If we say that we should buy American solely because we are American and we feel it is immoral or unjust to buy goods made elsewhere, then we are ignoring free-market capitalism – what works. When people trade with each other, they are looking for the best deal, the right product at the right price. As consumers, if we ignore these criteria, we will wind up with something that is either not as good or more expensive. Is that what we want? Of course not.
Now if you are the producer of said goods that are overpriced or not as good, you may come up with all sorts of justifications and cry “it’s unfair” and “can’t you see what they are doing to our company and our industry?” But in a free market, the consumer is king – they have to be for progress to be made. We can not limit their choices and drive up their cost with tariffs. (Tariffs on goods from a particular country are a TAX ON THE AMERICAN PEOPLE – because they are the ones who pay it.)
In a free market, we go shopping for what we want at the best price. Let’s say we wanted titanium. We can’t find any in the U.S., good thing Khazahstan has it, and we buy it from them because they have a resource we want.
Let’s say the resource we want is cheaper labor. Some countries have this. And make no mistake – they even have cheap skilled labor.
Let’s say we want (insert name of product or service here____) and it’s available at a better price from (insert name of country here_____). As a consumer, we have a choice. Buy it cheaper from a foreign supplier, or buy it from an American supplier at a higher price. It’s our choice. We can consider quality, availability, and many other factors, but it’s our choice. When we make that choice we are making it because we feel it is in our best interest. And that, ladies and gentlemen, is the key of the most powerful force in economics – free-market capitalism.
We need free competition, sound money to trade with (that is worth the same tomorrow as it is today), and yes – rule of law. We can’t have people ripping us off or cheating us and getting away with it. We can’t have the government saying we have to buy this or that, from here or there. It distorts the market by the limited choice and encourages suppliers who DO NOT offer the best thing to get lazy and not get better, more efficient, or innovating their way to the top again.
America has lots of resources. But there are some things it does not have. Other countries have resources, and they lack certain things they need. The solution? Trade with each other. Like people North Carolina and California trade furniture and wine and iPhones, because it is in their interest to do so, we can trade with Vietnam, China, and Pakistan for the same reason – it makes our lives better AND makes the lives of the people in those countries better too.
It would be crazy to give countries aid, while at the same time limiting trade with them by any means – right?
Free voluntary trade makes our lives better.
More tomorrow…
I agree with most of this. the area I have an issue with is when we tell our manufacturer that they have to meet certain EPA, OSHA or other standards and then allow another country to send in goods that were made cheaper due to them polluting our planet and abusing their workforce. I’ve said many times that the earth is a dirtier place when we incentivize manufacturers to take operations overseas by stacking on excessive regulations here.
Nice job! This is so hard for people to understand. I remember when I was a kid, my father saying we should spend our money in our little town rather than the slightly bigger town 25 miles ago. Basic principles of economics can be counterintuitive.
While I agree with much of what you said there are some problems with the trade agreements we have been enjoying with certain countries. Namely with countries that don’t promote or allow the same standard of living as America, who allow slave (or barely paid) labor, who allow dirty manufacturing processes that we know are harmful to our health and who use our money to pad the pockets of their ultra-wealthy while allowing the rest of the people to live in abject poverty. That’s not a level playing field upon which we could ever hope to compete. There are countless people in America currently on welfare because they aren’t qualified to perform the only jobs that are left in America. If they were allowed to produce some of these “cheap” products that require little skill then they could be earning a living for themselves instead of living off the government. As long as we have this imbalance we need the tariffs to pay for the welfare for the people who are put out of work due to the inequality of foreign labor. One way this could be “fixed” is by eliminating the minimum wage and overtime pay requirements in America. I doubt that will ever happen though.
You post makes perfect sense. Thank you for your daily posts!