How offshoring benefits the West

Offshoring of business processes to lower cost countries is inevitable - so long as the west does not waver in its commitment to capitalism. No one - no lawmaker, no amount of media hype, absolutely nothing whatsoever can stop jobs from moving to India or China or the Philippines.

And this is actually beneficial to the West, as this article from the Economist argues, and I could not agree more.

By Mukul Pareek

A 50 dollar a month checking account?

How would you like it if your bank charges you 50 bucks a month for your checking account? Or how about paying $500 for your new cell phone you got for $300? Or how about paying an extra 10 grand for your new car?

What great ideas! When Americans start saying 'yes' to the above questions, outsourcing of jobs to cheaper countries will stop. And I doubt if it will ever happen.

Outsourced jobs reduce costs for American companies, increase corporate profits and therefore the investible surplus in the hands of their shareholders, increase the real value of the money the ordinary guy on the street has in his pocket. And they help countries like India and China climb out of poverty. It connects these huge countries to the global economy, making sure their increasing political and economic clout is used in a manner consistent with the interests of the west.

Outsourcing is good. It benefits everyone. It is here to stay. Some people lose their jobs, but overall the economy and Americans end up being richer. Those who protest against this inevitable phenomena are probably just being selfish and short-sighted, I wouldn't really blame them for that.

Here is an article from a recent issue of the economist that presents a more substantiated argument than my logic above. I hope the folks at the Economist don't mind - this is a not-for-profit personal website and this is excellent publicity for them, so I guess a fair deal for all.

Download Economist article here