In age of outsourcing, do the old rules apply?

Christian Science Monitor ^ | March 5, 2004 | David R. Francis |

[sarcasm]

ping

[MegaSilver]

Politicians are trying to figure out if there are ways to discourage outsourcing without killing trade and international investment with its benefits.

Yes. Lower the corporate tax rate. Impose tariffs on countries that impose tariffs on us.

[EEDUDE]

Free traders leave out one of the most fundamental
assumptions that was used as a basis for the argument that "free trade is good".

The assumption in the early economic models of free trade was that there would be a free flow of capital AND labor in both directions.

That is NOT a realistic model of what's happening today.

[A. Pole]

The assumption in the early economic models of free trade was that there would be a free flow of capital AND labor in both directions. That is NOT a realistic model of what's happening today.

Good point. American workers will not get easily the work visas in China, India or even in Western Europe. And the few who could will have to abandon their families and friends. Also the knowledge of local language might be required.

First generation immigrants might have it easier. They can follow their jobs in the country of origin.

CEOs and shareholders do not need to migrate - they can move their assets with the click of mouse.

[neutrino]

Thanks for the ping! It has made software engineering look like a risky major for American college kids.

Yes...to the point where fewer are signing up for technical degree plans. Where will our next generation of scientists and engineers come from? They won't!

Ahh, well. Perhaps we can compete for jobs on our Chinese (or Indian?) masters' plantations.

[RussianConservative]

I already see issue of IT/Project Manager demand of Americans to China and India...these posted in job boards for Americans...soon US will have what it give Britian, Germany and Soviet Union and for time China/India, etc: brain drain...peoples of quality will follow monies and will learn language: places I see US intellect go: 1. Ireland, 2. New Zealand, 3. Russia, 4. India and last China...in that order.

[Elliott Jackalope]

There's another aspect to all of this. I've had a number of things break in my home over the last couple of weeks, all things that were supposedly good quality products, but that all turned out to be cheap "Made in China" junk. Brand name goods, top dollar things that were supposed to be good for years and years, but that didn't last 24 months.

From here on out I'm only going to buy what I absolutely need, only the barest minimum of that, and the cheapest, cheapest cheap cheap cheap of the cheap. Why not? It's not like you can buy anything of any quality any more. Nothing is made with any quality nowadays, the more you pay for anything the more you're getting burned. I've learned my lesson. From here on out I now realize that quality is an obsolete notion, it's only the cheapest of the cheapest for me from here on.

[Huber]

I can see from the article that Chuck Schumer and Christopher Dodd are ready to help in any way they can.

[searchandrecovery]

I think the long-term threat of offshoring s/w development is overstated. Yea, America will shed some jobs (and it will hurt), but many of these experiments will crash and burn. Why? There's something unique and special about being able to walk down the hall and talk to a developer whose work you are paying for. Work done 6,000(?) miles away, with only phone access (or, heaven forbid, get on a 747 and fly 15 hours), in a third-world country with a different culture, graduating from colleges you know nothing about, is RISKY. Plus, there's that whole problematic software as a strategic asset thing.

Call centers, radiologic analysis, financial analysis, tax prep - yea, many jobs at risk, but not all. Most cubicle-dwelling jobs in America - I think the risk is overstated. Word.

[Clintonfatigued]

Very well-put.

[Snuffington]

Some economists, including erstwhile free-traders, now worry that the offshoring trend reflects a fundamentally new situation. Instant and cheap communication, coupled with the rise of millions of newly educated workers in low-wage nations, creates the risk of a rapid shift of jobs. "It has never before happened," says former Reagan administration economist Paul Craig Roberts.

Gets a little tiring playing Cassandra here. But here it goes again...

Beware of betting the future on things "that have never happened before."

Sheesh, not even 6 years ago we were reading about how this new World Wide Web thingy had made brick-and-morter retail obsolete. The writing was on the wall. The new technology had fundamentally changed old assumptions. Everything was going to be different now.

Anyone still betting on that one?

More importantly, is there any reason to believe we've truly figured out where all this offshore stuff is going with a whole.. maybe 2-3 years of experience with it? With as many horror stories as success stories? With the effects on long-term expectations still unknown?

This one isn't decided yet folks. I'm still not convinced that India's IT industry is our equal, let alone our superior. Not by a long-shot.

[lewislynn]

I can see from the article that Chuck Schumer and Christopher Dodd are ready to help in any way they can.

They know where their bread is buttered and the Republicans will be sucking hind tit on this one.

[lewislynn]

This one isn't decided yet folks. I'm still not convinced that India's IT industry is our equal, let alone our superior. Not by a long-shot.

No but the corporate mindset is exposed and it looks like they can't be relied upon or trusted anymore.

[Snuffington]

No but the corporate mindset is exposed and it looks like they can't be relied upon or trusted anymore.

The corporate mindset is somewhere between pack animals and weasels. But that's not new. That's why they fell so hard for the dot-com bubble then. That's why they're falling so hard for the offshore "bubble" now.

Not one in ten corporations are going about offshoring with proper understanding of what they're doing. They're focused on either keeping up with the fad, or hiding their financial ineptitude by quickly lowering quarterly labor costs.

[lewislynn]

Globalization, he writes in an e-mail, "should enhance overall world welfare, but at the immediate and extreme expense of the workers in the US who lose their jobs or suffer wage cuts as a result

Global redistribution of wealth (socialism) at our expense only.

Conservatives for redistribution of wealth?...Lots of them here at FR.

[Euro-American Scum]

John Williamson, an economist at the pro-trade Institute for International Economics in Washington, calls the Roberts thesis "a load of nonsense." The US economy, when it is firing properly, creates more than 2 million jobs a year, enough to offset losses to India or other nations. And many of these jobs will be paying well.

Repeat after me, John . . . "Outsourcing is good. Outsourcing is right. Outsourcing works."

[Euro-American Scum]

Lawyers have not standardized law sufficiently so far to let some jobs go abroad.

Knock me over with a feather! /sarcasm

[squidly]

Impose tariffs on countries that impose tariffs on us.

It really isn't that hard to figure out, is it?

[Euro-American Scum]

Work done 6,000(?) miles away, with only phone access (or, heaven forbid, get on a 747 and fly 15 hours), in a third-world country with a different culture, graduating from colleges you know nothing about, is RISKY. Plus, there's that whole problematic software as a strategic asset thing.

Ah, but they're not graduating from foreign universities. At least not all of them. Visit your local neighborhood university one of these days, and take a walk through the quad of an engineering or computer science department, and tell me if you hear the English language spoken.

Those cheap third world tech workers are being educated right here, underwritten by either their government or our own, or a combination of both.