Made In...

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Made In...

By: Kristyn Birrell
Posted on November 07, 2007 FREE Insights Topics:

If you had a label, where would you be made? I would be “Made in Valencia” or “Made in California,” or, if we took a broader perspective, I could have one of those little flag logos on my sticker and it would say “Made in the USA.” But would either of these identifiers tell the whole story? Yes, I was born in the U.S., as were my parents and grandparents, but what about more distant ancestors? My father’s grandparents were born in Scotland, Italy, England, and Germany, while my mother’s were born in Denmark and the United States. Look back only three generations, and already my label has gotten quite complicated—“Made in Scotland (1/8), Italy (1/8), England (1/8), Germany (1/8), Denmark (1/4), AND the USA (1/4).” My label is not an anomaly; most Americans have similarly complex histories. Given this mosaic of hominal origins, what should we make of products whose label proclaims simply “Made in Mexico” or “Made in China?”

In 1958, Leonard Read wrote a landmark piece entitled “I, Pencil,” in which he explained why there is not one single person in the world who can make a pencil. Economist Sudha Shenoy of the University of Newcastle extrapolates Read’s idea to the national level. Labels may claim that products are made in a single country, but Shenoy explains, “When you read a label which says ‘made in China,’ it is not made in China. It is made by the world economy, by the globe as a whole. ...It is impossible to make anything in one country.” Impossible may be debatable, but most products in today’s economy are in fact products of the world.

Let’s take your average work shirt as an example. The label says “Made in China,” so we conclude that a seamstress or seamster somewhere in China “made” the shirt. The raw cotton that the shirt is made from, however, came from Egypt, the buttons from India, and the dye from Germany. Investigating further we find out that the sewing machines were “Made in Korea,” and the machines to spin and weave the cotton were “Made in the UK.” This investigation could go on and on.

So what do “Made in ...” labels really mean? Only that final product assembly occurred in the named country. But just as our origin does not stop with the place we were born, a product’s origin should take into account its own full manufacturing history. With so many variables present, we shouldn’t be so quick to deride that “Made in China” t-shirt or teddy bear.

Congress and layman alike are expounding anti-trade and anti-China rhetoric. Chinese imports have skyrocketed over the past decade, from $38.8 billion in 1994 to more than $287 billion in 2006. Imports from China have been growing twice as fast as imports from the rest of the world, and in 2006 only Canada exported more goods to the U.S. Is the growing pervasiveness of “Made in China” imports necessarily a bad thing for U.S. consumers and businesses?

Imports from China, or any other country for that matter, rather than harm the U.S. economy, raise the living standards of American workers and provide low-cost inputs and capital for American industries. It is estimated that cheaper Chinese imports have saved American consumers more than $600 billion since 1997. U.S. manufacturers are the biggest importers in America, and access to these less expensive inputs allows them to remain profitable. And, contrary to popular belief, Chinese imports have not replaced domestic manufacturing production so much as they have been substitutes for higher priced goods from other Asian economies, like Japan, Hong Kong, Taiwan, and South Korea. For example, in the late 1980s, 60 percent of footwear imports came from Taiwan and South Korea and only 2 percent came from China; by 2001 60 percent came from China and only 2 percent from Taiwan and South Korea.

Of course, there is much, much more to the story of “Made in China” products, and imports in general—but that is exactly the point. Before passing over a good simply because its label proclaims it made somewhere else, ask yourself if there is any one possible label that could encapsulate you?

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