Ten Economic Truths

One of the hammers that the Democrats have used, and will continue to use, to beat the Bush administration over the head is the matter of job flight beyond our borders. As Senator Kerry has alleged, "Benedict Arnold CEOs" are outsourcing work to third world countries and depriving Americans of job opportunities. Bush's general commitment to free trade and globalization, the Democrats have argued, is resulting in tens of thousands of people being added to the unemployment rolls as their employers export their jobs offshore. The conventional wisdom among many is that job outsourcing is enormously harmful to the American worker and economy and Bush should be punished for it at the polls.

The conventional wisdom, however, is quite mistaken according to Brink Lindsey in a Reason article entitled Ten Truths About Trade. The article is clear, concise and very helpful in answering the main arguments raised by the left against free trade. An excerpt:

Is globalization sending the best American jobs overseas? If you get your news from CNN's Lou Dobbs, the answer is "of course" and the only real issue is how many trade restrictions should be applied to stem the bleeding. But the recent scare about "offshoring" is just the latest twist on an inaccurate, decades-old complaint that global trade is stealing jobs and causing a "race to the bottom" in which corporations relentlessly scour the world for the lowest wages and most squalid working conditions. China and India have replaced 1980s Japan and 1990s Mexico as the most feared foreign threats to U.S. employment, and the old fallacy of job scarcity has once again reared its distracting head.

The truth is cheerier. Trade is only one element in a much bigger picture of incessant turnover in the American labor market. Furthermore, the overall trend is toward more and better jobs for American workers. While job losses are real and sometimes very painful, it is important -- indeed, for the formulation of sound public policy, it is vital - to distinguish between the painful aspects of progress and outright decline.

Lindsey then goes on to discuss ten reasons why free trade is beneficial to the country and, in the long run, to our workers.

Thanks to Dan Drezner for the tip. Drezner himself has a much lengthier, more scholarly piece on the same topic in Foreign Affairs for those who are interested in a deeper economic analysis of the effect of outsourcing on American workers.