Campaigns/Elections

Barack on Outsourcing, Love

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While (some) Republican candidates are busy demagoguing immigration, (some of) their Democratic opponents, the New York Times reports, are demagoguing free trade and outsourcing—or, as the Times puts it, many candidates "are increasingly moving toward a full-throated populist critique of the current economy." Take it away, Barack:

While campaigning in Iowa last week, Senator Barack Obama, Democrat of Illinois, suggested that even those who followed the standard advice for coping with a globalized economy—get more education for higher-skilled jobs—were losing out.

"People were told, you've got to be trained for high-tech jobs," Mr. Obama said, "and then it turned out that some of those high-tech jobs were being outsourced. And people were told, now you need to train for service jobs. And then it turned out the call centers were moving overseas."

No more high-tech jobs in America, eh? No low-skill jobs either? Are there any jobs left, besides those in the $32 million Obama campaign? Is this why otherwise upstanding citizens in Washington, DC have taken to robbing backyard barbeques of Chateau Malescot St-Exupery?

This was, of course, the "populist" line taken by the Democratic candidates in the 2004. As economist Dan Drezner wrote in Foreign Affairs, "the alleged migration of jobs overseas" was the "chosen scapegoat" of Sen. Kerry:

Should Americans be concerned about the economic effects of outsourcing? Not particularly. Most of the numbers thrown around are vague, overhyped estimates… The creation of new jobs overseas will eventually lead to more jobs and higher incomes in the United States. Because the economy—and especially job growth—is sluggish at the moment, commentators are attempting to draw a connection between offshore outsourcing and high unemployment. But believing that offshore outsourcing causes unemployment is the economic equivalent of believing that the sun revolves around the earth: intuitively compelling but clearly wrong.

Obama also called for a permanent reinstitution of the assault weapon ban, channeling the philosophesof the Black Eyed Peas: "There's a reason they go out and shoot each other, because they don't love themselves."

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  1. For all the talk of jobs being outsourced, I have yet to meet a fellow programmer that has had it happen to them.

  2. I’m not an economist, so I won’t pretend to address whether increased outsourcing is all going to be for the good in the end (though I will comment that quite a few libertarians seem skeptical of the consensus among experts that global warming is a real problem, a consensus that is bound to be as strong as the one among “economists” that outsourcing is going to be great in the end). But I think what gets folks about it is the change that it engenders. Many working class folks, especially males not oriented towards college, could at one time count on getting a decent job that was physical and paid decent money. Now they can’t. Yes, you can say, these guys should go to college and become accountants or such, but that’s a great change to ask of them. I guess they don’t have a “right” to stop outsourcing, but they certainly have the right not like it one bit as it effects them in a way they personally feel is quite negative.

  3. Obama also called for a permanent reinstitution of the assault weapon ban

    Bu-Bu-But the Democrats keep telling us they don’t want to take our guns away!

    Pay no attention to the man behind the curtain.

  4. There was an interesting WSJ editorial about outsourcing, and the author claimed that the effects of outsourcing are comprable to the effects that a new technology would have. The example he gave was x-ray processing outsourcing – having an Indian radiologist look at an x-ray for 10 dollars rather than 100 dollars is the same as inventing a machine that would read the x-ray for 10 dollars rather than 100.

  5. There will always be a need for skilled trades in the US. They can outsource factory jobs to China and even medical jobs (like reading radiology reports) to India, but if you need your roof fixed or your house rewired…

  6. He of the gentle bumping will soon be here to pick insane nits regarding heliocentrism.

  7. but if you need your roof fixed or your house rewired…

    Tough noogies! Send your wiring to India. Send your roof to Bangledesh. Turnaround time is currently less than three months.

  8. How many Iowans became unemployed when their job was outsourced to Idaho?

  9. Are there any jobs left?

    According to Michael Moore some years ago, all jobs in this country involve flipping hamburgers. That is the kind of intellect I want behind healthcare reform.

    It is time some American workers at Boeing lost the cushy jobs that Japanese and Indian politicians promised to their commercial jet manufacturing base. Obama knows this cuts in both directions, doesn’t he? Protectionism has such a glorious history this can’t go wrong.

  10. My question regarding outsourcing and manufacturing deals with what we will do when we are in another major war say with CHINA. Will we be expecting China to ship us our guns to fight against them with?

