The Great Betrayal: How American Sovereignty and Social Justice are Being Sacrificed to the Gods of the Global Economy.

by Patrick J. Buchanan Little, Brown & Co., $22.95

Pat Buchanan has a mission: He wants to make protectionism respectable. The American public, he thinks, is being fed a pack of lies about international trade and its consequences. The perpetrators are politicians who ignore the lessons of American history, cosmopolitan economists who disregard facts in favor of theories, and a coterie of business elites who lack any sense of patriotic duty. The victims are the working people of America who have fallen on hard times -- and for whom worse lies ahead unless the economic nationalism that made this country great is reinstated.

So goes the argument of Buchanan's new book, The Great Betrayal. This is unlikely to come as a surprise, unless you happen to have been on a different planet during the last two presidential campaigns and have never heard of CNN. Buchanan's fiery mix of conservative populism has long made him a household name. But this book is more than an ordinary political manifesto. It is Buchanan's attempt to rewrite American history through the prism of the import tariff Buchanan wants to take on the scribes who cherish free trade on their own turf. Hence a book packed with charts, footnotes, and references to the works of economists, living and dead.

Buchanan's interpretation of American history is straightforward: Great things happened whenever the United States raised its tariffs on imports. Washington, Hamilton, and Madison all "abhorred `free trade,'" Jefferson "ended his days as fierce an economic nationalist as Andrew Jackson," and Lincoln was "America's Great Protectionist." Import tariffs stood at 40 to 50 percent as America caught up with and surpassed Europe in manufacturing production during the five decades before World War I. The Smoot-Hawley tariff of 1930 was not the highest in American history -- that honor belongs to the Tariff of Abominations of 1828 -- and in any case did not play a significant role in the Great Depression.

Buchanan thinks America's protectionist past should be the beacon for its future. He would like to see the U.S. declare its economic independence by imposing a 15 percent tariff on all imports that compete with domestic production. (Canada would be exempt provided it too adopted the 15 percent tariff.) But that is just the beginning. Developing countries would be hit by additional tariffs aimed at equalizing labor costs and calibrated to their wage differential with the U.S. Japan would also face special tariffs, unless Japanese companies were to shift auto production en masse to the U.S. China would be denied most-favored-nation status, NAFTA would be renegotiated, and membership in the World Trade Organization would be withdrawn.

The trouble with Buchanan's vision is the blind spots. Buchanan's account makes it seem as if unpatriotic fat cats are the only ones who benefit from trade. He remains silent about the millions of workers who are employed in export-related industries, and whose livelihood would necessarily be threatened by a policy of economic nationalism. He is also silent about technological change, which is a much greater source of job churning and dislocation than trade. It is not clear what Buchanan's blueprint has to offer, say, the 37-year old high-school graduate who is unable to find a job paying more than the minimum wage after the video store that he used to manage closes. In practice this kind of job loss -- due to shifts in consumer demands or in technology -- overwhelms any that might be associated with import competition. For the bulk of displaced workers, there is very little to soften the blow in Buchanan's "humane economy" with its high tariffs but otherwise no government role in providing safety nets and educational opportunities.

The example of the video store manager is taken from the book by Bob Davis and David Wessel, Prosperity. Davis and Wessel are two Wall Street Journal reporters who think Buchanan and the other prophets of doom have got it exactly backward. They believe that we are about to enter a period of prosperity that will boost the nation's productivity and raise the incomes of the middle class.

Why the optimism? First, the revolution in information technology will finally show up in the productivity numbers. Second, community colleges will provide less-skilled workers with the education and training needed to work with the new technologies. And third, globalization -- far from squeezing the middle class a la Buchanan -- will open up new employment opportunities and raise the wages of U.S. workers. Technology, education, and globalization will combine to open a new golden era for the American economy.

On the face of it, Davis and Wessel's consummate optimism is easy to ridicule, but if you can get beyond the first few pages, you'll find yourself less of a skeptic by the end of the book. The two authors have done their homework. Their claims are based on a close reading of the economics literature and are buttressed by extensive interviewing. The idea that computers will soon give rise to a much-delayed productivity boom, for example, draws on Stanford economic historian Paul David's analogy with the gradual introduction of electricity in the nation's factories during the early part of the century. It is also nicely illustrated by the story of Maytag Corp.'s early years in Newton, Iowa, based on interviews with several surviving Maytag employees. The claims on education and globalization are also developed convincingly, combining insights from the academic literature with anecdotes from the lives of real people.

Since Davis and Wessel want to observe America!s future through rose-tinted glasses, they are often forced to argue both sides of the issues. Their chapter on why computers have not yet paid off is a fascinating catalogue of wrong turns and false promises; unfortunately, it undercuts their subsequent argument about the productivity miracle just around the corner. They tout the benefits of global specialization exemplified by Silicon Valley's growing reliance on software engineers in Bangalore, India; in the same breath they discount worries that this may take jobs away from American programmers by arguing that the relevant trade is tiny (in which case, it follows that the economic benefits are commensurately small as well). They maintain that many of the new technologies in the work place, designed with the less skilled in mind, will favor American workers at the bottom of the wage scale; but they neglect to mention that such technologies will also make it easier for employers to replace American workers with Honduran or Chinese ones.

Davis and Wessel's all-too-short final chapter brings in the one institution that is curiously absent from the rest of the book: the government. The authors tick off a number of things they would like to see the government do: support community colleges and subsidize low-income students; consolidate and expand training and adjustment programs for displaced workers; increase federal funding for R&D; exhibit greater candor about the down-side of globalization and trade agreements.

In view of the brevity of the final chapter, many readers will take the wrong message from the Davis and Wessel book, and conclude that shared prosperity will drop out of the sky as long as Washington does not screw up too badly. I doubt this is what the authors had in mind. Ultimately, their book works best not as a prediction, but as a plausible vision of what it would be possible for American society to achieve if all the pieces somehow fell into place. Making the vision a reality will require policies that take care of the losers and promote a sense of shared goals while fostering the transformations in education, technology, and globalization that Davis and Wessel foresee.

Given a choice, we are collectively much better off taking a gamble on Davis and Wessel's future than opting for Buchanan's idyllic past.

DANI RODRIK is a Professor of international political economy at the John F. Kennedy School of Government, Harvard University.