Textile Workers’ Forgotten Warning

REVIEW ESSAY
Fraying Fabric:
How Trade Policy and Industrial Decline Transformed America
by James C. Benton
University of Illinois Press, 2022, 304 pages

When the Trump administration announced its first round of tariffs on China in 2018, few observers believed it would be the start of a new bipartisan consensus on industrial strategy. In each decade that protectionist sentiment rose following the end of the Second World War, calls to shield American industry and jobs were parried away by free trade politicians and appointed officials who hailed from both parties and all sections of the United States. They viewed trade policy as an important instrument of both soft and hard power abroad: lifting emerging economies through Americans’ ample demand for low-cost clothes, toys, home appliances, automobiles, building supplies, and other goods generated a rising tide of prosperity that would cement an open system of ever-expanding global exchange, contra the controlled econo­mies of the Eastern Bloc and anti-Western third world autocracies.

Until recently, the reasons this globalist bloc prevailed so handily after the 1980s were taken for granted. Support for neoliberalism across the political spectrum had reoriented state power to serve capital mobili­ty, oligopolistic multinationals, and financialization, supplanting the New Deal’s guardrails for democratic capitalism. The communitarian and producerist aspects of the Keynesian era, steadily minimized in the drive toward global market integration, appeared antiquated in the years spanning the Soviet Union’s collapse and U.S. approval of permanent normal trade relations with China in 2000.

Yet there were important continuities between the postwar consensus and the new era of globalization. For one thing, Cold War liberalism exerted a powerful influence on key sectors and interest groups even amid regional downturns and signs that the Rust Belt was spreading from the North to the South. In the fight to contain communism, successive presidential administrations had positioned leading American trade unions and American corporations as partners for global development and the advance of liberty. As trade policy, gradually removed from the ambit of Congress and situated within the executive branch, fused more tightly with other foreign policy concerns, proponents of free trade prevailed over those community and industry voices who held less sway in Washington.

This dynamic, explains labor historian James C. Benton in his new book Fraying Fabric: How Trade Policy and Industrial Decline Trans­formed America, was reinforced by the fact that the sense of emergency which haunted much of American manufacturing by the late 1970s had been treated as a parochial issue limited to the oldest industries. During the postwar boom, objections to trade policy were voiced most strongly by the textile and garment unions, as well as some beleaguered companies in the sector. By contrast, advanced manufacturing sectors with healthy export demand, such as automobiles, could largely afford to take the “internationalist” stance until the era of stagflation. The assumption that trade growth would unfailingly beget more shared prosperity had been ingrained in the postwar labor-capital compromise, even as trade policy itself constrained New Deal–style corporatism and contributed to the New Deal’s unraveling.

Writing from a labor-left perspective, Benton’s excellent case study of the U.S. textile industry is an unsparing appraisal of how trade policy ultimately compromised liberals’ domestic goals of inclusive growth and full employment. In his telling, textile workers’ comparatively weak position within the labor-Roosevelt coalition made them an early casualty of southern progressives’ marriage of Wilsonian ideals and Smithian economics. A universal cornerstone of development, textiles comprised the industries that, beginning in the 1930s, laid the groundwork for a more uniformly neoliberal approach to international trade. This shift was paradigmatic of the subordination of workers’ basic se­curity to economists’ notions of market efficiency. But it also served to strengthen an ideology-suffused projection of American power abroad. While trade liberalization was justified on the basis that it would boost domestic growth and consumer welfare, trade policy itself became one of the primary economic issues to be insulated from serious democratic contestation.

Rising anxiety over trade policy often intersected with other conflicts and competing interests within the New Deal coalition as well. Representing around one-seventh of the country’s manufacturing workers from the Second World War until the mid-1970s,¹ textiles and related industries suffered first and most devastatingly from import competition with emerging markets based on severe wage repression. Widespread fears of permanent sectoral decline, however, did not generate robust coalitions to save domestic textiles. Instead, textiles were a fount of sectional tension. Calls to preserve northern industry—which overall had been more accommodating of trade unions—and standardize wages between northern and southern workers clashed with the developmental goals of southern elites. The combination of anti-union sentiment in the South and the racism of southern textile executives, Benton emphasizes, effectively impeded substantial tripartite interventions, thereby shielding much of postwar trade policy against protectionist impulses.

