THE UPSIDE OF OUTSOURCING

by Virginia Postrel  •  Jan 29, 2004 at 12:27 am

http://www.dynamist.com/696/the-upside-of-outsourcing

As a faithful reader of Dan Drezner's blog, I knew about Catherine Mann's important policy paper on the future of info-tech outsourcing (.pdf download here) almost as soon as it came out. I somehow assumed everyone else did too, equating blog awareness with widespread media coverage. Then I met Mann at the MIT alumni party at the American Economic Association meetings early this month. We had an interesting conversation about the trend, its positive long-term implications, and its immediate challenges, and I also learned that Dan's blog and the New York Sun pretty much accounted for all the press attention the paper had gotten.

So I devoted my latest NYT column to Mann's work. Her argument is particularly interesting to me because I'm old enough to remember--and cite quotations from--the last time we had this kind of hysteria about tech jobs going abroad. Hardware went offshore in the late 1980s, and the result was a huge boom in computer use, business productivity, and overall employment in the United States.

As a side note, I look forward to the day when my pal Glenn Reynolds stops coyly feeding the anti-outsourcing frenzy by egging on demagogic politicians and actually defends the international division of labor. Sure, outsourcing is a political issue. So was Japanese auto competition. So are steel imports. But the fact that unemployed workers are understandably upset doesn't mean the policies they want--or the general anti-competitive attitudes they express--are in the public interest.

If you haven't read it yet, Dan Pink's cover story in Wired is not just a must read but a good read as well.