I occasionally (not too often) force myself to watch Lou Dobbs just in the interest of maintaining a diverse news/opinion diet. I would love to have the opportunity to challenge him on his protectionism and, specifically, his implicit argument that outsourcing offshore is evil. Primarily, I'd like ask Lou if he thinks it's evil for a U.S.-based company with U.S. operations to acquire new manufacturing equipment or information technology that enables it to conduct its operations with fewer employees. If not, then why is offshore outsourcing evil when it accomplishes the same purpose with the same impact on American workers, while also providing an opportunity for desperately poor people elsewhere to escape (or diminish) hunger and utter deprivation (which is why they'll work for far less compensation)?

Outsourcing is, on balance, a very good thing on a number of levels. First, it enables efficient capitalism, which means -- in the aggregate -- maximum productivity, optimal allocation of resources (generally speaking, with some exceptions), minimum prices of goods and services for consumers, moving jobs to people who need them most, the freeing of resources to where they are best applied (e.g., what economists call "comparative advantages" among nations -- for example, poor, low-cost labor countries producing labor-intensive products and more affluent, educated, tech-savvy countries producing high-tech or high value-added products) and as a result of all of the above, a higher material quality of life -- again, in aggregate. There is also the pragmatic point that we cannot wall ourselves off from the global economy (or at least not without tremendous price increases across much of the economy, lost jobs from our inability to export -- due to lower competitiveness and tariff wars -- and other negative consequences), so we cannot try to defy market forces and force U.S. companies to be less and less competitive.

Needless to say, some individuals suffer from outsourcing, as they do from open markets in general and even more broadly from capitalism (as opposed to pure socialism in which employment and compensation are guaranteed regardless of market forces -- at least until the whole system starts to deteriorate). I do believe that a society has some obligation to cushion the sufferring of those who are temporarily displaced, to ease the pain to a reasonable degree (e.g., unemployment benefits) and to aid in their transition to different jobs that hopefully fit better with what they can provide competitively in a global economy.

So, as I alluded to above, arguments against outsourcing are, for the most part, really arguments against capitalism. In other words, it values protection of particular jobs over a more efficient economy with all the benefits it provides for quality of life in the aggregate (i.e., for the population as a whole). The only twist is a presumed moral imperative to choose the protection of particular types of American jobs over the benefits to much poorer foreigners of shifting those jobs to them. And I would argue that, even leaving aside the moral argument that we should indeed care about a desperately poor person who happened to have the bad fortune of not being born here, forcing a substantial reduction in outsourcing (by legislation or public pressure) would harm most Americans for reasons I've explained above.

One exception to what I said above: If another country is clearly irresponsible in environmental policy or clearly, greatly abusive of labor (i.e., abusing their labor force in ways that artificially reduce wages), some exceptions are legitimate. However, labor unions and others against open markets and outsourcing often put forth exaggerated claims in these areas as a smokescreen for the unrealistic, harmful standard they are really seeking: making trade and outsourcing contingent upon foreign workers in poor countries being paid the same as American workers.

Full disclosure: I'm a management consultant and some of my clients outsource offshore (outsourcing is not the primary focus of my work, but I do occasionally advise on offshore outsourcing decisions). So there is the chance of inadvertent bias on my part. But I truly believe the opinion I’ve expressed above for the reasons I’ve given. If anyone has a different view, I encourage you to comment.