Nothing quite like a cup of coffee, an English muffin, some whole grain cereal, and this:

John Kerry and John Edwards, who are not speaking under oath and who know that economic illiteracy has never been a disqualification for high office, have led the scrum against the chairman of the president’s Council of Economic Advisers, N. Gregory Mankiw, who said the arguments for free trade apply to trade in services as well as manufactured goods. But the prize for the pithiest nonsense went to [House Speaker Dennis] Hastert: “An economy suffers when jobs disappear.”

So the economy suffered when automobiles caused the disappearance of the jobs of most blacksmiths, buggy makers, operators of livery stables, etc.? The economy did not seem to be suffering in 1999, when 33 million jobs were wiped out - by an economic dynamism that created 35.7 million jobs. How many of the 4,500 U.S jobs that IBM is planning to create this year will be made possible by sending 3,000 jobs overseas?

Hastert’s ideal economy, where jobs do not disappear, existed almost everywhere for almost everyone through almost all of human history. In, say, 12th-century France, the ox behind which a man plowed a field changed, but otherwise the plowman was doing what generations of his ancestors had done and what generations of his descendants would do. Those were the good old days, before economic growth.

As I’ve said before, I am potentially putting my money where my mouth is on this. This isn’t some abstraction like “the textile industry” that conjures up Dickensian images of ten-year-olds scurring under huge looms to pick pennies’ worth of lint off the floor, that couldn’t possibly be connected to my life. It’s, like, my job.

Read it all.

UPDATE: a friend IMed me this morning to tell me, among other things, that I was less than clear in this post. I was assuming knowledge on the part of the reader of my previous endorsements of the general idea of offshoring of U.S. tech jobs. There is an ironic constrast here with the fact that I happen to hold a U.S. tech job myself (when I’m not blogging). My brief comments in the original post were probably overly hasty and insufficiently clear.

My friend went on to tell me that he is seeing other essentially conservative IT professionals getting angry at Bush over this issue, possibly to the point of not voting for him in November. Now I tend to put this in the same bin as the rest of the conservative bellyaching over Bush–yeah, fine, there are things to complain about, but come on: are you really going to put Kerry in the Whitehouse because of it? Well, on this issue, maybe they will. These guys are afraid for their jobs, and the Democrat is much more likely to give them the protection they seek.

But let’s look at the real options here. Suppose for a moment that falling communication costs and rising education levels in third-world countries open up authentically lower-cost labor markets to compete with American IT professionals. We can:

1. Elect politicians who will use the force of law to prevent American industry from following cheaper labor resources.
2. Unionize and try to use the power of collective bargaining to achieve the same end as (1).
3. Let stewards of capital make free decisions about how to trade goods and services, recognizing that some technological developments (e.g., communication) may be disruptive to the present order from time to time to the point that I, personally, might even have to make a career change.

Call me Austrian, but I think you see where I’m going. Options (1) and (2) cannot succeed in the long term, despite whatever short-term gain I might personally realize under protectionist regimes. If the laws or labor unions (which operate under the protection of the laws) of the United States deny businesses the ability to operate efficiently, the businesses will be at a competitive disadvantage globally. At best, this means Americans shareholders earn smaller dividends. At worst, it means technological innovation ceases to be a defining American idiom. Entrepreneurial smart people will set up their whole shops elsewhere, instead of just sending some of their coding there.

And besides that, do you really want to have a job just because the guys with the guns are forcing your boss to keep you on the payroll? Wouldn’t you rather be carving out your own little sphere of value in an entropic creation? You can sign me up for the latter.

Note that this assumes that offshoring is actually going to produce cost savings in the long haul. Personally, I believe the jury is still out on this, but I am willing to accept the practice as an economic, social, and moral good if the jury comes back and says it does. There is a fertile debate to be had among IT professionals about the details of running cross-cultural, trans-global development teams, and I wouldn’t mind talking about that if anyone is interested. If you have relevant experience, or just want to cuss me out, the comments are open.

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• Posted by Tim on Thursday, February 19, 2004 at 8:25:15 am PST
• Category: Technology, Politics, Economics
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