...that reaked of propaganda in my life. It's such utter bullshit on it's face, that a little common sense and knowledge of the facts disprove it.

The first sign that it's bullshit is that this "research" came from "Matthew Slaughter of Dartmouth's Tuck School of Business". Notice this is a business school, whose focus is on the interests of businesses.

Claim 1 in this article:

"Instead of shredding employment opportunities in this country, outsourcing actually creates two jobs for every one displaced to another country."

If this is true, then we should be able to see it in the unemployment figures. When free trade began in 1995 unemployment was at 5.5%. Today it is 9.6%. Note that since then, the only time we had particularly low unemployment rates was at the height of the dot com bubble. Furthermore, the "discouraged worker" rate (workers who have given up looking for a job) has steadily increased ever since outsourcing began. If this claim was even mildly true, then we'd wouldn't be in the Great Recession.

Claim 2) "--Those new U.S.-based jobs created as a result of the dynamic impact of outsourcing not only outnumber the jobs they replaced by a factor of 2 to 1, but the new jobs also offer better pay and demand higher skills than the old ones."

If that is true, then we should see Americans with an increasing amount of disposable income. The facts tell us that incomes have remained flat or have fallen. The only exception here are the corporate executives who are profiting so handsomely from outsourcing.

Claim 3) "--The phenomenon is not limited to the U.S.: in the past generation, companies based outside the U.S. have doubled the number of jobs created in America."

In the past generation, many companies did this because America was the place to be to sell your goods. This has NOTHING to do with outsourcing, and would classify as "intellectual dishonesty" if it wasn't for the fact that it isn't very intellectual.

In other words, it's complete and utter bullshit. The track record on outsourcing is so overwhelmingly clear by now, that to deny reality demonstrates one's ignorance on the subject to the point of embarrassment.

Every major economy of the last hundred years became a major player by protectionism. It built the British and American Empires, it turned a little Asian nation with the wealth of Haiti today into the economic powerhouse that is South Korea, and it is turning China into a first world country very quickly with 12% GDP growth.

In comparison, every nation that has tried free trade has paid dearly. Haiti is a free trade nation since the early 90's, and it's benefited them so much that they remain the poorest nation in the Western Hemisphere. Mexico is a free trade nation, and so many Mexican workers have been displaced that difficult to count them all. Mexico has a population of 100 million, and 20 million of them are estimated to be here in the US, solely for economic reasons.

The reality is that Ross Perot and the protesters in Seattle back in 1999 were both right. Free trade has been a disaster, and is slowly turning the USA into a third world nation.  

Do you know anything about Perot? Do you know anything of his origin in the OUTSOURCING business, and free trade? I've no idea why he was against NAFTA, because his operating models run counter to NAFTA.

I'm a fan of Perot. Not necessarily because of his run for President in 1992, but basically he coined the term outsourcing in 1962, and created a huge industry within IT.

You need to take a hiatus from your secure little govt job and get out in the real world. Before you spew your standard "outsourcing is bad" mantra, work for IBM, Accenture, HP, CSC, Deloitte, even some of the Indian outsourcing firms.

You need to understand why companies outsource. Cost is one factor. It's not their core competency is another factor. Competitive pressures to deploy new technologies in order to compete globally is another. Want me to continue? Irrespective of the lower cost, one of the key drivers is the lack of resources in this country with the requisite skill sets. Fix that problem and maybe I'll limit the amount of IT professionals I deploy overseas.

You need to spend time in the real world.

Capitalist lackey explaining the effects of outsourcing. IMHO this guy just needed to generate some traffic
for his site. The comments tell a different story.
www.informationweek.com/news/global-cio/interviews/showArticle.jhtml?articleID=228000211&cid=nl_IW_btl_2010-10-29_html

Forgetting the term "capitalist lackeys" which I see to be inaccurate as the current global corporatism is not inherent in capitalism; I believe both Charlie and Willy to be making important points.

I believe strongly in economic nationalism; without regard to the form of the economic model.

The purpose of a nation's government is to secure the wellbeing of the people of that nation -- and NOT to worship some sort of abstract theory that tries to turn man-made economics into something as immutable and unchallengeable as "the Will of God."

It is my belief that economic nationalism is absolutely in the best interests of the people of a nation overall; and that economic globalism can at best only serve to hurt most people in the U.S. to the benefit of a relative handful.

Outsourcing is a term that has been used for years, and its definition was very broad. It garnered a lot of attention when companies outsourced some or all of their IT functions to an EDS, IBM, CSC in the early days, and they in turn deployed resources in other countries to perform functions or tasks for a variety of reasons. This was done before the onslaught of manufacturing outsourcing.

