SOUTHSOURCING

I posted Stephen Colbert's hilarious coining of this term a few months back. But companies simply moving their operations to Mexico (where, as Colbert notes, there is unlimited access to Mexicans), is no joke. Markets have a way of winning out when government's try and limit trade and immigration. I like to tell folks who try and pretend there are plenty of Americans ready to work our farms, "If you like imported oil, you're going to LOVE having to import all of our food." And that's exactly where we're headed.

[UPDATE] Here's another story from Florida on a farmer in that state who is doing the same thing.

Comments

[USC]

"If you think it is bogus, feel free to find out more about the conference - perhas there are transcripts or other media content available:"

Will do. My doubts stem from the fact that it would be truly bizzare for a Friedman to call the US a welfare state. I would have expected him to refer to us as a capitalist state. I wouldn't take a Wikipedia link as an authority but for what it is worth:

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

"The Real Worlds of Welfare Capitalism (Cambridge University Press, 1999), show that on some economic and social indicators the **United States performs worse than the Netherlands**, which has a high commitment to welfare provision. However, the United States leads most welfare states on certain economic indicators, such as GDP per capita"

** Clearly, if one compares the US to a welfare state such as the Netherlands, the implication is that the US is not a welfare state.

"Q: Instead of a green card [resident alien status], can the USA issue a blue card which does not give welfare?"

Admittedly, Friedman didn't ask the question but "which does not give welfare" is strange usage. I have no idea what the reference is to, Social Security, Food Stamps, Medicare, Medicaid.

[R. Lawson]

USC - we allow citizens of US territories to vote for their representative. I think that parallells what the EU does.

"RL, I believe that this "transcript" is bogus. "

I will be incommunicado for the most part until next Monday and won't have reliable Internet access.

The transcript had a citation, which I will paste below. If you think it is bogus, feel free to find out more about the conference - perhas there are transcripts or other media content available:

Q & A session with Milton Friedman at the 18th Annual Institute for Liberty and Policy Analysis (ISIL) World Libertarian Conference, August 20-22, 1999, in San Jose, Costa Rica. Co-sponsors: The Mackinac Center for Public Policy; the Atlas Economic Research Foundation.

You questioned the authenticity - and I have given you enough information to prove that one way or another. Let me know what you find. Otherwise, I have no reason to not believe that the transcript is accurate. I'll check this thread next week and see what you came up with. -RL

[USC]

"A: Unfortunately no. You cannot simultaneously have free immigration and a welfare state."

RL, I believe that this "transcript" is bogus. I would not expect Milton Friedman or any other economist to refer to the US as a welfare state. That description is often used when describing Sweden and some of the other Scandinavian countries.

[USC]

"Are you saying that non British citizens can vote in a British election. You can't possibly be right. What are
you smoking?"

Believe it! Here is link to the British Electoral commission and a cite:

http://www.aboutmyvote.co.uk/FAQ/RegToVote.cfm?OfficeID=68

You can register to vote if you are:

16 or over (but you can not vote until you are 18)

a UK, Republic of Ireland or Commonwealth citizen

a citizen of a European Union country living in the UK

a citizen of the Channel Islands, the Isle of Man or a British Overseas Territory living in the UK

Accordingly, India being a Commonwealth country any of the Indians posting here could vote in the UK. Which is what I originally claimed.

[R. Lawson]

"Similarly, there is a strong argument for Green Carders (even H1bers) to be granted the right to vote. Remember, the rallying cry "No taxation without representation"?"

I have a long drive ahead of me early in the morning, so this is my last comment tonight.

I think Milton Friedman has the best response to this in terms of green card/blue card/citizen:

"We want a society in which every individual is treated as an end in themselves. We don't want a society in which some people are in there under blue conditions, others are in there under red conditions, others are in there under black conditions."

In short, I don't agree that we should change the constitution to allow non-citizens to vote. But, I do believe that temporary immigrants should have (voting aside) equal rights and we need to have a better path to citizenship. This is why I support the GC over the H-1b since it gives people the ability to participate in the free labor market. The H-1b restricts your ability to change jobs - doesn't sound very "free" to me.

That's all for tonight. Goodnight.

