Monday, October 15, 2007

Chinese Junk

The lovely and longsuffering spouse purchased a small appliance last week--and then, thinking of Christmas, purchased two more for certain offspring.

Of course, there was also the matter of several hundred pounds of zucchini at hand--which will be baked into 10,000 muffins in the next few weeks.

So she assembles one of the items and proceeds to try it out.

It doesn't work.

OK. Try three more sockets. Wiggle the appliance. Waggle the attachments.

No go.

Call the Husband (this is AFTER invoking the assistance of God and several Saints, as hubby is a reliable curmudgeon with ever-ready quips....)

Husband fiddles, twiggers, and waggles.

No go.

Husband looks for the 'dead-man' switch, finds it, depresses, and wallah!!! the appliance works.

Hmmmmm.

Re-assemble. No go. Attempt alternative re-assemblies to trigger dead-man switch. No go, no go, no go.

Call the brand-name "warranty" office located in WEST BEND, WI. Be placed on hold for 10 minutes (think there are other calls about this????)

Screw "on-hold."

The SOHO appliances will be returned. All THREE are identically defective, by the way.

Tell me again about how "less expensive" is GOOD for America, you FreeTraitors!
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9 comments:

PaulNoonan said...

Are you serious about this question?

Tell me again about how "less expensive" is GOOD for America, you FreeTraitors!

No problem. Just read this:

http://en.wikipedia.org/wiki/Comparative_advantage

That's why "less expensive" is good for America.

10/15/2007 2:06 PM
Dad29 said...

Paul:

If you're trying to make the economic case for 'comparative advantage,' then you should make the case INCLUDING the mobility of capital, which simply did not exist when that theory was written. Actual, real, live economists have conceded that the theory cannot be applied in the age of electronic capital.

You might also consider such minor items as "The Defense Industry" and what it takes to support that...

2)Although it may not be obvious to you, the COST of buying, trying, and returning the Chinese Junk happens to be significant.

So, by the way, is the cost of disposing of Chinese Junk every 3-5 years, landfilling it, and replacing it.

10/15/2007 3:48 PM
Dad29 said...

For ONE economist (Morgan Stanley's) on that topic, see:

http://dad29.blogspot.com/2006/07/free-trade-re-examined.html

His paper is linked. Highlights are in the post.

10/15/2007 4:21 PM
Kevin said...

The cost of buying and returning only seems significant because the small possibility of it not working actually obtained in this case. In the aggregate, we buy cheaper goods from China and they generally work. They may not work for as long as we'd like, but the cost savings makes that a moot point. We can just replace them. This is obviously the aggregate judgement of american consumers because we do in fact continue to buy Chinese.

You may disagree with other people's preferences as expressed by their choices, but that's not the same as comparative advantage not existing. If we could make the same (relatively crappy) device just as cheaply as the chinese, don't you think somebody would do that and then undercut their prices because shipping is unneccessary? But it doesn't happen.

10/15/2007 4:24 PM
Anonymous said...

I buy stuff for a living and we are starting to discover the very thing Dad is talking about. You have to look at total cost in the business case when selecting a supplier or manufacturing location. Sometimes the cheapest really isn't.

Look for a slowing of Chinese manufacturing as companies look for alternatives that don't have all the "baggage" including, in some cases, returning to North America

10/15/2007 10:49 PM
Unknown said...

Matt 15:10-20

10/16/2007 7:36 AM
PaulNoonan said...

There are several thousand problems with the post you provided, but the most obvious two are that it makes no case against comparative advantage being obsolete, (just stating that this is the case because of "the internet" does not make it so) and it's "evidence" is widely stated as the negative effects of free trade by those who support free trade. (Which is to say, all respected economists.) There are negatives to free trade. Some workers will be permanently displaced. Most economists recommend more job-training investment to combat this, but it is never denied. Free trade is better for everyone in the aggregate.

He also doesn't mention how free trade allocates capital more efficiently than it otherwise would be allowing society to focus on creating those things that society wants.

He also thinks that a trade deficit is an actual deficit, and gives a terrible explanation of China's "savings" v. our "savings," as if those are real and as if they matter.

As for the theory that increased capital mobility causes comparative advantage to fail, it doesn't even stand up to the most basic scrutiny. I'll quote George Mason University professor Don Boudreaux:

Like other real-world happenings, capital mobility does indeed change the specific pattern of comparative advantage. It does not, however, nullify the principle. If it does - if, as you assert, capital mobility makes comparative advantage "obsolete” - then the principle of comparative advantage would be useless for explaining the pattern of specialization and trade within national or local economies, where capital has long been mobile.

Of course, comparative advantage has always helped to determine the pattern of specialization and trade between Brooklyn and Queens no less than it has always helped to determine the pattern of trade between America and other countries. And this helpfulness does not diminish as capital mobility increases.

http://cafehayek.typepad.com/hayek/2007/10/on-comparative-.html

Follow the links inside for a more technical take-down.

10/16/2007 10:47 AM
Dad29 said...

First off, I do not hold that "cheap is best." Nor should anyone with an ounce of common sense--which economists are notorious for lacking, by the way.

In the case of China-made goods, we are dealing with 'labor arbitrage,' not "free-trade." The ruling families in PRC have decided to sell their subjects' labor for the benefit of those rulers.

They sell that labor cheaply (after all, it's no skin off THEIR collective noses) and have directly or indirectly approved horrific labor-conditions as part of the bargain.

This argument cannot be about "economics," for that is merely an excuse to justify the degradation of humanity practiced in Red China--no different from the degradations imposed by many US industrialists before the FLSA passed.

I realize that I've switched fields on you, but the serious discussion is about men, not about money--as it should be.

10/16/2007 2:09 PM
PaulNoonan said...

If China wishes to subsidize our consumption by propping up their currency, we benefit from that as well.

You can obtain the benefits of free trade even if you are the only one participating in free trade (for this I would cite Douglas Irwin's excellent "Free Trade Under Fire").

If you wish to inform political change on China, you will also benefit from consuming their subsidized goods. First and foremost, you will be inflicting a comparative loss on them, as that capital could have been used more efficiently elsewhere.

You also free up capital in this country for use in more important sector (defense, if you like).

Boycotting China personally is fine, it shows a voluntary preference and the psychic benefit that you derive from doing so will be offset by the higher price. That is a wealth-maximizing transaction. Government protectionism destroys wealth and stunts economic growth because it is not voluntary. Free actors can factor in the possible detrimental effects of supporting a communist economy vs. the gain that they stand to get from the transaction. The government is typically ill-equipped to make such decisions.

Lastly, you may recall that our blockade on consuming Soviet products did not ultimately bring them down. It was ultimately our ability to outspend them that did them in. Our own free market philosophy allowed for the unparalleled economic growth (almost double that of Western Europe) that made outspending the USSR possible.

Had we not enforced our end of the boycott, we probably would have grown even faster, while they likely would have continues to stagnate under the burden of a planned economy.

10/16/2007 2:26 PM

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