“The Truth about Dick DeVos and China”
In the 2006 Michigan gubernatorial elections, incumbent Jennifer Granholm attacked the Republican candidate, Dick DeVos, of cutting Michigan jobs and giving them to China. This election focused heavily on jobs market due to the state’s high unemployment rate. As one of the highest in the nations, Michigan’s unemployment rate can be attributed to the large decline in the domestic automotive industry affecting major employers such as Ford and General Motors. Controversy over offshoring focuses mainly on the trade of services within the international economy. Most Americans deem the immediate effects of outsourcing harmful to the domestic economy while failing to address its long term benefits. Granholm misled the public by attacking DeVos’ previous history of investing in China without any comment over its positive results. With advertisements like this, it is obvious why almost 70% (AP Poll) of Americans believe that outsourcing hurts the economy. In actuality, outsourcing follows the common beliefs of the international political economy rooted from the writings of economists such as Adam Smith and David Ricardo. For more than a century, decentralized principles supported by these models have increased social and economic interdependence. Globalization generates substantial social welfare gains through specialization and comparative advantage; however, it also poses significant costs and risks to individual groups that find themselves less competitive in the face of global market forces. The negative effects of outsourcing have been exaggerated by the media and specifically democrat politicians in an effort to garner votes from medium-to-low income workers. Short-term unemployment costs must not only be weighed against the broader benefits to consumers and business, but also against the damaging consequences of resisting change.
In 1776, Adam Smith’s Wealth of Nations debuted as a rebuttal to the emerging...