RAPID ECONOMIC growth is disruptive, uncomfortable and sometimes frightening. Its benefits are great, but it forces people to live differently and earn their livings differently from the way they are accustomed to doing. Nothing pushes growth faster than foreign trade, and the United States is now in the process of coming to terms with the enormous expansion of trade in the 1970s. The political reaction is expressed in the rising campaign for protection against imports.
Several weeks ago, this newspaper published a vigorous defense of protectionism by Wolfgang Hager, a visiting professor at Georgetown University. Today, on the opposite page, we offer a rebuttal by William E. Brock, the U.S. trade representative.
The case for protectionism comes down to wages. It argues that there's an endless supply of low-wage labor in the world that threatens to destroy the high- wage economies. But the actual experience of the past four decades, with decreasing trade barriers and rising prosperity, suggests precisely the opposite.
The protectionist position argues that in the postwar years the Atlantic countries with their high standards of living had a sort of self-protective monopoly that has now been broken by Latin American and Asian industry. In response, it's useful to recall that in the 1950s industrial wages in West Germany and France were as far below the American level as wages in Brazil and Mexico are today. As trade expanded across the Atlantic in the 1960s, according to protectionist theory, American wages should have dropped under competitive pressure. In fact, they kept rising steadily, while European wages soared and are now--allowing for the swings in exchange rates--in the same range as they are here.
Japan's wages are about half the American average. But wages in Brazil are less than half as high as Japan's. Both have automobile industries. Why isn't Brazil the stronger competitor?
A long recession and a strong dollar are currently giving the protectionist cause a plausibility that it doesn't deserve. The main reason for this country's poor trade performance at the moment is a huge budget deficit that keeps interest rates high, in turn lifting the dollar's exchange rate and making it harder to sell American goods abroad. The 1930s demonstrated more than adequately that pulling up the drawbridge won't remedy mistakes in domestic economic policy. Mr. Brock does an important service by reminding the country of the real sources of its competitive strength.