# Would some economist please explain: What's wrong with outsourcing? **URL:** \ **Category:** Great Debates\ **Created:** [August 13, 2016, 9:43pm UTC](https://boards.straightdope.com/t/would-some-economist-please-explain-whats-wrong-with-outsourcing/762720 "2016-08-13T21:43:13Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![Johnny\_L.A](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/johnny_l.a/32/1084_2.png) [@Johnny\_L.A](https://boards.straightdope.com/u/Johnny_L.A)\ **Post date:** [August 14, 2016, 4:09pm UTC](https://boards.straightdope.com/t/would-some-economist-please-explain-whats-wrong-with-outsourcing/762720/21 "2016-08-14T16:09:45Z")
> [@octopus](#): > > They’d be able to find work at market value if they weren’t forbidden. The implication is that if it weren’t for that pesky minimum wage, jobs would come back. Except you’re forgetting that it’s more expensive to live in the United States than it is to live in Mexico. So workers’ ‘market value’ is more in the United States. But let’s say we got rid of the already too-low minimum wage. Yes, people would have jobs. But they would not be able to afford to pay for housing, utilities, food, medical expenses, raising children etc. They certainly would not be able to afford consumer items. If consumers can’t consume, then fewer consumer items need to be made. If fewer consumer items need to be made, there is no need for a large workforce. If there is no need for a large workforce, then people will lose their jobs. This was demonstrated quite clearly during the Bush Recession. Henry Ford had this wacky idea that his workers should be able to afford to buy the products they made. It worked. Other manufacturers followed suit. With more consumers, the price of automobiles went down. More people could afford cars, and production went up. Ford made millions. You may complain that raising the minimum wage will increase the price of your pizza 15¢, or the price of your $7 Big Mac combo to $7.25, but the overall effect on the economy from millions of people making enough to support the economy is positive. Or we can just deem people ‘obsolete’ and euthanise them, or let them die on their own. ---
**Author:** ![Amateur\_Barbarian](https://avatars.discourse-cdn.com/v4/letter/a/59ef9b/32.png) [@Amateur\_Barbarian](https://boards.straightdope.com/u/Amateur_Barbarian)\ **Post date:** [August 14, 2016, 4:19pm UTC](https://boards.straightdope.com/t/would-some-economist-please-explain-whats-wrong-with-outsourcing/762720/22 "2016-08-14T16:19:35Z")
The basis for this argument and most other economic and social-economic ones can be summarized as “Let’s bring back 1955.” The idea is that in the immediate postwar era, the US was “what it was supposed to be” and all decline since about 1970 is someone’s fault - pinkos, liberals, globalists, Dems, the Fed, whatever. If we just shoot these obstructors, America will stand astride the economic globe like the colossus it always was, and there will be jobs for everyone, money in every pot and an immeasurable outflow of goods to the world. You know, bullshit from the crowd who can’t cope with the idea that 1946-1970 was a huge global economic aberration, not “normality.” ---
**Author:** ![octopus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/octopus/32/3716_2.png) [@octopus](https://boards.straightdope.com/u/octopus)\ **Post date:** [August 14, 2016, 4:28pm UTC](https://boards.straightdope.com/t/would-some-economist-please-explain-whats-wrong-with-outsourcing/762720/23 "2016-08-14T16:28:44Z")
> [@Nava](#): > > Forbidden by whom? The government. I’m sure you’ve heard of minimum wage laws. Well the real minimum is $0 and that’s what many are making as they sit idle. But at least the noble politician gets a vote and that’s all that matters. ---
**Author:** ![octopus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/octopus/32/3716_2.png) [@octopus](https://boards.straightdope.com/u/octopus)\ **Post date:** [August 14, 2016, 4:33pm UTC](https://boards.straightdope.com/t/would-some-economist-please-explain-whats-wrong-with-outsourcing/762720/24 "2016-08-14T16:33:49Z")
> [@Johnny\_L.A](#): > > The implication is that if it weren’t for that pesky minimum wage, jobs would come back. Except you’re forgetting that it’s more expensive to live in the United States than it is to live in Mexico. So workers’ ‘market value’ is more in the United States. > > But let’s say we got rid of the already too-low minimum wage. Yes, people would have jobs. But they would not be able to afford to pay for housing, utilities, food, medical expenses, raising children etc. They certainly would not be able to afford consumer items. If consumers can’t consume, then fewer consumer items need to be made. If fewer consumer items need to be made, there is no need for a large workforce. If there is no need for a large workforce, then people will lose their jobs. This was demonstrated quite clearly during the Bush Recession. Henry Ford had this wacky idea