Friday, September 21, 2012

Outsourcing

After recently posting on why I have not written much on politics recently, I want to say a few things on where the policies that Democrats tend to favor that are in error.

Please note that I write this as somebody who very strongly supports Obama over Romney and somebody who wants every Tea Party Republican and theocrat voted out of office at the earliest possible opportunity.

However, one area where I think that the Democrats make a serious mistake - one which betrays the same moral qualities that they are fond of condemning in others - is on the issue of outsourcing.

I hold that outsourcing tends to benefit the average American and, even if it did not - at its worst, outsourcing lifts people out of poverty, giving them better access to medical care and education and greater opportunities in their own lives at a small cost to those in the top 10% in terms of global income.

Democrats, at least in principle, speak as if they favor lifting people out of poverty and seeing that they have better health care, education, and opportunities even at the expense of those in the top 10 percent. However, put the word "Outsourcing" in the statement, and suddenly many Democrats loathe the idea of seeing the top 10 percent suffer any type of economic setback, even if it results in large numbers of impoverished people obtaining these benefits in health care, education, and opportunities. We see them pointing to those living in impoverished reasons in the world as a threat and using arguments defending the status quo that would make a Republican supporter of the top 1% beam with pride.

I have mentioned in the past few days the fact that China has lifted hundreds of millions of people out of poverty, gaining access to levels of health care, education, and opportunities unimagined a generation ago.

It is impossible to separate this fact from the economic practice of outsourcing. What lifted these people out of poverty was American citizens purchasing goods and services that they produced.

I do not think that America has suffered from this development, any more than the top 1 percent of the population suffers by living in a world where the other 99 percent are healthier, better educated, and surrounded with opportunities.

With respect to oursourcing, Americans have obtained the benefit of lower-priced goods. In terms of overall economic status, there is no difference between cutting the prices of particular goods by 50 percent and getting a pay raise that would have allowed one to purchase twice as many of those goods at their original price.

Furthermore, increased wealth in other parts of the world means greater demand for American goods and services. It gives those people the means pay for things that people living with starvation and disease cannot buy.

Americans have suffered some economic downturns. Certainly, those people who were responsible would love it if we targeted the Chinese and blamed them for our troubles rather than blame those who were actually guilty. However, the guilty party in this case was not Chinese factory worker. It was American bankers.

Those bankers robbed the American people twice. First, they robbed us by selling sham mortgages - promising great benefits and burying the risks and costs. Then, when their financial slight-of-hand ruined their industry and their companies started to suffer, they robbed us again by collecting tons of government money and passing the bill on to us, our children, and our grandchildren.

The heads of these financial companies are the people who drove many Americans out of their jobs and homes - not the Chinese factory worker. Yet, they certainly do not mind the fact that Americans are blaming the Chinese factory worker and insisting on driving them back into squalor and starvation than meanding that these corporate executives lose their jobs and their multi-million dollar homes.

As I sit here in Colorado, I see nothing but benefit in the fact that people in Iowa or Florida or Washington state are doing well. I ask myself, "Would I be better off if California was a land of poverty, squalor, starvation and disease with no factories and no jobs and a population with no hope or opportunities? I do not see even the beginnings of an argument that says that this would benefit me in any way.

Similarly, it would be hard to make the case that my life would be better if only it were the case that Europe and Japan had the level of poverty and disease that we now find in Africa. I do not see how a case can be made that when 20 million to 40 million people starved to death in China from 1958 to 1961 that this was such a huge boon for - well, for my parents, in this case, that it was to be celebrated. I do not see an argument for attempting to arrange for a second great famine because of the economic benefits I would enjoy.

This latter point not only illustrate some of the economic aspects of outsourcing, it illustrates a moral issue. Even if it were the case that American workers - who are almost all in the top 10 percent in terms of income in the world - were to suffer a loss of a few dollars per hour due to outsourcing, there are moral problems with demanding that a couple billion people live with starvation and disease just so that those few Americans can purchase a few more sports tickets and beers.

In saying this, I am not claiming that all outsourcing is necessarily virtuous.

There are cases in which corporations go to foreign governments and say, "Let us build a factory and 'hire' your citizens as . . . well, as slave labor, though our marketing department tells us we cannot call it that. We will ensure that you and your military supporters obtain some of the benefits of this slave labor."

There are cases in which the corporation says, "Let us build a factory, poison your air and water, destroy your land, and spread disease among your population. We will profit from the goods we sell elsewhere and, again, make sure that you and your military backers are properly compensated for your support."

There are cases in which the corporation says, "Pass laws keeping my competitors out of this region, allowing us to better exploit the local population and circumstances by denying your people the opportunity to pursue alternatives to what we provide, and we will see to it that you and your military supporters share in the profits."

