# 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:** 3
**Author:** ![Shodan](https://avatars.discourse-cdn.com/v4/letter/s/9f8e36/32.png) [@Shodan](https://boards.straightdope.com/u/Shodan)\ **Post date:** [August 15, 2016, 12:31pm UTC](https://boards.straightdope.com/t/would-some-economist-please-explain-whats-wrong-with-outsourcing/762720/41 "2016-08-15T12:31:19Z")
> [@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 Still waiting for a cite for this claim. > [@Jonathan Chance](#): > > Is it moral to choose to sacrifice one family to promote another? As **Ruken** and others have mentioned, flipping this around makes more sense than the way you state it. Given that outsourcing and free trade in labor helps more people than it hurts, is it moral to sacrifice the well-being of several members in order to help one? You say you support trade sanctions against countries that do not guarantee workers’ rights. Would you say that you support such sanctions against, say, Cuba? Their record on human rights in general is appalling. Therefore we, and Europe and Canada and the rest of the developed world, need to prevent the sale of their cigars and sugar until they clean up their record. Right? Regards, Shodan ---
**Author:** ![Hellestal](https://avatars.discourse-cdn.com/v4/letter/h/3ab097/32.png) [@Hellestal](https://boards.straightdope.com/u/Hellestal)\ **Post date:** [August 15, 2016, 1:41pm UTC](https://boards.straightdope.com/t/would-some-economist-please-explain-whats-wrong-with-outsourcing/762720/42 "2016-08-15T13:41:12Z")
> [@Jonathan\_Chance](#): > > I want to address this in particular because both you and Mace - whom I respect - are again missing my point here. I really don’t think I am. From my post: > [@Hellestal](#): > > 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. From your second cite: > [@](#): > > I ranked detailed industries (defined at the 3-digit Census of Population Industrial Classification [CIC] level) by their percentage change in import share during the 1979-94 period (from largest positive changes to smallest). Your own cite backs up what I said, the same time period _and_ a restriction to developed countries. You don’t seem to be arguing against the point I made. Let’s take a step back or two. If a poster here started complaining that we didn’t protect our own workers from the creators of goods with the wrong skin color, this sort of discussion would turn out much differently. If they provided cites that people of their preferred skin color lost a little, while people of their non-preferred skin color gained a lot, we would not see the discussion played out as it tends to in this thread and in others like it. At least, I don’t think it would. If a poster here started complaining that we didn’t protect our own workers from the creators of goods with the wrong gender or sexual orientation, this discussion would not work out the way it normally does. But here we have a thread in which some people, it seems, are complaining that we don’t properly protect our own workers from the creators of goods who were born on the wrong side of an _an arbitrary line drawn on a map_. And for reasons that I can’t quite understand, the discussion seems to go a completely different way. People tell me it’s “natural” that they want to favor [their chosen ingroup] over [the resulting outgroup]. (We can fill in the blanks there in any number of possible ways.) And I agree completely, tribalism is completely natural to human behavior. We divide ourselves into groups and heap scorn on our preferred scapegoats. But what has happened with respect to some groups is that we have acknowledged (at least some of us…) that doing this is morally wrong. But when it comes to that line on that map, the old atavistic part of our brain starts squeaking in alarm, and for some reason we _don’t_ recognize collectively as a group that this is problematic and morally questionable. And then people start talking about politics. One group of people is saying, hey, just _leave us alone_. We want to trade with who we want to trade with, and it really isn’t your business to interfere with that. And the other group is like, nope, we’re going to tell the people with guns that they’re going to interfere with that voluntary exchange because of, you know, lines on maps and all that. _In any other context_, this sort of discussion would not develop in the way that it does. But for some reason, this topic is different. It’s not even every line on the map. Basically nobody worries about imports from Canada. We do more trade with them and with the EU than we do with China at present (altho maybe that won’t last much longer) but we don’t hear the same complaints about trading with developed countries that we do trading with poorer countries. This is, of course, because a place like Canada or France does not compete in the low wage labor markets. We gain more trading with richer countries. They