that his workers should be able to afford to buy the products they made. It worked. Other manufacturers followed suit. With more consumers, the price of automobiles went down. More people could afford cars, and production went up. Ford made millions. > > You may complain that raising the minimum wage will increase the price of your pizza 15¢, or the price of your $7 Big Mac combo to $7.25, but the overall effect on the economy from millions of people making enough to support the economy is positive. > > Or we can just deem people ‘obsolete’ and euthanise them, or let them die on their own. Or you could realize that in the real world we have social programs targeted to help mitigate income shortcomings. But you apparently would rather pay X than X-y. You’d rather have a higher cost of production and you’d rather have less production. But at least you have “compassion” and you “care.” The fact is globalization and a blind eye towards economic migration, especially if it helps the dominant political party in the long term demographically, are here to stay. Finally, someone’s expenses are irrelevant with respect to his market value. ---
**Author:** ![Johnny\_L.A](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/johnny_l.a/32/1084_2.png) [@Johnny\_L.A](https://boards.straightdope.com/u/Johnny_L.A)\ **Post date:** [August 14, 2016, 4:52pm UTC](https://boards.straightdope.com/t/would-some-economist-please-explain-whats-wrong-with-outsourcing/762720/25 "2016-08-14T16:52:00Z")
> [@octopus](#): > > Or you could realize that in the real world we have social programs targeted to help mitigate income shortcomings. Except that the group that wants to bring back slave wages is the same group that wants to do away with social programs that help mitigate income shortcomings. > [@octopus](#): > > Finally, someone’s expenses are irrelevant with respect to his market value. No, they’re not. Sure, if you’re talking about someone buying a new ATV they can’t afford; but there is a minimum income upon which people can survive. ---
**Author:** ![octopus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/octopus/32/3716_2.png) [@octopus](https://boards.straightdope.com/u/octopus)\ **Post date:** [August 14, 2016, 5:15pm UTC](https://boards.straightdope.com/t/would-some-economist-please-explain-whats-wrong-with-outsourcing/762720/26 "2016-08-14T17:15:10Z")
> [@Johnny\_L.A](#): > > Except that the group that wants to bring back slave wages is the same group that wants to do away with social programs that help mitigate income shortcomings. Two different issues. The left is wrong about wage floors. The right is wrong about eliminating useful programs that can mitigate poverty. > [@](#): > > No, they’re not. Sure, if you’re talking about someone buying a new ATV they can’t afford; but there is a minimum income upon which people can survive. Labor, like gold, has no intrinsic dollar value. ---
**Author:** ![WillFarnaby](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/willfarnaby/32/514_2.png) [@WillFarnaby](https://boards.straightdope.com/u/WillFarnaby)\ **Post date:** [August 14, 2016, 5:17pm UTC](https://boards.straightdope.com/t/would-some-economist-please-explain-whats-wrong-with-outsourcing/762720/27 "2016-08-14T17:17:00Z")
> [@chappachula](#): > > Imagine an Phd economist who writes a well-researched article in the New York Times about the benefits of outsourcing . Then imagine that the Times tells him that they have outsourced his job to a guy in India, who also has a Phd in economics, but is happy to write well-researched articles for a much lower salary. > But everybody benefits!!! The Times makes more profit, and their ex-economist in Manhatten is now free to get a job at a sidewalk stand selling newspapers. > It’s interesting that the people in favor of outsourcing are never the ones who lose their jobs. > > * * * > > (yes, I know…that’s the way the global economy works, and we can’t do anything about it. > But millions of people will never enjoy any “benefits” from outsourcing, and it’s cruel when politicians to tell them that they should.) I’m not an economist and I work in manufacturing. Please don’t chop up my posts to pretend moral superiority, thanks. ---
**Author:** ![Wesley\_Clark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/wesley_clark/32/20581_2.png) [@Wesley\_Clark](https://boards.straightdope.com/u/Wesley_Clark)\ **Post date:** [August 14, 2016, 6:14pm UTC](https://boards.straightdope.com/t/would-some-economist-please-explain-whats-wrong-with-outsourcing/762720/28 "2016-08-14T18:14:21Z")
I’m not an economist but here are some complaints people have 1. Laborers in foreign nations work for low wages and in nations with very few consumer protections, quality control mechanisms, environmental protections, etc. So maybe something is being made for $0.30 an hour, all the toxins are being dumped in the river and there is no QC measure to make sure the product is safe and reliable (I’ve bought a lot of stuff over the years that turned out to be Chinese crap). Plus the employees may be worked until their bones break or they develop permanent health problems because there are no ergonomic regulations or employee safety standards. It is a race to the bottom as companies look for the lowest wages, fewest environmental regulations, fewest quality controls, fewest employee protections, etc. 2. Nations may have protectionist policies, but we may not. So other nations may have tariffs or taxes that put our imports at a disadvantage, but that allow our exports to go into their nations. In that case, we send them money and they keep it. 3. Currency manipulation does the same thing as point 2. ---
