Tuesday, March 02, 2004

A question for David Orland and the RIL Boys on Free Trade

Imagine that a company invents a secret new manufacturing process for tires. It allows the company to make the same number of tires as before but with far fewer people manning the machine. Everyone praises the company for their marvelous invention and for the slightly lower prices they pay for tires. Sure, it’s sad that some people have lost their jobs but no one seriously suggests that we bury the manufacturing plans and go back to the old way.

Now, let’s further imagine that the company’s secret is revealed: the factory is really just a tunnel to a foreign country where a conventional factory has been built and staffed by low-wage foreigners. Suddenly, there’s a public uproar. Why? What is the difference between a new manufacturing process and outsourcing?

To restate: Although they are obviously different processes, in what way is the effect of outsourcing on American jobs different from effect of new technology?


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