    Some fields can be re-established in no time. Production, tool and die making, machining are all trades that take years and years to master. So what happens if we suddenly need to increase the output to major war levels in the future? Who will do all the work if there is no field left for people to get in to begin with that could be used for such activities? Certainly not the illegals as I don’t see many folks who have the skill set to pick fruit, cut up chickens, mow grass or roof houses using those same skill sets to operate a Swiss Turret Lathe. I can learn to pick veggies in about 5 minutes.

    I look at it like this. If we are not producing anything we are headed for the shitter fast. We already allow many things to be made overseas that used to be made here, yet we are surprised when we find glycol in in food products from China being sent here.

  11. Obama supports reinstituting the utterly failed and symbolic ban on so-called “assault weapons?”

    He of the empty platitude?

    Really?

    I’m shocked.

  12. “There’s a reason they go out and shoot each other, because they don’t love themselves.”

    So ‘batin is the key to ending violence?

  13. Pretty much any job that can be done at a desk can be outsourced. There’s been talks about outsourcing teachers. Replacing the In-class highly educated teacher with a computer monitor and a low-educated security guard. This way, 5th grade Math can be taught by 1 individual.

  14. Outsourcing Teachers will help promoting HOME-TEACHING

  15. For all the talk of jobs being outsourced, I have yet to meet a fellow programmer that has had it happen to them.

    I know several. However, each and every one of them got a new equal-quality job within six months (most within two months). The only exception was a younger kid who decided to go back to school.

  16. I wouldn’t tell my young son/daughter to go to college and study computer science, engineering, etc. There’s NO POINT.

  17. With unemployment reaching an all time high of 4.5% this outsourcing thing has got to be stopped. If things keep going the way they are, unemployment could reach 4.4% or even 4.3% and then the shit will surely hit the fan.

  18. It always amazes me that the people who complain about outsourcing jobs to other countries or even other states are the same ones who endorse a massive amount of taxes and enviromental, labor, and price controls on businesses. Then they talk about the evils of capitalism and the greed of profits that make other places more attractive to run their businesses.

  19. Hey Dee,

    Who builds like half or MORE of all the weapon systems? Good ol’ USA. War production is not a problem…. Well, it IS a problem, but in the opposite way.

  20. No more high-tech jobs in America, eh? No low-skill jobs either? Are there any jobs left, besides those in the $32 million Obama campaign?

    Maybe we could all get government jobs – I understand that it’s a real growth industry.

  21. Yes Stephen Macklin…ur absolutely right,

    Having Unemployment got to .0001% would be great Think for America.

    .We can all work for McDonalds, mow lawns, do roofing, sell trinkets. Is’nt that the point of the immigration POLICY…to kick out the mexicans…outsource all high paying jobs to other countries…and have americans pick tomatoes, work in McDonalds, mow lawns, etc.

  22. Tell me Stephen Macklin,

    I don’t know if u have any kids…but…what would u recommend your son/daughter to study in college?

  23. Capn Mike- We are in what amounts to a piss ant war right now when compared to the last world war. Should this country in the next 25-50 years need an instant ability to make MANY more weapons than we do now you will not have all the production areas to pool from to make those weapons.

    At this very moment in time we are ok. But in time with fewer and fewer people getting educated or trained in production techniques due to lack of jobs and this move to outsource overseas you will have a big vacuum to fill. If you recall in WWII nearly all factories were overtaken to produce war goods. We made lots of weapons back then as well but did not have the need for LOTS of them until the war got going. Back then you could turn a manufacturing facility for just about anything into one for making war good and count on being able to us the same employees to make the needed goods.

    If in 25+ years we don’t have much manufacturing to speak ok not only will you lose the skillset and workers in that field you will also lose your ability to change over now non-existant factories to make goods for a war. After all its hard to make something at a place that no longer exists as of 20 years ago.

    I just see the outsourcing of this particular field to be a real detriment to the US and only will become more so in the future.

    The government has not made its own weapons in over 30 years. If the gun control crowd gets its way in the coming years as well and manages to shut down the only manufacturers we have in the US then who will make these weapons? How good a shape will we be in should we need guns and people to shoot them if by the time we need them they have been outlawed for 30 years? All our production capacity has been sent overseas to China who the last time I checked was our enemy just a few years ago but now aren’t even though they are still communist! So in no time you could lose your ability to manufacture guns, lose the skills of shooting since its would be outlawed for a generation and not have either. I think thats whats called fucked, especially when your new non-enemy communist friends are all now geared up with the production abilities we used to win our past wars.

