January 13, 2015: Dr. Richard M. Ebeling, renowned economist and author, spoke to the Club about the global economy and South Carolina’s presence in it. Dr. Ebeling is the BB&T Distinguished Professor of Ethics and Free Enterprise Leadership at The Citadel. Prior to joining The Citadel, along with other professorships he was Vice President for Academic Affairs at the Future of Freedom Foundation and is recognized as one of the leading members of the Austrian School of Economics.
Acknowledging the recent terrorist attacks in France, Dr. Ebeling noted how small and interconnected the world is. He suggested the media gives the impression that we are more susceptible to the threat of violence and conflict because of this connectivity, but stressed that this shouldn’t distract from the positive aspects of our linkages – namely, the global economy.
The economy has been transformed by innovations in transportation and communication. Much as we can travel from Charleston to Boston by plane in a few hours now, versus two weeks by stage coach in our past, the ability to meet the supply and demand of goods and services has evolved. In 2013, South Carolina exported $26 billion in goods to more than 200 countries, equaling 15% of the gross domestic product for the state. South Carolina is #1 in tire exports and #2 in automobile exports worldwide. Conversely, we imported $42 billion in goods.
In promoting this balance of import and export, Dr. Ebeling quoted economist Adam Smith, stating that it is the duty of every prudent person to not make something themselves if doing so would be more expensive than buying it elsewhere. He noted the argument that not buying American-made deprives domestic workers of opportunity, but countered this with the notion that the foreign worker needs income to be able to buy from somewhere else.
Dr. Ebeling proposed that while jobs are lost and businesses close as a result of shifts to non-US product, opportunity is gained in the long run as new, different consumer demands are met or efficiencies are gained in production. For example, US auto manufacturers began to rebound when they responded to efficiencies European and Asian countries were using in car production. These production changes then result in greater spending – paying $10 for something that used to cost $15 frees up $5 to spend that the consumer didn’t have before.
Finally, Dr. Ebeling predicted that if current economic trends continue, we have the potential to escape completely from poverty in all corners of the globe in this century.
— Tammy Coghill