Outsourcing and Unintended Consequences

Topics: United States, U.S. state, Economy of the United States Pages: 2 (427 words) Published: October 5, 2008
This article discusses several things we learned about in class such as outsourcing, unintended consequences,

and mentions indirectly comparative advantage, social responsibility, Ricardan theory, and technoligical change.

The article starts by telling us that "outsourcing occurs when business decides that profits are more important

than global location or human principles" and that government regulation is the major cause for such behavior.

It also mentions as we discussed in class that "it is less expensive than hiring workers in the United States

and abiding by U.S. government watchdogs and regulation".The author then implies that this gives NAFTA (and others

like it) better things to do off our shores, that our government is doing nothing other than trying to watch

and control every penny that comes and goes from Mr. and Mrs. Taxpayer in order to use it for government policies

and regulations, and that in this sense the U.S. is lacking in social responsibility to its own people.

But here the author misses a few important points as to why and how there is outsourcing and that if we were to

limit or get rid of it there would be negative consequences. The reason that the U.S. companies CAN outsource in

the first place is because of technological change; dramatic improvements in telecommunications and computing have

allowed for business to be conducted elsewhere for a cheaper cost.Also this creates a comparative advantage

in that we are perfectly capable of producing this good or service here in the U.S., but the fact that it could be

done more efficiently, cheaper, and just as good elsewhere, gives us more time to do what we are best at. This

leads to the Ricardian theory, that implies that the jobs that are then "left over" for Americans are what they

are best at in the first place anyway. This also keeps our trading partners happy and well satisfied, which in

turn is good for our economy...
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