Monday, January 11, 2010

"Buy American"? Then Why Not "Buy Virginia"?

It is certainly true that people’s jobs are affected by consumers’ choices. If customers stay away in droves from Chinese hose attachments, it might well mean more work for an American hose and belting manufacturer. But why stop there? In addition to boycotting goods and services made in other countries, let’s avoid spending money on products from other states. Those of us who live in Massachusetts should refuse to buy dryer sheets from California, Ohio lightbulbs, and hoses made in California. My Boston cabbie should be curling his lip at cars made not just by companies headquartered in Japan or Germany, but by those based in Michigan, too.

Crazy? Of course. Refusing to trade across state lines wouldn’t make us economically stronger. It would make us weaker, condemning us to higher prices, less variety, reduced purchasing power, and inferior quality. Granted, such protectionism might work to the advantage of a few local producers. But it would do so only by depriving everyone else of economic opportunity and improved quality of life. To turn state borders into trade barriers would be irrational and self-defeating.

~Jeff Jacoby's recent article "The Old Delusion of Protectionism"

MP: National/state/county/city/neighborhood borders are just imaginary lines on a map, and voluntarily restricting our choices to trade on only one side of an imaginary line called a national border ("Buy American") makes as much sense (none) as restricting our choices to trade on only one side of an imaginary line called a state border ("Buy Virginia"), or trade on only one side of a county border ("Buy Fairfax County"), or a city border ("Buy Falls Church"), or a neighborhood ("Buy Dupont Circle"), etc.

Bottom Line: Trade and voluntary exchange are win-win outcomes and it doesn't matter whether the buyer and seller are on the same side, or different sides, of imaginary lines. Enjoy your coffee, tea, hot chocolate and orange juice, your diamond jewelry, your iPod, and your ski vacation in Canada, or cruise in the Caribbean, etc.


19 Comments:

At 1/11/2010 10:02 AM, Blogger David said...

This is a little bit simplistic. If you are, say, a machinist, and all the machining work moves from New England to the South, then you have the option to move with it while still speaking the same language, living under (pretty much) the same political system, and being close enough to friends and relatives to visit them occasionally. None of this is the case if the work moves to, say, China.

If electronics component manufacturing moves from San Jose to Salt Lake City, it is most improbable that Utah will put an embargo on critical weapons-systems parts during a war. If the component manfucturing moves to Country X, the story may be very different.

To say that national boundaries are imaginary lines on a map is to completely ignore the the role of government, language, and culture.

 
At 1/11/2010 10:09 AM, Anonymous CompEng said...

Geography, culture, language, laws: these are all imaginary? There's no difference between America, India, China, Brazil, France, and Peru? Go back to smoking whatever you're smoking or bring some reality to your thought experiments.

I can pick up and move to Virginia, Oregon, etc. relatively easily, operating under the same laws, within the same culture, speaking the same language, with minimal legal restrictions, leaving travel costs to visit friends and family reasonable, etc. Hence, America is available to me cheaply as a greater labor market in a way many other countries are not.

 
At 1/11/2010 10:25 AM, Anonymous gettingrational said...

If your government is the tip of the spear for basic inalienable and self evident rights around the world then national boundaries matter.

A debating Cafe Society may establish parlor rules that extinguish borders. Tyrannical regimes push their borders outward for more control. Which case is real? Should the U.S. ignore borders and the flow outward of despotism?

Captialism has created critical mass because of the underpinnings of democratic institutions. The ability to carry the spear is fragile now due to precarious finances.

The Cafe parlor talk should be confined to U.S. state borders and not national boundaries. Ignoring feudal and tyrannical governments stifles and recedes democracy.

 
At 1/11/2010 10:34 AM, Blogger Colin said...

Mark, this is an excellent point and exposes a tension of the political left. While they may view themselves primarily as internationalists and profess to eschew nationalism, in reality they advocate a chauvinism of the first order through restrictive trade policies. They are the ultimate misguided America Firsters.

Trade is a consenting act between two adults that only in the rarest of exceptions-- e.g. selling arms to Iran -- should be any of the government's business.

 
At 1/11/2010 11:33 AM, Blogger Walt G. said...

Colin,

If I steal your radio and sell it to someone else, is that OK because the buyer and I are consenting adults? Is that the same as your Iran exception? Not all trading rules can automatically be called protectionism.

 
At 1/11/2010 11:45 AM, Blogger James Fraasch said...

There is a difference here between international trade and local trade. For instance, my town my have some tremendous local restaurants that are on par with a Fridays or a Chili's or something of that nature.

