good question... realistically, an active solution is unlikely, in that the profit motives are only on one side - the parties with the power to change it have no incentive to do so, and the people being exploited have little power. meanwhile, the chinese are working, saving, and learning from the outsourcers - and the american consumer doesn't seem to care. it will accelerate until either the market adapts to correct the imbalances, or until there's a political or economic crisis. as for tariffs, as you said they're generally not a viable solution - and they seem unlikely in the near-term, given american dependence on asian treasury holdings.
Why should anyone be able to force a consumer to buy a good or service more expensively than the consumer can get it elsewhere? Everyone would love to erect an artificial wall against competitors, and force the public to be a sucker and pay for their good or service. But, this practice is a first cousin to theft. The economist Milton Friedman had it right, saying, essentially, "If a country produces goods at a loss, we shouldn't restrict these goods in trade. On the contrary, we should buy all we can."
There are millions of things in every country and every society that people are forced to do by laws and regulations that they would rather not do or do differently. There are millions of things that people are forced not to do that they would love to do. They all have one characteristic in common - they were presumably created for "public good". Whether oursourcing, cheap foreign labor and cheaper foreign goods are beneficial for this country or not is of course debatable, but if majority of americans decide that banning them serves "public good", that they will be better off, the economy will be stronger and more robust then there will be nothing wrong with forcing the consumer to pay slightly higher price for locally manufactured goods and services.
there is already an artificial wall against competitors, the whole outsourcing scheme depends on that wall -- if the market were truly as "free" as claimed by the multinationals, then the chinese slave laborer could simply choose to move to the US to seek a higher wage and the protection of first-world labor laws. but he can't do that easily, due to chinese laws, US immigration laws, as well as non-financial considerations. the point is not making people buy expensive things, but rather that corporations want to sell products to the first world, at first-world prices, and to enjoy the benefits of an advanced society, infrastructure, health care system, legal system, police force, etc. -- those things come at a cost, namely, workers have more rights and earn more wages. outsourcing is an attempt to avoid that cost without giving up those benefits.
"He served as Assistant Secretary of the Treasury in the Reagan administration." No wonder the economy is so screwed up.
In my mind protectionism is not a public good. The gains go to the relatively few who are protected (say shoe makers), at the expense of the many (all shoe buyers). The shoe maker commonly enlists a politician for help. The faceless public is then enlisted to make a transfer payment to less competitive industries. This scenario can be applied to almost all protectionism. How can folks on the political left sign up a single mother to pay more for shoes to benefit an uncompetitive company? That's what protectionism is. The few benefit at the expense of the public.
I think this example was already mentioned before in another thread. Everything is cheaper overseas, absolutely everything. The difference is therefore between a single mother having a job at a shoe factory paying living wage and able to afford slightly more expensive local shoes or having no job at all (as everything is cheaper to produce overseas) and being unable to buy even cheapest "made in china" shoes. It's not just manufacturing of course, substitute mother with father, shoe factory with computer hardware/software/engineering/accounting company, you'll still get the same picture. That's where I think you make a mistake, it's not just a few shoemakers, its the whole manufacturing, computer, engineering, eventually science and research and many other sectors of the economy that are affected. And what do we have left in this country that cannot be outsourced - lawyers, doctors, plumbers and used car/insurance salesmen. Oh, and of course traders. Why is it so hard to understand? Everything is done overseas (cheaper) -> no jobs in america (or $1hr jobs) -> no consumers -> no profits eventually, dirt poor population, third world status. RACE TO THE BOTTOM.
Ok, how do you explain the unbelievable success of Hong Kong the last 40 years? They have roughly the same standard of living as the US (about 20 times better than China), and they have had free trade for a very long time. They have been FAR more exposed to outsourcing, trade, etc with China, being as they border with it (well are part of it now of course). -Taric
Hong Kong: GDP per head ($ at PPP): 2000: 25,671 2001: 26,173 2002: 26,830 2003: 27,700 China: GDP per head ($ at PPP): 2000: 3,980 2001: 4,340 2002: 4,720 2003: 5,180 edit: typo -Taric
Labor arbitrage is a fact of life, although not a widely understood topic. It is holding down our reported inflation, both through outsourcing and also through official tolerance of widespread illegal immigration. Clearly it has almost destroyed the union movement, which in my view is not altogether a bad outcome. I don't see a lot of very thoughtful analysis of it. You see a fair amount of handwringing, a lot of anger and the usual think-tank generated recitations of the benefits of free trade. I can appreciate being able to buy manufactured goods at low prices, but I wonder where the future innovations will come from if we lose our manufacturing base. It's not like we have an educational system that excels in teaching science and math. Go into any engineering school and you will find most of the classes being taught by foreign born grad assistants. The free trade advocates will say, compare our economy to europe. They have 10% unemployment and no growth. They say we will come up with new industries that will pay higher and generate more wealth. Let's hope so. Someone has to pay the taxes to support those full pay for life beginning at age 52 public sector retirement packages.