If outsourcing is wrong, I don’t want to be right

If outsourcing is wrong, I don’t want to be right

I promised Micah that I would address the issue of outsourcing here at T&C, since he linked to this photo:

Now it is clear that the points made in this photo must be taken seriously because of 1) the bold font, 2) the red bold font, 3) the excessive punctuation,,, and 4) the ALL CAPS.

The “anti-outsourcing bill” was called the “Bring Jobs Home Act,” which demonstrates the political reality that there be no correlation between a bill’s title and its actual effects. To be clear, the assertion that we need to prevent people from trading with whomever they wish is not partisan; here Harry Reid is against outsourcing but plenty of Republicans would espouse the same opinion.

What is outsourcing? It is simply the substitution of cheaper labor for expensive labor, where the cheaper labor happens to live in another country and the expensive labor lives here. At the risk of repeating myself, the basic case for outsourcing is simple: if we like 1) businesses to lower their costs of production, 2) businesses to then be able to lower their selling prices for all of us, 3) scarce resources being allocated to their most highly-valued uses, 4) rewarding efficiency and not inefficiency, 5) treating all human persons with equal dignity (not granting more to those who live within our border and less to those who live outside it), and 6) a preferential concern for the poor, then outsourcing is a clear way to achieve all these things.

1) and 2) need no explanation. 3) and 4) refer to the decision to send resources (land, labor, machinery, etc.) to one industry versus another. We would consider it wasteful of such resources if we devoted half our national effort to, say, producing Hummers since consumer preferences have clearly shifted away from these gas guzzlers. But resources should not only be directed toward those products that consumers want, but also to those products that can be produced more cheaply (since, basically, consumers want more of products that are more affordable).

The difference is clear

5) and 6) obviously recognize that outsourcing has objective moral benefits. The pro-free trade position is frequently characterized as appealing only to materialistic concerns with profit and efficiency and the protectionist position as holding a monopoly on morality against this materialism. But, virtually all protectionist arguments include some variant of “keep jobs in the USA,” which raises the question of why we should be keeping jobs away from people in other countries? If they work more efficiently (either producing more or doing so more cheaply) than us, why prevent them from getting jobs? Is it simply a lack of charity for our neighbor? Further, when we recognize that these foreigners are usually quite poor, what right do we have to prevent them from working for an American company when their alternative is usually just subsistence farming?

Of course, you will say that our neighbors in the USA are nearer than those in Malaysia, and perhaps subsidiarity might require us to protect nearer jobs at the expense of far-away ones. But this goes back to my original point; preventing outsourcing to “Bring Jobs Home” will only do so at the expense of more domestic jobs lost. Propping up inefficient domestic industries will raise consumer prices (harming other domestic and foreign businesses), and reduce foreigners’ ability to buy our exports (since we are forcibly keeping relatively high-paying jobs from them).

I’ll use the reductio ad absurdem again: if you are against outsourcing, then I presume you find it preferable to personally produce every single item you consume.

2 Comments

  1. To be fair, I posted the picture because of the point that the Democrats controlled the legislative and executive branches for 2 years and did nothing, but freely complain now that the House is Republican.

    I don’t know much about economics. I am, however (and very unfortunately), quite knowledgeable about hypocrisy.

    • Well, you only have to pay mild attention to Congress to become knowledgeable about hypocrisy.