However, the problem here is not "outsourcing".

In these types of cases, it is important to focus on the actual evil. Mis-identifying the evil results in cases in which some good is inaccurately branded as evil while also increasing the chance that some evil will be missed because it does not contain this mis-identified property. In this case, it means that good outsourcing is inaccurately condemned, and domestic production containing the same evils are ignored because they do not qualify as outsourcing.

When I hear Democrats condemn outsourcing, I hear people making the same types of arguments and defending the same types of economic injustices as Republicans defend when they seek to protect and promote the interests of the top 1 percent at the expense of everybody else. I see people condemning in one sentence the very same set of principles and practices they embrace in the next sentence. It makes no sense to me.

9 comments:

Emu Sam said...

Parallel to the increased demands for American goods is the fact that we supply a lot of raw materials. We are a land-rich nation and have huge quantities of natural resources. As a result, many "Made in China" items started as Texas cotton shipped to India for weaving and were only sewn in China - for just the start of one supply chain.

Despite that, most of America's economy is in the service sector, which would seem to be the easiest to outsource - and yet, we're still an economic powerhouse.

Jesse Reeve said...

Outsourcing tends to benefit the average American... outsourcing lifts people out of poverty... Americans have obtained the benefit of lower-priced goods...

I had to scroll back to the top of the page after I finished reading, to be sure this wasn't written by a guest poster. Not one use of the word 'desire?' Has Alonzo become a consequentialist? What blog am I reading, again? :)

Lifting people out of poverty, etc. are handy justifications after the fact, but if outsourcing was the less profitable option, I doubt that manufacturers would do it anyway, to raise Chinese people out of poverty and provide American consumers with cheaper goods. Maybe the people responsible for outsourcing are motivated by a praiseworthy desire to lift Chinese factory workers out of poverty. But I think it's more likely that they're motivated by a condemnable desire to maximize their profit, no matter the consequences.

This blog post also contains a surprising amount of demagoguery.

We see them... using arguments defending the status quo that would make a Republican supporter of the top 1% beam with pride.

As if agreement with a "Republican supporter of the top 1%" on any issue is condemnable, or implies their allegiance or endorsement.

Americans have suffered some economic downturns. Certainly, those people who were responsible would love it if we targeted the Chinese and blamed them for our troubles rather than blame those who were actually guilty. However, the guilty party in this case was not Chinese factory worker [sic]. It was American bankers.

This is a red herring, plain and simple. "Don't blame outsourcing for American manufacturing jobs moving overseas-- blame the financial industry and the mortgage crisis!"

[T]here are moral problems with demanding that a couple billion people live with starvation and disease just so that those few Americans can purchase a few more sports tickets and beers.

As if there were no other reason to oppose outsourcing than to preserve Americans' luxury spending. As if the only consequence to an American factory worker who loses his job due to outsourcing is that he and his family have to cut back on their beer-and-sports budget.

Alonzo, I substantially agree with your conclusions on outsourcing, but these arguments stink.

Alonzo Fyfe said...

Remember, desires have no intrinsic value. Their value is determined by the degree to which they tend to fulfill or thwart other desires. Lifting people out of poverty, providing them with better health care and other opportunities, count as tending to fulfill other desires.

The desire to maximize profit ALONE certainly is not something we have reason to praise. However, even something like parental affection ALONE would be a threat to the well-being of anybody who is not the offspring of such a person. We must combine any desire with others that regulate their use. For example, they require aversions to causing harm and to deception.

I do not think it is necessary to explicitly state that lifting people out of poverty, providing them with better health care and better access to education tend to be desire-fulfilling.


As for agreement with a Republican supporter of the top 1% . . .

My post was directed at the Democratic opponent to outsourcing. These are people who alredy object to the types of arguments that say that the top 1 percent should keep their wealth regardless of the harms others are forced to endure. Consequently, a demonstration that their defense of outsourcing requires the same arguments would be sufficient to demonstrate that their views, at the very least, are inconsistent.

In writing a blog post, I commonly use this technique to narrow the focus of a post and prevent it from being too long. In fact, in my writings I typically assume that the proposition that there is no god has been rejected. Rather than spending paragraphs repeatedly defending this claim, I simply assume it and investigate where to go from there.


"Don't blame outsourcing for American manufacturing jobs moving overseas-- blame the financial industry and the mortgage crisis!"

It's more like, "Don't blame outsourcing for causing significant harm to the American economy. Blame the financial industry and the mortgage crisis."

Of course you can blame outsourcing for American manufacturing jobs moving over seas. Outsourcing in this context is DEFINED as the moving of American manufacturing jobs overseas. However, my point was that this is not harmful to the overall economy. Recent economic downturns have another cause.


