High-End Audio & the Invisible Hand

A recent e-mail from a reader asked why we list the recordings and systems used by Stereophile writers in their reviews. I responded that we do so in order that readers can place our value judgments in context, and predict how those products might sound with different ancillaries and recordings when they audition the products reviewed at their local high-end audio retailer.

"What local retailer?" was this reader's response. The nearest audio retailer was 200 miles from where he lived, and even that retailer had a very limited selection of products to demonstrate.

The scarcity of retailers at which audiophiles can audition components, let alone compare them, thus increases the importance of audio shows, and it is perhaps no coincidence that, as Jason Victor Serinus reported last January, 2011 sees more shows taking place in North America than in previous years. Because shows are a major conduit through which to pump energy and enthusiasm into the audio market, I decided at the end of last year that Stereophile should be represented at as many of the 2011 shows as possible, and should take part in dealer-sponsored events elsewhere as well.

As I write this, we're halfway through the 2011 audio-show season, and some events have done better than others. Salon Son et Image, in Montreal at the end of March, took place in a good venue, was well supported by manufacturers, distributors, and dealers, had a full program of musical performances and educational seminars, and was well attended. However, I was told that it didn't generate as many sales for the retailers who participated as had been expected.

AXPONA, which took place in Atlanta in mid-April, was also held in a good venue with plenty of good-size rooms, and its list of exhibitors included plenty of marquee names. And while it, too, had a full program of musical performances and educational seminars, attendance was poor. Still, more than one exhibitor told me that having exhibited at AXPONA generated enough sales in subsequent weeks to cover their show expenses.

Michael Fremer writes about his experience at AXPONA in his column this month (p.31), as well as about T.H.E. Show Newport Beach, which took place in southern California in early June. T.H.E. Show was held in a good venue and boasted about the same number of major brands as AXPONA—but attendance was approximately three times greater than at the Atlanta show, and even twice that at the 2010 edition of the well-established Rocky Mountain Audio Fest. Partly this may have been because the ticket price was low. But no matter how you look at it, T.H.E. Show Newport Beach must be judged a success.

By contrast, AXPONA New York City, held at the end of June, was a disappointment, with only a small number of exhibitors. Partly this was because of a very short lead time—the New York event was first announced at the Atlanta show, just two months before—but the hotel was shabby, the signage poor, and attendance low. However, while attendees complained to me about the small number of exhibit rooms, this did mean that almost every exhibitor enjoyed a packed room for the entire length of the show.

Two weeks after this issue goes to press, I am off to the Capital AudioFest, in Rockville, MD; the week after that, Stephen Mejias will report from the California Audio Show, in San Francisco. September sees the TAVES Show, in Toronto, and October the Rocky Mountain Audio Fest, in Denver. As far as audiophiles are concerned, the more shows, the better—but which of all these shows will survive into 2012 will ultimately depend on how many exhibitors get a commensurate benefit from what they spend supporting them.

Returning home on the subway from AXPONA NYC, I realized something about the loudspeakers reviewed in this issue. The KEF Q900 is ostensibly English, the Pioneer SP-BS41-LR Japanese, the Atlantic Technology AT-1 American—yet all three are made in China. I then ran down the list of the other products we write about this month. Just one, the Ares phono preamplifier from Rogue Audio, is made in the US. The Oppo BDP-95 Blu-ray player, featured on our cover, is Chinese, as are the AudioQuest and RadioShack cables Stephen Mejias auditions in "The Entry Level." The EAR 324 phono preamp, Giant-Killer cables, and Musical Fidelity AMS100 come from England; the Furutech GT40 and Integra DHC-80.2 ostensibly from Japan; the Stein Music Harmonizers, MBL 9007 power amplifier, EMT TSD 15 pickup head, and Dr. Feickert Analogue Blackbird turntable from Germany; the Kuzma 4Point tonearm from Slovenia. And though the Classé CT-M600 is made in Canada, that is only because, at its high price, the cost of manufacture is less critical in that it can be passed on to potential customers.

