Reversing another of Bush's policies, the US Department of Education reported today that it will not renew it's foreign-outsourced telecommunications contract. Some 2,000 American jobs will be brought home.
It wasn't announced whether these would be government or private jobs, but the bottom line is, they're American jobs and for once, they're coming back.
--- End forwarded message ---
If this means higher cost per product then, AFAICS, American taxpayers are losing money on the deal.
Not really. Outsourcing costs more in the long run since it deprives Americans of employment. Corporatism is flawed for the same reason Communism is: it's premised on the assumption that consumption can exist without production.
Eric:
You said: "Outsourcing costs more in the long run since it deprives Americans of employment"
How do you figure? Do you believe the economy and labor markets to be zero-sum games?
If yes, you might find this article informative:
http://en.wikipedia.org/wiki/Comparative_advantage
-Derek
No, but I believe that nations founded on free market principles have an obligation to protect those markets. Outsourcing to non-free markets like China gives these authoritarian economies (and the corporations who work with them) an extremely unfair competative advantage. The American worker and small business owner is unable to compete against slave-labour markets; that was similar to what existed prior to the Civil War when large plantations monopolized entire economic sectors the way that corporations do now.
Eric,
This is certainly a legitimate concern. I share it to the extent that I believe companies should avoid doing business with state-run companies or those that use actual forced labor (I don't count "sweatshops" which simply pay very low wages or have harsh working conditions in that category, as long as employment there is strictly voluntary). However, I have come to see the idea that authoritarian economies can gain a competitive advantage over those that are significantly freer as a fallacy. Sure, there may be some short-term cases where a coercion-free business will find its trade undercut by those using slave labor or receiving government subsidies or protection. But I'm confident that in the end, a relatively free market will always outperform a relatively unfree one, for all the familiar reasons related to the inefficiency and inflexibility of central planning and the amazing inventiveness and productive potential of people who have greater freedom and incentive to create and produce, compared with those who have less freedom and incentive.
Love & Liberty,
((( starchild )))
Here's a good, short blog piece that addresses some of the issues related to the supposed advantages of coercion -- http://pajamasmedia.com/blog/myths-of-organized-labor/.
Love & Liberty,
((( starchild )))
I would add that even in cases where an outsourcing deprives United Statians of employment, this is not a negative development if the economic good that such a measure achieves elsewhere exceeds the harm it causes in the U.S. Libertarianism is ultimately at odds with nationalism, therefore our allegiance as libertarians should be to the cause of equal freedom and opportunity everywhere, rather than as partisans for the people of a particular region.
A global perspective that sees all workers as equally deserving is part of what helped communists build a mass movement that transcended national borders and resulted in communist regimes coming to power in numerous countries around the world. United Statian nationalism will appeal to, at most, about 5% of the world's population, while building nationalist libertarian movements in multiple countries would produce a movement divided against itself.
Love & Liberty,
((( starchild )))
Starchild,
What you say is largely true in theory, but the corporatists play the 'government coercion game' from both ends. At the same time they seek unregulated access to slave labour economies, they are among the foremost advocates of high taxes and heavy regulation on their domestic competitors.
Some protectionist measures may have their place, such as in agriculture or emerging (or recovering) industries.
Those are good points too, but until the rest of the world becomes libertarian or free-market oriented, protection of the free market here is of paramount importance. In a world where everyone adheres to the free market, exclusive national economies would become counter-productive and irrelevant.
Eric:
Nations don't trade with each other. Individuals do. Why would you force me to pay a higher price for some good I seek to buy from an individual abroad? What responsibility do I have toward an American who cannot produce said product cost competitively?
-Derek
In theory, what you say is true. But you can't argue that you're trading with individuals in a case like China, for example. There, the nation owns all the industry.
It's very much the same as well with transnational corporations. They are not individuals, but often organisations functioning much like an independent country.
By trading and buying from such entities, you actually undermine the free market. The cost as a consumer may be less in the short run; but the long-term effect is the ultimate erosion of a genuine domestic free market and ultimately, higher prices with lower quality and fewer choices. We see the results of that even now; in 1960, 50% of Americans owned their own farms; 25% were engaged in domestic manufacturing and about 15% either owned or worked for a small business of some kind. Today, 1% are farmers, about 9% are in manufacturing and our trade-deficit with China is soaring. The only people profitting from this situation are the stock-speculators whose portfolios are boosted by outsourcing; and the money-manipulators who drive down wages while increasing costs.
As small businesses and domestic production continues to decrease, more and more economic power passes into the hands of corporate monopolists who charge higher and higher prices for goods and services of less quality. We're witnessing this situation in America as well. In the recent North Dakota floods, the US was forced to obtain an emergency relief request from Bangladesh for ropes and sandbags, which are no longer produced here.
There is no reason why the US should be economically dependent on any other country. We'd see a revival of the free market here; with corresponding wage increases, lower prices, and higher quality goods with more choices the minute we can pry these corporate theives and their foreign contractors out of the system.