We had an interesting discussion last week in the office about trade.
The focus of our discussion (OK, to be honest it was likely only a degree or two away from a take no prisoners, last person standing death match) was whether action should be taken to level the playing field to allow U.S. companies to be more competitive against their overseas counterparts or whether barriers should be eliminated and whoever happens to be able to do it better and cheaper wins.
What prompted the discussion was the U.S. trade imbalance (which is often referred to as a deficit, although I personally think that balance is a much more appropriate descriptor) which stood at $55 billion in March.
One of the points we debated was that, in simple terms, all the figure shows is that $61 billion more worth of goods were imported into the United States than were exported. Not really surprising, I would argue, when you consider that as Americans we’ve taken the consumption-driven lifestyle to the extreme. And in our single-minded rush to be the first to have the newest and the best, little consideration is given by most folks to where a product or service originates.
I’m not saying this is bad. I think the beauty of capitalism is that everyone should be able to choose whatever goods or services they want based on their individual desires and means. I also think that whoever can deliver the best-quality goods and services at the best prices should be rewarded for their efforts.
If a Japanese or Mexican company can produce better widgets than we can in the United States and American businesses or consumers want those widgets, why should anyone complain? Unfair competition is usually the argument espoused at this point.
But is it really unfair that that lifestyles, attitudes and socio-economic factors vary from country to country? Would the people here complaining about fairness be willing to advance the idea that the creature comforts that most Americans take for granted in their daily lives be taken away to level the playing field and make the United States more competitive?
Free enterprise, free markets and free trade reward the entrepreneurial spirit. Leveling the playing field so to speak tells the successful entrepreneur that his or her efforts shouldn’t be rewarded if someone else feels slighted.
Another topic we batted around was offshoring. Of course, pointing out that many other countries have built production facilities and have offices in the United States (meaning that they too are offshoring) didn’t win many argument or style points.
Falling back on my belief in the beauty of capitalism, businesses are in business to make money. Those who find a way to provide their goods or services at a price point that consumers will accept while still earning a profit will succeed; those who don’t will fail.
I guess I just don’t understand how complaining about unfairness or imbalance gets anyone into the former as opposed to the latter.
Mike Boyd is editor of the Colorado Springs Business Journal. He can be reached at firstname.lastname@example.org or 634-3223, ext. 206.