These local restaurants are locally owned and the owners pay their income taxes (in PA we have local income tax) to our municipality. If I put an extra $10 in their pockets at the end of the year, that is an extra buck for the municipality. If I put an extra $10 in the pocket of the CEO of Friday's I have no idea where it ends up.

For me, decisions like where to eat and shop do sometimes revolve around the "buy local" slogan.

James

 
At 1/11/2010 1:02 PM, Anonymous Benny The Man said...

Well, what if by buying oil from another nation, we help them finance global terrorism?

 
At 1/11/2010 1:18 PM, Blogger Colin said...

Walt,

Your scenario is premised on the goods being stolen, which is absurd.

 
At 1/11/2010 2:52 PM, Blogger Walt G. said...

Colin,

No, it isn't absurd. Not if the buyer doesn't know the radio is stolen.

My hypothetical situation is premised on the consumer not having all the information that the seller has. Free markets require both parties to have equal information. Do you know if the royalties have been paid on your Chinese purchases? How do you like the manure on your Mexican strawberries?

We can't expect other countries with huge problems to meet our standards. On the other hand, few U.S. CEOs commit suicide when they are exposed cheating the public.

 
At 1/11/2010 3:40 PM, Anonymous richard said...

For those of you who do not know where Dupont Circle is:

http://en.wikipedia.org/wiki/Dupont_Circle,_Washington,_D.C.

A very fine neighborhood I would say.

 
At 1/11/2010 3:49 PM, Blogger Colin said...

Walt,

You are correct, trafficking in stolen goods is wrong. And that would be a rare circumstance under which government interference is warranted.

But I would also add that buying and selling stolen goods isn't all that relevant to the discussion. After all, such trade takes place within countries, it isn't something that only occurs under free trade. Further, the primary problem there is the stealing in the first place.

You've made a point, but I don't see how impactful it is in terms of the free trade debate. I still believe that I should be able to conduct business with people and trade for goods without regard for national origin, with government interference in that taking place in only the rarest of circumstances.

 
At 1/11/2010 4:01 PM, Blogger Bret said...

Since the government takes a cut of every transaction and is directly or indirectly involved in many transactions, trade between nations is not really individuals trading with each other, but rather collectives of individuals trading with each other. These groupings are not imaginary and it's either flippant or naive to claim they are. It's somewhat similar to firms trading with each other or using internal resources.

There are many good reasons for free trade. Pretending that groupings don't matter isn't one of them.

 
At 1/11/2010 4:30 PM, Blogger Walt G. said...

Colin,

I agree that consumers and buyers should be able to make well-informed choices. I just wanted to point out that free trade is not as black-and-white as some people think. Stolen goods can be defined as not getting what you think you are paying for, so I believe, in that context, it is a relevent point.

I've never bought into the theory that U.S. manufacturing problems are trade related. Consumers are, and should be, the king.

 
At 1/11/2010 7:50 PM, Blogger Craig said...

For me, decisions like where to eat and shop do sometimes revolve around the "buy local" slogan.

I think it's the same for a lot of us -- even us inveterate free-traders. As long as the food is as good, or as reasonably-priced or as convenient then go ahead. But being forced to buy locally because the government dictated it and when it's a bad economic choice for you personally might dim the local luster a bit.

 
At 1/12/2010 12:03 AM, Blogger James Fraasch said...

Craig, good point. My municipality would never pass a law that says I can't travel to the next town to go to a restaurant...that I have to spend my wages in MY town.

Good thread on this one.

 
At 1/12/2010 4:32 AM, Anonymous Ian Random said...

I like to look at it this way, generally an entity that is good at making something will produce it better. Why not buy from those that produce it better and leave more coinage in your pocket? That prevents money wasted in uncompetitive industries. Look at farming, obviously we are not very efficient at it, we pay the government to ensure we are gouged and subsidize foreigners to buy it.

 
At 1/12/2010 5:09 PM, Blogger sethstorm said...

Regulatory domains.

Virginia is covered by the US government in that respect. Other countries are not, and can/will use that against us.

 
At 1/12/2010 5:14 PM, Blogger sethstorm said...


I like to look at it this way, generally an entity that is good at making something will produce it better. Why not buy from those that produce it better and leave more coinage in your pocket

Except that looking at it from strict cost perspective is myopic at best.

They aren't making it any better. They're making it in large enough quantities to crowd out US/First World products; they are also making these products under conditions long-abandoned elsewhere in the world.

 
At 1/12/2010 5:37 PM, Blogger Daniel said...

This is a good analogy - to a point. The rules for trading across state lines pretty much ensure a level playing field for both sides. The playing field between the US and China is anything BUT level.

 

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