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State and Local Government / Transparency

Buy Here, There, and Everywhere

By Sarah Brodsky on Feb 9, 2009

I enjoyed reading this column by David Nicklaus about the dangers of “Buy American” policies. He notes several drawbacks, such as the inevitable retaliation from trade partners.

I agree with Nicklaus’ argument. In addition to his points, I’d like to emphasize one aspect of trade policy that doesn’t get enough attention. Even if nobody were to mimic our policy and stop buying from us, restricting ourselves to spending locally would still be a bad idea. To understand why, imagine that the activists changed their minds and decided you should only buy in the state of Missouri. Or you could only buy in your city. Or only on your street.

That might sound good if you’re thinking about all the money that would stay on your particular street. You could eat fresh, homegrown tomatoes that your neighbor tended to in his backyard. But what about in the winter, when there aren’t any tomatoes growing on your street? And who would have time to grow tomatoes? After all, whenever someone on your street wanted a new computer, everyone would have to stop what they were doing and turn your neighborhood into a miniature computer factory.

Your money wouldn’t leave the street, but it would be less useful. You and your neighbors would spend every waking minute trying to produce an array of goods without proper training or equipment. Whenever you spent money, you would get one of those products made by amateurs.

The problem with “Buy American” is the same — only on a larger scale. It makes American currency less valuable and forces Americans to waste their time on things that other countries could do better.

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Sarah Brodsky

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