What’s the Austrian response to this?
I guess If people aren’t buying Romanian products already, it’s because Romanian producers aren’t producing the right things. Encouraging them to continue making the wrong things with a “buy Romanian” campaign can only make things worse.
In its purest form, this has no logic. As a consumer you want to do one thing…buy the cheapest product that fits into your desire as a consumer. As a producer you have one goal…to make profit through selling as many goods as you can at the highest price possible. Wherever these meet is when one specific consumer buys from one specific producer. Buying purely Romanian goods means that you will likely be paying more, therefore reducing the amount of money you have to buy other items which you may have previously bought..
Also, if you buy foreign goods, what do the companies in other countries do with that money?
They have only two choices:
1.)Buy capital or labor or
2.) Invest the money in banks.
If 1 happens, then wherever they bought the capital or labor from, those laborers or other companies will continue the cycle by spending or investing. This continues on and on and on, and eventually the money will continue back into your country through spending or saving, at which point your country may be even better off.
If 2 happens then the cycle described above perpetuates itself.
Not buying purely Romanian goods will send a signal to the producers that they need to lower their domestic prices by either improving their returns on capital or by other means of resource allocation. The problem of scarcity enforces in them the desire to innovate which will create a better world for all.
Altogether now, buying the cheapest goods as a consumer creates a profit maximization incentive for the company that can not be matched by purely domestic consumption.
You can achieve this by buying foreign too.