Economy & Business

‘Made in America.’ So What?

Gibson guitars on display at the White House’s “Made in America” event. (Photo: Evan Walker/White House)
‘Buy American’ has little meaning in today’s world of globalized supply chains.

“Made in America Week” at the White House has come and gone, amounting to . . . not much.

There was a terrific parade of American-made goods, some of them near to my heart: Stetson hats and Gibson guitars among them.

But the newly energized nationalists among us may not want to look too closely at those sentimental “All-American” claims.

Gibson makes some of the finest electric guitars in the world, along with some very fine acoustic guitars, mandolins, and much more. It was founded by a child of immigrants and currently is owned by an immigrant, Henry Juszkiewicz, whose parents moved from Poland to Argentina before he found his way to the United States. For much of its history, Gibson was a Panamanian company, and while Gibson-branded guitars are indeed made in the United States, there is much more to Gibson Brands than American-made guitars: Chinese-made Baldwin pianos, Chinese- and Japanese-made Epiphone guitars, Boston-based Cakewalk Software, Malaysian-made Cerwin Vega audio components, a stake in Japanese electronics firm Onkyo, and much more. The U.S. Fish and Wildlife Service took an interest in Gibson’s wood imports from Madagascar a few years back, which came via a German intermediary. Which is to say, in its triumphs and in its troubles, Gibson is a truly global company.

Stetson hats currently are made under license in Texas, but the original John B. Stetson Company of Philadelphia was a global enterprise, too, over the years operating facilities everywhere from Germany to Brazil to New Zealand. In the 1990s, the iconic Western headgear was acquired by a conglomerate held by an all-American leveraged-buyout firm based in New York.

In some ways, it hardly makes any sense to label almost anything “Made in the U.S.A.,” or “Made in” any other place. Real life in the 21st-century economy is a great deal more complicated than anything that can be captured on a label. The Michigan-based watchmaker Shinola was informed by the Federal Trade Commission last year that it could no longer describe its watches as American-made. Shinola watches are American-made, but they are made in America by inserting Swiss-made watch movements into cases made in any number of places. Isn’t that Made in the U.S.A.? In a sense, sure, and also in a sense not. About 80 percent of what goes into a Toyota Camry sold in the United States is made in the United States, which is a lot more than in some “American” cars. About 70 percent of a 2011 Honda Civic was American-made, while only about 2 percent of a Chevy Aveo from the same year was of North American origin. (Weird thing: The country-of-origin breakdown often is given in U.S. and Canadian content — is Canada a foreign country or isn’t it?) Toyota gets a fair amount of mileage out of advertising that the trucks it sells in Texas are made in Texas, to heck with the other 49 states.

One of the great enduring stupidities of modern economic life is the belief that buying American is somehow beneficial to the United States as a whole. A related daft notion, very popular among our progressive friends horrified at the chauvinism of “Buy American” campaigns, is that buying local helps your local community and economy. This stuff has been studied and studied and studied, and the short version is that buy-American/buy-local efforts amount to approximately squat. It makes sense if you think about it: You can buy a bag of green beans from your local farmers’ cooperative and feel good about yourself, but that farmer is going to use the money to pay his bills, probably to a faraway financial company that holds his mortgage, a carmaker overseas, or a tractor-financing company abroad. He might buy his diesel from a local retailer, but that diesel very likely comes from crude oil drilled in some faraway place (from Canada to the Middle East) and refined in another faraway place. The components that went into those green beans — seeds, fertilizer, farming equipment — probably weren’t locally made. Money likes to move around.

Does “Buy American” create or protect American jobs? Almost certainly not. That’s because we all buy lots of different things, and paying more than you have to for an inferior General Motors product doesn’t stick it to Honda so much as it sticks it to . . . everybody else you might have bought something from with that money you spent making yourself feel patriotic about buying a car assembled in Michigan out of components from all over God’s green Earth.

Does ‘Buy American’ create or protect American jobs? Almost certainly not.

There is a word for making a national economy policy out of “buy local” or “buy national,” and that word is “autarky.” Autarky is what happens when a country tries to produce everything it uses and use everything it produces. There are a few countries organized around something like that principle, and they are desperately poor: North Korea is the leading example, though a little bit of autarkical policy helped to reduce Venezuela from one of the wealthiest countries in the Western Hemisphere to one of the poorest, a country so far up that infamous creek that it cannot even manage to produce toilet paper in sufficient quantities. Autarky and socialism tend to go hand-in-hand, for reasons that are pretty obvious: Both are attempts to put economic exchange and production under political discipline. The results of each are predictable and similar: misery.

I once had the pleasure of meeting a few of the master luthiers who craft Gibson guitars, and I can tell you that it isn’t sentimentality, dopey and half-digested nationalism, or pity that is keeping them in business. What keeps them in business is that they are among the best in the world at what they do. They have a great deal of which to be proud — they enrich the American scene and do not require our condescending protection. Likewise, a few years ago I asked some workers at the Mercedes-Benz factory in Stuttgart whether they were worried about their jobs being outsourced. They scoffed at the notion of some low-paid Third World clock-puncher taking their jobs. They know who the real competition is: robots, many of which are designed and made right here in the United States.

Americans make a great deal of the best stuff in the world. But how often do you hear the complaint: “When I go into Walmart, everything says ‘Made in China.’ Where’s the ‘Made in the U.S.A.’?” It is true that you will not find a great quantity of cheap T-shirts, flip-flops, or injection-molded plastic toys made in the United States. Those things are made overseas — often on industrial equipment made in the United States. Ordinary consumers see only consumer goods and have no appreciation for the size and scope of the American capital-goods industry. We import a lot of shoes and apparel, but we export a lot more industrial machinery — and twice as much transportation equipment. But those are big, general categories: We export a lot of industrial machinery, and we import a lot of it, too. Some of that imported machinery is used to make Gibson guitars, among other things. Part of the case for free trade is the fact that the gentlemen at Gibson know a great deal more about what kind of wood they need, and what kind of machinery they need, than the gentlemen in Washington do.

And there is almost nothing in this modern world that is as truly American-made as the principles and practices that make truly global production possible. It is a system of incalculable complexity and vast subtlety, as great a work of genuine and humane greatness as anything the hands of men have produced.

So, about those hats and guitars:

Made in the U.S.A.?

It’s complicated.


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Kevin D. Williamson is National Reviews roving correspondent.

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