**Author:** ![Deeg](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/deeg/32/2955_2.png) [@Deeg](https://boards.straightdope.com/u/Deeg)\ **Post date:** [August 14, 2016, 7:16pm UTC](https://boards.straightdope.com/t/would-some-economist-please-explain-whats-wrong-with-outsourcing/762720/29 "2016-08-14T19:16:40Z")
> [@Jonathan\_Chance](#): > > NYT columnist David Brooks on Friday’s NPR politics discussion also brought the point that globalization - allowing jobs and goods to flow around the world - has brought a great many of the world’s poorest out of crushing poverty by providing jobs where previously there had been none. I totally disagree with your assessment. The UN believes that it can eliminate extreme poverty by 2030. This is almost completely because of globalization and the expanding of the world economy. There are a few losers in this but overall it’s a tremendous boon to the world. ---
**Author:** ![Jonathan\_Chance](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/jonathan_chance/32/701_2.png) [@Jonathan\_Chance](https://boards.straightdope.com/u/Jonathan_Chance)\ **Post date:** [August 15, 2016, 1:54am UTC](https://boards.straightdope.com/t/would-some-economist-please-explain-whats-wrong-with-outsourcing/762720/30 "2016-08-15T01:54:15Z")
And without taking it to extremes can you see the moral equation? Essentially, it’s choosing someone to suffer so that someone else can benefit. It’s a matter of whose ox is being gored. It’s easy to talk about ‘some losers’ but there are real people being harmed here. Is it the role of the United States government to promote non-citizen development at the cost of dislocation of its own citizens? Look, I’m not arguing that globalization doesn’t net increase overall economic activity. It clearly does. I’m arguing that the way in which we’ve gone about it is showing significant short-term thinking. Both Mace and Hellestal, above, are arguing against a point I’m not making - that it’s holding nations back. But by thinking only at the global or nation-state level they’re making the mistake I discussed above. In a democracy, economic decision makers must take the impact on citizens into account. Without such you give demogogues a fertile ground in which to operate. That leads to the rise of the Tea Party and now Trump. Yes, Trump will lose. I acknowledge that. But globalization is now so unpopular that Clinton has had to do a 180 on her support of the Trans-Pacific Partnership and that is now significantly threatened. Hillary’s not taking that position because the republicans in congress are opposing it. She’s taking it because a significant percentage of her potential voter base is opposing it. Polling suggests - the latest numbers I could find are from March - that 29% of voters support the TPP and 26% oppose it. That’s a lot of undecideds out there. And that’s with Trump staking out the position when we know he’s going to lose. AND it’s with the party that typically pushes free trade, the republicans, have gone from full support in the 2012 platform to [eliminating all mention of it](http://www.politico.com/story/2016/07/republican-platform-panel-tpp-225364) on this year’s platform. Not to take the impact of globalization on voting behaviors is irresponsible in the extreme. People hurt - or know people that are hurting - and need to blame someone. Is that irrational? Perhaps. But it’s also real. We could lose the gains made in a single election cycle and see modifications or rollbacks of all of our trade deals. Yes, voter behavior is messy and subject to whims and oddball behavior but it’s what matters in terms of American policy. ---