[USC]

"The remarks contradict Mr. Friedman's body of work, were never acknowledged anywhere else by Mr. Friedman and it is not even clear what the context was for the remark. All I know is that a single quote is repeated about 900 times if you type "Friedman" and "H-1B" in Google."

Yes. It is especially difficult for me to believe that any self-respecting economist, let alone Milton Friedman, would claim that a commodity being the subject of a quota is the one receiving a subsidy.

My apologies to those offended at my referring to H1bs as commodities but we are talking economics here and not social issues.

[USC]

"I like how my country works for the most part - this law is based on the Constitution. If you don't like our country, I think you know what you can do. I will tell you, the grass isn't always greener on the other side and you may be better off if you stick around."

If I don't like something about the US I think the thing for me to day is to try and make the US a better country than to leave for greener pastures. The US constitution is not always right. For instance, it was not until the 19th amendment that women were granted the right to vote. Should the women who didn't like not being able to vote have been told if you don't like it you should go somewhere else?

Unlike the antis, who rather than seeking an amendment to the constitution seek to subvert it in the context of birthright citizenship, if I disagree with something I would suggest a constitutional amendment. Similarly, there is a strong argument for Green Carders (even H1bers) to be granted the right to vote. Remember, the rallying cry "No taxation without representation"?

[Georg Chell]

People like Mark Kirkorian and Dan Steyn who say that without immigration Americans would be paid higher wages are bluffing. Jobs will move abroad and Americans will be paid even lower wages. Norman Matloff is still complaining that Computer Programmer wages hage gone down since 2003 after H1Bs were reduced to 65,000. It is still going down because those jobs are going abroad. I believe Kirkorian and Steyn are not fools. They know this. Their goal is to keep non-white immigrants out of the country and keep this country majority white.

[R. Lawson]

"So let's give Mr. Donnelly the benefit of the doubt and I'll offer an apology. That still does not mean that the Friedman statement is helpful or that Mr. Friedman would not say something different if presented with these additional facts. "

Very classy of you. I respect that you are able to say such a thing. I think it is great when we can disagree without going for the throat. Sure, I'm just as guilty of that and I would like to apologize now for the times I went too far. I'm sure USC or someone else will kindly point out when that has occured ;-)

[R. Lawson]

OK, I found something Friedmand did say on immigration at an open forum. I found this from a biased website - but I have no reason not to believe points. If you have doubts, I'll dig further and find transcripts or audio from the conference.

I agree strongly with his final statement regarding how we don't want second class citizens with less rights than other citizens (H-1b holders, I would presume, fall under that category):

Q & A session with Milton Friedman at the 18th Annual Institute for Liberty and Policy Analysis (ISIL) World Libertarian Conference, August 20-22, 1999, in San Jose, Costa Rica. Co-sponsors: The Mackinac Center for Public Policy; the Atlas Economic Research Foundation.

Q: Dr. Friedman should the U.S.A. open its borders to all immigrants? What is your opinion on that?

A: Unfortunately no. You cannot simultaneously have free immigration and a welfare state.

Q: Do you oppose a unilateral reduction of tariffs and if not how can you oppose open immigration until the welfare state is eliminated?

A: I am in favor of the unilateral reduction of tariffs, but the movement of goods is a substitute for the movement of people. As long as you have a welfare state, I do not believe you can have a unilateral open immigration. I would like to see a world in which you could have open immigration, but stop kidding yourselves. On the other hand, the welfare state does not prevent unilateral free trade. I believe that they are in different categories.

Q: Instead of a green card [resident alien status], can the USA issue a blue card which does not give welfare?

A: If you could do that, that would be fine. But I don't believe you can do that. It's not only that it is not politically feasible, I don't think that it is desirable to have two classes of citizens in a society. We want a free society. We want a society in which every individual is treated as an end in themselves. We don't want a society in which some people are in there under blue conditions, others are in there under red conditions, others are in there under black conditions. We want a free society. So I don't believe such ....

I haven't really ever thought of that system. It's a new question. I very rarely get a new question, but I must admit that's a new question for me. And I haven't really thought about it a great deal, but my initial reaction is that it's a very undesirable proposal.

