An egret takes off from a cedar tree in Scalloptown Park and flies across Greenwich Cove.
One of the main reasons our nation’s economy is failing is because people don’t buy stuff that Americans make anymore. Indeed, even the U.S. Olympic team has its uniforms made in China, by Ralph Lauren no less. Congressman David Cicilline, speaking at Northwest Woolen Mills in Woonsocket yesterday, said parts of those uniforms could be made right here. The company said they could get the uniforms to the athletes before the start of the games, but the US Olympic Committee said maybe next time. Thus, China gets to thrill of victory and American manufacturing the agony of defeat.
Two developmentally disabled men, a war veteran and the RI ACLU are challenging a state law that forbids sex offenders from living within 300 feet of a school. They say that if the state makes them move, they are likely to become homeless. It’s a very interesting constitutional question about cruel and unusual punishment and exclusion zones.
Self-described progressive Linda Dill Finn is challenging Dan Reilly to represent Portsmouth in the General Assembly … this will be an interesting race.
You’d think the Rhode Island Republican Party would be sympathetic to the plight of the poor, being how they are the most cash-strapped GOP in the nation.
Like Mitt Romney, I’d like to retain the right to retire retroactively … therefore if RI Future happens to do or say anything that, in hindsight, I might second guess, I can just say it has nothing to do with me.
Speaking of Romney, one of the myriad of reasons that his success at Bain Capital doesn’t translate into good experience for public service is the rules are different … as president, you can’t improve the economy by outsourcing jobs overseas, like Romney did at Bain.
Get ready for a hot and humid one today … any maybe do like this egret did and get on the water:
“Buy local” is really just advocating for shutting down trade. It’s an prime example of how many of our politicians and voters still don’t understand basic economic concepts upon which the vast majority of the economics field is in significant agreement. If “buy local” is the path to wealth, then why are countries that produce and buy everything locally, such as Nepal, among the poorest countries in the world while countries that engage in the most trade are the wealthiest?
“If “buy local” is the path to wealth, then why are countries that produce and buy everything locally, such as Nepal, among the poorest countries in the world while countries that engage in the most trade are the wealthiest?”
This is one of the weakest arrows in the your–quite limited–quiver. You bring it up frequently enough that you must actually believe in it, which is sad.
Nepal is relatively poor because it has few natural resources and little industrialization.
Yes; trade plays an important role in increasing wealth. You are trying to say that every buy local campaign aims to end all trade. Your position is absurd. No one has ever made the argument that ending all trade is the key to growth.
You have created a straw man and now you are clutching your pearls over it. Not only is your straw man ludicrous, but so is your counter-argument.
From ‘buy local’ to Nepal? Get a grip on yourself (rather than your pearls). Nobody thinks you’re serious, and you look silly.
Plus, you really need to decide whether economics as a discipline matters or not. You change your view on this point every other post. Not without a pattern, of course: when economics agrees with your weird, mish-mosh ideology of Tea Party-isms, then economics is a valuable source of knowledge. When its findings dispute your preconceptions (in the very citations you yourself provide, often enough), then it’s suddenly important to point out that social sciences aren’t really science.
At any rate, economics does not actually agree with you:
By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it.
You see, even Adam Smith knew that buying local can promote the public good.
Of course, we are now moments away from your link to some paper or other saying we need to buy everything from abroad while producing nothing at home, and this paper will be valid, because economics is, for a few minutes anyway, a science again.
“‘Buy local’ is really just advocating for shutting down trade.”
turbo does a fairly good job on this one imho. I’d add that your statement is false in itself. You put up the strawman that the choice is between an unrestricted race to the bottom and total isolation. Progressives would say “buy local” is simply looking at the actual costs of goods, including externalized costs, not just the retail price. It’s entirely rational to consider the real cost of goods in purchasing decisions.
“If ‘buy local’ is the path to wealth, then why are countries that produce and buy everything locally, such as Nepal, among the poorest countries in the world while countries that engage in the most trade are the wealthiest?”
Which of these U.S. industries has not benefited or continued to benefit from protectionism? I can’t think of a single industry… certainly nothing related to high-tech or defense, steel, agriculture, pharma, oil/natural gas, automobiles, air and rail travel, and on, and on.
Turbo (AKA Turbo the Troll) does not do a “good job on this one.” He accuses me of straw-manning buy local campaigns as invariable attempts to end all trade and then engages in histrionics on that basis, but a more fair reading of my comment would recognize that the shutting down of trade to which I refer would necessarily only extend as far as the buy local campaign itself. So if a group was arguing that Americans should buy local for all products, then yes, they are literally arguing for shutting down all trade with other countries. But a more limited buy local campaign would be arguing for shutting down only some types of trade. Nowhere did I say that all buy local campaigns are for shutting down all trade, but he ridicules and insults me through multiple long-winded and irrelevant paragraphs as if I had. He then accuses me of subscribing to “Tea Party-isms” in an attempt to insult and troll me into unrelated political arguments, which is his modus operandi on this blog.
