THE MISSING PART OF THE STORY. Asymmetrical Information reflects on the effects of the most recent shakeout in manufacturing.

Liberals often accuse conservatives of hating union workers, and maybe some do, but I think it's great that people who maybe weren't cut out for college had a decent way of earning a good living, getting ahead a little. I think it's really sad that era is over, especially for people who were encouraged to bet their whole futures on a deeply troubled industry. It's just that I'm also aware that the reason people could have well-appointed jobs-for-life was an oligopolistic cartel which was able to cut rich side deals in order to buy labor and political peace. The culmination of this was the hideous junk of the 1970s, which is the kind of place that oligopolistic cartels tend to end up.

But that doesn't make all this any less tragic for the workers.

It's a meditation inspired by a long New York Times article about the legacy car companies' troubles and their effects on Detroit's black middle class.

What if you were 38 and had spent the last 12 years doing one thing for a company and an industry that allowed your predecessors to escape the Jim Crow South, that gave generations of black workers a shot at dignity and their rightful place in the American middle class, that allowed you to buy a decent home in a neighborhood right next door to white families who had fled your city years before? Maybe it wasn’t the job you dreamed of when you were 20, but it was what you did and what your father did and what you and almost everyone around you knew, and it had never failed you before.

There's nothing in that formulation that requires a monopoly manufacturer sharing rents with a monopoly union. The article recognizes part of the story.

Ford started hiring African-Americans in 1914, offering them the same $5-a-day wage it paid its white employees, even as it limited them to sweeping the floors and pouring hot steel in sweltering foundries. To discourage African-American employees from improving their lot by unionizing, the company offered free coal to ministers of black churches who preached the Ford gospel.

The scientific management techniques of the day (Taylorism, Fordism, whatever you wish to call them) did turn workers into appendages of the machine on a scale that might have startled Adam Smith or Karl Marx, but they did turn those appendages into productive appendages. (More recent technical change has augmented a different sort of human capital.) This Lexington essay in The Economist grasps the point in part, but falls back on the closed market argument.

The first is that the foundations of blue-collar America have all crumbled. Global competition, first from Japan and now from almost everywhere, has transformed manufacturing. Even shop-floor workers are expected to work with their brains as well as their hands, as flexible production replaces mass production. And a growing number of women expect to work. In fact, the golden age of blue-collar man was the product of a peculiar set of circumstances, when Europe and Japan were on their backs, mass-production ruled in the factories and a small number of companies could dominate the American economy.

There was a lot of industrial organization economics of the era suggesting that manufacturing would inevitably be concentrated, whether for good or for ill left to the policymakers to determine, and some research suggesting that unionized companies were more selective in their hiring. There is nothing in the current conditions that precludes future innovation that once again augments the productivity of people with modest intellectual capital relative to others: consider fast-food's pictographic cash registers that can be worked by anyone with eyesight.

Perhaps Lexington has that in mind.

But there is still hope for blue-collar workers as long as they are willing to learn from the calamity that is General Motors. Plenty of manufacturing companies, even carmakers, have flourished at a time when General Motors has floundered. And plenty of women today enjoy opportunities that were denied to their mothers and grandmothers. Blue-collar Americans may not be able to gorge themselves as their predecessors did. But that does not mean that they will be doomed to live on scraps.

I don't agree with that "gorge themselves." At any time, the earning power of an individual depends on the embedded technology he or she works with, and we cannot rule out a future Lexington writing a passage about hedge-fund managers no longer able to gorge themselves, perhaps as asset-management technologies improve.