    We already had a a problem just counting the numbers of people we would have to fight. If they are the only ones with guns as well we might as well surrender now.

  24. To be fair to Moore, he probably was repeating the oft heard reference (Perot made it famous) to the fastest growing occupations in the US, and burger flipping (food prep) is one of them. But if you look at the list, not all of these jobs suck.
    http://www.bls.gov/news.release/ecopro.t06.htm
    (I have to ask though, why in the world do we need so many more JANITORS? Are people making more of a mess these days?)

  25. Alice,

    As a 30-year old engineer, I recommend you tell your offspring to study engineering. Preferable chemical, but mechanical or electrical will also do. Then tell them to get involved in the biotech/pharma industry. It’ll be tough to get started, but once you’ve hit three years of experience, you’re golden. Why? Because in biotech, you not only need to know all your “engineering fundamentals” (i.e. schoolwork) but also your “practical engineering” (i.e. real-world work involving creatively addressing or getting around the ridiculous levels of regulation) and also completing enough paperwork to make a the most hardened paper-shuffler have a heart attack.

    BUT, if you can master these three seemingly-unrelated skill sets, there’s money to be made because most people can only handle one or two.

  26. Alice Bowie,

    Robotics.

  27. Except the Communications majors, of course, who get distracted by shiny objects and can’t handle any.

  28. Food prep can rock – think of it as an expanding luxury industry. I’ve made as much as 25 bucks an hour doing food prep for a high end catering company.

  29. Alice,

    As a Director in an IT Consulting company that actually does, among many other things, occasionally help clients move some of their operations off-shore, I’d would definitely tell anyone’s children to study engineering/IT. Over the past few years several of my clients have gone through several waves of off-shoring, and despite some jobs going to India/Shanghai/Ireland (yes, Ireland), even more positions end up getting created on shore. There seems to be a fallacy that there is a limited, fixed, finite amount of jobs in the US, when in reality there are whole new fields of employment being created all the time. As it stands now, I have many more open positions than I have viable candidates to fill them, and it has been this way since at least ’98….

  30. With unemployment reaching an all time high of 4.5% this outsourcing thing has got to be stopped. If things keep going the way they are, unemployment could reach 4.4% or even 4.3% and then the shit will surely hit the fan.

    That’s if you believe that to really be the unemployment rate. Some people are skeptical of that number.

  31. I wouldn’t tell my young son/daughter to go to college and study computer science, engineering, etc. There’s NO POINT.

    You’re doing your children a diservice if you’re telling them that. All these industries still have lots of openings in the US. Getting visas to have foreign developers come to the US to work in software development is more common that moving development abroad, which is generally a pain to manage and not worth the hassle unless it is something that can be very explicitly speced out. And while India and China may have tons of unskilled laborers available, they’re not exactly overrun with highly skilled software developers.

    Engineering is a slightly different situation but still is a relatively stable field. Manufacturing engineering is in a slight decline because the engineers need to be on-site, but the R&D side of engineering is still strong and unlikely to change that much.

    Skilled labor in these fields is scarce on the global level and will remain so, since once developing countries start to get some traction in these fields, the result tends to be that the wages equalize to the higher level as labor becomes more efficiently utilized. See the evolution of high-tech industry in Japan and South Korea for example. The real long-run determinant of wages in these fields will be productivity and the suppression of productivity by poor infrastructure and institutions, the lack of supporting tradespeople, and limited access to credit markets goes a long way to explaining the gap in wages.

  32. Outsourcing is as much about employing more workers than employing cheaper workers. By outsourcing the work that can be outsourced, a company can concentrate on work higher up the value chain. Through outsourcing, the US is effectively leveraging the efforts of workers outside the US to make US workers more productive and more wealthy.

    Bottom line: Today’s children should not at all fear high tech education or careers.

  33. Just a question for the more informed on the whole outsourced production thing.

    China is a good example.
    When an American company outsources manufacturing work to China it can save money because there are lower costs for manufacturing in China. But the source of those lower cost include, among other factors, working conditions, environmental controls, and other factors that raise the cost to manufacture in the US. Given that we value our own workers, and now recognize that environmental issues do not respect borders, what are the ethical implications of outsourcing (beyond the bottom line). If we consider the global economy, when we pass along externalities like worker abuse and environmental degradation to another country what is the overall impact on the global economy. China’s recent reforms have created a large privileged class at the expense of the rest of their society. Is that an overall benefit for China? Is it an overall benefit for US?

