They haven’t seen the effects of too much government control of trade lately (which are much worse than the “unfair” competition they fear), so they think open markets are costing jobs, lowering living standards etc. After a few years of government control, they will see the mistake in their thinking, and opinion will trend back toward favor of free trade.
Temporary self-delusion is sometimes part of the price we pay for self-government. It’s worth it, even though it causes inefficiency at times.
‘These swings happen from time to time. People suddenly get the brilliant idea that government control of trade is good if it protects “me and mine.” What they are really saying is “I can’t cut the competition, so the government needs to help me.” The people currently fooled by such silliness try to cover themselves by calling such ideas “fair” trade instead of protectionism.’
Please explain exactly what your overall economic interpretation is of outsourcing to India. For instance, let’s say a programmer here in the States was making $80,000/year. His competition in India, at the time, was quite happy to be paid $20,000 a year in a country where the median income was something like $800/year. “Naturally” many US corporations bit the bullet and outsourced, though it certainly didn’t work out well for all.
It is true that in the intervening time the salary of Indian programming talent has risen to perhaps $50,000 a year, while American salaries have remained flat or dipped a bit. In a sense it’s been like foreign aid, transferring wealth to India at the expense of Americans. However, the net effects of this practice and the policies that permitted it seem negative overall:
- Quite a lot of American capital has flowed to India (deficit).
- American workers that would have had high incomes and spent them in the US are unemployed or making less (in general).
- We have created a formidable workforce and infrastructure in India, which will now largely compete with the US.
- There is considerable reluctance on the part of young people to enter the technology field. Who can blame them?
Where’s the upside in that scenario? That we can pay the CEOs 5000x a normal worker’s salary rather than 3000x?
Outsource the CEOs, I say.