- Jul 17, 2002
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I confess, I am guilty of outsourcing. I outsource the production of my food, clothes, car, many other objects I buy; I also outsource services like haircuts, food preparation, entertainment. Now why would I not do these tasks on my own? Because there are others out there who can do them better, cheaper, and faster than I can. Besides I am perfectly happy giving compensation for these objects and services, even if they buy nothing in return.
Now that we can see some of the great opportunities outsourcing allows for, we can now consider where we are willing to draw the line when it comes to buying these items. Ideally people would like to support their own communities and would look to outsource close to their home. Say I live in New York City; I'm not a big fan of the food produced within the city and would likely turn to rural areas to supply my food, seems logical right? But why should I have to settle for a expensive, lower quality food products from my small state, it makes much more sense to get my dairy from wisconsin, potatoes from idaho, etc. Similarly with many other products; because my area of the world is too costly for that particular product, I look to compensate people in other areas even within my own country for these goods and services.
But that's still ok right? Paying people in another state to produce my food and other items i buy. I mean my state's potato and dairy producers aren't too impressed by my decision, and instead of funds staying within my own state I'm not supporting my community. Could this be morally wrong? Should we be jumping up and down to stop this horrendous injustice? Of course not, it's a much better use of limited resources for me to buy from another state as property values are lower, the product is similar, and will be much less expensive. Does the farmer buy products from me? No. But he sells me a good product at a fair price and I am happy with this.
Now finally take it onto the national level, why should this be any different? Everybody in our country conciously outsources on a day to day basis; either due to quality, cost or both. Remember outsourcing can be the purchase of a fine italian leather, or a bottle of aged french wine.
By definition trade is the exchange of goods and services mutually benificial for both parties. It is trade that has allowed each nation to specialize in production of certain products at a lower price. So the argument to keep *everything* within one's borders is not only less than ideal, but repressive for increasing productivity and wealth.
It's not as simple as equating labour of nation 1 vs. labour of nation 2. Outsourcing tends to go to areas of political instability and low capital investment is desired, therefore more labour is required for the same output (less automation means less consumption of energy during manufacture). Also, these regions are long distances away and require extremely large inventories for warehousing and during shipment; causing much more costs and inflexibility to customer demand. That's not even considering costs to ship and distribute these goods as you are so focused on in this thread. Therefore it's not just a labour issue as magomago thinks; there are many other cost considerations when deciding to outsource.
It is for these reasons I fully support the outsourcing of manufacturing when economically justified, as it is the most efficient use of limited resources, we increase our productivity and wealth, and we allow the poorer nations of the world a chance to better their lives. Read Here
Companies who do not remain competitive will not survive and eventually die. If a company in the US decides to go against the most economically favourable route (ie. to outsource or not to outsource), within a margin of course; they will likely underperform, lose investment and become a burden on the economy through debt, lack of profits and poor opportunities for growth.
Don't be short sighted in saying that domestic products are always in our best interests, and don't assume outsourcing is a bad thing. It will be up to the company to outsource or not and I full support the most effective way to produce. This is the only way we will continue to grow and succeed; the biggest growth periods have been expericienced through the reduction of trade barriers, don't push backwards through short-sighted reasoning.
Now that we can see some of the great opportunities outsourcing allows for, we can now consider where we are willing to draw the line when it comes to buying these items. Ideally people would like to support their own communities and would look to outsource close to their home. Say I live in New York City; I'm not a big fan of the food produced within the city and would likely turn to rural areas to supply my food, seems logical right? But why should I have to settle for a expensive, lower quality food products from my small state, it makes much more sense to get my dairy from wisconsin, potatoes from idaho, etc. Similarly with many other products; because my area of the world is too costly for that particular product, I look to compensate people in other areas even within my own country for these goods and services.
But that's still ok right? Paying people in another state to produce my food and other items i buy. I mean my state's potato and dairy producers aren't too impressed by my decision, and instead of funds staying within my own state I'm not supporting my community. Could this be morally wrong? Should we be jumping up and down to stop this horrendous injustice? Of course not, it's a much better use of limited resources for me to buy from another state as property values are lower, the product is similar, and will be much less expensive. Does the farmer buy products from me? No. But he sells me a good product at a fair price and I am happy with this.
Now finally take it onto the national level, why should this be any different? Everybody in our country conciously outsources on a day to day basis; either due to quality, cost or both. Remember outsourcing can be the purchase of a fine italian leather, or a bottle of aged french wine.
By definition trade is the exchange of goods and services mutually benificial for both parties. It is trade that has allowed each nation to specialize in production of certain products at a lower price. So the argument to keep *everything* within one's borders is not only less than ideal, but repressive for increasing productivity and wealth.
It's not as simple as equating labour of nation 1 vs. labour of nation 2. Outsourcing tends to go to areas of political instability and low capital investment is desired, therefore more labour is required for the same output (less automation means less consumption of energy during manufacture). Also, these regions are long distances away and require extremely large inventories for warehousing and during shipment; causing much more costs and inflexibility to customer demand. That's not even considering costs to ship and distribute these goods as you are so focused on in this thread. Therefore it's not just a labour issue as magomago thinks; there are many other cost considerations when deciding to outsource.
It is for these reasons I fully support the outsourcing of manufacturing when economically justified, as it is the most efficient use of limited resources, we increase our productivity and wealth, and we allow the poorer nations of the world a chance to better their lives. Read Here
Companies who do not remain competitive will not survive and eventually die. If a company in the US decides to go against the most economically favourable route (ie. to outsource or not to outsource), within a margin of course; they will likely underperform, lose investment and become a burden on the economy through debt, lack of profits and poor opportunities for growth.
Don't be short sighted in saying that domestic products are always in our best interests, and don't assume outsourcing is a bad thing. It will be up to the company to outsource or not and I full support the most effective way to produce. This is the only way we will continue to grow and succeed; the biggest growth periods have been expericienced through the reduction of trade barriers, don't push backwards through short-sighted reasoning.
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