Saturday, July 21, 2007


Recently, I read that a couple of economists have begun to concede that there may be some downsides to globalization. I'm not an economist, but these are two flaws that I see:

"High status" jobs can be outsourced as easily as. or more easily than "low status" jobs
Economists tell us that it is good for consumers for goods to be produced wherever they can be made most cheaply, then sold to us at a fair market price not subject to tariffs. They insist that U.S. citizens can then do those kinds of high value work that we are best at.

There are a couple of problems with this theory of outsourcing. First, it is obvious that lots of "high value" jobs can be just as easily outsourced as manufacturing jobs: software development, hardware & software phone support, legal work, tutoring, architectural drawings, etc. are already being done abroad But, with increases in broadband and video technology, it seems to me that the only jobs that are "safe" are those that require the presence of a physical body: farm labor, hair cutters, many medical positions (surgeons, nurses, technicians who draw blood, dentists), waiters, etc. The work of most magazine and newspaper writers, reporters, and editors could just as easily be done abroad. Why do we need to have TV reporters stand in front of a courthouse, the White House or the Congress, fro example, just because the story emanates from people who work in those buildings. Even Tony Snow's news briefings could be done via teleconferencing. And how many American pundits (print, radio or TV) could just as easily be replaced by pundits who live abroad. One needn't live in Washington to hold a conversation with a Senator. Come to think of it, why do we have to have CEOs who earn outrageous incomes stationed in the U.S. ? They head, mainly, multinational corporations so why couldn't the CEOs be foreigners? Think about all the kinds of "high status" jobs economists assure us will stay here. I suspect you'll come up with a very long list of work that could just as easily be done elsewhere. I can't wait until U.S.-based economists discover that their jobs have been outsourced.

Human skills and job requirements are not infinitely interchangeable
Second: these economists seems to assume that we are all capable of doing any kind of work, although this is clearly ridiculous. I doubt that Wolf Blitzer could, for example, design a new building if he lost his job (to say nothing of the fact that some architectural design could easily be done abroad). And could the average person working on a manufacturing line learn to be a lawyer or engineer (assuming, of course, that most legal and engineering jobs aren't also eventually sent abroad)? We all have different talents and, while most of us can learn to do something other than what we are doing, there are absolute limits imposed by the brains and bodies we have inherited.

In short, taken to its limits, globalization could result in an American workforce consisting primarily of jobs requiring on-site manual labor of some kind with, maybe a sprinkling of "brain-based" work.

Outsourcing is asymmetrical
Quite simply, under the current system of globalization, work can be located wherever it makes sense for a company to to do it, but all countries restrict immigration; some also restrict emigration. Workers, unlike jobs, are not included in the concept of globalization: they are not free to live and work wherever they want to. In other words, that low-paid Chinese or Mexican or Indian worker cannot simply pick up and decide to move to Denmark or Australia or the United States.

It seems to me that for globalization to be fair, people should be able to move just as freely as goods or services or jobs.