Concerns that the United States may not find alternative uses for its lesser skilled labor at comparable pay are overstated. If offshore labor were free, how much of it should the United States buy? All of it. At $1 an hour, it’s effectively free. Cheap offshore labor is no different than any other productivity improvement that lowers cost. It makes the United States richer and stronger by increasing the relative value of its alternative endeavors — both existing alternatives and new investments. When it competes with China for manufactured goods, the United States is attempting to make for $20 an hour what it can buy for $1 an hour. It should use the $19 of savings to employ additional nurses, school teachers, and waitresses — positions that cannot be outsourced.Mr. Conard is right about the above--and Americans need to hear such, much more often than they do--but, this...not so much;
Supporters of the Obama administration and its economic policies have found some refuge amid the tide of dismal economic news in the fact that the U.S. manufacturing sector has grown slightly in the past year. But the truth remains that America’s future does not lie in making things — it lies in conceiving of things, much of which others will make for us.There is no way he can know if this true, and we currently make plenty of things right now, as even PBS documentarians know. We manufacture cars, airplanes, computer chips, steel. We just do it so much more efficiently than we did it in days gone by.
Whatever the future brings, stuff or ideas, it brings. All that matters is how innovative we are. If we are open to it, we'll prosper. If we merely sit around and throw temper tantrums, like European socialists, we won't. Ed Conard deserves a lot of credit for writing and promoting his book Unintended Consequences, but some of his missteps do grate. Not everything we've been told about economics is wrong.