Outsourcing can be considered a means of optimizing profits or it can be considered an effort to maintain competitiveness. It is probably used in both ways.
I also think you may mean offshoring which is to set up operations in a lower cost country. Even more generally I wonder if you are simply talking about job loss.
Productivity is the key driver for improved standard of living for all. Productivity can be improved in many ways. It can be improved by eliminating none value added work or via automation. It can be improved by insuring the work is done by the most efficient work group. It can be improved by improving the skill set of the current work group. Outsourcing is a method that is used to improve productivity by utilizing the most efficient work group. Offshoring can also be used to utilize the most efficient work group or to eliminate none value added work.
Every method has potential failure modes. If you put resources into improving the skill set of the work group, it can fail. Outsourcing can fail in several ways. One is that the people involved in design lose knowledge on how the item they are designing is put together.
The idea that outsourcing or offshoring is inherently bad because of the loss of jobs is incorrect. Automation eliminates jobs. Should we not automate?
It seems to me that like most things the US population is not educated. Instead they are fed a bunch of malarky that leads to them believing things that actually hurt their long term standard of living.
In the eighties and nineties, corporations were warning that operating in the US was becoming difficult. They warned about the tax structure, the regulator issues, educational issues and labor issues. You can look at California today to see the exact same thing.
Capitalism relies on creative destruction and creative destruction results in short term pain for a few in order to have long term gain for most.
It is easy to blame others for our own failures. It is really easy to blame management and even more easy to blame the unperson called the corporation.
Intel has lost 30% of its revenue in 2 years. They are experiencing creative destruction as AMD designs better chips and sells them for lower prices. AMD uses outsourcing. I believe they use GlobalFoundries that manufactures in the US, Singapore and Germany (not low cost countries by the way). Should AMD be forced to take back the foundries they sold off so that Intel can compete? What should Intel’s management do? Should they simply retain all employees until they need to declare bankruptcy? Or maybe the government should just give them money and retain Intel as a jobs program.
The US will likely fail because the people do not want competition. We have a very high standard of living and want it to get better without any sacrifice. Hiding from competition and preventing creative destruction is firmly ingrained in the US.
Why is it that China has so many domestic car companies? The US car manufacturers have been protected from competition for more than 40 years. If we relied on the big three automakers, we would have the same cars as Cuba.
What was the nations take on a bit of inflation?
How so?
Let me put it another way. Let’s look at where people have skin in the game. What percentage of nationalists are buying US made clothing? What percent are buying US mid sized cars? When given a choice between paying more to buy US made goods, the overwhelming majority of people most often don’t.
Economic nationalism is the height of hypocrisy. If people want economic nationalism, then buy US made products at every opportunity.
People aren’t going to like economic nationalism. We already know this because they don’t want to pay more for stuff. This isn’t theory.
People support economic nationalism because they can convince themselves there are perfect solutions. Everything will be the same, but we will have better paying jobs. Be honest. Some people will have better paying jobs and everyone will be paying a lot more for nearly everything and nearly everything will be poorer quality.
Economic nationalism is simply protectionism in a country that has failed to compete because of protectionism. It is a politician’s sales pitch no different than promising to cancel student loans. It is based on magical thinking which relies on not considering any consequences.
It doesn’t take government action to buy stuff made in the US.
Which one of the below will people buy? The one on the left is made in the US and the piece of shit on the right is made in Asia but is 3 times less expensive. Are people ready to pay 3X for everything. Are they going to get a 3X pay increase? If they do, will the costs of things only be 3X more?
By the way, I can say with certainty that the one on the left is much more competitively manufactured than almost everything else you will buy in the new US.
With regard to global financial stability. Economics is not a stable system regardless of globalization. I don’t disagree that the financial system is a fraud. Fundamentally the financial system is what it is because of politics. It isn’t like we didn’t know what was happening prior to 2008. Even if we didn’t know, we certainly knew after 2008 and didn’t want to fix it.
If we move past the massive fraud of our current system, I think what happens is that a country cannot compete. Times get tougher for the citizens. To keep the monkeys from killing the politicians, the politicians go to war. It isn’t us, it is them. It is no different than the idea that the problem with US manufacturing is that the greedy corporations offshored all the jobs. Regulating the piss out of them, taxing the crap out of them, preventing automation, suing the crap out of them and not feeling as though you had a responsibility to earn your pay had absolutely nothing to do with it.
EDIT: I want to clarify that when I use YOU, I don’t specifically mean any given person and certainly not the reader. I really mean a large portion of people.