  34. There will always be a need for skilled trades in the US. They can outsource factory jobs to China and even medical jobs (like reading radiology reports) to India, but if you need your roof fixed or your house rewired… Hire a Mexican. There overhead is lower and you are already paying for their health care.

  35. Neu Mejican,

    There answer would be that it is a benefit to both at this point, though that could change.
    James Fallows wrote a Great article in last (?) month’s ATLANTIC MONTHLY that tackles your question as well as some others. Good read.

  36. China’s recent reforms have created a large privileged class at the expense of while also improving the standard of living of the rest of their society.

    There. Fixed.

    Is that an overall benefit for China?

    Of course.

    Is it an overall benefit for US?

    It is… just as Virginia is better off because California is a fairly wealthy state and not a totalitarian hellhole where 80% of the occupants are peasants living off the land.

    But, just for the sake of argument. What if it weren’t?

    Do you think the lives of 300 million Chinese who are fabulously more wealthy than their parents 25 years ago should not be considered at all?

  37. Alice Bowie:

    I wouldn’t tell my young son/daughter to go to college and study computer science, engineering, etc. There’s NO POINT

    Why would you do that, when they can make $100k at Google? Unless you think they won’t be smart enough to work there..

  38. If we consider the global economy, when we pass along externalities like worker abuse and environmental degradation to another country what is the overall impact on the global economy.

    (Presuming we’re not talking about actual worker abuse, e.g., slavery…)

    In the global economy these things are better viewed not as externalizing poor working or environmental conditions as much as internalizing good working and environmental conditions. The US has chosen to require certain protections for workers and the environment. Outsourcing work to people who place less interest or value on these concerns means moving the work to the frankly better place to do it.

    To think that this poses a problem for the outsourcing society or the global economy in general requires first proving that the economics of free trade is wrong. Regardless of the reason the costs are lower, lowering the costs of production are a win for everyone involved.


  39. Will we be expecting China to ship us our guns to fight against them with?

    No, we’d do what Israel does – which is buy our weapons from someone else. We can buy from the Germans or Italians. Anyway, last I checked, all our major weapons systems are built here, so your point is moot.

  40. Because in biotech, you not only need to know all your “engineering fundamentals” (i.e. schoolwork) but also your “practical engineering” (i.e. real-world work involving creatively addressing or getting around the ridiculous levels of regulation) and also completing enough paperwork to make a the most hardened paper-shuffler have a heart attack.

    BUT, if you can master these three seemingly-unrelated skill sets, there’s money to be made because most people can only handle one or two.

    The same is true for environmental engineering. Environmental consulting firms are making fortunes right now, mostly for generating massive piles of paperwork for environmental impact studies and permitting.

  41. MikeP,

    I want to make clear that I don’t have a well formed opinion on this… but I notice an error in the above post…

    I posted: created a large privileged class at the expense of

    Which you felt could be corrected as: while also improving the standard of living of the rest of their society

    This is objectively false. The standard of living of the poor majority in China has fallen significantly during the reform period despite the increased wealth of a small sector of the society. How are you measuring the improved standard of living for the society? Does one new millionaire averaged against those who have lost ground result in an overall gain? At what ratio? I would say that when more people see a decline in their living standard than see a gain, the gains of the minority that see them are “at the expense of” those with the loss. Quibble with the wording if you like, but your correction goes against the facts as I understand them.

  42. Hire “a mexican” (assumed unskilled) to roof my house? Maybe – a pro could come back and fix it later. Hire the same unskilled worker to wire my house? Yeah….. The fire department can probably extinguish the fire, and the EMT’s can probably get my heart going again.

  43. MikeP,

    (Presuming we’re not talking about actual worker abuse, e.g., slavery…)

    Oh but we are.

  44. MikeP,

    Regardless of the reason the costs are lower, lowering the costs of production are a win for everyone involved.

    But when one sector which has internalized those costs avoids them buy moving production to another sector, the cost are not gone, they are just externalized by a different route.

  45. I got an idea for you Alice – tell your kids to go work for the UAW:
    UAW workers

  46. To All who respond,

    From your Keyboards…to Gods Hear. I studied Electrical Engineering (undergraduate BSEE) and things did work out for me. I’m pretty successful (I work in the finanical IT Industry.)