As if all of this were not enough, he then equates early economist Adam Smith with the entirety of the modern economics field by stating that “economics” (unilaterally, apparently) does not agree with me (present tense). To support this claim, he selectively quotes a portion of Smith’s discussion on man’s natural preference for supporting his own community while leaving out portions of the broader discussion in The Wealth of Nations in which Smith very clearly states that it is in the best interest of countries to outsource production when it is cheaper to do so elsewhere, and only in situations where there is not a significant cost savings to outsourcing should countries prefer to produce locally. I’ve already corrected this same commenter on this same point in past posts and wasted more than enough time on the subject, so I won’t bother reposting the relevant passages here – anyone with a good faith intention can find them online, in my previous discussion of the topic on this blog, or simply read The Wealth of Nations for themselves.
“But a more limited buy local campaign would be arguing for shutting down only some types of trade.”
This explains your argument from Nepal!
“If “buy local” is the path to wealth, then why are countries that produce and buy everything locally, such as Nepal”
Remember that? It’s in your post from earlier today.
So when you say this: “a more fair reading of my comment would recognize that the shutting down of trade to which I refer would necessarily only extend as far as the buy local campaign itself”
You establish a conflict with this:
“buy everything locally”
Gosh, whatever did you mean by ”buy everything locally“? What did you mean by that, Right to Work???
I hope that everyone reads Wealth of Nations, too, especially the later chapters!
Your quotes perfectly illustrate that I was using Nepal as an extreme example of how economies that produce nearly everything locally become trapped in a poverty cycle, since trade is widely accepted in the economics field as a critical and central component achieving prosperity. Thus a particularly compelling case must be made for limiting trade, such as through buy local campaigns or protectionist policies. Again, a fair reading of my comment would recognize that I was not directly comparing the two scenarios but rather using Nepal as an example to illustrate the broader point on the value of trade in creating wealth.
This is what has led me and other commenters to identify you as a troll - at least 90% of your verbose, histrionic, insulting arguments against us would be resolved if you simply gave our comments the same benefit of the doubt that any objective reader would.
“I was using Nepal as an extreme example”
Also known as a straw man.
““buy local” practicioners still engage in trade, but they do so at the expense of more efficient trade opportunities”
Not necessarily so.
As Adam Smith pointed out, it is commonplace for people to better the lot, not only of themselves, but of their neighbors as well “by preferring the support of domestic to that of foreign industry”.
You assume, for unknown reasons, that whatever trade regime is in place is already the optimal one. This assumption is nonsense.
“At least in theory, there is a measurable efficiency loss associated with buy-local policies”
In theory? Why not in practice? Your statement is bizarre. For one thing, no, not in theory. There is no theory whatsoever that says everything bought locally is produced less efficiently than everything bought non-locally. For another thing, what do you do when the theory leads to conclusions disproved by reality? Go with what theory recommends anyway?
How neoclassical of you.
“buying goods locally is more commonly associated with the poverty trap ”
Associated by whom? And what does association matter? Why is association more important than the actual consequences of a particular policy?
“Doing everything yourself is the surest road to poverty”
Again a straw man. There is simply no buy local campaign that advocates for a return to subsistance farming. None.
To sum up, you have argued:
1) ‘buy local’ means “buy everything locally”.
2) ‘buy local’ means “make all goods yourself”.
3) Theory is more important than actuality.
4) Association is more important than actuality
5) “the shutting down of trade to which I refer would necessarily only extend as far as the buy local campaign itself”–which is a tautology: buying local would replace trade in non-local goods with trade in local goods. No kidding!
You refer to not a single, actual, real-world problem. You simply assume that non-local goods are always produced more efficiently than local goods and that whatever trade regime is in place is already optimal.
Your assumptions are pure hogwash.
“the shutting down of trade to which I refer would necessarily only extend as far as the buy local campaign itself.”
So people who buy local don’t engage in trade? Last I checked it’s still commerce when I buy from the local guy.
“Your quotes perfectly illustrate that I was using Nepal as an extreme example of how economies that produce nearly everything locally become trapped in a poverty cycle…”
Sounds an awful lot like a strawman. Buying tomatos at a farm stand? Why don’t you move the North Korea then!
“…an example to illustrate the broader point on the value of trade in creating wealth.”
Yes, but for whom? What good does it do Americans to create wealth for say despotic regimes in the Middle East?
“So people who buy local don’t engage in trade? Last I checked it’s still commerce when I buy from the local guy.”
There were presumably effiency reasons for outsourcing the production of those goods in the first place. You are correct that “buy local” practicioners still engage in trade, but they do so at the expense of more efficient trade opportunities, i.e. “shutting them down.” At least in theory, there is a measurable efficiency loss associated with buy-local policies, so there should be a compelling reason for it beyond “It’s good for Industry A or Company B,” which are short-sighted justifications that don’t consider the wider effects.
