On The Horizon: Three Cheers For Free Trade

This is the second of two columns on outsourcing. Post and Brown differ in their views on this issue, so they are addressing it in separate columns. This week, Post presents his views; Brown's ran Nov. 17.

Last month, my colleague and co-columnist Bradford Brown raised the alarm that "the dominant position the United States has held in high technology is in deep trouble because software and technology-services businesses are being undermined by cheap labor costs." Outsourcing, he wrote, is "becoming an unstoppable juggernaut," and the IT industry, which has already "lost hundreds of thousands of jobs," may go the way of steel and textiles, industries in which the United States had a significant percentage of world market share and lost it to lower-cost producers overseas. We need, he suggested, "more analysis, a broader public debate, and some political leadership."

There's much to be said, of course, for broader public debate, although the politicians, if they start kicking this football around the political gridiron, are likely to do much more harm than good. It takes real political courage to stand up for free trade, and political courage on this issue seems to be in short supply--witness President Bush's recent cave-in on the question of steel import quotas.

We live in a networked world; there is little our politicians can do to put that genie back in the bottle and less that we should want them to do. Capital and investment and jobs will move, more freely than ever, to where they can be deployed most efficiently.

The benefits to American consumers from such movement, in the form of higher-quality goods and services at lower cost, are immense. The benefits to American producers also are immense; rising incomes for the thousands of programmers in and around Bangalore, India, who work on outsourced projects for U.S. companies mean more consumers of the goods and services that we produce most efficiently. If we are afraid of our ability to continue to find goods and services that we can produce most efficiently, we are in deep trouble.

The "free" in free trade and free markets is a lot like the "free" in free speech--if we value it only when it's harmless, we don't value it at all. When left unfettered, both are enormously powerful and creative engines for growth. They're easy and tempting targets at which to chip away, for, like all powerful forces, they can cause real harm, real dislocation. And it's certainly our obligation to assist those who suffer injury at the hands of free trade and free markets; job retraining programs, educational vouchers for displaced workers, and other such ideas should be part of our response to these forces.

But leave trade as free as can be; being "sort of" free is like being sort of pregnant or sort of dead; it doesn't work like that. It's true: We've lost hundreds of thousands of jobs in textiles, in steel, in mining over the past several decades, as jobs moved offshore. But at the same time, we're far richer as a nation than ever before. That's not a coincidence.

David Post is a Temple University law professor and senior fellow at the National Center for Technology and Law at the George Mason University School of Law. Reach him at [email protected]. Bradford C. Brown is chairman of the National Center for Technology and Law at the George Mason University School of Law. Reach him at [email protected].

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