screwed up the italics, d'oh.

should read:
thanks! great read. i really want to get Veseth's book now.

best section that i thought was:
In practice, then, the trend in U.S. living standards is determined by our own rate of productivity growth -- full stop. International competition has nothing to do with it.

If that's the case, however, what does it mean when people talk about U.S. "competitiveness"?

The answer, sadly, is that it almost always means that they don't know what they are talking about.
--The Age of Diminished Expectations: U.S. Economic Policy in the 1990s

my question to you is, with jobs being outsourced, can the economy keep its previous production?

personaly, i would say no. with less workers making an income there is less currency stimulating the economy. equaling less of a demand for product, whether it be goods or services. with less, maybe negative, productivity growth our standard of living lessens. in the meantime i would believe that the other country would have growth because of the work arrangement. meaning that there is an equalization of income like i believed before.

granted, the outsourcing corporation can make up for a part of this with its increased spending from the money that has been saved. is the increased spending by the corporation equal to that of the worker's normal spending overall, it's hard to say.

now that i feel like i'm babbling, please let me know what you think. i would especially like to know how globalization is not a zero sum equation. thanks

A quick explanation is that workers in developed countries take on more and more valuable jobs (productivity growth), while those jobs that are less valued get outsourced to other countries. In America, lots and lots of people were farmers long ago, and with the industrial revolution, people could create more value and get paid more by working in factories. Nowadays we create more value by becoming information workers.

So the win-win is that here we are developing more and more information worker jobs, and other countries are getting more of our manufacturing jobs. Information worker jobs are worth more, and thus pay more, than manufacturing jobs (certain unsustainable union situations notwithstanding). The countries that are picking up manufacturing jobs also win because instead of living in hard conditions working on a farm, they come to the city and work in the factories and make more money there (as happened here in the past). Finally, these manufactured goods are sold back to us here at a lower cost than before, thus allowing us to buy more per dollar and raise our standard of living a little more.

Of course, when you look at individuals, transition to "better" jobs may be difficult, and not everyone will move ahead like this. But I'm talking more general trends, when you average the experiences across an entire society.

Anyway, I realize this explanation is a bit anecdotal and simplistic, but I'm not really an economics professor. I guess my explanation is not too quick either, sorry.