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OUTSOURCING: The end of the affair



Christopher Jones and Cameron Sawyer have conflicting opinions about globalization and its cohort, outsourcing. First Christopher Jones, who sends us an article from which an extract is posted below, with the comment: "You can substitute Germany or France for the US and the same sorry story is the same: globalization, which is none other than corporate greed gone ballistic, will destroy our current system of government".

Long queue at drive-in soup kitchen (The Guardian, 11/3/03)

George Bush's America, the wealthiest nation in history, faces a growing poverty crisis. In the first of a three-part series Julian Borger takes the pulse of the US with elections just a year away

The free food is handed out at nine, but the queue starts forming hours earlier. By dawn, there is a line of cars stretching half a mile back. In Logan, it is what passes for rush hour - a traffic jam driven by poverty and hunger. The cars come out of the Ohio hills in all shapes and sizes, from the old jalopies of the chronically poor, to the newer, sleeker models of the new members of the club, who only months ago considered themselves middle class, before jobs and their retirement funds evaporated. Dan Larkin is sitting in his middle-of-the-range pick-up truck. Since the glassware company he worked for closed its doors this time last year, he has found it hard to pay his bills. His unemployment benefits ran out six months ago and his groceries bill is the only part of his budget that has some give. He and his wife sometimes skip meals or eat less to make sure their six-year-old daughter has enough. "I would have a real problem putting food on the table if it wasn't for this," Mr Larkin said, his car inching towards Logan's church-run food pantry. As the queue rolled forward, he reflected on the ironies of being a citizen of the world's sole superpower. "They're sending $87bn to the second richest oil nation in the world but can't afford to feed their own here in the States."

George Bush's America is the wealthiest and most powerful nation the world has ever known, but at home it is being gnawed away from the inside by persistent and rising poverty. The three million Americans who have lost their jobs since Mr Bush took office in January 2001 have yet to find new work in a largely jobless recovery, and they are finding that the safety net they assumed was beneath them has long since unravelled. There is not much left to stop them falling."

RH:
We posted Christopher Jones' indictment of ousourcing as a cause of unemployment in the US and Western Europe. Here is Cameron Sawyer's defense of outsourcing: "Economic progress requires economic change, which means some jobs are lost while others are created, and people have to adapt. I do not mean to minimize the suffering endured by people whose jobs are eliminated or sent abroad. But there is simply no alternative. Imagine that 100 years ago we had made a strategic policy decision not to allow unskilled factory jobs to be lost. We would still be living in a sweatshop economy with workers at near starvation.

As it is, the number of unskilled factory jobs has fallen by, what? At least ten-fold, and are well on their way to total extinction as automation and robotics takes over all of the most menial work. Yet our unemployment rate is lower than then, and the standard of living of industrial workers is vastly higher (and the children and grandchildren of former unskilled factory workers are, more than likely, not workers at all).

Is this bad? Do you want to stop progress? As the economy develops, particular types of work disappear, and people have to adapt. Yes, it can be very painful, but this mechanism is the very engine of progress.

P.S. Adriana should not think that I have never suffered personally from economic change. Once in my career I was laid off in an economic downturn when the chances of finding other similar work were almost zero. It was painful and frightening. Later, not so long ago actually, as an entrepreneur, I was caught in the horrific 1998 financial crisis in Russia which reduced the volume of my business by more than tenfold and nearly bankrupted me. Both times, hunger did not seem far from my door. But both times, I struggled and adapted. Life is simply like that: there is simply no such thing as total security, and even if there were, I would not trade my grandchildren's prosperity for the sake of being insulated from economic change"

Ronald Hilton - 11.06.03


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