Outsourcing Gone Wild...

I think that is an exaggeration. You are right that free trade is one of the few issues on which most economists agree. All major schools of economics take a stance in favor of free trade. Keynes supported free trade, as did Hayek, Friedman, etc. Modern economists are almost all in favor of free trade as well. However where I think you go too far, is to say that free trade "at any and all levels is beneficial to all parties involved."


There are trade-offs in having free trade, as there are trade-offs in almost all things. Saying free trade and outsourcing frees our citizens up to do more productive work, is true to a large extent. However, the people who are losing their jobs ARE being harmed. A 45 year old in the manufacturing sector, who raised his family through that industry, cannot simply retrain into a more advanced sector of the economy. It isn't that simple. That person IS harmed by free trade. However, you have to look at the benefits to contrast that point. The benefits are that all people everywhere receive cheaper goods, and future workers and young workers, instead of being in the manufacturing sector, are free to train into more productive sectors of the economy. So the trade-off is that thousands of people lost their jobs, but hundreds of millions get cheaper goods. I don't see how that is even really a tough decision. Far more people benefit from free trade than are harmed. Therefore I think the case for free trade is incredibly strong, and the case against it is quite weak. But to say there isn't a case against it and that there are not trade-offs involved, is not accurate.

 

Oh b(*)(*)(*)sh(*)(*)!!! You don't give a dog squat about the people being exploited, you just want to take advantage of the situation so you can show an unrealistic profit margin at everybody else's expense. If you wanted to help them, you would stop supporting and financing the dictators that enslaves them. Then you would invest in their countries so they can become productive and self sustaining, by making the items they make to sale in their own countries to boost their economies so they are comparable to our own, then a balance of trade can be established that doesn't destroy our own economy, in the process.
　
　
　
Oh that's right, there is no "guaranteed" profit in that, right?

 

I thank you for the compliment, I guess. However, don't you think it is possible that you are missing something? You seem to ignore the benefits of free trade, while exaggerating the detriments of that trade. There are some workers harmed by free trade, that is correct. However, there are far more workers who benefit from that trade. Why do you do that? Why do you ignore the fact that workers in this country get cheaper goods out of this bargain? Why do you ignore the fact, that the price of goods goes a long way in determining standard of living? Maybe I am not the one missing something, maybe you are.

 

The overwhelming majority of the companies outsourcing do not pass that savings on as it should according to all capitalistic models. The whole purpose is creating a profit where one isn't obtainable elsewhere. Those profits go directly into the pockets of the management and the shareholders, and does little to nothing to help the consumers pocket except help lightening it.
　
　
Why do you think so many of these companies are showing record profits and expanding salaries to unheard of levels of compensation for their management, and the politicians that help them make all this, the rich get richer and the poor get poorer scenario, possible?

 

We have more unique and diverse jobs in this country than we've ever had in our history. We have a position at my company for a Social Media Manager, this job never existed before the last 5 years. Same can be said for various levels of software engineers, Q&A testers, product support technicians, business information analysts. You really need to divorce yourself from the idea that people have to be making object in order for them to be productive, frequently we're our most productive when we're facilitating the production and distribution of those things, rather than turning bolts in a factory.

Look up comparative advantage, please!

In general, these reduce the quantity of the goods imported below the point that the tariff recovers, IOW we make more money in the aggregate just letting goods come in free and clear.

Like I said earlier, making the thing is often less important than selling, distributing, marketing and handling the logistics for the thing.

This is an issue, just not with trade, it's another issue with median voters, poor political structures and irresponsible politicians.

I have, and it was very painful for me to accept at first, if this place was archived you could see my early posts here sounded a lot like what you're typing now. I took time however to seek out and digest information from various sources, and in the end, I couldn't argue with either the logic, nor the evidence. The jury isn't out on this topic.

And yet... virtually any measure you want to take of quality of life clearly shows it's increased exponentially since that time period. We get goods more cheapily and of better quality. Folks love to romanticize the past, but it's unrealistic. Just take for example the act of buying a good. Used to be that I had to leave after work to go to a store that may or may not have the thing I want and if they do ti's unlikely they'll have much variety.