My late father always told me that wealth comes from people making things and selling them; bankers, stockbrokers, and realtors move money around, he said, but they don't create wealth. It was only years later that I realized that he was channeling what 18th-century philosopher and economist Adam Smith had written in his The Wealth of Nations (1776): "Labour was the first price, the original purchase—money that was paid for all things. It was not by gold or by silver, but by labour, that all wealth of the world was originally purchased."

But it was also Adam Smith, called "the Father of Modern Economics," who first defined the concept of the free market. Smith proposed the theory of how the invisible hand of self-interest allows a free market to operate. (It is often overlooked that for the invisible hand to operate efficiently, customers need access to all relevant information, and that a free market mandates freedom of information.) In a global marketplace, the efficient operation of the free market demands that manufacturing be done where it costs least—which you see in today's migration to China of the manufacturing of audio products.

It remains to be seen if, in China, the rise of a prosperous middle class and the growth of stricter environmental laws in that pollution-ridden country will increase the cost of manufacturing there. Some US audio manufacturers are already talking about moving production back to North America. But if manufacturing continues to leave North America, while some of us may still have money, we might not necessarily have wealth. As Adam Smith also wrote in The Wealth of Nations, "No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable." And no matter where it is made, poor and miserable people don't buy high-end audio equipment.

hifibuster's picture

Hey John,

Good comments as usual. I think the USA is presently traveling on some rocky road that has been made by crooks and liars who benefit from the demise of others. At age 68 I don't know if I will see better days, but I hope so for the yong people, who may be more ethical than the villianairs from 1981 to present. Damn, ranting again.

I suppose we are going through the growing pains of becoming a world community where the developed countries see lower wages and developing countries enjoy improved standards of living; Lets not forget to include the likes of CEO's and other overpaid fortunates. If everyone was making a living wage more people would be spending money, maybe on hifi.

In the mean time, I look forward to the next issue of SP just like I did in 1964.

Make it a good day.

Later, Buster.

Catch22's picture

And he did so without taking a cheap shot at Sarah Palin. That must have taken a lot of self discipline.

es347's picture

That's become the mantra for the past 3 years so here's the question: when all that wealth gets spread around...right on brother...how many folks will be lining up to purchase those $20K TTs?  How many for the $10K ones?  $2K?  The answer is damned few.  So those who are hell-bent on ushering in the european socialist economic model may as well say bye bye to the uber-expensive audio equipment cause the market for that jewelry will be shrinking to nada.  But not to fear..."a chicken in every pot and a car in every garage" may be supplanted with "a chicken in every pot and a Bose Wave in every listening room" compliments of the administration's Audio Czar.

Soothsayerman's picture

There was an interesting article in the Times today...

"TOKYO — Sony, Toshiba and Hitachi announced on Wednesday that they would work with a government-backed fund to spin off and merge their liquid-crystal display businesses, joining forces in the face of rising global competition.

The deal could create the world’s biggest maker of LCDs for mobile phones and cameras, with 22 percent of the market for small and midsize screens, according to DisplaySearch, an industry research firm.

The fund, the Innovation Network Corporation, will invest 200 billion yen ($2.6 billion) in the new company for a 70 percent stake, while the three manufacturers will equally split the other 30 percent, they said in a statement."

In Japan and China, government has long had a direct investment link to business to increase their countries competitive advantage.  We just do not do that here in the US and we feel the effects.  The flip side of this though is that you do not have private companies where the top execs make hundreds of millions.  Which model works best?  Time will tell.

enfant_teribl's picture

I think this it is exxcellent that people are talking about this. Not only are many hi fi products made in China, but also Chinese companies have bought a number of well-known brands - KEF, Quad, Mission to name a few. 

As you say, arming people with all the relevant information is important - people need to know their money is going elsewhere. It wouldn't be so bad if the country was one that we saw eye-to-eye with, but it isn't, and we are helping it become a strategic competitor. 

Utopianemo's picture

Damned few? Really? The countries I associate with the European socialistic economic model are Sweden, Denmark, and Finland. Last time I checked, their average standard of living was significantly higher than ours. I'd be willing to wager that per capita, you'd find more audiophile gear in a Scandinavian home than an American one. I lived in Iceland in the late 90's and for a tiny island nation with a volatile economy and few indiginous resources, they lived a heck of a lot more comfortably than most Americans I knew. I'm not necessarily pro-socialist, but the anti-socialist rhetoric needs to have some basis in reality if we're going to have a real conversation here.

