U.S. copper tubing manufacturing

The law of comparative advantage with regard to copper tubing is we never lost the copper tubing business. Copper tubing is relatively easy to make if you start out with the five or six million dollar investment into an extrusion press. This is glowing red copper going in, they just squirt it out like toothpaste, very fast. We had seven plants in the United States making copper pipe. Why? Because the transportation cost of shipping all that air inside the pipe was too great. Even though we didn't have the comparative advantage in terms of labor rates, we had the advantage on transportation costs.

Another externality is transportation, and it might be fairly mundane. Copper tubing — the kind we use for water pipe in homes — we never lost that business in the United States. All you need is an extrusion press that turns the copper into a tube, and then you draw it. It doesn't take a very large building; the size of the Student Center would be able to produce copper tubing. In the mid-1990s, there were five companies still making copper tubing in the United States, because you couldn't afford to transport all that air. You can afford to transport copper around the world as solid copper, but when you make it into ninety-five percent air, it's cheaper to bring the copper from Chile to the United States and extrude it here. The transportation costs kill you.