Competition drives manufactures to always seek ways to supply products cheaper.
Customers are attracted to cheaper goods.
If you enact policies that change those two driving forces, you can affect the market.
How do they make a profit?
- Because we buy their products.
Why do we buy their products?
- Because they are cheaper than American made.
Why do we buy cheaper products? Are they not a much lesser quality?
- This question has multifaceted, complicated answers. Ask a group of different people and you'll probably get a variety of answers.
- Because our real wages have not kept up with the costs of living in America.
- Because the incentive to Buy American isn't as strong as the incentive to save money and buy more Chinese crap.
- Because corporate America maximizes their shareholder value over the value of offering employees a living wage.
- Because shareholders demand corporations make profits on their investments instead of demanding a corporation pays a wage that offers a quality of life for American employees.
.. and on and on..
However, the trend and market impact of buyers switching to the cheaper goods is nothing new -
.. it happens within our own borders: Once US industrialization took hold from the mid-1800s, local manufacturing of consumer goods like furniture, textiles, clothes, were out-competed by large manufactures and sellers like Sears, Westinghouse, GE, etc. because they were cheaper. Think of that example on a global scale. Instead of small manufacturing being replaced by a factory in a different state, it is a large US manufacturer being replaced by a giant plant in China. But first - remember what happened after WW2? Japan was rebuilt with US funding, and their manufacturers and engineers hit the ground running, exporting cheaper consumer goods to the Good ol' US of A. You can look up newspaper articles of Americans protesting the avalanche of Made in Japan products of the modern age; Radios, TVs', Stereos, and on to cars of course. Japan grew a large middle class with more affluence, more education, demanding higher wages, and their manufacturing sector moved up to upscale goods. That left the bottom of the consumer product market to a less-costly, lower-wage newcomer like China. China was a closed society under Mao, but have opened to the West for trade and revenue purposes.
As someone mentioned above, China is already seeing wage increases and an emerging middle-class, especially in the tech industries and cosmopolitan areas like Shanghai.
Must we fear China's economic and manufacturing power?
- I suggest the answer is yes and no. China has been a source of cheap knock-off goods for a very long time. There was a scandalous incident where the Chinese got hold of the latest fashion in silk dresses from a Spanish source. The Chinese made a load of cheap silk knock-offs and sold them to Spanish suppliers who no longer bought them from Spanish dress-makers. Spain had to enact import restrictions to save their domestic dress makers.
That happened in the late 1400s.
We should not fear the Chinese because China is STILL copying Western products and technologies, over 500 years later.
We should fear Chinese industrial espionage and theft of intellectual property.
Enough said for now, it's time to take my son to practice,
Be good and Buy American,
- Art
