From the Mises Institute, which is a free-market economics website. -------------------------- The Economics of Outsourcing by William L. Anderson [Posted April 21, 2004] The latest political fallout of the current "outsourcing" debate came recently when the Bush Administration's designated "manufacturing czar" turned out to be Anthony F. Raimondo, whose "crime" was to be the head of a firm that recently opened a factory in China. The embarrassed Bushies quickly urged Raimondo to withdraw his nomination, as the Democrats (and a number of Republicans) made hay over the whole thing. Of course, the idea that the United States needs a "manufacturing czar" continues the misguided policies that gave us a "drug czar" and, during the 1970s, an "energy czar." (At least the first "energy czar," William Simon, had the good sense to note that the very presence of his office was counterproductive and downright dictatorial and dangerous. Subsequent "czars" have, instead, reveled in their powers and have continued the deception.) This is not a discussion about the necessity of "czars" to guide public policy unless the "czar" calls for laissez-faire and closes up shop. (Unfortunately, "czars" labor under the delusion, as do the political classes and the general public, that their labors are the only thing between prosperity and chaos.) Instead, I directly address the issue of "outsourcing," from an Austrian point of view. Now, in the current political climate, "outsourcing" is bad and is blamed for unemployment and other social evils, and already Congress has jumped into the fray, framing legislation that will deny firms to do business with the federal government if the companies have invested in overseas operations that Congress deems having "cost" American jobs.