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Subj: Re: Milton Friedman: Economist
Posted: Wed Oct 15, 2008 at 08:15:03 pm EDT (Viewed 613 times)
Reply Subj: Re: Milton Friedman: Economist
Posted: Wed Oct 15, 2008 at 12:06:41 pm EDT (Viewed 636 times)
Not really. My argument is that businesses are shirking their responsibility to America and its workers. Businesses that outsource are causing American workers financial detriment. If all outsourcing stopped tomorrow, American workers wouldn't have to compete with workers in third world countries as to who can absorb the lowest wage and shoddiest medical benefits.
True, but the technically correct definition fits the context of my comments and doesn't negate them.
"In economics, an externality is an impact on any party not directly involved in an economic decision. An externality occurs when an economic activity causes external costs or external benefits to third party stakeholders who did not directly affect the economic transaction."
Outsourcing to other countries has an impact on American workers, who were not directly involved in the economic decision to outsource, who did not directly affect the economic transaction, and who incur cost: loss of job, lower wages, less robust medical benefits.
And then the money they make goes back to their country. The key difference is that foreign investors don't usually build here. There are exceptions, but generally foreign investors buy assets that are already developed. Thus they don't create new jobs, so no new money is getting into American hands, and the profit is going to the foreign investor, who doesn't live in America.
Foreign investment contributes to this? I know we borrow from other countries, such as China, but I think you mean something else.
True. Good point. Yet it's still bad for American workers. If an American company creates a customer service phone bank in America, it's a net gain for the American worker. If that same company creates a customer service phone bank in some other country, it's a net loss for the American worker. American companies have a responsibility to post net gains for the American worker. This is the American company's version of patriotism.
But the jobs don't pay as well as they should. It's true that American corporations are growing and thus jobs are being created. But wages don't go up appropriately because instead of raising wages, the company can outsource. And fewer jobs are being created than under the scenario of zero outsourcing.
Oh, if support is given to people adversely affected, then all is well. But such isn't the case.
Fifty years ago was the 1950's. Wasn't the middle class in pretty good shape back then? Oh, but you're talking about the poorest ten percent. Your comment may be true, I don't know.
Your comment seems to imply that if other countries are enriched, that's as good as America being enriched. If I lived in those countries, I'd agree, but since I live in America, the only enrichment I value is that which occurs in America.
Trouble is, the destruction falls on human beings. Any policy that is good for American workers is good. Any policy that is bad for American workers is bad. Because most Americans are workers.
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