Finally, someone gets it: “Globalism” didn’t fail the working class — globalization without proper regulation did. And it’s fixable.

Vice President J.D. Vance addressed a packed house on Tuesday morning in Washington, D.C.

Since January, Vice President Vance has been deeply engaged in a whirlwind tour of speaking engagements, international diplomacy, and world-class salesmanship.

Selling the Trump administration’s agenda is obviously something the Vice President takes very seriously. Mr. Vance seems to believe sincerely in some of the tenets of Trump’s policies, especially the potential of American energy independence and innovation.

Speaking to attendees of the American Dynamism Summit on Tuesday, Vice President Vance spoke about issues near and dear to the hearts of U.S.-based manufacturers, innovators, and corporate executives.

“There were two conceits that our leadership class had when it came to globalization,” VP Vance began. “The first is assuming that we can separate the making of things from the design of things. The idea of globalization was that rich countries would move further up the value chain while poor countries made the simpler things. You would open an iPhone box, and it would say, ‘Designed in Cupertino, California.’”

“Now, the implication, of course, is that it would be manufactured in Shenzhen or somewhere else,” Vance went on. “And, yeah, some people might lose their jobs in manufacturing, but they could learn to design or, to use a very popular phrase, ‘learn to code.’”

“But I think we got it wrong,” explained Vance. “It turns out that the geographies that do the manufacturing get awfully good at the designing of things. There are network effects, as you all well understand.”

“The firms that design products work with firms that manufacture,” Vance went into greater detail. “They share intellectual property. They share best practices, and they even sometimes share critical employees. Now, we assumed that other nations would always trail us in the value chain, but it turns out that, as they got better at the low end of the value chain, they also started catching up on the higher end. We were squeezed from both ends. Now, that was the first conceit of globalization.”

“I think the second is that cheap labor is fundamentally a crutch, and it’s a crutch that inhibits innovation,” Vance continued succinctly. “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,” Vance said. “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. And I’d say that if you look at nearly every country — from Canada to the UK — that imported large amounts of cheap labor, you’ve seen productivity stagnate. And I don’t think that’s a total happenstance. I think that the connection is very direct.”

“Now, one of the debates you hear on the minimum wage, for instance, is that increases in the minimum wage force firms to automate,” Vance said. “So, a higher wage at McDonald’s means more kiosks. And, whatever your views on the wisdom of the minimum wage, I’m not going to comment on that here. Companies innovating in the absence of cheap labor is a good thing. I think most of you are not worried about getting cheaper and cheaper labor. You’re worried about innovating, about building new things, about the old formulation of technology: doing more with less. You guys are all trying to do more with less every single day.”

“And so, I’d ask my friends, both on the tech optimist side and on the populist side, not to see the failure of the logic of globalization as a failure of innovation,” he implored. “Indeed, I’d say that globalization’s hunger for cheap labor is a problem precisely because it’s been bad for innovation. Both our working people, our populists, and our innovators gathered here today have the same enemy, and the solution, I believe, is American innovation.”

Vice President V.D. Vance is right about the failures of globalization. If the American economy is to survive and thrive in the next decades, the malfunctions and disparities in globalization are going to have to be identified and addressed.

(contributing writer, Brooke Bell)