Some excerpts from a article from the CATO institute: Interesting take on outsourcing, I am a free trader because I believe that the principle of "comparative advantage" does indeed exist. No one state can live in autarky and still have economic growth. If a company is going to make more money in India then they would in the US why shouldn't we allow that happen? The great irony here for the US is that she fought the USSR for this globalized capitalist economy, it has always been the US who has pushed for greater access to markets, yet when it hits home the population doesn't like capitalism anymore? American consumers benefit greatly from outsourcing, your computer is almost certainty made in China, or Taiwan, or has parts originating from there. If you have a toy, it's Chinese, if you have a shirt its made in Central America or Asia (where I object to the working conditions), and you have more disposable income then before. If the US was enact tariffs, and to stop outsourcing firstly there would be shortages of goods, secondly inflation would skyrocket, and American industry would be weaker for it (yes you heard me). This is quite possibly the only line of argumentation in which I agree with the Bush administration, I support its trade policy. I support globalization as well because it is the great equalizer, it does spread the wealth. Granted corporations are raking in the profits, but wages and living standards all over the world have increased, and in some places significantly. Countries like China, Brazil, even India have a greater voice in the economic survival of the world. The Chinese now account for 7.9%(2002) of total world trade and the US 14.5% (2002), consider that China in 1975 didn’t even account for 1%. The US is increasingly dependant on states like China, and with over $75 billion worth of American investments in China, it would be the epitome of economic idiocy to stifle that trade. But that's what is being lauded by some in the US, and effectively stop about $150 billion worth of bilateral trade. India is another country where Americans obviously feel iffy about; so much IT jobs are being created in India Americans feel like they are losing out. As the aforementioned article already outlined it's not that bad. But there is undoubtedly a dark side to outsourcing (if you perceive it as such), one that it would force the US economy to change. That change is from an economy that could absorb the "lower educated" masses into jobs like textiles, steel works, and manufacturing, into one that simply cannot. The US is transforming into one where a college education is a necessity not an asset. Yes jobs in the US are now starting to pay more in the sense that they are more specialized, and require so much professionalism that you have to pay them highly. But the US economy is having a shift, one that puts so many people into the services sector (i.e. McDonalds, the Gap,etc) . There is a growing disparity btwn rich and poor in the US. It's an educational divide, and the US is not known for her "excellent educational programs". Real wages have been declining since the economic liberalization of the mid-70's. What a worker was making back in 1975 (around $15/hr), he now makes around$9/hr (real wages). Yet most jobs in the US are lost to technological and productivity gains. As shown with the typists, 500,000 jobs were lost, as a result of the PC rather then an Indian. What about Kerry? Well he does scare me in this sense; I support his candidacy because Iraq is a much bigger problem imo. But his trade policy seems to be a bit, backward. Kerry is a crude politico and he realizes that thanks to media spokespersons like Lou Dobbs, there is an overt and over reactionary backlash against free trade. Kerry will exploit Bush's trade policy as one of "Benedict Arnolds CEO's", that it is not patriotic, and that entire BS. (Now don't confuse my support of Bush's trade policy, with anything else, like the budget, or tax cuts). It would be almost impossible to convince the American public that outsourcing is a good thing. Typical of politics, short sighted individuals seem to determine everything. So what do you think is outscoring and globalization a good thing? Or a disaster waiting to happen?
Just a note on toys and such from China .... The New York Times ran a special last year called The World's Sweatshop. It seems to me that in many cases, while dollars going abroad produce dollars for the white collars at the top of the American pyramid, they are killing jobs and empowering poor labor standards. • Killing jobs: When profits and bonuses and all that is accounted for, how does that $1.12 relate to increasing employment? A general answer is that it relates very slowly compared to the decrease in employment that seems to be coupled with the current outsourcing trend. • Empowering poor labor standards: We don't get cheap products from China because the workers are well-paid and protected by rigid safety and health standards. My father, at the height of his Capitalism, projected that America would move from a blue-collar to a white-collar existence, becoming sort of a holding and consultation company. We can expect to lament the loss of the factory laborer as we have the farmer by such a projection. The problem with this, of course, is the economization of education, but that's a different issue (e.g. preparing a nation of white collars). Nonetheless, we would have to get food, trinkets, and manufactured goods from somewhere, and that white-collar existence would be dependent on America's ability to provide the needs not being provided by an absent blue-collar manufacturing labor force. We would still be starving someone somewhere. Because heaven knows the $80 for a Nordstrom's work shirt has to trickle down quite a bit to reach the average worker abroad.
