The (false) globalisation narrative

IN the public imagination, no industry better symbolises the downfall of US manufacturing than steel. Shuttered plants dot the Mid-west. Since 1973, steel employment has dropped 76 per cent, from 610,700 to 147,300 in 2015. Moreover, the culprit seems clear - trade - and its influence seems pervasive: manufacturing as a whole lost about five million jobs from 2000 to 2015. No wonder both Hillary Clinton and Donald Trump have jumped on the anti-globalisation bandwagon.

Globalisation seems guilty as charged - except that the popular indictment is wildly misleading.

Though trade has helped reshape US manufacturing, it is only one force of many. The appeal of making it the prime villain is political and psychological. We can blame manufacturing's problems and dislocations on foreigners and disloyal American multinational firms. If they behaved better, the American economy would improve. There is some truth to this, but it is hardly the whole truth - as the case of steel shows.