Who hates Walmart?

[amicus]

There is a two hour television special production by CNBC 2004 entitled, "The Age of Walmart" which offers a few insights into the recent Walmart controversy.

Walmart has approximately 5800 stores worldwide, near 1800 in international locations and employs 1.5 million people.

Walmart is the largest employer of workers in both Canada and Mexico and has stores in 10 different countries.

There were several interesting points in the program, one of which was the information that there are 30 Walmart stores operating in China.

Usually one only hears about the outsourcing of suppliers to China, so it was interesting to learn how Walmart operates in that country.

Although business bores me to tears, the inside look at the Walmart operation was an eye opener.

Walmart stores feature 90 million different items, each one of which is tracked daily on a computer system which was said to be nearly as sophicated as the best computer systems used by the Pentagon and the Federal government.

The business philosophy of Walmart, instituted by its founder, the late Sam Walton, is to bring quality products, easily accessible and at the lowest price possible to the customer.

Walmart began with one store in rural Arkansas and has spread around the globe to be one of the largest businesses in history and the largest corporation in the United States.

Since most people I have known shop at Walmart because they have a wide selection, low prices and a one stop shopping center, I did not understand the controversy concerning the company.

The final portion of the program illuminated some of the complaints against the company, but the interviewer was somewhat hostile to the Walmart CEO and did not provide a good conclusion to the program.

But enough was said to determine where the real resistance to Walmart comes from; AFL CIO; Unions.

Walmart employs a huge number of people and has resisted unionization since its inception.

Union organizers invade potential sites for new Walmart stores, (260 new stores planned for 2005), and organize resistance to the development of property for the new stores. The Unions prepare city council resolutions to prevent Walmart from building in almost every area they choose.

In addition, college professors from University of California and University of Washington act as consultants to the Unions and make presentations concerning the impact a new store will have in an area. (those same nine out ten left wing liberal, anti business bastards I continually harp about in our colleges.)

The Union organizers and the college lefties go door to door in a community, setting small business owners and residents against the Walmart effort to build a store. The attempt to pass zoning laws to prevent commerce in order to 'preserve the environment' and 'save the small mom and pop stores from extinction'.

Walmart is successful Capitalism. The low prices keeps inflation down and allows people to purchase things they could not afford at the high prices of a smaller distributor.

The high cost of american products, brough about by Union wage demands have driven many companies out of business, or over seas for less expensive labor. High taxes and imposed restrictions by city, county and state have driven many corporations to seek a better business environment, which is why the go overseas.

Of course this came up during the Presidential campaign and I now understand why. Anti business left wing democrats attempting to squelch free enterprise.

I did not fully understand the controversy before, I do now.

Just about everyone I know appreciates the low prices and wide selection at Walmart. They pay higher wages than most employers, have a good health plan and promotion for their 'associates' along with profit sharing programs.

Once again the liberal left wing democrats are in bed with a special interest group, organized labor and working against the best interests of everyday americans who appreciate Walmart.

Oh, yes...the suits filed against Walmart by women and minority groups...mostly instigated by union activists. It all fits.

amicus...

 

[Vincent E]

I shop at Walmart from time to time. It is the only place that sells Cranberry and Black Cherry Juice.

Meanwhile Target kicks the Salvation Army off its property because the Salvation Army kettle doesn't fit with Target's snooty, snobbish image; no one ever complains about them. I'm hijacking the thread.

Target sucks!

Then again, what did you expect? Target is French.

 

[amicus]

I boycott everything French...except the ladies..but I do wish they would shave their armpits...


amicus...

 

[cantdog]

We had this thread.

 

[Pure]

see

http://www.snopes.com/politics/military/target.asp

snopes is pretty reliable.
target stores are not French owned, Vincent E.

wikipedia has a list of department stores in the major countries.

http://en.wikipedia.org/wiki/List_of_department_stores

For the US, under 'Target' is this listing.

http://en.wikipedia.org/wiki/Target_Stores

Target Stores is a division of Target Corporation. The discount retail chain in the United States has 1,272 stores in 47 states that operate under the mastheads of Target, Target Greatland, and SuperTarget. The first Target store opened in 1962 in Roseville, Minnesota. That store will close on January 8, 2005 so that it can be demolished to make room for a SuperTarget in its place.

In order to create a niche for itself, Target is known for differentiating itself from competitors like Kmart and Wal-Mart by offering more upscale, trend-forward merchandise. In fact, Target refers to itself as a "discount department store" instead of just a discount store. To further differentiate itself, Target does not play Muzak in its stores, the stores are typically cleaner and more organized than its rivals, and it calls its customers "guests".

