The-Morality-of-Capitalism-PDF

a new study of domestic and foreign investment by U.S. multinationalcorporations. The study demonstrated that for every dollarinvested in a foreign country, they invest three and a half dollarsin the United States. This proves that there is a complementaryrelationship between foreign and domestic investment: when oneincreases, the other increases as well. McKinsey and Companyestimates that for every dollar U.S. companies outsource to India,$1.14 accrues to the benefit of the United States. About half ofthis benefit is returned to investors and customers and most ofthe remainder is spent on new jobs that have been created. Bycontrast, in Germany every Euro invested abroad only generatesan 80 percent benefit to the domestic economy, mainly becausethe reemployment rate of displaced German workers is so muchlower due to the vast number of government regulations.I believe that as long as the United States remains number oneon the world innovation index, we have nothing to fear from outsourcingand much to fear if our politicians succeed in opposingit. According to the Institute for International Economics, morethan one hundred and fifteen thousand higher-paying computersoftware jobs were created in 1999–2003, while seventy thousandjobs were eliminated due to outsourcing. Similarly in the servicesector twelve million new jobs were being created while ten millionold jobs were being replaced. This phenomenon of rapidtechnological change and the replacement of old jobs with newones is what economic development is all about.By outsourcing to foreign countries, American businessessave money that enables them to invest in new technologies andnew jobs in order to remain competitive in the world market.Unfortunately, we cannot enjoy the benefits without incurringthe pain of transition. Change is certainly painful. It is painful forthose who lose their jobs and must seek new careers. It is painfulfor those who risk investment in new technologies and lose. Butthe benefits captured by winners generate great new wealth forthe economy as a whole. These benefits, in turn, are consolidatedacross the market through the discovery process and competitivelearning experience.Globalization is not new. It is a modern word describingan ancient human movement, a word for mankind’s search for112