**Author:** ![octopus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/octopus/32/3716_2.png) [@octopus](https://boards.straightdope.com/u/octopus)\ **Post date:** [August 15, 2016, 2:04am UTC](https://boards.straightdope.com/t/would-some-economist-please-explain-whats-wrong-with-outsourcing/762720/31 "2016-08-15T02:04:24Z")
> [@Jonathan\_Chance](#): > > And without taking it to extremes can you see the moral equation? Essentially, it’s choosing someone to suffer so that someone else can benefit. It’s a matter of whose ox is being gored. It’s easy to talk about ‘some losers’ but there are real people being harmed here. Is it the role of the United States government to promote non-citizen development at the cost of dislocation of its own citizens? > > Look, I’m not arguing that globalization doesn’t net increase overall economic activity. It clearly does. I’m arguing that the way in which we’ve gone about it is showing significant short-term thinking. > > Both Mace and Hellestal, above, are arguing against a point I’m not making - that it’s holding nations back. But by thinking only at the global or nation-state level they’re making the mistake I discussed above. In a democracy, economic decision makers must take the impact on citizens into account. Without such you give demogogues a fertile ground in which to operate. That leads to the rise of the Tea Party and now Trump. > > Yes, Trump will lose. I acknowledge that. But globalization is now so unpopular that Clinton has had to do a 180 on her support of the Trans-Pacific Partnership and that is now significantly threatened. Hillary’s not taking that position because the republicans in congress are opposing it. She’s taking it because a significant percentage of her potential voter base is opposing it. Polling suggests - the latest numbers I could find are from March - that 29% of voters support the TPP and 26% oppose it. That’s a lot of undecideds out there. > > And that’s with Trump staking out the position when we know he’s going to lose. AND it’s with the party that typically pushes free trade, the republicans, have gone from full support in the 2012 platform to [eliminating all mention of it](http://www.politico.com/story/2016/07/republican-platform-panel-tpp-225364) on this year’s platform. > > Not to take the impact of globalization on voting behaviors is irresponsible in the extreme. People hurt - or know people that are hurting - and need to blame someone. Is that irrational? Perhaps. But it’s also real. We could lose the gains made in a single election cycle and see modifications or rollbacks of all of our trade deals. Yes, voter behavior is messy and subject to whims and oddball behavior but it’s what matters in terms of American policy. Seems immoral to promote bad policy to keep other countries poor and to lower our own standard of living to placate those who are deliberately misled by the political class. ---
**Author:** ![nightshadea](https://avatars.discourse-cdn.com/v4/letter/n/7ba0ec/32.png) [@nightshadea](https://boards.straightdope.com/u/nightshadea)\ **Post date:** [August 15, 2016, 2:15am UTC](https://boards.straightdope.com/t/would-some-economist-please-explain-whats-wrong-with-outsourcing/762720/32 "2016-08-15T02:15:57Z")
what ive always found odd is the “close the borders” crowd are the ones who are outsourcing everything because with out that incoming flow of cheap labor …which helped moderate wages Americas too expensive to make anything in ---
**Author:** ![Jonathan\_Chance](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/jonathan_chance/32/701_2.png) [@Jonathan\_Chance](https://boards.straightdope.com/u/Jonathan_Chance)\ **Post date:** [August 15, 2016, 2:16am UTC](https://boards.straightdope.com/t/would-some-economist-please-explain-whats-wrong-with-outsourcing/762720/33 "2016-08-15T02:16:55Z")
> [@Hellestal](#): > > If it were “not true for most in practice”, then the median income in the United States would still be hovering at less than $2 a day. It’s possible that it has been true for a particular subset of people: low-wage workers in the developed world since the 1980s, when the world labor markets expanded by a couple billion people. But there is absolutely no chance that it is the normal state for the world as a whole today, let alone the normal state in history. Lots and lots of jobs in China get out-sourced, because Chinese wages are rising so quickly. But that doesn’t prevent them from finding better jobs. I want to address this in particular because both you and Mace - whom I respect - are again missing my point here. Yes, wages rise. Economics is not a zero-sum game. God knows I make my living on economic expansion. But to draw this sort of thing is to make again clear the fallacy that the impact on those displaced is irrelevant. There is significant evidence that displaced workers - numbering in the millions - do not get back [on the job treadmill](http://voxeu.org/article/job-ladders-and-earnings-displaced-workers) at the spot [they were forced off](https://piie.com/publications/chapters_preview/110/1iie2962.pdf). As I mentioned before, it really boils down to the difference between gross growth and net losses. In the links above it’s noted that average loss of income came in at 17% and that workers don’t catch up over a 10 or 20 year gap - depending on industry and so forth. That’s a significant loss for the individual. Is it moral to choose to sacrifice one family to promote another? Is it safe, electorally, to do so to a large enough part of the American - and European - electorate when the entire globalization process could come to a halt. Better safeguards need to be in place to mitigate the impact and it needs to be the sort of safeguards that people will take advantage of. There’s been interest from the Federal Reserve as well as others about retraining programs and wage insurance but the Fed seems to have the opinion [that funding is insufficient](https://core.ac.uk/download/files/153/6793086.pdf)for the task at hand. ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [August 15, 2016, 2:23am UTC](https://boards.straightdope.com/t/would-some-economist-please-explain-whats-wrong-with-outsourcing/762720/34 "2016-08-15T02:23:43Z")
