There has been a lot of consternation in the IKC this week about Made in the USA. For the last three years, I have been trying to write an thorough article on Made in the USA, but it always got off track. Instead of boring you with those details, I am going to cut to the heart of the matter—stating my position and justifying it.

Before I get there, let’s clear the ground a little on three issues: 1) the definition of Made in the USA; 2) the scale of the “problem”; and 3) why it might not be a good thing to have stuff Made in the USA.

Made in the USA is a legal term of art. There is a statute that defines what it means. It is not insignificant to earn the statutory Made in the USA label. Something is made when “all or virtually all” components are made in the US (see here for more). Assembling something in the US from foreign parts is not enough. Being mostly made in the USA is not enough. So this is a real thing with real standards (enforced by the Federal Trade Commission, noting that you cannot earn the label ahead of time—if you use it, you have to be able to withstand FTC scrutiny if there as question raised about the validity of its use). It is not just a marketing gimmick—there is a real, legal definition of Made in the USA.

Second, while consumer goods are being made overseas in greater numbers than 100 years ago, the majority of things people buy are (and probably will) remain Made in the USA. Roughly 10-11% of what people spend is on imported things (see here for more), which is much, much lower than most people think. We tend to think of Made in the USA when we talk about where our phones are made, but Americans still spend much more money on Made in the USA stuff. Here is why—most of our food and virtually all of our utilities (energy, water etc.) is made in the USA. These two things represent a large percentage of a person’s annual purchases (number of things purchased) and money spent (total dollars spent). When you toss in almost all of our services (doctors, construction, therapists, et al) there is no chance that overseas made stuff will overwhelm Made in the USA stuff. In consumer goods, like TVs, computers, cellphones, and the like, of course, a large percentage of stuff is made overseas, but these things do not represent a majority of what we buy.

Finally, there are good system-scale economic reasons to have things made overseas. If you can make Boeings or pocket knives, the logic of capitalism dictates you should make the vastly more profitable Boeings. Capitalism doesn’t give profit-motivated companies the ability to do both. If you have the means, you should always make that which generates more profit. So the fact that lots of knives are made overseas is not necessarily a bad thing on a macroeconomics level—the highly skilled and well-resourced workers of the US are making things significantly more profitable than folding knives and that is good for the economic on a large scale even if folks like us prefer USA made knives and some people are put out of work because not all companies can make Boeings.

So the Made in the USA debate is pretty complicated from a legal, microeconomic, and macroeconomic level. With that stuff out of the way here is my position:

First, Made in the USA (using the legal term of art) items will receive a positive bump because of that. Note that this excludes overseas made items sold by domestic companies and vague baloney like “Assembled in the USA.” Second, items not not be penalized for being made overseas. Finally, I am willing to pay more, roughly double, for items to be Made in the USA.

Here is why this is my position.

I am a gear enthusiast. I do not NEED more than one knife and I do not need a thousand dollar blade. I buy nice gear because I like it. As such, I am okay paying for stuff to be made here. While on a macroeconomic level it makes no sense to make knives, when you harness the gathering power of the Internet, you can make high end gear in the US and make a profit (see e.g. TRM).

I am also a firm believer in supporting your community. Buying American compels manufacturers to make things here and give people that live here jobs. To that end, buying American is like investing in your neighbors. If my purchase, collected with the purchase of others, incentivizes stuff being made here, I am happy to do it, even if it does mean I pay more for stuff.

I am also in favor of buying American because it disincentivizes low pay elsewhere. Stuff made overseas isn’t cheaper because the raw materials cost less. Stuff made overseas is less expensive because people get paid less there, its that simple. I am happy to pay more to help move the world towards a living wage instead of a race to the bottom where the people that make our consumer goods make them because they are forced to work for exploitative wages.

One last point—transparency is key. I don’t care if something is made overseas, as I stated above, but companies should disclose that. I am not a fan of having to guess as the country of origin—just tell us (similarly, if you are using an OEM, just tell us who it is). The “surgical steel” rule applies—if no country of origin is listed, then you should assume it is not the US. That said, incumbent upon the makers and sellers of products to disclose the country of origin. Better to over disclose than under disclose.

I have condensed years of research into what I hope is a clear, well-reasoned opinion. It has guided my reviews for years and will for years to come. Of course, like any thoughtful person, I am one good argument away from changing my mind. If you want make it in the comments.