Outsourcing America: What's Behind Our National Crisis and How Can We Reclaim American Jobs

Outsourcing America: What's Behind Our National Crisis and How Can We Reclaim American Jobs Ron Hira and Anil Hira AMACOM (2005) 256 pages, Paperback, $14.96 Reviewed by: D. W. MacKenzie, Ramapo College The authors of Outsourcing America claim to explain the real world of globalization, as opposed to the unduly optimistic proclamations of many economists. They focus on uneven distribution of gains from international trade, the costs of retraining displaced workers, persistent unemployment and lost income, and uncertainty regarding which parts of the economy will replace jobs lost to outsourcing. Hira and Hira think that globalization is threatening America's future by allowing corporations to export high paying jobs, rather than revenue generating manufactures. They see global competition as a national, rather than an individual matter. Corporations focus on short run profits rather than long run national well-being. In their view, the Federal government must save America from the myopia of the market with a policy to protect important domestic industries. Hira and Hira have taken on a very complex issue in this book, one that is certainly subject to significant debate. Their contention that the effects of globalization are uneven is correct, and already known to economists. Free trade benefits consumers through lower prices, as well as those workers and capitalists who edge out rivals in global markets. Obviously, those who come in second place lose income, but still benefit from lower prices as consumers. The authors contend that globalization benefits capital at the expense of labor. They also display concern about businesses' influence in politics. Narrow business interests do have inordinate influence in politics. However, the same thing is true of narrow labor interests. Smaller is better in politics. Relatively small groups, like business associations and labor unions, can organize to lobby the government more effectively than larger groups, like the general consuming public1. The authors should note that efforts to protect workers in select industries redistribute incomes between workers. President Bush's steel tariff benefited steel workers at the expense of autoworkers, construction workers, and all consumers. Both industry and labor have lobbied to avoid competition throughout history, and success in these efforts comes at the expense of the general consuming public. Yet Hira and Hira speak of special interest politics as an unfortunate turn of events that favors business interests. They think that government should oppose competition in labor markets, instead of supporting big business. What they overlook is that by supporting competition in general the general consuming public benefits at the expense of narrow business and labor interests. This is why mainstream economists support globalization. Special interest bias is a general defect of government. Hira and Hira insist that government can promote the national interest, but this is a highly controversial notion2. There are real costs to politicizing commerce. The fact that government restrictions on global competition redistribute income means that interest groups will expend real resources to influence government policy. …