Can you learn a lesson in economics by going on vacation?
On March 18 through 22, I spent some time at a convention on the North Shore, held for people who write about skiing, snowboarding and winter generally to talk about their work, swap stories, and ski and snowboard at Lutsen Mountains.
Over the next few weeks I’ll be offering up some observations I gleaned about economics and public policy from the conference.
Today, the hat.
Though winter is on its way out, I’m still wearing a knit cap I received in the conference goodie bag.
This beanie hat works just fine. It keeps my head warm, it (almost) fits, and it looks good.
The hat is produced by Wintergreen Northernwear, of Ely, Minnesota. And that latter fact, I guess, is supposed to make me feel good.
After all, the company web site says “We take great pride in being one of the largest private employers in a small remote town where jobs are scarce but garment-making talents and pride in workmanship are in abundance. We’re one of the last full-line outdoor clothing makers in the U.S.”
That may explain why the beanie on my head sells for $40.00, while REI sells what appears to be a comparable one for $30.00, and Amazon.com sells it for $20.00. This cheaper model is, in the words of REI, “imported,” which probably means that it was made in Bangladesh or the Dominican Republic, or some other country where wages are a fraction of those in Ely.
Is this bad? Some people say yes. But does it make any sense for Americans to try to outhustle people working on third-world wages? Buying Ely-made clothing may make you feel an authentic patriot, a supporter of the Iron Range, someone who strikes a blow for “community” and against the global economy and impersonal corporations.
But it also means that you’ve given up the opportunity to buy a hat AND spend the $10 or $20 on another business. We might say that you’ve paid a locality premium for a single product.
I suppose that’s fine. People pay for more than the utilitarian value of products all the time. (With baseball season coming up, think of those Minnesota Twins jerseys you’ll start seeing around the office.)
But it’s not without costs, which I’ll discuss next week.