can afford to pay us more. Yet those poor countries are slowly becoming rich countries. The current round of globalization is the biggest anti-poverty program in the history of the world. The moral questions above are about the weirdities of who we like to scapegoat – the people who aren’t good enough to be in our hallowed ingroup – but I think an even more fundamental moral question is one of the greatest good for the greatest number of people. One of the poorest countries on earth, where literally _tens of millions of people had starved to death_, is starting to become a rich country. This is one of the greatest goods that has happened in all of human history. Yet people are complaining about it. (I can understand complaints about the relative instability of their government, which I completely understand. But these sorts of conversations are complaints about starving peasants working in new factories, which I do not understand.) After it becomes a rich country, it will no longer compete in the low-wage labor markets. We’ll stop complaining, like we don’t complain so much about Canada. It’ll be a bunch of rich people trading with each other, where it’s more emotionally obvious that everyone is a winner. This is what is going to happen. This is what is happening. Even more than that, it’s not clear what our other options even would be. How would we even stop the process if we wanted to? Island USA? All we’d manage to do in that context is create a mass of weak industries that people would falsely claim require _permanent_ protection as they fell further and further behind the rest of the world. Rather than the very painful, but ultimately temporary, adjustment we’re suffering now, we would be crippling ourselves indefinitely, until the unknown future day when we eventually came to our sense. This damage would be extremely bad. People have to keep in mind that “import” numbers have become a lot more hazy in the era of the global supply chain. Final assembly in the US still contains a lot of foreign parts. Foreign assembly still tends to contain a lot of US parts. The web of interconnection is deeper than any one person realizes, and in fact deeper than any human brain is _capable_ of realizing. There are arteries and veins in the world supply chain that don’t get properly measured, and we cannot cut off those blood vessels without doing vast harm to the body. _What is Seen and What is Not Seen_, in the language of Bastiat. There is a shitload out that that we cannot directly see. It’s not a great plan which causes double the suffering in the attempt to alleviate the original suffering. When the proposed cures are worse than the disease, we need to acknowledge that. ---
**Author:** ![Richard\_Parker](https://avatars.discourse-cdn.com/v4/letter/r/35a633/32.png) [@Richard\_Parker](https://boards.straightdope.com/u/Richard_Parker)\ **Post date:** [August 15, 2016, 2:04pm UTC](https://boards.straightdope.com/t/would-some-economist-please-explain-whats-wrong-with-outsourcing/762720/43 "2016-08-15T14:04:16Z")
You know that feeling when someone articulates something that exists in your head but less coherent and articulate? Is there a word for that? Probably a German one. If only I had something to give them in exchange… ---
**Author:** ![bizerta](https://avatars.discourse-cdn.com/v4/letter/b/3be4f8/32.png) [@bizerta](https://boards.straightdope.com/u/bizerta)\ **Post date:** [August 15, 2016, 2:51pm UTC](https://boards.straightdope.com/t/would-some-economist-please-explain-whats-wrong-with-outsourcing/762720/44 "2016-08-15T14:51:20Z")
> [@Ravenman](#): > > Except that the way you’re portraying it, no country could run a trade deficit, because the money would always return to the home country. Except we know that doesn’t happen in a neat and tidy way. … O.P. here: Great: If the money does not return to the home country, the home country wins. We have their goods and all they have is pieces of paper for their walls. We can just print more. … But if there is too much money in the foreign country, the law-of-supply-and-demand will lower the value of our dollar, making our goods less expensive and their goods more costly and things will eventually balance out. Try as much as Congress does, the can’t repleal the law of supply-and-demand for any length of time. > [@Martini\_Enfield](#): > > … Serious question: What’s still made in the USA that the average international consumer is likely to buy? Cars, plastics, guns\*, bourbon, lollies/soft drink, some children’s toys (higher-end stuff) and books are the major ones I can think of, with a guest appearance by clothing. … Well, I know that South Korea imports it’s Volkswagen Passats from Chattanooga, TN. I was wondering if anyone would mention that my Passat was made in the USA while my Dodge Caravan was imported. Nobody did. > [@chappachula](#): > > … It’s interesting that the people in favor of outsourcing are never the ones who lose their jobs. … Twenty years ago, I lost my job when my company decided to merge two divisions. The company wanted (and presumably succeeded) to lower its costs. I was unemployed. It made no difference whether I had been replaced by a computer, a robot, or a Brazilian. It’s not “outsourcing”, per se, that I endorse; it’s the free market. As a whole, the economy does best when everyone is allowed to act in their own self-interest. ---
