Globalization Trumps Nationalism
A furor has erupted in defense circles over the Pentagon’s award of a contract for a new aerial refueling tanker to a consortium led by European Airbus over American Boeing. But, as Thomas Lifson points out, this newest clash of globalization and nationalism reflects opportunity, not threat.The idea that globalization’s ugly daughter outsourcing hurts American jobs has long been a staple of protectionist sentiment. The problem arises from the fact that the supposed harm to American jobs is relatively easy to see while the very real benefits (cheaper and higher quality products along with “insourcing” of jobs where Americans are more efficient than their foreign competitors) are often hidden by intervening processes. For example, economic and defense nationalists quickly seize upon the loss of jobs at the Boeing headquarters plant near Seattle and the supposed vulnerability of a U.S. defense asset to coercion or blackmail in the hands of the awe-inspiring French and Germans that control Airbus, but in doing so they lose sight of the “insourcing” jobs that come along with the deal in a new assembly plant in Alabama and the political effects of European investment (and corresponding incentive to support) American defense procurement.
Globalization is not a zero-sum game, it is a positive-sum game. Ech side wins far more than it loses from the greater overall efficiency in production and in product quality. Defense procurement is no different. The fact that Airbus can produce a larger, more capable tanker than Boeing right now is good news to the U.S. military (it receives a more capable tanker to replace its aging fleet), good news to U.S. workers in the new Alabama assembly plant (which will probably be used fr far more than just this one contract), and in a backhanded way even good for Boeing (which gains the incentive to improve its product lines for the future).
Not to mention that Boeing having to compete instead of automatically getting awarded bids means that there’s much less chance that they’ll defraud American taxpayers as they have a history of doing (or attempting to do.)
"The idea that globalization’s ugly daughter outsourcing hurts American jobs has long been a staple of protectionist sentiment." True, and as far as defense contract,s you may be right.
In a few years, paying a worker in India will cost the American company almost as much as it would if the job stayed in the US. I see a trend down the road that this sort of outsourcing will be seen as less viable to American countries.
However…
I think quite a few "John Jane Everypersons" in the USA would also believe this, and I would tend to agree with them. I work in technology, and a few years back, used to manage a helpdesk. (I saw the forest for the trees, and got out of that line of work fast!!) I have seen first hand how outsourcing overseas did not help, but hurt American workers. I think that is more where most people are pointing when they are discussing the real impact of outsourcing hurting American jobs. However, it is ironic that future trending shows that for example, in India workers are starting to demand higher pay. (Go figure, never saw that coming, right
"The problem arises from the fact that the supposed harm to American jobs is relatively easy to see while the very real benefits (cheaper and higher quality products along with ?insourcing? of jobs where Americans are more efficient than their foreign competitors) are often hidden by intervening processes."
The country may be (and may not) better off in the aggregate, but one need only look at wages in this country to see that these ‘benefits’ are not shared among the broad population, but go to a very few.