The Business Ethics Blog

One of the most amazing — and perhaps depressing — facts of current American politics is that the Occupy Wall Street folks and the American political right are apparently unified in their support for a “buy American” policy. The need to appease the political right is reportedly the entire reason for the “buy American” provision in Obama’s new jobs bill. The very same sentiment is embodied in the recent 99 Percent Declaration. (See Point #14: “End Outsourcing.”)

The “buy American” thing is just a special case of the more general plea we often hear to “support your local economy.” But maybe even less well-justified. And more cynical.

There are plenty of reasons to worry about the “buy American” slogan. For a start, it’s the slogan for the kind of protectionism that is generally understood to reduce economic efficiency (and hence to reduce human well-being). Bigger markets are generally better, and the right solution to the negative side-effects of globalization isn’t to build walls around your economy. Plus, protectionism tends to result in arms races, in which Country A erects trade barriers, to which Country B responds, and so on and so on. And in some cases, “buy American” (or “buy Canadian” or “buy UK” or whatever) is a thin disguise for xenophobia, and perhaps racism. As in, “Buy American rather than from…you know…foreigners.”

But the flip-side of the consumer-oriented question posed in the title of this entry is the question faced by businesses (and this is, after all, a blog about business ethics.) Should businesses play into the protectionism implied by the “Buy American” slogan? As I’ve pointed out before, one of the most general obligations businesses have is not to reduce the efficiency of markets, for it is that very market efficiency that provides the moral underpinning for their general pattern of aggressively competitive behaviour. So businesses generally have a responsibility not to play upon consumers’ lack of economic sophistication, or their xenophobia. So, on the lips of a captain of industry, “buy American” betrays either a lack of understanding, or a cynical willingness to damage the public good in order to turn a profit. What it betokens on the lips of politicians or protestors, I leave for others to speculate.