The Bullseye logo of Target is one of the most recognized corporate logos in the country.

Many of Target's biggest fans often refer to the store as "Tar-zhay" (pronounced in pseudo-French accent), a reference to its staunchly middle-class clientele.

There is also a Target operating as discount department store under the same logo and a similar style in Australia with over 150 stores. The brand in Australia is owned by Coles Myer and is licensed from corporate parent Target Corporation. Target USA does not and never has operated stores outside of the United States.

----

amicus, as far as your poll, though I'm neither liberal nor democrat, I don't like Walmart in general, though have visited a couple times. i like my brother's description, "It's part of the Full Employment for China Program."

yes, capitalism, unconstrained by any national sentiment or loyalty or long run considerations. yes it's very successful at delivering $5 dollars sports sneakers made by Chinese getting 2 dollars a day.

despite your professed concern for America's unique character, you support *international capital movements* determined by *international* considerations; this is the weakening of the US's industrial engine and autonomy; exacerbating class inequality and undermining American freedoms.

X many AMERICAN workers losing jobs means nothing to you; your concern is primarily the profitability of capital on an international scale, in an international arena.

The US has some strong unions; same in Britain; in Colombia, they're under government control; other places, like China, not allowed or only as official organs of the government. Which do you support? the foreign model, of course, and in your 'patriotism,' you're quiet about pay cuts and benefits cuts to American workers.

While claiming to admire the Bill of Rights, you support the governments that don't abide by one; that may arrest union persons and any alleged 'subversive' they please, and even shoot them.

Needless to say, such views are devoid of both patriotism and conservatism.

 

[cloudy]

Interestingly enough, the thing that most of the programs and profiles on Walmart fail to mention is something that is fairly significant.....Sam Walton got his early management experience at JCPenney, and a lot of the principles he used to found Walmart were "borrowed" from Mr. Penney. He wasn't quite the originator of these ideas as he is made out to be.

 

[amicus]

Pure...with you and many others in this venue, I am never certain if you seek answers and understand or just pull my chain as it is clear that I will defend freedom every time.

The function of any efficient market place is to bring the highest quality goods to the consumer at the lowest possible price.

Read that again and think about it.

The market place does not guarantee jobs or wages or protect an industry or the environment or the status quo. The function of the market place, between you and I and your neighbors, is for someone to produce a service or a product, offer it to those who need it and get more back than we put into it, i.e. profit, a reward for our work.

There is a Liberal mindset that business must be concerned about social issues which is simply not true, not right, not real and not rational.

The real function of business, of enterprise, of trade, is to produce a product or service that is needed, to produce it in quality and quantity and at the lowest price possible that still provides a return of investment to those who created, invented or otherwise made the product possible.

Left over remnants of the middle ages, socialists, carry the baggage of thinking that wealth just exists, through inheritance or luck. Wealth is earned and maintained and invested and loaned and a whole host of other things in a market system.

To address your comments on Unions, they are remnants of the old European Guild system that attempted to control good and services to maintain a scarsity of goods and services to keep the price high for their own benefit. Read up on Guilds and you will see what I mean.

Modern Labour Unions play the same card, they organize and coerce employers for higher wages and better benefits and eventually price themselves out of the market, as is occuring now.


The free market place, Capitalism, works just fine if all the fucking Liberal do gooders would just get the hell out of the way.

But then...that is why we debate these issues...


amicus...

 

[Pure]

Amicus: The market place does not guarantee jobs or wages or protect an industry or the environment or the status quo. The function of the market place, between you and I and your neighbors, is for someone to produce a service or a product, offer it to those who need it and get more back than we put into it, i.e. profit, a reward for our work.

There is a Liberal mindset that business must be concerned about social issues which is simply not true, not right, not real and not rational.

The real function of business, of enterprise, of trade, is to produce a product or service that is needed, to produce it in quality and quantity and at the lowest price possible that still provides a return of investment to those who created, invented or otherwise made the product possible.

There is a very simple fallacy in evidence here: economic reductionism. What you say about 'market' and 'business' and 'trade' are true; likewise what 'investors' look for. But the country and the world hold many activities besides 'market' and business' 'trade, etc.

Because of the reduction of society to marketers, traders, and consumers, there is of course, no role for government, church, union, or ultimately nation. These, on your view should facilitate business and trading or step aside.

This is not conservatism, since the only values honored are market values.

