Monday, February 23, 2004

Tom Friedman offers his own take on the outsourcing issue:

... economists are surely right: the biggest factor eliminating old jobs and churning new ones is technological change -- the phone mail system that eliminated your secretary. As for the zippies who soak up certain U.S. or European jobs, they will become consumers, the global pie will grow, and ultimately we will all be better off. As long as America maintains its ability to do cutting-edge innovation, the long run should be fine. Saving money by outsourcing basic jobs to zippies, so we can invest in more high-end innovation, makes sense.

How might we interpret this? Perhaps we are supposed to wait for a few innovators to come up with the basis of new industries, which will then employ all the workers whose jobs being displaced by cheaper labor in China and India. Except for one thing -- when those new businesses are ready to go into production, why would they put their offices and factories in the States? What we keep on hearing from everyone, including Friedman himself earlier in this same column, is that workers in India are just as educated, just as trainable as workers in the U.S. -- and whole lot cheaper. Which makes Friedman's later call to ease the transition, echoing Robert Reich, by providing "job training" seem rather hollow. Like every other paean that I've seen for "transition assistance" for the workers, it begs the question, transition to what?

Or are the displaced office and manufacturing workers to be involved in "innovation" up close and personal? In which case, Friedman is clearly breaking new intellectual ground. How many people would have said before him: Let them get Ph.D.s!

And it's not just that he can't see the future; he's also blowing it on the past -- Kevin Drum points out that he got the phone mail example exactly backward...


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