Outsourcing and the Global Economy

Paper Summary:

This paper argues that, although free trade as represented in the outsourcing question is by nature emotional, the truth is the artificial barrier to trade in labor is counterproductive in many senses because it keep prices high for consumers, wastes resources and perhaps stifles innovation. The author points out that outsourcing American jobs is a necessary component of inevitable economic free trade. The paper contends that many people feel that globalization, which is Adam Smith's "invisible hand" at work on a global scale, is inevitable regardless of its intentions.

Table of Contents
Introduction
American Popular Attitudes toward Globalization
Must the United States Participate in Free Trade?
The "Invisible Hand" in the Globalized World
Outsourcing: A Necessary Component of the Global Economy?
Conclusions

From the Paper:

"Consider, for example, that many generations of dairy farmers may have stayed on the family farm, raising cow after cow even if no one needed the milk. Further consider the possibility that those farmers may have better used their time to learn an "in demand" skill, or that even their land and financial resources could have helped to meet a real market demand in another area. By not offering an artificial incentive to stay in business (the subsidy), product would not have been over-produced and wasted (perhaps an environmental impact), new and in-demand skills would have been acquired, real demands would have been met, and the price for those demands would have fallen (helping the consumer). Thus, by removing the artificial barrier to real and free trade (perhaps influenced by political pressure), economic well-being is ensured for all parties."

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