[Greg Siskind]

Let me say something further, however. I don't know Mr. Donnelly and let's assume that Mr. Friedman wrote the message (and I'm sorry Mr. Donnelly for questioning your integrity, but the remark just doesn't make sense to me so it's very hard for me to accept). It would seem that the set up for the statement would have to be that H-1B workers are "cheap labor" paid less than their American counterparts. If Mr. Friedman believed this to be true, than perhaps it would explain the remark. So the question would then be whether Mr. Friedman made the remark based on an assumption that was incorrect. H-1B employers are required to demonstrate that they are paying the prevailing wage and they also pay thousands of dollars in legal fees and government filing fees (frequently $6000) every three years and then you figure in the green card legal fees several years later (which can no longer be paid by the worker and you're adding as much as another $10,000), you have a pretty expensive worker. So let's give Mr. Donnelly the benefit of the doubt and I'll offer an apology. That still does not mean that the Friedman statement is helpful or that Mr. Friedman would not say something different if presented with these additional facts.

**Hell, the Indians posting here would be allowed to vote in their Parliamentary elections**

Are you saying that non British citizens can vote in a British election. You can't possibly be right. What are
you smoking?

[R. Lawson]

"So it seems like the burden is on you to prove the truth here and not demand apologies from those who question you."

I'll let Donnelly speak for himself. I don't believe there is a burden, at least on Donnelly's behalf. It seems to me that if you are going to challenge the legitimacy of the quote, the burden is on you to establish why "it sure looks suspicious" beyond wild speculation.

Finally, as was said before, Friedman was living when that was published so NOBODY was claiming to represent the viewpoints of a dead Milton Friedman. He had at least four years to contradict any quotes published by Donnelly. Yet he didn't. Perhaps there was nothing to contradict? Is that so hard to believe?

[Greg Siskind]

Roy - I don't know Paul Donnelly and will say here what I said to Mr. Donnelly when you emailed him and told him to email me asking for an apology. "Whether you are a liar or not is between you and your maker. But when you claim to be representing the opinions of the late Mr. Friedman and you are the only person to have ever been privy to this supposed conversation and when Mr. Friedman never made any statements consistent with this anywhere else, it sure looks suspicious. Did Mr. Friedman give you permission to publish the remarks?" The remarks contradict Mr. Friedman's body of work, were never acknowledged anywhere else by Mr. Friedman and it is not even clear what the context was for the remark. All I know is that a single quote is repeated about 900 times if you type "Friedman" and "H-1B" in Google. You and your allies throw this quote out every time someone makes a free trade argument. So it seems like the burden is on you to prove the truth here and not demand apologies from those who question you.

[R. Lawson]

You owe Paul Donnelly an apology by suggesting he is not being honest about this. He has a very good reputation and you are really just speculating as to the circumstances.

It does not matter what you can prove in court or not. This is a matter of reputation, not a matter of law. Are you seriously suggesting someone pretending to be Friedman emailed and duped all of us? That's quite a stretch.

Friedman was alive and well when the article was published in 2002. I'm sure he read it - and as far as I know he never disputed the account. If someone misquoted him, don't you think he would have said something? Did Computer World publish a retraction? Not that I know of.

Using your standard Greg, there is very little published today that we can trust. I can understand you disagreeing with Friedman or Donnelly and my political viewpoints, but you are attacking the credibility of Donnelly and have provided no reason for that.

[Greg Siskind]

Headers? I just got an email from myself with a terrible virus attached to it. It must be real since it's got my email address in the from box. But why would I send myself a virus. I must really have been out of my mind when I sent that.

Get it. Just because someone says they got an email from a famous person taking a position that was completely contradictory to their entire body of work does not make it real. And, conveniently, Mr. Friedman is not around anymore to dispute anything.

Incidentally, in the legal world we call this hearsay and it's not admissible in court. For a reason.

"OK, prove it was. Milton Friedman told me he was a cross dresser and liked to read Danielle Steel. Prove this is a lie."

Would the email with headers prove anything to you? I'm not sure what physical evidence exists. And I doubt that short high def video with surround sound in the Imax of Friedman saying this, you would believe it.

As with many accounts of other people, we must rely on the truthfulness of the person providing the account.

Are you calling the author of that article a liar?

[Greg Siskind]

OK, prove it was. Milton Friedman told me he was a cross dresser and liked to read Danielle Steel. Prove this is a lie.