    But, I’ve seen changes, if u remember the tv show from long ago…alien nation…where aliens came to earth and took peoples jobs…and earth-lings revolted…and a new KKK (of all human races) got together to bother these aliens…I don’t see that scenario to be too unreasonable. Maybe not not…but perhaps in 20 years. I don’t think America will be able to compete with the High Tech of some of these countries…But I hope I’m completely…at least for my kids sake.

  47. Especially the way education is goin in this country….

    It’s ashame that US companies had to go abroad to get educated labor…I’d wish they’d simply educated the kids growing up hear…Just picking the Creme-of-the-Creme…from all races and social classes…probably would have made me feel better.

  48. Just picking the Creme-of-the-Creme…from all races and social classes…

    Just what the hell do you think that employers who see national borders as the mere inconveniences they are are doing???

  49. This is objectively false. The standard of living of the poor majority in China has fallen significantly during the reform period despite the increased wealth of a small sector of the society. How are you measuring the improved standard of living for the society? Does one new millionaire averaged against those who have lost ground result in an overall gain? At what ratio? I would say that when more people see a decline in their living standard than see a gain, the gains of the minority that see them are “at the expense of” those with the loss. Quibble with the wording if you like, but your correction goes against the facts as I understand them.

    Okay, Neu Mejican. I have just spent the last 20 minutes trying to verify the facts as you understand them. I have been completely unable to. I can’t find any nice summary of incomes over time by quartile or region — at least none including the last decade. But not a single source I have looked at indicates any sort of broad decrease in standard of living in China. Even those that decry increasing income inequality note that, except for the poorest peasants whose only income is now-cheaper agricultural products, everyone’s income is rising.

    Care to share your sources?

  50. I agree MikeP,

    Perhaps I’m too afraid of Globalization. Perhaps I’ve become 2 cozy with how it was during my time (im 42).

    I feel that once all is diluted throughout the world…all I can do for my kids is leaving them lots and lots of Life Insurance…B-Cause money will probably always b king…baring the NUCLEAR BOMB..and all

  51. But when one sector which has internalized those costs avoids them buy moving production to another sector, the cost are not gone, they are just externalized by a different route.

    When Manhattan outsources its garbage dumping to Staten Island, you get a Manhattan without a garbage dump and a Staten Island with a garbage dump and a wad of money. And that is exactly as it should be since the cost of a garbage dump in Manhattan vastly exceeds the cost of a garbage dump on Staten Island.

    If one society is going to protect its workers and environment and another isn’t, it is because the workers and environment are more valuable to the former society than the latter. In no social calculus should they be valued the same.

    In other words, the externalized costs are much lower to the society willfully accepting them than to the society outsourcing them. The costs to the globe of those externalities is actually decreased by their outsourcing.

  52. MikeP,

    I would assume that you have access to better data than I. I am going mainly on media–
    (e.g., A recent Frontline, and http://www.time.com/time/asia/covers/1101020617/cover.html )

    a couple of articles I have read.

    http://journals.cambridge.org/action/displayAbstract?fromPage=online&aid=416028

    http://rspas.anu.edu.au/economics/staff/meng/inequal.pdf

    I am perfectly willing to believe that not only do I not have the facts, but that the facts are difficult to get for China.

  53. MikeP,

    This means I overstated when I said “is” objectively false.

    I should have said “seems”

  54. Alice –

    In answer to your earlier question I have two children, both very young. I don’t have a crystal ball that will tell me what the most lucrative or employable field of study will be when they would likely be graduating from college.

    I would however advise them not to make their choice based on that. i wouldn’t encourage my children to take on a well paying employable career that they would hate.

    I would tell them to pursue what they love. Then figure it out from there.

  55. “(Presuming we’re not talking about actual worker abuse, e.g., slavery…)”
    Ditto what Neu Mejican said. In China the state crushes any attempt by workers to organize for their betterment, as well as applying pressure to the workers in other ways. Its a situation of socialized working conditions and privatized profits, all state sanctioned.
    Libertarian arguments about workers not being coerced because they can always just go to another job are much stronger in contemporary free first world nations where there are enough decent jobs for an employee to really use that option without subjecting him and his family to starvation. In peasant societies I actually think Marx had something to sensible say, starving people who have no savings or property don’t exercise “freedom to contract” they are victimized by it.
    And MikeP, while I think that its good to see all boats rise, I do think that can happen in situations where there still is a problem (for example, if the poorer classes are working incredibly harder yet getting marginally better off while some state supported rent seeking Chinese “CEO” gets incredibly better off while working marginally harder, then this is still a sucky program). If our trade policies help legitimize such a society then I say that stinks.

