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Globalization: Do You Believe?

I received a funny email the other day, following one of my economic screeds, asking whether I really "believed" in globalization. I'll admit some bemusement towards people who do not see the benefits of having goods produced in the most efficient manner. But that's a different question, isn't it?

I admit to being an unabashed capitalist. I believe that empirical evidence shows the overwhelming failure of job protection, government subsidy, and make-work schemes to do anything but destroy jobs. Again, a different question. Do I believe in globalization?

To answer, I strolled around my house, noting where things were made. You'll note that many of these things were produced in foreign countries by (or under the name of ) American companies. I gave myself one hour, so as not to descend into the absurd (looking for components of products, etc.) As we approach this holiday season, it might be a good time to recognize that our planet is becoming a smaller place. Believe in globalism? How could I not?

So, what's in the House?
Or, more directly, where was it made? Here's just a sample (where companies publicly traded in the United States are involved, I've included their names). Prepare to scroll; in fact, that the list is so unwieldy helps make its point.

  • Afghanistan -- (Nasdaq: OSTK  )
  • Argentina -- Gap Stores (NYSE: GPS  )
  • Australia -- News Corporation (NYSE: NWS  )
  • Bahrain -- Gap Stores
  • Bangladesh -- Nike (NYSE: NKE  ) , Reebok (NYSE: RBK  )
  • Belize
  • Brunei -- Gap Stores
  • Burma -- Gap Stores
  • Canada -- 3M (NYSE: MMM  ) , Kimberly Clark (NYSE: KMB  ) , Johnson & Johnson (NYSE: JNJ  ) , Toronto Dominion Bank (NYSE: TD  )
  • China -- Disney (NYSE: DIS  ) , Texas Instruments (NYSE: TXN  ) , Sony (NYSE: SNE  ) , National Presto (NYSE: NPK  )
  • Colombia -- Disney, Hartmarx (NYSE: HMX  )
  • Costa Rica -- Gap Stores
  • Cuba
  • Ecuador -- Del Monte (NYSE: DLM  )
  • Egypt
  • El Salvador
  • England -- Cadbury Schweppes (NYSE: CSG  )
  • Ethiopia -- Starbucks (Nasdaq: SBUX  )
  • Finland -- Nokia (NYSE: NOK  )
  • France -- Schlumberger (NYSE: SLB  ) , Groupe Danone (NYSE: DA  )
  • Germany
  • Greece
  • Guatemala
  • Haiti -- Sara Lee (NYSE: SLE  )
  • Hong Kong -- Texas Instruments, Nam Tai Electronics (NYSE: NTE  )
  • Hungary
  • India -- Gap Stores
  • Indonesia -- Gap Stores, Kenneth Cole (NYSE: KCP  ) , Jones New York (NYSE: JNY  )
  • Ireland -- Diageo (NYSE: DEO  )
  • Israel -- Gap Stores
  • Italy -- Natuzzi (NYSE: NTZ  ) , Gucci (NYSE: GUC  ) , Neiman Marcus (NYSE: NMGa  )
  • Jamaica
  • Japan -- Sony, NEC (Nasdaq: NIPNY  ) , Bombay Company (NYSE: BBA  )
  • Jordan
  • Korea -- Gap Stores
  • Kuwait
  • Lesotho -- Gap Stores
  • Macau - Ralph Lauren (NYSE: RL  )
  • Madagascar -- Gap Stores
  • Mexico -- 3M, Sony, Scientific Atlanta (NYSE: SFA  ) , Diageo
  • Nepal -- Gap Stores
  • Pakistan -- Liz Claiborne (NYSE: LIZ  )
  • Papua New Guinea -- Starbucks
  • Peru --
  • Philippines -- General Electric (NYSE: GE  )
  • Qatar
  • Russia
  • Saudi Arabia -- Coca Cola Company (NYSE: KO  )
  • St. Lucia -- Disney
  • Scotland -- Brown-Forman (NYSE: BF.b  )
  • Senegal
  • Singapore -- Hewlett-Packard (NYSE: HPQ  )
  • Sri Lanka -- Gap Stores
  • Sweden -- Ford (NYSE: F  ) , Hennes & Mauritz (Pink Sheets: HMRZF.PK)
  • Switzerland -- Novartis (NYSE: NVS  )
  • Taiwan
  • Turkey -- Gap Stores
  • Ukraine -- Gap Stores
  • Vietnam -- Nike

Mind you, this list was generated in an hour of rummaging around. I'm sure that pulling apart the furniture or looking under the hood of the cars, or divining the origin of various natural resources would have yielded plenty more (is that Nigerian crude in my car?). The point of this exercise would be the same: Global trade is responsible for many of the products we each use every day.

I'm also a little staggered by the amount of clothing my family has from Gap, Banana Republic, and Old Navy. Of course, anyone who has young children can tell you just what a godsend Baby Gap can be. And there's a reason that Baby Gap can offer so many products at reasonable prices. Gap Stores understand what Adam Smith understood, and what politicians have yet to grasp: people naturally gravitate toward buying the same goods at the lowest price available.

If our government demanded that Gap produce most of its goods here in the U.S., it wouldn't mean any increase in U.S. jobs, because those items of clothing would go up in price, meaning that people would consume less of them. This would mean that there would be less need for the raw materials that go into them, and it would also mean that the additional money required to buy each piece of Gap clothing would necessarily be money that would not be spent buying something else in its place.

A more pressing concern
I am less concerned with where the goods are coming from than that this holiday season people are buying them with money that they do not have. The biggest issue facing us isn't whether Tommy Hilfiger (NYSE: TOM  ) produces in South Carolina or South Korea, it's whether American consumers, already up to their eyeballs in debt, should be unsheathing those credit cards at all.

But with continued improvements in transportation, communications, and infrastructure, it would seem that the efficiencies that are available to producers are greater than ever before. In the question of whether I believe in globalization or not, I plea "no contest."

Fool on!
Bill Mann, TMFOtter on the Fool Discussion Boards

Bill Mann didn't know that they made anything in Qatar besides oil and gas, and yet, voila, in his house -- paints. Bill owns shares in Hennes & Mauritz and Disney.

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