Tuesday, April 26, 2005

Let's go back to using horses and buggies

At Cafe Hayek, Don Boudreaux takes on paleoconservative Paul Craig Roberts, who warns that the final days are coming -- i.e., that eventually all American jobs will end up outsourced to foreigners, with no new jobs to replace them.

4 comments:

Allen said...

Well, frankly, I do believe that we are on track for the dissapearance of almost all American jobs and this is NOT (I repeat NOT) a result of free trade. I've covered this topic endlessly at the meetings and on the blog... the reason industries in the U.S. are going abroad is because their costs are too high. Why are their costs too high? Because our government overregulates them. Why does lowering tariffs then become bad? Because you are setting your industries up to fail. What is the solution? You deregulate the industries in your country, THEN you discuss lowering tariffs. Based on capital per worker, American laborers are the most productive in the world. Anyone who believes that firms and jobs are going overseas as a result of our inefficiency, needs to think again. Free trade comes about as a result of voluntary agreements. EU-style socialist bureaucracy (NAFTA, CAFTA, FTAA) is not the recipe for free trade. Ask yourselves why some of the most ardent proponents of free trade are overwhelmingly against these "free trade" agreements.

Clara said...

Even if we are the most productive, across the board, according to the theory of *comparative advantage* we should specialize and outsource in some areas.

Also: What about people who talk (usually in a tone of disparagement) about "cheap labor" from the third world? The very-low wages in poorer countries make them attractive areas for hiring. Do you have a problem with that form of cost-cutting? It's not unlike a technological advance. If we create a machine to do that work, the result is the same: lower costs. More efficiency.

Jeff said...

The thing is, over 80% of American jobs simply cannot be outsourced, no matter what happens. You can't outsource your pizza place, or your electrician, or your real estate agent. The only things that can really be outsourced are indirect labor jobs (factory workers) and non-direct support (such as telephone operators). Most jobs simply cannot be outsourced, no matter what.

Allen said...

Clara, I would say that without regulation we can produce more of just about everything than others can produce if we entrust it to them. If this is not the case, I would not object something like outsourcing if it is on a voluntary basis and not in a defense-related industry.

It isn't that I have a problem with cheap labor, it is that firms would find it more costly to hire uneducated members of the third world. And if it is not more costly, then to a certain extent I would have a security problem with a mass shipping of third world people into this country. If however, the firm wishes to relocate overseas, by all means...