I didn’t realize there would be so much to say on this subject when I began writing. But sound bites that you can fit on a bumper sticker fuel ignorance. “Buy American – save our jobs”. “Support the union and support jobs”. Sounds ok. But it’s not in our interest to support America or a union IF it doesn’t work well or produce what we would choose if we had a choice. Consumers must rule in free markets.
There’s an idea that if we lose manufacturing jobs we lose it all. But is that true? Yes, manufacturing jobs have been declining for decades. But consider this – we make more than ever -the production of goods in America is up, it’s just that we need fewer people to do it because we have become better at it. Machines and automation have replaced more jobs than China. Are they the enemy?
If either were an enemy, why then was unemployment the lowest in decades (just before the government forced so many out of work this spring)? The answer is that things are changing. There are far more service jobs, distribution jobs, high tech jobs, and other kinds of jobs. We have plenty of jobs. Manufacturing does not equal jobs as a whole. If you were a manufacturer and did not change, you are toast. But when you were born they did not stamp your forehead “thou shalt be a manufacturer the rest of your life”. Change. People can change.
And these days, who wants the manufacturing jobs of yesteryear? Doing repetitive work all day standing by a workbench or loud machine, day in and day out? Do you?
Yes, we should make sure other countries are fair to us. We don’t want them ripping off our patents or cheating, but selling something cheaper is not cheating – it’s what consumers want.
I live in a house that is made in America. My HVAC guy gives me service made in America. My grocery store sells me food largely made in America. My bank has tellers that give me service made in America. My mechanic, my lawn guy, my gas station attendant, my dry cleaners, and all the restaurants I go to give me services made in America. The goods my businesses make and sell are mostly made in America. The truckers and accountants and lawyers and roofers and the gas company and hundreds if not thousands of Americans give me products and services, made in America. Some distribute and service goods made in other countries. And in my Chevy pickup truck, there are foreign parts. Heck, it may have been assembled in Mexico.
We have come a long way, and we have all benefitted. America has adapted. Americans live far better today and have far more choices than they did in 1964 when I was born or in 1982 when I graduated high school.
To say we must buy American because it’s American, or not buy something made elsewhere because it is made elsewhere, is ignorant, and goes against what works. People that say this have houses filled with foreign goods when they may not know it or want to admit it.
Buy what you think is best. Let’s have an open marketplace so we have a choice. Let’s protect competition with anyone.
The most patriotic thing you can do is to contribute to a highly competitive organization. Be a high-value provider to others, likely through a company with others you collaborate with to produce an excellent product or service that others love and want. Don’t ask to be protected – compete.
That’s very American and very patriotic.
Your points are proven by the auto industry in the 80’s and 90’s when the Japanese cars were miles ahead of us in quality and sales were showing it. Then American car builders stepped it up to compete with them and it worked because we get a better product for a competitive price.
Competition is the backbone of a competitive marketplace. Couple that with the “invisible hand” and it is a fascinating model.
I have read all of the Buying American posts. I understand what you are saying and even agree with it. However, you have not so far said anything about products that are made in sweat shops with non existent labor laws using women and children who are basically slaves. While we are enjoying our freedoms and living our better than ever lives here in America, we need to make sure we are not doing it on the backs of slaves and children that will never know anything at all about having even their basic needs met. Buy foreign made products. Use all the American made things that have parts that were manufactured in other countries. Promote free trade and the idea of competition so that we have choices. Do it all day long. But remember that a person made those things. Let’s not forget the human equation in this discussion. I am not sure I want to be considered patriotic if it means that I ignore humanity.
Some of us are producers, but every last one of us is a consumer. When consumers win with free trade, we all win.
Competition is king. The medical field is a good indicator of that. When the insurance companies took over deciding who would get paid to care for you competition went out the window. The best thing that would happen would be to get rid of insurance – completely. Therefore you only pay for a service when you need it. And choose who is the best practitioner to spend your money with.