**Author:** ![Ravenman](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ravenman/32/2929_2.png) [@Ravenman](https://boards.straightdope.com/u/Ravenman)\ **Post date:** [August 15, 2016, 3:47pm UTC](https://boards.straightdope.com/t/would-some-economist-please-explain-whats-wrong-with-outsourcing/762720/45 "2016-08-15T15:47:10Z")
> [@bizerta](#): > > Great: If the money does not return to the home country, the home country wins. We have their goods and all they have is pieces of paper for their walls. And fewer jobs in the sectors which the home country loses competitive advantage. Trade balances are not determinative of currency values. There’s a whole branch of economics and public policy known as monetary policy, and on the whole, governments have central banks that set monetary policy to address things like inflation, bank solvency, etc. Countries don’t “print more money”’ to address the economic effects (job losses, etc) of trade. Besides, if exchange values swing back and forth to the point that Dodge Caravans become much more competitively priced overseas, boosting the home country auto industry, the corollary is that Passats become unaffordable by a commensurate amount. We know empirically this doesn’t happen. You’re arguing a fiction. Look, everyone in this thread is on the same page that overall, trade is beneficial to all nations that engage in it. But you don’t seem to acknowledge that there are sectors of each country that will lose, and that means bankrupted companies, foreclosed houses, unemployment, and financial misery for real people. If trade worked as neatly as you’re talking about it in this thread, the whole Rust Belt phenomenon would be impossible. China would gain an advantage in steel production, and American steelworkers would become software engineers, and everyone would be better off. That’s a fantasy. In each of your posts, you seem to imply that the major debate is whether countries should trade or be protectionist. In reality, the number of protectionists is quite few. The major political debate is actually between free trade and fair trade, with the difference being that, to be flippant, free traders don’t care if smartphone manufacturers in Fredonia pay slave wages and poison their workers with toxic chemicals, and fair traders want to make sure that the smartphone workers have universal health care and a union contract. > [@](#): > > It’s not “outsourcing”, per se, that I endorse; it’s the free market. As a whole, the economy does best when everyone is allowed to act in their own self-interest. Let’s say we find out that the manufacturing process used to build your smartphone cost the lives of three Fredonians every week. It’s in your self-interest to buy a phone at a low price; its in the company’s interest to sell it to you; the Fredonians who don’t die each week get a modest paycheck. Is this the sort of free trade you endorse? ---
**Author:** ![Richard\_Parker](https://avatars.discourse-cdn.com/v4/letter/r/35a633/32.png) [@Richard\_Parker](https://boards.straightdope.com/u/Richard_Parker)\ **Post date:** [August 15, 2016, 4:31pm UTC](https://boards.straightdope.com/t/would-some-economist-please-explain-whats-wrong-with-outsourcing/762720/46 "2016-08-15T16:31:17Z")
Many of those on the “free trade” side of the fair vs. free debate you posit simply ask which approach is more _effective_ at reducing the number of unnecessary deaths of Freedonians: relatively unrestricted trade deals that will increase Freedonian wealth marginally more than trade deals with lots of conditions, or trade deals with lots of conditions to incentivize Freedonians to adopt reforms in order to get more business. In other words, they start from the assumption that the lives of Freedonians are more important than the marginal cost of a phone, they just think the answer to how to get there is not highly encumbered trade deals. ---
**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, 4:51pm UTC](https://boards.straightdope.com/t/would-some-economist-please-explain-whats-wrong-with-outsourcing/762720/47 "2016-08-15T16:51:56Z")
> [@KellyCriterion](#): > > 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? Well the machine won’t buy what you produce whereas the country might. Thus there should be higher demand with the country doing the work that it can at a cheaper rate thus freeing up labor in your country to do more valuable things. However, labor within a country is pretty damn far from homogeneous. Go to Appalachia or a random inner city ghetto and I’d wager the quality of labor you’d find might approach a market value of 0/hr or even -/hr. So some of that labor displaced is permanently out of the market due to artificial barriers to trade. That leads to many bad second order effects. Trade is wonderful. But the market needs less regulation in order to achieve even higher levels of wealth production. Distribution is a separate issue. ---