“By shunning labor,” he writes, “executives . . . blocked the development of an independent worker voice—one that could have joined with labor union officials, textile executives, their counterparts in other, similarly affected industries, and politicians at all levels concerned about the effects of imports on workers, industries, and local economies.”² As a result, select import controls were determined on an ad-hoc basis by Democratic and Republican administrations, depending on the largely uncoordinated efforts of industry leaders and union representatives to obtain relief. Regular workers, meanwhile, increasingly resorted to pub­lic campaigns across the country to spur boycotts of foreign, “sweat­shop” goods sold at U.S. retailers and department stores. The purpose was to deter consumers’ growing preference for cheap imports, which grew further still in the late 1960s and 1970s due to inflation.

Textile workers’ prescient warnings about national industrial decline went unheeded until larger domestic, macroeconomic, and international challenges irrevocably split the New Deal coalition. By the time the afl‑cio leadership broke with the postwar trade consensus, industrial labor had been diminished by the 1974–75 recession and would soon be boxed out by the forces coalescing behind neoliberal globalization. Now a rump sector, the history of domestic textiles in the mid-twentieth century nevertheless remains central to explaining the broader contraction in domestic manufacturing employment over the last thirty years, accelerated by nafta and the “China Shock,” and the attendant rise of income inequality and regional polarization.

Pursuing Southern Growth, Promoting International Peace

One of Benton’s main insights concerns the ascent of modern free trade ideology. Its roots stretch back to Wilsonian progressivism and Cordell Hull, a U.S. representative from Tennessee who would later serve as Franklin Roosevelt’s secretary of state. Hull spent much of his congressional career attacking the political economy of the late nineteenth and early twentieth centuries. Under Republican administrations and Re­publican-led Congresses, northern political support for high tariffs had become reflexive; by the 1910s, the United States was well past the critical stage of import substitution that was inaugurated by the 1861 Morill Tariff and the Civil War. Phenomenal growth in manufacturing and innovation, augmented by the rise of scientific agriculture, could be observed across the Northeast and Midwest. An urgent problem facing the national economy, however, was the striking underdevelopment of the postbellum, post-slavery South. The migration of northern capital to the region had helped spread textile manufacturing, especially across the southern piedmont. But these were middling gains at first, driven pri­marily by competition with better-paid northern textile workers such as those in the small cities of Massachusetts.

Hull linked his autodidactic study of economics with his other political theories and sectional interests. He saw protectionism as a fetter on southern development and a source of monopoly power, but also as an obstacle to export growth, the absence of which would ultimately weaken national prosperity and international diplomacy.³ Though Hull and his allies scored a few victories during the first two years of Wood­row Wilson’s presidency—most significantly, the Underwood-Simmons Tariff Act reintroduced a federal income tax while reducing tariff rates to around 27 percent⁴—the 1920s saw the return of Republican hegemo­ny and high tariffs.

The Great Depression and Franklin Roosevelt’s election finally offered Hull an opportunity to fully test his theories. Beginning with a bill conceived by Hull that would become the Reciprocal Trade Agree­ments Act of 1934, trade policy shifted from Congress to the executive branch.⁵ On the face of it, the RTAA was prudent and overdue. The tariff regime, as Hull long asserted, had indeed become a creature of dominant northern industries, to the point where it aroused complaints over the cost of living even in prosperous years. In raising the price of foreign industrial inputs and household goods, tariffs had stimulated northern production while depleting the South of capital and revenue to expand its own. For decades, meanwhile, Republicans had insisted that craft and industrial workers benefitted from protectionism—the premise being that strong domestic industries would ensure decent wages, provided they were not undercut by a flood of cheaper imports. Yet the increasing instability and decline of New England textiles illustrated the limits of this claim. Because the 1931 Smooth-Hawley Tariff had aggres­sively curtailed the expansion of export markets, Hull argued, commodities suited for international commerce, such as textiles, would suffer further without a substantial reversal in policy.

The RTAA was a decisive move that enhanced executive discretion over the expanding umbrella of foreign policy, as Benton explains, one that greatly diminished the authority of members of Congress to deter­mine trade policy in accord with their constituents, business associations, and related regional interests. The act promoted trade by reducing tariffs once again but also by codifying the principle of Most Favored Nation status, which guaranteed that any new trade agreements worked out between the United States and another nation extended to all U.S. trading partners.⁶ It therefore advanced Hull’s goal of enhancing Ameri­can diplomacy and curbing what were isolationist and perhaps even semi‑autarkic inclinations in domestic politics.