Thank you Larry, for the very simple and excellent lesson on free market capitalism!! It needs to be told to more people through more outlets.
Great article!
100% agree with your post. I have four sons ages 30-35. They were made in America. None of them want factory jobs but they do want lower prices. We all do. Furthermore, I’m a wholesaler of plumbing supplies and I sell to plumbers. Some very large and other very small. The larger players buy cheap and have most of the bargaining power. Several suppliers fight and lower pricing, extend terms etc…. just to get the large players business. My point is, America holds the power here when we are the largest player in the market. Let’s use our buying power to buy better and stop these nonsensical trade wars. We are only taxing ourselves. No disrespect to those who feel differently but my suggestion would be to sign up for an economics course to gain a better understanding of free markets and how important it is to the US economy. More markets equal more competition and more competition is good for the consumer.
Amen Larry,
I agree with everything you have said!
Don’t forget to talk about the so called trade deficit. If we send money to another country to get goods that is not a deficit that is a win win.
Just like Americans do every day every time they buy something.
Keep up the great work and I hope to be able to ride off road motorcycles with you someday!
Tim Slamans
Well said Larry!
Buy American Smart!
I agree with Larry and Nancy. Buy American but at what cost…..Supporting the unions?
Buy Chinese but at what cost….Supporting genocide?
I do my research and vote with my dollars.
I am a maintenance supervisor at a manufacturing company in Shelton CT, we make parts for all kinds of companies especially automotive. The machines are loud and the work is repetitive and we have machine operators that have been there for forty years or more, is that any worse than crawling into a crawl space or attic day in and day out? Not everyone is going to college. There have been a lot of american companies that just sold out. I am all for competition, but how do you deal with a country like China when the only good idea they came up with was to steal everyone else`s idea`s and become a super power.
Loved this, my friends and I fight about this all the time…especially about cars. I’m a dodge man myself 😉
I have read and reread your recent blog posts regarding capitalism, the advantages of free markets, and the problems with slogans like buy American, etc. You have some legitimate points but like the slogans you rightly suggest over simplify an issue your analysis of why free market capitalism is a better system makes much the same mistake just in a lot more words. For one thing the free market capitalism you describe does not exist for the most part except in theory and for another our loyalty to an ideal or principle is of equal or greater importance than the one sided view you have articulated in your posts. To illustrate the point I will share a personal life altering story with you:
In 2003 I was working for a professional liability insurance company that had been acquired by General Electric a few year earlier. Also in that year the US and allies invaded Iraq and my son was among the first to be sent off to war in what would become the longest year of my life living in constant fear that someone in dress uniform would knock on our door to report his death. (in fact his best friend was killed by a suicide bomber that year). Shortly after his deployment I was asked to attend a presentation in Overland Park, Kansas at out parent company, ERC (Employers Reinsurance Corporation) to listen to Jack Welch, Chairman/CEO of GE expound on his views of business. I was dumbfounded to listen to his opinions that loyalty was dead, employees should be prepared to be terminated at any time (always be in fear of losing your job), the only thing that really mattered was getting the numbers and if your company or division couldn’t produce a net in excess of 28% be prepared to be sold or liquidated. In short the only thing that mattered were the numbers. I thought about those remarks for a long time particularly in the context that my son’s life depended on reciprocal loyalty to his country and to his unit and it was his willingness and those around him to adhere to that code that made it possible for Mr. Welch to have the freedom to express his opinions and pursue GE’s corporate goals.. That presentation altered my life because much to the dismay of my superiors I resigned three months later after 18 years and went into business for myself. I was offered more money, a promotion all to no avail as I explained I would not work for anyone whose view of the world was constrained to “getting the numbers”, whatever the cost.