**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, 4:53pm UTC](https://boards.straightdope.com/t/would-some-economist-please-explain-whats-wrong-with-outsourcing/762720/48 "2016-08-15T16:53:13Z")
> [@Richard\_Parker](#): > > Many of those on the “free trade” side of the fair vs. free debate you posit simply ask which approach is more _effective_ at reducing the number of unnecessary deaths of Freedonians: relatively unrestricted trade deals that will increase Freedonian wealth marginally more than trade deals with lots of conditions, or trade deals with lots of conditions to incentivize Freedonians to adopt reforms in order to get more business. In other words, they start from the assumption that the lives of Freedonians are more important than the marginal cost of a phone, they just think the answer to how to get there is not highly encumbered trade deals. Define fair? And why is the life of an American worth more than the life of a Chinese? ---
**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, 4:55pm UTC](https://boards.straightdope.com/t/would-some-economist-please-explain-whats-wrong-with-outsourcing/762720/49 "2016-08-15T16:55:52Z")
> [@Hellestal](#): > > If a poster here started complaining that we didn’t protect our own workers from the creators of goods with the wrong skin color, this sort of discussion would turn out much differently. If they provided cites that people of their preferred skin color lost a little, while people of their non-preferred skin color gained a lot, we would not see the discussion played out as it tends to in this thread and in others like it. At least, I don’t think it would. > > If a poster here started complaining that we didn’t protect our own workers from the creators of goods with the wrong gender or sexual orientation, this discussion would not work out the way it normally does. > > But here we have a thread in which some people, it seems, are complaining that we don’t properly protect our own workers from the creators of goods who were born on the wrong side of an _an arbitrary line drawn on a map_. And for reasons that I can’t quite understand, the discussion seems to go a completely different way. Those folks outside that political line can’t directly empower a preferred political party. It’s that simple. Why do you think the utilization of doublethink on topics that obviously display such blatant intellectual double standards is so prevalent? ---
**Author:** ![Richard\_Parker](https://avatars.discourse-cdn.com/v4/letter/r/35a633/32.png) [@Richard\_Parker](https://boards.straightdope.com/u/Richard_Parker)\ **Post date:** [August 15, 2016, 5:16pm UTC](https://boards.straightdope.com/t/would-some-economist-please-explain-whats-wrong-with-outsourcing/762720/50 "2016-08-15T17:16:06Z")
> [@octopus](#): > > Define fair? You’d have to ask **Ravenman** , but I took it to denote trade deals in which the rich countries require the poor countries to take specific efforts on worker safety and rights in order to access the rich countries’ markets. > [@octopus](#): > > And why is the life of an American worth more than the life of a Chinese? It isn’t, IMO, not morally speaking. I suspect you rather misinterpreted my post if you’re asking that. ---
**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, 5:30pm UTC](https://boards.straightdope.com/t/would-some-economist-please-explain-whats-wrong-with-outsourcing/762720/51 "2016-08-15T17:30:46Z")
> [@Richard\_Parker](#): > > You’d have to ask **Ravenman** , but I took it to denote trade deals in which the rich countries require the poor countries to take specific efforts on worker safety and rights in order to access the rich countries’ markets. > > It isn’t, IMO, not morally speaking. I suspect you rather misinterpreted my post if you’re asking that. I shouldn’t have asked that question after your quote. Sorry. It wasn’t a question prompted by your quote. ---