Restoring America’s fallen share of exports would be an additional way to spur the manufacturing growth essential to economic health, Hull thought. Here, he sought to avoid resuming the core-periphery dynamic of the high-tariff home market. In this, Hull and other free-traders frequently had an informal ally in the Republican-aligned Na­tional Association of Manufacturers. During Wilson’s presidency, his­torian Jennifer C. Delton writes, NAM had already begun to propound the virtues of enlarged foreign markets and use its burgeoning international networks to influence U.S. trade policy, infusing a “cosmopoli­tan” outlook within an otherwise politically conservative organization.⁷

Thus, while ending the Depression hinged on reviving the manufacturing core, a simple reversion to the status quo ante was not desirable. A recovery in prices and wages across agriculture and industry, dubbed “reflation,” had to be efficiently absorbed by foreign markets, domestic supply chains, and American consumers—the latter of whom were still quite poor in the South. As with the North, any rise in income in the South had to translate into real purchasing power for more goods in order to quicken the pace of economic recovery.⁸

At the same time, sustained export growth in consumer durables, nondurables, and farm commodities required competitive output at prices that other countries could tolerate and which generated meaningful foreign exchange. The low-wage South provided an answer. Policies that expanded foreign markets therefore tempered the possibility that reflation would overly favor the industrial core at the expense of other U.S. regions and priorities. Between federal support for infrastructure projects and a trade policy that quietly strengthened the competitive position of southern entrants to basic industries, the South would be able to develop in a manner that the previous Republican developmental paradigm had forestalled. In doing so, it would revitalize the global influence of the United States and dampen the pull of isolationism.

Sources of Disorganization

On the one hand, the RTAA was a logical, even farsighted component of Roosevelt’s agenda for economic recovery. On the other hand, it conflicted with other aspects of the New Deal as well as the ambitions of organized labor. The 1933 National Industrial Recovery Act (NIRA), the New Deal’s first, ill-fated experiment in corporatism, ostensibly set price and wage “codes” for several major industries while introducing, via Section 7a, a federal right to unionize.

While successful enforcement proved intractable on several fronts, Benton writes, southern interests played an outsized role in the “failure of the NIRA to protect textile workers.” Textiles were “highly decentralized” when compared to other industries, while the Cotton-Textile Institute (CTI), a leading industry group based in North Carolina, rejected labor’s participation in industry decisions.⁹

With southern plants now dominating textile production, workers came up hard against the NIRA’s limited enforcement mechanisms and poor federal oversight. The CTI, for instance, reduced wages in 1933 and 1934 while exploitative practices such as the “stretch out,” whereby firms cut employment and overworked remaining employees to max­imize profits from temporary production schedules, continued undisturbed.¹⁰

Although labor organizing at the national level skyrocketed follow­ing the NIRA, boosting membership in the textile sector’s previously moribund unions, conditions for organizers remained hostile in the South. In autumn 1934, Georgia’s Democratic governor, Eugene Talmadge, responded to strikes with martial law, imprisoning thousands of strikers and detaining over a hundred in a prison camp.¹¹ With national textile employment actually dropping by over 12.7 percent between 1933 and 1934, despite the goals of the NIRA and reflation, southern textile workers became increasingly captive to the region’s militantly antiunion atmosphere. Northern-based unions were unable to win in­dustry-wide concessions in this period, further quelling the appetite of southern workers to embrace organizing.¹²

Though the RTAA had followed the NIRA—which the Supreme Court would soon declare unconstitutional in 1935—it compounded the latter’s flaws, namely those which allowed southern capitalists to frustrate any kind of sector-wide cooperation that might also improve worker power. Increased trade would plainly favor southern textile firms and therefore inhibit the goals of northern workers, such as interregional convergence toward standardized wages and hours. But the problem of decentralized action would worsen the outlook for the industry overall, as the very proponents of free trade and southern in­dustry would encounter headwinds from other countries that replicated their development model.

Indeed, the RTAA did not anticipate the imminent limits of America’s export advantage. It could not be buttressed in perpetuity by southern labor, no matter how severely underpaid. In turn, advocates like Hull either did not apprehend or disregarded how it would exacer­bate the problems already facing the textile industry.