Your view, for instance, looks at the importation of third world women as prostitutes under indenture as a business; to be pursued where profitable. Likewise the heroin trade. It looks at the mining of coal solely in terms of the 'bottom line,' without concern for mine safety.

Unlike liberals (nowadays) conservatives, socialists, and other radicals, you have no role of government except as defender of nation from invasion and facilitator of its trade. According to you, national policy on 'human trade' or 'heroin trade' is not something a society and government should think about and act on, as policy issues. Laws on the safety of coal mines are not legitimate, and interfere with the 'free trade' right of the company.
(The only check you propose, is that if the miners don't like it, and survive, they can look elsewhere, so that the really bad mines with few survivors may well shut down, iow moving toward safer conditions as a by product of 'good business.'


The ultimate center of this confusion is the idea that a 'free market' is a place conducive to or productive of other freedoms.
Thus the confusion of you, Box, and others about Latin America, Russia (now), China. In fact, they are dictatorships who have free trade with the US; you view them as 'free' in virtue of their open trade policies, and if not now quite there, moving there; since, free trade produces 'freedom.' All your talk of 'objectivism' and 'truth' founders on this simple affirmation of faith, and refusal to test it against actual facts in the world.

Thus fascist goverments that persist defeat your thesis, since they usually have 'free trade' but aren't free or democratic--Batistas Cuba or Pinochet's Chile would be examples.

It is by the way, becoming rather clear that the main 'freedom' brought to Iraq will be 'free trade'-- openness to US oil companies, etc. That will be sold as 'freedom.'

It's appropriate to see clearly what you recommend, and not make insults, but point out where your heart lies. You may talk about mass graves and poison gas-- which the last Republicans you supported were free in supplying [free trade!]-- and try to appeal to our ideals. Send our boys and girls to die so the Kurds don't get more gas.

But the setting up of American companies with the ability to trade freely is the actual objective. Even now the proof is starting to come in; the companies have 'freedom'-- just as in Afghanistan-- but the people don't, except in the confusion mentioned above: that a country with 'free trade' is actually 'free.'

Merry Christmas! May the coming year bring you profitable enterprises!

 

[amicus]

Pure, et al, T'is Christmas morning and greetings are tendered..

you said, in part:

"...There is a very simple fallacy in evidence here: economic reductionism. What you say about 'market' and 'business' and 'trade' are true; likewise what 'investors' look for. But the country and the world hold many activities besides 'market' and business' 'trade, etc.

Because of the reduction of society to marketers, traders, and consumers, there is of course, no role for government, church, union, or ultimately nation. These, on your view should facilitate business and trading or step aside.

This is not conservatism, since the only values honored are market values.