Now the IT industry has coined a number of terms that are more, let's say politically correct. Yes, we use terms like offshoring. We also use onshoring, nearshoring (Canada, Mexico, etc). We also use terms like backsourcing, insourcing, X-sourcing, best of breed sourcing.

All we did is give marketing people a job to come up with a bevy of terms that are basically outsourcing. Now when I'm at a cocktail party, and in the presence of liberals, I'm very careful of what I say and how I say it, because at the end of the day they just flat don't understand.

you talking about St. Croix?

Now go back to your cocktail party while I watch the rest of the Heat-Magic game.

plus I'm watching the SoCal high school football game of the week.

What kind of reaction do you think I'm going to get at a West LA party when I say I work for X and I sell outsourcing, oops I mean offshoring, or whatever term. They would immediately blame me for all that ails this country. I can try and explain the rationale, or value, but all it would do is ruin the taste of a good chardonnay (lol).

-- Modified on 10/29/2010 8:22:48 PM

If I am building cars and don't want to set up a foundry for smelting in order to make the steel; then by purchasing my steel from a company that specializes in making steel, I have outsourced steel production. If a company specializing in gages can make my speedometers better an less expensively; then I'll have that company make them instead of making them in-house. If I need file-folders in the back office, by getting them from a paper company instead of starting my own paper plant, I am outsourcing. NO company can do everything.

Outsourcing in and of itself can make a great deal of business sense for a lot of reasons.

But there is a BIG difference between outsourcing and offshoring.

Offshoring is a situation where work is outsourced overseas to markets where either regulations are more favorable (e.g. I can be more free with pollution, not carry workman's comp insurance) or labor is less expensive (e.g. someone working for $10/day instead of $18/hr.).

I believe Willy's primary objection is to offshoring.

outsource. The running dogs of capitalism will take their profits any way that they can get them. Liberals dont give a fuck about outsourcing. The TP people say they have problems with it though. At the end of the day global capitalism will gut all traces of nationalism from the planet and create a fertile environment for the growth of global communism.

Economic nationalism is the only force that can stop international communism.

Global corporatism -- a/k/a "free flow of capital and labor" -- is spreading a lot of misery and destroying a lot of cultures.

Cultural and nationalistic destruction pave the way for communism. Gramsci knew this.

Certainly, from the standpoint of stock performance of Company X; outsourcing that cuts costs and boosts profits is absolutely the same thing no matter where it is outsourced. So from that perspective -- you are right, it is splitting hairs.

But from the standpoint of a national economy, it is NOT splitting hairs.

IMHO too many people have a vision of America as a "service economy" in which all baseline production (i.e. conversion of natural resources into goods that are desired, save time, etc.) is done by whichever nation can do it most cheaply and everyone in America gets rich from the ability to essentially act as middlemen for transactions in one form or another. Sheer speed of movement of money, taking commissions, shuffling papers, suing each other and so forth becomes our economy.

But at its core, wealth originates from the transmutation of natural resources into products -- wood gets turned into furniture, ore gets turned into iron, that iron gets turned into steel and that steel into cutlery. This is where ALL wealth starts because without it, there are no commissions for stock brokers.

Why do you think China owns so much of the U.S. national debt? Because they have to dollars with which to buy it. Where did they get the dollars? From Americans buying tangible physical products made in China.

Off-shoring moves dollars from America to other places. Certainly, some amount of that comes back in the form of American products that they buy. But if they have the surplus funds with which to speculate by buying U.S. debt; a lot of that money is NOT coming back.

When outsourcing takes place within the nation, it can truly create a rising tide that lifts all boats. But in the variant known as offshoring, it exports your national wealth.

Don't be deceived by the fact some people in the top 0.1% of wealth are doing better than ever before. Look instead at the bottom 75% and you'll notice their real wages have been stagnant or declining for years.

There is tough opposition to globalism though. The religious extremists are currently mounting a strong offensive to it. I think in the long run the extremists will have broader support than the globalists. The problem with the extremists is that they are highly fragmented. The best that they can hope for is to is to
death from a thousand cuts on the capitalist class. I think class consciousness paves the way for communism. Developing class consciousness is a grass roots political process directed by the middle class according to Gramsci. I don't totally agree with that point of view. Pol pot is an extreme example of another who didn't agree with Gramsci.

Labor creates surplus value in goods during the production process. The surplus value is then withheld from the working class and retained by the capitalist class as gross profits according to Engels. The point is that the working class is key to the capitalists wealth. There are potentially more workers in Asia than any where on the planet. The capitalist class knows this. The western working classes will suffer because of it. The PRC will defeat capitalism one way or another.