"USC is right. Friedman is alleged to have told this to someone via email. "

I don't care how it was communicated. The question is if it was or not. Not if Friedman wrote prolifically about the topic.

I hope the original email and any other information substantiating the quote is released publicly.

"Hell, the Indians posting here would be allowed to vote in their Parliamentary elections even if they were merely there on a tourist visa."

I like how my country works for the most part - this law is based on the Constitution. If you don't like our country, I think you know what you can do. I will tell you, the grass isn't always greener on the other side and you may be better off if you stick around.

"LOL!! That's just an urban legend. Can you provide a cite?"

I just emailed the person who wrote the article with the quote - originally published in 2002. I'll let you know when I get more information substantiating the quote. The original article was published in Computer World in 2002.

"Incidentally, there is only one global economy."

This is a sovereign nation. We determine as a nation how we participate in the global economy. Most people embrace this participation - but most people also want fair trade. The trade imbalance is evidence that there is something very wrong with our current trade relationships. I don't know anyone who is saying to stop global trade. I know plenty of people who would like to see reciprocal trade.

[Greg Siskind]

USC is right. Friedman is alleged to have told this to someone via email. If Friedman genuinely believed this or thought about the subject seriously, he would have published his thoughts. The man was incredibly prolific in his writing right up until his death.

[USC]

"According to Milton Friedman, the cheap labor supply is a subsidy."

LOL!! That's just an urban legend. Can you provide a cite? Incidentally, there is only one global economy. If you want to argue that the US is an isolated economy you need to back that up.

"If Mexico wasn't such a despot of a country filled with corruption and rampant organized crime perhaps American business people would like to do business there."

I think the United States needs to emulate countries that set a good example. We don't need to emulate the Saudi Arabia's of the world. For instance the UK is better on immigration and free trade. Hell, the Indians posting here would be allowed to vote in their Parliamentary elections even if they were merely there on a tourist visa.

Also, I might also point out that you (Greg) have voice NO concern about Mexico's restrictionist policies. American citizens cannot own property in Mexico - they are stuck with a long term "lease" and limited transfer of ownership rights. We are also restricted from owning property along the coast.

If Mexico wasn't such a despot of a country filled with corruption and rampant organized crime perhaps American business people would like to do business there.

Mexico is not a good trading partner. They have abhorent labor and environmental laws.

The only direction goods and labor is flowing from Mexico is NORTH. The flow south is negligible in comparison.

[Jack]

It is true that tariffs vitiate Ricardo's Law of Comparative Advantage but the law itself is based upon immobility of labor between nations.

" Barring immigration is imposing a trade barrier by limiting the supply of workers artificially which means that we either have to accept higher food prices or import food."

According to YOU. According to Milton Friedman, the cheap labor supply is a subsidy. Nice try spin-meister.

[Greg Siskind]

Jack - Ahah! You've fallen in to my free trade trap! Free trade means being able to import needed supplies tariff-free to produce goods efficiently in each country. Barring immigration is imposing a trade barrier by limiting the supply of workers artificially which means that we either have to accept higher food prices or import food. This means consumers lose because they have to pay more or American farmers have to either go out out of business or leave the country. So if you really like free trade, this story should disturb you.

[Jack]

'And that's exactly where we're headed.'

Why are you scaremongering imported food? I thought you said you were a free trader. A true free trader would have no concerns and applaud comparative advantage at work.

"I'll second Greg on this where are all of those college students and out of work Americans that were suppoosed to work the farm."

That is laughable. When is the last time you saw a student or unemployed US citizen doing farm work? I know about farming. In all of my time, never seen this - at least for the manual labor part of the equation.

[No we aren't]

You must disregard lots of history to think that.

When we run out of cheap labor, famers innovate. There are machines that pick any type of fruit. In time, these machines will become more productive than manual labor if they aren't already.

Exploitable labor has stifled innovation. Cutting off the supply will surely drive new inventions.

[Another voice]

While its sad to see the US lose more jobs, we pay the price of our bad desicions when it come to Immigration. I'll second Greg on this where are all of those college students and out of work Americans that were suppoosed to work the farm. After all food inflation is a reality world wide therefore farmers can pay more but if there is no people to do the job you have to go where the people are.