Spectre's picture



There's nothing wrong with the word Socialist (often confused with Communist in the US) so don't feel any shame in using it. You hit the nail on the head exactly about rhetoric vs reality, on the whole people are happier with their lives in these countries. By the way I'm a Brit currently living and working in the US and I'm afraid the experience has left a bitter taste in my mouth.

es347's picture

That bitter taste is more than likely from eating blood sausage.  Socialism is a bad word my friend and I want no part of it here in the states.  We don't need 65% taxes (income + VAT), 8 week vacations and the obligatory nanny state with its massive government, but it appears we're well on our way unfortunately.

es347's picture

Unless living in Iceland for a while qualifies you as an expert on the subject of living standards, prove it.  Show me the numbers U-nemo.  I googled a few sites and the numbers don't support your claim that Scandanavians enjoy a higher standard of living than Americans.  Better check again my socialist friend.

dhs0403's picture




Your are absolutely correct -- the American economy is rapidly becoming a hodge podge of contradictions.


And where does that leave the Stereophile reader who can afford less than $3,000 per component?


The old adage has been:


   -- develop a long-term relationship with a local dealer

   -- discuss your budget, listening environment and musical preferences

   -- trust the dealer's judgement in configuring an appropriate system

   -- preview the recommended system in your own home


The new adage appears to be:


   -- read Stereophile for general information and reviews

   -- select trade shows based on the participating manufacturers

   -- attend trade shows -- despite travel and lodging expenses.

   -- listen to whatever is displayed in each booth or suite

   -- explain to a stranger your budget, environment and preferences

   -- take copious notes on whatever the stranger says

   -- return home, order through the internet and hope for the best.


With all due respect, I don't think our average reader can rely on regional trade shows rather than seasoned local dealers.  We need to pull together to find ways of protecting and retaining local expertise and demos.


wkhanna's picture

I personally see finding my way to a trade show as a luxury. If not a luxury of money, considering the current cost of petrol and potential overnight lodging, then one of personal time constraint, what with all the demands this ridiculous and paraphrased ‘modern’ lifestyle is putting on most of us. I hardly have time to listen to my music, let alone take a weekend to travel from Pittsburgh PA to Washington D.C. for the Capital AudioFest show held earlier this year. 

I bought my first system with money earned from a summer job in 1976 before I left for my freshman year of college. It consisted of an AdventModel 201 Cassette Deck, an Advent 300 Stereo Receiver and a pair of original Large Advent Loud Speakers. That very same system endured with flawless grace and dignity until 1994. 

I don’t know what your definition of value is, but I do know that without the help of an honest, knowledgeable and dedicated local dealer (the long defunct Opus One shop in the town of Indiana PA, where I grew up (its main store was in Pittsburgh 45 miles to the West) I would never have made such a wise (IMHAO) choice. 

Some of us were fortunate to have had the experience of fellowship and camaraderie that could be found at the audio retailers of the pre-big box store and pre-internet era (christ, I sound like a friggin old fart). To those weaned too recently to have such memories, and those who still longingly do, I offer a simple suggestion. But be warned. It will take some personal effort. I probably lost 70% of you just now. Too bad. All that is needed is to take advantage of today’s technology and, for once, use it to actually connect to real people, not virtual ‘reality’. Use the internet to search out people in your community who share our passion. There are more than you think, in most cases, and invite them to you home. 

I’ve been doing this for the past five years and can assure you it is time and effort well spent. I’ve had equipment placed in my system I would never have even heard of, let alone listened to. And taking some of my equipment to others homes and hearing it in a completely different environment is in some cases a revelation. Again, an experience you won’t get at some distant show in some odd hotel room or banquet room. And most times, less than a 30 minute drive from home. 

On top of that, you get to meet real enthusiasts, some with a great wealth of experience & knowledge, who love nothing more than sharing it all. Not that I don’t enjoy reading my monthly hardcopy of Stereophile every month, but the way I see it, sharing our passion, one on one, is trumped only by the time we spend listening. 

I’m off the soapbox now.



Practicing curmudgeon and audio snob