Thursday, December 04, 2008

Why buy American

The Chinese melamine and lead paint on toys fiascoes bring to light why Americans should buy American-made products.

American-manufactured products face American regulations, and those regulators are agents of "We The People" so they are theoretically acting in consumers' best interest. In practice, this may not be completely true, but there is hope of regulatory reform through our own elected Congress. In contrast, a foreign regulator of a foreign manufacturer, especially of a product primarily for export to the United States, has no perogative to look out for the best interests of American consumers. Furthermore, Americans have no recourse to change the foreign regulator's behavior.

The second reason to buy American is you can sue the manufacturer in American court if the need arises. We have a functioning justice system, complete with a jury of our peers, and a history of judgments against manufacturers when they deserve it. We have laws for class-action lawsuits and punitive damages. The threat of lawsuits induces American manufacturers to be careful not to poison their consumers.

In contrast, you could sue a foreign manufacturer in American court, but even if you win, the foreign manufacturer may never pay and there is nothing you can do about it, consequently the foreign manufacturer has no incentive to engage in practices that avoid lawsuits. You could sue the foreign manufacturer in foreign court and face a myriad of problems, including that a jury of THEIR peers might in fact find the manufacturer's behavior acceptable.

Other reasons I've heard for buying American have been for patriotic and altruistic reasons: save American jobs, for example. These annoy me as a free marketeer, but more importantly, it's hard for consumers to internalize such reasons to actually induce them into buying American.

The two reasons I have outlined above are internalizable by the consumer. The designation "Made in USA" is a designation of safety, that the manufacturer was under the auspices of American regulators, and faces lawsuits in American court if their product is unsafe. Thus, as a mark of safety, the consumer may decide whether the "Made in USA" product is worth the extra cost compared to a similar foreign-made product. "Is your baby going to ingest or lick this?" may be a relevant reason for a consumer to prefer a safer product.

1 comment :

Matthew said...

I agree that safety, and legal recourse, are great reasons for Americans to intentionally buy "Made In USA" products, but I also think that voting with your dollars to help keep fellow Americans employed is a valid reason. I think that Americans can, and should, internalize this.

I work hard to promote American made products at