[lbo-talk] outsourcing

Wojtek Sokolowski sokol at jhu.edu
Wed Mar 10 06:59:52 PST 2004



> Michael Pollak wrote:
>
> >On Fri, 5 Mar 2004, Doug Henwood wrote:
> >
> >> >Read this forum with Sarah Anderson, John Cavanagh, Doug Henwood
and Jeff
> >> >Madrick, from the March 22, 2004 issue of The Nation.
> >> >
> >> >Toward a Progressive View on Outsourcing:
> >> >http://www.thenation.com/doc.mhtml?i=20040322&c=1&s=cavanagh
> >
> >I liked your piece a lot. You always have the clearest figures.

I like that piece not for its figures (which have the obvious problem of ecological fallacy, as the subsequent discussion in this thread shows) but because of its (rare nowadays) property of thinking outside the box. That is to say, the real problem is not whether the US jobs are outsourced to China or elsewhere, but what outsourcing means to the US labor market. Doug's answer was - not much, since the outsourced jobs are only a small fraction of all US jobs, hence outsourcing cannot be blamed for problems experienced by the US labor.

Doug quite correctly argues that these problems are due mainly to domestic causes, especially the weak position of labor vis a vis the management (an argument more fully developed in _After the New Economy_). From that point of view it can be argued that outsourcing is essentially a good thing because (i) it has little effect on worsening the position of the US labor, but (ii) it has some positive effect on improving wages of labor overseas.

This, however, brings us to an interesting question: "What if improving wages (and living standards) of labor overseas was linked to the deteriorating wages in the US?"

I do not want to speak for anyone else on this list, but I have a hunch that most lefties and pwogies would eagerly join the "Amerika uber alles" crowd in denouncing such "capitalist excesses" and cry for saving "our" jobs from those "damn foreigners." Which brings us to another question: "Are the US high wages worth preserving?"

I can think of several good reasons for a negative answer to this question.

#1 US-ers already enjoy very high standards of living, while the majority of world population lives in abject poverty, so a small drop in the former to improve the latter is consistent with the principles of distributive justice.

#2 US high wages lead to extremely wasteful consumption, so cutting the wages that fuel that waste will reduce that waste and its externalities (especially environmental pollution). That may lead to more efficient utilization of resources (denser residential areas, expansion of public transit, greater energy efficiency of structures and appliances, greater reliance on renewable resources).

#3 Reducing aggregate wages may create a push for a different organization of working time i.e. instead of some people earning full-time wages and other being unemployed, everyone can work less than fulltime (by current standards) and thus receive extra free time as a form of "compensation" (we've already seen that trend in Europe). That may actually lead to overall better quality of life.

Wojtek



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