Shan, this is all true in an Adam Smith mumbo-jumbo sort of way. But it doesn't do the out-of-work EDI Analyst/Mapper or programmer any good in the short term. In the meantime, the U.S. (and to a lesser extent, British) taxpayer (e.g., the employed EDI Analyst/Mapper) is paying to keep pirates and terrorists at bay and shipping lanes open. And, internally, she maintains an expensive legal system for protecting intellectual property.
This presents a classic "free-rider" or "tragedy of the commons" problem. Theoretically, everyone participating in the global economy (e.g., Indian outsourcers) benefits by the Pax-Americana/Britannica, but only a few (e.g., employed American or British EDI Analyst/Mappers) pay for it. Perhaps my previous messages were too subtle. If Americans (and before them, the British and the Romans) weren't providing the framework by which commerce is made reasonably safe and reliable, there'd be no "off-shoring" to speak of. Therefore it's only reasonable that we attempt to "recover" some of the costs through tariffs applied to products and work-for-hire coming from overseas. Write your Congress-critter and Senator. I have no doubt that - absent the costs of aircraft carriers and others I've described - American EDI Analyst/Mapper services would be less expensive than any out-sourced off-shored solution. William J. Kammerer Novannet, LLC. Columbus, OH 43221-3859 . USA +1 (614) 487-0320 ----- Original Message ----- From: "Shan Harter" <[EMAIL PROTECTED]> To: "'EDI-L Mailing List'" <[email protected]> Sent: Wednesday, 12 January, 2005 05:08 PM Subject: RE: [EDI-L] The compelling logic of off-shoring This will be true until comparative advantage has been exceeded. This principle says that the total output will be greatest when each good is produced by the nation that has the lowest domestic opportunity cost for that good. Which means as long as the relative opportunity costs of producing goods differ among nations, there are potential gains from trade. This is just being efficient. A simple non-service example (but applies to service as well): If the US produces wheat more efficiently than Brazil and Brazil produces coffee more efficiently, then both countries are better off by adjusting their production possibilities curve so that the US sells wheat to Brazil and Brazil sells coffee to the US. What happens when an economy is risen, in part by the increased jobs and revenue? Well the gap between opportunity costs, that originally pushed out the frontier now makes that country less attractive and no longer have their competitive (comparative) advantage. At that point resources will be either diverted to another country (if one exists for that good or service) or they will be forced to use their own country resources. Outsourcing cost benefits will not last forever because the economies of those countries outsourced will eventually catch up to an equilibrium point but not in the near future. These countries do this through specialization but as they equalize, they lose that specialization. As firm's implicit costs (opportunity costs) are consumed by their "best alternative use." Right now its several countries like China, India, etc. Regards, Shan Shan Harter VP of Project Services Systrends, Inc. 7855 South River Parkway Tempe Arizona, 85284 480-756-6777 Ext 205, fax: 480-9755, cell: 602-821-2951 -----Original Message----- From: William J. Kammerer [mailto:[EMAIL PROTECTED] Sent: Wednesday, January 12, 2005 2:43 PM To: EDI-L Mailing List Subject: [EDI-L] The compelling logic of off-shoring To Brian Lehrhoff: see below. I was right! You can easily save 50% when off-shoring. Consider that when you want to provide prescription drug coverage for old farts or field armies in far-off places. Indians may or may not be better mappers or programmers, but you have to admit they have a heck of lot less overhead. William J. Kammerer Novannet, LLC. Columbus, OH 43221-3859 . USA +1 (614) 487-0320 . Please use the following Message Identifiers as your subject prefix: <SALES>, <JOBS>, <LIST>, <TECH>, <MISC>, <EVENT>, <OFF-TOPIC> Access the list online at: http://groups.yahoo.com/group/EDI-L Yahoo! Groups Links <*> To visit your group on the web, go to: http://groups.yahoo.com/group/EDI-L/ <*> To unsubscribe from this group, send an email to: [EMAIL PROTECTED] <*> Your use of Yahoo! Groups is subject to: http://docs.yahoo.com/info/terms/