“Sounds an awful lot like a strawman. Buying tomatos at a farm stand? Why don’t you move the North Korea then!”
It’s only a strawman if you strain the meaning beyond what is in my comment, as Turbo does deliberately. My point was that trade is one of the principle ways that countries generate wealth, and buying goods locally is more commonly associated with the poverty trap that many of the poorest and least developed countries, such as Nepal, fall into.
“Yes, but for whom? What good does it do Americans to create wealth for say despotic regimes in the Middle East?”
Trade benefits both parties economically and also tends to improve diplomatic relations and discourage aggressive military foreign policies.
“There were presumably effiency reasons for outsourcing the production of those goods in the first place.”
Efficiancy reasons for whom? You seem to think the economic best interests of a corporate concern are universal. I’d argue their short-term profits are the ones that don’t consider the wider effects, exactly the point in fact.
“…tends to improve diplomatic relations and discourage aggressive military foreign policies.”
Jefferson certainly thought so and there’s some truth to that. So you oppose sanctions against Cuba, North Korea, and Iran? Just asking.
I’m wasn’t mainly talking about corporations, although I suppose they are market participants as well. If a good can be produced more efficiently in another country, then consumers in this country who buy the product also benefit from the lower price and time and resources saved through division of labor. Nor am I persuaded by the “bring jobs home” protectionist arguments. Households in this country used to be more self-sufficient by hunting or growing food themselves, making clothes themselves, building their homes and furniture themselves, and they bought nearly everything locally, but they spent all day, every day laboring and there was little surplus time as a result. Trade alleviated that burden and freed up time and resources through specialization. Doing everything yourself is the surest road to poverty, for a household or a country. A more economically productive way to create local jobs is figuring out some way to specialize or innovate in new ways when it becomes more efficient to do a certain type of job elsewhere.
Economic sanctions are a poor policy choice in each of those cases for the reasons that they restrains our own economy and exacerbate an already bad diplomatic situation. I am not familiar with any “success stories” resulting from economic sanctions – they always seem to always backfire.
“Trade alleviated that burden and freed up time and resources through specialization.”
But that’s still true of goods purchased locally. Not like I’m milking the cows, when I drink Rhody Fresh.
True, but I’d argue that the potential efficiency gains from outsourcing a task from your household are of the same type as the potential efficiency gains from outsourcing a task from your community, state, or country. Very few people hate homemade goods – usually the reason for “buying foreign” is that the goods are more efficiently produced elsewhere. The two situations aren’t directly equivalent, but the same principle is in play.
The whole point of “buy local” is that you should supposedly buy goods and services locally *even though* they are more expensive or otherwise less convenient. If locally produced goods and services were produced more efficiently, then in all likelihood there would be no need for the campaign in the first place because people would be buying locally anyway.
The problem here is that while you point out that wealthy nations trade, you neglect to mention that many of the poorest nations run huge trade deficits, exporting raw materials and importing nearly all manufactured goods. That kind of economic colonialism is the road to banana republic, not economic powerhouse. If trade is so beneficial, shouldn’t we see those benefits across the board?
What do economists say about the idea that a country can run massive trade deficits year after year?
I don’t see any economic reason why it would be problematic if a country is exporting more of a given product than it is importing, regardless of whether it is a manufactured good or raw material. The trades are prima facie evidence that the country needs what it is importing more than what it is exporting and thus it is being made wealthier through the trades.
I think many the true underlying problems in the “economically colonial” countries you describe are due to the exploitation of a lower class of people through a perverse set of institutions and improper rule of law. I don’t believe in “trade deficits” as a problem for the reasons described in this EconTalk podcast:
www.econtalk.org/archives/2010/11/don_boudreaux_o_4.html
“If locally produced goods and services were produced more efficiently, then in all likelihood there would be no need for the campaign in the first place because people would be buying locally anyway.”
In all likelihood. That’s where you lose the argument.
There is no “in all likelihood”. There is only the condition that actually prevails. And the condition that actually prevails can easily be one in which, when we account for externalities, the price of the local good is better than that of the non-local good.
In other words, you are saying “in all likelihood” as a euphemism for “because markets are perfectly efficient”.
“If trade is so beneficial, shouldn’t we see those benefits across the board?”
Sure! Because all the players are on an even footing!
Right?!?
Actually, much of the point of free trade rhetoric is to create exactly these disparities. No rich country ever became rich by applying free market principles. Every rich country industrialized under protectionist policies, then slowly, carefully, and never fully liberalized trade.
When rich countries tell developing countries to liberalize before they become wealthy, the whole point is to trick them into doing the wrong thing.
Let me help with a few missed points:
” The self aggrandizing Congressman David Cicilline, speaking at Northwest Woolen Mills the business of a prominent campaign contributor in Woonsocket yesterday, said parts of those uniforms could be made right here all the while knowing that the Olympic Committee’s decision was final.”