"It's unfair that you want all your products marketed globally but you don't want any jobs to go."

Reporting from India, Thomas Friedman gives his view on outsourcing, in the New York Times today:

"How can it be good for America to have all these Indians doing our white-collar jobs?" I asked 24/7's founder, S. Nagarajan.

"Well," he answered patiently, "look around this office." All the computers are from Compaq. The basic software is from Microsoft. The phones are from Lucent. The air-conditioning is by Carrier, and even the bottled water is by Coke, because when it comes to drinking water in India, people want a trusted brand. On top of all this, says Mr. Nagarajan, 90 percent of the shares in 24/7 are owned by U.S. investors. This explains why, although the U.S. has lost some service jobs to India, total exports from U.S. companies to India have grown from $2.5 billion in 1990 to $4.1 billion in 2002. What goes around comes around, and also benefits Americans.

Friedman's piece is an excellent illustration of comparative advantage. If you have a bit of free time, I urge you to read Paul Krugman's "Ricardo's Difficult Idea", in which the theoretical aspect of international trade is beautifully explained.

Comments

[AJE]

here here.
There was also an solid piece in the Economist suggesting that people are confusing structural with cyclical unemployment. The outsourcing is small compared to the number of jobs 'churned' every month, but now that middle class people are starting to be affected, we're obviously hearing more squeling.