**Author:** ![bump](https://avatars.discourse-cdn.com/v4/letter/b/7c8e57/32.png) [@bump](https://boards.straightdope.com/u/bump)\ **Post date:** [August 15, 2016, 6:37pm UTC](https://boards.straightdope.com/t/would-some-economist-please-explain-whats-wrong-with-outsourcing/762720/52 "2016-08-15T18:37:57Z")
> [@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. That’s really it- globalization and outsourcing are great for people with money and jobs in the US as we get cheaper goods, and is great for the third-worlders providing the cheap labor (they get paid more), but it’s all at the expense of the working class/lower-middle class American workers, as they’re the ones being cut from their jobs without replacement as the casualties/cost of doing business, etc… What worries me is rather than a rising tide lifting all boats, it sure looks like everyone’s going to level out at some equilibrium wage point better than where the third world nations were before, but substantially lower than where working-class US wages and benefits are with our current laws and regulations. I realize that most of this stuff is high-level macroeconomics- the US is still better off overall with globalization and free trade, but I also hate to see our own people being screwed. And for all the people saying “Why is an American worth more than a Chinese?” or other stuff like that- nobody’s saying that in an absolute sense. But is IS part and parcel of a government’s responsibilities to look out for their own citizens- they would be seriously remiss in their duty to the citizenry if they didn’t prioritize their well being above that of people in other countries. And in democracies, in a large sense, it’s the people themselves prioritizing their own well being (and that of their countrymen) above that of people from other countries. ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [August 15, 2016, 6:38pm UTC](https://boards.straightdope.com/t/would-some-economist-please-explain-whats-wrong-with-outsourcing/762720/53 "2016-08-15T18:38:17Z")
> [@bizerta](#): > > Hillary is chastising Donald for importing products from China, which is putting Americans out of work. About once a month, ABC news does a fluff story on “Made in America”. Buying products made in one’s own country sounds laudible, but does it really make a difference? Could some economist please explain: what’s wrong with buying a product that was made in a country other than your own? > > Ilive in the USA and own two cars: A Volkswagen Passat and a Dodge Caravan. One of them was made in the USA, the other was made in a foreign country. However, when I bought the foreign car, my US dollars went to that foreign country and now someone over there has US dollars. They could take those US dollars and paste them on the wall (great, just print more), but most likely, they want those US dollars in order to buy some product that was made in the USA. In other words, even though I bought a foreign car, some USA product will eventually get purchased with those dollars. > > Am I over simplifying? When two bazillion people buy a cup of Brazlian coffee, Brazil can now import a Boeing 737. When I buy French wine, the vinyard owner can now buy a German BMW and the Bavarian worker can now import Nebraskan wheat to make bread. You seem to be assuming balanced trade. When you issue the world’s reserve currency, there is really no reason for people to spend your money, they can just save it. This can result in the shift of wealth from importing nations to exporting nations. In the past with mercantalism, those factories in China would belong to Americans and the wealth would come back to America but that is not what happens today. ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [August 15, 2016, 6:41pm UTC](https://boards.straightdope.com/t/would-some-economist-please-explain-whats-wrong-with-outsourcing/762720/54 "2016-08-15T18:41:31Z")
> [@John\_Mace](#): > > I am not a CPA, but it would be nice if one our resident experts would chime in on that subject. This is the province of ERISA lawyers. There’s maybe a few thousand of them in the world, probably none of them on this board. ---
**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, 6:49pm UTC](https://boards.straightdope.com/t/would-some-economist-please-explain-whats-wrong-with-outsourcing/762720/55 "2016-08-15T18:49:53Z")
is it me or do you think octopus wouldn’t mind a return to guilded age labor relations and wages ? ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [August 15, 2016, 6:53pm UTC](https://boards.straightdope.com/t/would-some-economist-please-explain-whats-wrong-with-outsourcing/762720/56 "2016-08-15T18:53:52Z")
> [@Hellestal](#): > > People suffer from losing their jobs. This is plain fact, no dancing around it. But those same people have gained immeasurably from an economy that is orders of magnitude more productive. This includes you. The majority of jobs that existed in the past were destroyed. On net, the winners are always bigger than the group of losers. This is as true today as it was two hundred years ago. Sure in the sense that everyone wins a little bit when you can buy shit for a few pennies less and there are only a few guys that end up on the government line for cheese when their job gets outsourced. > [@](#): > > We have an engine of prosperity here. This is the reason we don’t live in mud huts. We stopped living in mud huts way before Ricardo came along with the theory of comparative advantage. The industrrial revolution was not only well under way when comparative advantage