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An Outsource Of A Different Color
It becomes increasingly hard for me, these days, to make my mind up about various issues, because it's so hard to extricate the tiny slivers of fact from the vast tar pits of propaganda -- from both the right and the left. That's why I was grateful to find this Jacob Sullum piece -- a sensible defense of outsourcing:

When I started working in journalism, strips of copy had to be physically cut and pasted onto boards, which were then photographed to make printing plates. Today, thanks to cheap, powerful computers and desktop publishing software, this whole process is handled electronically: Instead of assembling and transporting boards, you create and transmit files.

The shift to electronic composing has reduced the manpower, time, and cost involved in putting together a publication. At the same time, it has eliminated all the jobs associated with literal cutting and pasting.

Was that fair? The question can't really be answered, and the reason goes to the heart of the ongoing debate about offshore outsourcing of jobs by U.S. companies. Fairness, a concept appropriate in resolving schoolyard disputes and adjudicating legal cases, does not apply to market outcomes, which are not dictated by a referee or judge but arise spontaneously from the interactions of myriad individuals engaged in voluntary, mutually beneficial exchange.

Like the people who used to work in newspaper composing rooms, call center employees replaced by lower-wage workers in India don't "deserve" to lose their jobs. But that does not mean they have a right to keep them, any more than candle makers had a right to block electric lighting or blacksmiths had a right to prevent the introduction of the automobile.

In all of these cases, the need to make a profit in the face of competition drove people to produce better goods or services or to produce them more cheaply. The upshot of this process has been lower prices, higher productivity, and a standard of living unparalleled in history.

Posted by aalkon at April 3, 2004 8:12 AM

Comments

Competition very seldom seems to produce better customer service, however. Wonder why that is?

Posted by: LYT at April 3, 2004 2:26 PM

Good to see some down to earth logic about outsourcing, which should be prefaced with the word foreign to differentiate it from just plain outsourcing that has been the norm in job evolution since the Luddites or before. Sure is strange to see the usually bitter antagonists waving the same protest signs and screaming bloody murder over 'foreign' outsourcing. We have the dem-union-kerry crowd marching right alongside the Perot-Buchanon 'that sucking sound' bunch fervently squawking that we're giving away American jobs. But then along comes Jacob Sullum with the nasty little truth that everyone seems to be missing. Yell as loud as you want, folks. The markets will have the last word.

The one thing in the US's favor is China and India still need us to buy their production, for now at least. Some pundits are comparing the US situation to the UK right before WWI. We were their 'china' then. We took away their lunch money in the decades following. Guess who's turn it is? But don't be too scared. Britain is still around. Just not the 500 pound gorilla it used to be. The one trump card the US still has is we Americans don't give up easily. Although we've never been this soft and fat as we are now. Going to be very interesting this first decade of the 21st century.

Posted by: allan at April 3, 2004 2:30 PM

Excepting my own lumpy, fleshy build, Americans are not soft and fat. The other argument about outsourcing was summarized by Daniel Drezner recently. I can't find the precise link now, but look for posts around 15 March 2004. Basically, productivity of workers in the States continues to skyrocket. We're better than the Japanese, the Germans, we're better than anybody. If our productivity continues to increase at this rate, Ford Expeditions will cost $17.33 in fiscal 2017.

I made that last part up.

Americans are not scared of work. In a dynamic, responsive society there will always be dislocations as markets make choices. But if you bet against the USA (at least for the next fifty years), you're going to lose.

BTW, did you see what's going on in Germany this weekend?

Posted by: Crid at April 3, 2004 7:35 PM

LYT,

I would say that competition has created customers with higher expectations of what good customer service is without creating more customers who are pleasant to deal with.

Posted by: A.Ho at April 3, 2004 7:56 PM