Posted by DR on July 25, 2005 at 06:14 [67.83.76.91]
In Reply to: Outsourcing posted by Me on July 25, 2005 at 00:23
You should really read my above posts, which directly and entirely contradict your conclusions.
But if your mental picture of outsourcing is forced labor at gunpoint, you have entirely the wrong picture. That is *not* outsourcing. That's a human rights violation.
Rather, a correct mental picture of outsourcing would be ADP - Automatic Data Processing, a New Jersey based corporation. Many companies outsource ADP for payroll services (and other services, such as tax, retirement services, etc.). So for example, if your pay stub says "ADP" on top, then your offices *outsource* their payroll to ADP -- meaning that your company doesn't do payroll in-house.
Which makes sense since your company doesn't specialize in payroll -- it specializes in providing a product or service. So instead of hiring someone internally to keep the payroll, which costs a lot of money (e.g. advertisements, screening applicants, salary, benefits, on-the-job training) and incurs many risks, (e.g. flight risk), your company simply hires ADP, which is an *expert* in payroll services and which generates economies of scale so that it charges less for its payroll services than if your company hired someone internally.
That's outsourcing. And while ADP is a domestic outsourcer, many outsourcers are located internationally, where they can sustain a competitive advantage through cheaper labor, more efficient trading routes, and penetration into local markets. As mentioned, outsourcing in LDC's not only lowers aggregate world prices, but also directly benefits the people of those LDC's by providing jobs, infrastructure, and by encouraging further FDI inflows.
As for the "commies putting guns to the heads of children," I know of no corporation that would knowingly purchase overseas products manufactured through force or coercion. Does it happen? Yes, but that's a gross distortion of what outsourcing really is -- a boon to consumers, local economies and to the people of many of the poorest LDC's around the world.
Really, your example is as ridiculous as saying that all ABies are harassers of women because some moron in Arkansas accosted a woman in a public park while wearing only a diaper and a baby bonnet. One bad example does not make an argument.
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