Protecting Manufacturing From "Creative Destruction"

The missing ingredient in Martin Feil's analysis of outsourcing (The Age, 30/5/2006) is workers - all workers, that is. At the risk of being dismissed as a "globalist", I don't see the imperative to be concerned about low-skilled workers in a first-world country at the expense of low-skilled workers in much dire straits in the developing world. The unstated assumptions of protectionists - selfishness, nostalgia, populism, nationalism and mercantilism - are neither persuasive nor attractive to me and many other "globalists".

Constantly changing economic circumstances - including "creative destruction" of comparatively weak enterprises - are inevitable and desirable. While our governments should do more to minimise the fallout through investing in skills, retaining a "sheltered-factory" mindset for workers unsuited to jobs in the service economy is not the answer to our balance-of-trade problems.

Rather than subsidising the local manufacture of shoes and the like, we should be ensuring that political liberalisation and freedom goes hand-in-hand with economic growth in our offshore partners. The whole world benefits from a prosperous and free global community, including workers in advanced economies.