Sunday, December 28, 2003

Outsourcing Sucks!

Peter Cuthbertson is posting again, but - for once - I think he's dead wrong. He's come out in favour of outsourcing. For starters, I have to say I've always found automatic response systems to be annoying in the extreme, and usually badly designed as well. Similarly, having dealt with an Indian call centre, I can safely say 'never again' for the company concerned. For myself, I think that outsourcing is not only a stupid management fad but is positively harmful to Britain.

The case for outsourcing relies on a kind of economic fundamentalism. First there's idea of comparative advantage, which is (crudely) the idea that it's best to do what you're best at. Second, the idea that mass firings free up labour and capital to go off and work on warp drives or whatever.

The second point is the easiest to refute. It may indeed hold true in the long term but, to quote Keynes, in the long-term we're all dead. It's twenty years since Lady T cut off life-support for heavy industry and still no starships have been built in Barnsley. Similarly, there's no law that says the resources have to stay in Britain. Success breeds success, and no one in their right mind would invest in a socialist hell hole like Liverpool. So the likely result of outsourcing is a net flow of capital, both human and financial, to somewhere more economically healthy.

As far as comparative advantage goes, the question is best for who ? It holds true, but only on a global scale. In other words, there are parallels here to the concept of humanitarian intervention - this time sacrificing jobs rather than soldier's lives to achieve some kind of greater good. Which is all very well and good, but no part of Britain's national interest.

There are many good reasons to oppose outsourcing. For the left, it's a no-brainer. They've pushed through a whole series of employment regulations, ensuring any employer who dosen't provide head massages to their employees risks a billion pound lawsuit. Surely the left, guardians of equality, aren't saying it's alright for employers to evade their responsibilities by running off to the Third World ? If it is, surely the left have no particular objection to Bhopal, after all, they've already conceded the principle ?

Of course, this doesn't take account of Tranzis, some of whom may be closer to power than many suspect. To these people losing jobs to Cheapistan is all part of the vast karmic levelling down between the evil West and the loveable Third World. They at least have a coherent world view, albeit one they're too slimly to articulate in public.

For the right, it is tempting to support outsourcing reflexively. However, just because the L3 use the same hysterical rhetoric to denounce big business as they use for conservatives, doesn't mean my enemy's enemy is my friend. On the contrary, big business has been useless in the culture wars and every conservative should enjoy the site of big business twisting in the wind. Similarly, the fact we hate the self-same employment regulations big business is trying to dodge, does not mean we don't have a dog in the fight.

Above all else, we on the right should never be afraid to say we put Britain's interest first. Neither tranzi nonsense or theoretical babbling about the big picture should deflect us from ruthlessly considering how best we can serve our nation's interest. Conservatives rhetoric tends to concentrate on the benefits of the free market, and indeed our ideal world would be a lot freer, but - libertarians aside - most on the right are not in favour of free trade. Conservatives support a whole range of restrictions on trade including restrictions on child pornography, plutonium and slave trading. There is no great hypocrisy in conservatives wanting to restrict outsourcing. Of course, it's possible for conservatives to argue that any cure is likely to be worse than the disease, but the debate is worth having.

Financial institutions have been most active in outsourcing yet, contra Marx, Hitler and other idiots, the financial markets are anything but free. Regulations abound, and many of them directly affect outsourcing. Take the role of the Financial Services Authority. This body supposedly regulates Britain's banks and is funded by levies on those banks. If many of the key functions of a British bank are sent to Upper Pooraeia, can they be regulated effectively ? Possibly, but why exactly should Fulchester Building Society pay higher fees to cover the costs of regulating Gigantic Bank PLC's operations in the Fourth World ? Equally, why should Gigantic Bank be allowed to present themselves as FSA regulated when a large part of their operations is beyond direct supervision ?

The principle holds true for many industries. They want to claim the cachet and the benefits of operating in Britain, without actually operating in Britain except in the most basic, flag of convenience way. I say let them go, but let them understand they are gone - in every sense of the word. Look at recent events in Istanbul. A bomb goes off at HSBC, and suddenly they're a British bank again. Now, standard disclaimer applies about assisting individual citizens in trouble abroad, but why exactly should we tax barmaids in Dudley to protect companies that have done all but film an ad with their management wiping their backside on the Union Flag ?

The people running the companies concerned are just a mirror image of the tranzi fools on the left. They claim to have outgrown archaic concepts like nationality and loyalty, to enter the new world of twenty-first century business. Fine, next time let them call Kofi's Klowns. Not a single pound should be spent to protect people who've made their contempt for us quite clear.

No comments: