TCS Daily


Outsourcing: The Invisible Hand's Global Justice

By Uriah Kriegel - April 14, 2004 12:00 AM

For years, the radical left proclaimed that free trade was evil because it disenfranchised the world's poor. "Globalization," we were told, is a complex mechanism designed to facilitate the exploitation of those who have nothing by those who have everything. Twice or thrice a year hoards of enraged youths would come down on cities the globe over to protest this injustice.

Now we are seeing what market-friendly observers have predicted all along: that globalization will lead to the emigration of employment -- and with it opportunity -- from wealthy nations to struggling ones.

The organ of this emigration is what is euphemistically called outsourcing. Outsourcing brings employment to the citizens of countries who are rarely offered opportunities by either their government or by their private sector. That is, it is the private sector of the United States (and to, a lesser degree, other wealthy nations) that offers them a way out of their socioeconomic predicament.

Yet the critics of free trade are unhappy. More absurdly, many of the anti-globalizers of yore are also -- or have transformed into -- fierce opponents of outsourcing. The reason is that outsourcing leads to the "exporting" of American jobs to China, India, Mexico, and other foreign countries. In other words, what is now a reason to oppose free trade is just the opposite what used to be the reason to oppose it: that it may help the less fortunate at the expense of the more fortunate, God forbid.

Part of the appeal of the anti-globalization movement in certain circles has to do with its casting of "globalization" as a complex and multi-faceted phenomenon, whose culmination is bound to be the world's cultural conquest and domination by America.

In reality, globalization is a simple and single-faceted phenomenon consisting in nothing more than the removal of trade barriers artificially imposed by entities which had no business imposing them in the first place. This removal does indeed have far-reaching consequences, but it is important to see that at its core globalization is simply the introduction of this little fact into commercial life.

If I want to sell my apple to a Dutchman for a dollar, I should be allowed to. The Dutchman and I are consenting adults who decided in good faith to exchange goods for our mutual benefit. When the American and Dutch government decide that they will each charge a dime to allow our exchange to go through, they overstep their natural authority, but also, they distort the market, by requiring me to sell my 1-dollar worth apple for 80 cents or the Dutchman to buy a 1-dollar worth apple for 1.20 or for us to share these extra costs.

The opposition to free trade used to be dominated by what were after all good, though perhaps misguided, intentions. Its main concern was that workers employed by American companies in the third world were not protected by labor regulation the way their developed-world counterparts were. The worry was that labor conditions in American-owned third-world plants and factories were inhumane.

Set aside the paternalism involved in disallowing third-world workers to make their own decisions regarding which jobs to accept, using their own reasoning and given their own circumstances. To my mind, such paternalism is the manifestation of truer and deeper disenfranchisement

-- but let that pass. The motivation, after all, was rooted in genuine concern for the well-being of people whose life is not nearly as good as ours; and that's to be commended.

Today, the opposition to free trade has been appropriated by motivations less noble. Worries about "exporting America" don't tap into compassion for the plight of third-world workers. Instead, they tap into feelings of nationalism and xenophobia. They fuel hatred for Chinese, Indian, Mexican, and other people whose life is, after all, not nearly as good as ours; and that's certainly not to be commended.

In other words, the case against free trade has morphed from the Naderite to the Buchananite. That Democrats should tap into and exploit such feelings that are the lifeblood of the Buchananite economic agenda is ironic and sad. Having premised their 2004 campaign on the supposed horrors of Bush's "unilateralism" and disrespect of other nations, they proceed to brandish with great pride a much more sanguine unilaterlism in economic matters. Where Bush speaks of sacrificing American life for the well-being of the Iraqi people, Democrats insist that America should steer away from contributing to the well-being of the Chinese people.

It may be claimed that the desperate Left would say anything in the run-up to the elections in order to get rid of Bush, but the cries against "exporting America" do not in fact capture its true sentiments. And indeed it is quite likely that this is one more act in a long line of pretense by the leadership of the Democratic party, from its support of the war in Iraq two summers ago to its opposition to gay marriage today.

But with a little more sense of leadership, Democrats could have cast outsourcing as a way to offer genuine aid to developing countries, aid that is much more likely to have a positive structural and long-lasting effect of these countries' economies than the one-time handouts style of aid we are accustomed to. My own sense is that the reason Democrats don't do anything like this is, at bottom, that they don't have the confidence that they stand for what Americans really appreciate.


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