»  National Review Online

October 7th, 2003

  Outsource This!

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As parents, Mr & Mrs Derb rely to a certain degree — no more than we can help, and let the parent who is without sin cast the first stone — on bribery and threats to keep our kids in line. We don't usually think of our parenting techniques in those terms, of course; more like "incentives and cautions," or some such jargon from the child-raising manual, but I'm in a reductionist mood here today. Well, we recently received a gift from heaven in this line. It arrived in the following manner.

In my daily browse of the news a couple of weeks ago, I picked up a news item from one of the big broadsheet papers — and for reasons I don't understand, I can't now find it again — about black parents in Washington DC who find the local school system so intolerable, they are sending their kids to boarding schools in West Africa. These schools, the parents had satisfied themselves, are well run, have strict behavior codes and excellent academic programs, teach in English, and are cheap — around a quarter the cost of a year's parochial day school in the New York suburbs.

Well, I thought this was an interesting titbit to bring up at the dinner table. ("Why didn't ya say so at dinner? We coulda used the conversation." — Tony's father in Saturday Night Fever.) So I did. Once we had got through the day's street gossip and school stories, I told the family about these people sending their kids to be educated in Africa. Before I got to the end I noticed an unexpected and wonderful thing: my kids had expressions of abject terror on their faces. "Daddy," said Nellie (age 10) in a small uncertain voice, "you're not going to … send us to school … in … Africa, are you?"

I was about to reassure her that of course I had no such thing in mind, when I caught my wife's eye. The eye said: We can use this. I saw the point at once, stared thoughtfully into my mashed potatos for a couple of beats, then said: "Well … probably not Africa. But you know, the schools in China are excellent, and also very cheap." (My wife is from China. The kids attend Chinese school Friday evenings, speak rudimentary Chinese, and we spent summer over there two years ago. The Chinese middle-school day runs from 7:30 am to 4:30 pm, six days a week, with three or four hours of homework a night and regular stiff examinations.)

This was followed by much wailing and gnashing of teeth while Rosie and I worked away calmly on our meat and veggies, rejoicing inwardly that we had, quite by chance, found a new threat to hold over the little angels. Oh, I know, it's a bit dishonest. We have no intention of sending them to school in China. This is nuclear deterrence. We shall just casually murmur some remark about it once in a while: "How's your nephew doing in school over there, honey?"  "Oh, great! Education there is really good! With these exams coming up, he's going to study right through the vacation …" The kids will overhear, and be subdued for an hour or two. That's all. You use anything that comes to hand. If you are a parent, you know all about this.

The fact that American parents are outsourcing their kids' education does, though, tell us something about the times we live in. Once you start thinking about this stuff, you get all sorts of ideas. Enterprising people in Third World countries have been having exactly the same ideas, and some of those people are already making a bundle of money by doing things for Americans not only more cheaply than we can do them for ourselves, but sometimes, as in the case of schooling, doing them better.

Let your imagination loose on this for a while. What other kinds of services could we outsource?

A great many American jobs have already gone to the Third World, of course. Manufacturing we all know about. Cost of a manufacturing worker in the U.S.? $26 an hour. Cost of same in China? $0.25 an hour. That's an old story.

The new story is that the middle class is caught in the same relentless arithmetic. Cost of a tax accountant in New York? $40 an hour, plus benefits, plus employer-liability litigation risks. Cost of same in Bangladesh? $4 an hour, plus … nothing. It's not surprising that the tax-preparation firm you use is sending your 1040 data to Dacca to be processed. Or that your stockbroker gets basic financial analysis done in Kuala Lumpur. Or that if you call your computer help line, you will be talking to someone in Sri Lanka. Or that if you break your leg, your X-ray will be scrutinized in Bombay. Or that the chip in your laptop computer was designed in Jakarta …

Any economist can tell you that free trade rests on the principle of comparative advantage. My country has rich soil but no mineral deposits. Your country is all stony mountainsides; but the stone is laced with iron ore. So you supply me with iron, I supply you with food. In this game, we are both winners.

A high proportion of a modern economy consists of knowledge work, though, and here the principle of comparative advantage breaks down. Any country can produce knowledge workers; and with the internet, they can be put to work from ten thousand miles away, at negligible cost. In this game, the winner is the country whose knowledge workers cost the least. That ain't us.

I have grossly over-simplified, of course. The U.S.A. still has some things going for her. There is stability — we have been governing ourselves under the same Constitution (with occasional amendments, to be sure) for two and a quarter centuries, an extraordinary length of time by world standards. There are some concentrations of skill sets, in things like movie-making, that no other country can compete with, and that can't be outsourced. There is creativity, which we have much more of than other nations, for reasons arising from our great personal liberty and unusually large variety of rooted traditions. (Those are depreciating assets, though. We have less liberty now than we had a generation ago — ask your Dad — and regional differences are blurring and vanishing as a homogenous culture takes hold everywhere.)

So the fact that we might outsource their education is really the least of our kids' worries. By the time they are through with that education, they may need to head off to Lagos or Calcutta anyway, if they want to have a decent job. And what about me? Doing a daily trawl through news sites, looking for interesting stuff to pass an opinion on in an internet magazine … Why pay an American to do this when there are probably a lot of English-speakers in the Third World who could do it better, and way cheaper? Feel the ground shifting under your feet? If you don't, you soon will.