Thursday, July 19, 2012

The fallacy of Buy American

Once again the cry "Buy American" is heard from high and low places.  One was Chip Cravaack, R-MN8, putting a statement into a transportation bill that the steel used in highways should be American-made.

A little aside I can't resist.  Aren't the Republicans the one who are all for free markets and no government intervention?  Shouldn't the free market decide the best quality for the lowest price?  Not some government bureaucrat or politician?

I try to buy American and buy local, but in general this is only a preference, not an iron-clad rule.  We buy local produce when it is available.  I love my made-in-Minnesota Red Wing work boots and some of my made-in-America yard equipment.  For decades I wore 36-30 Levis and then they suddenly became too long.  It wasn't me that changed; I found the 30-inch inseam was actually over 31 inches!  Could that have been because Levi Strauss outsourced the making of Levis and that somebody didn't make a proper conversion to metric?

On the other hand we own one American vehicle and one Japanese vehicle, each bought for specific reasons, not the country of manufacture.  Can you find an American-made digital camera?  Same for most computers and related stuff.  The software might be made anywhere.  I prefer a French music-composing program to a Minnesota program.  Do you know anyplace in the U.S., other than Hawaii or greenhouses where bananas are grown?  Would you rather have chicory than coffee?

On the other hand, we should be grateful that many other countries aren't pushing too strongly on Buy English or Buy German, and surprise, Buy Chinese.

Personally, I'm very glad that in the 60s and 70s European governments weren't pushing very hard to buy only European computers.  Otherwise, I wouldn't have been able to live in Europe for six years maintaining software for Univac computers made in Minnesota.  Our customers included Lufthansa, the French Army, and the Swedish Police.

Minnesota doesn't make many computers now-a-days, but many medical devices are designed and made in Minnesota.  If we don't buy goods from other countries, should they buy our medical devices?

Farmers in the U.S. are glad that they have a big export market for all kinds of agricultural products, from grains to meat.  Although India still has many import restrictions "Indian Consumers already buy almonds and grapes from California, and apples by the truckload from Washington." Adam Belz, "Minnesota looks for a bigger taste of India", Star Tribune, 2012-07-19

The military-industrial complex is probably very glad that military establishments around the world aren't restricted  by Buy Nationally policies.  Even the most militarily-oriented Congress couldn't raise enough taxes to buy all the weapons that the U.S. military-industrial complex could produce.  So, those countries buying U.S. military hardware have to raise funds to purchase the hardware.  To do that, they have to sell goods and services outside their own countries, for example, oil!

One of the most interesting news items is the direction of parts for wind turbines passing through the Duluth Harbor.  Big blades are coming from Europe to U.S. destinations.  Big blades are going out to many other countries, the latest being Brazil.  Probably each set of blades had different features that met the requirements of the buyers.

And then there is the name game.  Some years ago a U.S. city was considering buying a piece of heavy equipment.  The city council favored Caterpillar over Kubota because the later was an American name.  Surprise!  The Caterpillar was made in Japan and the Kubota was made in the U.S.

It isn't easy being a free-marketer and a protectionist at the same time.