It is bad for the workers in America but great for the companies doing business in America. So it looks like in the long run it will destroy Americas workforce but Americas business and stock market will be helped.
Outsourcing is an amazing piece of cognitive dissonance. We wouldn't let our own workers in our own country work in such poor conditions, long hours, with such poor health and safety procedures, or for such crappy wages, but as soon as we outsource, we disregrard all these things because we're getting a good deal, and forget the human aspect. There's only an advantage to it while there are underdeveloped countries willing to work for less. So the subtext of outsourcing, is keeping poor countries poor, so they can be exploited. Hence the continued third world debt, and the interest charged by the world banks.
By all means, make shirts in the US. Im sure everyone here would like to pay $50 for a t-shirt. Instead of having a low skilled stupid labor force that makes %@%# t-shirts the US is becoming a Hi-tech labor force. If you want your kids to make t-shirts for a living go ahead. I tell you what, lets just get rid of all manufacturing. That way everyone will have a job growing their own food, making their clothes etc.etc..etc..
We wouldn't let our own workers in our own country work in such poor conditions, long hours, with such poor health and safety procedures, or for such crappy wages, But you did, if you look at every country that today stands as a major industrial power they all had "lassiez faire" economic systems. From Industrializing Britain, to the US. Working conditions were not the best in the world, yet look at the amount of development has happened as a result of the blood, sweat, and tears of our forefathers? Is what I am saying ethical? No, but it’s the natural development of the global economy, let's not live in a world of flowers, when we have mines right beside. but as soon as we outsource, we disregrard all these things because we're getting a good deal, and forget the human aspect. Your local Wal-Mart employee would like to talk to you... There's only an advantage to it while there are underdeveloped countries willing to work for less. I find this to be a half-truth, if you look at the countries that being invested in their conditions were markedly worse before outsourcing and free trade happened. Outsourcing has merely shifted the blame from their repressive gov'ts to corporations. At least with the latter you can hope for some development. Also since the relative wealth of the world is increasing so do the wages of the ones employed in those countries. If we wanted to be egalitarian world economy you would have to give up around $24,000 in your GDP to reach international economic standards. It is awfully easy to preach from our high chair isn't it? So the subtext of outsourcing, is keeping poor countries poor, so they can be exploited. If true, then India, China, Brazil, etc. would not be able to stop trade negotiations as they did in Cancun. This is a non-argument. Hence the continued third world debt, and the interest charged by the world banks. Most debt was incurred by the states independent decisions, official debt is not nearly as bad as market debt. Debt is something these states decided to incur on themselves, full knowing the interest. Now I do think that all debt incurred during a dictatorship should be nulified, but that's a dream isn't it?
"So the subtext of outsourcing, is keeping poor countries poor, so they can be exploited" Wrong. Taiwan used to make nothing but cheap plastic toys (remember "made in Taiwan"= crap). Now Taiwan has entered the world of high tech production and research. S Korea was the same. The only thing making most countries 3rd world is their governments.
What's wrong with making shirts for a living? Everybody can't have office jobs, or program computers. We need there to be jobs for everybody at every skill level. My girlfriend used to work in a sock factory, but they have been forced to go the outsourcing route to stay in business, as they can't produce goods cheap enough over here. My gf's company is very stringent about which foreign factories it uses, and inspects them to make sure they are up to standard for health and safety (she'll be inspecting one in Turkey in two weeks time in fact), and don't use child labour. Plenty of other places don't care though. So sure, outsourcing is great, is you don't mind other people's kids working in a sweat shop and not getting an education. But I guess that's fine as long as your kids are OK, eh?
