OUTSOURCING

Is outsourcing of American jobs overseas inevitable?  The Obama-Romney campaign has brought to the fore once again the question of outsourcing.  Obama and his people believe they can use the issue as a club to beat Mitt Romney over the head.  There is always a segment of the population that can be riled up by the vision of selfish, greedy plutocratic businessmen putting their profits ahead of the welfare of their fellow Americans.  Of course, as this New Hampshire Union Leader editorial points out, the reason outsourcing happens is because products can be made more cheaply overseas, and when they are imported into the U.S. our consumers will usually choose the cheaper option, especially if there is little or no difference in quality.

If we accept the premise that business owners are going to do those things that ensure they make more money, and cease doing things that lose them money, and if we understand that a failure to do those things will eventually lead to the demise of the business, then we are left with one question.  What are the best policies for creating an atmosphere within our borders that allows our business owners to make the most money in the widest possible array of economic activities, thus creating the most vibrant economic atmosphere for the creation of the most jobs?  Unfortunately, as you know, there is absolutely no consensus on the answer to that question.  In the specific arena of outsourcing, from some one hears that raising tariffs is the answer.  If we just tax imports to such a level that those products are equalized on price, or even made more expensive, than American-made goods, American consumers will buy them, and American high-wage jobs will be saved.  But if we do that, free trade proponents will say, then other nations will retaliate on our exports, thus damaging those industries and losing jobs in those sectors.

I do not have the answer.  I have interviewed dozens of protectionists and dozens of free-traders over the years.  Both sides make compelling arguments.  In the end, our generally free trade policy as a nation continues under both Republican and Democratic administrations, and many of our manufacturing industries have died as a result.  Of course, we have also still been at the forefront of inventing new products and industries.  Perhaps outsourcing is inevitable.  But I have to believe that our strengths as a nation so far outweigh our weaknesses that we shall overcome these job losses, if only we remember that it is the private sector economy that has made this nation prosperous, and not the heavy hand of the state.