There are societal costs that are not included in the computation of macro economic benefits and costs.
Yes, there may be. But there are benefits also that may be hard to quantify. Like the qualitative improvement in customer service I have noticed with my American Express account since my calls have been answered by Sharma in India instead of Paul in Minneapolis, and the improved customer retention that Amex will obtain along with their cost saving. Shadow price that.
If you want to buy only the "Made in USA" label, you can go right ahead, but be careful, there may be more domestic content in a Honda than a Ford. The distinctions are increasingly blurry. It's a competitive world market out there. Deny American companies the ability to buy programming talent in India and some British company will certainly buy it and sell it in the US at a Barclays Bank branch.
It's too late to batten down the hatches. Walmart has become the world's favorite retailer, as well as its most respected and feared one. It is the only place I can buy a fragrence-free shaving cream for under $2 a can (and it is made in TX).
The mills in Massachusetts have closed. The millworkers did not succeed in getting jobs at Digital Equipment, but some of their children did. Those labor markets are notoriously sticky. People just hate to move and you can't teach an old dog new tricks. Young dogs love tricks though.
I don't agree that some combination of your proposals will be attempted or that free trade zones have to be regional.
It will be hard to reach sufficient consensus on a solution to manifest itself in law. But market prices adjust instantly. If India is producing twice the number of graduates in software engineering as the US and the cost of living is much lower there, that is where you can expect more software jobs to be created. Multinational corporations based in the USA and other countries will employ these talented individuals if it is a cost-effective proposition for them to do so and any attempt by legislation to prevent American companies to do so will simply handicap "our" competitive position.
I don't see anything wrong with the search for cheap foreign labor, per se. One day the notorious sweat shops of China, producing cheap plastic toys and garments will move to Zimbabwe, where those jobs and working conditions will be a distinct improvement over what the people of that country are currently facing.
We usually don't even notice these things unless our own job is being threatened, because our benefits as consumers is pretty enormous. Wage rates for programmers in US were pretty high last time I looked. I expect them to fall some. Radiologists are next. On and on. The prices adjust and the market clears.
One question for you, Cary: How would you justify taking interventionist measures to prevent outsourcing of labor if you are opposed to taxing labor-saving technology? Isn't it really better to buy hand-made goods instead of plastic ones made by machines? And think of all the jobs that are lost to these machines that work night and day.
Sam |