So sure, outsourcing is great, is you don't mind other people's kids working in a sweat shop and not getting an education. Well that is an extreme over-generalization on your part. Are we going to stop economic and social development in nations because you believe that all outscoring is so easily stereotyped in such a way? If you are trying to help those nations, why deny them what they want so badly? Even North Korea wants foreign investment! You are being quite selfish yourself, consider that you would be destroying the economy you so enjoy (obviously by your use of a low cost computer) and making millions poorer then they are today. The facts state that Globalization has been utilitarian in its efforts to help increase the standard of living for many nations, and it shows. In States like China, and India the level of development and improvements have been amazing. You would not be able to afford the luxuries in life, it is said that if outsourcing is stopped the prices for goods would increase by about 2x. Shoes you buy at Nike would cost in excess of $300 that is not a way to increase a consumer economy. Also you must understand the reason for outsourcing is simple, to create markets! Corporations want to create more markets for their goods so they can make more money. Sure they will make less money here, but it will be made up for the increase in consumption in the new countries. Simple economics dictate as such, our markets are exploited; they can only grow so much more. Why not give those countries a chance?
We do already should we choose to. And they're made in the third-world. The only real difference in what we pay for the shirt would be where the money goes. More to the worker if the shirt is made in the US. The $80 long-sleeve button-down work shirt? Do you really think the guy in Nepal who made it gets a fair cut? Jeez, maybe that's why there's a freaking Maoist insurrection? Oh, wait, wait ... silly me. There's a Maoist insurrection because people are lazy ingrates. It was explained to me back when Kathy Lee got busted in the press for child labor in Nepal that these children in Nepal ought to be thankful for the chance to support their families. And people want me to trust the New Economy? Apparently decency and public education are only good enough in Americans' minds for Americans. Okay, I take it back. Americans aren't decent to one another, but they have a bizarre fetish for pretending they are.
Do you really think the guy in Nepal who made it gets a fair cut? Jeez, maybe that's why there's a freaking Maoist insurrection? The Maoist insurrection existed well before the concept of Globalization became a reality. The reality in Nepal is that the Maoists want to get rid of the monarchy. Maoists by definition is an ideology of the peasantry, not the proletariat industrial class. The Nepalese economic situation is dire to say the least, it’s it geographical isolation, and lack of resources that have made her country so very desperate. Consider that if there is a textile industry established in Nepal, the economy will grow, and the Indian cotton growing industry will also grow to satisfy demand. Nepal has very little FDI, and is not representative of anything. . It was explained to me back when Kathy Lee got busted in the press for child labor in Nepal that these children in Nepal ought to be thankful for the chance to support their families Child labour should be combated with the full vigor of the international trade organization, and should be included in Free Trade agreements. Was it Nepal? I thought it was Honduras? Oh well… But child labour you must understand is not seen in the same light we see it here, they would have worked anyways on their subsistence farms, or as beggars. Have you been to La Paz lately? Apparently decency and public education are only good enough in Americans' minds for Americans. Oh Tiassa you know Americans don’t get a good public education. American minds are too insular to care, and so is most of the western world. But the overall benefits far outweigh that of the negatives.
The capitalist system favors the capitalists. Outsourcing and related globalization are just the next step in the quest for new profits. American workers are layed off, factories close, the money that these people were paid is no longer recycled in America in taxes, to local merchants, their workers and suppliers. Instead the money goes abroad to much poorer countries, but along the way it is hijacked by middle men, foreign government officials and taxes. Nepalese children get a few pennies for a few years, then the pennies move on to Nicaragua. In the meanwhile, American consumers buy $80 workshirts even though they no longer have any job prospects. But the shirts look good. Moral: Become a capitalist or a corrupt foreign government official then you too can enjoy outsourcing and globalization.
Outsourcing is a good thing for the Corporate. It is a good thing for the shareholders for a short time. It is a bad thing for the Government. It is a bad thing for the middle class. The result: After 5 years: There would be less tax money for the government to spend in security, education, basic infrastructure (you wont need any roads, since there will be no place to go to work!), medicare, etc....then the government will be forced to raise taxes....but the companies who are making the money would be Bermuda based....so the government can not tax them. You will see more Dollar Stores pop up, Winn-Dixie would do great since the middle class would move to the poor class. Unemployment would remain stable due to severe underemployment. and so on... There is nothing wrong with outsourcing as long as there are new type of jobs in the marketplace. Everyone thinks there would be a lot around the horizon. It is more like looking at the mirage while walking in a desert. You see it, but it is not real. Just because one entered the desert from a lush green land, does not mean there would be one in a desert. Eventually if you are alive, you may find a lush green land at the end of a desert or fall off into the ocean! That is my 2 cents...specially while I am working on solving a 50% recidivism issue in Ohio.
