I continue to be amazed at how CNN’s Lou Dobbs and a number of fellow-traveling politicians are consistently able to bash U. S. companies with impunity on a daily basis for their outsourcing strategies, while corporate leaders seem too cowed and intimidated to make any attempt to defend themselves. It has been called “the great outsourcing scare of 2004”, and it is unfounded by any logic of market capitalism, unless, of course, one wants to challenge two of its major foundational premises, the principle of comparative advantage among nations and the faith in creative destruction. Of course, I understand that some do want to challenge these premises as outdated, namely economist Paul Craig Roberts and Senator Charles Schumer among others, but no one has an answer as to what will replace them, and some of the short-term fixes would be extremely dangerous.Probably the poster “villain” for American split-mindedness on globalization, outsourcing, creative destruction, comparative advantage, and related issues is Wal-Mart. Recently, the residents of Inglewood, California voted to block the development of a Wal-Mart Supercenter. Is this the tipping point? Should we care about this development? Ultimately, yes, we should, mainly because of what it represents in the failure of our elites to be honest about the issues and the realities. Tom Donahue, President of the U. S. Chamber of Commerce, was on point recently when he called on our business and political leaders to be more forthcoming, for example: Will there be more job losses from creative destruction? Yes, the next wave will probably be in land/wire communications-the old Bells, et al, but many more jobs will be created by broadband expansion, if we don’t tax it to death. The Chamber has recently released a report with some enlightening findings, such as: more Americans are working today than ever before in our history; in white collar employment, insourcing of jobs to America exceeds outsourcing; Detroit is producing the same number of autos today as it did thirty years ago with 40% of the workers; the unemployment rate for Americans with four-year college degrees is 2.9%; and the significant job growth produced by small business, particularly in rural areas as well as by women-owned businesses, is underreported. Another point well made by Donohue is that the developing world is now doing what we told them to do over the past fifty years—get yourself educated, free your economies, free your trade, and join us in the world market. Guess what? It worked. Of course, the usual election year rhetoric won’t help produce honest debate about all this because people will be told what they want to hear. (Example from John Kerry: “My economic policy is not to export American jobs….”.) And there is no doubt that the major issue for the political class is that lost jobs are an immediate problem while the jobs of the future are a leap of faith into the unknown. But hasn’t democratic capitalism by its nature always presupposed a significant element of faith?
