Lively Debate

Rumsfeld talks about the power of words versus pictures in his testimony before congress:

Words don't do it. The words that there were abuses, that it was cruel, that it was inhumane, all of which is true, that it was blatant, you read that and it's one thing.

You see the photographs, and you get a sense of it, and you cannot help but be outraged...

I heard speculation on NPR this weekend that the power of pictures to create an emotional impact and a believable impression was due to the relatively new evolution of the use of language in our brains versus the relatively old processing of sight.

The combination of the internet and digital photography has left the US powerless to halt Iraq net images. Clay Shirky compares new free production and distribution of images to the free production and distribution of text from the printing press. He wonders what the Protestant Revolution of the Digital Image age will be.

While the shocking images of American wrong doing dominates the established newscasts, various blogs work to distribute images that tell a different story of the war in Iraq.

Congress can tackle some of the negative consequences of spontaneous photography. But I wonder if there is also a price to be paid for too much transparency? The sausage might be tastier without the images of what went into it. Focusing too much on one thing one can lose sight of the big picture. Observation changes the result. There may be some political problems that can be solved by a back-room deal between elected representatives that could never be solved under the scrutiny of the 24 hour news cycle and polarized watchful constituencies. Is there a role for secrecy in government just as there is a role for privacy for individuals?

I wonder what new institutions this revolution will bring?

It sounds like an over the top scene from an action movie, but this is not fiction:

While leading his platoon north on Highway 1 toward Ad Diwaniyah, Chontosh's platoon moved into a coordinated ambush of mortars, rocket propelled grenades and automatic weapons fire. With coalitions tanks blocking the road ahead, he realized his platoon was caught in a kill zone.

He had his driver move the vehicle through a breach along his flank, where he was immediately taken under fire from an entrenched machine gun. Without hesitation, Chontosh ordered the driver to advanced directly at the enemy position enabling his .50 caliber machine gunner to silence the enemy.

He then directed his driver into the enemy trench, where he exited his vehicle and began to clear the trench with an M16A2 service rifle and 9 millimeter pistol. His ammunition depleted, Chontosh, with complete disregard for his safety, twice picked up discarded enemy rifles and continued his ferocious attack.

When a Marine following him found an enemy rocket propelled grenade launcher, Chontosh used it to destroy yet another group of enemy soldiers.

When his audacious attack ended, he had cleared over 200 meters of the enemy trench, killing more than 20 enemy soldiers and wounding several others.

David Coursey has a thoughtful, well written piece Offshoring is Bad for America.

Too bad he is wrong. There are several faulty premises at work here.

One would only worry about "lost" jobs to cheap foreign labor markets if one believed that those markets had an advantage in developing software. I do not believe this is true, or at least remains to be seen.

Martin Fowler summarizes a presentation given by the Standish Group.

SACWIS is a child welfare system that all the states in the US must implement. He stated that Florida began its SACWIS system in 1990 with an original cost estimate of $32 million for delivery in 1998 with a development team of around a 100 people. When they last looked the new cost was $170 million due to ship in 2005. He pointed out the state of Minnesota has to build the same capability with pretty much the same demographic issues as Florida - leading to very much the same broad system requirements. Minnesota started work in 1999, finished in 2000 with eight people costing $1.1 million.

This is a staggering example of the variation in productivity: A 200 to 1 cost differential between two nearly identical projects. To put this in the context of outsourcing, Minnesota could have paid each of the developers on their project $10 million per year and STILL developed a system sooner and cheaper than Florida. Labor cost is only one variable is a complex equation.

Do jobs in projects like Florida's deserve legislative protection? Do jobs in projects like Minnesota's need it?

I've seen the arguments of outsourcing doom sayers a decade ago in The Decline and Fall of the American Programmer, which were followed later by the embarrassing retraction of The Rise and Resurrection of the American Programmer.

Coursey does admit one positive of outsourcing:

On one level, I support creating more jobs in underdeveloped countries. Economic injustice and underdevelopment was one of the key motivators for World War II as well as the current turmoil in the Arab world. It is in our best interest to spread the wealth, at least enough to keep the peace.

But he fails to draw the counter intuitive conclusions of the economic theory of comparative advantage. That is higher wages in underdeveloped countries mean larger markets for American goods, and thus more jobs here in America.

Self professed liberal Coursey thinks that higher prices is worth the higher costs of protectionism:

customers should be willing to pay a bit more not to purchase offshored products and services

But, trade protection is a regressive tax. It hurts the poor more than it hurts the rich. Increased buying power for America's poor is a frequently overlooked benefit of the lower costs due to offshore outsourcing.

Additionally, any protective legislation would amount to corporate welfare, much like the sugar industry protection has turned into a corporate welfare gold mine for ADM. Shielded from competition, American software development would be unable to compete overseas and jobs would be lost. Protectionism is a boon for lobbyists and corruption. Think of the shady accounting that Coursey's tax scheme would encourage.

Worse, holding people in jobs for which they have no relative advantage is an inefficiency that slows the growth of the entire economy. I don't accept that the United States cannot compete in the world software development market. But, if that were so, there would be opportunity costs for holding workers in dead end jobs, instead of allowing them to shift to the jobs that the theory of comparative advantage suggests will be available.

Easing the plight of workers caught in any such shift is a laudable goal and has the advantage of being temporary, while protectionism is notoriously difficult to remove. If this is a problem that requires government action, let the government give money to the workers in the form of training, education and small business grants and loans. Do not give money to corporations in the form of industry protections.

Interestingly the presumably conservative CEO of Intel and the liberal David Coursey can agree on one aspect of the outsourcing debate: The need for education reform.

I haven't really bought into the sky is falling outsourcing paranoia peddled by Lou Dobbs every night on CNN and his protectionist sympathizers. Projecting dire consequences by connecting a few dots on a graph and drawing a straight line into the far future is an old standby of sensationalist journalism.

Fresh out of the overly optimistic "New Economy" bubble, is outsourcing or off-shoring the overly pessimistic new "new economy?" Perhaps Not. Danieal Drezner has a more reasonable voice on the issue.