  56. Neu Mejican,

    Here’s a different take from Cato@Liberty today…

    The low wages and tedious work of the early sweatshops were a temporary condition. The author reports that the minimum wage in Shenzhen has been increasing by about 30 percent per year in the last couple of years. As the workers in Shenzhen become more skilled and the companies develop better business relationships with Western companies, demand for the area’s manufacturing facilities rise. The companies expand their facilities and hire more workers, and the competition for workers then pushes up wages. And that, in turn, will lead companies to increasingly transition to more complex and lucrative activities. Firms in Shenzhen will specialize in manufacturing more and more complex products, and eventually some of them will begin designing and building their own products.

    That’s what happened in postwar Japan, South Korea, and Taiwan, all of which have since achieved Western levels of affluence. The anti-globalization activists meant well, but in reality, the opportunity to become integrated with the global economy will do far more to help the average Chinese worker than anti-sweatshop laws could possibly have done.

  57. “People were told, you’ve got to be trained for high-tech jobs,” Mr. Obama said, “and then it turned out that some of those high-tech jobs were being outsourced. And people were told, now you need to train for service jobs. And then it turned out the call centers were moving overseas.”

    Sounds like the kind of woefully awful advice handed out by high school guidance counselors.

  58. My question regarding outsourcing and manufacturing deals with what we will do when we are in another major war say with CHINA. Will we be expecting China to ship us our guns to fight against them with?

    True, but you need to balance that consideration with the consideration that international trade promotes peace, preventing that war from happening in the first place.

  59. I work in IT. Outsourcing is only an option for a very small number of projects. One of the biggest obstacles to software development is effective communication. Even on a team with 10 developers all at the same location there are constant problems with this. Moving half the development off shore would make it unmanageable.

    As someone mentioned above, it can work when a project is well speced, but anyone who works in IT knows that almost nothing is well speced!

    In any case, the kind of things that would get outsourced would be the easier stuff. It would only free the domestic developers to work on more complex/higher level work, which would be a gain in productivity.

  60. I have to ask though, why in the world do we need so many more JANITORS?

    I don’t suppose we need them but it is nice that we can afford them. It is nice to work in an office that’s cleaned every day and has toilets that are cleaned every day and has someone on call if a toilet overflows etc.

    If there’s one thing I notice about other countries it is that facilities often tend not to be kept up quite so well.

  61. MikeP-I’m always a little suspect of work from Cato (or Heritage or New Century for that matter). If a Cato fellow said that he found that globaliization was not great he would probably lose his job as that kind of organization only hires and keeps paying people who tow the ideological line. There are more disinterested sources out there (academe and government, and yes, I know they are not free from bias either, but they do have institutional mechanisms, like blind peer review, that make them more disinterested). Mind you, I’m not sure what those sources have to say on this subject. You and Cato may be right.

  62. To those who decry conditions in China due to trade, I have three questions…

    1. Would the government treat the people better absent relatively free trade?

    2. Do you think that some middle ground where the US government micromanaged China trade policy would be any better than relatively free trade — especially considering that both industry and labor in the US will do everything they can to impair that policy.

    3. Are the half a billion people the last three decades have raised to relative prosperity utterly invisible to you between the new-millionaires and the still-peasants? What the hell???

  63. True, but you need to balance that consideration with the consideration that international trade promotes peace, preventing that war from happening in the first place.

    True.

    You think the Neocons would be so quiet on Saudi Arabia if they weren’t pouring oil down our throats?

  64. MikeP,

    You seem, in the face of admitting you can’t find any good data, a little too willing to believe the conclusion that would fit your assumptions.

    I never said trade with China was bad… I just think the ethical questions are worth asking. Solutions to problems can not come about if those problems, or potential problems, are ignored.

    For instance, the economic reforms in China seem to be doing more to entrench the authoritarian power structure than to displace it. China is the perfect environment for capitalist interests to leverage state power.

    Surely you recognize that this is occurring. Is the continued repressed liberty of 1.3 billion people invisible to you. Doesn’t the fact that your purchases support that repression directly bother you?

    What the Hell? ;^)

  65. Surely you recognize that this is occurring.

    No doubt. It even (horrors!) happens in the US.

