I just read a book review, "Debugging Indian Computer Programs - Dude, Did I Steal Your Job?" Because it's a book review, the article itself was thin on actual content, but his position is provocative: that Americans, instead of trying to be competitive just want to shut the competition out. Current arguments about outsourcing would support his claim. And in particular those made by Lou Dobbs.
Mr. Dobbs is a CNN heavy who has a business commentary show, has written books, sydicated columns, etc and has a degree in economics from Harvard. (you can search google and get plenty) He has just released a book called "Exporting America" which assembles much about what he has written over the last couple of years, namely that jobs are being shamelessly exported by corporations, which the Bush adminstration is "doing nothing" about (hey wait, but Clinton signed NAFTA), and it's terrible because the trade deficit is also widening along with the job exports.
His prescription is more government regulation and "fair trade" legislation. He speaks the conventional wisdom, and so has had glowing reviews and fawning from the media elites.
I think his prescription is completely wrong. But who the heck am I? Right?
On the other hand, he doesn't have a post graduate degree, and I wonder if his popularity grows because he's just confirming what the liberal elite want to hear. My guess is that that's what John Stossel would say...
One of the big problems is that it appears he doesn't understand the trade deficit, which, if you don't know, suggests that there is not enough capital in the economy to fund all the desired investments, so foreign capital arrives to keep the engines running.
But what is the root of the problem? Government solutions are always like medicines addressing so many symptoms. Someone who is obese with joint problems and diabetes treats their symptoms, and then complains that the medical costs are too high so demands that someone else pay for it. Attacking the root problem is so much simpler, and is free of coercion, but doctors (or anyone) are "insensitive" to demand it, let alone to suggest it. If it were a free-market issue, the person would have to eat less or else they would be uncomfortable, or even die (and I'm not talking about real medical conditions).
In the current climate, we won't change the root problems because we think we can bandaid the symptoms. It's easier in the short term, but who ends up paying in the long term?
What are the root causes of outsourcing? Lou Dobbs says that if corporations don't stop it themselves by being socially responsible citizens, then government should step in. But that's treating the symptom.
Is it because employees have become inured to salaries that were too high in the first place? Is it because unions have used the force of government to keep salaries artificially high? Is it because the market has been distorted by government action in banking, farming, entertainment, trade policy and labor laws? Are we now facing new pressures to absorb previously failed policy to equalize results by applying new layers of policy to try and keep results equal? Will there ever come a time when we will let the market sort it out?
My guess is that the more we try to bandaid the symptoms by re-working previous flawed policies that compound distortions in the market, we risk increasing the likelihood that the final reckoning will be violent.
In searching for continuous improvement in business, some theories posit that managers should keep asking "why" to get to the root of the problem. Why are there 10 defects for every 50 widgets we make? Because the machine misses stamping them on center. Why? Because they enter the machine too fast. Why? Because the rubber slowing mechanisms don't work. Why? Because they haven't been replaced. Why? Because Jim hasn't replaced them. Why? Because he operates 10 machines. Why? Because he's the only one who knows how. Why? Because he won't train anyone. Why? Because he is affraid of losing his job. Why? Because managment has fired others who have trained people that will take their jobs for less. Why? Because managment has not shown a long term commitment to employees... (I'm assuming you allow for this strawman argument to make the point)
Ahh. So, our basic problem is managment policy, and how employees respond to it. What can we do to fix it? What is the new paradigm that the employee will embrace because if we have his trust, we can get those 10 defects down to one, and really make a profit!
Who is doing this with outsourcing, let alone education, or medicine, or whatever. Why can't really fix the problem until we know the root cause, can we?