Donald Trump recently said:
Wouldn’t it be a great thing if the new leader of Apple said we’re going to start building plants in the United States.
That seems harmless, right? We have unemployment and could use a few more jobs here in the US.
Maybe the incentive’s not there…but when 100 percent of Apple’s products–or virtually 100 percent–are made outside of this country, it’s pretty sad.
Well, he agrees with President Obama:
Let’s stop rewarding business that ship jobs overseas, let’s reward companies that are investing and creating jobs right here in the United States of America.
They are both wrong.
And this is hardly sad. It is something to rejoice over.
Apple is making the lives of the poor better by offering them the opportunity to earn more money than they would otherwise. Apple is increasing the standard of living of the employees of Foxconn, the factory that makes Apple products. Apple is seeks out the people most willing to work for the most competitive price.
There are three auctions going on at all times in the economy.
- Employer vs Employer. If the employees of Foxconn are offered more money or better conditions by another company, they can choose to work there.
- Worker vs Worker. If an individual will work for lower wages than another, he is given the opportunity to produce.
- Consumer vs Consumer. If one consumer will pay more than another, he can purchase the product.
To say that it is sad that Apple chooses the lowest offer for a worker is to argue against capitalism and for protectionism. This will raise the costs of production. It will decrease the profits of Apple. It will hurt their long term viability because they will have less reserves for recruiting the best talent and R&D for innovation.
American’s will not work for the same price as the employees of Foxconn. “Gimme more.”
Why? Foxconn says, “I will do it.”
There is nothing sad about giving the world the opportunity, and opening up the bidding process beyond arbitrary geography.
This is true progress.