So how did GE’s pursuit of getting the numbers work out. Well, “free market capitalism” didn’t exist for GE, one of the most criminally and civilly fined companies in the US in 2003. The way GE and many companies work is by stifling competition, bribing officials, buying out competitors and shutting them down, and by controlling expenses the biggest of which (for most companies) is labor. In an ideal “free market” world all companies would compete on a level playing field, with workers in a particular industry given similar wages and benefits. But that’s not the way it works. In fact you could probably say slavery is the ultimate expression of capitalism – nothing better than free labor. So why do you think we have had to pass so many laws to protect workers? That comes at a cost so if labor costs are a problem and you can’t get around that through mechanization then you either find a way to cheat or move offshore, where the laws are less restrictive, which brings me back to GE and its move to send work to China and India. {And by the way these weren’t just manufacturing jobs, it was service and clerical jobs as well, I know because I was there when the “process mappers” from India showed up to figure out how many clerical and service jobs could be “mapped” to Bangalore, India ). So what’s been the net result of this competition to reduce costs and deliver a cheaper product to the consumer? Well in the case of China we are certainly waking up to Jack’s and many other CEO’s mistake – the largest transfer of wealth and technology (the FBI’s characterization not mine) in world history.
What’s my point? What was the cost? To quote you:
“We have come a long way, and we have all benefitted. America has adapted. Americans live far better today and have far more choices than they did in 1964 when I was born or in 1982 when I graduated high school”
It might interest you to know that in 1985 the US became the world’’s largest debtor nation, thanks to decisions by Jack Welch, other likeminded CEOs and our elected representatives – a debt my children and grandchildren will bear as a burden in the form of higher interest rates and taxation. Was my son’s loyalty misplaced? Is that how “we have all benefited? Jack had no loyalty to anything other than shareholder value. It’s equally disturbing that in 1964 we produced almost all our own clothes, pharmaceuticals, etc. and now we find ourselves vulnerable to foreign interests in many vital areas. Is that how “we have all benefited”? The outcome for GE as a direct result of Jack’s and his hand picked and trained successor Jeff Immelt’s policies is a company saddled with debt and worth about 10% of what it was valued at in 2000. My personal observation as to one reason why GE is in its current sorry state is that lack of loyalty – the thing that helped my son through his experience in Iraq. GE drove out all the people that cared about getting it right, getting it done, caring about the customer, making things, etc. and replaced them with people that did whatever it took to “get the numbers”. They drove out everybody else – the people that actually cared. Sure labor costs came down and the share price went up but the underlying motivation ignored what really made the company great and that was the loyalty of it’s employees to the company and its ideals. So when you say slogans like “Buy American” are “ignorant” I would urge you to check your prejudice and look at the issue a little deeper. First it is pure fantasy that free market capitalism exists in most parts of the world to any great degree when the driving forces of capitalism are maximizing gain by driving down costs. Likewise it a fantasy that loyalty to an ideal whether it be company or a country and its principles don’t matter. At the end of the day for most capitalists “greed is good” to quote a movie character, to which I would reply, yes but principles and loyalty matter.
(Note: You may be wondering why GE took an interest in insurance companies like the one I worked for, when they were noted for many other things. They didn’t care about delivering a quality service or product to insurance consumers in spite of all their promotional double talk. What they really were interested in was the large amount of cash reserves many of these companies held to pay future losses. In the insurance world companies are required by law to set aside a certain amount of money to cover future claims. This dollar amount is referred to as a loss reserve and represents liquid assets that can be converted to cash to pay claims. The first act of GE’s “process managers” was to have the reserve amounts on pending cases reduced so they could strip the excess cash for other purposes, acts that now are still being litigated and investigated.)
Signed:
Vic Bennett
Arizona Foundation Solutions
Vic,
If GE’s value is far less than what it was, this shows their behavior is not appreciated by people like you who left. Their competitors have done better. But, you are a beneficiary of capitalism as a consumer – you can’t not be. Just because Jack Welch had a given approach, doesn’t mean he represents all of the actors in the system. Personally, I am no GE fan, that is for sure. I appreciate your son’s service. Thank you.