came along it was pretty coincident with the end or slowing down of the industrial revolution wasn’t it? > [@](#): > > Not everybody gains equally from this engine. Some individuals in fact suffer vicious set-backs. That’s a problem. There are two ways to approach the problem. The smart way is to look at the pain of transition and try to do something to ameliorate it. And after almost 200 years we have seen generations for politicians pushing this trade model and almost never pushing ways to ameliorate the painful transition. Probably because the benefactors of this sort of trade don’t want to share the benefit with those who are negatively affected and they own the politicians. I have never heard economists supporting a painful transition amelioration tariff or anything else that would tax those who benefit the most from this form of trade. > [@](#): > > The less-smart way is to destroy the engine in a fit of pique because the world seems so unfair. Who said, lets destroy it. Lets just stop taking it as an article of faith that more trade is always better for the nation as a whole if we take marginal utility into account. ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [August 15, 2016, 6:58pm UTC](https://boards.straightdope.com/t/would-some-economist-please-explain-whats-wrong-with-outsourcing/762720/57 "2016-08-15T18:58:24Z")
> [@Ruken](#): > > 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. Our politicians have no moral or ethical obligation to the suffering poor of other countries. ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [August 15, 2016, 7:36pm UTC](https://boards.straightdope.com/t/would-some-economist-please-explain-whats-wrong-with-outsourcing/762720/58 "2016-08-15T19:36:47Z")
> [@Hellestal](#): > > Let’s take a step back or two. > > If a poster here started complaining that we didn’t protect our own workers from the creators of goods with the wrong skin color, this sort of discussion would turn out much differently. If they provided cites that people of their preferred skin color lost a little, while people of their non-preferred skin color gained a lot, we would not see the discussion played out as it tends to in this thread and in others like it. At least, I don’t think it would. > > If a poster here started complaining that we didn’t protect our own workers from the creators of goods with the wrong gender or sexual orientation, this discussion would not work out the way it normally does. > > But here we have a thread in which some people, it seems, are complaining that we don’t properly protect our own workers from the creators of goods who were born on the wrong side of an _an arbitrary line drawn on a map_. And for reasons that I can’t quite understand, the discussion seems to go a completely different way. > > People tell me it’s “natural” that they want to favor [their chosen ingroup] over [the resulting outgroup]. (We can fill in the blanks there in any number of possible ways.) And I agree completely, tribalism is completely natural to human behavior. We divide ourselves into groups and heap scorn on our preferred scapegoats. But what has happened with respect to some groups is that we have acknowledged (at least some of us…) that doing this is morally wrong. But when it comes to that line on that map, the old atavistic part of our brain starts squeaking in alarm, and for some reason we _don’t_ recognize collectively as a group that this is problematic and morally questionable. > > And then people start talking about politics. > > One group of people is saying, hey, just _leave us alone_. We want to trade with who we want to trade with, and it really isn’t your business to interfere with that. And the other group is like, nope, we’re going to tell the people with guns that they’re going to interfere with that voluntary exchange because of, you know, lines on maps and all that. _In any other context_, this sort of discussion would not develop in the way that it does. But for some reason, this topic is different. > > It’s not even every line on the map. Basically nobody worries about imports from Canada. We do more trade with them and with the EU than we do with China at present (altho maybe that won’t last much longer) but we don’t hear the same complaints about trading with developed countries that we do trading with poorer countries. This is, of course, because a place like Canada or France does not compete in the low wage labor markets. > > We gain more trading with richer countries. They can afford to pay us more. > > Yet those poor countries are slowly becoming rich countries. The current round of globalization is the biggest anti-poverty program in the history of the world. The moral questions above are about the weirdities of who we like to scapegoat – the people who aren’t good enough to be in our hallowed ingroup – but I think an even more fundamental moral question is one of the greatest good for the greatest number