I'm a free trader down to my toes. Always have been. Yet lately, I'm being treated as a heretic by many of my fellow economists. Why? Because I have stuck my neck out and predicted that the offshoring of service jobs from rich countries such as the United States to poor countries such as India may pose major problems for tens of millions of American workers over the coming decades. In fact, I think offshoring may be the biggest political issue in economics for a generation.First off, Alan: 2004 called, it wants it's election issue back. Secondly, you've got to love the desperate attempt to reassure readers that he's still a level-headed economist, because after all he's a free-trader "down to his toes". Not like those smelly hippies who value things like "clean air" or "liveable wages". Down the page a bit:
The first is technology, especially information and communications technology, which has been improving at an astonishing pace in recent decades.... And it's not just low-skill services such as key punching, transcription and telemarketing. It's also high-skill services such as radiology, architecture and engineering -- maybe even college teaching. [Lord, I hope that was a joke Alan.]So. Technological change and a growing population in the rapidly-developing world are an unprecedented danger to the core economies? Gee, that's never happened before, unless you count Japan, Germany, or even the United States back in the day.
The second driver is the entry of about 1.5 billion "new" workers into the world economy. These folks aren't new to the world, of course. But they live in places such as China, India and the former Soviet bloc -- countries that used to stand outside the world economy....
What is happening here is not, as Alan Blinder would have us believe, unprecedented Nor is he trying to "save free trade from itself." He's trying to save himself from free trade. The world would not, in fact, be much worse off if some Indian Econ. Phd could teach Alan Blinder's classes for 1/10 the cost. His students would be much better off, his university could afford more books -- the only person who would be worse off would be, you guessed it, Alan Blinder.
What is being made here is not an argument about politics or economics, but rather ethics:
For these same forces don't look so benign from the viewpoint of an American computer programmer or accountant. They've done what they were told to do: They went to college and prepared for well-paid careers with bountiful employment opportunities. But now their bosses are eyeing legions of well-qualified, English-speaking programmers and accountants in India, for example, who will happily work for a fraction of what Americans earn. Such prospective competition puts a damper on wage increases. And if the jobs do move offshore, displaced American workers may lose not only their jobs but also their pensions and health insurance. These people can be forgiven if they have doubts about the virtues of globalization.For Blinder, the American army of accountants, lawyers, programmers, etc. are deserving of protection because they played by the rules of the game -- the rules Blinder helped write -- and still look to be screwed over. This isn't an issue of efficiency or politics, but of a morally privileged position. Because the professional class behaved like good little Homo Economicus like the Chicago School told them to, they deserve to be saved. Alan Blinder is Noah, trying to build an ark for the professionals of the United States, two by two.
But of course, this isn't the first generation of people to "do what they were told to do." The baby boomer generation of industrial workers was told to work hard every day, save up for their kids and a pension, and they'd retire well in old age. About halfway through that process, economists like Alan Blinder -- guys who were "free-traders down to their toes" -- decided that, in fact, being an industrial worker was a thing of the past (especially if you belonged to a union, God forbid) and that your job could be better performed in Taiwan, Mexico, Malaysia, or any number of other places. And the downsizing of the 1980s and 1990s ensued, and the hemorrhage continues today.
This is worse than self-serving. It's grossly callous, and it sounds like Alan Blinder believes that the millions of people who lost their jobs because of "free" "trade" deserved their fates, while the millions of professionals who still stand to lose theirs don't. Alan Blinder wants to build a life raft for him and his family, after his profession helped push millions of people overboard in a storm.
And what kind of life raft does he want to build? Why, more of the same of course:
In addition, we need to rethink our education system so that it turns out more people who are trained for the jobs that will remain in the United States and fewer for the jobs that will migrate overseas. We cannot, of course, foresee exactly which jobs will go and which will stay. But one good bet is that many electronic service jobs will move offshore, whereas personal service jobs will not. Here are a few examples. Tax accounting is easily offshorable; onsite auditing is not. Computer programming is offshorable; computer repair is not. Architects could be endangered, but builders aren't.Boy, that surname is sounding really appropriate right now, Prof. Blinder. As in "nobody is blinder to reality than I am": remember, the very professionals whose livelihoods are now threatened by offshoring got themselves educated in fields that were supposed to be "safe", as in immune to deindustrialization. Blinder's answer: more education! In different fields! Just because it's always failed in the past, that's no reason to give up hope now! Just keep clapping your hands, Alan.
Finally, this part is simply wrong. Not "open to interpretation", not "experts disagree", just plain stupid ignorant wrong:
Trade protection won't work. You can't block electrons from crossing national borders.Oh yes, God Forbid we think about anything quite so, um, heretical as "trade protection." Because we all know that electrons can't be stopped at the border. Unless, of course, you work in China. Or any government office building. Or most workplaces with computers in North America. Yes, blocking electronic access to undesirable computers is actually a simple matter, and we do it every hour of every day, though the Chinese do it a bit more thoroughly than the rest of us. If we actually wanted to block Indian call centers from the North American phone network, we could do it. Whether we should bother would of course be another question, but there's no question we could do it, and quickly.
Look, you can accept the premise of free traders like Alan Blinder does with the 90% of American workers that aren't him or people like him, that free trade is a net plus. Or you can argue that, in fact, the reality of the global economy is far more complicated and that, yes, governments can intervene in international trade at least as much as they intervene in domestic trade, and if done competently we can all benefit. But you can't have both. Blinder was fine to let a generation of workers be ravaged by forces he's too much of a coward to face himself. So why the hell should I care what he thinks, and why the hell does he have a page in the Washington Post for this crap?