[sarcasm]

Paul Craig Roberts must be a communist.

[Batrachian]

Outsourcing and offshoring of work does help corporate earnings, and sometimes stock prices, and that's it. There is no other benefit to us. To China, yes. To India, yes. To Mexico, yes. To us, no.

[jpthomas]

The US must have an "absolute advantage" in private services expertise, because as the Wall Street Journal reported on Monday, foreigners outsourced 53.64 billion more office work to the United States than American companies send abroad in 2003. (See More work outsourced to US than away from it)

[Southack]

"There is no necessary reason for the relative costs of producing manufactured goods to vary from one country to another. Yet without different internal cost ratios, there is no basis for comparative advantage."

1. Infrastructure (good infrastructures move goods and services and data faster, for less money, with fewer losses)
2. Rule of Law (court costs, piracy protection, theft prevention, property rights...all factor into the cost of doing business anywhere)
3. Taxes
4. Freely exchangeable currency
5. Foreign Exchange value of currency
6. Local worker Productivity levels (some cultures value working hard for lots of hours with few days off, others don't)
7. Local regulations (red tape costs money)
8. Local corruption (paying off self-important bureaucrats is a big reason why "cheap" labor is seldom actually cheap)
9. Government stability (forget low costs, the risks are too high to invest in Zimbabwe)
10.Employee turnover (some cultures foster long employee/employer relationships, while other cultures don't breed such loyalty in any reasonable degree)

All of these things are above and beyond simple access to surplus labor or materials.

And ask yourself this: If "cheap labor" is the key to wealth, then why are the two highest-wage-paying nations in the world (e.g. the U.S. and Japan) also the two richest?

Likewise, ask yourself why the lowest wage-paying nations (e.g. Nigeria with 47% of its working population earning $100 per year...10% of China's average wages) aren't the ones with the most economic growth?!

[edsheppa]

For comparative advantage to work, a country's labor, capital, and technology must not move offshore.

This fellow must have got his econ degree in a box of Cracker Jack.

[WFTR]

First, it should be noted that economists don't really produce anything. Economists are mostly college professors who spin theories and bore students.

Secondly, the winning country in almost every major war in the past 150 years has been the country with the greater industrial strength. Keeping production in the United States is a matter of national security.

Thirdly, we should be concerned when productivity moves to other nations. People can say that other jobs will replace those that are lost, but we need to question whether those jobs are really productive. Shuffling paper for a bureaucracy may be a job, but often bureaucracies are just a means of bleeding the productivity from companies that are actually making something. If the companies that are actually making things eventually disappear completely, there won't be any productivity for the bureaucracies to bleed. Then both the bureaucrats and the workers will be without means of financial support.

Fourth, I think things will get better only after we begin outsourcing lawyers, bureaucrats, and TV personalities. I vote that this process begin at FOX News with Fred Barnes. He's just not that appealing, and his commentary could be just as easily outsourced to some guy sitting in India and reading into a TV camera. They could put a screen in Fred's chair and get the same quality of commentary at a much lower cost.

Ready for a Repeat
Bill

[EGPWS]

Economists are blind to the loss of American industries and occupations because they believe these results reflect the beneficial workings of free trade.

So who is it we should turn to as an alternative for infinite wisdom on the economy Mr. Roberts?

[Tuco Ramirez]

The worst aspect of outsourcing, which is rarely addressed, is the fact as more US companies employ people in other countries, US troops will certainly be used to ensure that work flows uninterrupted.

If Microsoft had thousands of workers in Cuba in 1959 as a cost-cutting measure, Castro wouldn't have been in power for a week...

[neutrino]

Excellent article! This describes how the free trade theories of Ricardo (circa 1817) are now obsolete and destructive.

If you'd like to be added to (or removed from) the offshore ping list, please FReepmail me!

[FrankR]

If we/they want the corporations to come back to the USA, there is one thing that will do it for sure:

Just make it cheaper for them to operate over here, than outsourcing...

I know...I have a remarkable grasp for the obvious, however, it's as simple as that...follow the money.

But as long as Congress and their greedy ilk keep piling punitive regulations and taxes on businesses and corporations...not to mention the lawsuits and unions...then I really can't blame the corporations for outsourcing...

It's call "Capitalism".