By Arnold Kling
The link may only work for a day, but Tyler Cowen and John Irons go at it on the online WSJ over outcourcing. I think that Tyler supplies all of the highlights:
Outsourcing resembles technical progress in its economics; in both cases, we procure something more cheaply, whether it is produced by machine or by Indians. We have had dramatic technical progress now for several hundred years. While particular groups take short-run losses, real wages have risen across the board. It is because we shed low-productivity jobs that we move to a wealthier and more-productive set of options.
…Many Indians and other recipients of outsourcing investment are desperately poor by U.S. standards. It is both proper and in our long-term national interest to help India develop into a free and prosperous economy. Indians do not count for less simply because they stand outside of U.S. national borders.
…Poor countries should not have the same environmental and labor standards that the U.S. does; they simply cannot afford them and do not have the requisite legal structures to enforce them. The best way to improve their standards is to help them grow rich, so outsourcing is part of the solution in this regard.
…I’m all for improving the lot of the current unemployed. This is best done by private-sector training, including for-profit education. Our rather bureaucratic government has no comparative advantage in retraining displaced labor.
For Discussion. Is it fair or unfair to refuse to trade with countries that have different environmental standards?