Would some economist please explain: What's wrong with outsourcing?

Unfortunately the voters are too easily persuaded, and many will prefer an American-sounding product assembled overseas than a foreign-sounding product assembled in America.

Which is fine but in a democracy people need to be honest about their value system. It’s not human life that matters. It’s the life of my countrymen and those whom they empower. In other words it’s pure selfishness at the expense of the welfare of billions of others.

It’s not even about countrymen if you really think about it. Who doesn’t purchase goods made cheaper abroad or services derived from illegal labor? We just turn a blind eye to it and try to make ourselves feel better by bloviating about a “living wage” or “fair trade.”

It’s just you and a few others, perhaps, who don’t read carefully. And I think it’s gilded.

You must be confused. Those who describe their views as “fair trade” are the most critical of trade in items that use illegal labor. See, for example, maquiladoras, blood diamonds, etc.

“Our politicians have no obligation, moral or otherwise, to give a rats ass about slaves.”

“Our politicians have no obligation, moral or otherwise, to give a rats ass about the rights of women”

“Our kings who rule with divine right have no obligation, moral or otherwise, to give a rats ass about anybody but themselves.”

People really believed that sort of shit, you know. Or maybe you don’t know. Your moral position is so retrograde, it wouldn’t surprise me if you didn’t.

Honestly, I’ve never met anybody who brazenly declared that the difference between right and wrong suddenly disappears when you cross a line on a map, but I guess there’s a first for everything.

The same people ignore the fact that their Whole Foods organic produce is picked by whom? That lawn care, construction, and meat processing employ lots of illegal immigrants and pricing of the products and services reflect that.

Who in this thread chooses to pay the price for union labor wherever it’s available or at the very least products made where the supply chain pays a “living wage” or the American minimum wage? Probably no one. Even if such a choice was readily available.

Blood diamonds are irrelevant.

Helestal has said what I believe way more eloquently than I and I want to hilight this quote:

I agree and it explains why I am pro-free trade.

I assume the OP means offshore outsourcing.

I’m generally in favor of free markets. But just to play devils advocate, here are some of the problems with outsourcing (forgive me if I repeat anything):

  • Real or not, there is a perception that outsourcing disproportionately affects lower income workers. Most people can’t comprehend the benefits to the overall economy in terms of lower prices. But they can see that the factory in town is no longer open.
  • Outsourcing transfers knowledge and expertise offshore. Apple’s outsourcing of the iPhone enabled Samsung to become it’s greatest competitor.
  • It can eliminate many of the entry-level jobs people need to gain practical experience in their career path.
  • Outsourcing can exploit foreign workers who don’t enjoy the protections we enjoy. It’s still slavery even if you outsource it to slaveowners in another country.

I think one of the dangers of outsourcing is that it creates an economy of people who don’t know how to do anything except be salespeople and middle managers.

That is within our borders. Perhaps they have a moral obligation to give a rats ass about slavery in other parts of the world but in what way is improving the economic welfare of people in other countries with their OWN governments in any way similar to slavery. Why not just call me Hitler.

Once again, within our borders. In what way do politicians here sacrifice the welfare of US residents to advance the rights of women in other countries? Because you seem to be saying that politicians here should be willing to make significant sacrifices on behalf of Americans to improve the economic welfare of people in other countries.

How is this applicable to anything?

Sure, I’m sure you can find someone somewhere that has said that the moon is made of swiss cheese but when have we ever said, that slavery in other countries is hunky dory?

You are imposing your views on the world.

This is only a matter of right and wrong in your head. There is no obligation for our politicians to put the economic welfare of the global poor ahead of the welfare of their constituents.

And this current round of globalization has caused significant displacement in this country because of how poorly the trade deals were negotiated. Our trade deals are negotiated with too much of an eye towards diplomatic relationships and not enough emphasis on economic benefits.

I don’t know what meaning you’re using here, but in the original a maquiladora is nothing but a manufacturing subcontractor. There is nothing in the word which implies any kind of bad situation, at least, like I said, in origin. If y’all have managed to turn a name for a business model into a negative term I’d like to know so I can take it into account in the future.

After NAFTA, when US companies began to move manufacturing to just over the Mexican border, there were years of controversy about the working conditions and environmental impact of these factories. The term maquiladora became a buzzword in certain circles for the exploitation of Mexican workers that was encouraged by, in these people’s views, a bad free trade agreement.

I don’t mean to say that maquiladora is a pejorative term - it’s just a buzzword that was used quite a bit to refer to the loss of American jobs as they were sent just over the border to, in some cases, substantially worse working conditions. Here are some examples of that criticism:

http://www.alternet.org/labor/after-20-years-nafta-thanks-nafta-what-happened-mexican-factory-workers-rosa-moreno
http://cfomaquiladoras.org/english%20site/InterviewDBacon.pdf
http://med.stanford.edu/schoolhealtheval/files/StephanieNavarro_HumBio122MFinal.pdf

They might feel otherwise; I can’t speak for them. But I never made this claim.