Your view, for instance, looks at the importation of third world women as prostitutes under indenture as a business; to be pursued where profitable. Likewise the heroin trade. It looks at the mining of coal solely in terms of the 'bottom line,' without concern for mine safety...."

~~~~~ Well Pure whatever the 'fallacy' of economic reductionism may be in your mind, human values or market values are in general one and the same. Whether there should be churches or unions or any other institution providing goods and services is the province of the people, not the government, to have if they wish.

Months ago on a thread, I attempted to explain and equate just what 'values' were and how the concept could be understood and comprehended rationally and logically.

The response was that 'values' like everything else are subjective and relative and 'non absolute', the typical modern reaction to any thing of certainty and truth.

Government interference in the market place has become so common that most seems to think it is essential for government to set safety standards and to enforce laws the provide a safe working place. We have argued about sweat shop fires, collapsing damns, coal mines, automobile safety, child labor until both sides were blue in the face.

At the end of the debate, those who 'believe' that business is evil and will use and corrupt and endanger people for the almighty dollar still believed the same thing.

Of course I maintain otherwise; that it is in the best interest of the entrepeneur to establish and maintain a safe work place, produce a safe product in order to keep the business functioning. In short, the values, ethics and morality of 'doing business' are the same as any other and emerge from the same concern about human rights.

Are there bad people, crooks, those who will cut corners, endanger people and consumers and turn out a shoddy or dangerous product for short term benefit? Well, duh, yeah there are.

Should we destroy freedom because of a few bad apples? Well, duh, No!

You spoke of narcotics and prostitution as if everyone knew that those are 'bad' things and must be regulated and controlled.

Says who? By what right do you claim to control a person who chooses to use cocaine or sell their body for sex? In a free society you have the liberty to do both, either or neither. Choice, that is what freedom is all about; insofar as it does not violate those 'innate unalienable rights' of anyone else.

At the very base level, economics is just the act of one person exchanging goods or services with another. That exchange, for mutual benefit enculcates an entire system of ethics and morality, self contained in the conduct of human beings.

It is of course more complex than that as the individual becomes a group, then a business then a corporation; still the basic operating function applies at all levels.

Thank you for a well thought out and presented post, even if we may disagree.

May you and yours have a wonderful holiday season.

amicus...

 

[thebullet]

Nothing that Amicus says should surprise anyone. He's a broken record that keeps skipping back to the same tired refrain.

Those of us who think there is more to life than unfettered commerce see some problems with Wal-Mart. First it treats its employees like shit. My nephew works for Wal-Mart and he is a pawn in their employee abuse campaign. His hours change constantly. They manipulate his time so that he never gets overtime and yet works long hours. Most importantly, he doesn't make a living wage. In order to survive he must work a second job. But since Wal-Mart keeps changing his hours, he is extremely limited in what second job he can take.

From an esthetic point of view Wal-Mart is a prime mover (though certainly not the only mover) in the homogenization of America. There was a time in the not too distant past when one could go from state to state, town to town, and find differences, originality. Each town had its own flavor, its own personality. The town center was a thriving place of local commerce. Locals owned the businesses, were involved in the welfare of the community, paid a living wage, and earned a good living.

But now that all has changed. Wal-Mart and its fellow travelers build outside of town where land is cheap. They can undersell the in-town businesses because they have VOLUME! In no time the town center is filled with charity organizations and empty buildings. The locals no longer own the businesses in the community. The average wage in the area has dropped precipitously.

What was once a thriving town has become a community struggling for survival.

And throughout America, ever town looks the same. Amicus thinks this is a good thing. I would beg to differ.

 

[amicus]

Bullet....you and your fellow travelers make quite the same error and by your words, I detect it to be a character flaw, possibly genetic in nature.

But you did express a little old fashioned conservatism, in a jaded sort of way.

You represent the same kind of folks that tried to keep the horse and buggy era going with the advent of the automobile. And even farther back, when the steam engines became factories that mass produced goods and provided employment.

Had you been alive and kicking way back then, I am sure you would have railed against that also.

It is fine for you to have a pastoral view of village life and the farmer toiling in the fields. It is fine for you to live in those times in your mind and wish they would return again. A simpler time, man closer to the earth, closer to real values.

That is all fine...but...

It is not fine to use force, through laws and taxes to restrict access to timber used to build houses just to keep a pristine wilderness. You increase the cost of building and buying a home and cause pain and suffering to many.

As you well know, Walmart pays wages somewhat above minimum wage, calls its employees, 'associates' and gave bonuses of company stock which made many of the first employees wealthy.

And while you cherish the old mom and pop enterprise model, one can travel coast to coast and be assured of quality products, safe food and all the conveniences of the 21st century in the mall.

