Thursday, July 23, 2009

Buy American: Geeks go Mercantilist

As a gadget geek, I spend a lot of time at the popular blogs Gizmodo and Engadget. The vast majority of posts on those sites happen to be apolitical. Which cell phone is the latest and greatest seems to be the only topic that can stir up controversy. But the recent economic downturn has everyone thinking dollars and cents, and (sadly) using very little common sense.

Gizmodo's "Question of the Day" asks Would You Pay More To Have Your Gadgets Made In The US? and so far, according to the polling, 65% of respondents say yes in some degree. In the comments, you can see the level of thinking that goes into this poll response:
To be honest, I wouldn't mind all of our products being made in the US. In fact, I'd like to see outsourcing come to an end
Yes I would. Spending more money on American product = more jobs = better economy = I'm richer = not minding to pay more.
Anybody who's taken Econ 101, or even knows a modicum of Chinese history can see the glaring fallacy of these statements. The Chinese were THE most advanced civilization UNTIL they became closed off to the outside world in the 15th century. To put it simply, there is only one thing all modern economists agree on and that is the mutually wealth producing benefits of international trade and openness. First popularized by Adam Smith in the 18th century and then expounded upon by David Ricardo, international free trade policies have brought wealth and prosperity to billions of people previously bound to poverty by the caste-like qualities of mercantilism. Even the Chinese get that now and are benefitting, despite their government's horrible humanitarian policies.

You don't even need to think about countries or history trying to understand free trade. Behind sleeping, thinking and breathing, trade is the most common activity that humans engage in, and for good reason. When you take a job, and are working at that job, you are engaging in a mutually beneficial trade: your labor for the employers money. If you were not better off, you would not be working. If the company were not better you, they would not pay you. You are both better off than before the job offer was accepted. When you shop, even before you get to the register, you have traded your some of your free time comparing deals in order to get the most benefit for your money, and the store STILL makes a profit! Although, it's smaller than the one they make off the impulse buyer.

There are countless examples of how free trade has made all involved parties better off. So why does everyone hate their job, hate buying from Chinese companies and companies that outsource, but continue to work at their "lousy" job, shop at Wal-Mart and buy iPods? Because the alternatives suck even more. It would be nice to be Kobe Bryant and get paid millions to do something you love, or be a millionaire's son and not have to work at all, AND have plenty of money NOT to shop at Wal Mart, or spend X dollars more on a 100% American made iPod. But we don't have those alternatives available. No, the alternatives we have involve changing careers (and usually taking a reduction in pay), studying harder for some certification, working less or not working at all, and shopping at more expensive stores. Some people make these sacrifices, because to them, it enriches their lives. Happiness cannot be bought in a store or haggled over. The price (what you give up for it) is unique for everyone.

The human spirit craves change AND security at the same time. That's what makes us so antsy; so fickle; and so creative. We want to improve our financial situation without losing everything we've worked so hard for, even though we're not entirely satisfied with the fruit of that labor. So improving means saving the most money via prudent trading and security means complaining about everyone else who does that, especially corporations like Apple.

So to all those who favor buying American, I ask this: why wouldn't you also favor buying local; just within your city? What makes Detroit so special that you wouldn't try to start a car company locally as to benefit your community, or even a bike company? Why would you buy anything out of state that could be produced in your state? Because you share something with Americans all across the country, but not people in a different country? How do you know you share something with them? You've never even met them! Why not let people you've never met before compete for your hard earned dollar, regardless of geographical or political affiliation?

Because your friendly local politician or labor leader convinced you that it's okay to discriminate based on the nationality of the workers who made the product that you wish to buy. But it's not okay, like racial favoritism isn't okay. Protectionism is affirmative action for American companies who don't like to compete for your hard earned dollar. It also gives bureaucrats job security because they get money simply because foreigners want to sell goods here. (How dare they!)

I have a new slogan: Instead of Buying American, Just Buy What-You-Can. Buy the opposite of what others think you should buy, just to spite them.

Or just join the herd and be P.C.. It's a free country!