**JC** : Your first cite (have not gotten to the second yet) is talking about workers who lost their jobs during the Great Recession. Those jobs were were generally not lost due to outsourcing (ore even the more general term of “globalization”). Before digging thru your second cite, can you quote the part you think proves your point? ---
**Author:** ![octopus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/octopus/32/3716_2.png) [@octopus](https://boards.straightdope.com/u/octopus)\ **Post date:** [August 15, 2016, 2:50am UTC](https://boards.straightdope.com/t/would-some-economist-please-explain-whats-wrong-with-outsourcing/762720/35 "2016-08-15T02:50:08Z")
> [@Jonathan\_Chance](#): > > I want to address this in particular because both you and Mace - whom I respect - are again missing my point here. > > Yes, wages rise. Economics is not a zero-sum game. God knows I make my living on economic expansion. > > But to draw this sort of thing is to make again clear the fallacy that the impact on those displaced is irrelevant. There is significant evidence that displaced workers - numbering in the millions - do not get back [on the job treadmill](http://voxeu.org/article/job-ladders-and-earnings-displaced-workers) at the spot [they were forced off](https://piie.com/publications/chapters_preview/110/1iie2962.pdf). > > As I mentioned before, it really boils down to the difference between gross growth and net losses. In the links above it’s noted that average loss of income came in at 17% and that workers don’t catch up over a 10 or 20 year gap - depending on industry and so forth. That’s a significant loss for the individual. > > Is it moral to choose to sacrifice one family to promote another? Is it safe, electorally, to do so to a large enough part of the American - and European - electorate when the entire globalization process could come to a halt. > > Better safeguards need to be in place to mitigate the impact and it needs to be the sort of safeguards that people will take advantage of. There’s been interest from the Federal Reserve as well as others about retraining programs and wage insurance but the Fed seems to have the opinion [that funding is insufficient](https://core.ac.uk/download/files/153/6793086.pdf)for the task at hand. Of course they don’t make the same. The fact someone is being paid less to do what they did suggests that if they won’t to keep working they’ll need to accept less or improve their economic value. This is no surprise. However aggregate wealth is increasing. Solution is to work towards a basic income and remove the wage floor. ---
**Author:** ![Ruken](https://avatars.discourse-cdn.com/v4/letter/r/f475e1/32.png) [@Ruken](https://boards.straightdope.com/u/Ruken)\ **Post date:** [August 15, 2016, 3:06am UTC](https://boards.straightdope.com/t/would-some-economist-please-explain-whats-wrong-with-outsourcing/762720/36 "2016-08-15T03:06:57Z")
> [@Jonathan\_Chance](#): > > Is it moral to choose to sacrifice one family to promote another? I’m looking at this in reverse. Trade restrictions are a choice to sacrifice one family to promote another, and it’s ok to undo that, especially for net benefit. That doesn’t address your other questions, e.g. if it’s safe. ---
**Author:** ![Deeg](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/deeg/32/2955_2.png) [@Deeg](https://boards.straightdope.com/u/Deeg)\ **Post date:** [August 15, 2016, 3:59am UTC](https://boards.straightdope.com/t/would-some-economist-please-explain-whats-wrong-with-outsourcing/762720/37 "2016-08-15T03:59:18Z")
> [@Jonathan\_Chance](#): > > Yes, wages rise. Economics is not a zero-sum game. God knows I make my living on economic expansion. > > But to draw this sort of thing is to make again clear the fallacy that the impact on those displaced is irrelevant. I don’t think they are irrelevant. It’s just that it needs to be weighed against the good of billions of people being lifted out of extreme poverty. If somebody can suggest a workable way to get the benefits of outsourcing (ending extreme poverty) without the pain of the displaced then I will gladly support it. ---
