Like most undergraduates during the '60's, I remember lugging around a very heavy (but barely worn) Economics text written by the esteemed Paul Samuelson. I could almost imagine his soothing voice, leading me out to "efficient frontiers," or on journeys to world markets where supply and demand moved together in an elegant dance. I became confident in the self-regulating nature of free markets, and learned to love capitalism, even with its flaws.
Imagine my surprise to learn that this same Paul Samuelson, at 89, is still deeply engaged in developing our understanding of world markets. From this past Sunday's Maine Today, we learn the following:
Writing in the summer 2004 Journal of Economic Perspectives, Samuelson questioned whether, in an era when huge economies like India and China produce at comparable efficiency to the United States, but at a fraction of its wages, gains from free trade really offset the losses entailed.
Criticizing by name such eminent figures as Federal Reserve chairman Alan Greenspan and presidential economic adviser Gregory Mankiw (he of outsourcing-is-good fame), Samuelson called their assertions that trade-induced disruptions produce more winners than losers a "popular polemical untruth."
Samuelson proceeded to attack what he labeled his profession's "oversimple complacencies about globalization" and pointedly argued that the current enthusiasm for outsourcing "can induce for the United States permanent lost per capita real income."
What does this mean for those of us involved in conversion work, be it sales or human capital supply/demand management?
First, we need to understand the full impact of trade agreements on our businesses, realizing that we have some collective responsibility to keep the US economy strong beyond our own narrow (business) interests.
Second, we have to stay in touch with our political representatives, making sure they understand the real impact on our economy (and the ability of our markets to stay viable) when job migration is followed by knowledge migration. As reported in Business & Industry section of the Deccan Herald (Bangalore):
A study conduced by the Confederation of Indian Industry (CII) has revealed that India is all set to move from being the most preferred business process outsourcing (BPO) destination to a knowledge process outsourcing (KPO) destination.
Third, we need to continue to improve our own means of reaching global markets with products and services that are difficult to duplicate or reverse-engineer. To do this we need to embrace continuous learning, both for ourselves, our employees and the generation to follow.
In his own, singular way, Paul Samuelson sets the mark for us all. He's shown a willingness to challenge his long-held beliefs, and be open to a rethinking of fundamental principles in his field . . . at 89! If he can do it, we can, too. Way to go, Paul.