Outsourcing America

A teacher in California recently penned a reponse to the Business Week article on white collar outsourcing. The response sharply contrasts this sites viewpoint. However, the perspective is valid, and is held by many within the US. Posted below, are sections of my response to the author:

Dear Author,

I eagerly read your article just now. I am very curious to read about this topic. This fascination is partly based on intellectual curiosity, and partly based on my career. I own a software development center in Vancouver Canada and run a project management office in the Bay area.

A big emphasis with my company is to show clients how to save money and get quality results by moving work offsite (locations vary, but usually to Vancouver or an India based development center).

This is, of course a conflict. A few years ago, I was gleefully enjoying my comfortable salary working as a software engineer in New York. Now, my actions are helping to erode the salaries of my old coworkers and friends.

However, it is an inevitable force. The steel industry is a good example. It employed many across the country for years. However, eventually, smart CEOs found ways to get their steel more cheaply. This was the result of improved technology used in other locations, along with the a lower cost of labor and other infrastructure.

For a while, the US government tried to counteract this shift in the steel market by placing steep tariffs and quotas on imported steel. This benefited US steel producers for a short time.

But what was the result of this governmental interference? According to Robert Reich in the book The Work of Nations, it increased the cost of goods that used steel as a raw material. This cost consumers "... about $1 billion a year more than they would have paid for cars had the American market been open.".

From my current perspective, I can see that attempts to counteract the global forces of capitalism within the US will only serve to reduce our competitiveness. My suggestion would be, rather than to fight this gigantic profit inspired force, we should educate children how to effectively survive and thrive in a marketplace that plays by these rules.

I feel that the educational process leaves many unprepared for the realities of the world. Why not include greater education on economics? Why not include readings from Marx's Capital, or other, more moderns works that describe how capitalism really does work?

Changes are approaching from the future more quickly than ever. The rate of technological progress is faster than ever before. If our country does not learn how to play the game better, then our strong standing in the world economy will be challenged.