Buy American is a dumb idea.

Why? Because that idea costs jobs, reduces our standard of living and makes us all poorer.

Almost all economists say it's nonsense, and the reason is simple and fundamental in a capitalist society. We should buy things where they're cheapest because that frees up more of our resources to buy other things, and other Americans get jobs producing those things.

The equation is especially beneficial to America if you purchase cheap, low-value added goods from overseas and use the surplus to invest in high value added goods like professional services, hi-tech manufacturing and advanced technology. We win. USA! USA!

This simple economic fact is what people always forget. Anytime we can use fewer resources and less labor to produce one thing, it leaves more resources for other things we couldn’t usually afford. If we save money buying abroad, we can make and buy other products.

The nonsense of "Buy American" can be seen if you use the following logic.

If it's good to Buy American, then why isn't it better to “Buy Arizonan?”

And if it's good to have to “Buy Arizonan”, why isn't it even better to “Buy Phoenix?” And if it's good to “Buy Phoenix” why isn’t it even better to “Buy Guadalupe?”

You get the idea. You wouldn't get very good stuff if everything you bought came from Phoenix Arizona exclusively. And you would pay more for it. Any jobs created in Arizona in ski-boot manufacturing industry would be pretty short lived. Even the tards in the government fall for this an invest in the local ski-boot shop. (A rant for another day)

A huge part of the history of mankind is an increase in the “division of labor”. Division of labor is the specialization of cooperative labor in specific, circumscribed tasks and like roles. Historically an increasingly complex division of labor is closely associated with the growth of total output and trade, the rise of  capitalism, and of the complexity of  industrialization processes.

And that division of labor goes across national boundaries, as it did when there WERE NO FORMAL NATIONAL BOUNDARIES. This division of labor, and the expansion of the access to labor globally, creates wealth -- and jobs. Always has, always will.

In a similar vein, consider "fair trade" coffee. It costs much more money than regular (unfair trade?) coffee, but we're told that if we buy it, we should have a warm feeling inside because somebody in a poor country will supposedly get paid more.

There are two problems with this program, beyond the base economic ignorance on which it is built on. If the coffee costs more – we will buy LESS of it, not more of it, thereby hurting the very farmers we purport to want to help, and secondly, most of the premium in the price goes to the bureaucracy that organized it. They tree-huggers keep the money, the farmers sell less coffee, and in the end they lose both money and jobs.

Thanks Starbucks. Really. Thanks a lot.

If you want to help farmers, buy cheaper coffee and send them part of the difference in cash. Everybody wins.

The same applies to so-called “sweatshop-free” products. I'm for free trade, but trade means you get the lowest price, and that might mean you buy something from what some people call a "sweatshop".

The name itself conveys abuse. However, as most things that “do-gooders” get involved with – they are wrong. The workers aren't abused.

In fact, they're better off taking those jobs. The mistake Americans make is they think WE would never work in a sweatshop and therefore they say these people shouldn't either. Well, no one's offering those people green cards, and those people are stuck in those countries. They're choosing their best of a bunch of bad options. And when you take away someone's best bad option, they're worse off.

That happened after Sen. Tom Harkin (Dumocrat) of Iowa complained about sweatshops in Bangladesh. Some shops closed. Then Oxfam discovered that kids who were laid off often turned to prostitution to support themselves.

Thanks Tom. Really. Thanks very much.

An old adage says that "the person who tries to get you fired is not your friend.” The conglomerates that hire people in poor countries usually pay more than local employers do. In Honduras, many “sweatshops” pay $3.10 per hour. That's low to us, but most Hondurans earn less than two dollars an hour. Many more earn nothing at all.

Since Third World countries do not pursue free-market policies, worker opportunities are usually controlled by self-serving local politicians and district landlords. So multinational “sweatshops” are usually people's best alternative. Do-Gooders and Humanitarians should target the politicians, not the factories that provide some hope.

Interfering with peaceful exchange is never a good idea. The great 19th-century liberal Richard Cobden was right when he praised free trade for "drawing men together, thrusting aside the antagonism of race, and creed, and language, and uniting us in the bonds of eternal peace."

There you have it. Stark in it’s reality, and cold in it’s application.

Left alone, the free market flourishes and the water rises and takes everyone’s boat with it – even the poor. Meddled with by those that seek to line their own pockets or make themselves “feel better”, it will come back to bite you.

Just ask the 13 year old prostitute in Bangladesh how he feels about YOUR feeling better about the origin of your running shoes.


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