Globalization and Outsourcing Questions

I understand from many political and economic experts that free trade is a good thing. It is almost an article of faith. I am not sure I get it and would like some help. Perhaps you, dear reader, can help.

I am told that our (North American) economies are transitioning to a service economy, providing high-value services while outsourcing manufacturing to low cost countries. This is supposed to keep our economies growing and grow the economies of our trading partners, increasing the size of the pie and raising the boat for all (mixed metaphor intentional).

Here are my questions:

  1. Are business services not primarily in place to service companies creating and building physical products?
  2. Why would North American business services be preferred in other countries, in the long run?
  3. Are we not growing the economies of other countries by outsourcing manufacturing to other countries? For example, is the wealth of China not primarily based on the vast amounts of money transferred from North America to buy product from China?
  4. Is there not a reasonably short period of time before the cheap manufacturing companies start to take on the high value tasks (design, management, etc), rather than have them done from afar? I am old enough to remember the transition from "cheap Japanese electronics" to a high quality "Made in Japan".
  5. As the North American economies become weaker, will our manufacturing partners continue to obey patent and intellectual property laws?
  6. What is the plan for workers who are no longer making things? Are they fated to have to compete with the $1 a day workers found in other countries around the world.

Can you help me out with these questions? If you want, feel free to feed back other questions and I will add them to the list.



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