Although it may not seem likely to you, I do not shop at malls or Walmart and I much prefer a small family restaurant over a Mickey D's or a Subway or a Pizza Hut. Perhaps we are of an age where personal association with those we did business with was common place and we miss it.

But time marches on, things change and another generation recreates the world in their own vision. That is as it should be.

At the heart of this fast paced modern world, is corporate america. Doing wonders unthinkable a half century ago. Large corporations such as Walmart keep prices low so that all americans can share in the bounty of a post industrial capitalist world.

Things are good and are getting even better if we can just keep the goddamned Liberals out of our pockets.

amicus

 

[thebullet]

Amicus:

Have you been to small town America? Do you care about the destruction of these towns? Of course you don't.

Things are not better they are worse.

I live with my feet firmly planted in the 21st century. But I also live with my eyes wide open. I don't have rose colored glasses to alter my view of reality.

Because I wish people could have a living wage to you that makes me a bleeding heart liberal. I'm sure you know that a person living on minimum wages in the 1960's lived far better than a person can live on minimum wage today.

You will say, well things are better all over. Look at our health care system. Yes we have more and more 'things' to improve our health care system. And yet we deprive access to those things to the poor and underprivileged.

I am certain that you saw the study I posted last week that showed that 900,000 (that's nearly a million!) people died in the 1990's who could have been cured with currently existing healthcare but weren't given access to it because they were poor.

To you that's no great shakes. It's the market economy at work. And by the way, they were only poor people, after all. Plenty more where they came from. And by the time GWBush and Wal-Mart gets done, there will be more still. Who cares if a few hundred thousand of them die because our health care system stinks?

 

[amicus]

Bullet...damnit...we can't seem to find a common ground on anything.

We are about the same age, I think...I worked in the fields as a boy for fifty cents an hour so don't freakin lecture me about a 'living wage'. My first job at a radio station, as an announcer was a buck an hour...yeah $1.00 an hour...so get off your high horse.

Wages are a function of the market place, the goddamned unions and government workers were able to coerce higher wages that effectively destroyed the market place and minimum wage laws have made it worse, not better.

And health insurance in the fifties? shit man, the reason health costs are so damned high and so few can afford private plans is because health insurance has no patient input, no controls and that lack of control is destroying the health care market.

If health insurance recipients had to pay a portion of the medical and hospital bills they would pay more attention and pick and choose what they could afford instead of getting every goddamned test in the world to cover the doctors ass....

Most liberals dont give a damn about this as they want and expect medical care to be a universal right to all, which is insane, has never worked and never will. So forgive me if I class you as a Liberal in some sense, but crap, you walk like a duck, quack like a duck, there is a fairly good chance you be a duck...

I also apologize for what others thought about my comments on your DBF and E-kids stories...as it was indeed only the last few stories I read that became intensly political and I quit reading. I may try to find a way to say that on the forum.

regards...

amicus

 

[Guest]

I may try to find a way to say that on the forum.

Are we still jinxed tomorrow?

Of course, from tomorrow, I'll be chasing skirts for real.

 

[thebullet]

We are about the same age, I think...I worked in the fields as a boy for fifty cents an hour so don't freakin lecture me about a 'living wage'. My first job at a radio station, as an announcer was a buck an hour...yeah $1.00 an hour...so get off your high horse.

Hey, Amicus, I'm on no high horse. I also worked for minimum wage back in the day. I worked 40 hours a week (3 jobs spaced at various times during the day), went to college full time (I had a large scholarship and my Dad paid for the rest - so that wasn't a burden on me), and was a varsity athlete. I was able to afford a 3 bedroom apartment with living room, dining room and kitchen. All expenses except my college were paid for by me and my minimum wage jobs. My wife had a baby and I paid for her out of pocket.

Yes, times were tough, but minimum wage meant a living wage then. Today a person cannot live on 'minimum' wage. Is a living wage so much to ask of a job?

You are so convinced of your 'free market' vision. If you are looking to improve competition, your 'free market' won't do it.
Giving business free riegn to do whatever they want with no oversite will insure the destruction of the competitive marketplace.

Business does best when prices are fixed and when monopolies run things. That's when they make their highest profits. They certainly don't want to have to deal with competition. That only lowers profits.

Your free market will lead to the dictatorship of the corporation. That's where we are headed, so I guess you will have your way in the end. Hope you like the result.

 

[dr_mabeuse]

I don't know. When I think of the things that are important to me, that make life worth living, low low prices are pretty far down the list.

Merry Chistmas to all.

---dr.M.

 

[Colleen Thomas]

I don't know. When I think of the things that are important to me, that make life worth living, low low prices are pretty far down the list.

Merry Chistmas to all.

---dr.M.

Merry Christmas Doc!

Best wishes to you and yours and all the belssings of the season

 

[tealeaves1984]

There is a two hour television special production by CNBC 2004 entitled, "The Age of Walmart" which offers a few insights into the recent Walmart controversy.

Walmart has approximately 5800 stores worldwide, near 1800 in international locations and employs 1.5 million people.

