What are the hiccups with this idea of Americans buying products that are only made in the USA?
As long as we continue functioning under a pure capitalist system, the need to justify our actions will always be overshadowed by our wish to gain profit.
Some believe that by buying products that are made in the USA will help stimulate the economy while keeping the dollar re-circulating longer within the country. Although it is not a bad idea to have Americans invest in Americans products, to have actually exercised it fully would have developed tensions that could lead to policy change or even sanctions between USA and some foreign countries.
The core problem of today’s society begins with globalization. Although globalization maybe viewed as a good idea, under a pure capitalist system it doesn’t work. Globalization opens the door for all countries to trade freely in these forums known as MASDAQ, NYSE or FOREX EXCHANGE.
It is undoubtedly forecasted by some Americans that if most of them where to purchased products that were made in the USA it would have help revolutionize the American manufacturing industry. Which means more American manufactures would have find it in their interest to move their line of production in the US to avoid being sanctioned. This assumption is obviously base on the statistic that Americans consume more than the rest of the world and by that any discouragement to buy foreign made products is a counter act to minimize foreign import.
Although the above reasoning is satisfactory to some, the truth dictates that the gravitation towards buying American made products have not completely taken flight since “The Nation’s international trade deficit in goods and services increased to $40.4 billion in March from $39.4 billion (revised) in February, as imports increased more than exports. (May 12, 2010)”. This tells us; while we may be good at talking the talk, walking it is a whole different ball game.
You can’t eliminate competition out of trades by taking a patriotic approach in buying American made products. People need to have choices so that they make intelligent decisions, taking a patriotic approach can only leave the patriot with fewer options, making them vulnerable to monopoly.
The American business can move their lines of production into other countries as they wish, but the transportation fees and taxes that the US Government will charge may offset the anticipated profit for that company. Given that the American government is less likely to discourage the transfer of American jobs overseas for the simple fact that our economic system is considered a free market. Where the ability to move production to a different region can be viewed as a comparative advantage between the producer and the entrepreneur, it doesn’t help the people if they have to buy this product at an inflated price while their jobs get shipped overseas.
Inflation is destroying the dollar and therefore making tradeoff between US and other industrialized countries economically disadvantageous year after year.
There is however a fundamental error in thinking that there is such a thing as the American economy, and that this economy functions independently from all other economies. Even though we may not have implied that the American economy is independent, but to have actually kept trying to isolate Americans from buying foreign good is an informed consent that proves our intent is to minimize foreign market from our economic system. The reason is understood, but the means by which we go about doing it may seems as a discouragement to a free market system. Unless of-course we don't believe in a free market system.
This would have been an excellent idea had we not been introduced with globalization. To imply sanctions on foreign made products signified that we can manage without them. Meanwhile, the recent free trade agreement dictates otherwise. The free market system has long opened all barricades for any country to trade as they please. This way of limiting trades on foreign import although it may be beneficial for some American businesses to some extent can restrict a business long term growth. In that sense, there is a comparative advantage that is underlined here, and to understand this point we can read the next paragraph.
As an American businessman if profit encourages us to expand our business into a foreign country as a mean to increase on sales, having some of our products manufactured in that country would have discouraged some Americans to buy that product simply because they were not made in the USA. This is obviously not a reasonable way to conduct trades especially if the profit that is generated from those sells is being channeled into the American economy.
In fact, this is what Globalization is about; Globalization discourages regulation on trades whether it be labor or goods. But the problem arises when labor has been transferred into a different region, looking for cheapest cost of production under the Capitalistic System, while profit is socialized and the American Economy doesn't benefit from it. That is the main problem when it comes to outsourcing jobs. This is why the American people oppose it, because if distribution of labor takes a Capitalistic approach why not profit. Another word, why must profit be socialized?
The absolute advantage is one in which the American entrepreneur cut cost by moving his industry to a foreign country where the cost of production may be cheaper. He sells the same products that are manufactured in foreign countries to the American Public at a price that is way above the equilibrium price when compare to some other countries. He does that because he calculates the price elasticity of demand for that same product and realizes that Americans are more likely to pay more for it. Meanwhile he makes a greater profit selling the same product in India for less. His profit is greater in India because he has a greater market to sale to. This condition is what we would consider to be an absolute advantage.
Americans buying foreign goods is not the problem, what we would like to see though is for America to consume less and produce more and there is nothing wrong with that for that idea depends on cost over quality - not restriction. While saying that, I think it is fair to say that some foreign countries could have experienced more growth had they not been exploited and intimidated by shark investors who are overwhelmingly expanded with economic power.
The next argument implies that for the American to buy only products that were made in the USA, if successful will eventually reduce the competitive level, and thereby lower the quality of the American made products. In this situation, it is easier to think that if American manufactures don’t have to compete against foreign goods than the competition will only be among American manufactures. This is why during the Toyota uncontrolled acceleration problem found in the Prius, Toyota blamed the American manufacturing line, claiming that those models were made in America.
