In Defense of Outsourcing

Over at Foreign Affairs, Daniel W. Drezner has some interesting things to say about outsourcing. A snippet:

Until robust job growth returns, the debate over outsourcing will not go away—the political temptation to scapegoat foreigners is simply too great.

The refrain of "this time, it's different" is not new in the debate over free trade. In the 1980s, the Japanese variety of capitalism—with its omniscient industrial policy and high nontariff barriers—was supposed to supplant the U.S. system. Fifteen years later, that prediction sounds absurd. During the 1990s, the passage of NAFTA and the Uruguay Round of trade talks were supposed to create a "giant sucking sound" as jobs left the United States. Contrary to such fears, tens of millions of new jobs were created. Once the economy improves, the political hysteria over outsourcing will also disappear.

It is easy to praise economic globalization during boom times; the challenge, however, is to defend it during the lean years of a business cycle. Offshore outsourcing is not the bogeyman that critics say it is. Their arguments, however, must be persistently refuted. Otherwise, the results will be disastrous: less growth, lower incomes—and fewer jobs for American workers.

To his credit, Drezner does defend outsourcing and he even offers up a couple of strategies to deal with the politics of the matter. Worth reading in full, which you can do here.

[Link via Arts and Letters Daily]