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#1 2012-08-01 18:46:11

TheWake
Illuminatus Sacerdos
From: Yankee-Occupied South
Registered: 2012-06-09
Posts: 8,272

Stop Complaining About Outsourcing

Source: http://reason.com/archives/2012/08/01/s … utsourcing

Stop Complaining About Outsourcing
Both Obama and Romney are sowing the seeds of a trade war.

Sheldon Richman | August 1, 2012

When economic times are bad, animosity is directed at foreigners: “They’re taking our jobs!” So it’s unsurprising that the presidential campaigns feature charges and countercharges about outsourcing, the employment of foreign labor by American companies. This is a dangerous game because it sows the seeds of trade war.

Economists understand the benefits of the division of labor. If you and your family had to live on only what you could produce yourselves, you’d be dirt poor. You wouldn’t be much better off if you could buy only what the residents of your town or county could produce. As the trading area grows, a more intensive specialization and hence division of labor are possible. Combine this with the increased productivity that the growth in knowledge and inventiveness also make possible, and dramatic prosperity results.

Adam Smith observed, “The division of labor is limited by the extent of the market.” If the extent of the market is artificially constricted by politicians (no one else has such power), the division of labor and its concomitant progress are stunted—and we are poorer than we would have been.

Thus we should worry whenever politicians attempt to incite the public against global trade in goods and services.
“But they’re taking our jobs!” In the course of things, jobs are moving, changing, disappearing, and emerging all the time. It can be disconcerting and disruptive, but we wouldn’t like the alternative: a government powerful enough to stifle freedom and change. When the free market is allowed to operate (which is not the case today), change is the rule. Consumer preferences evolve. Entrepreneurs try to win favor by offering new or improved goods. New knowledge brings technological developments that lower costs, which enable things to be produced with fewer resources and less labor.

While of course this all can create hardship for those—workers and business owners—invested in the old ways, the general benefits are undeniable. Whenever fewer resources and less labor are required to produce a good, resources and labor formerly devoted to that good can now be directed to things we couldn’t afford yesterday. That’s how societies prosper.

Moreover, whenever a new good comes to market, it plants the seeds of new opportunities for other people. Think of the many firms launched to complement the personal-computer industry, with products ranging from software to a multitude of accessories. No one was making mouse pads, laptop fans, and web cams a few years ago, nor mobile-phone cases, ring tones, and apps.

The same process that “destroys” jobs also creates them. Our desire for goods and services is open-ended, and so the opportunities for work—absent government impediments—are similarly unlimited. Even if we could acquire all imaginable “necessities,” we also value leisure, which results in the demand for skis, tennis racquets, fishing rods, e-book readers, tablets, game consoles, and things yet to be dreamed up.

I don’t wish to understate the hardship that change can produce. But government policies designed to tamp down change are a blueprint for poverty for the poorest among us. The wealthy have their riches already. It is those who have yet to make it who stand to lose the most from economic stagnation.

Fortunately, the hardship that is a byproduct of social dynamism can be ameliorated by the very freedom which produces that dynamism. Because our desire for goods and services is unlimited, there is always new work to be done.

It is shameful for Americans—fabulously wealthy by world and historical standards—to begrudge poorer people their chance to prosper. Progressives and conservatives profess compassion and charity—but they are the first to object when the world’s worst-off “take our jobs!”

The foregoing requires a caveat. America does not have a free market; the economy is laden with intervention, much of it in the form of privileges for big, established companies at the expense of would-be competitors. Tax and regulatory interventions distort market forces and facilitate the migration of jobs and other resources. Moreover, neo-feudalism in developing countries likely reduces workers’ options, providing cheaper labor to transnational corporations.

All of this underscores the imperative to free the market at home and to set an example for others abroad. Global cooperation beats trade war every time.

This article originally appeared at The Future of Freedom Foundation.

I've always found criticism of outsourcing to smack of xenophobia, on top of revealing that the person who criticizes it lacks any understanding of economics whatsoever.


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#2 2012-08-01 19:13:55

Thought Criminal
Member
Registered: 2012-06-11
Posts: 491

Re: Stop Complaining About Outsourcing

It's mostly just factory jobs that are being out sourced. There are benefits and drawbacks to it but it's certainly not the end of the world. Unskilled laborers have a smaller job pool but the country as a whole has moved away from a working class economy, from the time you hit middle school its drilled into your head that you have to go to college to be successful and that's what people are doing. We've moved from being blue collar factory workers to white collar office employees.
I don't know a whole lot about this issue but there certainly seems to be more profit in manipulating money than producing goods for a profit. People complain about China taking or jobs but if we kept them here in the U.S. they would complain about the ridiculous prices of consumer goods. I think within the next 30 years or so we will see the Chinese demanding higher wages and most factory work move out of China and into Africa where the labor will be cheaper, so the prices of goods can be kept low, which is the whole reason jobs went to China in the first place.
One of the biggest drawbacks I see with the outsourcing of factory work is that we are no longer as independent as we used to be. Our ability to switch into war production mode is lowered drastically because we don't have a large number of factories anymore. China on the other hand would be at an advantage right now because the own a large part of the worlds manufacturing base.
I'm not spouting TRUST NO 1 China will call in their debt and fuck us over. That won't happen. China needs us just as much as we need them because we buy all of their crap. If they went to war with us and won their economy would be in the shitter because they wouldn't be able to export all of their stuff that their precious factories make.

People just like to blow things out of proportion.

Last edited by Thought Criminal (2012-08-01 19:16:29)

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#3 2012-08-01 22:27:26

TheWake
Illuminatus Sacerdos
From: Yankee-Occupied South
Registered: 2012-06-09
Posts: 8,272

Re: Stop Complaining About Outsourcing

What's so great about independence anyway? Specialization is one of the important things that makes our economy able to produce so many things and so many different things. Remember the big uproar about the U.S. Olympic team wearing Chinese clothing? Well, the clothes were designed in America and so were the planes that flew them there.


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