Roger clocks out at the end of his shift at the North Carolina furniture factory and changes into his jeans (made in Vietnam) and Budweiser t-shirt (made in China). He gets in his Dodge (made of parts from around the world) and heads home. Life sure is better having a job, thanks to the Buy American program, backed up by taxes Americans now pay on the cheaper imported furniture they used to prefer. Roger arrives at his home (made with Canadian timber) and gets a cold beer (aluminum from Iceland) and a chicken drumstick (butchered in China!) from the refrigerator (made in Taiwan). He turns on the TV (made in Japan) and gets ready for an evening of entertainment (made in California). But first he takes a break to use the toilet (made in Mexico). Buy American worked. Now that American consumers, rich and poor alike, have to pay more for their furniture, Roger enjoys a better quality of life with more security. He never really worried about getting food to eat, having access to a refrigerator and indoor plumbing, or losing access to a warm, dry place to sleep. His greatest fear was having to sleep on someone else's sofa and share their toilet, and maybe getting sick and not having access to excellent, modern medical care. On the other side of the world, a Chinese furniture maker is now out of work, and has moved back to the village where he sleeps on a mat on the floor, under a leaky roof, and urinates in a hole outside. So far so good, Roger is taken care of. But what about American producers of textiles, lumber, refrigerators, and toilets? Fair's fair, Roger, you should be buying American too. America has the resources and ingenuity to produce all of these goods; all have in fact been produced in America. But Roger isn't getting rich making furniture, and the reason he selected imported products for his home, though it sometimes meant compromising on quality, was to save money. Roger is going to have to give some things up in order to Buy American. If the "buy local" idea is a good one, we should go all the way and refuse to take advantage of the efficiency that a country like Iceland has in smelting aluminium. Iceland should grow it's own food and manufacture its own cars, too. So should Fiji! When a Fiji native buys a German car, that means fewer manufacturing jobs for native islanders. There's plenty of space for an automobile plant on Fiji, what's stopping them?
Reductio ad absurdum is no way to conduct a debate. You're mixing commodities, durable goods and consumer goods as if they're all the same, as if a chicken is the same as a TV is the same as a house. And you're studiously ignoring cost of living. An American-made recliner cost the equivalent of $610 in 1976. A similar "made in America with American and foreign parts" recliner is $650 now. Fact of the matter is, shipping armchairs across the ocean isn't cost-effective. Washing machines, on the other hand... The first VCR my family owned was a $400 GE. It lasted ten years. The second VCR my family owned was a $100 Toshiba. It lasted two. We now live in a world with disposable cell phones. A lot of that is related to the fact that the cost of living in Shenzhen is half what it is in Chicago so wages can be half - and Shenzhen is were the supertight tech shit is made. Bangalore? Get outta here. Capitalism will argue that Indians will only be competitive until their cost of living increases and eventually everything will be equal. Capitalists, on the other hand, will open and close factories in order to maximize their margins and please their shareholders. Meanwhile, it does ME good to have beds made in Corvallis rather than in Manila because I live in an extended trade ecosystem that swaps cash, food, tourism, and all sorts of other things up and down the I-5 corridor that has nothing whatsoever to do with the myriad overseas trading partners that make the shit I use. It's better for my community to purchase community goods. But this is Econ 101 shit. You know it. I know it. Yeah - it's better for the Fijians to build cars. Who's stopping them? Capitalism. Now - throw in some repressive isolationism and trade tarrffs and who knows what can happen.
—Paul Krugman, Economics (High School Version), p. 37 But I know you’re not really questioning the truth of comparative advantage; you tipped your hand by forbidding reductio — it’s a classical Greek rhetorical technique, and we Americans don’t need no foreign rhetoric! I get it.Bangladesh, though it is at an absolute disadvantage compared with the United States in almost everything, has a comparative advantage in clothing production. This means that both the United States and Bangladesh are able to consume more because they specialize in producing different things, with Bangladesh supplying our clothing and the United States supplying Bangladesh with more sophisticated goods.