Drive American!

"Buy American" is UN-American

By Harry Binswanger, Ph.D.

With a rebuttal by Ray Parker

According to a recent poll, 80% of Americans think it their patriotic duty to give preference to American-made products. But "Buy American" is wholly un-American in both its economics and its philosophy.

America's distinction among all the nations of the world is that it enshrined political and economic freedom. Although we have departed greatly from our original laissez-faire principles, to the whole world America still symbolizes capitalism. Americanism means understanding that a free market, domestically and internationally, is the only path to general prosperity.

Yes, America is a free country that values free enterprise but that doesn't necessarily mean that we believe in a totally unregulated market, either domestically or internationally! Regulations are needed to guide and control the development of domestic capacity, encourage growth, and protect our industry. For example, the government gives incentives to small growers to keep them profitable. It subsidizes energy production. It taxes imported grain to prevent our farms from being put out of business. It charges tariffs on most imported goods to control the economic motivation for trade. It's obvious that America does not believe a free market is the only path to general prosperity. No matter what other countries consider us to be or represent, America is and should be looking out for its citizens' interests by controlling the market. So the assertion, "Americanism means understanding that a free market, domestically and internationally, is the only path to general prosperity." is merely the author's subjective opinion, and isn't true.

The author is presumably espousing beliefs of the Ayn Rand institute. The Ayn Rand philosophy holds that reason and freedom are all important and that we must remain vigilant so as not to succumb to popular opinion and irrationalism. It recognizes the virtues of being an "individualist" and respects those who have the self-confidence to live by their own counsel and are willing to stand alone against tradition and popular opinion. It believes that selfishness and acting in one's own interest is a virtue.

I don't agree with this philosophy. I think it's sensationalist and flawed and satisfies peoples' basest interests. And I'd like to point out that philosophies are merely ways of looking at the world and have little basis in fact. However, for the sake of argument, if the Ayn Rand followers believe in selfishness and individualism, surely they can see that, to buy American is to support our economy which will ultimately benefit the individual in the form of civil services, infrastructure, roads and highways, hospitals, and other support. If the individual is truly selfish and only interested in himself, his only course of action is to buy American! But the author lobbies for the support of universal trade for the benefit of everyone --even other countries!

International trade is not mortal combat but a form of cooperation, a means of expanding worldwide production. The benefits of international trade flow to both trading partners, even when one of the countries is more efficient across the board. This is the "Law of Comparative Advantage," covered in every economics textbook. Free trade does not destroy but creates employment.

The lucrative workings of free markets do not depend upon lines drawn on a map. The economic advantages of international commerce are the same as those of interstate, intercity, and crosstown commerce. And if we kept crosstown trade accounts, the "trade deficits" that would appear would be as meaningless as are our international "trade deficits." Fact confirms theory: the U.S. ran a trade "deficit" practically every year of the nineteenth century, the time of our most rapid economic progress.

No one claimed international trade was mortal combat. Implying that people who believe in "buying American" think that it is, is merely ridicule and doesn't support the argument at all. International trade is not a cooperative global effort as the first sentence implies; it is the buying and selling between two or more countries, each with its own goals and interests. The extent to which they trade with each other is carefully measured as each party seeks to gain an advantage. International trade may not involve arms but the interests are as selfishly focused as they are in war. Of course, it is true that international trade can mutually benefit two or more countries simultaneously but, unchecked and unregulated, it will lead to the collapse of specific industries. An example is how Japanese companies cooperated to destroy the American television manufacturers. Japanese industry organized itself to conquer the American television industry by close cooperation between Japanese companies and their government, illegal secret agreements, discipline, high quality products, product dumping on an immense scale, and using only Japanese suppliers. They destroyed the American TV industry by taking technology from RCA and others and selling televisions in America for less than it cost to manufacture them while forbidding the sale of American-made televisions in Japan. Although some may say this is an example of being more efficient, it is actually an example of unfair trade practices. And in this case, thousands of jobs were destroyed.

The "Law of Comparative Advantage" is the title attached to a common-sense aspect of trade: that it can be to a country's advantage to buy certain foreign goods even if they can be produced more cheaply domestically. I am of the opinion that while this can be true, it is not always. In a country as large and varied as ours, we do not need to sacrifice any productivity in order to focus on other products. Further, the Law of Comparitive Advantage is based on the assumption that the goal of trade is selfish; each country's ultimate concern is its own benefit and very much depends on "lines drawn on a map". So to cite this "law" to support the argument that trade should be free and unregulated and that it is some kind of benevolent, global endeavor is incorrect.

Philosophically, Americanism means individualism. Individualism holds that one's personal identity, moral worth, and inalienable rights belong to one as an individual, not as a member of a particular race, class, nation, or other collective.

But collectivism is the premise of "Buy American." In purchasing goods, we are expected to view ourselves and the sellers not as individuals, but as units of a nation. We are expected to accept lower quality or more expensive goods in the name of alleged benefits to the national collective.