By the 1920s, twin challenges for the industry had crystallized that would fuel uncertainty and turmoil for textile-producing re­gions for the rest of the century. The first, as noted, was interregional competition within the United States that undermined collaboration for the sake of the industry’s long-term health. Rising unemployment in the industry’s original core in the Northeast was both driven and offset by growth in the South; although some New England Republicans ex­pressed concern over the effects of imports on wages,¹³ solutions were not forthcoming on the question of domestic competition. With the advantage of not just paltry wages but the pervasive employment of child labor until the 1938 Fair Labor Standards Act, southern textile plants and firms had become critical sources of local capital formation that southern political elites would not readily compromise. This growth, however, was not sufficient to blunt the second challenge facing the industry: import competition, led by Japan in the interwar era and again in the 1950s, and from other emerging economies in East Asia and Latin America.

Mounting evidence of fierce import competition from Japan along­side its heightened presence in U.S. export markets in the Western Hemisphere prompted the first major departure of southern firms from the new free trade consensus. Increased competition from nations friendly to the United States, particularly the UK and Czechoslovakia, also loomed. During the mid-to-late 1930s, Benton writes, industry leaders used congressional hearings and other fora to oppose new tariff reductions and bilateral trade negotiations, which were increasingly overseen by Hull’s State Department. Stunted, perhaps, by the events of 1934, southern textile workers were generally absent from these lobby­ing efforts, whereas New England workers, already sensitive to southern competition, ironically converged with those Southern executives who sought import barriers. After almost two decades of regional decline, Northern textile workers still had much to lose.¹⁴

Yet it would take time for union locals to fully capture the attention of their national leadership on this issue, Benton writes. As organized labor’s general rapport with the Roosevelt administration grew in the years following the Wagner Act, leaders from the International Ladies’ Garment Workers’ Union and Amalgamated Clothing Workers of America extended their support to the RTAA despite the burgeoning opposition of rank-and-file members.¹⁵

On the eve of the Second World War, substantial doubts over the direction of U.S. trade policy thus brought into proximate alignment two major coalition partners of the New Deal. But their pronounced class and regional antagonisms, alongside policy disagreements within organized labor itself, precluded the possibility of an alternative trade policy that could serve postwar reconstruction without harming a key segment of American workers and industry.

Cold War Challenges

Foreign policy—influenced as much by realpolitik as the tenets of Cold War liberalism—would continue to set the terms of the debate after 1945. The watchword of the agencies tasked with carrying out the Euro­pean Recovery Program was “trade, not aid.” The goal of American policymakers was to rebuild Europe through the cultivation of deeper economic ties that stood to benefit American exports, with representatives of American unions enlisted in the effort to strengthen the Atlanticist alliance through dialogue with non-communist trade unions abroad.¹⁶

In turn, the program for European economic growth appealed to three prevailing sentiments: the commercial Keynesian notion that loan-financed consumption of American goods would buttress domestic employment at the same time that lower tariffs would, via U.S. demand, accelerate the rehabilitation of European industries; the corresponding belief that expanded trade was far superior for postwar growth than aid that more directly subsidized reconstruction, which may or may not have inadvertently encouraged a return to pre-RTAA barriers as well as more European statism; and the neo-Wilsonian view, advanced by Hull and the Truman Doctrine, that trade was the essential economic coun­terpart to multiplying U.S. security commitments under NATO and in the Pacific.

Combined with a counteroffensive against organized labor by busi­ness and Congress’s conservative coalition, the postwar trade agenda perpetuated the textile industry’s instability and sectional divide, raising difficult questions about urban renewal in parts of the Northeast and the future of development in the peri-urban South. At the national level, organized labor reached its apex during the Second World War, but the Textile Workers’ Union of America (TWUA), formed in 1939, did not experience the surge in membership witnessed in heavy and higher-value‑added industries.¹⁷ Following a dramatic textile strike in 1945 at the Gaffney plant in South Carolina that led to temporary government operation under federal war powers, labor organizers undertook Opera­tion Dixie—another foiled campaign to bring industrial democracy to the South. On top of right-to-work laws that proliferated after the 1947 Taft-Hartley Act and the familiar tactics of employer intimidation, organizers were sometimes rebuffed by southern workers fearful of losing the relative rise in prosperity and stable employment furnished by the war economy.¹⁸

Defense-contracted orders, boosted by U.S. intervention in Korea, confirmed the overarching expectation that Cold War military spending would reinforce all pillars of southern development. Nationally, mean­while, consumer demand was sufficient to lift profits for northern producers for a short period. These dynamics tended to defer a realistic assessment of textile fortunes, despite awareness of the threat posed by growing import competition in the 1930s.

