Beach Volleyball Player Smarter Than Senators

http://www.futureofcapitalism.com/2012/07/olympic-uniforms-made-in-china

USA Today has coverage of congressmen outraged at the news that the U.S. Olympic Team's uniforms for the opening ceremonies of the Summer Games, designed by the American company Ralph Lauren, were manufactured in China:

Sen. Harry Reid, D-Nev., said the USOC should be "ashamed" that the blue blazers, white pants and berets that American athletes will wear are manufactured in China.... "They should take all the uniforms, put them in a big pile and burn them," Reid said.

..."You'd think they'd know better," House Speaker John Boehner, R-Ohio, said of the USOC.

Added Sen. Bernie Sanders [a socialist from Vermont]: "... At a time when millions of Americans are unemployed, there is no reason why U.S. Olympic uniforms are not being manufactured in the U.S."

Leave it to an Olympic athlete to understand the issue better than the politicians:

"It's a global world we live in," Olympic beach volleyball player Todd Rogers, a 2008 gold medalist, told USA TODAY Sports. "I would say there are much bigger issues to worry about than where Ralph Lauren has the opening ceremonies clothes made."

It's hard to imagine that Mr. Boehner, Mr. Reid, and Mr. Sanders all live their lives without wearing or using anything that is made in China. If they want to appropriate funds to help improve political freedom in China, including the right to organize free labor unions there, I'll be cheering them on. But even with political and labor freedom, wages in less-developed countries will still be lower than wages in First World countries like the United States, and in that case, having some low-skilled labor, like some apparel manufacturing, take place in the low-wage place while the higher-skilled, higher-cost labor, like design and marketing, takes place in America is just classic free-trade, comparative advantage stuff that benefits both nations involved in the trade. The lower cost of the Chinese-made uniforms means that Ralph Lauren has more money to spend advertising on American-made television programs, or that the Olympic Committee has more money to spend on fancy training centers for athletes.

Taking the protectionist approach just invites retaliation. If America just burns the Chinese-made uniforms, as Senator Reid suggests, what does he think the Chinese are going to do to all the KFC restaurants in China, or all the GM cars sold there, or iPhones, or all the many other American products and services and companies that sell to Chinese consumers?

This point about how global free trade benefits both sides is a basic concept taught to freshmen economic students. Adam Smith and David Ricardo understood this stuff more than 200 years ago. The beach volleyball player understands it. Why in the world can't the Republican speaker of the House, the Democratic majority leader of the Senate, and the socialist senator from Vermont understand it?

by Editor  |  Jul 13, 2012 at 9:40 am Related Topics:  China, Politics receive the latest by email: subscribe to the free futureofcapitalism.com mailing list