We're All "Addicted" to Our Best Options

Earlier this year, J.D. Vance decried “cheap labor” as both a “crutch” and an “addictive drug”:

[C]heap labor is fundamentally a crutch, and it’s a crutch that inhibits innovation. I might even say that it’s a drug that too many American firms got addicted to. Now, if you can make a product more cheaply, it’s far too easy to do that rather than to innovate.

And whether we were offshoring factories to cheap labor economies or importing cheap labor through our immigration system, cheap labor became the drug of Western economies.

“Cheap labor”?! In point of fact, wages in the United States are higher than virtually anywhere else on Earth. Only three countries — Luxembourg, Iceland, and Switzerland — pay workers more. But the U.S. obviously has some relatively low-paid workers. Rare though they are, is Vance right to decry our dependency on them?

I answer with a simple slogan: We’re all “addicted” to our best options. We’re addicted to our cars for transportation. We’re addicted to our air conditioning and heating for year-round comfort. We’re addicted to our family and friends for support and fun. We’re addicted to our jobs for money. We’re addicted to our favorite foods for flavor and sustenance. And we’re addicted to our favorite hobbies for entertainment. Yes, extreme innovation potentially allows us to move on. But if the cost of innovation is high, and the probability of finding a better option is low, our best bet is to remain addicted.

Sure, you could insist that status quo bias leads to suboptimal innovation. But have you pondered the offsetting dangers of overconfidence and action bias? If a self-styled “visionary” declares, “There’s a great alternative to air conditioning out there, and we must make finding it our top priority,” you should laugh, not invest your life savings.

Yes, a person capable of walking might atrophy his legs by stubbornly using a crutch. But the main reason people use crutches is because they have no better way to move around. Yes, a person might use a drug with pleasant short-run benefits, but devastating long-run costs. But the main reason people use drugs is because they have no better way to improve their health. U.S. obesity rates rose for decades until pharmaceutical companies figured out how to replace “addictive food” with “addictive weight-loss drugs.”

Once in a long while, we’re foolishly dependent on things we’re better off without. Normally, however, we’re wisely dependent on things we’re better off with. Decrying cheap labor as a “crutch” or a “drug,” without a shred of evidence that we’re in the former rare scenario rather than the latter standard scenario, is classic demagoguery.

OK, but is demagoguery yet another product on which we are wisely dependent? This would be a perfectly fair challenge… if I hadn’t written a whole book arguing otherwise. Breaking our addiction to cheap labor is silly. Breaking our addiction to politicians’ pretty lies is common sense.

An addiction I have no desire to break.