Walmart is the largest employer of workers in both Canada and Mexico and has stores in 10 different countries.

There were several interesting points in the program, one of which was the information that there are 30 Walmart stores operating in China.

Usually one only hears about the outsourcing of suppliers to China, so it was interesting to learn how Walmart operates in that country.

Although business bores me to tears, the inside look at the Walmart operation was an eye opener.

Walmart stores feature 90 million different items, each one of which is tracked daily on a computer system which was said to be nearly as sophicated as the best computer systems used by the Pentagon and the Federal government.

The business philosophy of Walmart, instituted by its founder, the late Sam Walton, is to bring quality products, easily accessible and at the lowest price possible to the customer.

Walmart began with one store in rural Arkansas and has spread around the globe to be one of the largest businesses in history and the largest corporation in the United States.

Since most people I have known shop at Walmart because they have a wide selection, low prices and a one stop shopping center, I did not understand the controversy concerning the company.

The final portion of the program illuminated some of the complaints against the company, but the interviewer was somewhat hostile to the Walmart CEO and did not provide a good conclusion to the program.

But enough was said to determine where the real resistance to Walmart comes from; AFL CIO; Unions.

Walmart employs a huge number of people and has resisted unionization since its inception.

Union organizers invade potential sites for new Walmart stores, (260 new stores planned for 2005), and organize resistance to the development of property for the new stores. The Unions prepare city council resolutions to prevent Walmart from building in almost every area they choose.

In addition, college professors from University of California and University of Washington act as consultants to the Unions and make presentations concerning the impact a new store will have in an area. (those same nine out ten left wing liberal, anti business bastards I continually harp about in our colleges.)

The Union organizers and the college lefties go door to door in a community, setting small business owners and residents against the Walmart effort to build a store. The attempt to pass zoning laws to prevent commerce in order to 'preserve the environment' and 'save the small mom and pop stores from extinction'.

Walmart is successful Capitalism. The low prices keeps inflation down and allows people to purchase things they could not afford at the high prices of a smaller distributor.

The high cost of american products, brough about by Union wage demands have driven many companies out of business, or over seas for less expensive labor. High taxes and imposed restrictions by city, county and state have driven many corporations to seek a better business environment, which is why the go overseas.

Of course this came up during the Presidential campaign and I now understand why. Anti business left wing democrats attempting to squelch free enterprise.

I did not fully understand the controversy before, I do now.

Just about everyone I know appreciates the low prices and wide selection at Walmart. They pay higher wages than most employers, have a good health plan and promotion for their 'associates' along with profit sharing programs.

Once again the liberal left wing democrats are in bed with a special interest group, organized labor and working against the best interests of everyday americans who appreciate Walmart.

Oh, yes...the suits filed against Walmart by women and minority groups...mostly instigated by union activists. It all fits.

amicus...

you got my vote. they are taking over England now. they owned the asda brand before but kept asda as asda but now they are changing the bags to 'wal-mart' how shite is that?!

 

[Pure]

Just so there's some light as well as heat to this debate, I've appended a Wall Street Journal debate, and first given some other refs. I find it interesting that Bhagwati mentions that, counteracting effects of outsourcing, will be employment opportunities for Americans working in the obesity control field!

I've seen some good factual material on Walmart, and hope others will post some of it, or the urls.


The Great Hollowing-Out Myth (The Economist)
http://www.economist.com/agenda/displayStory.cfm?story_id=2454530Jobs,


Immigration, and Outsourcing (The Cato Institute)
http://www.cato.org/current/outsourcing/index.html

Towards A Progressive View on Outsourcing (The Nation)
http://www.thenation.com/doc.mhtml?i=20040322&s=cavanagh

Interview with Lou Dobbs (NOW with Bill Moyers)
http://www.pbs.org/now/transcript/transcript334_full.html#dobbs
http://www.careerjournal.com/hrcenter/articles/20040520-aeppel.html

Top Economists Square Off
In Debate Over Outsourcing

By Timothy Aeppel

From The Wall Street Journal Online

Does offshore outsourcing hurt the U.S. economy by draining away jobs and investment, or does it ultimately make the U.S. stronger? Is it a cost-cutting tactic that should be encouraged, or should it be punished in some way? The issue has become a hot button this election year.

Framing the debate in economic terms can be tricky, because while economic theory offers tidy equations that lead to win-win situations, there are losers in the real world. Workers who see their jobs shipped overseas are hurt, even while companies and the economy as a whole may see benefits, such as lower prices for consumers.

It's also problematic that the pain is felt quickly and prominently, while benefits are spread out over time and hard to quantify, says Haseeb Ahmed, an economist at Economy.com, an economic-research company in West Chester, Pa. Still, many economists say offshore outsourcing is good for the U.S. for the same reasons that free trade is beneficial for a vibrant economy. "Arguing that outsourcing hurts is arguing that free trade hurts," says Mr. Ahmed.