Contrast that with today where I can open a new tab in my browser and in a few clicks have that item sitting at my door either today, or by tomorrow morning. Even despite... and perhaps in spite of our current slump, we're wealthier than we've ever been in our history.
　
It's my supportable opinion that we have more competition from more sources providing us with more purchasing options that we've ever been fortunate enough to have. Computers and more specifically the internet have destroyed the boundaries that used to stand in the way of business and created an enormous amount of jobs and products that have never before existed. China can have the job in the assembly line, I'd prefer we have more folks writing the software that will replace that factory worker one day or an engineer designing it.　
　

And yet! Nations just as poorly run that are able to trade are prosperous, the evidence doesn't support your hypothesis.
　
　

Why is that? Trade benefit their societies and eventually leaves their citizenry wanting more liberalization, in both trade and social issues eventually leading to the collapse of authoritarian political structures. Hence why these types of authoritarian states are also the least likely to embrace free trade, you don't want to get lumped in with that lot, do you?

 

If the products that are cheap were as good a quality, and had an emphasis of lasting long while being made, than your argument would have merit. The quality of the products merit a price that would be the equivalent if it was made here. The only difference is there would be more people with money to participate in the market. To get the actual quality, you must pay the equivalent in price as all American products use to be. And all of that is not taking into consideration the fact that since imported products our now the majority, basically outsourced labor has the monopoly, the prices of those same cheap products is increasing monthly. Those who support free trade could say that has to do with inflation and the devaluing of the dollar, but they have argued that inflation doesn't exist because the consumer goods going up aren't to be counted in the equation, that they would cut their own throats in doing so. Basically, your side has nothing, but claiming it is my side who has nothing, when in all actuality, if you count numbers and the fact we live in "democracies", my side has the free traders by the balls.

 

I chose my words carefully there, I said trade, not necessarily global or free trade. My point was only that trade, and thus specialization and comparative advantage are always beneficial at the high level.

Of course some individuals are hurt, but this is a macro concept so the aggregates are all that matter. This worker losing his job sends a signal to the rest of the economy that this sector is no longer profitable and the rest of us learn at his expense. This is creative destruction, a Schumpeterian concept that tells us, that through failure, innovation is encouraged.

This isn't a case against it however, no event occurs without an effect, that's like me building a boat, but chipping a nail in the process and calling the overall project a net loss because a nail was lost in the process.

 

So folks stopped buying American cars because they were of higher quality? I think not.

This isn't supportable in the isolation of this thread, nor in any broader context whatsoever. You are flat out lying now, dishonesty is extremely unbecoming.

Just to underscore that this is a blatant lie, I'll supply more logical evidence in support:
http://arnoldkling.com/econ/markets/trade.html
http://www.csun.edu/~vcecn007/ECON_350/Fall10/ECON350GainsFromTrade.htm

You literally have to hide from information to arrive at your conclusion and maintain it. You shouldn't keep your head in the sand.

 

This is another misnomer. Like those positions wouldn't exist if manufacturing hadn't been shipped overseas. We would just simply have both, if not more, as 20 trillion dollars wouldn't have left our economy. We have over 300 million residents. All individuals, with different talents and handicaps. I truly believe that you except that misnomer as fact, however, if you took a step back and thought about it you would see it doesn't make sense. It is basically arguing you can't have rich and a middle class, which we all know is simply untrue.

 

American cars from every generation are still running to this day. With protectionism in place, the imports would have been priced in a way only a selected few could afford. Older American cars you could hit a pole at 60 in and not get scratched. The fiberglass cars of today you are dead if you hit a deer. The main reason imports were so popular is gas consumption. The effect of that one could attribute to the gas industry lobby more than anything, and the constant gouging of the American public. Repair costs of imports is atrocious, and one simply needs to have a national geographic from 1980 to see you could get a brand new pick up that got 25 miles to the gallon and cost 2500 to see the benefits of "free trade" from the automotive perspective.

 

Why would they? There'd be no incentive to create those positions. It's not a matter of "losing these jobs" but rather gaining more productive jobs in their stead. Just like the lawyer that doesn't do all of his own filing.

It's always amusing to me how we in our every day lives exploit comparative advantage and then view it as a negative when the topic is expanded to nations instead of individuals. Very confusing to me.