of people. One of the poorest countries on earth, where literally _tens of millions of people had starved to death_, is starting to become a rich country. This is one of the greatest goods that has happened in all of human history. Yet people are complaining about it. (I can understand complaints about the relative instability of their government, which I completely understand. But these sorts of conversations are complaints about starving peasants working in new factories, which I do not understand.) > > After it becomes a rich country, it will no longer compete in the low-wage labor markets. We’ll stop complaining, like we don’t complain so much about Canada. It’ll be a bunch of rich people trading with each other, where it’s more emotionally obvious that everyone is a winner. This is what is going to happen. This is what is happening. > > Even more than that, it’s not clear what our other options even would be. > > How would we even stop the process if we wanted to? Island USA? All we’d manage to do in that context is create a mass of weak industries that people would falsely claim require _permanent_ protection as they fell further and further behind the rest of the world. Rather than the very painful, but ultimately temporary, adjustment we’re suffering now, we would be crippling ourselves indefinitely, until the unknown future day when we eventually came to our sense. > > This damage would be extremely bad. People have to keep in mind that “import” numbers have become a lot more hazy in the era of the global supply chain. Final assembly in the US still contains a lot of foreign parts. Foreign assembly still tends to contain a lot of US parts. The web of interconnection is deeper than any one person realizes, and in fact deeper than any human brain is _capable_ of realizing. There are arteries and veins in the world supply chain that don’t get properly measured, and we cannot cut off those blood vessels without doing vast harm to the body. _What is Seen and What is Not Seen_, in the language of Bastiat. There is a shitload out that that we cannot directly see. It’s not a great plan which causes double the suffering in the attempt to alleviate the original suffering. > > When the proposed cures are worse than the disease, we need to acknowledge that. Our politicians have no obligation, moral or otherwise, to give a rats ass about the welfare of the poor in other countries except to the extent it affects their constituency. It is not clear that their constituency is better off because a few people get very rich, a lot of people get laid off and everyone gets their widgets for a few pennies less. Its not even clear that the world is better off as the American consumer class gets gutted. ---
**Author:** ![Ravenman](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ravenman/32/2929_2.png) [@Ravenman](https://boards.straightdope.com/u/Ravenman)\ **Post date:** [August 15, 2016, 7:44pm UTC](https://boards.straightdope.com/t/would-some-economist-please-explain-whats-wrong-with-outsourcing/762720/59 "2016-08-15T19:44:02Z")
> [@octopus](#): > > Define fair? Fairness doesn’t have an authoritative meaning. I’m sure you will agree that fairness is a fairly subjective opinion that the relative benefits of a particular situation are generally shared by interested parties. I’m not sure what this has to do with this debate, however. > [@](#): > > And why is the life of an American worth more than the life of a Chinese? I have no damned idea what you’re talking about. ---
**Author:** ![Velocity](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/velocity/32/18006_2.png) [@Velocity](https://boards.straightdope.com/u/Velocity)\ **Post date:** [August 15, 2016, 7:49pm UTC](https://boards.straightdope.com/t/would-some-economist-please-explain-whats-wrong-with-outsourcing/762720/60 "2016-08-15T19:49:10Z")
As I understand it, outsourcing has become something of a necessary evil in international contract competitions, in the sense that the company that outsources the most, wins - this is supposedly the case with defense contractors, for instance. If Defense Contractor A and Defense Contractor B are bidding to sell fighter jets to India, and Defense Contractor A is willing to outsource a lot of the work and allow the jets to be assembled in India and offer all sorts of industrial offsets, and Defense Contractor B isn’t willing to, then all other things being equal Defense Contractor A is more likely to walk away with the contract. Thus, perversely, it is Defense Contractor B that misses out on revenue and an industrial boost, and thus the economy of Defense Contractor B misses out on good stuff. Some is better than nothing at all. [Previous page](https://boards.straightdope.com/t/would-some-economist-please-explain-whats-wrong-with-outsourcing/762720.md?page=2) [Next page](https://boards.straightdope.com/t/would-some-economist-please-explain-whats-wrong-with-outsourcing/762720.md?page=4)