To say that Americans are individualists with no reason to collectively defend themselves is an utterly untrue statement based on a false premise. The author claims that Americans are "individuals", cowboys, and as such should only be interested in themselves and have no concern whatsoever for their fellow man. That is not true. Americans have strong family ties and have historically cooperated to benefit themselves, their neighborhoods, their states, and their country. They have worked together to form unions, to establish communities, and win wars. To believe that Americans are "individualists" is the most naive interpretation of what it means to be American and is not a valid argument.

The author makes an unsupported leap in logic when he says buying American means accepting lower quality goods in the name of alleged benefits to the national collective. How did he arrive at that fact? Collectivism may be the premise for buying American but it does not, in any way, follow that collectivism means that we have to accept lower quality or sacrifice standards.

Most "Buy American" advocates are motivated by misplaced patriotism. But for some the motive is a collectivist hostility towards foreigners. This xenophobic attitude is thoroughly un-American; it is plain bigotry.

Giving preference to American-made products over German or Japanese products is the same injustice as giving preference to products made by whites over those made by blacks. Economic nationalism, like racism, means judging men and their products by the group from which they come, not by merit.

The author is trying to associate buying American goods with being racist so as to make the topic too sensitive for discussion. But the fact is that this is a free country and we are free to buy or not buy from anyone or any nation as we see fit. Not buying from a specific person or nation does not automatically make a person racist or xenophobic. If that is the case, maybe the author should be admonishing Japan and not America. America, as the world's melting pot, knows all about race-relations and playing the race card. We know that just because someone claims racism it ain't always so. In this particular case, we prefer to not buy products from a country that does not allow us the same trade access that we allow them and there is nothing racist about that.

Collectivism reflects the notion that life is "a zero sum game," that we live in a dog-eat-dog world, where one man's gain is another man's loss. On this premise, everyone has to cling to his own herd and fight all the other herds for a share of a fixed, static, supply of goods. And that is exactly the premise of the "Buy American" campaign. "It's Japan or us," is the implication. If Japan is getting richer, then we must be getting poorer.

But individualism recognizes that wealth is produced, not merely appropriated, and that man's rise from the cave to the skyscraper demonstrates that life is not a zero-sum game not where men are free to seek progress.

This train of thought is based on a false premise. Collectivism does not "reflect the notion that life is a zero sum game". Collectivism is a term used to describe an outlook that stresses human interdependence and the importance of a collective rather than the importance of individuals. Collectivism suggests an interest in supporting one's own group. And that's what buying American does --it supports the collective. Individualism recognizes that wealth is produced and not merely appropriated? What does that mean? Since Americans are not individualists, this argument has no meaning.

Accordingly, individualism holds that the interests of men do not conflict provided we are speaking of self-supporting individuals who pay for what they get. Where there is free trade, the exchange of value for value, one man's gain is another man's gain.

The same harmony of men's interests applies in the international arena. One nation's enrichment raises the standard of living of all other nations with which it trades. Which nation adds more to your standard of living: Japan or Bangladesh? And how would you fare if Japan were suddenly reduced to the economic level of Bangladesh?

It is true that trade can be mutually beneficial to all trading partners but, without regulation or supervision, it can become more beneficial to one partner than the other.

The patriotic advocates of buying American would be shocked to learn that the economic theory underlying their viewpoint is Marxism. In describing the influx of Japanese products and investment, they don't use the Marxist terminology of "imperialism" and "exploitation," but the basic idea is the same: capitalistic acts are destructive and free markets will impoverish you. It's the same anti-capitalist nonsense whether it is used by leftists to attack the United States for its commerce with Latin America or by supposed patriots to attack Japan for its commerce with the United States.

Contrary to Marxism, one does not benefit from the poverty or incompetence of others. It is in your interest that other men in every country be smart, ambitious, and productive, not stupid, lazy, or incompetent. Would you be better off if Thomas Edison had been dim-witted? Nothing is changed if we substitute a Japanese inventor for Edison.

Lacking any valid argument for buying American, the author resorts to smearing the idea of buying American by associating it with Marxism. He implies that a group of people, the American people, looking out for their own interests, is Marxist. Just because Marxists believe that the middle-class is intelligent enough to look out for their own interests does not mean they have exclusive rights to that trait. It is only common sense to react, when informed of unfair trade practices, as a people. The author makes a leap from one subject, Marxism, to the statement that one does not benefit from the poverty of others. There is no relationship between those two subjects and I cannot follow the logic.

More and better production is good for all men, everywhere. What's good for Toyota is good for America. That's individualism, and that's Americanism.

Government interference with free trade is un-American. Sacrificing one's standard of living in order to subsidize inefficient domestic producers is un-American. The tribal fear of foreigners is un-American. Resentment at others' success is un-American.

A patriotic American acts as a capitalist and an individualist: he buys the best, wherever it may be found.

This series of broad, unrelated statements are all false:

In summary, I believe that this author is completely wrong in his beliefs and I question his motives in espousing such counter-productive nonsense. Because the author has a PHD and cites obscure references, there is a danger that the reader will assume that what he says is correct. But if the reader will critically read his essay, it will be apparent that his statements are unsupported. An American who cares about the welfare of his brothers and sisters and himself, when given a choice of products of equal quality, should buy that product made by his brothers or sisters.

Buy American!