While now the second most expensive item a family purchases is a car (the first is a house), between 1870 and 1930 it was the piano. It was all down hill after that year until all that remains of the once great US piano industry is Steinway. And only the fabulously wealthy can now afford one of them. Most of the rest of the companies suffered increasing lost sales and went out of business. By 1960 more than twice as many pianos were being made in Japan as were still being produced in the US. Today the center of the world piano industry is in China.
But what would have happened in 1930 if FDR had initiated a bailout of the piano industry? And then took it over and nationalized it? Would that have prevented the Japanese from going into piano making and creating a thriving industry? It would still have been prosperous resulting from lots of sales to people who wanted to buy cheaper pianos than they could get elsewhere. USers would want them too because they would be cheaper.
Jeffrey Tucker in his article, "The End of the US Piano Industry" writes of such a scenario:
American pianos, because they would be state owned, would fall in quality, lower and lower to the point that they would become like a Soviet car in the 1960s. Of course you could set up tariff barriers. That would have forced American pianos on us. Except for one thing: demand would still have collapsed. The pianos still have to have a market. But let's say you find a workaround for that problem by requiring everyone to own a piano. You still can't make people play them and value them.
The question Tucker raises is one that is not being asked by very many (and likely none who are politicians) - "Is it really worth trillions in subsidies, vast tariffs, impositions all around, just to keep what you declare to be an essential industry alive?" The case of the pianos makes it clear that it is not essential.
Thank goodness that FDR didn't bother saving the US piano industry! As a result, Americans can get a huge range of instruments from all countries in the world at any price they are willing to pay.
Tucker makes good points in relating the history of the US piano industry to the US automotive industry, which the vast majority in federal government actually believe will be saved by passing legislation.
[Government] can subsidize and pay for uneconomic activities, and pay ever more every year. The government can also pay millions of people to make mud pies because mud pies are deemed to be an essential industry. You can do this, but at what cost and what would possibly be the point? Eventually, even the government will have to accord itself to the reality that economics reminds us of on a daily basis.
And of course what the government pays out it has first expropriated from citizens, residents and visitors. Government does not "make money", the meaning of which means to produce value.
Read entire article by Jeffrey Tucker, "The End of the US Piano Industry"