This is the core of the disagreement, Hellestal. It circles back to what I’ve said earlier. Voters look to themselves. Economists tend to look at a bigger picture without taking electoral behavior into account.

Look at this statement you made - the first paragraph - where you use the past tense. That’s wrong. People still believe - and there’s real evidence for it - that democratic governments are designed to represent their constituents first and non-constituents second. You put that statement in front of every member of congress and you’ll get at least 90% agreement.

And ignoring that is foolish. People, by and large, are generous until they feel the pinch. Then they’re willing to cut off people without much thought to it. “I’m All right Jack” isn’t just a phrase from a Pink Floyd song. It’s an expression of a popular style of behavior.

The voter process allows for a great many demogogues and idealogues to be elected. And not just in the usual places. Beyond the fact that Hitler, god help us, was elected there are many examples of demogogues who were popularly elected such as Huey Long, Hugo Chavez and Andrew Jackson. Any of this form - or similar - when elected are capable of blowing up what you and I might perceive as a useful solution because their voters want them to do it.

Again, we have the rise of the tea party and Trump’s domination of one of the two major American parties because of the perception of economic dislocation - whether real or not - to not take that into account or to wish it away is to invite those gains to be lost in a hurry.

The problem with outsourcing is that the gains haven’t distributed evenly. Branko Milanovic’s ‘Elephant Chart’ shows that while the majority of the world (Asia in particular) has benefited in the past few decades, the lower-middle class of the OECD countries (US, Japan, Europe) has struggled with zero income growth since 1988.

Western lumpen-proletariat are hurting and will gladly listen to whispers from demagogues like Trump encouraging false class consciousness and racial identity to lash out blindly at their perceived rivals in Asia/Latin America, instead of going after the global 1%.

Really? In what way was NAFTA, for example, poorly negotiated in a way that displaces people unnecessarily? What was so inept about NAFTA that you caught but the negotiators didn’t?

[QUOTE=Damuri Ajashi]
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.
[/QUOTE]

That’s flatly silly. Of course all human beings have a moral responsibility to care about the welfare of all other human beings. I don’t want psychopaths running MY country.

It is true that a politician has a LEGAL obligation only to serve their constituents. It is true that an American politician cannot practically, or politically, do as much for a person in Sierra Leone as they can for an American. But of course they have a moral right to try to do right by the human race.

If the United States were to try to improve its economy by launching a nuclear attack on Europe, killing a hundred million people but giving the USA more competitive access to the Asian market with all its European competitors gone, would you think that a morally neutral action?

I think it’s funny that people believe that politicians care about anything but their own power and wealth. If politicians honestly cared they wouldn’t advocate politically expedient but economically disastrous policy.

Some good objections here, especially number 3.
-Ok so those that understand the benefits of free trade should explain it to them. This is like the argument against marijuana legalization. Yeah less people are murdered, jailed and introduced to harder drugs, but that store with the leaf on the door gives me the willies.

-Great. The dispersal of knowledge overseas is great for consumers. Now Apple must come up with better products cheaper than they were. Should we cut off American universities from foreign-born? They may take our knowledge back with them and create great cheap products.

-Firstly how practical would the experience be if they’d have to move to Asia to pursue the career. With a higher standard of living, taking low-wage and unpaid internships would become an option for more individuals. With this type of experience, it would prepare them for more productive thus higher paying jobs. Service industries have not been outsourced or automated to a larger extent, although minimum wage advocates are trying their best to change that. These jobs are many folks introduction to the job market.

  • It depends on where you come down on this question: Does a higher standard of living in a society create the conditions in which slavery tends to wither away? I say yes. Slavery was a constant through all of history and all different configurations of government. The difference maker was capitalism. Also here is an interesting theoretical argument mises.ca.
    In regards to the comment on middle managers and salesmen: My answer would be if an entire society made of middle managers was proven to be the optimal arrangement for satisfying the desires of consumers with the least amount of input possible, so be it. Although, I don’t think this is the case at all.

An addendum to the middle manager bit:

For a Reductio ad absurdum I posted earlier that got no traction. Imagine a family of doctors standing around slapping themselves in the head when the shitter breaks because none of them became a plumber. Or a middle class neighborhood upset they must put up with transportation fees for their electricity instead of having a local power plant

Do you differentiate between those who are outcompeted by foreign labor and those outcompeted by domestic labor.

If Joe’s Pizza is better and cheaper than Lou’s Pizza, should we pass a law that says Joe must pay a $5 tax for every pizza? Why or why not?