There are many people saying precisely that these days, as reflected in a protectionist wave in Congress and in conversations on the streets of battered mill towns in North Carolina and among unemployed computer programmers in Boston. So we asked two economists, known for their positions on opposite sides of this debate, to conduct an e-mail conversation on the subject.

Jagdish N. Bhagwati is a university professor at Columbia University in New York and a leading expert on trade who has emerged as a defender of offshore outsourcing. He was born in India and was educated there as well as in England and the U.S. He earned his Ph.D. from the Massachusetts Institute of Technology and is currently the Andre Meyer Senior Fellow in International Economics at the Council on Foreign Relations in New York.

Prof. Bhagwati says the offshore-outsourcing controversy has arisen over the growing ability to import services from other countries through advanced computer technology, like having radiologists in Bangalore read X-rays taken in Boston. It's a form of trade, he says, and, as such, is a positive force.

Paul Craig Roberts is a former assistant Treasury secretary for economic policy in the Reagan administration and was once an avid free-trader. He's one of a small but growing group of economists raising warning flags about the impact of offshore outsourcing.

Mr. Roberts, who studied in the U.S. and England and has a Ph.D. in economics from the University of Virginia, argues that the world may have fundamentally changed and that economic thinking simply hasn't kept up. He says companies are now freer to move capital and technology around the globe in search of cheaper labor. And as countries like China and India have emerged, with their vast pools of skilled and well-educated workers, it becomes harder for any industry to justify investing in or employing people in the U.S. and other high-wage countries.

Mr. Roberts is currently chairman of the Institute for Political Economy, a think tank in Washington.

Here are excerpts from their discussion.

Mr. Roberts: From the perspective of trade theory and economic-development theory, it is hard to see the benefit to the country whose firms outsource. With domestic capital and technology reallocated to the employment of foreign labor, there is less to employ domestic labor. Either unemployment results or the remaining capital is spread more thinly with a decline in labor productivity and real incomes. As industries move offshore, suppliers are forced to follow. The domestic economy becomes a less-efficient place to produce as concentrations of skills are diluted by movement offshore.

If outsourcing were a limited phenomenon driven, for example, by domestic scarcity of a few specific skills, it is possible to imagine scenarios under which a country gains from outsourcing. But even here caution is appropriate. For example, if technology jobs are outsourced because of domestic supply constraints, the mechanism for expanding domestic supply is short-circuited. If a shortage of nurses is met by importing foreign nurses under a visa work program, domestic nursing schools are unlikely to increase their enrollments.

Outsourcing is a problem for the U.S. and First World in general, because all tradable goods production and service jobs can be outsourced. The higher the value added, the greater the incentive to outsource the work to India or China where enormous excess supplies of labor guarantee relatively low wages for years to come. Faith that new industries and occupations will rise to replace lost ones is problematical, because the same incentive will encourage replacement industries to be outsourced as well.

With excess supply overhanging Indian and Chinese labor markets, First World wages and salaries can fall swiftly and sharply long before Asian wages rise. The resulting declines in employment and/or real wages can bring political instability to First World countries.

Mr. Bhagwati: Since arguing over unwarranted criticisms of international trade theory is hardly productive, let me turn instead to the important issues at stake in the furor over the outsourcing of online services today. First, that the transition to new jobs is a hardship for the workers who are losing jobs; and second, that the new jobs are less good, that in the famous words of Vice President Mondale, our workers will lose good jobs and we will become a nation of "hamburger flippers." Or, in modern parlance, that the programmers who were earning $60,000 will wind up bagging groceries or stocking shelves for $15,000.

Take the issue of whether we are going to lose skilled jobs so that Mondale's scenario is vindicated. For starters, it did not [happen] when he was sketching it in gory colors. Fast-food jobs increased for sure; but by no means did they overtake the expansion of skilled jobs. And there is little fear of it happening now either. Look at the facts for 1999-2002. The Bureau of Labor Statistics shows that, counting four IT-related sectors, the jobs expanded; slowly no doubt, but contract they did not. In 2002, the number of jobs in these sectors was over 17 million.

Contrast that with the estimate of gross numbers of outsourced jobs: They were around 100,000 per annum, and the upper estimates of job loss annually over the next 15 years has been put at 225,000, which is less than 1.5% of the stock of available jobs in 2002. I must add that the net estimates show that the U.S. has many more people employed in services that are exported than are "lost" in services that are imported.

And these jobs will surely expand because the main driver of growth in our economy is our prodigious technical change. Technical change nearly always substitutes for unskilled labor, but it creates new skilled jobs, both by creating new products and processes but also because the maintenance of technology also requires skilled labor.

Devising a Policy

The Wall Street Journal: Mr. Roberts, what should the U.S. do about all this? Do you favor some sort of protectionist response?

