It makes no more sense to inflict “Buy American” protectionism on yourself than it does to endorse it when it’s imposed on you by law.
by Lawrence W. Reed
Last week I posted on my Facebook page that I purchased a new car, a Toyota RAV4. Someone then commented, “Should have bought American.” I responded as follows:
I think it’s more important to BE American than to BUY American. BEING American means exercising the liberty of choice in purchasing goods and services. The fact that somebody lives in Flint, Michigan doesn’t entitle him to my patronage. I am no one’s slave.
I wondered later, “From where does he get his coffee and bananas? From Milwaukee?”
The two principal arguments against the nativist “Buy American” idea are 1) moral and 2) economic. My post expressed the essence of the first. More on that in a moment.
The Economic Argument
The economic argument goes like this: When I choose what I regard as the best option for my money, I don’t hurt the economy; I help it, even if a local seller is deprived of my business. How? My satisfaction level is highest when I’m free to make my own purchasing decisions, and I am, after all, part of “the economy,” am I not? An “economy” is nothing more than the myriad of exchanges that allow each of us to improve our level of satisfaction; in our own personal estimations, we trade so as to be better off once we’ve done it.
If I save some money because the foreign option is cheapest, then I have savings left over that I might very well employ in the purchase of other products, quite possibly locally-made ones. And because my choice intensifies the impact of foreign competition, it will likely spur the local producers to cut costs, improve their products, or provide better service. They might even convince local, state, and federal governments to create a more business-friendly environment by reducing onerous taxes or dumb regulations.
For all I know, the Toyota RAV4 might be made in the US. I really don’t care. I do know that when I purchase a car that might be made overseas, I get a car and the foreigner gets American dollars. If that’s where everything ended, both the American economy and Lawrence Reed are richer by one car. The foreigner is one car poorer, but he now possesses a potential claim against American goods or services in the form of dollars.
If the foreigner never does anything with those dollars—even burns them, let’s say—who’s better off? I have a car and the foreigner has pieces of paper with pictures of American politicians on them. But of course, that’s never the end of it. The foreigner uses those dollars, sooner or later, one way or the other. He may buy American goods, services, real estate, stocks, bonds, Treasury notes, or other financial instruments. Or he may sell the dollars and buy, say, Euros with them. In that case, the former Euro-holder now can use them. Those dollars may traverse the globe before they ever come back as a claim against something made in America, but that’s ultimately what happens.
It doesn’t follow that I’ve “hurt” a local seller simply because I didn’t buy from him. Lots of people didn’t buy from him, including those who didn’t buy a competing product from a foreigner either. That local seller probably never bought a lecture or a book from me, though I’m sure he’s paid to hear a lecture and purchased a book from somebody at one time or another. I’d be foolish and presumptuous to resent his choices to patronize others instead of me.
Bottom line? It makes no more sense to inflict “Buy American” protectionism on yourself than it does to endorse it when it’s imposed on you by law. See my previous article, “The Case Against Protectionism.” John Stossel also offered some good economic arguments in this article, “Why ‘Buy American’ is a Dumb Idea.”
The Moral Argument
However, it’s the moral argument against “Buy American” that I find the most compelling. It’s rooted in the fundamental principles of liberty. That should mean a lot because, without liberty, life would be unbearable (and unAmerican too).
The moral argument goes like this: Buying a good or service is a voluntary, peaceful, mutually-beneficial, life-enhancing activity of consenting adults. No one’s rights to life or property are violated by the mere act of exchange. It shouldn’t matter what languages the traders speak, the political or geographic borders they live behind, or what color their skins may be.
If there are any legitimate exceptions to this rule, they bear an extraordinary burden of proof (some might conjure up a war-time scenario, for instance) before we do violence to the rights of individuals to better themselves through trade. In any event, simply a desire to ensure the local guy gets the business because of where he lives is no justifiable exception. That would be nothing more than an arbitrary cancellation of one man’s eternal rights for the temporary, material gain of another based on residence.
The world is full of people who want to tell others what to buy and where to buy it. It always has been. One of the reasons America historically stands apart as an exceptional country is that we protect and respect the free, nonviolent choices of our citizens (though I admit we once did a better job of this than we do today). We cajole, we persuade, we argue—but in the end, we don’t compel or intimidate others into imitating our personal desires. If you can’t convince your neighbor that he should buy from you, then thank him for his consideration, part in peace, and try again next time. You are not entitled to his bank account.
This is, among many other things, what it means to be an American.
So the next time someone suggests you’re a bad guy because you bought something from his foreign competitor, tell him you believe it’s more important to be American than to buy American.
Lawrence W. Reed is president of the Foundation for Economic Education and author of Real Heroes: Incredible True Stories of Courage, Character, and Conviction and Excuse Me, Professor: Challenging the Myths of Progressivism. Follow on Twitter and Like on Facebook.