The problems glimpsed in the 1930s would become more pronounced with each recession of the postwar boom. Downturns for the textile sector would be more severe than in other industries; rebounds would usually be slower and regionally stratified. In fact, the structural crisis facing New England was acute by the early 1950s. Corporate mergers led to mass layoffs and a preference to cannibalize equipment and sell off property instead of reinvesting in technological upgrades that might sustain a leaner but more secure workforce. Since textiles had remained a relatively low-margin industry, Benton writes, capital depre­ciation was quite protracted and outdated machinery was commonplace; southern competition had probably further disincentivized basic mainte­nance in northern textile regions—let alone R&D—that was common in more advanced industries.

Import competition, however, did not rest solely on labor exploitation in places like Hong Kong, South Korea, Singapore, and Japan. Benton notes that firms in those countries and elsewhere were combining low wages with new technical advantages and innovations, particularly in synthetic materials, that American firms had been slow to invest in. While pride in American craftsmanship had been a tenet of the labor movement for decades—a quality that had been likewise trumpeted by firms eager to promote an “American standard” in the era of high tariffs—consumer textiles gradually defied the simple equation of im­ports with inferior quality. As the abundance generated by mass produc­tion in the 1950s came to define consumer welfare, imports of everyday clothes as well as mid-market fashion appealed to thrifty households that wanted more for less. Beginning in the realm of textiles, developing economies increasingly satisfied this demand, normalizing lower quality for some products while eliminating evident differences in others.

The textile sector’s increasing divergence from the industries driving the postwar boom was stark for northern labor, but also for several executives, by the end of the 1950s. New England’s governors, Benton writes, concluded that the entire industry had shrunk by 31 percent since 1929.¹⁹ At least in the Northeast, labor, industry, and a handful of political leaders had begun to coalesce to demand intervention by the federal government. The region’s most sympathetic and prominent ear at this juncture was Senator John F. Kennedy of Massachusetts, soon to become the Democrats’ 1960 presidential nominee.

Kennedy’s election seemed to augur some concrete measures that would provide relief for all factions of the industry. Although sometimes characterized as a policy lightweight during his time in Congress, Kennedy had dutifully pursued various forms of protection for New England textiles. In addition to his record of support for targeted import quotas and tariffs, Kennedy promised an area redevelopment program and policies to expand unemployment benefits and retraining subsidies. Kennedy also courted southern textile executives, who, while also favoring protection, remained wary of federal action that might interlink the demands of northern unions to achieve nationwide sectoral stand­ards with those of the civil rights movement to end discriminatory Jim Crow labor practices.²⁰

Kennedy had important pragmatic reasons for doing so. In a 1954 essay for the Atlantic Monthly, Kennedy had assailed southern developmental strategies that, in his view, had “liquidated” New England indus­try. The decisive factor behind the out-migration of Northern mills and factories, Kennedy wrote, was “the cost differential [between the South and the Northeast] resulting from practices or conditions permitted or provided by Federal law which are unfair or substandard by any crite­rion.”²¹ Economic competition now firmly dovetailed with segregation as a source of sectional stress between the two poles of the Democratic Party. In order to win the presidency as a northern liberal, however, Kennedy had to nimbly retreat from these more overt criticisms and establish common goals that also conceivably aligned with his muscular approach to Wilsonian internationalism. As Benton writes, textile poli­tics thus continued to be a microcosm of the competing pressures of the New Deal order—both domestic and international—that Kennedy would fully inherit.

Irreconcilable Demands

Reconciling these demands was a tall order even for an administration entertaining a robust domestic reinvestment and developmental agenda. Once in office, however, Kennedy’s devotion to foreign policy and pursuit of a reinvigorated sphere of American influence motivated at­tempts to extricate these priorities from domestic economic lobbies that had conflicting goals. In Kennedy’s view, several issues concerning America’s competitive position vis-à-vis a growing and technologically advancing Soviet Union necessarily had to be met with lower trade barriers. The opportunities and challenges presented by the growth of the European Economic Community and increased development in Latin America further underscored the imperative to counter the global influence of the Soviet Union through more substantial trade relations.

