliver prosperity for American workers. Friedman touts new energy companies exploiting sun, wind and tides, but Sieff highlights the old-fashioned oil and gas drilling industry which, thanks to its new fracking techniques, bids fair to make America energy-independent for decades, with pleasing results for its trade balance.

Sieff’s forte, though, is in taking a fresh look at economic history. Lincoln emerges as the founder of American prosperity. By pushing corporation-friendly legislation through Congress and giving railroad companies land grants enabling them to build a nationwide transportation network (essential for getting industrial and agricultural produce to markets home and abroad) and then protecting the entire commercial edifice with stiff tariffs during the Civil War, Lincoln converted a nation partly dependent for its productive capacity on slave labor into an advanced industrial state. This was no accident.

Lincoln did not make his legal reputation doing pro bono work for slaves who tried to escape via the Underground Railroad.

He became wealthy as a lawyer through his skillful representation of commercial clients – especially railroad companies.

Sieff accepts that protectionism is not enough on its own. “Your managerial structure, engineering design, and production expertise and efficiency of production have to be good,” he notes.

“Quality matters.” But it has the added attraction of being an investor-friendly policy. International investment “flows most of all into a successful, industrialized, and protected industrial economy.” Right now, China fulfills these criteria best, not the United States, and therefore attracts more foreign direct investment.

At present, protectionis m is off the American political agenda. With bad economic times, people fear the risk of trade wars leading to a greater crisis. But this finely argued book has clear relevance for Israel. One of Sieff’s complaints about Friedman is his lack of sympathy for industry and those who work in it. Here, the old Zionist ethos of redemption through physical labor has long since gone. Factories have the image of being so dilapidated and run-down, so yesterday, in contrast to the vaunted glittering concrete and glass palaces of Herzliya and Yokneam.

I don’t knock high-tech. In many ways, it helps the country earn its keep and makes the most of an intelligent workforce. But what of the rest of us? The under-educated, the under-trained, the under-qualified? Stef Wertheimer gets the point. Our columnist Shlomo Maital, reviewing his biography last year in these pages, recalled the advice Wertheimer gave to entrepreneurship students. “Launch factories, make tangible things for export, don’t work abroad, you have endless opportunities at home.” And Maital added that both Wertheimer and his son Eitan “believe in the old-fashioned notion that a modern nation has to have advanced factories that produce goods for export and generate well-paying jobs – something America forgot long ago, to its detriment.”

It would be nice to think that one day the ghost of Acre’s ceramics industry (unlike that of Napoleon, one hopes) will rise from the dead, and that I can replace my lost cookware with some blue-and-white product. Till then I warmly recommend the Treasures in the Walls museum to you all. It is an under-appreciated gem.

And let’s hope that those in charge of the museum don’t have to extend it over the next few years to accommodate the rest of Israeli industry.


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