Nor is it exactly optional. If clothing can be made far cheaper in China than in South Carolina, a company with plants in South Carolina can do one of two things. It can move its production to China to take advantage of the lower costs, or it can dig itself a grave and then climb in.
A company that successfully outsources saves jobs -- since a company that goes bust employs no one. If Bain had barred corporations from shifting factories when it made sense to do so, it would have been guilty of economic malfeasance.
Outsourcing, contrary to myth, has not led to the collapse of American manufacturing. In fact, U.S. industrial production has risen by nearly 50 percent in the past 15 years. The reason manufacturing employment has declined is that workers have gotten more productive -- meaning it takes less labor to make more goods.
But outsourcing is a two-way street. Nobody here seems to think the German government should stop Volkswagen from building cars in Tennessee. Some 700,000 Americans work for U.S. affiliates of Japanese companies, which apparently is cool with Japanese politicians.
Dartmouth economist Douglas Irwin points out that the U.S. has a trade deficit in goods but a trade surplus in services. Chinese companies, and U.S. companies that operate in China, often need the services of lawyers, architects and software engineers working on this side of the Pacific. In the end, both we and the Chinese gain from the process.
But it's the nature of our politics to ignore the vast benefits generated by international commerce and obsess about every negative consequence that can be found. Romney and Obama both manage to convey the impression that they have no clue how trade acts to continually raise our standard of living.
Luckily for us, they don't have to understand it. But it would help a lot if they would stay out of the way.
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