My former colleague Dan Griswold has a typically lucid article over at The American on iPods and the trade deficit:
As I was admiring the cool design and user-friendly functions on my boys’ new Nanos, I noticed an inscription on the back: “Designed by Apple in California. Assembled in China.” That’s a more clever label–and a more accurate depiction of economic trends–than the “Made in China” we see stamped on so many imported shirts, shoes, toys, and consumer electronics.
To those obsessed with the trade balance as a zero-sum scorecard, another imported, $200 Nano merely adds to our growing bilateral trade deficit with China and knocks a few more Americans out of jobs. Wouldn’t we be better off, they ask, if the whole thing were made and assembled at home by American workers?
The answer is a definite no.
As with other high-tech devices, iPods are assembled in China, but the real guts of the device–the brand name, the design, the engineering, the most sophisticated components–come from the United States and other countries outside of China. Like trade in general, importing iPods from China creates a win-win scenario for people in both countries. Assembling the devices is relatively high-paying work in China, so the Chinese workers and their economy do benefit to some extent. But Americans benefit even more from the deal–even, in the long run, the tattooed and pierced erstwhile clerks from Tower.
Quite so. “The trade deficit” is little more than an accounting abstraction. It could be symptomatic of problems with the American economy, such as a large budget deficit or anemic growth in our export industries. But the fact that American consumers are getting a lot of affordable goods overseas isn’t inherently troubling–especially when a substantial amount of the value in those “imports” was actually produced by American workers.
The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.
Comments on this entry are closed.