As if there were no other reason to oppose outsourcing than to preserve Americans' luxury spending.

There is no general reason to oppose outsourcing. It would be foolish to deny that specific individuals may have specific reasons to oppose what is generally useful.

If we were to continue the discussion from general concerns to agent-specific concerns, we would encounter the fact that specific individuals suffer specific harms. Here, concern for the well-being of others and an opposition to "sacrificial lambs" would argue for adding measures to use some of the general benefit to deal with specific harms. Furthermore, it would argue that if the specific harms were so great, and the general benefits so small, that the latter could not cover the former, then the whole program is called into question. However, my arguments above are meant to argue that this is not the case. There is more than enough general benefit to justify using some of it to cover specific harms.

Jesse Reeve said...

Alonzo, I would guess-- though of course it is only a guess-- that your post was partially motivated by President Obama's campaign ad condeming Mitt Romney for his involvement in Bain Capital while it was engaged in outsourcing. If that's the case, then the general argument for or against outsourcing doesn't hit the mark directly. It is consistent for a voter to say, "Outsourcing may have good results, but I don't want to vote for a person involved in it. The job of the president is to serve the American people, and outsourcing shows a lack of concern for their well-being."

"Don't blame outsourcing for causing significant harm to the American economy. Blame the financial industry and the mortgage crisis."... Recent economic downturns have another cause.

"Economic downturns" are not simple events with single causes, nor is the economic downturn the single cause of every job lost. If a production line is outsourced, then outsourcing is to blame, not "the economic downturn." If unemployment contributes to economic downturns-- which seems plausible-- then so does outsourcing. Now, if you can find a Democrat, or indeed anyone, willing to say that outsourcing and not the financial crisis caused the downturn, I will support you there 100%.

There is no general reason to oppose outsourcing.
Here is one: outsourcing creates a market in which client countries compete to offer incentives to multinational companies-- including relaxed labor, environmental, health, safety, and inspection laws. It creates a situation in which Colombia can secure a competitive advantage by offering the services of death squads to intimidate factory workers ( http://news.bbc.co.uk/2/hi/business/1448962.stm ).

Emu Sam said...

If unemployment contributes to economic downturns-- which seems plausible-- then so does outsourcing.

Given that the economic downturn is global, and outsourcing has probably contributed more to global employment than to global unemployment, a person with more concern for international welfare than in local welfare might cheer outsourcing as a moral activity.

I'd also add that economic inter-connectivity is a great way to reduce conflict between two parties, although it does sometimes lead to "The enemy of my friend is my enemy" situations. I'm glad China's pretty happy with the US right now, and that's largely due to being each others' trading partner.

Alonzo Fyfe said...

Jesse Reeve

Your guess turns out to be wrong, though that would not affect your point.

Even though I live in a battleground state, I have not seen a single political advertisement - which tells you something about how I spend my spare time.

On the point at hand, outsourcing alone would not be a problem. A company that outsources jobs still has an option to use some of its expected gains to help those it puts out of work. Helping employees find new jobs, getting them into training programs (and paying for it), continuing their health insurance . . . these would demonstrate some level of concern for others that would be nice to see in a candidate for President.

However, I have not heard of Mitt Romney doing anything like this.

In fact, I cannot recall hearing Mitt Romney doing anything compassionate - though I have not done any detailed research on the subject.

dysangelist said...

I want to ask, though, since I know you take a strong stance against persistent government deficits: do you see any problem with the persistent trade deficits that seem to be connected to outsourcing (although the desire to burn more fossil fuel than we produce is also a big contributor)?

Alonzo Fyfe said...

There is a moral dimension to the debt that I object to. It is like taking out a credit card in your child's name, spending it on a vacation in Europe, and then giving the child the bill. From the moment the child starts working, he is paying hundreds of dollars per month for your vacation.

The debt takes money from those who cannot vote to buy the votes of those who can.

There are some exceptions to this.

Sending on projects that present generations well not benefit from should come from future generations that benefit. Education and infrastructure improvements (highway cinstruction) go here.

The costs of just wars should be borne in part by future generations - the present generation will sacrifice things far more valuable.

Rescuing the economy - assuming it is possible to do so through short-term deficit spending - qualifies. Even here, the spending should be on education and infrastructure that benefits those who will need to pay back the debt.

If you already have a massive debt, then a period of surplus is to be used to pay off the debt before adding on new debt.

I do not know of similar issues regarding a trade deficit.

Arthur Ruiz said...

Different people wrote different scriptures and offered different interpretations of the scriptures they adopted. In all of this, different versions were "tested" by their ability to promote the objective satisfaction of the desires of those who did the testing.