Saturday, August 06, 2005

Scott Kirwin over at Dean’s world decries outsourcing, and I am forced to (mostly) disagree.

I think the world needs free trade agreements, which includes free labor markets. It’s the only way poor countries will ever grow their economies. One of the ironies of the globalization debate is that a lot of the same people who oppose outsourcing are the very ones who think we should give more global aid. In other words, we'll give you enough of our money that you don't starve, but keep your grimy Third World hands off the jobs that might provide sustainable economic development and free you from dependence on aid.

Unfortunately, the U.S. is the victim of unfair trade practices in virtually every trade relationship we have. We carry a lot of the trade "free riders" in Japan, Europe, and China that continue to restrict the ability of their consumers to import goods through currency devaluation and barriers to entry. On the other hand, our consumers benefit handsomely from the arrangement: not only is inflation practically nonexistent, you can now buy a pretty decent new car for around $7,000 - $10,000, which wasn’t possible a couple decades ago. Europeans and others like to decry the crass "consumer culture" of the United States, but the fact is that other developed countries in general simply cannot afford to live the way we do -- and a big part of the reason is their trade practices. Plus, the influx of imports makes our businesses the most competitive in the world.

Some economists argue the resulting trade deficits have a negative impact, but we haven't seen much evidence of that, at least not yet. Interest rates remain near historic lows, and GDP growth is one of the strongest of the developed countries.

Something else that often gets overlooked is that a large part of our prosperity can be traced back to the interstate commerce clause. We live in the largest real free trade zone in the world – the United States of America.


Anonymous Fitch said...

So outsourcing jobs is supposed to be so terrible, but insourcing workers is a good thing? I'm speaking illegal immigration, and the argument that it keeps the mushrooms cheap. Cheaper than, say, developing technology to do the same job more efficiently? Am I missing a part of the logic here. Free trade is a good thing, and so is technology. In fact, the two seem to be linked.

4:11 PM  
Blogger TallDave said...

That's a good point, I've never thought about illegal immigration as relating to outsourcing,

5:09 PM  
Blogger Paul said...

Another contradiction from the anti-globalization movement is how they view sanctions. Sanctions are generally bad, but so is free trade?

How does one square those two beliefs?

10:06 AM  

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