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December 29, 2014
Smart Talk with Andrew Mazzone and Eamonn Fingleton

A former editor for the Financial Times and Forbes, Eamonn Fingleton has written on East Asian and global issues for The Atlantic Magazine, The New York Times, and other publications. His specialty is Asian and American economic interactions and their implications. One of the first to sound the alarm about off- shoring and its effects on the long-term prospects of America, he is author of seven books including In Praise of Hard Industries, which anticipated the American dot.com crash of 2000, and In the Jaws of the Dragon. In his Smart Talk interview, Fingleton discusses the effects of free trade and the loss of manufacturing in the U.S.

In looking at America’s loss of manufacturing, Fingleton points out that the Japanese see manufacturing as the key to their survival and their future prosperity while Americans seem to think “manufacturing is rather optional.”  Fingleton feels that the media, Wall Street, and academics—particularly economists—are responsible for much of the lack of understanding. “Specifically they did not understand that if you give all your manufacturing technology away, which has been the effect of free trade…you’re going to impoverish your own nation.”  Some might disagree, pointing to the success of companies like Apple and Boeing.  Fingleton, however, explains that these companies actually rely heavily on technology and components developed in Asia.

According to Fingleton, the historical roots of free trade date to the late 1940s when U.S. policy makers decided not to “chase for markets.”   A few capitalist centers were developed “so that we can free trade amongst them, spread the wealth and prevent, let’s say, a WW III.”  The underlying belief was that the U.S. would provide “the idea people, selling ideas to the rest of the world.”  These are often “Ph.D. level-people…what proportion of your population has Ph.D.s?”  His conclusion is that to have a “well- balanced, prosperous economy, you have to have jobs for ordinary people.”

These jobs, he says, are for PhDs. But “jobs are not in America any more. If you don’t have jobs for your middle classes, you don’t have a seriously sustainable economy.”