Though the 1962 Trade Expansion Act initially encountered some resistance by members of Congress who were aggravated by the State Department’s increasing control of trade negotiations, it won broad support from the textile industry and the afl‑cio, in part because it contained Trade Adjustment Assistance (TAA) for displaced workers and communities struggling with fading industries.²² Still, the administration and its labor allies were emphatic about the need for more international trade. In explaining his endorsement, the afl‑cio’s leader, George Meany, minimized anxiety over import competition and de­clared, “World trade has become a weapon in the Cold War.”²³

On most fronts, Meany was in agreement with Kennedy. His main point of contention was that tax cuts should only be aimed at workers to raise their purchasing power since, in his view, that was the best way to close recent disparities in growth between the United States and west­ern Europe.²⁴ The problems of communities grappling with cheap imports and deindustrialization could otherwise be met through the 1961 Area Redevelopment Act, TAA, and more commercial reinvestment. The administration, meanwhile, attempted to fulfill its commitments to do­mestic textiles through a seven-point plan that included delays on fur­ther tariff reductions and promises to aid R&D in the industry.

Even as the administration used trade liberalization to advance its foreign policy objectives, it linked the emphasis on growth through trade to other domestic issues. Sensitive to the rising economic demands of the civil rights movement, the administration believed trade-driven growth and innovation, alongside proposed tax cuts, could harmonize its economic opportunity and civil rights agendas. For a short period after Kennedy’s assassination, Benton writes, it appeared that his succes­sor, Lyndon Johnson, could navigate these waters. Johnson extended support to domestic textiles at the same time that civil rights legislation, other Great Society initiatives, and economic factors greatly boosted the employment of African Americans and other minorities in the textile sector.²⁵ In 1964, the Johnson administration secured a bill that eliminat­ed disparities in the price of raw cotton, with the twofold aim to spur domestic production and lower the cost of American-made textiles for consumers.²⁶ But despite an enormous jump in profits over the next two years due to this indirect subsidy, savings were not significantly passed on to consumers nor did the flow of imports decelerate. On the contrary, a modest trade surplus in textiles surged to a deficit of over a billion dollars by the time Johnson left office.²⁷ His brief flirtation with protectionist measures, meanwhile, gave way to the same rationale that had animated Kennedy. In spite of a growing chorus favoring import quotas across multiple industries, Johnson signed the 1967 Kennedy Round that had been negotiated with U.S. trade partners, lowering tariffs further.²⁸

As Benton suggests, the Democrats’ competing impulses over how to manage international growth and shore up domestic industry exacerbated the fracture in the New Deal coalition over civil rights, the Vietnam War, and sociocultural issues. Aggravating the North-South cleavage were polarizing debates over crime, welfare, and, later in the 1970s, federal budget formulas to distribute aid to states and municipalities, particularly those in the Northeast reeling from deindustrialization and high unemployment. Strain over Cold War liberalism further cleaved Washington insiders from the expanding Rust Belt: commercial Keynesians and foreign policy interventionists were divided against increasing numbers of House Democrats now being pulled in a protectionist direction by alarmed union locals.²⁹

Old-guard Southern Democrats and former Dixiecrats, meanwhile, moved toward the Republican column, but not only because of Richard Nixon’s law-and-order message. Once the bastion of zealous free trade advocacy, the South could no longer ignore the ramifications of height­ened import competition. As with a significant portion of white union households in the North, Nixon courted Southern industrial interests and nonunion Southern workers by promising import quotas where Johnson had rejected them.³⁰ Elements from the two New Deal constituencies that had arguably clashed the most before the civil rights era thus once again found themselves in de facto alignment on trade; in turn, a transitional Republican coalition under Nixon was well-posi­tioned to exploit the Democrats’ schisms in the 1968 and 1972 elections.

