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Good, or bad?

  1. profile image0
    JaxsonRaineposted 4 years ago

    If you want a wedding dress that is made in the US, you're going to be looking at something like $1,000 minimum cost just to make the dress(fixed and dynamic costs, labor, utilities, lease, healthcare, materials, etc etc etc).

    That can easily be $5,000 per dress, just the cost of the dress with no profit for the company, or even without paying the owner a salary.

    So, someone looks at that market, and says 'Hey, I can go to Country A, and pay workers $500/month(which is 5 times what they make selling stuff on the street), and make a dres for $200. Now I can sell dresses to people in the US who can't afford to pay $5,000+ for a dress they will wear once.

    So, a business starts to fill a market. US jobs are created. Jobs in Country A, that pay much more than the national average there, are created, and Americans get a product they want at a price they can afford.

    So, is this good, or bad? Who is suffering in this equation?

    1. wilderness profile image95
      wildernessposted 4 years ago in reply to this

      I missed the part about US job creation.  Yes, there will be salesmen, CEO's, truck drivers and such, but unless you are assuming that US buyers will choose to go to a wedding nude, all of those will be there with US made, $200 dresses anyway. 

      The buyer just won't have a $5,000 dress for $200 is all.  That, and the people that make that $200 dress will be their neighbors instead of a foreign citizen in another country.

      1. profile image0
        JaxsonRaineposted 4 years ago in reply to this

        You don't get wedding dresses, made in the US, for $200. Not unless you have a very talented neighbor who does it for that price. There are no actual US-made dress lines at that price range.

        It's a product that fills a demand. It provides people with a product they can afford. There are tons of brides who can't afford the kind of dress they want. So why is it a bad thing to give it to them? Lots of brides end up settling for a cheaper dress they don't like as much, or buying one used off Craigslist.

        1. wilderness profile image95
          wildernessposted 4 years ago in reply to this

          C'mon, Jaxson - you don't buy the dress your neighbor makes for you, he can't buy the refrigerator you make for him. 

          There are no $200 wedding dress made in the US because they cost $5,000 to make.  US workers can make a $200 dress (while earning enough to live on) and do; make them white and call them a wedding dress.  If that's all there is there will be lots of wedding dresses in the country.

          We don't do that, though.  We'd rather ignore our neighbor (and the long term results to our own job) by buying cheap overseas.  Of course, that will only work until the foreign labor market rises to the same standard of living, whereupon there will no longer be those $5,000 dresses available for $200.  That's OK, though - we get cheap products for now and hang the future.

          1. profile image0
            JaxsonRaineposted 4 years ago in reply to this

            Yup, and that's a good thing. Society benefits from trade, comparative advantage, and specialization(think assembly line).



            Not enough demand for dresses like that, so no, they can't. There is no problem with people wanting fancy or unique dresses. It's commerce, and it's good for an economy.

            It's not a bad thing to 'ignore' your neighbor. We are as rich as we are because of the fact that we don't do business that way. To create wealth, you need to create innovation and efficiency. Our wealthy economy serves as a stimulus to bring up other economies. Third-world countries like China are growing in wealth rapidly because of (largely) the demand from the US.

            In a free, worldwide market, it is possible(and happens all the time) for everyone to benefit.

            So, back to the original question, exactly who is it that is suffering?

            1. wilderness profile image95
              wildernessposted 4 years ago in reply to this

              You are correct in that the species, the "society" of the entire world benefits. 

              Few would consider the entire species to be their society, however, and in the long term it is better for a particular society/country to buy within it's borders whenever possible.  It will promote economies of scale as well as technology (if the society is large enough, which the US is).  It will also hurt other societies and countries as they want to be "overpaid" for their labor.

              So.  The local people and economy are hurt, the foreign people and economy benefit.  (I leave out the "suffering" of the poor woman that can't afford a $5,000 dress but wants one anyway at the cost of hurting her neighbors).

              1. profile image0
                JaxsonRaineposted 4 years ago in reply to this

                No, it is not better for a country to buy within its borders. There is no economic principle that states such.

                It is better for each country to focus on the goods and services that it has the best comparative advantage in producing or providing. We would not be as wealthy as we are without taking advantage of comparative advantage. Not even close.

                1. Ralph Deeds profile image71
                  Ralph Deedsposted 4 years ago in reply to this

                  "We" meaning Walmart and Apple and their stockholders whose merchandise is made in Chinese and Bangladesh factories with abysmal, low paying, unsafe, polluting working conditions. Comparative advantage works better in theory than in practice betweek countries whose stage of economic development differs widely as in the case of U.S. and China.Comparative advantage works pretty well among countries which are at comparable stages of economic development. Blind devotion to free trade by both political parties and the foreign policy establishment has nearly destroyed the manufacturing industry in the United States and with it many formerly high paying jobs, and it hasn't benefited Chinese workers as much as it should have because the government has skimmed off the profits for its own purposes rather than allowing wages to rise as much as they could.

 
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