Competition promotes quality, which means if Joey motorcycles and Tom’s are the only manufactures in the United States that Americans are force to buy from, those two manufactures will have no incentive to improve quality if their motorcycles are selling because consumer's choices are limited. If anything they’ll just copy the new motorcycles design from the Japanese, modify it a bit and have Americans buy it. After all, Americans won’t buy the Japanese’s motorcycles if they were not made in America. You see the problem with this concept; it is an idea that welcomes patent infringement for the benefit of profit due to a limitation place on trade.
Whereas competition promotes creativity, it can also discourage good ideas from being part of the norm. If an idea does not project the most return on investment no matter how it would enhance our lives it is viewed in this society as a bad idea. Consequently, further projections of our lives lie on which idea will consume the most capital. Whether or not this idea will come with suffering for some is not the concern of the inventor or the investor, it is only interest that matter from that point. We ought to promote for Americans to buy foreign and domestic goods for the next idea that can enhance our lives could be the result of the foreign inventor.
The idea is not to run away from completion, but to allow completion to make us into better inventors and wiser consumers. It is through competition that new ideas are developed. In that sense competition is not the problem, but greed the true cause of most economic failure. On a different note, if we are calling for Americans to buy only goods that are made in America we should also think of what would happen to America if most foreign countries were to stop buying products that were made in America just because American manufactures produce them. Being that America also benefit from export, one would think that any idea as such would be unreasonable, but it is not what some Americans think.
We thought the final provisions of the North American Free Trade Agreement (NAFTA) contribute significantly to agriculture, a sector that United States agriculture dominates. Are they not the biggest exporters of food, a need that is essential for human existence? For those who promote Americans to buy American made products only I'm not sure it’s a good idea because it brings to mind a double standard?
For argument sake let say the stock market crash like it did in 1929 - the result of-course would have been another great depression. And even is all American products where made right here in America the outcome would still be the same. We would still experience a depression. Being that we need an influx of money to enter our boarders so that our economy stay floating, trade is not an option for, us but instead a necessity.
We should also remember that goods and services are not sold at true value in America. We live under an inflated economic system, and therefore our costs of production are also inflated. This is one of the reasons why some corporations find it in their interest to offer cheap labor abroad. Since inflation is already high, in order for some corporations to satisfy their stock holders they find it necessary to impose low wages on their workers.
Although some can argue that exploitation is not the reason why the rich continue getting richer, one thing that is indisputable is that exploitation is the byproduct of capitalism. Which mean they would be no reason for corporations to exploit workers if the capitalist system didn’t provide a need for them to engage in such behavior? As we have seen, it is the advantage to compete for investors that has necessitate the possibility to exploit workers.
In the film “the corporation” directed and produce by Mark Achbar, Noam Chomsky linguistic professor of MIT stated “Corporations were given the right of an immortal person but a special kind of person. A person who has no moral conscience, these are special kinds of persons which are designed by law to be concern only for their stockholders not the stakeholders.” He continues to say that “they concerns only for the short term profits of their stockholders who are very highly concentrated.”
As we have seen in the past, when a fine is given to a corporation because of a violation, if that fine is too minimal to create an effect that fine somehow becomes part of the cost of operation. When that happen our lives and the environment is at stake for the need to justify our actions will always be overshadowed by our wish to gain profit even when what is just can be achieve without us longing for profit.
For example, the need to sale drinking water that is provided to us by nature becomes costly due to a need to make profit. These are the result of an extreme capitalist system because under such system even the air we breathe will at some point becomes privatized.
We are one people sharing one planet living under one sky. Environmental problems have no boundaries, the cause may be different but the effect is imprinted for what’s effecting people in china will eventually effects those in India and subsequently people in the USA. Environmental concerns are the world problem not individual country's worry.
We live in a world that is profit driven and the process of reducing cost to maximize profit has left the world population with a tumor where if no real action is taken to revert this condition will develop into a cancer. Like The great historian Howard Zinn once said "you can't be neutral on a moving train" well, in this analogy the economy is the moving train, and the resistance for us to take appropriate action to minimize the negative effects that are caused by greed if nothing is done will left us neutralized.
- North American Free Trade Agreement (NAFTA)
Benefits to U.S. Agriculture In 2007, Canada and Mexico were, respectively, the first and second largest export markets for U.S. agricultural products. Exports to the two markets combined were greater than exports to the next six largest markets com
- FTD - Reference - AIP
The U.S. Department of Commerce released findings on the differences between the official trade statistics produced by the United States and China.
- Foreign Trade: Data
The Nations international trade deficit in goods and services increased to $40.4 billion in March from $39.4 billion (revised) in February, as imports increased more than exports. (May 12, 2010)
- FTD - Profile of U.S. Exporting Companies: 2007 - 2008
The exporter profiles are developed to provide both government and private sector users with information about the exporting community including employment size, type of company, and major foreign markets.