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We sometimes hear people say “Buy American." Why don't we?

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We sometimes hear people say “Buy American." Why don't we?

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There are at least two main reasons for this.

One of these reasons is price.  Many of the things that we buy are made using relatively unskilled labor.  This is particularly true of things like clothes.  Labor costs make up a relatively large portion of the cost of clothes and unskilled workers can make clothes.  This means that clothes made in the United States will cost much more than clothes made in other countries where the price of labor is lower.  Consumers are generally more concerned with saving money than with being patriotic.  Patriotism does not pay the bills.

A second reason is related to the first.  Because of the price differentials, there are many things that are essentially not produced in the United States any longer.  We could not “buy American” if we wanted to.  For example, there are no longer any televisions made in the United States.  The companies that produce TVs in foreign countries have outcompeted American companies and so there are no longer any such countries.

Making all of this possible is the globalization of trade.  Trade has become much cheaper as shipping becomes cheaper, communications easier, and trade barriers less prevalent

For these reasons, we often do not “buy American.”

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