by Charles Peterson

Created on: May 30, 2009   Last Updated: June 01, 2009

When we hear the words global economy today, in 2009, we think of outsourcing and the Internet.

Outsourcing started out as a new term for an old thing. It used to be that manufacturing companies relied on a lot of outside sources. The digging up and putting into a usable form of raw materials is such an old and honest form of labor that we still call it primary work along with farming and little else. Component parts that go into larger machines have long been made to standard gauge so they can be supplied to various and sundry companies.

Conglomerates began to form under the assumption that by controlling prices in house one could save money on the large scale. Many conglomerates were formed into pipelines where all the component parts were added along the line of production in house.

The global economy changed this. The management of companies began to see that they wouldn't have to pay such a large portion of the cost of production if they could circumvent the power of unions. At first outside labor, which could go into the parts of production, was going to come from anywhere. Soon we began to discover that the companies would acquire the labor in distant lands. The cost saved would pay for the transportation as long as we had cheap oil. In an economy which slants more into E-commerce with every passing year, we don't even need to factor in transportation costs. All the managers care about is where to find cheap labor. They are little hindered in this country, US America, now, as unions comprise only 12 percent of the workforce as of 2008. Who is to stop the managers from selecting the cheapest supply of competent labor?

The solution to the US American economy being weakened by outsourcing, in the context of the growing portion of E-commerce, has to start with basics. We have to know facts about foreign countries. We have to meet people from foreign countries. We have to know their way of life. Did you know that in general a foreigner really appreciates honestly when a US American can speak as much as two or three sentences in their native tongue?

We have to know their religions. Would the tragic plane crashes of 9-11-2001 have happened if US Americans were conversant in the Koran? Muslims form a huge part of global citizenry. At least we could form a criticism of the Koran, from our point of view, and give them the opportunity to say, You're not reading the Koran right. The present situation of our global awareness is so minimal now.

We have to see inside their economy. Do they have huge families or small? Do they live as subsistence farmers? Do they have a comparative advantage?

If we don't even know these basic things, how can we talk with them or compete with them on cheap labor? Ignoring a problem doesn't make it go away. Hiding one's head in the sand solves nothing.

Learn more about this author, Charles Peterson.
Click here to send this author comments or questions.