**Author:** ![Stringbean](https://avatars.discourse-cdn.com/v4/letter/s/d6d6ee/32.png) [@Stringbean](https://boards.straightdope.com/u/Stringbean)\ **Post date:** [August 15, 2016, 4:13am UTC](https://boards.straightdope.com/t/would-some-economist-please-explain-whats-wrong-with-outsourcing/762720/38 "2016-08-15T04:13:28Z")
> [@Jonathan\_Chance](#): > > First, yes, outsourcing - allowing jobs to flow to where they’ll cost the least - is a valid economic proposition. It cuts costs and theoretically that flows downhill to where everyone pays less for their t-shirts and iPhones and such. Well and good. Right off the bat, you are acknowledging the single greatest benefit of globalization: that everybody (including the poor) can get goods at a cheaper price. This is a universal benefit that you casually mention but then ignore the rest of the way. > [@Jonathan\_Chance](#): > > But there an implicit assumption here at the economics level - and it’s a mistake economists make a lot - that the displaced workers are able to find other and equivalent work. That’s simply not true for most in practice. By approaching it at the macro level - wealth of nations as a whole - economics leaves off the individual troubles caused by outsourcing. It has always been this way. People adapt. > [@Jonathan\_Chance](#): > > NYT columnist David Brooks on Friday’s NPR politics discussion also brought the point that globalization - allowing jobs and goods to flow around the world - has brought a great many of the world’s poorest out of crushing poverty by providing jobs where previously there had been none. An undeniable truth. Alleviating hundreds of millions from crushing poverty. > [@Jonathan\_Chance](#): > > But there is at least two things wrong with this argument. There’s not a fair playing field. Many of those workers being lifted out of poverty are working in horrendous and unsafe conditions. Alleviating workers from crushing poverty is an unambiguous good. It’s better than starving. > [@Jonathan\_Chance](#): > > People die for our iPhones and we’re allowed to turn a blind eye to it. Morally, that’s horrific. People die for want of food. Better they should do so than work at an Apple factory so their families can eat? The morality is quite ambiguous when portrayed against the alternative. > [@Jonathan\_Chance](#): > > One of the reasons we’re a more expensive place to be employed is the hard-won protections for workers. I don’t care if you work on a factory floor, in a cushy office or at a stand selling ice cream at the beach. Whether you acknowledge it or not you benefit from having OSHA and DoL looking out for you. It’s pretty well established that most corporations - when they get big enough - would mulch excess workers and sell them as fertilizer if it could get away with it. Scare-mongering hyperbole aside, yes, we benefit from hard-earned protections for workers. What’s that got to do with the difference between starving and working? > [@Jonathan\_Chance](#): > > The second answer to Brooks argument about ‘emmiseration’ (no kidding, he used the word) is a basic one. Who says it’s our responsibility to raise those people out of misery through sacrifice? That’s a discussion no one seems to have. Should we empoverish ourselves to benefit others when their governments aren’t also doing so with human rights and workers rights guarantees? Again, do the workers care more about workers’ rights or feeding their families? You’re appropriating first-world humanitarian concerns to places where such concepts aren’t even on the radar. Is it reasonable to think the protections come before the jobs themselves? > [@Jonathan\_Chance](#): > > The second point about globalization - and where economic arguments really break down - is political. We’re seeing it right now. Yes, globalization may have made goods cheaper for us. But it comes as a human price of displaced workers and a lower standard of living for some. And those people are voters. The rise of Trump’s style of populism - that’s what it is demogogic populism - only becomes viable when there’s a large cohort of people feeling excessively pinched by economic pressure. They look for someone to lead them in blaming some sort of other - illegal immigrants, outsourcing, whatever - and it can cause a backlash against globalization. Sure, the masses cheer for Trump watching from their $200 widescreen TV made in China. Their ignorance of the widespread good of globalization and propensity to scream “I’m a victim!” doesn’t give their anger validity. Politicians pandering to the economically-ignorant masses may work, but that will always be the case and can’t be seen as any sort of legitimate criticism of globalization. > [@Jonathan\_Chance](#): > > Now, I don’t expect Trump to win. But that’s largely because he’s an idiot as a campaigner. If someone with real political chops had seized that message and won the R nomination - Rubio, Kasich, even Cruz - Hillary would be sweating bullets now. And when that person won - if he did - he’d be beholden to his voters to raise tariffs and roll back some of the last 20 years of international trade treaties. And he’d be sowing the seeds of our economic undoing. Reactionary economic policy has _never_ worked. Economic history is quite clear that tariffs