Illusions of Market Capitalism

2011-09-03

Global commerce has been a contentious issue. One one side people complain that we undermine domestic interest by importing products from elsewhere that could be or were once made locally with local materials. On the other side, people argue that importing products is the only practical ("economic") option when imported products cost less money. Some who believe in this "economic" argument might do so regretfully, while others exclaim that such importation is a sign of the "free-market" doing its magic. All of these positions make the same assumption (an assumption that limits the possibility of an alternative): imported products are cheaper because they come at a lower monetary cost. But lets forget about that mysterious thing called money for a moment, and think about the problem from a different angle.

Whether produced domestically or on the other side of the world, regardless of the socio-economic situation of the laborers used for production, and regardless of the value of one currency relative to another, a product likely requires roughly the same amount of technical training and expertise, time and exertion of labor, tools and machinery, land use, raw materials, and energy. Thus, even if the monetary cost is different, the tangible cost of producing many products is the same regardless of where they are produced.

When we take logistical costs into account, such as the tangible cost in fuel, machinery, and time and exertion of labor required for shipping a product long distances, the tangible cost of imported products might significantly exceeds that of domestically produced products. Perishable or delicate product such as food also lose tangible value due to significant degradation of quality (ripeness, taste, texture, nutrition, etc) and from losses of product (due to rot, damage, etc) that occur during long transport.

Further, lower monetary costs of foreign-produced goods make repairing or upgrading products unattractive. Since many things are no longer produced locally, we have lost much of the know-how needed to repair or products. Instead we just buy more foreign-made replacements. This of course leads to further unnecessary waste of energy, materials, and labor, and increase environmental and logistical problems such as waste disposal.

Critics might point out that monetarily cheaper imports do make tangible economic sense because exploited or poorer workers consume fewer tangible resources, offsetting any other tangible costs. But I think this should lead us to a different conclusion than those critics intend. If we cut back on our over-consumption and waste of goods, then we will have less trouble paying a fair price for labor and materials, and so domestic and foreign producers can compete not over price undercutting and labor exploitation, but over quality of product.