Nixon’s pivot to economic nationalism itself proved to be temporary, its fruits short-lived. By the mid-1970s, Benton writes, organized labor’s simmering opposition to U.S. trade policy faced impossible headwinds, despite earlier signs that a coalition of congressional Democrats and Republicans would pursue a revision of the postwar trade agenda.³¹ The most explicitly protectionist bill under consideration in this period was introduced in 1971 by Democratic representative James Burke of Massachusetts and Democratic senator Vance Hartke of Indiana. Vociferously opposed by the Nixon administration and a plethora of business interests, the defeated Foreign Trade and Investment Act, known as Burke-Hartke, not only proposed import quotas for several products but sought to tax annual profits earned abroad by U.S. multinational subsidiaries that had not been repatriated, attempting, in effect, to stanch the rise of offshore tax havens. While the National Association of Manufacturers and other corporate leaders insisted Burke‑Hartke was a radical bill that would wall off and destabilize the American economy, it was also notably rejected by the United Auto Workers. Only a few years later, the decade’s economic turbulence would reverberate through Detroit and permanently change skilled manufacturing workers’ perceptions of the potential benefits of more trade agreements.

At the start of the Ford administration, lopsided congressional majorities defeated the afl‑cio’s campaign to stop passage of the 1974 Trade Reform Act,³² another bill to liberalize trade, while the Employee Retirement Income Security Act of 1974—a bill to guarantee private pensions for twenty-three million workers—was marred by its failure to include pension plan portability for those workers who switched em­ployers.³³ In effect, the pension bill was a concession to workers who were then being forced into early retirement because of regional trade shocks, automation, and other forces driving industrial decline. But like other attempts to buffer deindustrialization’s consequences, such efforts ignored the question of how to reimagine legacy industries for future workers in those cities and towns that globalization would leave behind.

Beyond Legacy Industries

In sacrificing domestic textiles to various Cold War calculations, policymakers failed to perceive how the sector’s wages, like those of other entry-level manufacturing sectors and the technical trades, had helped sustain the circulation of local and regional wealth. Clothing, shoes, linens, carpets, upholstery, industrial fabrics, and other textile goods once provided a foundation for ongoing regional growth and, increasingly, labor market entry for women and minorities. In prosperous years, the benefits to poorer communities could be substantial, even in the comparatively wage-restrained South. As textiles were removed from the equation of local tax bases and commercial revenue through accelerated offshoring, mom-and-pop businesses as well as medium-sized firms with specialization in higher-value-added manufacturing, from furniture and appliances to machine tools, would increasingly dis­appear from locales not primed to benefit from high-tech, finance, and upscale real estate markets.³⁴

Workers buffeted by import competition thus had multiple reasons for their despondency and political restlessness in the decades that followed. While in some ways the welfare state grew in response to the uncertainties of the 1970s, there were instances in which programs designed to assist communities affected by plant closures were glaringly inadequate or had been obstructed for parsimonious reasons. The TAA rules that the U.S. Tariff Commission applied to workers seeking cer­tification, for example, were so stringent that no workers were eligible for benefits until 1969, when Nixon eased the requirements determining benefit allocation.³⁵ But as Benton writes, TAA remained an under­funded tool, neglected by politicians reluctant to confront the broadening sweep of offshoring and the fallacies of market fundamentalism.

Textile workers also struggled to bring their case to the public. With the electorate increasingly conditioned to equate low prices with a high standard of living, it became harder still for textile workers to build sympathies that translated into meaningful consumer choices, particularly as inflation rose. The public was further divided over how to respond because of the ever-stratified geography of American prosperity, the pace of innovation, the seemingly endless tide of imports, and changing sources of economic growth. Even as the tribulations that befell textiles spread to other manufacturing sectors, trade policy seemed to broadly satisfy the middle-class electorates of the 1990s and 2000s. China’s rise, combined with the advent of big-box stores and then Amazon, meant a glut of goods at bargain-bin prices, which went hand in hand with easy credit and generally low interest rates. In the cosmopolitan tech and financial corridors of the knowledge economy, factory closures that now roiled the auto industry were usually a distant thought or glossed over in Schumpeterian terms.

