RUSS ROBERTS

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Mr. President, Don’t Toy With The Truth

From the St. Louis Post Dispatch

What if there really were a toy shop at the North Pole where elves made toys and gave them away?

And suppose you were dictator for a day. It’s up to you to decide whether to let those free toys into America. You’re a nice dictator, the kind that inhabits fiction and op-ed fantasies. So you ask your people how they feel about free toys. The American toy manufacturers tell you that it’s a ruse—part of a conspiracy to take away jobs from Americans. But most of the people you hear from are parents. They’re pretty pleased at the prospect of free toys. More smiles for the kids. And with less money spent on toys, there will be more money available to spend on clothes or vacations or books or piano lessons.

Is it a tough choice? Would you preserve the status quo and stop the world of free toys? Or would you bring it on and let people have the free toys with all the changes that would entail?

We’re actually getting close to a world of free toys. How? By letting China make them. China is the toy shop of the world.

I was thinking about free toys when President Bush came to St. Louis promoting his economic stimulus package. He came to JS Logistics, a warehousing and delivery operation, and posed in front of a bunch of boxes to talk about how small business would benefit from his economic proposals.

There was one problem. The boxes behind the President said “Made in China.” So in advance of the photo ops, White House aides replaced them with boxes saying “Made in USA.” (Bigger letters, too.) And they took the boxes that said “Made in China” and taped over the offending words and pushed them aside. In the New York Times photo, a few of the offending boxes could be seen in the foreground. The tape was clearly visible. So were the words “Build a Bear.”

The Build-a-Bear Workshop was started in St. Louis five years ago by Maxine Clarke, entrepreneur extraordinaire. Build-a-Bear now has over 100 stores. Over a hundred stores where kids can have the thrill of creating their own bear. You choose a skin, stuff it, drop in a heart, sew it up, and if you want, you can buy clothes for it.

You can get a basic bear for $10. You’d think for such a low price, it would be a little palm-sized creature. But it’s 14 inches high. And if you want to go crazy, you can have a two-foot high Panda, for a mere $25.

How can Build-a-Bear cover its costs at such low prices? Part of the answer is in those “Made in China” boxes. The skins come from China. If they had to be made here in the U.S., they’d cost a lot more.

It’s good for China that they’ve become the toy shop of the world. It’s allowed millions of Chinese to escape from rural poverty. And it’s good for America, too.

If Build-a-Bear bought its skins in America, there would be more jobs in America making bear skins. But there probably wouldn’t be 100 Build-a-Bear stores any more. And they’d have to let go of some of their 4000+ employees. Because if we didn’t buy things made in China, the bears would cost more and Build-a-Bear wouldn’t sell as many. That also means fewer jobs at JS Logistics and all the other American companies that Build-a-Bear works with. And the smaller number of customers who pay the higher prices at Build-a-Bear would have less money to spend on something else. So there’d be fewer jobs in other industries outside of toys. We’d be poorer as a nation if we tried to be self-sufficient and make everything for ourselves.

There’d be one more change to think about if we stopped buying things made in China. Fewer bears sold means fewer smiles from grandparents and their kids, fewer birthday parties. I wish President Bush had proudly stood in front of those “Made in China” boxes and explained how international trade creates jobs in America and makes the world a better place. He’d have saved some masking tape, some embarrassment and created a little more economic literacy.

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