 

What on earth are you talking about? Like your industry wouldn't exist without free trade? Such notions are ludicrous at best. As companies now make up positions for fun because they have so much wealth. I think it is funny how individuals can argue for their rights as an individual while arguing the exact opposite when nations are involved. Like people's best interest are motivating factors for free trade. LMAO. You honestly expect those of us on the other side of the fence to believe that even though you don't care about your own respective nations you still somehow care about the citizens of the world as a whole? "Comparative" advantage is the equivalent of "logical" fallacy.

 

Basic trade analysis supported by empirical evidence. Why are you making opinion free from economic analysis? It seems a little silly

 

Not to the extent to which it does, we're a global company and folks around the world help put food on my table.

This is crazy talk, companies are profit maximizing institutions, they don't do things for fun, they do them for profit and clearly these "made up positions" are contributing to that... else they wouldn't exist.

I'm a champion of liberty at all levels, I wouldn't restrict your right to exchange no more than I would a nations, we should be free to do business with whomever we please.

Don't go down this road, this is willful ignorance parallel with regarding gravity as a "theory" -- you'll reveal yourself as a fool with no potential to add to this conversation and that'd be disappointing.

 

LOL. 300 million working Americans can see the empirical evidence all around them. People don't need to read a book about what color the sky is when they can just look up. It doesn't take a genius to figure out with the widening wealth gap, and "economists" pushing for everything to be the same to remedy the situation, to understand who the "economists" work for.

 

You are arguing to pay protectionist policies, as I assume you are an American, to all nations but maybe Europe. You would not have to pay duties when selling to Americans, providing your company revenue wasn't based solely on using foreign slave labor. If your company can only turn a profit if you can use slaves to make your product, than your company truly doesn't deserve to exist.

 

First, you've made it clear your not aware of what empirical evidence is and your confusing it with anecdotal evidence, which is marred by bias, myopathy and ignorance. Most people know the sky is blue, but have no idea that it's a result of water molecules bending light, just like most folks don't know that not doing your own laundry or cutting your own grass are examples of comparative advantage.

I'm arguing for liberty, the right and ability to sell your wares to whomever you choose free of the distortions and limitations of protectionist policies.

I could be hyperbolic and ask why you hate liberty, freedom and the market? But I don't think I'd get a genuine answer, or worse.

 

Don't get all snooty. You can always find another job. Retrain. Go back to school...at least...that's what you tell all of us...right?

 

Just pointing out what is obvious to the reader.

Why should I have to? I have a productive job that aids in the creation of a product consumed by people in the national and global market. Why do you hate liberty so much? That's really all I can gather from your perspective, why do you embrace the authoritarian policies you claim to hate?

 

em·pir·i·cal
adj \im-ˈpir-i-kəl\
Definition of EMPIRICAL
1
: originating in or based on observation or experience <empirical data>
2
: relying on experience or observation alone often without due regard for system and theory <an empirical basis for the theory>
3
: capable of being verified or disproved by observation or experiment <empirical laws>
4
: of or relating to empiricism

Let's start off with that.

As for your last point, I'm sure the people working for national robber barons of the early 20th century would have argued much the same thing. Would you rather protectionism or world government to regulate you on a global level? I assure you, those are your only 2 options.

 

Anikdote;

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Yet the majority of the people in the USA are poorer than our grandparents, and their purchasing power is depleting as we speak because there are not enough good paying jobs to support the rising cost of living.
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I saw that episode of the twilight zone. Toys and trinkets maybe, in the meantime a loaf of bread that cost $.12 30 years ago cost almost $3.00, and wages are relatively smaller. A construction helper could make 2-3 times what minimum wage was then to build a $30,000.00 home, will be lucky to get minimum wage to help build a $300,000.00 (comparable as in the same square footage number bedrooms and baths) home.
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Yet one bread winner was all that was required in an average household in those days to raise a family, buy a home, put their kids through college, pay doctors bills, and still have enough to buy some medical insurance in case of an unexpected emergency.
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Now both parents "have to work" and three to four jobs are required to do those same things. And today you need medical insurance to pay for a doctor visit because the costs are so ridiculously high no average household can afford it. Did you live during that time, or is it you that is being unrealistic here?
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Once again what twilight zone was that. In the days I remember you could go to a local hardware store or lumber yard and get almost anything. And if they didn't have one assembled you could buy the stuff to build it yourself. Today you can't find anything, because nobody can afford to stock anything. Here is a simple test. Go to the local furniture store and look at a real wood coffee table, now go to the giant Lowe's or Home depot big box store, price the cost of the raw material and see which
cost's more. Even if you make it yourself a pair of pants or a simple button up shirt will cost more for the raw material than buying a cheap piece of garbage, made by a slave labor force and shipped from the other side of the world. This is why there is no competition.

