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Sep 10, 2012

Sending Jobs to Other States

Fred:  We should stop importing cheap foreign goods and support US jobs instead.
Mike:  May I ask, what work do you do?
Fred:  I make donuts.
Mike:  Well, I saved $100 last year buying Korean tools.
Fred:  That must stop.
Mike:  If so, I'll have to buy $100 less donuts.

There is much concern about "sending jobs overseas". Some people call for consumers and businesses to "Buy American" even if it costs more. They claim that much of US unemployment is caused by selfish businessmen who buy foreign goods or invest in foreign factories merely to increase their profits. They say that people should be more important than profits.

Maybe these claims don't go far enough.

A Glorious Plan For Jobssarcasm

This plan will benefit all US workers. Each state must stop outsourcing its demand for great products to the two states who happen to be the best producers.

Identify the two states that are the most efficient producers of each product, and ban that product from being shipped to the other states.

If a ban is too sudden, then impose increasing taxes on the production in those two states. The Constitution may currently prevent this ban, but that doesn't make this a bad idea, and we should change the Consititution to benefit us all.

This will redirect demand in all of the other states. Local production will no longer be savagely depressed by the competition of the former top two states. Local producers outside those two states will agree with this. Jobs will be created locally to produce these goods, possibly at lower efficiency. No caring person thinks cold efficiency is more important than warm, local jobs.

Yes, there will be some gnashing of teeth from the former cold hearted, most efficient producers. And, there will be some realignment of resources and prices. Prices for goods might go up.

Some former top dogs will need to be dissuaded from manufacturing for a black market. They may attempt to retain jobs for themselves by selfishly selling goods at a lower price, to the harm of all other producers. They should be punished for predatory under-pricing.

Workers could take pride in producing goods less efficiently at higher prices and lower wages, in good local jobs. They would support their counterparts taking the same pride in their work across America.

Apologists for business will argue that the goods from the top two states were cheaper due to hard-won experience and previously high volume. They will argue that cheaper goods allowed consumers to spend the difference on other products, many from the other 48 states. That seems to make sense, but I wouldn't bet on it.

In later rounds, we can continue to identify the top producers and limit them also. The increased jobs and wealth will support a grand solution:  No trading between the states. Each state will have local jobs producing fine local products. No more job-stealing by the other states, and certainly not by foreign countries.

If this doesn't produce enough jobs, then we can limit trading between all cities and incorporated areas. Our motto: "Good, local jobs. No scab competition from other states or cities".

We can no longer allow efficiency to sap the strength and eliminate the jobs of this great nation. Maybe we can have special rules for California and Florida strawberries, but that is it.


The above is sarcasm. In reality, most people understand that producers in any state should be allowed and enouraged to sell their great products to consumers everywhere. Most people do not think it is unfair for companies in Ohio to compete with companies in Tennesee, even if this means (say) fewer jobs in Tennessee making a particular product.

Products don't care about political boundaries. A product purchased from a company in China, or a job outsourced to China, is no worse than purchasing a product from Ohio or moving a job to Ohio. The Chinese or the Ohioans use the dollars they earn to spend them on something else in the US economy. The pattern of production and employment changes, but not spending demand. Overall production goes up and prices come down.

Efficiency Is Prosperity

Efficiency produces prosperity. Whatever you personally produce, whatever is your income, you are better off buying things at lower prices, because you can buy more things which benefit your life. Lower prices result from the invention and work of companies that produce a greater volume of products using fewer people.

Necessarily, other companies and other people will not be producing those products. Either they won't try to produce, or they will reluctantly lose customers and the jobs associated with those products.

Your charitable instinct may suggest that people should not lose their jobs. But, that would require telling you, and everyone else, that you cannot ever do anything better. If you do it better, then someone loses the customer that you gain. If you can never do it better, then you can never increase your income.

In reality, increased efficiency producing one product sends a signal to other people, to work on producing other products. Eventually, that signal of lower prices requires them to work on something else. At the same time, consumers save money which they can spend on those other products. Thousands of such rearrangements result in more and better goods available at lower cost. Everyone becomes more efficient and is able to buy more things.

The Problem Of Regulation

The problem for the United States is not that the Chinese and others are supplying inexpensive goods to us. The problem is that we are preventing business development in the US that would employ people to produce many things that we would like. Limiting trade does not create jobs overall or increase prosperity. We need to free ourselves from suffocating government restrictions on being productive.

Selling us what we won't make ourselves

Why was the IPad manufactured in Asia?

Dallas Weaver:  [edited]  You cannot manufacture products in the US for rapidly changing markets. Our malevolent government permit system and legal parasites slow projects far beyond the point of responding to changed market opportunities.