Sokath, his eyes opened

I recently moved back to Canada after living for four years in Seoul, Korea. Before Seoul, I spent four years in Seattle, WA. For the first time in eight years I'm a Canadian tax payer and soon to be a voter again. We're having a Federal election in October. I'm thinking of voting for the Natural Law Party as a kind of protest vote. The Liberal and Conservative parties look nothing like the versions I knew eight years ago.

One of the interesting things about living abroad is you begin to understand how much internal propaganda your own nation generates and how much you subconsciously swallow. It's not until you live abroad and see Americans or Koreans telling themselves nearly the same kinds of things Canadian tell each other, you realize this.

For example, Canadians generally don't believe they're flag wavers, not like those Americans. By way of evidence, Canadians point out you simply never see Canadian flags everywhere in Canada but when you go to the USA you see Old Glory every time you turn around. A friend in Seattle visited Canada for the first time and came back with a similar opinion of Canadians. That Canadian flag is everywhere. Why even McDonald's famous Golden Arches logo, the very symbol of American corporate prowess, is not safe. She noticed the Canadian Maple Leaf is incorporated into the McDonald's logo. This is clearly one of those cases where novelty jumps out at you. Your fire hydrants in your neighbourhood are pretty much unnoticed background to you, but if they all looked like R2D2 in another country you visited, you would be very aware of how many fire hydrants you saw on the streets of Trantor.

In Korea a friend was once in a grocery store, buying beef, and a Korean in line behind him started to inspect his grocery basket. Koreans, I've determined, treat all of Korea like one big family. So just as you have no problem getting all up in the business of a member of your actual family, Koreans generally have no problem getting up in the business of total strangers. Couple this with a curiosity of foreigners and, well, even a trip to the grocery store can be a novel experience. Right, so the Korean noticed my friend was buying Korean beef. The Korean made no secret of his approval of his purchase. He heartily congratulated my friend on making such a wise choice since Korean beef was simply the best beef in the world.

This comment struck my friend and I as somewhat cute and even a little provincial. Kind of like little boys who invariably think their mother is the most beautiful woman in the world (although they've never laid eyes on Kim So-yeon^{[1][2][3][4][5][6]}). I commented of course Alberta beef is the best beef in the world and my friend commented I was actually as wrong as the Korean since everyone knew Texas beef is the best beef in the world.

Of course when you hear this kind of drivel your right brain is screaming "game on" while your left brain is feverishly searching for logical argument to put down this silly claim Alberta beef is not the best beef in the world. Since you're a rational skeptic type, you have to ultimately admit you have no evidence whatsoever that Alberta beef is superior. In fact, you couldn't even define your goalpost for "better". The only reason Canadians think Alberta beef is better is because Albertan farmers tell us this. The only reason Americans think Grade A American beef is better is because Texas beef farmers tell them that. And naturally Korean beef farmers let word get out among Koreans that Korean beef is superior.

(If anyone can find a .org type web site offering objective, double blind tests of beef by nation, I would be much appreciative as I'd still like to prove my friend wrong.)

Aside from seeing a lot more of my own culture's propaganda (which is maybe too strong a word, and maybe "crap we just tell each other to make ourselves feel better over a cup of Tim Hortons coffee"), living in Korea opened my eyes to how much protectionism can suck for working stiffs like me. Korea has a lot of protectionism, namely levying large duties or taxes on imported goods, especially those that might compete with certain protected Korean industries like cars and electronics.

Korea, in case you haven't been keeping tabs over the last 10 years, has been wiping the floor with Japan in consumer electronics. Samsung and LG (formerly GoldStar) are just as much North American household names as Sony and Panasonic. However much I craved the nifty Samsung and LG products I saw in Korean department stores, I actually waited until I went back to Canada to buy Samsung and LG products. Because they were cheaper.

Jin jja?

Yeah. Although Samsung cameras and MP3 players are made in Korea, they were actually cheaper to buy in Canada (and even cheaper in the USA), despite being technically imported products. For example, a Korean-made MP3 player I bought in Canada for $100 was selling for $150 in Korea. (Amusingly, Koreans are beginning to discover their beloved Korean cars are being sold "down the river" to Americans for far less than their beloved Korean car companies are selling to the locals. And they're not really happy about it.)

So why are Koreans paying more for domestic electronics?

Quite simply, Korea highly protects its consumer electronics market and levies large duties on Japanese electronics. This makes Japanese electronics artificially more expensive in Korea. Of course in North America, Japan and Korea are on an even playing field and have to actually compete in terms of price. But back in Korea that Sony digital camera that sells for $100 in the USA is going to cost $150 in Korea with the additional duty levied by the Korean government. Now what is Samsung's pricing strategy in Korea? Is Samsung going to sell their Korean-made camera in Korea for $100, giving Koreans the deal of the century? Or are they going to sell their camera for $149.99, just slightly undercutting the Japanese competition? (Actually Koreans are rather partisan consumers and would happily pay more for Korean products.)

Right. Business is not a charity. They're going to charge whatever they can get away with.

So at the end of the day, protectionism hurts the Korean consumer, making consumer electronics unnecessarily more expensive. Now you might think "okay, well, a Samsung worker has a job." True. But that extra $50 the Korean consumer has to blow on a camera isn't going to go to a nice restaurant meal or a night at the movies. It's great if you're a worker at Samsung but sucks if you're a Korean who makes his living as a key grip on movie sets. Neh?

What's true in Korea is true here in North America. I like to think of protectionism this way: what if the government passed a law that said cars had to have $1,000 of unnecessary nickel from mines in Sudbury, Ontario. This would ensure job security for nickel miners but I don't think Canadian consumers would long stand for cars that are $1,000 more expensive. So I'm not sure why we might see it as a virtue our politicians are calling for domestic car and steel manufacturers to be protected. If GM with all its resources and acumen can't figure out how to compete against Korea, Japan, and soon China, I'm not sure consumers should be compelled to part with our hard earned dollars so they can figure it out.

And, to me, that's pretty much why protectionism is a bad thing for consumers.

-- Karl Mamer