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Wealth isn't based on how fast you can get junk you probably don't need in the first place. Wealth is the accumulation of money, valuables, or the purchasing of real estate, etc...
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Not how fast it takes you to get the latest video game.
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Once all the jobs are eliminated who will be able to buy that junk, the guy with the PHD fighting over a below minimum wage job wiping some rich guys arse competing with an illegal alien for the position???
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Maybe I'm just getting old but again, one you have eliminated the need for every worker and one guy is all that is needed to push a button and provide everything every one will ever need, how will they purchase the stuff, if they have no visible means of support, AKA a job??
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This fantasy that one day everybody will be individually wealthy if everybody designs a piece of software that makes them rich and famous is just that, a fantasy. Peepee cauca no substance.
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Everybody can't be a doctor or a lawyer or a computer designer for that matter, and even if it was the guy at the 7-11 with the PHD will still be working for minimum wage. Not to mention that everybody is not as diverse as you would assume. We need people who work for a living. We need people to have jobs so they can start with nothing and work their way up.
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At some point we need to think about stability again. It's a nice dream but everybody can't be born with a silver spoon sticking out every orifice. It ain't going to happen. People need jobs not fantasies.&#12288;

 

Of course the real problem is that, despite being completely ignorant of Ricardo/Heckscher-Ohlin/New Trade Theory/International Political Economy, the economic nationalist- whilst spouting their clear cut drivel- will find those that lap it up (egged on of course by industries that profit from low wage labour)

 

Loved this comment! Can you back it up with appropriate empirical evidence? You're probably going to need a poverty index analysis or a subjective poverty analysis based on securing a consensual basket of goods.
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Note that its difficult to find western nations that can compete with the US in terms of an abundance of low wage labour. Countries of course which have embraced free trade, with a much greater % of GDP in imports and exports

 

Hahaha. I even posted the definition of empirical. You guys have nothing.

Comparative Advantage

A situation in which a country, individual, company or region can produce a good at a lower opportunity cost than a competitor.

Let's break this down into a simple example. Suppose that two firms both produce two main products: ice cream and bicycles. The first firm, the Danish Ice Cream and Bicycle Co., is located in Denmark, where dairy milk is abundant; the second firm, the Gobi Ice Cream and Bicycle Co., is smack in the middle of the Gobi Desert.

The Gobi Ice Cream and Bicycle Co. must spend a lot of money to make ice cream, whereas the Danish Ice Cream and Bicycle Co. spends way less to produce the same amount. The two firms are dead even in their production costs for bicycles.

Because the Danish Ice Cream and Bicycle Co. has a comparative advantage with ice cream production, it should probably consider turning exclusively to ice cream. Along the same vein, the Gobi Ice Cream and Bicycle Co. should probably give up the ice cream and focus on the product in which it is the least disadvantaged (bicycles).

NO WHERE DOES IT SAY THE GOBI COMPANY SHOULD STAY IN THE ICE CREAM BUSINESS BY SHIPPING ITS JOBS TO DENMARK, THEN PAY GOBI OFFICIALS TO HELP DISENFRANCHISE GOBI CITIZENS SO THEY CAN STILL TURN A PROFIT WHILE THE NATION OF GOBI COLLAPSES.

Let's drop the "comparative" advantage BS and pick something new I can destroy. Please.

 

Let me try this again, the definition of empirical:
em·pir·i·cal
adj \im-&#712;pir-i-k&#601;l\
Definition of EMPIRICAL
1
: originating in or based on observation or experience <empirical data>
2
: relying on experience or observation alone often without due regard for system and theory <an empirical basis for the theory>
3
: capable of being verified or disproved by observation or experiment <empirical laws>
4
: of or relating to empiricism

NOT

1
originating in or based on observation or experience only a qualified, certified economic expert can explain using nothing more than theory and stats