Mr. Roberts: To get to the "solution" stage, we have to pass through the "identification of the problem" stage. Jagdish says that there is no problem, but I am concerned that comparative advantage [theory] might be broken. [The theory says countries should specialize in goods they're better at producing than other countries and then trade for things in which they don't have the edge.] One virtue of comparative advantage is that a country doesn't need a trade strategy, because comparative advantage causes all free-trade outcomes to be beneficial. But if comparative advantage is broken and cannot be fixed by restoring its premises, the U.S. needs to develop a trade strategy.

A successful trade strategy would require careful thought from many, and require economists first to get their minds around the problem. Perhaps this exchange will lead in that direction.

I am calling for a policy of thought to examine whether real-world conditions still support the case for free trade. If real-world conditions differ from the premises of the free-trade case, we must learn to think differently and to develop a strategy based on recognition of synergies between industries and occupations and geared toward retaining high-productivity industries.

Mr. Bhagwati: While your approach, based on views of international trade analytics which I believe are flawed, is not overtly protectionist, it will take you quickly into protectionism in reality. "Trade strategy," worked out with "careful thought from many," can only mean, if it means anything concrete, some sort of industrial, and associated, managed-trade policy.

One thing you need to remember, Craig, is that "strategic" trade and industrial policy, devised by gifted bureaucrats and wise economists, sounds fine in theory but is hard to work with in practice.

Mr. Roberts: I agree that government policy is capable of worsening any situation. At the same time, I am aware that economists, long accustomed to shouting down "protectionist impulses," can fail to carefully examine whether changed real-world conditions or new developments in theory undermine the assumption that every act of free trade is beneficial. All I am asking is that economists seriously re-examine the case for free trade and verify that the conditions necessary for the case still hold.

In my opinion the issue will be settled by developments in the U.S. labor market and not by economic debate. If there is a recovery in high-productivity, high-value-added jobs in the U.S., the issue will dissipate. However, if U.S. labor continues to be reallocated toward lower-pay, nontradable, domestic services, the issue will come to a head, especially as wages in domestic nontradable services would experience downward pressure both from entry from displaced manufacturing and knowledge workers and from high rates of legal and illegal immigration.

Jobs Lost and Found

WSJ: So what about the jobs, Prof. Bhagwati? Where are the good-paying ones going to come from in the future?

Mr. Bhagwati: Fifteen years ago, how many of us knew that there would be an obesity epidemic, with associated expansion in liposuction, diabetes management, etc.? How many could have forecast that our aging women would be increasingly flocking in huge numbers to plastic surgeons for cosmetic surgery of all kinds? And yet these and countless other new jobs in unforeseen and unforeseeable occupations, requiring new skills, have emerged and will continue to emerge.

True, we will need to extend our adjustment assistance programs beyond manufacturing. We will also need imaginative programs to assist the older folks who cannot readily acquire new skills for the new jobs. We will finally need to delink medical benefits from employment: a change whose time has come, now that increased exposure to trade means that flexible responses to changing opportunities are possible.

But what we do know is that protection will only compound manifold the difficulties of adjustment for our skilled workers. We live in a globalized economy where foreign firms sell in our markets and we sell in their markets and in third markets. If foreign governments do not share our hysteria, and they continue to outsource (as the British have openly said they will), several of our firms will become seriously uncompetitive and could fold.

Mr. Roberts: Jagdish, retraining programs are a misplaced hope. As all tradable goods and services production can be outsourced today, retraining is limited to domestic services, an increasingly crowded field, and even here foreign labor is brought in under various work-visa programs.

I appreciate your optimism, but it needs to be tempered with realism. According to economist Charles McMillion's report in the April 2 Manufacturing & Technology News, the U.S. has lost its lead in advanced-technology products and now runs a deficit in advanced technology with China (supposedly a low-tech producer of clothes and shoes) that is almost five times larger than the U.S. technology deficit with Japan. It is not clear how a country benefits from losing its superiority in advanced-technology products.

Neither is it clear how a country benefits from declining incomes. Occupations where jobs are growing pay considerably less than occupations that are contracting. Americans are heavily in debt, and their debts are not indexed to their incomes. With any luck, perhaps our discussion will prevent economists and policy makers from being caught off guard in the event there is a deterioration in U.S. economic welfare.

 

[Rocky Mountain Man]

I don't know. When I think of the things that are important to me, that make life worth living, low low prices are pretty far down the list.

Merry Chistmas to all.

---dr.M.

I'm with you brother! For the record, I hate wallmart too! I shop at the small homegrown shops as much as i can. I'd glady pay a little more to a neighbor than pay less to someone who's probably never even been to my town.

 

[BuffRudy]

I do not shop at Wal-Mart, Walgreens or Sam's Club. I am a diehard Target shopper. I shop Target purely for aesthetic reasons. Target is better organized, cleaner, better lighting, friendlier & better groomed cashiers, you don't have to wait in long lines & I am willing to pay a little more to shop in more pleasant surroundings. I won't even shop at Kohl's or Old Navy because they are dirty & disorganized.

And have you ever been in a Wal-mart bathroom? The outhouse on my Grandma's farm was cleaner.