Olympics

Myths We Live By

It's OK that China made our Olympics uniforms. We designed the planes that flew them to the games.

|

The Olympics have gone smoothly despite—gasp!—America's team wearing clothing made in China at the opening ceremony.

"I'm so upset," said Senate Majority Leader Harry Reid. "Take all the uniforms, put them in a big pile, and burn them….We have people in the textile industry who are desperate for jobs."

Here, Reid demonstrates economic cluelessness. It seems logical that Americans lose if American clothing is made overseas. But that's nonsense. First, it's no surprise the uniforms were made in China. Most clothing is. That's fine. It saves money. We invest the savings in other things, like the machines that Chinese factories buy and the trucks that ship the Olympic uniforms.

The Cato Institute's Daniel Ikenson's adds: "We design clothing here. We brand clothing here. We market and retail clothing….Chinese athletes arrived in London by U.S.-made aircraft, trained on U.S.-designed and -engineered equipment, wear U.S.-designed and -engineered footwear, having perfected their skills using U.S.-created technology." That's free trade. Trade makes us richer.

While making the clothes in America would employ some Americans, the excess cost would mean that the Olympic committee had less to spend on other products—many of which are made in America.

Losing jobs like cutting, sewing and working on a loom is a sign of progress because working in factories is unpleasant. It's good for most Americans when factory jobs are replaced by engineering and design jobs. Art Carden, an economist from Samford University's Brock School of Business, explained that "one could argue that the American uniforms were not manufactured in China, but grown in the soybean field in Iowa. We export soybeans to China. Because we're incredibly productive in the soybean market, we get more uniforms at lower prices (and) the Chinese get more soybeans at lower prices….Everybody wins."

Contrary to protectionists like Sen. Reid, if we insisted that everything be made in America, we'd be poor.

There is so much that we think we know—that is not so.

We're told that "overpopulation" is why countries are poor. But that's nonsense, too.

"The problem is not that there are too many people," Carden said. "The problem is that for the most part they don't have free markets."

Right. They have bad governments, kleptocracies that steal people's resources.

The data make that obvious. Poverty in Nigeria and Pakistan is often blamed on "overpopulation." Nigeria has 174 people per square mile! Pakistan 225! But so what? Wealthy Holland has 483 people per square mile. Hong Kong, 6,783. Singapore, 7,252. These are among the richest places in the world. They also have clean environments. When there is the rule of law and economic freedom, more people means more inventions, the cross-pollination of ideas—and that creates better lives.

Another myth is that we're running out of fuel. In 1977, President Jimmy Carter said gas and oil would be gone in the next decade. Others said by 2000 or 2010.

It didn't happen because as oil and gas get expensive, people search for substitutes. When they are free to profit by doing that, they invent new ways to dig deeper, suck more oil out of the same wells, etc. America now has stores of much more oil and gas than when Carter was president.

There are so many myths. I wrote my new book when I realized that the most dangerous myth is that solutions to our problems will most likely come from government. It's intuitive to think that the wise people in Washington know more than we do. Therefore, they should plan our lives. But the opposite is true.

People freed to pursue their own interests are more likely to solve problems. Government fails, but individuals succeed. Individuals would create prosperity if politicians and bureaucrats got out of the way.

It is time we saw through the big government scam.

NEXT: Xenophobes Embrace Charity

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. I call Vice-President!

  2. Obama will go down as the president who single handedly saved America from its own spending problems and debt by making it so obvious that spending cuts need to be done and that government has grown too much. He has made it obvious and the voting public has been energized. He is this generation’s James Buchanan.

  3. Fair enough, but I’d like to hear your thoughts on how to compete against companies in a nation where the government is heavily subsidizing manufacturing. Double bonus if you can tackle the fact that China has expressly made learning how to create, engineer and manufacture everything in China. They do not really want to be a trade “partner”.

    1. How does China compete in agriculture when the United States heavily subsidies that domestic industry? The answer to this question is the same as the answer to your manufacturing question.

      As to China’s desire to create, engineer, and manufacture everything there…it’s absurd. First off, these are conflicting goals. If China wishes to educate a ton of engineers and scientists, it pushes a ton of people into prosperity. Which pushes them away from manufacturing or pushes people in manufacturing to demand higher wages. Which makes China’s manufacturing costs higher and cuts into their competitive advantage.

      Second, China can decide not to trade all they want. In doing so, they’ll find critical parts of their industrial capacity sorely lacking. Want to do medical technology or microchip production? You’ll need the helium, of which the US controls 95% of the world’s supply. Textiles? There are few nations better at growing plants than the US.

  4. Okay, reason, you win. Team Stossel Live Blog is going on indefinite hiatus.

  5. ity’s Brook School of Business, explained that “one could argue that the American uniforms were not manufactured in China, http://www.maillotfr.com/maill…..22_26.html but grown in the soybean field in Iowa. We export soybeans to China. Because we’re incredibly productive in the soybean market, we get more uniforms at lower prices (and) the Chinese get more soybeans at lower prices….Everybody wins.”

  6. While making the clothes in America would employ some Americans, the excess cost would mean that the Olympic committee had less to spend on other products?many of which are made in America.

  7. Let’s not forget that Olympic competition was itself made in Greece. (Also invented there: setting your country on fire.)

  8. Ehh.. you were doing real good up to the “big gov’t scam” thing. The persistence of these myths is more reflective of a society where many members have yet to adjust to our new reality, than a gov’t plot – a downright silly assertion.

    Designing and engineering are great if you have the skill chops to do them. If you came up on a factory floor, then found yourself suddenly and completely cut out of the economy – laid off with no hope for re-employment — you might have a different view.

  9. I’ll always have a soft spot for Mr.Stossel since he introduced me to Classical Liberalism i.e. Libertarianism.

  10. The history of the textile industry, in so far as I know it (and if I’m wrong, please tell me) seems to be that such jobs move to locations that have cheap labor, the labor takes the jobs and improves its life and then prices itself out of the market. Then the industry moves to another location with cheap labor, and the cycle starts again.

    Case in point; when the whaling moguls say that their source of wealth was running down, the ones in New Bedford Mass. built textile mills. The mills had a good run, but the wages gradually rose, and the industry moved to the Deep South. Where, once again, the labor gradually priced itself out of the market and the industry moved overseas.

    In China, the government is already having to deal with raised expectations. They can hold back the tide for a while (that being what totalitarian governments do) but eventually the Chinese laborers will move on economically. And China will, in my amateur opinion, suffer from a generational shake-up that will make our experiences in the late 1960’s look like a squabble at a Sunday School picnic.

    I keep hoping that the 21st century will see the pestholes of the world get as rich as we are. There is no good reason why they can’t, other than pigheaded meddling by people who think they know better.

  11. [P]igheaded meddling by people who think they know better.
    Well isn’t that just (most) government in a nutshell.

  12. I enjoy most of your articles,the articles are so nice for readers.

Please to post comments

Comments are closed.