Mr. Jayson Ramos
Mr. Ramos:
Your regular Facebook responses to my posts on trade reveal that your confidence in protectionism is a product of your unfamiliarity with the case against it. Your latest response – sparked by a recent Café Hayek post in which I observe that most parents understandably want their children to have careers in the service sector – is no exception.
In that reaction, you mistakenly think that you score points by correctly noting that I composed that post on a computer, which is indeed a manufactured good. But a key point that you miss is that this computer, which I do own and use, wasn’t manufactured by me.
I personally could have manufactured for myself a usable computer. But to do so would have taken far too much time and effort. So instead of manufacturing my own computer, I instead produced that output for which I have a comparative advantage – economic instruction – and used some of the income that I thereby earned to purchase a computer from a company that, because it specializes in producing consumer electronics, was profitably able to sell to me an excellent computer at a price far lower than the cost that I’d have borne had I produced the computer with my own hands.
I submit that I’m neither hypocritical nor myopic for happily using a product that I myself did not produce.
You’ll sincerely protest that you don’t advocate that all the manufactured goods that I consume be manufactured by me. You merely want more such goods to be produced by our fellow Americans.
But in so protesting you miss the point – which is that it is not, contrary to your suggestion, hypocritical or myopic of me to own and use manufactured goods while simultaneously opposing government policies to artificially create more manufacturing jobs in America.
What does it matter that most of the workers who assembled my computer work in a foreign country rather than in the country where I live? Either way, the computer wouldn’t be manufactured by its ultimate owner and user: me.
More to the economic point, if our fellow Americans had no better job alternatives than snapping together computer components into finished laptops, my laptop might well have been manufactured in the U.S. But thankfully our fellow Americans do have better job alternatives – just as I have a better job alternative – than snapping together computer components into finished laptops. We Americans therefore profitably rely for this task’s performance on workers for whom this task is their best alternative.
That foreign workers can perform this task at a lower cost than can we Americans means that we Americans have better job alternatives than do those foreign workers. Do you think this reality is lamentable? Would you prefer American workers to have job alternatives as poor as those of many workers abroad? I assume not.
Yet if the U.S. government were to use protectionist policies to ‘bring back’ to America more such manufacturing jobs – jobs that can be performed abroad at lower costs – to produce the same amount of manufacturing output that Americans now consume, the U.S. government would ‘successfully’ direct many American workers out of jobs at which they are highly productive and into jobs at which they are less productive – that is, into jobs at which American workers are roughly no more productive than are the lower-productivity and lower-wage workers abroad who today manufacture goods that American workers don’t manufacture. We know that this unfortunate outcome would prevail because, if American workers were most productively employed to manufacture goods that are now manufactured abroad, businesses would on their own move to employ these American workers in those manufacturing tasks. There’d be no need for government intervention.
Exactly how would American workers, families, and consumers benefit from government policies that force untold numbers of American workers from their most-productive jobs – nearly all of which are in the service sector – into less-productive jobs in the manufacturing sector?
Unless and until you can convincingly answer this question, you should refrain from what appears to be knee-jerk advocacy of policies designed to artificially increase manufacturing employment in America.
The basic economics of trade aren’t difficult, Mr. Ramos, but they are real and important. I recommend that you learn this economics before you next pronounce on trade policy.
Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030