    Is the continued repressed liberty of 1.3 billion people invisible to you. Doesn’t the fact that your purchases support that repression directly bother you?

    I seriously fail to understand what in heaven’s name I can possibly do to stop the repression of Chinese people. I can’t even stop what I find to be repressive in the US.

    I do know that having economic rights and no social rights is a hell of a lot better than having no economic rights and no social rights. Also, having money and goods and services is better than having none. I also know that there is some evidence that a more broadly wealthy society is more likely to have the means, the time, and the power to change the government for the better.

    It may be a too-rosy view, but it’s entirely possible that after a few decades of the party apparatchiks feathering their beds from private favors, they may even be willing to cede power to the broader populace. In the meantime, they’ll have wiped out a lot of the local party corruption that interferes with the larger economic health of the country and that the population in the hinterlands has long suffered under.

    That’s at least as plausible a story as the suggestion that anything could be done by the US to improve the situation in China.

  66. I work in IT and close to 80% of our work is outsourced to India. I work on 1 project while I coordinate 4 or 5 in India.

    Do I or my co-workers fear loosing the remaining 20% of the work to India?

    Nope.

    The programmers in India do a very good job, but when there is a mistake or error, or a custom request from the client, the communication can be very difficult with them. Also, they have trouble ‘thinking outside the box’.

  67. MikeP-there are many folks who make the argument that free trade engages us with China which may indirectly help them. And I should guess that more wealth usually equals more education which may lead to more freedom seeking in the populace. It also would adimittedly be hard to change their policy, it’s quite stubborn from what I have read.
    However, if free nations, meaning Europe and the US and Japan, would condition opening their markets to China making concessions that would make their people’s lives better and more free, then that could put China in a hard spot. Of course, it would be hard to get the other nations to go along, as it would benefit any nation who did the unethical trade with them (in fact, this is a problem in any market where people have to decide whether to do business with an unethical yet economically beneficial partner). On the other hand, there is something to be said for not getting your hands dirty. If you were a company and you could buy cheap car parts from a Nazi company that used concentration camp labor, would you? I guess you could always argue that without your purchases they may gas the workers, so you are helping them. But I dunno…

  68. So, what is the link between Chinese prosperity and Ch?teau Malescot-St. Exupery? The popularity of great Bordeaux wines with the newly-prosperous Chinese is driving the price of classed-growth Bordeaux to absurd levels.

  69. MikeP,

    I think Mr. Nice Guy’s post at least raises some interesting speculation about what we can do to help repression in China. Now that they have committed to the market economy, leverage from US companies to improve worker’s conditions and environmental practice might be possible. This may require that the US government use some of its influence with US companies. Light touches all around. Nothing heavy handed.

    I, actually, think that the recent scare regarding Chinese food imports is the kind of incident that can have long-term positive impacts on China. Not wanting to lose the US market to regulation, they may make changes to internal controls. The same type of pressure could work to change the conditions for Chinese workers, or environmental practices.

    Currently, China needs us as much as we need them. That balance of power is shifting, I think. Our opportunity to be a positive influence may be missed if we wait to see if “a few decades of the party apparatchiks feathering their beds from private favors” leads to reduction in authoritarianism. China has had authoritarian governments for thousands of years…frequently paired with economic success. I see no reason to believe that those in power will cede that power without some overt carrot being offered.

    Don’t know the solution. But your view indeed seems too rosy a view to me.

  70. However, if free nations, meaning Europe and the US and Japan, would condition opening their markets to China making concessions that would make their people’s lives better and more free, then that could put China in a hard spot.

    That may well be true. But I still question whether doing so will improve the total utility of the people of China any faster or even as fast.

    I do not doubt that China is immeasurably more oppressive on dissent than free nations. I fully realize that China’s veto-proof one-party state is a terrible exemplar of government. But China has succeeded in bringing vastly more people more quickly out of grinding poverty than any state in history. Granted, there was no magic involved: All the government had to do was get out of the way. But it did, and further reforms still come regularly.

    In the end, trade is between the people of China and the people of the US and elsewhere. And in China it is the people of China who most benefit from that trade. Making political statements by fighting against the Chinese government does not seem to me to be obviously helpful.

  71. Most of the numbers thrown around are vague, overhyped estimates… The creation of new jobs overseas will eventually lead to more jobs and higher incomes in the United States.

    That’s some high-test irony right there. Gotta love a good ellipsis.

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