I recently received an email which was titled Buy American. All of us have read this email and know the theory. It goes something like this – if consumers band together and pay attention to labels, and only purchase those item manufactured in the US, this cumulative effort can save American jobs and positively affect the domestic economy. Unfortunately, our emotional psyche has us all jumping on this bandwagon as it seems to make sense. The problem is, when looking at the actual facts – this theory turns out to be a complete fallacy.
When looking at the facts we find the average salary in the US has steadily increased while our trade around the globe has increased. We also find an inverse relationship between unemployment and trade. As our trade increases, unemployment decreases with the opposite proving true as well. Those who feel the United States should “keep jobs at home” and put restraints on companies who move jobs overseas are really saying they are against the concept of globalization. Globalization is defined as the integration of national economies into the international economy through trade, foriegn direct investment, capital flows, migration, and the spread of technology.
Indur Golkany, the noted economic development expert, studied Globalization and its overall effect human well being by looking at 5 different factors (Food Supply, Child Mortality, the prevalence of Child Labor, life expectancy, and the Human Development Index (HDI)). In his article “The Globalization of Human Well Begin” he shows how the improvement of each factor over the last fifty or so years is a direct result of the developed countries actively getting involved in the economy of the lesser developed countries or globalization.
The simple truth is the Buy American rhetoric not only hurts the citizens of the United States, but ultimately hurts the citizens of the world.
This is something we find all too familiar in the US – someone makes a broad sweeping emotional statement and people get up in arms about it. This country is considered tend to show our country as protectionalist and self centered. Two factors which we train our children not to be.
I think it is time we stop listening to the people who would like for us to act on our emotion and use our intellect to determine the best course of action. I do believe we are among the most intelligent people on the planet, we just need to start acting like it.
Excellent Point! We need to return to our strengths which are innovation and hard work. This country can accomplish anything we set our collective mind to do. Unfortunately the current goal appears to be doing nothing.
I’m not against globalization nor international trade. However, what I am against is “owing our souls” to another country–namely China. I’m very much aware that the typical US salary is head and shoulders above other countries. Perhaps inflated salaries is what’s put us in the bind–and ultimately the high unemployment state that we’re in.
When you stated that we “train our children not to be protectionist or self-centered,” you are half correct. Being self-centered may be viewed as an unappealing quality—in regard to a person. Yet, don’t we want our government to be self-centered–thinking of its citizens first?
As for protectionism: don’t we teach our children to protect and be protective–of themselves, their families, their possessions, their rights and liberties? Here’s what Merriam-Webster has to say about a protectionist: ‘an advocate of government economic protection for domestic producers through restrictions on foreign competitors.’ I honestly don’t see anything wrong with that concept. To purchase from local growers, for example, not only helps the community and keeps locals working, but insures (to a great degree) that the produce / livestock my family purchases/consumes has been grown/raised under approved US regulations.
Protectionism is not a good thing when dealing with trade. If you are creating barriers to trade you are actually defining where the equilibrium point must lie, this creates a dead weight loss in the economic process which does not make for an efficient market for any of the parties. if you are not against globalism or international trade, then you cannot be for protectionism, the two simply do not work together.
Absolutely, Ron! If we only buy quality, quality will contine to improve from the suppliers…wherever they are! I hope some suppliers who “take the bait” of quality are within our country…