Posted 8:44 pm Monday, August 06, 2012
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Free markets don’t need protectionism
“Buy American” is both a reasonable personal choice and rotten public policy. When individuals choose to purchase a domestically made product, they’re exercising their own best judgment, and more importantly, spending their own money.
But when government does the same thing, it’s protectionism — a policy that does long-term damage to consumers and producers alike.
Two recent examples show this. In the first, Congress learned that Olympic athletes are wearing uniforms made in China.
“Republicans and Democrats railed today about the U.S. Olympic Committee’s decision to dress the U.S. team in Chinese manufactured berets, blazers and pants while the American textile industry struggles economically with many U.S. workers desperate for jobs,” the Associated Press reported.
Senate Majority Leader Harry Reid sputtered to find the words to express how upset he was.
Calm down. The uniforms were donated by the Ralph Lauren company, which used its usual manufacturers. And the company has pledged not to do it again.
The real reason the uniforms were manufactured in China is that China has a manufacturing economy. The U.S. largely has an information economy; do we really wish to go back? Is “American-made” really so important that we should dust off the looms and the sewing machines? Or would that effort be better spent do more of what we do well?
But when government does the same thing, it’s protectionism — a policy that does long-term damage to consumers and producers alike.
Two recent examples show this. In the first, Congress learned that Olympic athletes are wearing uniforms made in China.
“Republicans and Democrats railed today about the U.S. Olympic Committee’s decision to dress the U.S. team in Chinese manufactured berets, blazers and pants while the American textile industry struggles economically with many U.S. workers desperate for jobs,” the Associated Press reported.
Senate Majority Leader Harry Reid sputtered to find the words to express how upset he was.
Calm down. The uniforms were donated by the Ralph Lauren company, which used its usual manufacturers. And the company has pledged not to do it again.
The real reason the uniforms were manufactured in China is that China has a manufacturing economy. The U.S. largely has an information economy; do we really wish to go back? Is “American-made” really so important that we should dust off the looms and the sewing machines? Or would that effort be better spent do more of what we do well?
The second instance of protectionism is even more enlightening. It shows that protectionism hurts real people — even kids like 13-year-old Nathan Duszynski in Michigan.
“On Tuesday, as the young entrepreneur was downtown setting up a hot dog cart he helped buy with $1,200 saved from mowing lawns and shoveling snow, he got an unpleasant surprise courtesy of Holland City Hall,” Michigan Live reported last week. “Duszynski was told by city officials that his cart was in violation of a Holland zoning law that protects existing food businesses downtown against competition from mobile food vendors, and he would have to cease operation immediately.”
That’s right. This enterprising kid save up money from menial jobs, and invested in a hot-dog cart capable of making more money with less effort.
Oh, he was careful. He made sure to get all the right permits and licenses and mandatory food-service training. He jumped through all those hoops.
And he set up his cart on private property (with the permission of the owner).
But the local restaurants apparently feared the competition, and demanded the city act.
“To be frank, any sit-down restaurant that cannot handle competition from a hot dog stand run by a 13-year-old needs to re-evaluate the quality of its meals — if it should be in business at all — and should not be sheltered from free market competition, especially not by food stands owned and operated by children,” noted the Heritage Foundation on Wednesday.”
Because that’s what protectionism’s long-term effect is — bad business. Those downtown restaurants needn’t worry about the quality of their food, or probably more to the point, the speed of their service, because they have no quicker competition.
“On Tuesday, as the young entrepreneur was downtown setting up a hot dog cart he helped buy with $1,200 saved from mowing lawns and shoveling snow, he got an unpleasant surprise courtesy of Holland City Hall,” Michigan Live reported last week. “Duszynski was told by city officials that his cart was in violation of a Holland zoning law that protects existing food businesses downtown against competition from mobile food vendors, and he would have to cease operation immediately.”
That’s right. This enterprising kid save up money from menial jobs, and invested in a hot-dog cart capable of making more money with less effort.
Oh, he was careful. He made sure to get all the right permits and licenses and mandatory food-service training. He jumped through all those hoops.
And he set up his cart on private property (with the permission of the owner).
But the local restaurants apparently feared the competition, and demanded the city act.
“To be frank, any sit-down restaurant that cannot handle competition from a hot dog stand run by a 13-year-old needs to re-evaluate the quality of its meals — if it should be in business at all — and should not be sheltered from free market competition, especially not by food stands owned and operated by children,” noted the Heritage Foundation on Wednesday.”
Because that’s what protectionism’s long-term effect is — bad business. Those downtown restaurants needn’t worry about the quality of their food, or probably more to the point, the speed of their service, because they have no quicker competition.
We all make decisions for ourselves about what to buy or where to eat, based on any number of factors. And that’s fine.
Protectionism, however, takes those decisions away from us.
And we’re all worse off because of it.
Protectionism, however, takes those decisions away from us.
And we’re all worse off because of it.
