Sunday, June 24, 2012

On getting work done at the lowest possible price

Wal-Mart used to have a "Made In The USA" campaign.  They tried to fill their stores with nothing but U.S. manufactured products. 

The campaign folded. 


Because you won't support it.  If you can save .75 cents on a water hose made in Taiwan instead of Tennessee, you're going to purchase the one in Taiwan.  I've sat back and watched you do it. 

But doesn't that hurt America? 

Here's a helpful chart showing the possessions of those living in poverty.  It's from the noted right-wing, conservative periodical The Atlantic Monthly:

And how long have the poor amongst us owned these riches that would make a Roman Emperor turn green with envy? 

Here's something from The Austrian Economists.  I never tire of posting this chart, mostly because I'm old enough to remember most people doing without a lot of the following:

Households with:
Poor 1984Poor  1994Poor
All 1971All 2005
Washing machine58.271.767.068.771.384.0
Clothes dryer35.650.258.561.244.581.2
Color TV70.392.596.897.443.398.9
Personal computer2.97.436.
Air conditioner42.549.677.778.831.885.7
Cellular Telephone

One or more cars64.171.872.8 (2001)

source: and prior years

So tell me this....  Do you look back fondly on the pre-globalization era? 

I don't. 

My employer, Jukt Micronics, had something like 300 employees in the U.S. before we started outsourcing like mad.  We now get something like 45% of our products from China, Taiwan and Japan. 

Now that we've sent all those jobs oversease, we have 500 employees in the U.S.  Go figure.  We do the hard stuff, China does the easy stuff. 

Here's something by Erika Johnsen that I wish was tattooed on the forearms of every racist, anti-globalization idjit on the planet:

....if everybody on planet earth could just get the following through their heads so we can all move on and lead more productive lives, that would be great: When businesses find ways to do business less expensively, consumers win. Whether the business can offer their product more cheaply and consumers can then stretch their dollars further, or if the business is able to then hire more workers and grow their operation — the economy is going to grow. Which, in turn, means that everybody wins. That’s the great thing about free trade: all transactions are voluntary and mutually beneficial. When businesses outsource, they cut costs, and people in other, poorer countries with fewer opportunities are able to find jobs and income.

Everything related to this whole “Buy America” fallacy is just awful — barring even greater costs such as threats to national security, why on earth would you do something more expensively than necessary? That’s not the way to help people — buying goods from where they are most cheaply and efficiently produced is the best way to make everyone wealthier. Prosperity is not a zero-sum game, and a busy, bustling global economic village is probably just about the only true route to world peace in existence.

This sort of populist rhetoric that perpetuates these types of economic myths sorely needs to end.


Anonymous said...

I want to agree. It sounds right. And yet I look around me and see that the money my dad made, that supported my mother, and us four kids is about the same money I make. It won't do much more than pay the rent and a couple of bills. Which of course means my wife has to work. We have half the number of children he did. We are not big spenders. We save. We sacrifice. Yes we have the appliances that make life more comfortable. But most of them are second hand and as old as I am. If my wife or I lost our job we would lose our home. We work hard. We help those who we are able. We go to church and live frugal lives -- and that makes it so that we can get by. That's all. My dad raised four children. We weren't rich but we did pretty well compared to others. Our standard of living was as high then as it was today sans the internet. But he could do more with what he had to work with. A few years ago my neighbor found himself unemployed after his company offshored his job. They let him go. There aren't any jobs right now to replace what he lost. He is working a number of part time jobs -- which do not make up for what he lost. I felt sorry for him. Now my company is doing the same thing. They have offshored most of our jobs and are working like the devil to do the same to the rest of us. It's great for those nice folks in the Philippines who will benefit from the work but it sucks for my family. I have feelers out of course... but there isn't much out there. Some say start a business. I have a business idea but the banks aren't loaning any money. I want to agree with what you've written. My political ideology agrees with you. But the facts on the ground aren't quite adding up. We are suffering. We are hurting. We are feeling the hints of growing desperation. We have prayed. We have been patient. We are waiting for the good times to come back. It doesn't look like they are coming back. I'm getting older. My wife is getting older. We have children to feed and to educate. We aren't looking for any handouts. We just want to keep our dang jobs. You say its not a zero sum game. Maybe you are right. Maybe not. I don't know what the answer is but I know we are hurting. We are fearful for our children. Keep writing. I will keep reading. We will see what we will see.

CenTexTim said...

Anon - I feel your pain.

Economics is called the dismal science for a reason. I don't have the economics background to fully appreciate the benefits of globalization (and it does have some), but from where I sit I see 100,000 people saving 75 cents on a hose (to use Allen's example) but 1 person making, let's say, $50,000 getting laid off. Yes, that's a net gain to the global economy of $25K, and yes, that's a bunch of jobs for people in Taiwan, but that's cold comfort to the one now-unemployed person in Tennessee.

Take another look at Erika Johnsen's quote above: "When businesses outsource, they cut costs, and people in other, poorer countries with fewer opportunities are able to find jobs and income."

Substitute "jobs" for "costs" and you get a truer picture of what really happens.

I'm not an advocate of protectionism. I believe in the free market. But I also believe that disciples of the free market should be aware of and honest about both the costs and the benefits of unfettered capitalism.

The Whited Sepulchre said...

There is no such thing as "unfettered capitism" on this planet.