The battleground is the Smithsonian Museums in Washington D.C where the gift shops have been selling patriotic trinkets that are made in China. A US senator has decided that this is unacceptable and called the museum’s board of directors to account for their actions.
One can easily see the Senator’s motivations in attempting to provide US manufacturing jobs, and / or scoring political points, as the average “man on the street” thinks that they should be made in the USA. But the economist does a good job in explaining the possible costs of such a move, including a useful discussion on comparative advantage.
The video clip can be seen here.
Her reference to creating jobs “using spoons” is based on a Milton Friedman quote, which goes as follows…“At one of our dinners, Milton recalled traveling to an Asian country in the 1960s and visiting a worksite where a new canal was being built. He was shocked to see that, instead of modern tractors and earth movers, the workers had shovels. He asked why there were so few machines. The government bureaucrat explained: “You don’t understand. This is a jobs program.” To which Milton replied: “Oh, I thought you were trying to build a canal. If it’s jobs you want, then you should give these workers spoons, not shovels.” Original source for quote is here.
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