Be patriotic: Shop Smart!

On Jan 7, 2010, I got an e-mail message that encouraged everyone to "Buy American"

My challenge to you is to start reading the labels when you shop for everyday things and see what you can find that is made in the USA - the job you save may be your own or your neighbors!

If we care about the American economy, should we "Buy American"?

This is a popular myth believed by people who never read anything about economics.

To limit your purchases by lines on a map is to lose everything that the division of labor gives us.

The "division of labor" means we don't all have to be self-sufficient. I don't have to know how to build a guitar in order to play a guitar. I don't have to build my own car, or my own tools, or my own house. I don't have to learn how to build or maintain all of these things, Other people in the marketplace have learned from trial and error how best to make a quality product at a reasonable price. Through an investment of their time and money, entrepreneurs learn what techniques work best for production and distribution of a product. The bigger the marketplace, the better this works

When you limit your purchases to a certain area on a map, you are paying someone to invest their time and money in duplicating the process of "trial and error". It's terribly inefficient and uneconomical, and it ends up being a bad deal for the buyer and the seller. It's bad for the buyer because he's throwing good money after bad, and it's bad for the seller because his business is inefficient and therefore not viable.

It's okay to "buy American" if it makes you feel good. It's your choice. I guess people make purchases for stupider reasons. But don't delude yourself into thinking that this is good for American jobs or the American economy. The more competition we have in the marketplace, the better it is for everyone's prosperity. The bigger the marketplace, the better. When you limit your purchases to "buy American", you are cutting out a major chunk of competition, you are shrinking your marketplace, and you're asking for lower levels of prosperity for you, your family, and your country.

The best thing a shopper can do for himself, his family, and his country is to "buy smart": buy the best product at the best price from the company with the best service reputation. That's the best economic choice, and it's "win-win" for everyone involved. Anything other than "buying smart" weakens the American economy.

(Quote from a Gary North article): "To buy" is "to sell." It is the same transaction. It is an exchange. The person who suggests that Americans should buy only from Americans is suggesting the absolute abolition of international exchange. He is advocating the destruction of the international division of labor. He is advocating the abolition of international economic specialization. He is advocating international economic disintegration, given the key position internationally of American trade, American capital markets, and American technology. He is advocating economic collapse. He is advocating a return to barbarism.

Be patriotic: Shop Smart!