Knowing and Making

Michael Shuman at Curious Capitalist asks a bizarre question: Is the iPhone bad for the American economy? His careful analysis shows that the iPhone has a finely balanced effect on the US trade deficit. It makes a negative impact if the internal components exported from America are valued at their manufacturing cost, and the assembled iPhones coming back from China are valued at full price. But if you count the design and assembly expertise as a US export, the impact is positive. Fascinating. But completely irrelevant to the question he asks. To see this, simply ask if the iPhone is bad for the British economy? Or how about this: is copper bad for the British economy? Whether a product is made, mined, designed or assembled in a country is almost irrelevant to whether it's a good thing. Our lives are very much better with copper in them, even though there's a big trade deficit in copper for most countries outside of Chile. And for the same reason, of course  the iPhone...

Imagine you have saved up £550 and you're ordering a new iPhone. The supplier is short of stock, so you'll have to wait a while. It is going to be despatched by post in 30 days and will arrive with you the next day: a 31 day delay. Then, at the checkout screen, the site offers you an express delivery option. For an extra £20, they can deliver it by courier so you'll get it on the 30th day. Would you pay £20 to have it one day earlier? Now imagine you're ordering it from a different store and they have plenty of stock. It's going to be dispatched this afternoon and will arrive tomorrow. You see the £20 courier option: Is it worth £20 for courier delivery to get it in your hands in one hour? Alternatively, if you could travel to the shop and pick it up right now (which will take an hour or two out of your afternoon), would you do it? I haven't done the experiment, but I'd bet you a lot more people would say yes in the second scenario than the first. Equiva...