Worsening the quality of the debate, trade issues, then as now, were often pitched as stark, binary choices. For its advocates, free trade encapsulated openness and global leadership as opposed to isolation and beggar-thy-neighbor actions. Though one could trace industrial decline from New England in the 1950s to the Midwest in the 1970s and then across much of the South following nafta, proponents of the Washington Consensus routinely minimized the ramifications for social stability, municipal revenue, and regional economic health, insisting that market forces would duly replace lost livelihoods. Attempts to insulate Ameri­can workers and firms from foreign competition, whether through grassroot boycotts or lobbying, were framed as an “artificial” cornering of the market that was redolent of the barriers U.S. leadership sought to break down and which stymied other countries’ development. Such efforts, admonished most economists, pundits, multinational business lobbies, and neoliberal politicians, were futile and backward-looking.³⁶

This worldview—and the revisionist attitude, beginning in 2017, that any objection to free trade was innately Trumpian—would have prob­ably continued to dominate mainstream commentary had it not been for the supply-chain shocks of the Covid-19 pandemic. Those events created an opening for the Biden administration to more expansively employ industrial policy on behalf of the energy transition. In recognition of the fact that a successful industrial strategy must actively encourage capital expenditure through subsidies (i.e., “crowding in”) while deterring some forms of capital mobility (i.e., a new “high fence”), the administration has also embraced tariffs, procurement rules, and other trade restrictions to aid established industries, combining Hamil­tonian objectives with Keynesian-style infrastructure spending.

Less noticed by analysts is that, in doing so, the administration has marginalized the party’s traditional approach to trade that had been forged long ago through a precarious consensus between northern liberals and southern developmentalists: that free trade is almost always central to America’s long-term strategic interests and the enduring viability of its economic dynamism.³⁷ On this score, Benton’s otherwise revealing manuscript could have been extended to assess these changes in greater historical perspective. Precisely because he expertly contextualizes Cordell Hull’s pivotal role in shaping the priorities of midcentury liberalism, an exposition of Biden’s ideological shift at the end of Fraying Fabric would have clarified for readers just how significant the “new Washington Consensus” is.

Rather than maintain the illusion that a “homogenized” world market, contingent in practice on China’s unparalleled manufacturing capacity, is the sole path toward further development, the administration recognizes that without a strong and relatively decentralized domestic industrial base, no advanced country—not even the United States—can continue in the long run to improve its living standards and promote social cohesion. Accordingly, the administration’s unspoken wager is that the medium-term price of more market independence or regionalization—higher input costs, higher wages, and other counterweights to the supremacy of quarterly profits over all other considerations—will be more than compensated for through fewer supply-chain failures, new ecosystems of regional supply and demand that strengthen fair competition, and cost-saving goals such as national clean energy independence and healthier, more stable communities.

Given the fiscal multipliers that Biden’s industrial strategy is meant to spark, might any benefit redound to legacy sectors? Amid an un­expected resurgence of American manufacturing, recent talk of reshoring has expanded to include goods long assumed to have no sound financial basis in domestic production. Although it is unrealistic to think textiles will enjoy a renaissance—the workforce, Benton writes, has shrunk from 2,380,400 in 1973 to 183,000 in 2020³⁸—a handful of newer brands have built a reputation and customer base on the premise that good American-made clothes can be produced at decent wages and sold at reasonable prices.

In some corners of the Rust Belt and the South, this could mark an auspicious turn. As more and more consumers feel moved to make eco-conscious and ethical purchases, goods with a compelling story behind them—a rehabilitated factory town, a devotion to recovering old production techniques, a commitment to provide stable employment to the formerly incarcerated, or, in the case of developing countries, a guarantee of noncoerced labor and meaningful environmental standards—are informing the ways Americans approach their material needs and desires.³⁹ Alongside further policy changes in Washington and reform at the World Trade Organization, changing consumer behavior could advance more universal standards for “fair trade.”

Of course, the likelihood of such trends having a measurable impact on domestic manufacturing employment is fairly remote. As automation and AI continue to flummox our expectations for the economy, we have reason to doubt whether total manufacturing will ever again exceed 10 percent of the workforce.

And yet, there are real possibilities for new forms of inclusive growth outside the service sectors—provided that policymakers approach trade issues, workforce development, antitrust action, and social insurance holistically, as Benton urges. By expanding economic opportunity beyond the knowledge economy, the energy transition does have the potential to catalyze investment and innovation in auxiliary manufacturing and craft-oriented trades, which could generate niche yet sustainable regional markets that raise the labor force participation rate of underserved communities and reduce overall inequality. In an era where many young people express deep pessimism about their life chances, our social cohesion will depend on policies—labor, trade, and developmental—that substantiate the dignity of work for all Americans.

This article originally appeared in American Affairs Volume VII, Number 4 (Winter 2023): 52–69.

Notes