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Does Auto Crisis Sound Familiar?

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By JEFFREY A. TUCKER

Special to the Tribune

Published: January 25, 2009

The highest-priced goods that people buy besides their houses are their cars, which leads people to believe that we can't possibly let the American car industry die. We couldn't possibly be a real country and a powerful nation without our beloved auto industry, which is essential to our national well-being. This is what spokesmen for the Big Three say.

What about the time before the car?

Look at the years between 1870 and 1930. As surprising as this may sound, the big-ticket item on every household budget besides the house was its piano. Everyone had to have one. Those who didn't have one aspired to have one.

It was a prize, an essential part of life, and they sold by the millions.

That, too, was new. Americans before 1850 mostly imported their pianos. American manufacturing was nearly nonexistent. After 1850, that changed dramatically with the flowering of what would become a gigantic U.S. piano industry. The Gilded Age saw a vast increase in its popularity.

By 1890, Americans fed half the world market for pianos. Between 1890 and 1928, sales ranged from 172,000 to 364,000 a year. It was a case of relentless and astounding growth.

They were used in classrooms everywhere in a time when music education was considered the foundation of a good education. They were the concert instruments in homes before recorded music and iPods. They were essential for entertainment. American buyers couldn't get enough, and private enterprise responded.

New York, Boston and Chicago were the homes of these companies. There was the great Chickering piano made by a company founded in 1823 that later led the world in beauty and sound. There was Hallet and Davis in Boston, J. and C. Fischer in New York, as well as Strich and Ziedler, Hazelton, William Knabe, Baldwin, Weber, Mason & Hamlin, Decker and Sons, Wurlizer, Steck, Kimball in Chicago, and, finally, Steinway.

The American piano industry was the greatest in the world, not because the Americans came up with new and great manufacturing techniques, though there were some innovations, but because the economic conditions made it most favorable to be manufactured here.

With the rise of this industry came a vast marketing apparatus.

Piano ads were everywhere, as a tour of old magazines shows. It was widely thought that spending money on a piano wasn't really spending. It was an investment. The money you paid would be embedded right there in this beautiful and useful item. You could sell it for more than you paid for it, and this was generally true. So people would make great sacrifices for these instruments.

With the growth of this manufacturing came an explosion of shops that served the piano market all up and down the industry. Piano tuning was a big-time profession. Retail shops with pianos opened everywhere, and the sheet-music business exploded with them. Ever notice how in big cities the music stores are typically family owned and established 40, 50, even 100 years ago? This is a surviving remnant of our industrial past.

All of this changed in 1930, which was the last great year of the American piano. Sales fell and continued to fall when times were tough. The companies that were beloved by all Americans fell on hard times and began to go belly up, one by one. After World War II, the trend continued, as more pianos were made overseas.

In 1960, we began to see the first major international challenge to what was left of the U.S. market position. Japan was already manufacturing half as many pianos as the United States. By 1970, a revolution occurred as Japan's production outstripped the United States, and it has been straight down ever since. By 1980, Japan made twice as many pianos as the United States. Production then shifted to Korea. Today, China is the center of world piano production. You probably see them in your local hotel bar.

And what happened to the once-beloved and irreplaceable American piano industry? Steinway survives to make luxury instruments that few can afford. Baldwin is still around, too. Mason & Hamlin has made a great comeback in the high-end market. The rest moved overseas under new ownership or were wiped out.

Does anyone care that much?

Not too many.

Have we been devastated as a nation and a people because of it?

Not at all.

It was just a matter of economic facts. The demand went down and production costs for the pianos that were wanted were much cheaper elsewhere.

A piano aficionado reading this will say, buddy, you are crass.

Listen to the sound of an older model Chickering and you can tell the difference. It was warm and wonderful, nearly symphonic. It is mellow and perfect for the best repertoire. By comparison, this new Chinese piano is sharp and angular and pointed. It sounds like a marimba. You can't play Schubert or Brahms on such junk. No one wants to hear that thing. Bring back the old days when pianos made real music!

Well, you can still get that old Chickering sound, even from a piano made in New York. You can buy a Steinway. Of course, you have to pay $50,000-plus, as much as $120,000, but they are there. You say that is unaffordable? Says you. It is all a matter of priorities. You can forego your house and live in a tiny apartment and own the most gorgeous instrument money can buy. In any case, it makes no economic sense for you to demand a magnificent piano at a low price when reality does not make that possible.

In the same way, many people will bemoan the loss of the U.S. car industry and wax eloquent on the glory days of the 1957 Chevy or what have you. But we need to deal with reality - that's all in the past.

Economics demands forward motion, a conforming to facts, and a relentless and realistic assessment of the relationship between cost and price, supply and demand.

We must learn to love these forces in society because they are the only things that keep rationality alive in the way we use resources. Without them, there would be nothing but waste and chaos, and eventual starvation and death. We simply cannot live outside economic reality.

Jeffrey A. Tucker is editorial vice president of www.Mises.org, a research and educational center of classical liberalism, libertarian political theory and the Austrian School of economics.

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