on business. And Wall Street is right.rnThe core of the domestic social problemrnis linked to the international restructuringrnof the economy, though obviouslyrnthis is not its only cause. Economic theoryrntells us that full employment can bernreached at any level of income, and willrnmove toward this equilibrium in the absencernof external shocks if the labor marketrnis flexible enough. “Flexible” meansrnthat wages must be capable of movingrndown as well as up, to keep productionrncosts down when the markets for thernproducts are fiercely competitive —asrnglobal markets are. Indeed, the stockrnmarket has tended to drop in reaction tornany announcement that wages are rising.rnThere are several ways to make wagerncosts flexible downward. Within a domesticrnindustry, wages for existing positionsrncan be constrained. On an interregionalrnor international level, jobs can bernshifted to other labor markets wherernequilibrium wages are lower (and thernthreat to do so can be used to suppressrnwage increases at home). In terms of therntotal economy, the mix of jobs can bernchanged to one favoring low-wage work.rnAll three have occurred in the UnitedrnStates.rnIn the manufacturing sector, employmentrndropped by 2.5 million positionsrnbetween 1979 and 1997. The sectorrnwhich added the most jobs (7.1 million)rnduring this same period was retail sales.rnThe typical manufacturing job pays doublernthat of retail sales and usually comesrnwith substantial health and retirementrnbenefits which most retail sales posihonsrnlack. Manufacturing jobs are also primarilyrna male domain, while retail salesrnhave been dominated by women. Inrnshorthand form, rather than producerngoods, people are hired to sell what hasrnbeen produced elsewhere.rnDisplaced factory workers face difficultiesrnfinding new employment; morernthan one-third were out of work one tornthree years after their displacement.rnWhen they do find work, their new jobsrnpay, on average, about 13 percent lessrnthan the jobs they lost, and more thanrnone-fourth of those who had health insurancernon their old jobs do not have it atrntheir new ones.rnThis shift did not occur becausernAmericans bought fewer manufacturedrngoods, but because they substituted foreign-rnproduced goods for domestic-producedrngoods. In 1982, imported goodsrnequaled only 15.3 percent of domesticrnproduction; by 1997, imports were up torn39.3 percent of domestic production.rnThe drop in demand for labor in domesticrnmanufacturing reduced the workforcernneeded and put downward pressurernon industrial wages. Those who lostrntheir jobs in manufacturing moved tornother sectors, increasing the supply of laborrnthere, which also pushed down wagernrates to “clear the market” and creaternnew jobs. Thus, weekly earnings in bothrnthe manufacturing sector and the servicernsector have shown declines.rnMarkets operate on the margin, sorneven small changes can have large effects.rnFor example, the worst recessionrnof recent years was in 1982, when unemploymentrnhit 9.6 percent. Today’s prosperityrnhas taken unemployment downrnto 4.6 percent —a difference betweenrnboom and bust of five percent of thernworkforce. During this same period,rnmanufacturing jobs dropped from 22rnpercent of the workforce to only 17 percent;rnagain, a margin of five percent.rnThe negative impact of the loss of manufacturingrnjobs is multiplied if we take intornconsideration the effect that it has hadrnon other jobs, including service jobs,rnwhich are linked to industry. This affectsrnnot just blue-collar labor but white-collarrnmanagement slots as well, in everythingrnfrom transportation and waste disposal tornengineering and accounting.rnUnfortunately, the left-wing ideologicalrnagenda dovetails nicely with the “selfinterest”rnof Wall Street. Shortly afterrnWorld War II, the United Nations Educational,rnScienhfic, and Cultural Organizationrn(UNESCO) was created withrnmoney contributed by the National EducationrnAssociation (NEA) and the CarnegiernFoundation. It distributes a steadyrnstream of studies and teachers’ guides onrnthe theme that “it is frequently the familyrnthat infects the child with extreme nationalism.rnThe school should thereforern. . . combat family attitudes.” Throughrn”peace studies,” “multiculturalism,”rn”values clarification,” and “sex education,”rna program has been crafted to stiiprnchildren of all loyalty to any higher institutionsrnor belief systems beyond theirrnown desires. Personal gratification, sexualrnand material, is all that counts. Thernchild is to be molded into the perfectrnconsumer and be indifferent to anythingrnelse. Moral constraints on behavior orrncalls to community duties that would interferernwith this “pursuit of happiness”rnare to be shunned. Greed and selfishnessrnare not the building blocks of patriotism.rnThey are, however, the buildingrnblocks of corporate profits. The antidoternto a “free-trade” world run by transnationalrnbusiness is the doctrine of economicrnnationalism, which seeks to maximizernthe resources, both moral andrnmaterial, of a given society. In such a system,rnbusiness prospers only to the extentrnthat its actions are compatible with thesernlarger objectives. The left is correct tornsee the family as the origin of the communityrnand the nation-state. An economicrnsystem that breaks up the familyrnand empowers radicals in the media andrnthe schools to replace parents suits thosernbusiness firms which fear any nationalinterestrnlimitations on their activities.rnA few years before he joined the Clintonrnadministration as an assistant secretaryrnof defense, Joseph S. Nye of Harvardrnwrote about the global “interdependencernrhetoric” used by liberals. He notedrnthat adherents of this doctrine “usuallyrnargue that conflicts of interest arernreduced by interdependence, and thatrncooperation alone holds the answer tornworld problems.” The rhetoric, Nyerncontinues, is “to be used against bothrneconomic nationalism at home and assertivernchallengers abroad.” The Clintonrnadministration has emerged as thernperfect synthesis of liberal ideology andrncorporate ambition, built on the doctrinernof “globalization.”rnSocial conservatives cannot be indifferentrnto the choices that the countryrnfaces in economic policy. The old fusionrnbetween economic and social conservatives,rnwhere each paid lip service tornthe other but generally kept to themselves,rnbecame untenable when the naturernof the economy changed. Globalizationrnhas pushed the agenda of therneconomic conservatives off the deeprnend, to the point where the term “conservative”rnno longer properly applies.rnYet social conservatives cannot simplyrndenounce materialism. Joseph Schumpeterrnmay have been correct when hernsaid “the stock market is a poor substituternfor the Holy Grail,” but too many peoplernare now wedded to the Dow Jones. Instead,rnsocial conservatives must recreaterna viable fusion between economics andrnculture which can promise both prosperityrnand morality. The first step is to understandrnthat the current economic situationrnis not optimal, and that thisrnshortcoming opens the door to culturalrndecline. Economic nationalism, notrncorporate globalization, is the path torn”making America great again” as a civi-rnMAY 1999/43rnrnrn