are a net negative (outside of infant industries in developing countries, but that’s not what Trump is talking about). We can’t undo the economic realities of life in the 21st century. Pissing off our trading partners is just setting ourselves on fire for the sake of populist hoo-rahs. > [@Jonathan\_Chance](#): > > Honestly, I’m not sure that’d be a bad thing, either. I disagree. It would be a very bad thing entrusting an economically-ignorant populist to re-write our trade treaties and instate tariffs. > [@Jonathan\_Chance](#): > > I’d gladly pay more for my products to ensure workers in the PRC, Vietnam and so forth have some sort of legal rights protection. Alternately, I’d be glad to do so to see such things manufactured in Sandusky or Flint. You may be willing to do so; once the average American sees the prices at Wal-Mart go up 20% you may find their interests do not align with yours. > [@Jonathan\_Chance](#): > > Globalization should lead to the workers of the world being lifted up to American levels of prosperity over time. Instead, the first 20 or so years of it have seen the direction moving the other way. American workers are losing ground on the gains won in the 20th century. Globalization is certainly achieving the first task. If that comes at the expense of some American workers in industries unable to compete with global competitors, then that is simply the natural course of economic evolution. In a phrase: the cost of doing business. Any reactionary antidote to this intractable reality is almost certainly less good in the long run, for all involved. ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [August 15, 2016, 5:16am UTC](https://boards.straightdope.com/t/would-some-economist-please-explain-whats-wrong-with-outsourcing/762720/39 "2016-08-15T05:16:35Z")
> [@bizerta](#): > > [QUOTE=septimus] > You overlook another option. They can use the dollars to buy USA assets: stocks, bonds, real estate. Dollars spent on buying U.S. assets instead of U.S. products do not lead directly to hiring American workers. O.P. here I buy stocks and real estate. Nobody bitches at me. OK, so they buy assets. SO WHAT!! Now the seller of those assets has U.S. dollars and (s)he is going to spend them. No mater where they go, those US dollars will eventually buy US products. [/QUOTE] No, unless by “eventually” you refer to some “Final Day of Reckoning.” :rolleyes: Yes, some Americans sell their shares and spend the proceeds in America. And some American products are sold overseas, with the proceeds used to buy foreign shares or foreign debt. But what matters is the _net balance_, when transactions are averaged out over the whole economy. And the net balance is that Americans sell shares and bonds to foreigners and use the proceeds to buy foreign goods. We don’t have to _guess_ that this is the net effect. [The CIA publishes 2015 current account balances by country](https://www.cia.gov/library/publications/the-world-factbook/rankorder/2187rank.html). The U.S.A. annual account deficit was $484 billion. Combined with U.K., two countries have a larger deficit than the next 45 highest-deficit countries combined! This is not just a symptom of development: Germany, Japan and South Korea had account _ **surpluses** _ of $285, $138, $106 billion respectively. (China at $293 billion tops the list, if you ignore the composite EU at $352.) So, _on balance_, American spenders are leaving American workers unemployed to buy from Chinese and Japanese workers (etc.) and going into debt (to China and Japan) to do so. Some economists regard this as a more serious danger to the U.S. economy than the much-discussed government deficit. I won’t attempt any simple summary of this complex issue, but do feel compelled to correct the misconception in the quotation above. ---
**Author:** ![KellyCriterion](https://avatars.discourse-cdn.com/v4/letter/k/b3f665/32.png) [@KellyCriterion](https://boards.straightdope.com/u/KellyCriterion)\ **Post date:** [August 15, 2016, 7:21am UTC](https://boards.straightdope.com/t/would-some-economist-please-explain-whats-wrong-with-outsourcing/762720/40 "2016-08-15T07:21:42Z")
A good analogy I once read about, can’t find the source… Imagine you invented a machine that could convert firewood in to televisions. You start up a television factory, deck it out with machines that can convert firewood in to televisions, and make a fortune. You’d be lauded for living the American dream, you’d be written about in Forbes magazine, etc. Now, change just one thing. Instead of having a _ **machine** _ that can convert firewood in to televisions for you, you have a _ **country** _ that can convert firewood in to televisions for you. Economically speaking, what’s the difference? [Previous page](https://boards.straightdope.com/t/would-some-economist-please-explain-whats-wrong-with-outsourcing/762720.md?page=1) [Next page](https://boards.straightdope.com/t/would-some-economist-please-explain-whats-wrong-with-outsourcing/762720.md?page=3)