Here’s a letter to a first-time correspondent:
Thanks for your e-mail and for your kind words about the Sears’ catalog series at my blog.
I don’t share your concern that most of the consumer goods that Americans today purchase are not “Made in America.” Such labels today are virtually meaningless. They indicate only the country in which the final assembly of each good occurred. Because of the enormous complexity of the globe-spanning supply web, even the most mundane of goods today contains inputs – physical and intellectual – from across the globe, including the United States.
Although most of the consumer goods we buy sport labels such as “Made in China” or “Made in Turkey,” these labels would be far more accurate if they instead read “Final Assembly Occurred in China” or “Final Assembly Occurred in Turkey.” Equally accurate would be simply “Made on Earth.”
“Made in …” labels mask the fact that very often today the bulk of inputs contained in any good are produced in countries, including the U.S., other than the country whose name appears in the “Made in …” label.
Although made several years ago, this video narrated by Reason’s Nick Gillespie explains that “The Jeep Patriot, despite its name is actually less American than some Toyota products.”
Also note that the inflation-adjusted value of American manufacturing output in February 2020, just before Covid-19 struck, was only two percent below the all-time high that it hit in December 2007, at the start of the Great Recession. As for American industrial capacity, on the eve of Covid it was at an all-time high.
By the way, above I use the term “supply web” purposefully. Contrary to common parlance, there are no “supply chains.” Nearly every kind of input contained in nearly every good produced in modern economies is used also in the production of dozens, hundreds, or even thousands of different kinds of goods and services.
In follow-up e-mails I’ll do my best to address your other concerns.
Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030
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